1
EXHIBIT 4.1(t)
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LOMAK PETROLEUM, INC.
Company
and
KEYCORP SHAREHOLDER SERVICES, INC.,
Trustee
INDENTURE
Dated as of [___________________]
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[$_____________]
8.125% Subordinated Convertible Notes Due 2005
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TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitions . . . . . . . . . . . . . . . . . . . . . 7
Section 1.3. Incorporation by Reference of Trust Indenture Act . . . . . 7
Section 1.4. Rules of Construction . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2.
THE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.1. Form and Dating . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2. Execution and Authentication . . . . . . . . . . . . . . . 10
Section 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . 10
Section 2.4. Paying Agent to Hold Money in Trust . . . . . . . . . . . . 11
Section 2.5. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . . 12
Section 2.7. Replacement Notes . . . . . . . . . . . . . . . . . . . . . 18
Section 2.8. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . 19
Section 2.9. Treasury Notes . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . 19
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . 20
Section 2.13. Deposit of Moneys . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 3.
REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.1. Notices to Trustee . . . . . . . . . . . . . . . . . . . . 21
Section 3.2. Selection of Notes to be Redeemed . . . . . . . . . . . . . 21
Section 3.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . 22
Section 3.4. Effect of Notice of Redemption . . . . . . . . . . . . . . 23
Section 3.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . 23
Section 3.6. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . 23
ARTICLE 4.
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.1. Payment of Notes . . . . . . . . . . . . . . . . . . . . . 23
Section 4.2. Stay Extension and Usury Laws . . . . . . . . . . . . . . . 24
Section 4.3. Continued Existence . . . . . . . . . . . . . . . . . . . . 24
Section 4.4. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.5. Limitation on Restricted Payments . . . . . . . . . . . . . 25
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Section 4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.7. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.8. Limitation on Stock Splits, Consolidations and Reclassifications . 27
Section 4.9. Limitation on Dividend Restrictions Affecting Subsidiaries . . . . 27
Section 4.10. Limitation on Additional Debt After Default . . . . . . . . . . . . 28
Section 4.11. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.12. Further Assurance to the Trustee . . . . . . . . . . . . . . . . . 29
ARTICLE 5.
SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.1. When Company May Merge or Sell Assets . . . . . . . . . . . . . . . 29
Section 5.2. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 6.
DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.4. Waiver of Existing and Past Defaults . . . . . . . . . . . . . . . 32
Section 6.5. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.6. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.7. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . 33
Section 6.8. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . 33
Section 6.9. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . 34
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 7.
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . 36
Section 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.6. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . 37
Section 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . 37
Section 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . 38
## CT01/SCHIJ/68118.34 ii
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TABLE OF CONTENTS
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Section 7.9. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . 39
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . 39
Section 7.11. Preferential Collection of Claims Against Company . . . . . . . . 39
ARTICLE 8.
DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.1. Termination of Company's Obligations . . . . . . . . . . . . . . 39
Section 8.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . 41
Section 8.3. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.4. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 9.
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.1. Without Consent of Holders . . . . . . . . . . . . . . . . . . . 42
Section 9.2. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . 42
Section 9.3. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . 43
Section 9.4. Revocation and Effect of Consents . . . . . . . . . . . . . . . . 43
Section 9.5. Notation on or Exchange of Notes . . . . . . . . . . . . . . . . 44
Section 9.6. Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 10.
CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.1. Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.2. Conversion Procedure . . . . . . . . . . . . . . . . . . . . . . 45
Section 10.3. Cash Payments in Lieu of Fractional Shares . . . . . . . . . . . 46
Section 10.4. Adjustment of Conversion Price . . . . . . . . . . . . . . . . . 46
Section 10.5. Effect of Reclassification, Consolidation, Merger or Sale . . . . 49
Section 10.6. Taxes on Shares Issued . . . . . . . . . . . . . . . . . . . . . 50
Section 10.7. Reservation of Shares; Shares to be Fully Paid; Compliance with
Government Requirements; Listing of Common Stock . . . . . . . . . 50
Section 10.8. Responsibility of Trustee Requirements . . . . . . . . . . . . . 50
Section 10.9. Notice to Holders Prior to Certain Actions . . . . . . . . . . . 51
ARTICLE 11.
SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . 52
## CT01/SCHIJ/68118.34 iii
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Section 11.2 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . 52
Section 11.3 Company Not to Make Payment with Respect to Notes in Certain
Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.4 Acceleration of Notes . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.5 When Distribution Must Be Paid Over . . . . . . . . . . . . . . . 53
Section 11.6 Notice by Company . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.7 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.8 Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.9 Subordination May Not be Impaired by Company . . . . . . . . . . 54
Section 11.10 Distribution of Notice to Representative . . . . . . . . . . . . 54
Section 11.11 Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . 54
Section 11.12 Effectuation of Subordination by Trustee . . . . . . . . . . . . 56
Section 11.13 Trust Moneys Not Subordinated . . . . . . . . . . . . . . . . . . 56
ARTICLE 12.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.1. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . 56
Section 12.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.3. Communication by Holders with Other Holders . . . . . . . . . . . 57
Section 12.4. Certificate and Opinion as to Conditions Precedent . . . . . . . 57
Section 12.5. Statements Required in Certificate or Opinion of Counsel . . . . 58
Section 12.6. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . 58
Section 12.7. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.8. No Recourse Against Others . . . . . . . . . . . . . . . . . . . 58
Section 12.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.11. No Adverse Interpretation of Other Agreements . . . . . . . . . . 59
Section 12.12. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.14. Table of Contents, Headings, Etc. . . . . . . . . . . . . . . . . 59
EXHIBITS
Exhibit A - Form of Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Exhibit B - Transferee Letter of Representation . . . . . . . . . . . . . . . . . . . . . . . B
## CT01/SCHIJ/68118.34 iv
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INDENTURE dated as of [__________________], between Lomak Petroleum,
Inc., a Delaware corporation (the "Company"), and [Keycorp Shareholder
Services, Inc.], as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 8.125%
Subordinated Convertible Notes due December 31, 2005 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"AFFILIATE" of any specified Person means (i) any other Person which,
directly or indirectly, is in control of, is controlled by or is under common
control with such specified Person or (ii) any Person who is a director or
officer (a) of such specified Person, (b) of any Subsidiary of such specified
Person or (c) of any Person described in clause (i) above. For purpose of this
definition, control of a person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such person
whether by contract or otherwise; and the terms "controlling" or "controlled"
have meanings correlative to the foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar or any successor thereto.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee of the Board duly authorized to act under the Indenture.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in the common or preferred equity (however designated) of such
Person, including, without limitation, partnership interests.
"CAPITALIZED LEASE OBLIGATION" means, with respect to any person for
any period, an obligation of such Person to pay rent or other amounts under a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the
capitalized amount shown on the balance sheet of such Person as determined in
accordance with GAAP.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) any person (as the term "person" is used in Section 13(d) or
Section 14(d) of the Exchange Act) is or becomes the direct or indirect
beneficial owner of shares of the Company's Capital Stock
## CT01/SCHIJ/68118.34
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representing greater than 50% of the total voting power of all shares of
Capital Stock of the Company entitled to vote in the election of directors
under ordinary circumstances or sufficient to elect a majority of the Board of
Directors or (ii) the Company sells, transfers or otherwise disposes of all or
substantially all of the assets of the Company. Notwithstanding the foregoing,
a Change of Control will not include any transaction or series of related
transactions in which (a) 85% or more of the consideration receivable by the
Holders upon conversion of their Notes immediately after the occurrence of such
Change of Control consists of Common Stock that is listed on a national
securities exchange or approved for quotation on the Nasdaq Stock Market or (b)
immediately after the occurrence of such Change of Control (i) the Current
Market Price of the Notes or (ii) the sum of the Current Market Price of any
such Common Stock receivable upon conversion of the Notes immediately after
such occurrence that is listed on a national securities exchange or approved
for quotation on the Nasdaq Stock Market plus any cash receivable upon such
conversion has a value on each of the five trading days immediately after the
occurrence of such Change of Control equal to or in excess of 105% of the
principal amount of such Notes.
"COMMON STOCK" as applied to the Capital Stock of any corporation,
means the common equity (however designated) of such Person, and with respect
to the Company, means the Common Stock, par value $.01 per share, or any
successor class of common equity into which either such class of common stock
may hereafter be converted.
"COMPANY" means Lomak Petroleum, Inc., a Delaware corporation, until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter "COMPANY" shall mean such successor.
"CONVERSION AGENT" means the Trustee or any successor entity thereto.
"CURRENT MARKET PRICE" means, when used with respect to any security
as of any date, the last sale price, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, in either case as reported for consolidated transactions on the
New York Stock Exchange or, if the security is not listed or admitted to
trading on the New York Stock Exchange, as reported for consolidated
transactions with respect to securities listed on the principal national
securities exchange on which such security is listed or admitted to trading or,
if the security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System or
such other system then in use or, if the security is not quoted by any such
organization, the average of the closing bid and asked prices furnished by a
New York Stock Exchange member firm selected by the Company. "CURRENT MARKET
PRICE" means, when used with respect to any Property other than a security as
of any date, the market value of such Property on such date as determined by
the Board of Directors of the Company in good faith, which shall be entitled to
rely for such purposes on the advice of any firm of investment bankers or
appraisers having familiarity with such Property.
## CT01/SCHIJ/68118.34 2
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"DEBT" with respect to any Person as of any date means and includes
(without duplication) (i) the principal of and premium, if any, in respect of
indebtedness of such Person, contingent or otherwise, for borrowed money,
including, without limitation, all interest, fees and expenses owed with
respect thereto (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), or evidenced by bonds,
notes, debentures or similar instruments, or representing the deferred and
unpaid balance of the purchase price of any property or interest therein or
services, if and to the extent such indebtedness would appear as a liability
(other than a liability for accounts payable and accrued expenses incurred in
the ordinary course of business) upon a balance sheet of such Person prepared
on a consolidated basis in accordance with GAAP, (ii) all obligations issued or
contracted for as payment in consideration of the purchase by such Person of
Capital Stock or substantially all of the assets of another Person or as a
result of a merger or a consolidation (other than any earn-outs or installment
payments), (iii) all Capitalized Lease Obligations of such Person, (iv) all
obligations of such Person in respect of letters of credit or similar
instruments or reimbursement of letters of credit or similar instruments
(whether or not such items would appear on the balance sheet of such Person),
(v) all net obligations of such Person in respect of interest rate protection
and foreign currency hedging arrangements, (vi) all guarantees by such Person
of items that would constitute Debt under this definition (whether or not such
items would appear on such balance sheet), and (vii) the amount of all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock, but only to the extent such obligations
arise on or prior to March 31, 2006; provided, however, that Debt issued at a
discount from par shall be treated as if issued at par. The amount of Debt of
any person at any date shall be the outstanding balance on such date of all
unconditional obligations as described above and the maximum determinable
liability, upon the occurrence of the liability giving rise to the obligation,
of any contingent obligations referred to in clauses (i), (iv), (vi) and (vii)
above at such date.
"DEFAULT" means any event which is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Notes issued in global form,
the Person specified in Section 2.3 as the Depositary with respect to the
Notes, until a successor shall have been appointed and become such pursuant to
the applicable provisions of this Indenture, and, thereafter "DEPOSITARY" shall
mean or include such successor.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof or mandatorily (except to the
extent that such exchange or conversion right cannot be exercised or such
mandatory conversion cannot occur prior to March 31, 2006), is, or upon the
happening of an event or the passage of time would be, (a) required to be
redeemed or repurchased by the Company or any of its Subsidiaries, including at
the option of the holder, in whole or in part, or has, or upon the happening of
an event or passage of time would have, a redemption or similar payment due
prior to March 31, 2006 or (b) exchangeable or convertible into debt securities
of the Company or any of its Subsidiaries at the option of the holder thereof
## CT01/SCHIJ/68118.34 3
9
or mandatorily, except to the extent that such exchange or conversion right
cannot be exercised or such mandatory conversion cannot occur on or prior to
March 31, 2006.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means, as of any date, generally accepted accounting principles
in the United States and does not include any interpretations or regulations
that have been proposed but that have not become effective.
"HOLDER" means a Person in whose name a Note is registered on the
Register.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INTEREST PAYMENT DATE" means March 31, June 30, September 30 and
December 31 of each year.
"LEGAL HOLIDAY" means a Saturday, Sunday or any day on which banking
institutions in the state in which the principal corporate trust office of the
Trustee are required or authorized by law or other governmental action to be
closed.
"NOTES CUSTODIAN" means, with respect to the Notes issued in global
form, initially, the Trustee and any successor entity thereto or such other
Person as appointed by the Company from time to time in accordance with the
provisions of this Indenture.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of
such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers,
one of whom must be the Chairman of the Board, the President, the Treasurer or
a Vice-President of the Company, that meets the requirements of Sections 12.4
and 12.5 hereof.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Sections
12.4 and 12.5 hereof. The counsel may be an employee of or counsel to the
Company or the Trustee.
"PERMITTED DEBT" means (i) Debt owed by the Company to any wholly
owned Subsidiary of the Company, (ii) Debt owed by any wholly owned Subsidiary
of the Company to the Company or any wholly owned Subsidiary of the Company and
(iii) Refinancing Debt.
"PERSON" means any individual, corporation, partnership, association,
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
## CT01/SCHIJ/68118.34 4
10
"PREFERRED STOCK" means, with respect to any Person, Capital Stock of
such Person of any class or classes (however designated) which is preferred as
to the payments of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over any other class of the Capital Stock of such Person.
"PRINCIPAL" of a debt security means the principal of the security
plus the premium, if any, on the security.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included on
the most recent consolidated balance sheet of such Person in accordance with
GAAP.
"QUALIFIED STOCK" means Capital Stock of the Company that is not
Disqualified Stock.
"REFINANCING DEBT" means Debt that refunds, refinances or extends any
Notes or other Debt existing on the date hereof or hereafter incurred by the
Company or its Subsidiaries pursuant to the terms of this Indenture, but only
to the extent that (i) the Refinancing Debt is subordinated to the Notes to the
same extent as the Debt being refunded, refinanced or extended, if at all, (ii)
the Refinancing Debt is scheduled to mature either (a) no earlier than the Debt
being refunded, refinanced or extended or (b) after the maturity date of the
Notes, (iii) the portion, if any, of the Refinancing Debt that is scheduled to
mature on or prior to the maturity date of the Notes has a Weighted Average
Life to Maturity at the time such Refinancing Debt is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Debt being refunded, refinanced or extended that is scheduled to mature on or
prior to the maturity date of the Notes, (iv) such Refinancing Debt is in an
aggregate principal amount that is equal to or less than the aggregate
principal amount then outstanding under the Debt being refunded, refinanced or
extended, plus customary fees and expenses associated with refinancing and (v)
such Refinancing Debt is incurred by the same Person that initially incurred
the Debt being refunded, refinanced or extended, except that (a) the Company
may incur Refinancing Debt to refund, refinance or extend Debt of any
Subsidiary of the Company, and (b) any Subsidiary of the Company may incur
Refinancing Debt to refund, refinance or extend Debt of any other wholly owned
Subsidiary of the Company.
"REGULAR RECORD DATE" means March 15, June 15, September 15 and
December 15 of each year.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
## CT01/SCHIJ/68118.34 5
11
"SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
interest on (a) indebtedness or other obligations under the Amended and
Restated Revolving Credit and Term Loan Agreement dated as of July 6, 1994,
among the Company and certain of its Subsidiaries, as borrowers, Bank One,
Texas, N.A., as agent, and Bank One, Texas, N.A. and Texas Commerce Bank
National Association, as lenders; (b) indebtedness for money borrowed
(including purchase money obligations) evidenced by notes or other written
obligations, including letters of credit and bankers acceptances, (c)
indebtedness evidenced by notes, debentures, bonds or other securities issued
under the provisions of an indenture or similar instrument, (d) obligations as
lessee under capitalized leases and under leases of property made as part of
any sale and leaseback transactions, (e) indebtedness of others of any of the
kinds described in the preceding clauses (a) through (d) assumed or guaranteed
and (f) amendments, renewals, extensions, modifications and refundings of any
obligations or indebtedness described in the foregoing clauses (a) through (e);
provided, however, that the following will not constitute Senior Indebtedness:
(i) any indebtedness or obligation as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
expressly provided that such indebtedness or obligation is subordinate in right
of payment to all other indebtedness, (ii) any indebtedness or obligation which
refers explicitly to the Notes and states that the indebtedness or obligation
shall not be senior in right of payment thereto, (iii) any indebtedness or
obligation of the Company to any Affiliate and (iv) obligation of the Company
for compensation to employees or for items purchased or services rendered in
the ordinary course of business.
"SUBSIDIARY" of any Person means a corporation or other entity a
majority of whose Capital Stock with voting power, under ordinary
circumstances, entitling holders of such Capital Stock to elect the board of
directors or other governing body, is at the time, directly or indirectly,
owned by such Person and/or a Subsidiary or Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (U.S. Code Section Section
77aaa-77bbbb) as in effect on the date of execution of this Indenture;
provided, however, that in the event the TIA is amended after such date, "TIA"
means, to the extent required by any such amendments, to the TIA as so amended.
"TRANSFER RESTRICTED SECURITIES" means Notes that bear or are required
to bear the legend set forth in Section 2.6(g) hereof.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter "TRUSTEE" shall mean such successor.
"TRUST OFFICER" means any officer or corporate trust officer or
assistant corporate trust officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"U.S. GOVERNMENT OBLIGATIONS" means non-callable (i) direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States for which its full faith and credit are
pledged and (ii) obligations of a person controlled or supervised by, and
## CT01/SCHIJ/68118.34 6
12
acting as an agency or instrumentality of, the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of
the United States.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Debt or
Preferred Stock or portions thereof (if applicable) at any date, the number of
years obtained by dividing (i) the then outstanding principal amount or
liquidation amount of such Debt or Preferred Stock or portions thereof (if
applicable) into (ii) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payment of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
SECTION 1.2. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
---- ------------------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . 6.1
"Change of Control Date" . . . . . . . . . . . . . . . . . . 4.7
"Change of Control Offer" . . . . . . . . . . . . . . . . . . 4.7
"Change of Control Notice" . . . . . . . . . . . . . . . . . 4.7
"Change of Control Payment" . . . . . . . . . . . . . . . . . 4.7
"Change of Control Payment Date" . . . . . . . . . . . . . . 4.7
"Conversion Price" . . . . . . . . . . . . . . . . . . . . . 10.1
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Definitive Securities" . . . . . . . . . . . . . . . . . . . 2.1
"Event of Default" . . . . . . . . . . . . . . . . . . . . . 6.1
"Global Security" . . . . . . . . . . . . . . . . . . . . . . 2.1
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Register" . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . 4.5
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
This Indenture is subject to the mandatory provisions of the TIA,
which are incorporated by reference in and made part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder;
## CT01/SCHIJ/68118.34 7
13
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "institutional trustee" means the
Trustee;
"OBLIGOR" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by
the SEC from time to time.
ARTICLE 2.
THE DEBENTURES
SECTION 2.1. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Note shall be
dated the date of its authentication. The terms of the Notes set forth in
Exhibit A are part of the terms of this Indenture. The Notes are general
unsecured obligations of the Company limited to $___ million in aggregate
principal amount, subject to Section 2.7.
## CT01/SCHIJ/68118.34 8
14
(a) GLOBAL SECURITIES. The Notes are being issued by the Company
pursuant to the provisions of paragraph 6 of the Certificate of Designations of
Preferred Stock of Lomak Petroleum, Inc. to be designated $2.03 Convertible
Exhangeable Preferred Stock, Series C.
Notes issued to "qualified institutional buyers" (as defined in Rule
144A under the Securities Act ("Rule 144A")) whose interests in the $2.03
Convertible Exchangeable Preferred Stock were represented by interests in a
global certificate held by Person who is the Depositary, or, if different, The
Depository Trust Company or similar institution, shall be issued initially in
the form of one or more permanent global securities in definitive, fully
registered form without interest coupons and with the Global Securities Legend
and, unless removed in accordance with Section 2.6(g) hereof, the Restricted
Securities Legend set forth in Exhibit A hereto (each, a "Global Security"),
which shall be deposited on behalf of such qualified institutional buyers with
the Trustee, at its New York, New York office, as custodian for the Depositary,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only
to any Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of the Depositary and (ii)
shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security 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 Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of the Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in Section 2.10,
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Notes. Notes issued to Persons who
are not "qualified institutional buyers" shall be issued certificated Notes in
definitive, fully registered form without interest coupons, with the Restricted
Securities Legend and, if such Person is an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), the
Institutional Accredited
## CT01/SCHIJ/68118.34 9
15
Investor Legend, but without the Schedule of Exchanges of Global Security for
Definitive Securities, set forth in Exhibit A hereto ("Definitive Securities");
provided, however, that upon transfer of such Definitive Securities to a
"qualified institutional buyer," such Definitive Securities will, unless the
Global Security has previously been exchanged, be exchanged for an interest in
a Global Security pursuant to the provisions of Section 2.6 hereof.
After a transfer of any Notes during the period of the effectiveness
of a registration statement under the Securities Act with respect to the Notes,
all requirements pertaining to legends on such Notes will cease to apply, the
requirements requiring any such Notes issued to certain Holders be issued in
global form will cease to apply, and a certificated Note without legends will
be available to the transferee of the Holder of such Notes upon exchange of
such transferring Holder's certificated Notes or directions to transfer such
Holder's interest in the Global Security, as applicable.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time such Note is authenticated, such Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in Paragraph 4 of the Notes, upon a written
order of the Company signed by an Officer to a Trust Officer directing the
Trustee to authenticate the Notes and certifying that all conditions precedent
to the issuance of the Notes contained herein have been complied with. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount, except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent reasonably acceptable
to and at the expense of the Company to authenticate Notes. Unless limited by
the terms of such appointment, an authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Notes may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Notes (the "Register") and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any
## CT01/SCHIJ/68118.34 10
16
co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar. If the Company fails to
appoint or maintain itself or another entity as Registrar or Paying Agent, the
Trustee shall act as such.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.7. The Company or any of its wholly owned Subsidiaries may act as Paying
Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Security.
The Company initially appoints the Trustee to act as Registrar and
Paying Agent with respect to the Global Security.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal or interest on the Notes, and will notify the Trustee of any default
by the Company in making any such payment. While any such default continues,
the Trustee may require a Paying Agent to pay all money held by it to the
Trustee and account for any money disbursed by it. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and account
for any money disbursed by it. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary of the Company) shall have no
further liability for the money delivered to the Trustee. If the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresseS of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least three
Business Days before each Interest Payment Date and, at such other times as the
Trustee may request in writing, within five Business Days after such request a
list in such form
## CT01/SCHIJ/68118.34 11
17
and as of such date as the Trustee may reasonably require, and which the
Trustee may conclusively rely upon, of the names and addresses of Holders, and
the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar with the request:
(x) to register the transfer of the Definitive Securities;
or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive SecuritieS of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Securities presented or surrendered for register of transfer or
exchange:
i) shall be duly endorsed or accompanied by a written
instruction of transfer in form and substance
satisfactory to the Registrar duly executed by the
Holder thereof or by his or her attorney, duly
authorized in writing; and
ii) in the case of Transfer Restricted Securities that are
Definitive Securities, shall be accompanied by the
following additional information and documents, as
applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder,
without transfer, a certification from such
Holder to that effect (in the form set forth
on the reverse of the Notes); or
(B) if such Transfer Restricted Security is being
transferred to the Company or a "qualified
institutional buyer" (as defined in Rule
144A) in accordance with Rule 144A, a
certification to that effect (in the form set
forth on the reverse of the Notes); or
(C) if such Transfer Restricted Securities are
being transferred (w) pursuant to an
exemption from registration in accordance
with Rule 144 or Regulation S under the
Securities Act; or (x) to an institutional
"accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is acquiring the security
for its own account, or for the account of
such an institutional accredited investor, in
each case in a minimum principal amount of
Notes of $250,000 for investment purposes and
not with a view to, or for offer or sale in
connection with, any
## CT01/SCHIJ/68118.34 12
18
distribution in violation of the Act;
or (y) in reliance on another from
the registration requirements of the
Securities Act: (i) a certification to
that effect (in the form set forth on the
reverse of the Notes), (ii) if the Company,
Trustee or Registrar so requests, an Opinion
of Counsel reasonably acceptable to the
Company, Trustee and Registrar to the effect
that such transfer is in compliance with the
Securities Act and (iii) in the case of
clause (x), a signed letter in substantially
the form of Exhibit B hereto.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of
Exhibit B hereto, that such Definitive Security is
being transferred to a "qualified institutional buyer"
(as defined in Rule 144A) in accordance with Rule
144A; and
ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing
the Trustee to make, or to direct the Notes Custodian
to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount
of the Notes represented by the Global Security,
then the Trustee shall cancel such Definitive Security in accordance with
Section 2.11 hereof and cause, or direct the Notes Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Notes Custodian, the aggregate principal amount of Notes
represented by the Global Security to be increased accordingly. If no Global
Security is then outstanding, the Company shall issue and the Trustee shall
authenticate a new Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITY. The transfer and
exchange of a Global Security or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
i) Any Person having a beneficial interest in a Global
Security that is being exchanged or transferred
pursuant to an effective registration statement under
the Securities Act or pursuant to clause (A), (B) or
(C) below may upon request, and if accompanied by the
information specified below,
## CT01/SCHIJ/68118.34 13
19
exchange such beneficial interest for a Definitive Security of the
same aggregate principal amount. Upon receipt by the Trustee of
written instructions or such other form of instructions as is
customary for the Depositary, from the Depositary, or its nominee on
behalf of any Person having a beneficial interest in a Global
Security, and upon receipt by the Trustee of a written order or such
other form of instructions, and, in the case of a Transfer Restricted
Security only, the following additional information and documents (all
of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification from such Person to that effect
(in the form set forth on the reverse of the
Notes) or
(B) if such beneficial interest is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A) in
accordance with Rule 144A, a certification to
that effect from the transferor (in the form
set forth on the reverse of the Notes); or
(C) if such beneficial interest is being
transferred (w) pursuant to an exemption from
registration in accordance with Rule 144 or
Regulation S under the Securities Act; or (x)
to an institutional "accredited investor"
within the meaning of Rule 501 (a)( 1), (2),
(3) or (7) under the Securities Act that is
acquiring the security for its own account,
or for the account of such an institutional
accredited investor, in each case in a
minimum principal amount of Notes of $250,000
for investment purposes and not with a view
to, or for offer or sale in connection with,
any distribution in violation of the Notes;
or (y) in reliance on another exemption from
the registration requirements of the
Securities Act: (i) a certification to that
effect from the transferee or transferor (in
the form set forth on the reverse of the
Notes), (ii) if the Company, Trustee or
Registrar so requests, an Opinion of Counsel
from the transferee or transferor reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer is
in compliance with the Securities Act, and
(iii) in the case of clause (x), a signed
letter in substantially the form of Exhibit B
hereto,
then the Trustee or the Notes Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Notes Custodian,
the aggregate principal amount of the Global Security to be reduced on
its books and records and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the form of an
Officers' Certificate in accordance with Section 2.2 hereof, the
Trustee will
## CT01/SCHIJ/68118.34 14
20
authenticate and deliver to the transferee a
Definitive Security in the appropriate principal
amount.
ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Security pursuant to this Section
2.6(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant
to instructions from the Agent Members or otherwise,
shall instruct the Trustee. The Trustee shall deliver
such Definitive Securities to the Persons in whose
names such Notes are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITY.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Section 2.6(f)), a Global Security may not be
transferred as a whole or in part except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF
DEPOSITARY. If at any time:
i) the Depositary notifies the Company that the
Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed
by the Company within 90 days after delivery of such
notice; or
ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the
issuance of Definitive Securities under this
Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate, in accordance with Section 2.2 hereof, requesting the
authentication and delivery of Definitive Securities, will authenticate and
deliver Definitive Securities, in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
(g) LEGENDS.
i) Except as permitted by the following paragraph (ii),
each Note certificate evidencing the Global Securities
and the Definitive Securities (and all Notes issued in
exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR
## CT01/SCHIJ/68118.34 15
21
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
"THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (IV) TO THE
COMPANY OR (V) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE
FEDERAL OR STATE SECURITIES LAWS AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE."
ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Security) pursuant to Rule 144
under the Securities Act or an effective registration
statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Definitive Security that does not bear
the legends set forth above and rescind any
restriction on the transfer of such Transfer
Restricted Security; and
(B) any such Transfer Restricted Security
represented by a Global Security shall not be
subject to the provisions set forth in (i)
above (such sales or transfers being subject
only to the provisions of Section 2.6(e));
provided, however, that with respect to any
request for an exchange of a Transfer
Restricted Security that is represented by a
Global Security for a Definitive Security
that does not bear a legend, which request is
made in reliance upon Rule 144 under the
Securities Act, the Holder thereof shall
certify in writing to the Registrar that such
request is being made pursuant
## CT01/SCHIJ/68118.34 16
22
to Rule 144 under the Securities Act (such certification
to be in the form set forth on the reverse of the Notes).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such
time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or cancelled, such
Global Security shall be returned to or retained and cancelled by the Trustee
in accordance with Section 2.11. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, repurchased or cancelled, the principal amount of Notes
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security, by the Trustee or the Notes
Custodian, at the direction of the Trustee, to reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
DEFINITIVE SECURITIES.
i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Definitive Securities and a Global
Security at the Registrar's request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax,
assessments or similar governmental charge payable in
connection therewith.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any
Definitive Security selected for redemption in whole
or in part pursuant to Article 3, except the
unredeemed portion of any Definitive Security being
redeemed in part, or (b) any Note during the 15 day
period preceding the mailing of a notice of redemption
or an offer to repurchase or redeem Notes or the 15
day period preceding an Interest Payment Date.
(iv) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar may
deem and treat the Person in whose name a Note is
registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and
interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and
none of the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar shall be affected by
notice to the contrary.
(v) All Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence
the same debt and shall be entitled to the same
benefits under this Indenture as the Notes surrendered
upon such transfer or exchange.
## CT01/SCHIJ/68118.34 17
23
(j) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Security, a member
of, or a participant in the Depositary or other Person
with respect to the accuracy of the records of the
Depositary or its nominee or of any participant or
member thereof, with respect to any ownership interest
in the Notes or with respect to the delivery to any
participant, member, beneficial owner or other Person
(other than the Depositary) or any notice (including
any notice of redemption) or the payment of any
amount, under or with respect to such Notes. All
notices and communications to be given to the Holders
and all payments to be made to Holders under the Notes
shall be given or made only to or upon the order of
the registered Holders (which shall be the Depositary
or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security
shall be exercised only through the Depositary subject
to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the
Depositary with respect to its members, participants
and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any
transfers between or among the Agent Members or
beneficial owners in any Global Security) other than
to require delivery of such certificates and other
documentation or evidence as are expressly required
by, and to do so if and when expressly required by,
the terms of this Indenture, and to examine the same
to determine substantial compliance as to form with
the express requirements hereof.
SECTION 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, the Registrar or
Notes Custodian, or if the Holder of a Note claims that such Note has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee,
upon the written order of the Company signed by an Officer, shall authenticate
a replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond shall be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss
which any of them may suffer if a Note is replaced. The Company may charge the
Holder for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
## CT01/SCHIJ/68118.34 18
24
SECTION 2.8. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder, and those described in this Section 2.8 as not
outstanding. Except as set forth in Section 2.9 hereof, a Note does not cease
to be outstanding because the Company or an Affiliate holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of any thereof) segregates and holds interest, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay Notes payable on that date, and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.
SECTION 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Affiliate of the Company shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes as to which a Trust Officer of the Trustee knows are so owned shall be so
disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
(a) Until Definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes upon a
written order of the Company signed by an Officer and delivered or cause to be
delivered to a Trust Officer. Temporary Notes shall be substantially in the
form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Notes. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate, upon receipt of a
written order of the Company signed by two Officers which shall specify the
amount of the temporary Notes to be authenticated and the date on which the
temporary Notes are to be authenticated, Definitive Securities in exchange for
temporary Notes.
(b) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof
## CT01/SCHIJ/68118.34 19
25
only if such transfer complies with Section 2.6 and (i) the Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days after such notice or (ii) an Event of
Default has occurred and is continuing.
(c) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.10 shall be surrendered by the
Depositary to the Trustee located in New York, New York, to be so transferred,
in whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Initial Notes of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depository shall direct. Any Note delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.6(b) bear the
restricted securities legend set forth in Exhibit A hereto.
(d) Subject to the provisions of Section 2.10(c), the registered
Holder of a Global Security 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 Holder is entitled to take under this
Indenture or the Notes.
(e) In the event of the occurrence of either of the events
specified in Section 2.10(b), the Company will promptly make available to the
Trustee, at the Company's expense, a reasonable supply of certificated Notes in
definitive, fully registered form without interest coupons.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and certification
of their destruction (subject to the record retention requirements of the
Exchange Act) shall be delivered to the Company unless, by a written order,
signed by an Officer, the Company shall direct that cancelled Notes be returned
to it. The Company may not issue new Notes to replace Notes that it has paid
or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, the
Company shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) in any lawful manner. The Company shall pay the
defaulted interest to the Persons who are Holders on a subsequent special
record date. The Company shall fix or cause to be fixed (or upon the
## CT01/SCHIJ/68118.34 20
26
Company's failure to do so the Trustee shall fix) any such special record date
and payment date to the reasonable satisfaction of the Trustee, which specified
record date shall not be less than 10 days prior to the payment date for such
defaulted interest, and shall promptly mail or cause to be mailed to each
Holder a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid and the date
of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment such money when deposited to be held in trust for the benefit of the
Person entitled to such defaulted interest as in this subsection provided.
SECTION 2.13. DEPOSIT OF MONEYS.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the maturity date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date or maturity date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date or maturity date, as the case may be.
ARTICLE 3.
REDEMPTION
SECTION 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of paragraph 5 of the Notes, it shall notify the Trustee
of the redemption date, the principal amount of Notes to be redeemed and the
redemption price at least 15 days prior to mailing any notice of redemption to
the Holders (unless the Trustee consents to a shorter period). Such notice
shall be accompanied by an Officers' Certificate from the Company to the effect
that such redemption will comply with the conditions herein.
The Company shall give notice to the Holders of any redemption
pursuant to this Article 3 at least 30 days but not more than 60 days before
the redemption date. If fewer than all the Notes are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall be not less than 15 days after
the date of notice to the Trustee.
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are quoted
or listed or, if the Notes are not listed, on a pro rata basis,
## CT01/SCHIJ/68118.34 21
27
by lot or by such other method that complies with applicable legal requirements
and that the Trustee considers fair and appropriate. The Trustee shall make
the selection not more than 60 days and not less than 30 days before the
redemption date from Notes outstanding and not previously called for
redemption. The Trustee may select for redemption portions of the principal
amount of Notes that have denominations larger than $1,000. Notes and portions
of them it selects shall be in amounts of $1,000 or integral multiples of
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption. The Trustee shall
notify the Company promptly of the Notes or portions of Notes to be called for
redemption.
SECTION 3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first class mail to each
Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(d) the Conversion Price (as defined in the Note);
(e) the name and address of the Paying Agent and
Conversion Agent;
(f) that Notes called for redemption may be converted at
any time before the close of business on the redemption date, in
accordance with Article 10;
(g) that Holders who want to convert Notes must satisfy
the requirements in paragraph 8 of the Notes;
(h) that unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, Notes called for
redemption must be surrendered to the Paying Agent to collect the
redemption price; and
(i) that interest on Notes called for redemption ceases to
accrue on and after the redemption date.
## CT01/SCHIJ/68118.34 22
28
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense. In such event, the Company shall
provide the Trustee with the information required by this Section 3.3.
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.
Notice of redemption shall be deemed to be given when mailed to each
Holder at its last registered address, whether or not the Holder receives such
notice. Once notice of redemption is mailed, Notes called for redemption become
due and payable on the redemption date at the redemption price set forth in the
Notes. A notice of redemption may not be conditional. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
redemption price, plus accrued but unpaid interest thereon to the redemption
date. If the redemption date is after an Interest Payment Date but prior to the
next succeeding Regular Record Date, interest with respect to any Note
converted after delivery of the related notice of redemption shall be paid to
the Holder so converting for the period from the last Interest Payment Date to
the date of such conversion. If the redemption date is after a Regular Record
Date and on or prior to the related Interest Payment Date, the accrued interest
shall be payable to Holders of record on such Regular Record Date.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m. New York City time on any redemption date, the
Company shall deposit with the Trustee or with the Paying Agent available funds
sufficient to pay the redemption price of and accrued interest (if payable
under the Notes) on all Notes to be redeemed on that date other than Notes or
portions of Notes called for redemption which prior thereto have been delivered
by the Company to the Trustee for cancellation or have been converted. The
Trustee or the Paying Agent shall return to the Company any money not required
for that purpose.
SECTION 3.6. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE 4.
COVENANTS
SECTION 4.1. PAYMENT OF NOTES.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes or pursuant to this
Indenture. Principal and interest shall be considered paid on the date due if
the Paying Agent (other than the Company or a Subsidiary
## CT01/SCHIJ/68118.34 23
29
of the Company) on that date holds money in accordance with this Indenture
designated for and sufficient to pay in cash all principal and interest then
due and the Paying Agent is not prohibited from paying such money to Holders on
that date pursuant to the terms of this Indenture.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal at the rate borne by the Notes and (ii) overdue installments
of interest at the same rate.
SECTION 4.2. STAY EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury 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 it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, 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 has
been enacted.
SECTION 4.3. CONTINUED EXISTENCE.
Subject to Article 5 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence as a corporation and will refrain from taking any action that would
cause its existence as a corporation to cease, including without limitation any
action that would result in its liquidation, winding up or dissolution.
SECTION 4.4. SEC REPORTS.
The Company shall file with the SEC annual reports and information,
documents and other reports which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. Within 15 days after each
such filing, the Company shall deliver copies of the materials so filed to the
Trustee and the Holders (at their addresses as set forth in the Register) or
cause the Trustee to deliver copies of such materials to the Holders at the
Company's expense. If at any time the Company ceases to be required to file
information, documents and other reports pursuant to Section 13 or 15(d) of the
Exchange Act, the Company shall continue to prepare all such information,
documents and other reports it would be required to prepare and file with the
Commission if it were so required to file with the Commission, in each case
within the filing periods required by such Sections 13 or 15(d), and the
Company shall deliver copies of such materials to the Trustee and the Holders
(at their addresses as set forth in the Register) or cause the Trustee to
deliver copies of such materials to the Holders at the Company's expense. The
Company also shall comply with the other provisions of TIA Section 314(a). The
Company shall timely comply with its reporting and filing obligations under the
applicable federal securities laws.
## CT01/SCHIJ/68118.34 24
30
SECTION 4.5. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare or pay any distribution or dividend on or
in respect of any class of its Capital Stock (except dividends or distributions
payable by wholly owned Subsidiaries of the Company and dividends or
distributions payable in Qualified Stock of the Company or in options, warrants
or other rights to purchase Qualified Stock of the Company) (a "Restricted
Payment"); unless (a) at the time of and after giving effect to a proposed
Restricted Payment no Event of Default (and no event that, after notice or
lapse of time, or both, would become an Event of Default) shall have occurred
and be continuing and (b) such Restricted Payment is made in cash and in an
amount that, together with the sum of the aggregate of all other Restricted
Payments made by the Company and its Subsidiaries after the date of this
Indenture plus the aggregate amount of all dividends paid with respect to the
Company's Preferred Stock after the date of the Indenture, does not exceed the
cumulative retained earnings of the Company arising from and after the date of
this Indenture. Notwithstanding the foregoing, the Company will be permitted
to pay dividends on Preferred Stock of the Company outstanding on the date of
the Indenture in an amount not greater than that specifically provided for in
the Company's certificate of incorporation or the related certificate of
designations.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.6 were computed, which calculations may
be based upon the Company's latest available financial statements.
SECTION 4.6. TAXES.
The Company shall, and shall cause each of its Subsidiaries to, pay or
discharge prior to delinquency all taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings.
SECTION 4.7. CHANGE OF CONTROL.
(a) In the event of a Change of Control, the time of such Change
of Control being referred to as the "Change of Control Date," then the Company
shall give written notice (the "Change of Control Notice") to the Holders in
writing of such occurrence and shall make an offer to purchase (as the same may
be extended in accordance with applicable law, the "Change of Control Offer")
all then outstanding Notes at a purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon to the Change of
Control Payment Date, if any. The Change of Control Offer shall be mailed by
the Company not more than 30 days following any Change of Control Date, unless
the Company has previously mailed a notice of optional redemption by the
Company of all of the Notes, to each Holder at such Holder's last address on
the Note Register by first class mail with a copy to the Trustee and the Paying
Agent and shall set forth:
## CT01/SCHIJ/68118.34 25
31
(i) that a Change of Control has occurred and that the
Company is offering to repurchase all of such Holder's Notes;
(ii) the circumstances and relevant facts regarding such
Change of Control (including, but not limited to, information
with respect to pro forma income, cash flow and
capitalization of the Company after giving effect to such
Change of Control);
(iii) the repurchase price (the "Change of Control Payment");
(iv) the expiration date of the Change of Control Offer,
which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed;
(v) the date such purchase shall be effected, which shall
be no later than 30 days after expiration date of the Change
of Control Offer (the "Change of Control Payment Date");
(vi) that any Notes not accepted for payment pursuant to
the Change of Control Offer shall continue to accrue interest;
(vii) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(viii) the Conversion Price;
(ix) the name and address of the Paying Agent and
Conversion Agent;
(x) that Notes must be surrendered to the Paying Agent to
collect the repurchase price; and
(xi) any other information required by applicable law to be
included therein and any other procedures that a Holder must
follow in order to have such Notes repurchased.
(b) The Change of Control Offer shall remain open until the close
of business on the last day of the Change of Control Offer. If the Change of
Control Payment Date is on or after a Regular Record Date and on or before the
related Interest Payment Date, accrued interest through such Interest Payment
Date will be paid to each Person in whose name a Note repurchased in the Change
of Control Offer is registered at the close of business on such Regular Record
Date, and no additional interest will be payable to Holders who tender Notes
pursuant to the Change of Control Offer.
(c) In the event that the Company is required to make a Change of
Control Offer, the Company will comply with any applicable securities laws and
regulations, including, to the
## CT01/SCHIJ/68118.34 26
32
extent applicable, Section 14(e), Rule 14e-1 and any other tender offer rules
under the Exchange Act which may then be applicable in connection with any
offer by the Company to purchase Notes at the option of the Holders thereof.
(d) On the Change of Control Payment Date, the Company shall, to
the extent lawful:
(i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Notice,
(ii) deposit with the Paying Agent in immediately available
funds an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so accepted, and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof tendered to the
Company.
(e) The Paying Agent shall promptly mail to each Holder of Notes
so accepted payment in an amount equal to the purchase price for the Notes, and
the Trustee shall promptly authenticate and mail to each Holder a new Note
equal in principal amount to any unpurchased portion of the Notes surrendered
by such Holder, if any; provided, that each such new Note shall be in principal
amount of $1,000 or an integral multiple thereof. The Company shall publicly
announce the results of any redemptions by Holders pursuant to this Section 4.9
on or as soon as practicable after the Change of Control Payment Date.
SECTION 4.8. LIMITATION ON STOCK SPLITS, CONSOLIDATIONS AND
RECLASSIFICATIONS.
The Company shall not effect a stock split, consolidation or
reclassification of any class of its Capital Stock unless (a) an equivalent
stock split, consolidation or reclassification is simultaneously made with
respect to each other class of Capital Stock of the Company and all securities
exchangeable or exercisable for or convertible into any Capital Stock of the
Company, and (b) after such stock split, consolidation or reclassification all
of the relative voting, dividend and other rights and preferences of each class
of Capital Stock of the Company are identical to those in effect immediately
preceding such stock split, consolidation or reclassification.
SECTION 4.9. LIMITATION ON DIVIDEND RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction of any kind on the ability of any Subsidiary of the
Company to (a) pay to the Company dividends or make to the Company any other
distribution on its Capital Stock, (b) pay any Debt owed to the Company or any
of the Company's Subsidiaries, (c) make loans or advances to the Company or any
of the Company's Subsidiaries or (d) transfer any of its property or assets to
the Company or any of the Company's Subsidiaries, other than such encumbrances
or restrictions
## CT01/SCHIJ/68118.34 27
33
existing or created under or by reason of (i) applicable law, (ii) this
Indenture, (iii) covenants or restrictions contained in any instrument
governing Debt of the Company or any of its Subsidiaries existing on the date
of this Indenture, (iv) customary provisions restricting subletting, assignment
and transfer of any lease governing a leasehold interest of the Company or any
of its Subsidiaries or in any license or other agreement entered into in the
ordinary course of business, (v) any agreement governing Debt of a Person
acquired by the Company or any of its Subsidiaries in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrances
or restrictions are not applicable to any Person, or the property or assets of
any Person, other than the Person, or the property or assets of the Person so
acquired or (vi) any restriction with respect to a Subsidiary imposed pursuant
to an agreement entered into in accordance with the terms of this Indenture for
the sale or disposition of Capital Stock or property or assets of such
Subsidiary, pending the closing of such sale or disposition.
SECTION 4.10. LIMITATION ON ADDITIONAL DEBT AFTER DEFAULT.
The Company shall not, and shall not permit any of its Subsidiaries
to, incur any additional Debt (other than Permitted Debt) or Senior
Indebtedness following the occurrence of an Event of Default unless such Event
of Default (and all other Events of Default then pending) is cured or waived;
provided, however, that the Company shall be permitted to incur up to $5.0
million of Senior Indebtedness after the occurrence of an Event of Default
notwithstanding that such Event of Default (or any other Event of Default) is
then outstanding.
SECTION 4.11. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default or Events of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect
thereto), and that, to the best of his or her knowledge, no event has occurred
and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes are prohibited.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, within five Business Days after becoming aware of (i)
any Default, Event of Default or default in the performance of any covenant,
agreement or condition in this Indenture or (ii) any event of default under any
other instrument of Debt to which Section 6.1(d) applies, an Officers'
Certificate specifying such Default, Event of Default or default, describing
its status and what action the Company is taking or proposes to take with
respect thereto.
## CT01/SCHIJ/68118.34 28
34
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements shall be accompanied by a written statement of the Company's
independent public accountants (who shall be a firm of established national
reputation) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that the Company has violated any provisions of this Article 4, or
if any such violation has occurred, specifying the nature and, if known, the
period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
SECTION 4.12. FURTHER ASSURANCE TO THE TRUSTEE.
The Company shall, upon request of the Trustee, execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the provisions of this
Indenture.
ARTICLE 5.
SUCCESSORS
SECTION 5.1. WHEN COMPANY MAY MERGE OR SELL ASSETS.
The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets
to, any Person, without the consent of each Holder, unless:
(a) the Company is the continuing corporation or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, lease, conveyance or other disposition of
assets shall have been made, is organized and existing under the laws of the
United States, any state thereof or the District of Columbia and such Person
(if other than the Company) assumes by supplemental indenture executed and
delivered to the Trustee and in a form reasonably satisfactory to the Trustee,
all the obligations of the Company under the Notes and this Indenture
including, without limitation, conversion rights in accordance with Article 11
hereof;
(b) immediately after giving effect to the transaction no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing;
(c) immediately after giving effect to such transaction, the
Notes and this Indenture will be a valid and enforceable obligation of the
Company or such successor; and
## CT01/SCHIJ/68118.34 29
35
(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such proposed
transaction and such supplemental indenture comply with the applicable
provisions of this Indenture.
SECTION 5.2. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the Person formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance or
other disposition 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 has been named as the Company herein;
provided, however, that the predecessor Company in the case of a sale, lease,
conveyance or other disposition shall not be released from the obligation to
pay the principal of and interest on the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
The following shall constitute an "Event of Default":
(a) failure to pay principal of or premium, if any, on any
Note when due and payable at maturity, upon redemption, upon a Change of
Control Offer or otherwise, whether or not such payment is prohibited by the
subordination provisions of this Indenture;
(b) failure to pay any interest on any Note when due and
payable, which failure continues for 30 days, whether or not such payment is
prohibited by the subordination provisions of this Indenture;
(c) failure to perform the other covenants of the Company
in this Indenture, which failure continues for 60 days after written notice as
provided in this Indenture;
(d) failure to perform any covenants of the Company to the
holders of Senior Indebtedness as required by the terms of such Senior
Indebtedness unless waived by said holders;
(e) a default occurs (after giving effect to any
applicable grace periods or any extension of any maturity date) in the payment
when due of principal of and/or acceleration of, any indebtedness for money
borrowed by the Company or any of its Subsidiaries in excess of $5 million,
individually or in the aggregate, if such indebtedness is not discharged, or
such acceleration is not annulled, within 10 days after written notice as
provided in this Indenture;
(f) the Company pursuant to or within the meaning of any
Bankruptcy Law:
## CT01/SCHIJ/68118.34 30
36
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of it or for all or
substantially all of its property, and such Custodian is not
discharged within 30 days,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) generally is unable to pay its debts as the
same become due; and
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
Subsidiary of the Company in an involuntary case,
(ii) appoints a Custodian of the Company or any
Subsidiary of the Company or for all or substantially all of
its property, or
(iii) orders the liquidation of the Company or any
Subsidiary of the Company,
and, in each case, the order or decree remains unstayed and in effect for 60
days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (c) (other than a Default under Section 5.1,
which Default shall be an Event of Default with the notice but without the
passage of time specified in this Section 6.1), (d) or (e) shall not be an
Event of Default until the Trustee notifies the Company or the Holders of at
least 25% in principal amount of the then outstanding Notes notify the Company
and the Trustee of the Default and the Company does not cure the Default under
such clause (c) within 60 days after receipt of the notice, or under clause (d)
within 10 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 6.2. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (e) and (f) of Section 6.1) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of
the then outstanding Notes by notice to the Company and
## CT01/SCHIJ/68118.34 31
37
the Trustee, may declare the unpaid principal of and accrued interest on all
the Notes to be due and payable. Upon such declaration the principal and
interest shall be due and payable immediately. If an Event of Default
specified in clause (f) or (g) of Section 6.1 occurs, such a an amount shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder. The Holders of a majority
in principal amount of the then outstanding Notes by written notice to the
Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. No such recision shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or interest on
the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.4. WAIVER OF EXISTING AND PAST DEFAULTS.
The Holders of a majority in principal amount of the then outstanding
Notes by written notice to the Trustee may waive an existing Default or Event
of Default and its consequences, except (i) a continuing Default or Event of
Default in the payment of the principal of, or the interest on, any Note or
(ii) a Default or Event of Default in respect of a provision that under Section
9.2 cannot be amended without the consent of each Holder affected. Upon any
such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
SECTION 6.5. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with applicable law or this Indenture, that the Trustee determines is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
## CT01/SCHIJ/68118.34 32
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In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
SECTION 6.6. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder
or to obtain a preference or priority over another Holder.
SECTION 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and interest on the Note,
on or after the respective due dates expressed in the Note, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to bring suit for the enforcement of the right to convert
the Note shall not be impaired or affected without the consent of the Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Notes and interest on overdue principal and
interest, and such further amount as shall be sufficient to cover the costs
and, to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
## CT01/SCHIJ/68118.34 33
39
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing contained herein shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 6.8 or
7.7;
Second: to holders of Senior Indebtedness to the
extent required by Article 11;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for principal and interest,
respectively; and
Fourth: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
At least 15 days before the record date, the Company shall mail to the
Trustee and each Holder (at such Holder's address as it appears on the
Register, a notice that states the record date, the payment date and amount to
be paid.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
## CT01/SCHIJ/68118.34 34
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ARTICLE 7.
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture or the TIA and no others.
(ii) In the absence of negligence, misconduct or 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. However, the Trustee shall examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture, but the Trustee need not verify
the contents thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own misconduct,
except that:
(i) This paragraph does not limit the effect of paragraph
(b) of this Section.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to the provisions of the TIA, paragraphs (a), (b), (c)
and (e) of this Section 7.1 and Section 7.2.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds held
in trust except to the extent required by law.
## CT01/SCHIJ/68118.34 35
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SECTION 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters to the extent reasonably deemed necessary by it, and if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled upon reasonable notice, to examine the books and records and
premises of the Company, personally or by agent, authorized representative or
attorney.
(b) Before the Trustee acts or refrains from acting pursuant to
the terms of the Indenture or otherwise, it may require an Officers'
Certificate or an Opinion of Counsel, or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any Agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to and must comply with Sections 7.10 and 7.11.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in the Indenture or any statement in the Notes other
than its authentication.
SECTION 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each Holder a notice
of the Default or Event of Default within 90 days after it occurs, unless such
Default or Event of Default shall have been cured or waived. Except in the case
of a Default or Event of Default in payment on any Note under Section 6.1(a) or
(b), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
best interests of Holders. The second sentence of this Section 7.5 shall be in
lieu of the proviso to Section
## CT01/SCHIJ/68118.34 36
42
315(b) of the TIA, which proviso is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each July 1, commencing July 1, 1996, the Trustee
shall mail to Holders, at the Company's expense, a brief report dated as of
such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2) to the extent applicable. The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange or market on which the Notes are
listed or quoted. The Company shall notify the Trustee when the Notes are
listed on any stock exchange or quoted on any market.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities as Trustee,
Notes Custodian, Conversion Agent, Paying Agent and Registrar) from time to
time such compensation as may be agreed in writing between the Company and the
Trustee for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses may include the reasonable
compensation and out-of-pocket expenses of the Trustee's Agents and counsel,
except such disbursements, advances and expenses as may be attributable to its
negligence, misconduct or bad faith.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and Registrar) against any claim, demand,
expense (including reasonable attorney's fees and expenses), loss or liability
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder, except as set forth in the next paragraph.
The Trustee shall notify the Company promptly of any claim for which it may
seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. In the event that a conflict of interest or conflict
of defenses would arise in connection with representation of the Company and
the Trustee by the same counsel, the Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through misconduct, negligence or bad
faith.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation; provided, however, that
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.8. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company. The Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee is not appointed or does not take office within
60 days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
## CT01/SCHIJ/68118.34 38
44
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7. Notwithstanding the replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7
hereof shall continue for the benefit of the retiring trustee with respect to
expenses and liabilities incurred by it prior to such replacement.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This indenture shall always have a Trustee who satisfies the
requirements of TIA Section Section 310(a)(1) and 310(a)(2). The Trustee shall
always have a combined capital and surplus as stated in its most recent
published annual report of condition of at least $150 million. The Trustee
shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9). The provisions of
TIA Section 310 shall apply to the Company, as obligor of the Notes.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor of the Notes.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.1. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.7 and 8.3 shall survive) when all
outstanding Notes theretofore authenticated and issued (other than destroyed,
lost or stolen Notes which have been replaced or paid) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, the Company shall be discharged from all of its
obligations under Section 2.13 and Sections 4.3 through 4.19 while the Notes
remain outstanding if all outstanding Notes will
## CT01/SCHIJ/68118.34 39
45
become due and payable at their scheduled maturity within one year and the
following conditions have been satisfied:
(a) the Company has deposited, or caused to be deposited,
irrevocably with the Trustee as trust funds specifically pledged as security
for, and dedicated solely for, such purpose, (i) money in an amount, (ii)
non-callable U.S. Government Obligations which through the payment of
principal, premium, if any, and interest in accordance with their terms
(without the reinvestment of such interest or principal) will provide not later
than one day before the due date of any payment money in an amount, or (iii) a
combination thereof, sufficient with respect to clauses (ii) and (iii) in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee at or
prior to the time of such deposit, to pay the principal of, premium, if any,
and discharge each installment of interest on the outstanding Notes, together
with all other amounts payable by the Company under this Indenture.
(b) no Default or Event of Default with respect to the Notes has
occurred and is continuing on the date of such deposit or shall occur as a
result of such deposit or at any time during the period ending on the 91st day
after the date of such deposit, as evidenced to the Trustee by an Officer's
Certificate delivered to the Trustee concurrently with such deposit.
(c) such defeasance does not result in a breach or violation of,
or constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound, and is not prohibited by Article
11, as evidenced to the Trustee by an Officers' Certificate delivered to the
Trustee concurrently with such deposit,
(d) the Company has delivered to the Trustee a private Internal
Revenue Service ruling or an opinion of counsel that Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner, and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred,
(e) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the deposit shall not result in the Company, the
Trustee or the trust being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended,
(f) 91 days pass after the deposit is made and during such 91 day
period no event of Default specified in Section 6.1(f) or (g) shall occur and
be continuing at the end of such period, and
(g) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the discharge of such provisions of the Indenture have
been complied with. Notwithstanding the foregoing, the Company's obligations
to pay principal, premium, if any, and interest on the Notes shall continue
until the Internal Revenue Service ruling or Opinion of Counsel referred to in
clause (d) above is provided.
## CT01/SCHIJ/68118.34 40
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If the Company exercises such option to discharge such provisions of
the Indenture, payment of the Notes may not be accelerated because of an event
of default specified in Sections 6.1(c) with respect to the failure to perform
any of the covenants set forth in Section 2.13 and Section 4.3 through 4.19, or
Section 6.1(d).
After a deposit made pursuant to this Section 8.1, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
specified above under this Indenture.
SECTION 8.2. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on the
Notes. Money and securities so held in trust are not subject to Article 11.
SECTION 8.3. REPAYMENT TO COMPANY.
Subject to Section 7.7, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or securities held by
them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money held by them for the payment of principal or
interest that remains unclaimed for two years after the date upon which such
payment shall have become due; provided, however, that the Company shall have
first caused notice of such payment to the Company to be mailed to each Holder
entitled thereto no less than 30 days prior to such payment. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person.
SECTION 8.4. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.1 until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.2; provided, however, that if the
Company makes any payment of interest on or principal of 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 held by the
Trustee or Paying Agent.
## CT01/SCHIJ/68118.34 41
47
ARTICLE 9.
AMENDMENTS
SECTION 9.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Notes
without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
provided that such amendment does not in the opinion of the Trustee
adversely affect the rights of any Holder;
(b) to comply with Section 5.1;
(c) to provide for uncertificated Notes in addition to or
in lieu of certificated Notes;
(d) to make any change that does not adversely affect the
legal rights hereunder of any Holder; or
(e) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
provided, however, that, in each case, the Company has delivered to the Trustee
an Opinion of Counsel and an Officers' Certificate, each stating that such
amendment complies with the provisions of this Section 9.1.
SECTION 9.2. WITH CONSENT OF HOLDERS.
Subject to the provisions of Sections 6.4 and 6.7, the Company and the
Trustee may amend or modify this Indenture or the Notes with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and the Holders of a majority in principal amount of the
Notes then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Notes; provided, however,
that, without the consent of each Holder affected, an amendment, modification
or waiver under this Section 9.2 may not (with respect to any Notes held by a
non-consenting Holder):
(a) change the stated maturity of, or any installment of
interest on, any Note;
(b) reduce the principal amount of any Note or reduce the
rate or extend the time of payment of interest on any Note;
(c) increase the conversion price (other than in
connection with a reverse stock split as provided in this Indenture);
## CT01/SCHIJ/68118.34 42
48
(d) change the place or currency of payment of principal
of, or premium or repurchase price, if any, or interest on, any Note;
(e) impair the right to institute suit for the enforcement
of any payment on or with respect to any Note;
(f) adversely affect the right to exchange or convert
Notes;
(g) reduce the percentage of the aggregate principal
amount of outstanding Notes, the consent of the Holders of which is
necessary to modify or amend this Indenture;
(h) reduce the percentage of the aggregate principal
amount of outstanding Notes, the consent of the Holders of which is
necessary for waiver of compliance with certain provisions of this
Indenture or for waiver of certain defaults;
(i) modify the provisions of this Indenture with respect
to the subordination of the Notes in a manner adverse to the Holders;
(j) modify the provisions of this Indenture with respect
to the right to require the Company to repurchase Notes in a manner
adverse to the Holders; or
(k) modify the provisions of this Indenture with respect to
the vote necessary to amend this Section 9.2.
To secure a consent of the Holders under this Section 9.2, it shall
not be necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section 9.2 becomes effective,
the Company shall mail to Holders a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any defect
therein, shall not, however, in any way, impair or affect the validity of any
such amendment or waiver.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplemental indenture or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by
such Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as such consenting Holder's Note, even if notation of
the consent is not made on any Note. However, prior to becoming effective,
## CT01/SCHIJ/68118.34 43
49
any such Holder or subsequent Holder may revoke the consent as to its Notes or
a portion thereof if the Trustee receives written notice of revocation before
the consent of Holders of the requisite aggregate principal amount of Notes has
been obtained and not revoked.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of Notes
required hereunder for such amendment or waiver to be effective shall have also
been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (a) through (k) of
Section 9.2. In such case, the amendment or waiver shall bind each Holder of a
Note who has consented to it and every subsequent Holder of a Note that
evidences the same debt as the consenting Holder's Note.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee (in accordance with the written direction of the Company)
may (at the Company's expense) place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment or waiver. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment, supplement or waiver.
SECTION 9.6. TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the
Trustee need not sign any supplemental indenture that adversely affects its
rights. In signing or refusing to sign such supplemental Indenture, the Trustee
shall be entitled to receive an Officer's Certificate and Opinion of Counsel to
the effect that such supplemental Indenture is authorized or permitted by this
Indenture and will be valid and binding on the Company in accordance with its
terms.
ARTICLE 10.
CONVERSION
SECTION 10.1. CONVERSION PRIVILEGE.
Each Holder may, at such Holder's option, at any time prior to the
close of business on December 31, 2005, unless earlier redeemed or repurchased,
convert such Holder's Notes, in
## CT01/SCHIJ/68118.34 44
50
whole or in part (in denominations of $1,000 or multiples thereof), at 100% of
the principal amount so converted, into fully paid and non- assessable shares
of the Company's Common Stock at a conversion price per share equal to $____,
as such conversion price may be adjusted from time to time in accordance with
Section 10.4 (the "Conversion Price").
SECTION 10.2. CONVERSION PROCEDURE.
To convert a Note, a Holder must (1) complete and sign the notice on
the reverse of the Note, (2) surrender such Note to the Conversion Agent, (3)
furnish appropriate endorsements and transfer documents if required by the
Registrar or Conversion Agent and (4) pay any transfer or similar tax if
required by Section 10.6. The Company's delivery to the Holder of a fixed
number of shares of Common Stock (and any cash in lieu of fractional shares of
Class A Common Stock into which such Note is converted) shall be deemed to
satisfy the Company's obligation to pay the principal amount of such Note and,
subject to the provisions of Section 3.4, unless such Note is converted after a
Regular Record Date and prior to the related Interest Payment Date, all accrued
interest that has not previously been paid. If such Note is converted after a
Regular Record Date and prior to the related Interest Payment Date, the
interest installment on such Note scheduled to be paid on such Interest Payment
Date shall be payable on such Interest Payment Date to the Holder of record at
the close of business on such Regular Record Date through such date of
conversion.
As promptly as practicable after the surrender of such Note in
compliance with this Section 10.2, the Company shall issue and deliver at such
office or agency to such Holder, or on such Holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Note or portion thereof in accordance with
the provisions of this Article 10 and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 10.3. In case any Note of a denomination
greater than $1,000 shall be surrendered for partial conversion, subject to
Article 2, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of the Note so surrendered, without charge to such
Holder, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected on the date on
which such Note shall have been surrendered in compliance with this Section
10.2, and the Person in whose name any certificate or certificates for shares
of Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but
such conversion shall be at the Conversion Price in effect on the date upon
which such Note shall have been surrendered.
## CT01/SCHIJ/68118.34 45
51
If the last day on which a Note may be converted is a Legal Holiday in
a place where a Conversion Agent is located, the Note may be surrendered to
that Conversion Agent on the next succeeding day that is not a Legal Holiday.
Provisions of this Indenture that apply to conversion of all of a Note
also apply to conversion of a portion of such Note.
SECTION 10.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall
be surrendered for conversion at one time by the same Holder, the number of
full shares which shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Notes (or specified portions
thereof to the extent permitted hereby) so surrendered. If any fractional
share of Common Stock would be issuable upon the conversion of any Note or
Notes, the Company shall make an adjustment therefor in cash at the Current
Market Price of the Common Stock as of the close of business on the Business
Day prior to such conversion.
SECTION 10.4. ADJUSTMENT OF CONVERSION PRICE.
(a) In the event that the Company shall (i) pay a dividend or
other distribution, in shares of its Common Stock, on any class of Capital
Stock of the Company or any Subsidiary which is not wholly owned by the
Company, (ii) subdivide its outstanding Common Stock into a greater number of
shares or (iii) combine its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of any Note thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the
Company that such Holder would have owned or have been entitled to receive
after the happening of any of the events described above had such Note been
converted immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend and shall become effective immediately
after the effective date in the case of subdivision or combination.
(b) In the event that the Company shall issue or distribute
Capital Stock or issue rights, warrants or options entitling the holder thereof
to subscribe for or purchase Capital Stock at a price per share less than the
Current Market Price per share on the date of issuance or distribution
(provided that the issuance of Capital Stock upon the exercise of warrants or
options will not cause an adjustment in the Conversion Price if no such
adjustment would have been required at the time such warrant or option was
issued), then at the earliest of (i) the date the Company shall enter into a
firm contract for such issuance or distribution, (ii) the record date for the
determination of stockholders entitled to receive any such rights, warrants or
options, if applicable, or (iii) the date of actual issuance or distribution of
any such Capital Stock or rights, warrants or options, the Conversion Price in
effect immediately prior to such earliest date shall be adjusted so that the
Conversion Price shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to such earliest date by:
## CT01/SCHIJ/68118.34 46
52
(x) if such Capital Stock is Common Stock, the fraction whose
numerator shall be the number of shares of Common Stock outstanding on
such date plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at such
Current Market Price (such amount, with respect to any such rights,
warrants or options, determined by multiplying the total number of
shares subject thereto by the exercise price of such rights, warrants
or options and dividing the product so obtained by the Current Market
Price), and of which the denominator shall be the number of shares of
Common Stock outstanding on such date plus the number of additional
shares of Common Stock to be issued or distributed or receivable upon
exercise of any such warrant, right or option; or
(y) if such Capital Stock is other than Common Stock, the
fraction whose numerator shall be the Current Market Price per share
of Common Stock on such date minus an amount equal to (A) the sum of
(I) the Current Market Price per share of such class of Capital Stock
multiplied by the number of shares of such class of Capital Stock to
be so issued minus (II) the offering price per share of such Capital
Stock multiplied by the number of shares of such class of Capital
Stock to be so issued (B) divided by the number of shares of Common
Stock outstanding on such date and whose denominator is the Current
Market Price of the Common Stock on such date.
Such adjustment shall be made successively whenever any such Capital Stock,
rights, warrants or options are issued or distributed at a price below the
Current Market Price therefor as in effect on the date of issuance or
distribution. In determining whether any rights, warrants or options entitle
the holders to subscribe for or purchase shares of Capital Stock at less than
such Current Market Price, and in determining the aggregate offering price of
shares of Capital Stock so issued or distributed, there shall be taken into
account any consideration received by the Company for such Capital Stock,
rights, warrants or options, the value of such consideration, if other than
cash, to be determined by the Board of Directors, whose determination shall be
conclusive and described in a certificate filed with the Trustee. If any
right, warrant or option to purchase Capital Stock, the issuance of which
resulted in an adjustment in the Conversion Price pursuant to this subsection
(b), shall expire and shall not have been exercised, the Conversion Price shall
immediately upon such expiration be recomputed to the Conversion Price which
would have been in effect had the adjustment of the Conversion Price made upon
the issuance of such right, warrant or option been made on the basis of
offering for subscription or purchase only that number of shares of Capital
Stock actually purchased upon the actual exercise of such right, warrant or
option.
(c) In the event that the Company shall pay as a dividend or
other distribution to holders of any class of its Capital Stock generally or to
holders of any class of Capital Stock of any Subsidiary which is not wholly
owned by the Company evidences of indebtedness or assets (including, without
limitation, shares of Capital Stock, cash or other securities, but excluding
dividends, rights, warrants, options and distributions for which adjustment is
made as described in subsections (a) and (b) above and further excluding cash
dividends paid out of cumulative retained earnings of the Company arising after
the date hereof and determined in accordance with GAAP), then in each such case
the Conversion Price shall be adjusted so that the same
## CT01/SCHIJ/68118.34 47
53
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share of Common Stock on the
record date mentioned below less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a certificate filed with the Trustee) of the portion of the
Capital Stock or assets or evidences of indebtedness so distributed or of such
rights or warrants attributable to one share of Common Stock (the amount so
attributable equaling the aggregate fair market value of such indebtedness or
assets, as so determined by the Board of Directors, divided by the number of
shares of Common Stock outstanding on such record date), and the denominator
shall be the Current Market Price of the Common Stock on such record date. Such
adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution, except as
provided in subsection (f) below.
(d) Notwithstanding anything contained herein to the contrary, no
adjustment in the Conversion Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Conversion Price
then in effect; provided, however, that any adjustments which by reason of this
subsection (d) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
10 shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be and the Trustee shall be
entitled to rely thereon. Anything in this Section 10.4 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this Section 10.4, as it in
its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or exchangeable
for stock hereafter made by the Company to its stockholders shall not be
taxable. Notwithstanding any provision of this Article 10 to the contrary, no
adjustment in the Conversion Price shall be made upon (i) the issuance of
Common Stock of the Company pursuant to any compensation or incentive plan for
officers, directors, employees or consultants of the Company, which plan has
been approved by the Compensation Committee of the Board of Directors (or if
there is no such committee then serving, by the majority vote of the Directors
then serving on the Company's Board of Directors who are not an employee or
officer of the Company, a 5% or greater stockholder of the Company, an officer,
employee or Affiliate of any such 5% or greater stockholder of the Company or
any relative or spouse of any such Person or of such Person's spouse who has
the same home as such Person), and, if required by law, the requisite vote of
the stockholders of the Company (unless the exercise price thereof is changed
after the date hereof other than solely by operation of the anti-dilution
provisions thereof or by the Compensation Committee, if applicable, the Board
of Directors and, if required by law, the stockholders of the Company as
provided in this clause (i)), (ii) the issuance of Common Stock upon the
conversion or exercise of Preferred Stock or warrants of the Company
outstanding on the date of this Indenture, unless the conversion or exercise
price thereof is changed after the date of this Indenture (other than solely by
operation of the anti-dilution provisions thereof) or (iii) the declaration,
setting aside or payment of dividends out of the Company's cumulative retained
earnings (as evidenced by the quarterly financial statements of the Company,
certified by an Officer's Certificate delivered to the Trustee) from and after
January 1, 1997. Except as provided in this Article 10, no adjustment in the
Conversion Price
## CT01/SCHIJ/68118.34 48
54
will be made for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock, or carrying the right to purchase any of
the foregoing.
(e) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which such
adjustment becomes effective and shall mail or cause to be mailed such notice
to each Holder at his last address appearing on the Note Register.
(f) In any case in which this Section 10.4 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Holder of any Note converted after such record date and before the occurrence
of such event the additional shares of Common Stock issuable upon such
conversion by reason of the adjustment required by such event over and above
the Common Stock issuable upon such conversion before giving effect to such
adjustments and (ii) paying to such Holder any amount in cash in lieu of any
fraction pursuant to Section 10.3 :hereof.
SECTION 10.5. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
In the event of (i) any reclassification or change of outstanding
shares of 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), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive securities or other Property (including
cash) with respect to or in exchange for such Common Stock or (iii) any sale or
conveyance of the Property of the Company as, or substantially as, an entirety
to any other corporation as a result of which holders of Common Stock shall be
entitled to receive securities or other Property (including cash) with respect
to or in exchange for such Common Stock, then the Company or the successor or
purchasing corporation, as the case may be, shall enter into a supplemental
indenture providing that each Note shall be convertible into the kind and
amount of securities or other Property (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article 10.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at his address appearing on the
Register.
The above provisions of this Section 10.5 shall similarly apply to
successive reclassification, changes, consolidations, mergers, combinations,
sales and conveyances.
## CT01/SCHIJ/68118.34 49
55
SECTION 10.6. TAXES ON SHARES ISSUED.
The issuance of stock certificates on conversions of Notes shall be
made without charge to the converting Holder for any tax in respect of the
issuance thereof. 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 a stock certificate in any name other than that of the Holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.
SECTION 10.7. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENT REQUIREMENTS; LISTING OF COMMON STOCK.
The Company shall reserve, out of its authorized but unissued Common
Stock or its Common Stock held in treasury, sufficient shares of Common Stock
to provide for the conversion of the Notes that are outstanding from time to
time.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common
Stock issuable upon conversion of the Notes, the Company will take all
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of Common Stock at
such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issuance be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any applicable federal or
state law (excluding federal or state securities laws) before such shares may
be validly issued upon conversion, the Company will in good faith and as
expeditiously as possible endeavor to secure such registration or approval, as
the case may be.
The Company further covenants that if at any time Common Stock shall
be listed on the American Stock Exchange or any other national securities
exchange or on the Nasdaq Stock Market the Company will, if permitted by the
rules of such exchange or market, list and keep listed so long as the Common
Stock shall be so listed on such exchange or market, all Common Stock issuable
upon conversion of the Notes.
SECTION 10.8. RESPONSIBILITY OF TRUSTEE REQUIREMENTS.
The Trustee and any other Conversion Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any fact
exists which may require any
## CT01/SCHIJ/68118.34 50
56
adjustment of the Conversion Price or other adjustment or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
Conversion Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
other Property, which may at any time be issued or delivered upon the
conversion of any Note; and neither the Trustee nor any other Conversion Agent
makes any representations with respect thereto. Subject to the provisions of
Section 8.1 hereof, neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or other
Property (including cash) upon the surrender of any Note for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants
of the Company contained in this Article 10. Without limiting the generality
of the foregoing, neither the Trustee nor any Conversion Agent shall be under
any responsibility to determine the correctness of any provisions contained in
any supplemental indenture entered into pursuant to Section 10.5 hereof
relating either to the kind or amount of securities or other Property
(including cash) receivable by Holders upon the conversion of their Notes after
any event referred to in Section 10.5 hereof or to any adjustment to be made
with respect thereto, but, subject to the provisions of Section 8.1 hereof, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the
Company shall be obligated to file with the Trustee prior to the execution of
any such supplemental indenture) with respect thereto.
SECTION 10.9. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.
In the event that:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings); or
(b) the Company shall authorize the granting to the holders of
its Common Stock generally of rights or warrants to subscribe for or purchase
any shares of any class of its Capital Stock or any other rights or warrants;
or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par value to
par value), 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;
then, in each such case, the Company shall file or cause to be filed with the
Trustee and to be mailed to each Holder at his address appearing on the
Register, as promptly as possible but in any event at least 15 days prior to
the applicable date hereinafter specified, a notice prepared
## CT01/SCHIJ/68118.34 51
57
by the Company stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, 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 or warrants are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occurring and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other Property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
ARTICLE 11.
SUBORDINATION
SECTION 11.1. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 11, to the prior payment
in full of all Senior Indebtedness, and that the subordination is for the
benefit of the holders of Senior Indebtedness. All provisions of this Article
11 shall be subject to Section 11.13.
SECTION 11.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the Company in a
liquidation, dissolution or winding up of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full of all Senior Indebtedness before Holders
shall be entitled to receive any payments of principal of or premium,
if any, or interest on the Notes; and
(b) until the Senior Indebtedness is paid in full, any
distribution to which Holders would be entitled but for this Article
11 shall be made to holders of Senior Indebtedness as their interests
may appear, except that Holders may receive securities that are
subordinated to Senior Indebtedness to at least the same extent as the
Notes; provided that no such default will prevent any payment on, or
in respect of, the Notes for more than 120 days unless the maturity of
such Senior Indebtedness has been accelerated.
A distribution may consist of cash, securities or other property.
## CT01/SCHIJ/68118.34 52
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SECTION 11.3 COMPANY NOT TO MAKE PAYMENT WITH RESPECT TO NOTES IN CERTAIN
CIRCUMSTANCES.
(a) Upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof, premium, if any, and
interest thereon and any other amounts owing in respect thereof shall first be
paid in full, or such payment duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of or premium, if any, or interest on the
Notes or to acquire any of the Notes.
(b) Upon the happening of an event of default (or if any event of
default would result upon any payment upon or with respect to Notes) with
respect to any Senior Indebtedness as such event of default is defined therein
or in the instrument under which it is outstanding, permitting holders to
accelerate the maturity thereof, and, if the default is other than default in
payment of the principal of, premium, if any, or interest on or any other
amount owing in respect of such Senior Indebtedness, upon written notice
thereof given to the Company and the Trustee by the holders of Senior
Indebtedness or their Representative, then, unless (i) such an event of default
shall have been cured or waived or shall have ceased to exist or (ii) the
Company and the Trustee receive written notice from the Representatives of the
Senior Indebtedness with respect to which such event of default relates
approving payment on the Notes, no payment shall be made by the Company with
respect to the principal of or premium, if any, or interest on the Notes or to
acquire any of the Notes; provided that no such default will prevent any
payment on, or in respect of, the Notes for more than 120 days unless the
maturity of such Senior Indebtedness has been accelerated. Not more than one
such 120 day delay may be made in any consecutive 360 day period, irrespective
of the number of defaults with respect to Senior Indebtedness during such
period.
SECTION 11.4 ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
SECTION 11.5 WHEN DISTRIBUTION MUST BE PAID OVER.
If a distribution is made to Holders that, because of this Article 11,
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 11.6 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
premium, if any, or interest on the Notes to violate this Article 11.
## CT01/SCHIJ/68118.34 53
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SECTION 11.7 SUBROGATION.
After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Indebtedness. A distribution made under this Article 11
to holders of Senior Indebtedness which otherwise would have been made to
Holders is not, as between the Company and Holders, a payment by the Company on
Senior Indebtedness.
SECTION 11.8 RELATIVE RIGHTS.
This Article 11 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and premium, if any, and interest on the Notes in
accordance with their terms;
(b) affect the relative rights of Holders and creditors of
the Company, other than holders of Senior Indebtedness; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Holders.
If the Company fails because of this Article 11 to pay principal of or
premium, if any, or interest on a Note on the date, such failure shall
nevertheless be deemed a Default. Nothing in this Article 11 shall have any
effect on the right of the Holders or the Trustee to accelerate the maturity of
the Notes.
SECTION 11.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or by its failure to comply with the
terms of this Indenture.
SECTION 11.10 DISTRIBUTION OF NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative, if any.
SECTION 11.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding any provisions of this Indenture to the contrary, the
Trustee and any Paying Agent may continue to make payments on the Notes and
shall not at any time be charged
## CT01/SCHIJ/68118.34 54
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with knowledge of the existence of any facts which would prohibit the making of
such payments until it receives written notice (received by a Trust Officer, in
the case of the Trustee) reasonably satisfactory to it that payments may not be
made under this Article 11 and, prior to the receipt of any such notice, the
Trustee, subject to the provisions of Article 7, and any agent shall be
entitled to assume conclusively that no such facts exist. The Company, an
Agent, a Representative or a holder of Senior Indebtedness may give the notice.
If an issue of Senior Indebtedness has a Representative, only the
Representative (or any Representative, if more than one) may give the notice
with respect to such Senior Indebtedness.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a Representative) to establish that such notice has been given
by a holder of Senior Indebtedness (or a Representative), and shall be entitled
to rely on any written notice by a Person representing himself to be a holder
of a Senior Indebtedness to the effect that such issue of Senior Indebtedness
has no Representative.
Any deposit of moneys by the Company with the Trustee or any Paying
Agent (whether or not in trust) for the payment of the principal of or premium,
if any, or interest on, or a payment on account of a Change of Control or Net
Worth Deficiency, if any, of, any Notes shall be subject to the provisions of
this Article 11, except that if, at least three business days prior to the date
on which by the terms of this Indenture any such moneys may become payable for
any purpose (including without limitation, the payment of principal of or
premium, if any, or interest on any Note), the Trustee shall not have received
with respect to such moneys the notice provided for in this Section 11.11, then
the Trustee shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it within three
business days prior to or on or after such date. This Section 11.11 shall be
construed solely for the benefit of the Trustee and Paying Agent and shall not
otherwise affect the rights of holders of Senior Indebtedness. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 11, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of the Senior Indebtedness held by
such Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 11, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive payment.
The Trustee shall not be deemed to owe any fiduciary duty to holders
of Senior Indebtedness by virtue of the provisions of this Article 11. The
Trustee's responsibilities to the holders of Senior Indebtedness are limited to
those set forth in this Article 11 and no implied covenants or obligations
shall be read into this Indenture. The Trustee shall not become liable to
holders of Senior Indebtedness if it makes a payment prohibited by this Article
11 in good faith.
## CT01/SCHIJ/68118.34 55
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The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 11.12 EFFECTUATION OF SUBORDINATION BY TRUSTEE.
Each Holder of Notes, by acceptance thereof, authorizes and directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 11 and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 11.13 TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Senior Indebtedness
or subject to the restrictions set forth in this Article 11, and none of the
Holders shall be obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by
the TIA, the required provision shall control.
SECTION 12.2. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery addressed as follows:
if to the Company:
Lomak Petroleum, Inc.
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Fax No. (000) 000-0000
Attention: President
## CT01/SCHIJ/68118.34 56
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if to the Trustee:
Keycorp Shareholder Services, Inc.
______________________________________
Fax. No. __________________
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
SECTION 12.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
## CT01/SCHIJ/68118.34 57
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(b) at the Trustee's reasonable request, an Opinion of
Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION OF COUNSEL.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that the individual making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are
based;
(c) a statement that, in the opinion of such individual,
he or she has made such examination or investigation as is necessary
to enable him or her 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 or not, in the opinion of
such individual, such condition or covenant has been complied with;
provided, however, that, with respect to certain matters of fact not
involving any legal conclusion, an Opinion of Counsel may, upon the
consent of the parties relying on such opinion, rely on an Officers'
Certificate or certificates of public officials.
SECTION 12.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 12.7. LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding Business Day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 12.8. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation including with respect to any certificates
delivered thereunder or hereunder. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
## CT01/SCHIJ/68118.34 58
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SECTION 12.9. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 12.10. GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture
id the Notes, without regard to the conflict of laws provisions thereof.
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.12. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 12.13. SEVERABILITY.
In case any provision of this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
## CT01/SCHIJ/68118.34 59
65
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be executed as of the day and year first above written.
LOMAK PETROLEUM, INC.
By:_____________________________________
Name:
Title:
Attest:
__________________________________________
Name:
KEYCORP SHAREHOLDER SERVICES, INC.
By:_____________________________________
Name:
Title:
Attest:
__________________________________________
Name:
Dated: [___________________]
## CT01/SCHIJ/68118.34
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66
EXHIBIT A
[Face of Note]
LOMAK PETROLEUM
8.125% SUBORDINATED CONVERTIBLE NOTE DUE 2005
[Global Securities legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities legend]
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTIONS OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (IV) TO THE COMPANY OR (V)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, IN EACH OF CASES FL) THROUGH (V)IN ACCORDANCE WITH ANY
APPLICABLE FEDERAL OR STATE SECURITIES LAWS AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Institutional Accredited Investor Legend]
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE, THE HOLDER WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
A-1
67
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
CUSIP No. 000000000
$_________
No.______
Lomak Petroleum, Inc., a Delaware corporation, promises to pay to _______
_________________________________________________________________ or registered
assigns, the principal sum of __________________________________________
Dollars on December 31, 2005.
Interest Payment Dates: March 31, June 30, September 30 and
December 31.
Record Dates: March 15, June 15, September 15 and December 15.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Dated: ________________________ LOMAK PETROLEUM, INC.
By:_____________________________________
Officer of the Company
(SEAL)
Attest: ________________________________
By:_____________________________________
Secretary
Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
KEYCORP SHAREHOLDER SERVICES, INC.,
as Trustee
By:_______________________________________
Authorized Signature
Dated:____________________________________
## CT01/SCHIJ/68118.34
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[Reverse Side]
Capitalized terms used herein without definition shall have the
meaning ascribed to them in the Indenture, dated as of ___________________
[Indenture Date] (the "Indenture"), as amended from time to time, between Lomak
Petroleum, Inc. (the "Company") and Keycorp Shareholder Services, Inc., as
trustee (the "Trustee").
1. INTEREST.
(a) The Company shall pay interest on the outstanding
principal amount of this Note at the rate of 8.125% per annum from
_____________________ [Indenture Date] until maturity. The Company will pay
interest quarterly on March 31, June 30, September 30 and December 31 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date on which interest has been paid or duly provided for or,
if no interest has been paid, from ___________________ [Indenture Date];
provided, however, that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
(b) To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on (i) overdue principal, premium, if any, at the rate borne by the Notes; and
(ii) overdue installments of interest at the same rate.
2. METHOD OF PAYMENT. The Company will pay interest (except
defaulted interest) on the Notes to the Persons who are registered Holders at
the close of business on March 15, June 15, September 15 or December 15 next
preceding the applicable Interest Payment Date (each a "Regular Record Date"),
even if such Notes are cancelled after such Regular Record Date and on or
before such Interest Payment Date. Defaulted interest shall be paid to Holders
as of a special record date established for purposes of determining the Holders
entitled thereto. The Notes will be payable as to principal and interest at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest on the Global Security. Such payment shall be in currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.
3. PAVING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, the
Trustee will act as Paying Agent, Registrar and Conversion Agent. The Company
may change any Paying Agent, Registrar or Conversion Agent without notice to
any Holder. The Company or any of its subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under the Indenture.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Section Section 77aaa-77bbbb) (the "TIA"), as in effect
on the date of the Indenture. The Notes are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of such
terms. The Notes are general unsecured obligations of the Company limited to
$___ million in aggregate principal amount, subject to Section 2.7 of the
Indenture.
5. OPTIONAL REDEMPTION BY THE COMPANY. The Notes shall not be
subject to redemption at the option of the Company prior to November 1, 1998.
On or after November 1, 1998, the Notes will be redeemable at any time prior to
maturity at the option of the Company, in whole or in part from time to time,
upon not less than 30 days' nor more than 60 days' prior notice to the Holders
at the redemption prices (expressed as percentages of principal amount) set
forth below:
## CT01/SCHIJ/68118.34 A-3
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AFTER NOVEMBER 1, PERCENTAGE
----------------- ----------
1998 105%
1999 104
2000 103
2001 102
2002 101
2003 and thereafter 100
In each case together with accrued but unpaid interest, if any, to the
redemption date.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.
7. REDEMPTION AT THE OPTION OF HOLDER. Upon a Change of
Control, the Company shall offer to repurchase all or any part of the Notes (at
each Holder's option) at a repurchase price equal to 100% of the aggregate
principal amount thereof, plus accrued but unpaid interest, if any, to the date
of repurchase. Within 30 days after a Change of Control, the Company shall mail
a notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture. A Holder may tender or refrain from
tendering all or any portion of such Holder's Notes, at such Holder's
discretion, by completing the form entitled "Option of Holder to Elect
Repurchase" below and delivering such form, together with the Notes with
respect to which the repurchase right is being exercised, duly endorsed for
transfer to the Company, to the Trustee. Any partial tender of Notes must be in
an integral multiple of $1,000.
8. CONVERSION.
(a) Subject to the provisions of the Indenture, the Holder
hereof may, at such Holder's option, at any time prior to the close of business
on December 31, 2005, unless earlier redeemed or repurchased, convert this
Note, in whole or in part (provided partial conversions may only be made in
denominations of $1,000 or multiples thereof), at 100% of the principal amount
hereof so converted, into shares of Common Stock of the Company, par value $.01
per share, at a conversion price per share of $__________, subject to
adjustment as provided in the Indenture.
To convert a Note, a Holder must (i) complete and sign the
conversion notice below, (ii) surrender the Note to the Conversion Agent, (iii)
furnish appropriate endorsements and transfer documents if required by the
Registrar or Conversion Agent and (iv) pay any transfer or similar tax if
required by the Indenture. No fractional shares will be issued upon any
conversion, but an adjustment in cash will be made, as provided in the
Indenture, in respect of any fraction of a share which would otherwise be
issuable upon surrender of any Note for conversion. A Holder is not entitled to
any rights of a holder of Common Stock until such Holder has converted its
Notes into Common Stock as provided in the Indenture.
9. SUBORDINATION. The Notes are subordinated to Senior
Indebtedness. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Notes may be paid. The Company agrees, and each Holder by
accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give effect to such provisions, and
each Holder appoints the Trustee its attorney-in-fact for any and all such
purposes.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $25 and integral multiples
of $25. A Holder may transfer or exchange Notes as provided in the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Definitive Security (or portion thereof selected for
redemption). Also,
## CT01/SCHIJ/68118.34 A-4
70
it need not exchange or register the transfer of any Notes during the 15 day
period preceding the mailing of a notice of redemption or an offer to
repurchase Notes or the 15 day period preceding an Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding, and any
existing Default (except a payment default) may be waived with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to (i) cure any ambiguity,
defect or inconsistency, provided that such amendment does not in the opinion
of the Trustee adversely affect the rights of any Holder, (ii) provide for
uncertificated Notes in addition to or in lieu of certificated Notes, (iii)
comply with Section 5.1 of the Indenture, (iv) make any change that does not
adversely affect the legal rights of any Holder, or (v) comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA.
13. DEFAULTS AND REMEDIES. Events of Default include: (a)
failure to pay principal of or premium, if any, on any Note when due and
payable at maturity, upon redemption, upon a Change of Control Offer or
otherwise, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) failure to pay any interest on any Note when
due and payable, which failure continues for 30 days, whether or not such
payment is prohibited by the subordination provisions of the Indenture; (c)
failure to perform the other covenants of the Company in the Indenture, which
failure continues for 60 days after written notice as provided in the
Indenture; (d) failure to perform any covenants of the Company to the holders
of Senior Indebtedness as required by the terms of such Senior Indebtedness
unless waived by said holders; (e) a default occurs (after giving effect to any
applicable grace periods or any extension of any maturity date) in the payment
when due of principal of and/ or acceleration of, any indebtedness for money
borrowed by the Company or any of its Subsidiaries in excess of $5,000,000,
individually or in the aggregate, if such indebtedness is not discharged, or
such acceleration is not annulled, within 10 days after written notice as
provided in the Indenture; and (f) certain events of bankruptcy, insolvency or
reorganization of the Company or any Subsidiary. If an Event of Default shall
occur and be continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may accelerate the
maturity of all Notes, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes shall
immediately so accelerate. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Notes at the request or direction of
any of the Holders. Subject to certain limitations, the Holders of a majority
in aggregate principal amount of the outstanding Notes will 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. The Company must furnish an annual compliance certificate to the
Trustee.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee; provided, however,
that if the Trustee acquires any conflicting interest as described in the TIA,
it must eliminate such conflict or resign.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
## CT01/SCHIJ/68118.34
X-0
00
00. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts
to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Registration Rights Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Lomak Petroleum, Inc.
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn: President
## CT01/SCHIJ/68118.34 A-6
72
SCHEDULE OF EXCHANGES OF GLOBAL SECURITY
FOR DEFINITIVE SECURITIES
The following exchanges of this Global Security for Definitive Securities have
been made:
Amount of Principal Amount
decrease in Amount of increase of this Global Signature of
Principal Amount in Principal Security following authorized officer of
of this Global Amount of this such decrease or Trustee or Notes
Date of Exchange Security Global Security increase Custodian
----------------------------------------------------------------------------------------------------
## CT01/SCHIJ/68118.34 A-7
73
FORM OF ELECTION TO CONVERT
I (we) hereby irrevocably exercise the option to convert this Note, or
the portion below designated, into shares of Common Stock of Lomak Petroleum,
Inc. in accordance with the terms of the Indenture referred to in this Note,
and direct that the shares issuable and deliverable upon conversion, together
with any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned registered Holder hereof, unless a different name
has been indicated in the assignment below. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Portion of this Note to
be converted (if partial
conversion, $1,000 or an
integral multiple
thereof): $___________________________
If shares of Common Stock are to be issued and registered otherwise than to the
registered Holder named above, please print the name and address, including zip
code, and social security or other taxpayer identification number of the person
to whom such Common Stock is to be issued.
___________________________________________
___________________________________________
___________________________________________
Your Name:__________________________________________
(exactly as your name appears
on the face of this Note)
By:_______________________________________
Title:____________________________________
Date:_____________________________________
## CT01/SCHIJ/68118.34 A-8
74
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________ agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: ___________________
Your Name:______________________________
(exactly as your name
appears on the face of this
Note)
By:_____________________________________
Title:__________________________________
Date:___________________________________
Signature Guaranteed:
By:__________________________________________
(Bank or trust company having an office or
correspondent in the United States or a broker
or dealer which is a member of a registered
securities exchange or the National Association
of Securities Dealers, Inc.)
==========================================
In connection with any transfer or exchange of any of the Notes
evidenced by this certificate occurring prior to the date that is three years
after the later of the date of original issuance of such Notes and the last
date, if any, on which such Notes were owned by the Company or any Affiliate of
the Company, the undersigned confirms that such Notes are being:
[CONTINUED ON NEXT PAGE]
## CT01/SCHIJ/68118.34 A-9
75
CHECK ONE BOX BELOW:
[ ] (1) acquired for the undersigned's own account, without transfer
(in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture; or
[ ] (2) transferred to the Company; or
[ ] (3) transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
[ ] (4) transferred pursuant to id in compliance with Regulation S
under the Securities Act of 1933; or
[ ] (5) transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933), that has furnished to the Company
and the Trustee a signed letter containing certain
representations and agreements (the form of which letter
appears as Exhibit C to the Indenture); or
[ ] (6) transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than
the registered holder thereof; provided, however, that if box (4), (5) or (6)
is checked, the Company, Trustee or Registrar may require, prior to registering
any such transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Company, Trustee or Registrar has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, including but not limited to the
exemption provided by Rule 144 under such Act.
Your Name:______________________________
(exactly as your name
appears on the face of this
Note)
By:_____________________________________
Title:__________________________________
Date:___________________________________
Signature Guaranteed:
By:__________________________________________
(Bank or trust company having an office or
correspondent in the United States or a broker
or dealer which is a member of a registered
securities exchange or the National Association
of Securities Dealers, Inc.)
## CT01/SCHIJ/68118.34 A-10
76
OPTION OF HOLDER TO ELECT REPURCHASE
1. If you want to elect to have all or any part of this Note
repurchased by the Company pursuant to Article IV of the Indenture (in
connection with a Change of Control Offer or Deficiency Offer), state the
amount you elect to have repurchased (if all, write "ALL"): $
Your Name:______________________________
(exactly as your name
appears on the face of this
Note)
By:_____________________________________
Title:__________________________________
Date:___________________________________
Signature Guaranteed:
By:__________________________________________
(Bank or trust company having an office or
correspondent in the United States or a broker
or dealer which is a member of a registered
securities exchange or the National
Association of Securities Dealers, Inc.)
## CT01/SCHIJ/68118.34 A-11
77
EXHIBIT B
TRANSFEREE LETTER OF REPRESENTATION
Lomak Petroleum, Inc.
c/o [_____________________________]
__________________________________
__________________________________
Dear Sirs:
This Certificate is delivered to request a transfer of
$_______________ principal amount of the 8.125% Subordinated Convertible Notes
due 2005 (the "Notes") of Lomak Petroleum, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name:______________________________________________________________
Address:___________________________________________________________
Taxpayer ID Number:________________________________________________
The undersigned represents and warrant to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor," and we are acquiring the Notes for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial business matters as to be capable of
evaluating the merits and risk of our investment in the Notes and we invest in
or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is three years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) so long as the
Notes are eligible for resale pursuant to Rule 144A under the Securities Act,
to a person we reasonably believe is a qualified institutional buyer, as
defined in Rule 144A under the Securities Act, (a "QIB") in a transaction
complying with the requirements of Rule 144A, (b) in an offshore transaction in
accordance with Regulation S under the Securities Act, (c) pursuant to a
registration statement which has been declared effective under the Securities
Act, (d) to the Company, or (e) pursuant to any other available exemption from
the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. Each purchaser acknowledges that the Company,
Trustee and Registrar reserve the right prior to any offer, sale or other
transfer prior to the Resale Termination Date of the Notes pursuant to clauses
(b) or (e) above to require the
## CT01/SCHIJ/68118.34 B-1
78
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company, Trustee and Registrar.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
[Name]
By:______________________________________
Title:___________________________________
## CT01/SCHIJ/68118.34 B-2
