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Exhibit 4.7
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FIRST SUPPLEMENTAL INDENTURE
between
Lomak Petroleum, Inc.
and
The Bank of New York
Dated as of October 22, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms......................................................... 2
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1 Designation and Principal Amount............................................ 8
SECTION 2.2 Maturity.................................................................... 8
SECTION 2.3 Form and Payment............................................................ 8
SECTION 2.4 Exchange and Registration of Transfer of
Convertible Debentures; Restrictions on Transfers;
Depositary.................................................................. 8
SECTION 2.5 Interest.................................................................... 13
SECTION 2.6 No Satisfaction and Discharge............................................... 14
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1 Special Event Redemption.................................................... 14
SECTION 3.2 Optional Redemption by Company.............................................. 14
SECTION 3.3 No Sinking Fund............................................................. 16
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period........................................ 16
SECTION 4.2 Notice of Extension......................................................... 16
SECTION 4.3 Limitation of Transactions.................................................. 17
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses......................................................... 18
SECTION 5.2 Payment Upon Resignation or Removal......................................... 18
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ARTICLE VI
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 6.1 Conversion Rights........................................................... 19
SECTION 6.2 Conversion Procedures....................................................... 19
SECTION 6.3 Conversion Price Adjustments................................................ 21
SECTION 6.4 Merger, Consolidation, or Sale of Assets.................................... 27
SECTION 6.5 Notice of Adjustments of Conversion Price................................... 29
SECTION 6.6 Prior Notice of Certain Events.............................................. 30
SECTION 6.7 Certain Additional Rights................................................... 31
SECTION 6.8 Trustee Not Responsible for Determining
Conversion Price or Adjustments............................................. 31
ARTICLE VII
FORM OF CONVERTIBLE DEBENTURE
SECTION 7.1 Form of Convertible Debenture............................................... 32
ARTICLE VIII
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 8.1 Original Issue of Convertible Debentures.................................... 48
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture; First Supplemental
Indenture Controls.......................................................... 48
SECTION 9.2 Trustee Not Responsible for Recitals........................................ 48
SECTION 9.3 Governing Law............................................................... 48
SECTION 9.4 Separability................................................................ 49
SECTION 9.5 Counterparts................................................................ 49
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FIRST SUPPLEMENTAL INDENTURE, dated as of October 22, 1997
(the "First Supplemental Indenture"), between Lomak Petroleum, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, as trustee (the
"Trustee") under the Indenture dated as of October 22, 1997 between the Company
and the Trustee (the "Base Indenture" and together with the First Supplemental
Indenture, the "Indenture").
WHEREAS, the Company executed and delivered the Base Indenture
to the Trustee to provide for the future issuance of the Company's unsecured
junior subordinated debt securities to be issued from time to time in one or
more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the
Company desires to provide for the establishment of a new series of its
Debentures to be known as its 5-3/4% Convertible Junior Subordinated Debentures
(the "Convertible Debentures"), the form and substance of such Convertible
Debentures and the terms, provisions and conditions thereof to be set forth as
provided in the Base Indenture and this First Supplemental Indenture;
WHEREAS, Lomak Financing Trust, a Delaware statutory business
trust (the "Trust"), has offered to Xxxxxx Xxxxxxx & Co. Incorporated, Credit
Suisse First Boston Corporation, Forum Capital L.P. and XxXxxxxx & Company
Securities, Inc. (together the "Initial Purchasers") in a private placement
$120,000,000 aggregate liquidation amount of its 5-3/4% Trust Convertible
Preferred Securities (the "Convertible Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust and proposes to invest
the proceeds from such offering, together with the proceeds of the issuance and
sale by the Trust to the Company of $3,711,350 aggregate liquidation amount of
its Common Securities, in $123,711,350 aggregate principal amount of the
Convertible Debentures; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance
of the Convertible Debentures by the Holders thereof, and for the purpose of
setting forth, as provided in the Base Indenture, the form and substance of the
Convertible Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms.
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For all purposes of the First Supplemental Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Base Indenture have the
same meanings when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meaning
assigned to them in this Article and include the plural as well as the
singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, whether directly or by reference therein, have the
meanings assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation;
(e) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(f) the words "herein"' "hereof" and "hereunder" and other
words of similar import refer to this First Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not
affect interpretation; and
(h) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Common
Stock; (iv) Convertible Preferred Security Certificate; (v) Delaware
Trustee; (vi) Distribution; (vii) DTC; (viii) Institutional Trustee;
(ix) Placement Agreement; (x) PORTAL Market; (xi) QIB; (xii) Rule 144A;
(xiii) Rule 144(k) and (xiv) Regular Trustees.
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"APPLICABLE PRICE" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a holder of one share of Common Stock and (ii) in
the event of any other Fundamental Change, the average of the daily Closing
Price for one share of Common Stock during the 10 Trading Days immediately prior
to the record date for the determination of the holders of Common Stock entitled
to receive cash, securities, property or other assets in connection with such
Fundamental Change or, if there is no such record date, prior to the date upon
which the holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets.
"CLOSING PRICE" of any common stock on any day shall mean the
last recorded sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices
regular way of such common stock, in each case on the New York Stock Exchange
Composite Tape or, if the common stock is not listed or admitted to trading on
such exchange, on the principal national securities exchange on which such
common stock is listed or admitted to trading, or, if not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors of the Company for that purpose or,
if not so available in such manner, as otherwise determined in good faith by the
Board of Directors.
"COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change
in which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; PROVIDED, HOWEVER, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Debentures continue to exist as outstanding
Convertible Debentures, or (ii) not later than the occurrence of such
Fundamental Change, the outstanding Convertible Debentures are converted into or
exchanged for debentures of a corporation succeeding to the business of the
Company, which debentures have terms substantially similar to those of the
Convertible Debentures.
"COMPOUNDED INTEREST" shall have the meaning specified in
Section 4.1.
"CONVERTIBLE PREFERRED SECURITIES" has the meaning specified
in the recitals to this First Supplemental Indenture.
"CONVERSION PRICE" has the meaning set forth in Section 6.1.
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"DECLARATION" means the Amended and Restated Declaration of
Trust of Lomak Financing Trust, a Delaware statutory business trust, dated as of
October 22, 1997.
"DEFERRED INTEREST" has the meaning specified in Section 4.1.
"DISSOLUTION EVENT" means that the Trust is to be dissolved in
accordance with the Declaration, and the Convertible Debentures held by the
Institutional Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust PRO RATA in accordance with the Declaration.
"EXTENDED INTEREST PAYMENT PERIOD" has the meaning specified
in Section 4.1.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction
or event or series of transactions or events pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted into,
acquired for or shall constitute solely the right to receive cash, securities,
property or other assets (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); PROVIDED, HOWEVER, in the case of any such
series of transactions or events, for purposes of adjustment of the Conversion
Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets, but the adjustment shall be based
upon the consideration that the holders of Common Stock received in the
transaction or event as a result of which more than 50% of the Common Stock
shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.4.
"INVESTMENT COMPANY EVENT" means that the Regular Trustees
shall have received an opinion of independent counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulations by any legislative body, court, governmental agency or regulatory
authority on or after October 22, 1997 (a "Change in 1940 Act Law"), there is
more than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
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"MAKE-WHOLE AMOUNT" means the greater of (x) 100% of the
unpaid principal amount of the Convertible Debentures or (y) the sum, as
determined by the Reference Treasury Dealer, of the present values of the
remaining scheduled payments of principal and interest on the Convertible
Debentures discounted to the date of redemption on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury
Rate, plus, in each case, accrued and unpaid interest thereon to the date of
redemption. As used in this definition, the following terms have the following
meanings:
"ADJUSTED TREASURY RATE" means, with respect to any redemption
date, the rate per annum equal to (i) 1.00% plus (ii) (A) the yield,
under the heading which represents the average for the immediately
prior week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which establishes yields on
actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the
maturity date corresponding to the maturity date of the Convertible
Debentures (if no maturity date is within three months before or after
the maturity date of the Convertible Debentures, yields for the two
published maturities most closely corresponding to the maturity date of
the Convertible Debentures shall be interpolated and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (B) if such
release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury
security selected by the Reference Treasury Dealer as having a maturity
comparable to the remaining term of the Convertible Debentures to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term
of such Convertible Debentures.
"COMPARABLE TREASURY PRICE" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third business day preceding such
redemption date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York
and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the
average of the Reference Treasury Dealer quotations for such redemption
date.
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"REFERENCE TREASURY DEALER" means Xxxxxx Xxxxxxx & Co.
Incorporated and its successors; provided however, that if Xxxxxx
Xxxxxxx & Co. Incorporated shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to
the Reference Treasury Dealer and any redemption date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Debenture Trustee by
the Reference Treasury Dealer at 5:00 p.m., New York City time, on the
third business day preceding such redemption date.
"TREASURY RATE" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption
date.
"MATURITY DATE" means the date on which the Convertible
Debentures mature and on which the principal shall be due and payable together
with all accrued and unpaid interest thereon including Compounded Interest, if
any.
"NON BOOK-ENTRY CONVERTIBLE PREFERRED SECURITIES" has the
meaning set forth in Section 2.4.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change
other than a Common Stock Fundamental Change.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in
Section 3.2.
"PURCHASER STOCK PRICE" means, with respect to any Common
Stock Fundamental Change, the average of the daily Closing Price for one share
of the common stock received by holders of Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of Common Stock entitled to receive
such common stock or, if there is no such date, prior to the date upon which the
holders of Common Stock shall have the right to receive such common stock.
"REFERENCE MARKET PRICE" initially means $12.42 and, in the
event of any adjustment to the Conversion Price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the Conversion Price after giving
effect to any such
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adjustment shall always be the same as the ratio of the initial Reference Market
Price to the initial Conversion Price.
"SPECIAL EVENT" means a Tax Event or an Investment Company
Event.
"TAX EVENT" means that the Regular Trustees shall have
received an opinion of independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after October 22, 1997, as a
result of (a) any amendment to, clarification of, or change (including any
announced proposed change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification or change is made known, which amendment, clarification, or change
is effective or such pronouncement, proposed change or decision is announced, in
each case, on or after, October 22, 1997, there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable in cash by the Debenture Issuer
to the Trust on the Debentures is not, or within 90 days of the date thereof
will not be, deductible, in whole or in part, by the Debenture Issuer for United
States federal income tax purposes. Notwithstanding the foregoing, a Tax Event
shall not include any change in tax law that requires the Debenture Issuer for
United States federal income tax purposes to defer taking a deduction for any
original issue discount ("OID") that accrues with respect to the Debentures
until the interest payment related to such OID is paid by the Debenture Issuer
in cash; PROVIDED, that such change in tax law does not create more than an
insubstantial risk that the Debenture Issuer will be prevented from taking a
deduction for OID accruing with respect to the Debentures at a date that is no
later than the date the interest payment related to such OID is actually paid by
the Debenture Issuer in cash.
"TRADING DAY" shall mean a day on which any securities are
traded on the national securities exchange or quotation system used to determine
the Closing Price.
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ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1 Designation and Principal Amount.
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There is hereby authorized a series of Debentures designated
the "5-3/4% Convertible Junior Subordinated Debentures," limited in aggregate
principal amount to $123,711,350, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Convertible
Debentures pursuant to Section 3.3 of the Base Indenture.
SECTION 2.2 Maturity.
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The Maturity Date is November 1, 2027.
SECTION 2.3 Form and Payment.
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Except as provided in Section 2.4, the Convertible Debentures
shall be issued to the Trust in fully registered certificated form without
Coupons in denominations of $50 in principal amount and integral multiples
thereof. Principal and interest on the Convertible Debentures issued in
certificated form will be payable, the transfer of such Convertible Debentures
will be registrable and such Convertible Debentures will be exchangeable for
Convertible Debentures bearing identical terms and provisions at the office or
agency of the Trustee; PROVIDED, HOWEVER, that payment of interest may be made
at the option of the Company by check mailed to the Holder at such address as
shall appear in the Debenture Register. Notwithstanding the foregoing, so long
as the Holder of any Convertible Debentures is the Institutional Trustee, the
payment of the principal of and interest (including Compounded Interest, if any)
on such Convertible Debentures held by the Institutional Trustee will be made at
such place and to such account as may be designated by the Institutional
Trustee.
SECTION 2.4 Exchange and Registration of Transfer of Convertible
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Debentures; Restrictions on Transfers; Depositary.
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If distributed to holders of Convertible Preferred Securities
in connection with a Dissolution Event, the Convertible Debentures will be
issued to such holders in the same form as the Convertible Preferred Securities
that such Convertible Debentures replace in accordance with the following
procedures:
(a) So long as Convertible Debentures are eligible for
book-entry settlement with the Depositary, or unless otherwise required
by law, all Convertible Debentures that are so eligible may be
represented by one or more Convertible Debentures in global form
registered in the name of the Depositary
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or the nominee of the Depositary, except as otherwise specified below.
The transfer and exchange of beneficial interests in any such
Convertible Debenture in global form shall be effected through the
Depositary in accordance with the Indenture and the procedures of the
Depositary therefor.
Convertible Debentures that are distributed to QIBs in
replacement of Convertible Preferred Securities represented by a global
convertible Preferred Security will be represented by a global Convertible
Debenture (the "144A Global Debenture"). The 144A Global Debenture shall be
referred to herein as a "Global Debenture." Convertible Debentures that are
distributed to QIBs in replacement of Certificated Convertible Preferred
Securities will be represented by definitive Convertible Debentures as set forth
in Section 2.4(b).
Except as provided below, beneficial owners of a Convertible
Debenture in global form shall not be entitled to have certificates registered
in their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Convertible Debentures in global form.
(b) Convertible Preferred Securities held in certificated
form, except for certificates representing Convertible Preferred
Securities held by the Depositary or its nominee (or any successor
Clearing Agency or its nominee), shall upon presentation to the Trustee
by the Institutional Trustee or by the holder thereof or by the
Institutional Trustee on behalf of such holders shall be exchanged for
Convertible Debentures in fully registered certificated form of like
aggregate principal amount and tenor.
(c) So long as the Convertible Debentures are eligible for
book-entry settlement, and to the extent that Convertible Debentures
are held by QIBs, in a Global Debenture, or unless otherwise required
by law, upon any transfer of a definitive Convertible Debenture to a
QIB in accordance with Rule 144A, unless otherwise requested by the
transferor, and upon receipt of the definitive Convertible Debenture or
Convertible Debentures being so transferred, together with a
certification from the transferor that the transfer is being made in
compliance with Rule 144A (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on any 000X Xxxxxx
Xxxxxxxxx to reflect an increase in the aggregate principal amount of
the Convertible Debentures represented by such Global Debenture, and
the Trustee shall cancel such definitive Convertible Debenture or
Convertible Debentures in accordance with the standing instructions and
procedures of the Depositary, the aggregate principal amount of
Convertible Debentures represented by such Global Debenture to be
increased accordingly; PROVIDED that no definitive Convertible
Debenture, or portion thereof, in respect of which the Company or an
Affiliate of the Company held any beneficial interest shall be included
in such Global Debenture until such definitive Convertible Debenture is
freely tradable in accordance with Rule 144(k); PROVIDED FURTHER that
the Trustee shall, at the
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written request of the Company, issue Convertible Debentures in
definitive form upon any transfer of a beneficial interest in the
Global Debenture to the Company or any Affiliate of the Company.
Any Global Debenture may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of the Indenture as may be required by the Depositary, by the
American Stock Exchange or by the National Association of Securities Dealers,
Inc. in order for the Convertible Debentures to be tradeable on the PORTAL
Market or as may be required for the Convertible Debentures to be tradeable on
any other market developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Convertible
Debentures may be listed or traded or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Convertible Debentures are subject.
(d) Each Convertible Debenture that bears or is required to
bear the legend set forth in this Section 2.4(d) (a "Restricted
Security") shall be subject to the restrictions on transfer provided in
the legend set forth in this Section 2.4(d), unless such restrictions
on transfer shall be waived by the written consent of the Company, and
the Holder of each Restricted Security, by such securityholder's
acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.4(d) and in Section 2.4(e), the
terms "transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Security.
Prior to the Transfer Restriction Termination Date, any
certificate evidencing a Convertible Debenture shall bear a legend in
substantially the following form, unless otherwise agreed by the Company (with
written notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"), (2)
AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT
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(OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION
OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO LOMAK PETROLEUM, INC. OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON STOCK), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR
TRANSFER AGENT), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK,
AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER
MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE 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). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK,
AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
LOMAK PETROLEUM, INC. MAY
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REASONABLY REQUIRE 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. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF HOLDING PERIOD APPLICABLE TO THE SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT.
Following the Transfer Restriction Termination Date or the
sale of a Debenture pursuant to an effective registration statement or Rule 144
(or any successor provision) under the Securities Act, any Convertible Debenture
or security issued in exchange or substitution therefor (other than (i)
Convertible Debentures acquired by the Company or any Affiliate thereof since
the issue date of the Convertible Preferred Securities and (ii) Common Stock
issued upon the conversion or exchange of any Convertible Debenture described in
clause (i) above) may upon surrender of such Convertible Debenture for exchange
to the security Registrar in accordance with the provisions of this Section 2.4,
be exchanged for a new Convertible Debenture or Convertible Debentures, of like
tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.4(d).
Notwithstanding any other provisions of the Indenture (other
than the provisions set forth in this Section 2.4(d)), a Global Debenture may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee to a successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Convertible Debentures in global form.
Initially, the Global Debentures shall be issued to the Depositary, registered
in the name of Cede & Co., as the nominee of the Depositary, and deposited with
the Trustee as custodian for Cede & Co.
If at any time the Depositary for the Global Debentures
notifies the Company that it is unwilling or unable to continue as Depositary
for such Convertible Debentures, the Company may appoint a successor Depositary
with respect to such Convertible Debentures. If a successor Depositary for the
Convertible Debentures is not appointed by the Company within 90 days after the
Company receives such notice, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for authentication and delivery of
Convertible Debentures, will authenticate and deliver, Convertible Debentures in
definitive form, in an aggregate principal amount equal to the principal amount
of the Global Debentures, in exchange for such Global Debentures.
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Definitive Convertible Debentures issued in exchange for all
or a part of a Global Debenture pursuant to this Section 2.4(d) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Convertible Debentures to the person in whose names such
definitive Convertible Debentures are so registered.
At such time as all interests in a Global Debenture have been
redeemed, converted, exchanged, repurchased or canceled, such Global Debenture
shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions of the Depositary. At any time prior to
such cancellation, if any interest in a Global Debenture is exchanged for
definitive Convertible Debentures, redeemed, converted, exchanged, repurchased
by the Company pursuant to Article III or canceled, or transferred for part of a
Global Debenture, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Debenture by, or at the direction of, the Trustee to reflect such
reduction or increase.
(e) Any Convertible Debenture or Common Stock issued upon the
conversion or exchange of a Convertible Debenture that, prior to the
Transfer Restriction Termination Date, is purchased or owned by the
Company or any Affiliate thereof may not be resold by the Company or
such Affiliate unless registered under the Securities Act or resold
pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Convertible
Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
SECTION 2.5 Interest.
---------
(a) Each Convertible Debenture will bear interest at the rate
of 5-3/4% per annum (the "COUPON RATE") from October 22, 1997 until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on
February 1, May 1, August 1 and November 1 of each year (each, an "INTEREST
PAYMENT DATE), commencing on February 1, 1998, to the Person in whose name such
Convertible Debenture or any predecessor Convertible Debenture is registered, at
the close of business on the Regular Record Date for such interest installment
shall be the close of business on the fifteenth day prior to that Interest
Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the
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following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Convertible Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
SECTION 2.6 No Satisfaction and Discharge.
------------------------------
The Convertible Debentures are not entitled to the benefit of
the Satisfaction and Discharge Provisions of Article IV of the Base Indenture.
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1 Special Event Redemption.
-------------------------
If a Special Event has occurred and is continuing then,
notwithstanding Section 3.2(a), the Company shall have the right upon not less
than 30 days nor more than 60 days notice to the Holders of the Convertible
Debentures to redeem the Convertible Debentures, in whole but not in part, for
cash within 90 days following the occurrence of such Tax Event (the "90-DAY
PERIOD") at a redemption price (the "SPECIAL EVENT REDEMPTION PRICE") equal to
the Make-Whole Amount. The Special Event Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or such earlier time
as the Company determines, PROVIDED that the Company shall deposit with the
Trustee an amount sufficient to pay the Special Event Redemption Price prior to
the redemption date. Subject to the foregoing provisions of this Section 3.1,
the Company shall be permitted to redeem the Convertible Debentures pursuant to
this Section 3.1, regardless of whether the Company would also be permitted to
redeem the Convertible Debentures pursuant to Section 3.2 hereof.
SECTION 3.2 Optional Redemption by Company.
-------------------------------
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article XI of the Base Indenture, except as otherwise may be
specified in Section 3.1 or elsewhere in this First Supplemental Indenture, the
Company shall have the right to redeem the Convertible Debentures, in whole or
in part, from time to time, on or after November 4, 2000. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days notice to the Holders of the Convertible Debentures, at the following
prices (expressed as percentages of the principal amount
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of the Convertible Debentures) (the "OPTIONAL REDEMPTION PRICE") together with
accrued and unpaid interest, including Compounded Interest to, but excluding,
the Redemption Date, if redeemed during the 12-month period beginning November
1:
Year Redemption Price
---- ----------------
2000 104.025
2001 103.450
2002 102.875
2003 102.300
2004 101.725
2005 101.150
2006 100.575
2007 and thereafter 100.000
If Convertible Debentures are redeemed on any February 1, May
1, August 1 and November 1, accrued and unpaid interest shall be payable to
holders of record on the relevant Regular Record Date.
So long as the corresponding Convertible Preferred Securities
are outstanding, the proceeds from the redemption of the Convertible Debentures
will be used to redeem Convertible Preferred Securities.
If the Convertible Debentures are only partially redeemed
pursuant to this Section 3.2, the Convertible Debentures will be selected for
redemption by any method utilized by the Trustee. The Optional Redemption Price,
together with any required interest payment, shall be paid prior to 12:00 noon,
New York time, on the Redemption Date or at such earlier time as the Company
determines provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price, together with any required
interest payment, by 10:00 a.m., New York time, on the date such amounts are to
be paid.
(b) If a partial redemption of the Convertible Debentures
would result in the delisting of the Convertible Preferred Securities issued by
the Trust from any national securities exchange or other organization on which
the Convertible Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Convertible
Debentures in whole.
(c) Subject to the foregoing provisions of this Section 3.2,
the Company shall be permitted to redeem the Convertible Debentures pursuant to
this Section 3.2, regardless of whether the Company would also be permitted to
redeem the Convertible Debentures pursuant to Section 3.1 hereof.
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SECTION 3.3 No Sinking Fund.
----------------
The Convertible Debentures are not entitled to the benefit of
any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.
-------------------------------------
As long as an Event of Default under Section 5.1(a) of the
Base Indenture shall not have occurred and be continuing, the Company shall have
the right, at any time and from time to time during the term of the Convertible
Debentures, to defer payments of interest by extending the interest payment
period of such Convertible Debentures for a period not exceeding 20 consecutive
quarters (the "EXTENDED INTEREST PAYMENT PERIOD"), during which Extended
Interest Payment Period no interest shall be due and payable; PROVIDED that no
Extended Interest Payment Period may extend beyond the Maturity Date or any
earlier Redemption Date. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("COMPOUNDED INTEREST"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Convertible Debentures, including any Compounded Interest ("DEFERRED INTEREST")
that shall be payable to the Holders of the Convertible Debentures in whose
names the Convertible Debentures are registered in the Debenture Register on the
first Regular Record Date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive quarters, or extend
beyond the Maturity Date or any earlier Redemption Date. Upon the termination of
any Extended Interest Payment Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Company may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
SECTION 4.2 Notice of Extension.
--------------------
(a) If the Institutional Trustee is the only registered Holder
of the Convertible Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give written notice to the Regular
Trustees, the Institutional Trustee and the Trustee of its selection of such
Extended Interest Payment Period one Business Day before the earlier of (i) the
next succeeding date on which Distributions
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on the Trust Securities issued by the Trust are payable, or (ii) the date the
Trust is required to give notice of the record date, or the date such
Distributions are payable, to the American Stock Exchange or other applicable
self-regulatory organization or to holders of the Convertible Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Convertible Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the
American Stock Exchange or other applicable self-regulatory organization or to
Holders of the Convertible Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
consecutive quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
SECTION 4.3 Limitation of Transactions.
---------------------------
If the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, then (i) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (A) purchases or acquisitions of shares of its common
stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plans, (B) as a result of a reclassification of its
capital stock or the exchange or conversion of one class or series of its
capital stock for another class or series of its capital stock, (C) the purchase
of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or security being
converted or exchanged for Lomak capital stock, (D) dividends or distributions
in Lomak Common Stock and (E) any delcaration of a dividend in connection with
the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan (including such exisiting plan) in the future or the
redemption or repurchase or any such rights pursuant thereto), (ii) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company which rank
pari passu with or junior to the Convertible Debentures and (iii) the Company
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Trust Securities Guarantees).
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ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses.
--------------------
In connection with the offering, sale and issuance of the
Convertible Debentures to the Institutional Trustee and in connection with the
sale of the Trust Securities by the Trust, the Company, in its capacity as
borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Convertible Debentures, including commissions to
the purchasers payable pursuant to the Placement Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.6 of the Base Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the
Trust, the fees and expenses of the Institutional Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by
the Institutional Trustee of the rights of the holders of the
Convertible Preferred Securities;
(d) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(e) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the
Trust.
SECTION 5.2 Payment Upon Resignation or Removal.
------------------------------------
Upon termination of this First Supplemental Indenture or the
Base Indenture or the removal or resignation of the Trustee pursuant to Section
6.7 of the Base Indenture, the Company shall pay to the Trustee all amounts
accrued to the date of such termination, removal or resignation. Upon
termination of the Declaration or the removal or resignation of the Delaware
Trustee or the Institutional Trustee, as the
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case may be, pursuant to Section 5.6 of the Declaration, the Company shall pay
to the Delaware Trustee or the Institutional Trustee, and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE VI
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 6.1 Conversion Rights.
------------------
Subject to and upon compliance with the provisions of this
Article VI, the Convertible Debentures are convertible, at the option of the
Holder, at any time beginning January 20, 1998 through the close of business on
October 31, 2027 (or, in the case of Convertible Debentures called for
redemption, prior to the close of business on the Business Day prior to the
corresponding Redemption Date) into fully paid and nonassessable shares of
Common Stock of the Company at an initial conversion rate of 2.1277 shares of
Common Stock for each $50 in aggregate principal amount of Convertible
Debentures (equal to a conversion price of $23.50 per share of Common Stock (the
"Conversion Price")), subject to adjustment as described in this Article VI. A
Holder of Convertible Debentures may convert any portion of the principal amount
of the Convertible Debentures into that number of fully paid and nonassessable
shares of Common Stock obtained by dividing the principal amount of the
Convertible Debentures to be converted by such Conversion Price. All
calculations under this Article VI shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be.
SECTION 6.2 Conversion Procedures.
----------------------
(a) In order to convert all or a portion of the Convertible
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Convertible Debentures are definitive Convertible
Debentures, surrender to the Conversion Agent the Convertible Debentures to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Convertible Preferred Securities may exercise its right under the
Declaration to convert such Convertible Preferred Securities into Common Stock
by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Convertible Preferred Security for a
portion of the Convertible Debentures held by the Trust (at an exchange rate of
$50 principal amount of Convertible Debentures for each Convertible Preferred
Security) and (ii) to immediately convert such Convertible Debentures, on behalf
of such holder, into Common Stock of the Company pursuant to this Article VI
and, if such Convertible Preferred Securities are in definitive form,
surrendering such
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Convertible Preferred Securities, duly endorsed or assigned to the Company or in
blank. So long as any Convertible Preferred Securities are outstanding, the
Trust shall not convert any Convertible Debentures except pursuant to a Notice
of Conversion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder will
be entitled to receive the interest payable on the subsequent Interest Payment
Date on the portion of Convertible Debentures to be converted notwithstanding
the conversion thereof prior to such Interest Payment Date. However, if a
Redemption Date falls between a Regular Record Date and the subsequent Interest
Payment Date, the Holder will be entitled to receive, on such Interest Payment
Date, the interest accrued to, but excluding, the Redemption Date. Except as
otherwise provided in the first and second sentences of this paragraph, in the
case of any Convertible Debenture which is converted, interest whose Stated
Maturity is after the date of conversion of such Convertible Debenture shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest on
the Convertible Debentures being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "CONVERSION DATE") by the Conversion Agent from the Holder or from a holder
of the Convertible Preferred Securities effecting a conversion thereof pursuant
to its conversion rights under the Declaration, as the case may be. The Person
or Persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such Common
Stock as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number
of shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Compounded Interest) accrued on such Convertible Debentures
at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Convertible Debentures were duly
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surrendered to the Conversion Agent for conversion, or, if such day is not a
Trading Day, on the next Trading Day, and the Conversion Agent in turn will make
such payment, if any, to the Holder of the Convertible Debentures or the holder
of the Convertible Preferred Securities so converted.
(d) In the event of the conversion of any Convertible
Debenture in part only, a new Convertible Debenture or Convertible Debentures
for the unconverted portion thereof will be issued in the name of the Holder
thereof upon the cancellation thereof in accordance with Section 14.2 of the
Base Indenture.
(e) In effecting the conversion transactions described in this
Section 6.2, the Conversion Agent is acting as agent of the holders of
Convertible Preferred Securities (in the exchange of Convertible Preferred
Securities for Convertible Debentures) and as agent of the Holders of
Convertible Debentures (in the conversion of Convertible Debentures into Common
Stock), as the case may be. The Conversion Agent is hereby authorized (i) to
exchange Convertible Debentures held by the Trust from time to time for
Convertible Preferred Securities in connection with the conversion of such
Convertible Preferred Securities in accordance with this Article VI and (ii) to
convert all or a portion of the Convertible Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article VI and to deliver to the Trust a new Convertible
Debenture or Convertible Debentures for any resulting unconverted principal
amount.
SECTION 6.3 Conversion Price Adjustments.
-----------------------------
The Conversion Price shall be adjusted from time to time as
follows:
(a) In case the Company shall, while any of the Convertible
Debentures are outstanding, (i) pay a dividend or make a distribution
with respect to Common Stock in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock, (iii) combine outstanding shares of
Common Stock into a smaller number of shares or (iv) issue by
reclassification of its shares of Common Stock any shares of capital
stock of the Company, the conversion privilege and the Conversion Price
for the Convertible Debentures shall be adjusted so that the Holder of
any Convertible Debenture thereafter surrendered for conversion shall
be entitled to receive the number of shares of capital stock of the
Company which such Holder would have owned immediately following such
action had such Convertible Debenture been converted immediately prior
thereto. An adjustment made pursuant to this subsection (a) shall
become effective immediately after the record date in the case of a
dividend or other distribution and shall become effective immediately
after the effective date in case of a subdivision, combination or
reclassification (or immediately after the record date if a record date
shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any
Convertible Debenture thereafter surrendered for conversion shall
become
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entitled to receive shares of two or more classes or series of capital
stock of the Company, the Board of Directors (whose determination shall
be conclusive and shall be described in a Board Resolution filed with
the Trustee) shall determine the allocation of the adjusted Conversion
Price for the Convertible Debentures between or among shares of such
classes or series of capital stock.
(b) In case the Company shall, while any of the Convertible
Debentures are outstanding, issue rights or warrants to all holders of
its Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share less than the current
market price per share of Common Stock (as determined pursuant to
subsection (g) below) on the record date mentioned below, the
Conversion Price for the Convertible Debentures shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of
such rights or warrants by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price,
and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants. To the extent that no
shares of Common Stock are so delivered after the expiration of such
rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect if such date fixed for
the determination of stockholders entitled to receive such rights or
warrants had not been fixed. For the purposes of this subsection, the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall
not issue any rights or warrants in respect of shares of Common Stock
held in the treasury of the Company. In case any rights or warrants
referred to in this subsection in respect of which an adjustment shall
have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Company, the Conversion
Price shall be readjusted at the time of such expiration to the
Conversion Price that would have been in effect if no adjustment had
been made on account of the distribution or issuance of such expired
rights or warrants.
(c) Subject to the last sentence of this subsection (c), in
case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of
any class or series of capital stock, cash or assets or rights or
warrants to subscribe for or purchase any of its securities (excluding
any rights or warrants referred to in subsection
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(b), any dividend or distribution paid exclusively in cash and any
dividend or distribution referred to in subsection (a) of this Section
6.3), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (c) by a fraction of which
the numerator shall be the current market price per share (determined
as provided in subsection (g)) of the Common Stock on the date fixed
for the payment of such distribution (the "REFERENCE DATE") less the
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock, cash
and assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the
day following the Reference Date; PROVIDED, HOWEVER, that in the event
the numerator shall be less than one, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder of
Convertible Debentures shall have the right to receive upon conversion
the amount of such distribution such Holder would have received had
such Holder converted each Convertible Debenture immediately prior to
the Reference Date. In the event that no such dividend or distribution
is so paid or made, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such dividend or
distribution had not occurred. If the Board of Directors determines the
fair market value of any distribution for purposes of this subsection
(c) by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the
current market price per share of Common Stock (determined as provided
in subsection (g)). For purposes of this subsection (c), any dividend
or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (i) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such
shares of Common Stock or such rights or warrants (making any
Conversion Price reduction required by this subsection (c)) immediately
followed by (ii) a dividend or distribution of such shares of Common
Stock or such rights or warrants (making any further Conversion Price
reduction required by subsection (a) or (b)), except (A) the Reference
Date of such dividend or distribution as defined in this subsection (c)
shall be substituted as (1) "the record date in the case of a dividend
or other distribution," and (2) "the record date for the determination
of stockholders entitled to receive such rights or warrants" and (3)
"the date fixed for such determination" within the meaning of
subsections (a) and (b) and (B) any shares of Common Stock included in
such dividend or distribution shall not be
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deemed outstanding for purposes of computing any adjustment of the
Conversion Price in subsection (a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding any
quarterly cash dividend on Common Stock to the extent that the
aggregate cash dividend per share of Common Stock in any quarter does
not exceed the greater of (i) the amount per share of Common Stock of
the next preceding quarterly dividend on Common Stock to the extent
such preceding quarterly dividend did not require an adjustment of the
Conversion Price pursuant to this subsection (d) (as adjusted to
reflect subdivisions or combinations of Common Stock), and (ii) 3.75%
of the current market price per share determined as provided in
subsection (g), and excluding any dividend or distribution in
connection with the liquidation, dissolution or winding-up of the
Company), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (d) by a fraction of which
the numerator shall be the current market price per share (determined
as provided in subsection (g)) of the Common Stock on the date fixed
for the payment of such distribution less the amount of cash so
distributed (and not excluded as provided above) applicable to one
share of Common Stock and the denominator shall be such current market
price per share of the Common Stock (determined as provided in
subsection (g)), such reduction to become effective immediately prior
to the opening of business on the day following the date fixed for the
payment of such distribution; PROVIDED, HOWEVER, that in the event the
portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the current market price per share
(as defined in subsection (g)) of the Common Stock on the record date
mentioned above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of shares of Convertible
Debentures shall have the right to receive upon conversion the amount
of cash such Holder would have received had such Holder converted each
Convertible Debenture immediately prior to the record date for the
distribution of the cash. If an adjustment is required to be made
pursuant to this subsection (d) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by
which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded as provided above. If an adjustment
is required to be made pursuant to this subsection (d) as a result of a
distribution that is not a quarterly dividend, such adjustment shall be
based upon the full amount of the distribution. In the event that no
such dividend or distribution is so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such Record Date had not been fixed.
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(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or
any portion of the Company's Common Stock shall expire and such tender
or exchange offer shall involve the payment by the Company or such
subsidiary of consideration per share of Common Stock having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors) at the last time (the "EXPIRATION TIME")
tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Closing Price of
the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (e) by a fraction (which
shall not be greater than one) of which the numerator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by the Closing
Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (i) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "PURCHASED SHARES") and (ii) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become retroactively effective immediately prior to the
opening of business on the day following the Expiration Time.
(f) In case a tender or exchange offer made by a Person other
than the Company or any Subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or exchange
offer shall involve the payment by a Person other than the Company or
any Subsidiary of the Company of consideration per share of Common
Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) at the applicable
Expiration Time that exceeds the Closing Price of the Common Stock on
the Trading Day next succeeding the applicable Expiration Time in which
as of the closing date of the offer the Board of Directors of the
Company is not recommending rejection of the offer, the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (f) by a fraction (which shall not be
greater than one) of which the
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numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time
multiplied by the Closing Price of the Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator shall be the
sum of (i) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "PURCHASED SHARES") and, (ii) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Closing Price of the
Common Stock on the Trading Day next succeeding the Expiration Time,
such reduction to become retroactively effective immediately prior to
the opening of business on the day following the Expiration Time;
PROVIDED, HOWEVER, that the reduction of the Conversion Price
contemplated by this subsection (f) will only be made if the tender
offer or exchange offer is made for an amount which increases that
Person's ownership of Common Stock to more than 25% of the total shares
of Common Stock outstanding and PROVIDED, FURTHER, that the reduction
of the Conversion Price contemplated by this subsection (f) will not be
made if as of the close of the offer, the offering documents with
respect to such offer disclose a plan or an intention to cause the
Company to engage in a consolidation or merger of the Company or a sale
of all or substantially all of the assets of the Company.
(g) For the purpose of any computation under subsection (b),
(c) or (d), the current market price per share of Common Stock on any
date in question shall be deemed to be the average of the daily Closing
Prices for the ten Trading Day period ending on the earlier of the day
in question and, if applicable, the day before the "ex" date with
respect to the issuance or distribution requiring such computation;
PROVIDED, HOWEVER, that if more than one event occurs that would
require an adjustment pursuant to subsections (a) through (f),
inclusive, the Board of Directors may make such adjustments to the
Closing Prices during such ten Trading Day period as it deems
appropriate to effectuate the intent of the adjustments in this Section
7.3, in which case any such determination by the Board of Directors
shall be set forth in a Board Resolution and shall be conclusive. For
purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the American Stock Exchange or
on such successor securities exchange as the Common Stock may be listed
or in the relevant market from which the Closing Prices were obtained
without the right to receive such issuance or distribution, and (2)
when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such securities
exchange or in such market after the Expiration Time of such offer.
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(h) The Company may make such reductions in the Conversion
Price, in addition to those required by subsections (a) through (f), as
the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights
to acquire stock) or from any event treated as such for income tax
purposes. The Company from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least twenty
(20) days, the reduction is irrevocable during the period, and the
Board of Directors shall have made a determination that such reduction
would be in the best interest of the Company, which determination shall
be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to Holders of record of the
Convertible Debentures a notice of the reduction at least 15 days prior
to the date the reduced Conversion Price takes effect, and such notice
shall state the reduced Conversion Price and the period it will be in
effect.
(i) 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; PROVIDED, HOWEVER, that any
adjustments which by reason of this subsection (i) are not required to
be made shall be carried forward and taken into account in determining
whether any subsequent adjustment shall be required.
(j) If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions described above, only
one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of
Convertible Debentures.
SECTION 6.4 Merger, Consolidation, or Sale of Assets.
-----------------------------------------
(a) In the event that the Company shall be a party to any
transaction (including without limitation (i) any recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (iii) any sale or transfer of all or substantially
all of the assets of the Company or (iv) any compulsory share exchange) pursuant
to which either shares of Common Stock shall be converted into the right to
receive other securities, cash or other property, or, in the case of a sale or
transfer of all or substantially all of the assets of the Company, the holders
of Common Stock shall be entitled to receive other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby
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the Holder of each Convertible Debenture then outstanding shall have the right
thereafter to convert such Convertible Debenture only into:
(A) in the case of any such transaction that does not
constitute a Common Stock Fundamental Change and subject to funds being
legally available for such purpose under applicable law at the time of
such conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock issuable
upon conversion of such Convertible Debenture immediately prior to such
recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change (as defined below), to any adjustment in
the Conversion Price in accordance with clause (i) of subsection (c) of
this Section 6.4; and
(B) in the case of any such transaction that constitutes a
Common Stock Fundamental Change, common stock of the kind received by
holders of Common Stock as a result of such Common Stock Fundamental
Change in an amount determined in accordance with clause (ii) of
subsection (c) of this Section 6.4.
(b) The company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article VI. The above provisions shall similarly apply to successive
transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 6.4 to
the contrary, if any Fundamental Change occurs, then the Conversion Price in
effect will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Non-Stock Fundamental Change shall be the lower of (A) the
Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant Section 6.3, and (B) the product of (1)
the greater of the Applicable Price and the then applicable Reference
Market Price and (2) a fraction, the numerator of which is $50 and the
denominator of which is (x) the amount of the Optional Redemption Price
set forth in Section 3.2 for $50 in principal amount of Convertible
Debentures
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if the redemption date were the date of such Non-Stock Fundamental
Change (or, for the twelve-month periods commencing November 1, 1997,
November 1, 1998 and November 1, 1999, the product of 105.750%,
105.175% and 104.600% respectively, times $50) plus (y) any
then-accrued and unpaid interest on $50 principal amount of Convertible
Debentures; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant to
Section 6.3, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price and the denominator of which is the Applicable
Price; PROVIDED, HOWEVER, that in the event of a Common Stock
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in such common stock resulting from such
Common Stock Fundamental Change) and (B) all of the Common Stock shall
have been exchanged for, converted into or acquired for, common stock
of the successor, acquiror or other third party (and any cash with
respect to fractional interests), the Conversion Price of the
Convertible Debentures immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change multiplied by a fraction,
the numerator of which is one (1) and the denominator of which is the
number of shares of common stock of the successor, acquiror or other
third party received by a holder of one share of Common Stock as a
result of such Common Stock Fundamental Change.
SECTION 6.5 Notice of Adjustments of Conversion Price.
------------------------------------------
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price
and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with
the Trustee and the transfer agent for the Convertible Preferred
Securities and the Convertible Debentures; and
(b) a notice stating the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of
Convertible Preferred Securities and the Convertible Debentures at
their last addresses as they appear upon the transfer books of the
Company and the Trust.
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SECTION 6.6 Prior Notice of Certain Events.
-------------------------------
In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 6.3(c) or (d) or (ii)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 6.3(e);
(b) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the 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
shall be required, or of the sale or transfer of all or substantially
all of the assets of the Company or of any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or
other property; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Debenture Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, 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 (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice).
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SECTION 6.7 Certain Additional Rights.
--------------------------
In case the Company shall, by dividend or otherwise, declare
or make a distribution on the Common Stock referred to in Section 6.3 (c) or
6.3(d) (including, without limitation, dividends or distributions referred to in
the last sentence of Section 6.3(e)), the Holder of the Convertible Debentures,
upon the conversion thereof subsequent to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Convertible Debentures are converted, the
portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock; PROVIDED, HOWEVER, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due xxxx for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, PROVIDED, that such due xxxx (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 6.8 Trustee Not Responsible for Determining Conversion Price or
-----------------------------------------------------------
Adjustments.
------------
Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any Holder of any Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or whether this supplemental
indenture need be entered into. Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind of
account) of any shares of Common Stock or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Convertible
Debenture; and neither the Trustee
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nor any Conversion Agent makes any representation with respect thereto. Neither
the Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property upon the
surrender of any Convertible Debenture for the purpose of conversion.
ARTICLE VII
FORM OF CONVERTIBLE DEBENTURE
SECTION 7.1 Form of Convertible Debenture.
------------------------------
The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING - - THIS DEBENTURE IS A BOOK-ENTRY DEBENTURE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR CONVERTIBLE
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE 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) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX
XXXX) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
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No. __________ CUSIP NO.___________
LOMAK PETROLEUM, INC.
5-3/4% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"), (2)
AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OR
EXCHANGE OF SUCH SECURITY EXCEPT (A) TO LOMAK PETROLEUM, INC. OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON
STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT) OR (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE BANK OF
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NEW YORK, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH
HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE 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). IF THIS CERTIFICATE DOES
NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
BANK OF NEW YORK, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS LOMAK PETROLEUM, INC. MAY REASONABLY REQUIRE 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. THIS LEGEND
WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.
Lomak Petroleum, Inc., a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to, The Bank of New
York, as Institutional Trustee for Lomak Financing Trust or registered assigns,
the principal sum of ___________________________ Dollars ($___________)1 on
November 1, 2027, and to pay interest on said principal sum from February 1,
1998, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on February 1,
May 1, August 1 and November 1 of each year commencing February 1, 1998, at the
rate of 5 3/4% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on
this Convertible Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest
-----------
1 In the case of a Global Debenture the bracketed text will be replaced with the
following: "principal amount set forth on Schedule A hereto".
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installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof) be paid to the person in whose name this Convertible Debenture
(or one or more Predecessor Debentures, as defined in said Indenture) is
registered on the Regular Record Date for such interest installment, which shall
be the close of business on the fifteenth day prior to such Interest Payment
Date unless otherwise provided in the Indenture. Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such Regular Record Date and may be paid to the Person
in whose name this Convertible Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the Convertible Debentures 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 Convertible Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Convertible
Debenture shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that 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 by check mailed to the registered Holder at such address as shall appear
in the Debenture Register. Notwithstanding the foregoing, so long as the Holder
of this Convertible Debenture is the Institutional Trustee, the payment of the
principal of (and premium, if any) and interest on this Convertible Debenture
will be made at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Convertible Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Convertible Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Convertible Debenture shall not be entitled to any
benefit under the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of Authentication hereon shall
have been signed by or on behalf of the Trustee.
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The provisions of this Convertible Debenture are continued on
the reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
LOMAK PETROLEUM, INC.
By:
-----------------------------
Name:
Title
Attest:
By:
---------------------------------
Name:
Title:
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of
Convertible Debentures described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By
--------------------------
Authorized Signatory
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[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series
of Debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of October 22, 1997, duly executed
and delivered between the Company and The Bank of New York, as Trustee (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
October 22, 1997, between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Convertible Debentures. By the terms
of the Indenture, the Debentures are issuable thereunder in series that may vary
as to amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Debentures is limited in aggregate
principal amount as specified in said First Supplemental Indenture and herein
sometimes referred to as the "Convertible Debentures."
Because of the occurrence and continuation of a Special Event,
in certain circumstances, this Convertible Debenture may become due and payable
at a redemption price (the "Special Event Redemption Price") equal to the
Make-Whole Amount. The Special Event Redemption Price shall be paid prior to
12:00 noon, New York City time, on the date of such redemption or at such
earlier time as the Company determines. The Company shall also have the right to
redeem this Convertible Debenture at the option of the Company, upon not less
than 30 nor more than 60 days notice, without premium or penalty, in whole or in
part at any time on or after November 4, 2000 (an "Optional Redemption") at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with accrued
and unpaid interest, including Compounded Interest to, but excluding, the
redemption date, if redeemed during the 12-month period beginning November 1:
Year Redemption Price
---- ----------------
2000 104.025
2001 103.450
2002 102.875
2003 102.300
2004 101.725
2005 101.150
2006 100.575
2007 and thereafter 100.000
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If Convertible Debentures are redeemed on any February 1, May
1, August 1 or November 1, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
So long as the corresponding Convertible Preferred Securities
are outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Convertible Preferred Securities.
If the Convertible Debentures are only partially redeemed by
the Company pursuant to an Optional Redemption, the Convertible Debentures will
be redeemed PRO RATA or by lot or by any other method utilized by the Trustee;
In the event of redemption of this Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures of this series
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Convertible
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures of such
series; PROVIDED, HOWEVER, that no such supplemental indenture shall (a) extend
the fixed maturity of any Debenture of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, or make any
change that adversely affects the right to convert any Debenture of any series
or make any change in the subordination provisions that adversely affects the
rights of any Holders of any Debenture of any series, without the consent of the
Holder of each Debenture so affected, or (b) reduce the aforesaid percentage of
Debentures of such series, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debenture of any series then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any Debentures of such
series or a
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failure to convert any Debentures of such series in accordance with its terms
upon an election by the Holders thereof. Any such consent or waiver by the
registered Holder of this Convertible Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Convertible Debenture and of any Convertible
Debenture issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture 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, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the
Indenture shall not have occurred and be continuing, the Company shall have the
right at any time during the term of the Convertible Debentures and from time to
time to extend the interest payment period of such Convertible Debentures for up
to 20 consecutive quarters (an "Extended Interest Payment Period"), at the end
of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Convertible
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
PROVIDED that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Convertible Debenture is transferable by the
registered Holder hereof on the Debenture Register of the Company, upon
surrender of this Convertible Debenture for registration of transfer at the
office or agency of the Trustee in the City and State of New York accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Convertible
Debentures of authorized denominations and for the same aggregate principal
amount and series will be issued to the designated transferee or transferees. No
service charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Debenture Xxxxxxxxx
00
00
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Convertible Debenture shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any paying agent nor
any Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Convertible Debenture has the right,
exercisable at any time beginning January 20, 1998 through the close of business
(New York time) on October 31, 2027 (or, in the case of a Convertible Debenture
called for redemption, prior to the close of business on the Business Day prior
to the corresponding redemption date), to convert the principal amount thereof
(or any portion thereof that is an integral multiple of $50) into shares of
Common Stock at the initial conversion rate of 2.1277 shares of Common Stock for
each Convertible Debenture (equivalent to a Conversion Price of $23.50 per share
of Common Stock), subject to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete
and sign a conversion notice substantially in the form attached hereto, (b)
surrender the Convertible Debenture to a Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. Upon conversion, no
adjustment or payment will be made for interest or dividends, but if any Holder
surrenders a Convertible Debenture for conversion on or after the Regular Record
Date for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Convertible Debenture on such Regular Record Date.
In such event, such Convertible Debenture, when surrendered for conversion, need
not be accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the portion so converted. However, if a Redemption Date
falls between a Regular Record Date and the subsequent Interest Payment Date,
the Holder will be entitled to receive, on such Redemption Date, the interest
accrued to, but excluding, the Redemption Date. The number of shares issuable
upon conversion of a Convertible Debenture is determined by dividing the
principal amount of the Convertible Debenture converted by the Conversion Price
in
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effect on the Conversion Date. No fractional shares will be issued upon
conversion but a cash adjustment will be made for any fractional interest. The
outstanding principal amount of any Convertible Debenture shall be reduced by
the portion of the principal amount thereof converted into shares of Common
Stock.
The Convertible Debentures of this series are issuable only in
registered form without Coupons in denominations of $50 and any integral
multiple thereof.2 This Global Debenture is exchangeable for Convertible
Debentures in definitive form only under certain limited circumstances set forth
in the Indenture. Convertible Debentures of this series so issued are issuable
only in registered form without Coupons in denominations of $50 and any integral
multiple thereof.3 As provided in the Indenture and subject to certain
limitations therein set forth, Convertible Debentures of this series are
exchangeable for a like aggregate principal amount of Convertible Debentures of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Convertible Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
--------
2 This text will appear in the case of registered definitive certificates issued
to Institutional Accredited Investors.
3 This text will appear in the case of a Global Debenture.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Lomak Petroleum, Inc.
The undersigned owner of this Convertible Debenture hereby
irrevocably exercises the option to convert this Convertible Debenture, or the
portion below designated, into Common Stock of LOMAK PETROLEUM, INC. in
accordance with the terms of the Indenture referred to in this Convertible
Debenture, and directs 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, 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.
Date: _________,___
in whole Portions of Convertible Debenture to
be converted ($50 or integral
multiples-thereof):
$_____________
-------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
-------------------------------
-------------------------------
-------------------------------
Signature Guarantee: 4
------
--------------
4 Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Conversion Agent, which
requirements include membership of participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Conversion Agent in
addition to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
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ASSIGNMENT
[FORM OF ASSIGNMENT FOR, CONVERTIBLE DEBENTURES
THAT ARE NOT GLOBAL DEBENTURES]
For value received ___________________ hereby sell(s), assign(s) and transfer(s)
unto__________________________
(Please insert Social security or other taxpayer
identification number of assignee.)
the within Security and hereby irrevocably constitutes and appoints
______________ attorney to transfer the said Convertible Debenture on the books
of the Trust, with full power of substitution in the premises.
In connection with any transfer of the within Convertible Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned confirms
that such Security is being transferred:
[ ] To Lomak Petroleum, Inc. or a subsidiary thereof;
or
[ ] Pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
[ ] To an Institutional Accredited Investor pursuant
to and in compliance with the Securities Act of
1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under
the Securities Act of 1933, as amended;
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and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
Dated:
--------------------------
--------------------------
--------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or
a member firm of a major stock
exchange.
----------------------------------
Signature Guarantee*****
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
---------------
*****(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Debentures
================================================================================================================================
Principal Amount of
Securities by which
this Global Security
Is To Be Reduced or
Increased, and Remaining Principal
Reason for Reduction Amount of this Notation
Date or Increase Global Security Made by
-------- -------------------- ------------------- ---------
--------------------------------------------------------------------------------------------------------------------------------
-------- -------------------- ------------------- ---------
--------------------------------------------------------------------------------------------------------------------------------
-------- -------------------- ------------------- ---------
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-------- -------------------- ------------------- ---------
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-------- -------------------- ------------------- ---------
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-------- -------------------- ------------------- ---------
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-------- -------------------- ------------------- ---------
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-------- -------------------- ------------------- ---------
--------------------------------------------------------------------------------------------------------------------------------
-------- -------------------- ------------------- ---------
================================================================================================================================
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ARTICLE VIII
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 8.1 Original Issue of Convertible Debentures.
-----------------------------------------
Convertible Debentures in the aggregate principal amount of up
to $123,711,350 may, upon execution of this First Supplemental Indenture, be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said
Convertible Debentures to or upon the written order of the Company, signed by
its Chairman, its Executive Vice President, its President, or any Vice President
and its Treasurer or an Assistant Treasurer, without any further action by the
Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture; First Supplemental Indenture
-------------------------------------------------------
Controls.
---------
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided. The provisions of this First
Supplemental Indenture shall supersede the provisions of the Indenture to the
extent the Indenture is inconsistent herewith.
SECTION 9.2 Trustee Not Responsible for Recitals.
-------------------------------------
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 9.3 Governing Law.
--------------
This First Supplemental Indenture and each Debenture shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
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SECTION 9.4 Separability.
-------------
In case any one or more of the provisions contained in this
First Supplemental Indenture or in the Convertible Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this First Supplemental Indenture or of the Convertible Debentures, but this
First Supplemental Indenture and the Convertible Debentures shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
SECTION 9.5 Counterparts.
-------------
This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
LOMAK PETROLEUM, INC.
By
------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By
------------------------------
Name:
Title:
50
