Exhibit 4.2
[FORM OF NOTE]
[FORM OF FACE OF NOTE]
CROSS TIMBERS OIL COMPANY
9 1/4% SERIES A SENIOR SUBORDINATED NOTE DUE 2007
No. R $
CUSIP No.
Cross Timbers Oil Company, a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to_________
or registered assigns the principal sum of____________Dollars on April 1, 2007,
at the office or agency of the Company referred to below, and to pay interest
thereon, commencing on October 1, 1997 and continuing semiannually thereafter,
on April 1 and October 1 of each year, from April 2, 1997, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, at the rate of 9 1/4% per annum, until the principal hereof is paid or duly
provided for, and (to the extent lawful) to pay on demand, interest on any
overdue interest at the rate borne by the Securities from the date on which such
overdue interest becomes payable to the date payment of such interest has been
made or duly provided for. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the March 15 or September 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date, and such
defaulted interest, and (to the extent lawful) interest on such defaulted
interest at the rate borne by the Securities, may be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Interest on the Securities shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the City of New York, or at such other office or agency of the
Company as may be maintained for such purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided however, that payment of interest may be
made at the option of the Company (i) by check mailed to the registered holders
of the Securities at their respective addresses as shown on the Security
Register or (ii) with respect to any Holder owning Securities in the principal
amount of $500,000 or more, by wire transfer to an account maintained by the
Holder located in the United States, as specified in a written notice to the
Trustee (received prior to the relevant record date) by any such Holder
requesting payment by wire transfer and specifying the account to which transfer
is requested.
[Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole 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. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), to the issuer 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 may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be 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.]*
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DAY ON WHICH CROSS TIMBERS OIL
COMPANY (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT IS ACQUIRING SUCH SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
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* This paragraph should be included only if the Note is issued in global form.
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"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR") THAT
IS ACQUIRING SUCH SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF ANOTHER
INSTITUTIONAL ACCREDITED INVESTOR, 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, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CROSS TIMBERS OIL COMPANY
[SEAL]
By:
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Xxxxx X. Xxxxxxx
Senior Vice President
Attest:
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Secretary
Dated:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the 9 1/4%
Series A Senior Subordinated Notes due 2007 referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
By:
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Authorized Signatory
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[FORM OF REVERSE OF NOTE]
This Security is one of a duly authorized issue of securities of the
Company designated as its 9 1/4% Series A Senior Subordinated Notes due 2007
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $125,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of April 1, 1997, between the Company and The Bank of New York, as trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, obligations and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Indebtedness evidenced by the Securities is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
Indenture) and this Security is issued subject to such provisions. Each Holder
of this Security, by accepting the same, (i) agrees to and shall be bound by
such provisions, (ii) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (iii) appoints the Trustee as his attorney-in-
fact for such purpose.
The Securities are subject to redemption at the option of the Company, in
whole or in part, at any time on or after April 1, 2002, upon not less than 30
or more than 60 days notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below, if redeemed during the 12-
month period beginning on April 1 of the years indicated below:
Year Price
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2002 104.625%
2003 103.085%
2004 101.545%
2005 and thereafter 100%
together in the case of any such redemption with accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date), all as provided in the Indenture.
At any time and from time to time prior to April 1, 2000, the Company may,
at its option, redeem Securities in an amount in the aggregate equal to up to
33% of the aggregate principal amount of Securities originally issued under the
Indenture with the proceeds of one or more Public Equity Offerings by the
Company at a redemption price (expressed as a percentage of principal amount) of
109.25% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the applicable Redemption Date (subject to the right of Holders of
Securities on the relevant record date to receive interest due on the relevant
Interest Payment Date); provided, however, that at least $83,300,000 aggregate
principal amount of the Securities
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must remain outstanding after each such redemption. In order to effect the
foregoing redemption, the Company must mail notice of redemption no later than
60 days after the related Public Equity Offering and must consummate such
redemption within 90 days of the closing of the Public Equity Offering.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date. In the event of redemption or purchase of
this Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
The Securities do not have the benefit of any sinking fund obligations.
In the event of a Change of Control of the Company, and subject to certain
conditions and limitations provided in the Indenture, the Company will be
obligated to make an offer to purchase, on a Business Day not more than 70 or
less than 30 days following the occurrence of a Change of Control of the
Company, all of the then outstanding Securities validly tendered at a purchase
price equal to 101% of the principal amount thereof, together with accrued and
unpaid interest to the Change of Control Purchase Date, all as provided in the
Indenture.
In the event of Asset Sales, under certain circumstances, the Company will
be obligated to make a Net Proceeds Offer to purchase all or a specified portion
of each Holder's Securities at a purchase price equal to 100% of the principal
amount of the Securities, together with accrued and unpaid interest to the Net
Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (a) failure
to pay principal upon maturity, redemption or otherwise (including pursuant to a
Change of Control Offer or a Net Proceeds Offer); (b) default for 30 days in
payment of interest on any of the Securities; (c) default in the performance of
agreements relating to mergers, consolidations and sales of all or substantially
all assets or the failure to make or consummate a Change of Control Offer or a
Net Proceeds Offer; (d) failure for 30 days after notice to comply with any
other covenants in the Indenture or the Securities; (e) certain payment
defaults under, the acceleration prior to the maturity of, and the exercise of
certain enforcement rights with respect to, certain Indebtedness of the Company
or any Restricted Subsidiary in an aggregate principal amount in excess of
$5,000,000; (f) the failure of any Subsidiary Guarantee to be in full force and
effect or otherwise to be enforceable (except as permitted by the Indenture);
(g) certain events giving rise to ERISA liability; (h) certain final judgments
against any Restricted Subsidiary in an aggregate amount of $5,000,000 or more
which remain unsatisfied and either become subject to commencement of
enforcement proceedings or remain unstayed for a period of 60 days; and (i)
certain events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, except that (i) in the case of an Event of
Default arising from certain events of bankruptcy, insolvency or reorganization
of the
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Company or any Restricted Subsidiary, the principal amount of the Securities
will become due and payable immediately without further action or notice, and
(ii) in the case of an Event of Default which relates to certain payment
defaults, acceleration or the exercise of certain enforcement rights with
respect to certain Indebtedness, any acceleration of the Securities will be
automatically rescinded if any such Indebtedness is repaid or if the default
relating to such Indebtedness is cured or waived and if the holders thereof have
accelerated such Indebtedness then such holders have rescinded their declaration
of acceleration or if in certain circumstances the proceedings or enforcement
action with respect to the Indebtedness that is the subject of such Event of
Default is terminated or rescinded. No Holder may pursue any remedy under the
Indenture unless the Trustee shall have failed to act after notice of an Event
of Default and written request by Holders of at least 25% in principal amount of
the Outstanding Securities, and the offer to the Trustee of indemnity reasonably
satisfactory to it; however, such provision does not affect the right to sue for
enforcement of any overdue payment on a Security by the Holder thereof. Subject
to certain limitations, Holders of a majority in principal amount of the
Outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing default
(except default in payment of principal, premium or interest) if it determines
in good faith that withholding the notice is in the interest of the Holders.
The Company is required to file quarterly reports with the Trustee as to the
absence or existence of defaults.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of the Company on this Security and (ii) certain restrictive
covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and any Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, any Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security. Without the consent of any Holder, the
Company, any Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of Definitive
Securities and to make certain other specified changes and other changes that do
not adversely affect the rights of any Holder.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
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As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in the City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
A director, officer, incorporator, or stockholder of the Company or any
Subsidiary Guarantor, as such, shall not have any personal liability under this
Security or the Indenture by reason of his or its status as such director,
officer, incorporator or stockholder. Each Holder, by accepting this Security
with or without the notation of Subsidiary Guarantee endorsed hereon, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security with the notation of Subsidiary
Guarantee endorsed hereon.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, any Subsidiary Guarantors, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security is
overdue, and neither the Company, the Subsidiary Guarantors, if any, the Trustee
nor any agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish
to any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx,
Xxxxx 00000.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identifying information
printed hereon.
This Security shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of law principles.
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ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to_______________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
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(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee:
By:
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(Participant in a Recognized Signature
Guaranty Medallion Program)
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FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Security purchased by the Company pursuant to
Section 9.15 or Section 9.16 of the Indenture, check the appropriate box:
Section 9.15 [_] Section 9.16 [_]
If you elect to have only part of this Security purchased by the Company
pursuant to Section 9.15 or Section 9.16 of the Indenture, state the amount in
integral multiples of $1,000:
$
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Date: Signature:
---------------- -------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
By:
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(Participant in a Recognized Signature
Guaranty Medallion Program)
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[SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
Amount of Amount of Principal Amount
decrease in increase in of this Global Signature of
Principal Amount Principal Amount Security following authorized signatory
Date of of this Global of this Global such decrease of Trustee or
Exchange Security Security (or increase) Security Custodian]*
-------- ---------------- ---------------- ------------------ -------------------
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* This should be included only if the Note is issued in global form.
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