<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1996
REGISTRATION STATEMENT NO. 333-14785
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
SWIFT ENERGY COMPANY
(Exact name of Registrant)
<TABLE>
<S> <C> <C>
TEXAS 1311 74-2073055
(State of incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
</TABLE>
A. EARL SWIFT, PRESIDENT
SWIFT ENERGY COMPANY
16825 NORTHCHASE DRIVE, SUITE 400
HOUSTON, TEXAS 77060
(713) 874-2700
(Address and telephone number of Registrant's executive offices
and name, address and telephone number of agent for service)
Copies to:
<TABLE>
<S> <C>
DONALD W. BRODSKY CHRISTINE LAFOLLETTE
JUDY G. GECHMAN THOMAS P. MASON
JENKENS & GILCHRIST, A PROFESSIONAL CORPORATION ANDREWS & KURTH L.L.P.
1100 LOUISIANA STREET, SUITE 1800 4200 TEXAS COMMERCE TOWER
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 951-3300 (713) 220-4200
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER NOTE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
% Convertible Subordinated Notes due
2006................................ $115,000,000(1) 100% $115,000,000(1) $34,849
- --------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per
share............................... (2) (2) (2) (3)
====================================================================================================================
</TABLE>
(1) Includes $15,000,000 principal amount of Notes issuable upon exercise of the
Underwriters' over-allotment option.
(2) Such indeterminate number of shares as may be issued upon conversion of the
Notes.
(3) No additional consideration will be received for the Common Stock and
therefore no registration fee is required pursuant to Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This amendment is being filed solely to complete Part II of this
Registration Statement and include the exhibits that were not previously filed.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, all of which will be borne by the Company, are
set forth in the following itemized table:
<TABLE>
<S> <C>
SEC Registration Fee..................................................... $ 34,849
NASD Registration Fee.................................................... 12,000
New York Stock Exchange Listing Fee...................................... 40,000
Trustee's Fees........................................................... 20,000
Blue Sky Fees and Expenses............................................... 5,000
Accounting Fees.......................................................... 65,000
Legal Fees............................................................... 145,000
Printing................................................................. 100,000
Miscellaneous............................................................ 28,151
-------
Total.......................................................... $450,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify its officers, directors, employees and agents for
expenses and costs incurred in certain proceedings arising out of actions taken
in their official capacity only if such persons were acting in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, except in relation to matters in which they have been found
liable (i) to the corporation, or (ii) on the basis that personal benefit was
improperly received regardless of whether or not the benefit resulted from
action taken in their official capacity. In the case of any criminal proceeding,
such persons must also have had no reasonable cause to believe such conduct was
unlawful. Article 2.02-1 further provides that a corporation shall indemnify its
officers and directors against reasonable expenses incurred in connection with
proceedings arising out of actions taken in their official capacity in which
such persons have been wholly successful, on the merits or otherwise, in the
defense of such actions. The bylaws of the Company, as amended, provide for
indemnification in favor of the Company's directors, officers, and employees to
the fullest extent permitted by Article 2.02-1. Additionally, the Company
amended its Articles of Incorporation, with shareholder approval, to confirm
that the Company has the power to indemnify certain persons in such
circumstances as are provided in its bylaws. The amendment further enables the
Company to enter into additional insurance and indemnity arrangements at the
discretion of the board of directors. The Company has entered into
Indemnification Agreements with each of its officers and directors, the form of
which was approved by the shareholders of the Company, that essentially
indemnify such individuals to the fullest extent permitted by law.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
a corporation's articles of incorporation may provide for the elimination or
limitation of a director's liability. The Company's Articles of Incorporation
eliminate the liability of directors to the corporation or its shareholders for
monetary damages for an act or omission in his capacity as a director, with
certain specified exceptions to the Company and its shareholders to the fullest
extent permitted by Article 7.06 of the Texas Miscellaneous Corporation Laws
Act.
The Company maintains insurance, the general effect of which is to provide
coverage for the Company with respect to amounts that it is required to pay
officers and directors under the indemnity provisions described above and
coverage for officers and directors against certain liabilities, including
certain liabilities under the federal securities law.
II-1
<PAGE> 4
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
</TABLE>
<TABLE>
<C> <S>
**1 -- Form of Underwriting Agreement
++4 -- Form of Indenture between Swift Energy Company and Bank One,
Columbus, N.A.
++5 -- Opinion of Jenkens & Gilchrist, A Professional Corporation, regarding
legality
++8 -- Opinion of Jenkens & Gilchrist, A Professional Corporation, regarding
tax matters
**12 -- Statement of ratio of earnings to fixed charges
23(a) -- Consent of Jenkens & Gilchrist, a Professional Corporation (contained
in its opinion filed as Exhibits 5 and 8)
**23(b) -- Consent of Arthur Andersen LLP
**23(c) -- Consent of H.J. Gruy and Associates, Inc.
**24 -- Power of Attorney (a power of attorney pursuant to which amendments
to the Registration Statement may be filed is included on the
signature pages hereof)
**25 -- Statement of Eligibility of Bank One, Columbus, N.A., as trustee
99(a) -- The summary report of H.J. Gruy and Associates, Inc. report dated
February 19, 1996 pertaining to the Company's proved oil and gas
reserves as of December 31, 1995 (incorporated by reference from
Exhibit 99(a) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
99(b) -- Summary report of H.J. Gruy and Associates, Inc. dated February 17,
1995 pertaining to the Company's proved oil and gas reserves as of
December 31, 1994 (incorporated by reference from Exhibit 99(a) to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994)
99(c) -- Summary report of Gruy Engineering Corporation dated February 14,
1994 pertaining to the Company's proved oil and gas reserves as of
December 31, 1993 (incorporated by reference from Exhibit 28(a) to
the Company's Annual Report on Form 10-K for the year ended December
31, 1993)
</TABLE>
- ---------------
++ Filed herewith
** Filed previously
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 (the "1933
Act"), each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the "1934
Act") (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the 1934 Act) that is
incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 5
B. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication
of such issue.
C. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the 1933 Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the 1933 Act,
each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the 1933 Act, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on November 18, 1996.
SWIFT ENERGY COMPANY
By: /s/ A. EARL SWIFT
------------------------------------
A. Earl Swift,
Chairman of the Board, President and
Chief
Executive Officer, Swift Energy
Company
Pursuant to the requirements of the 1933 Act, as amended, this Registration
Statement has been signed below in multiple counterparts with the effect of one
original by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------- ------------------
<S> <C> <C>
/s/ A. EARL SWIFT Chairman of the Board, November 18, 1996
- --------------------------------------------- President and Chief
A. Earl Swift Executive Officer, Swift
Energy Company
/s/ JOHN R. ALDEN Senior Vice President -- November 18, 1996
- --------------------------------------------- Finance, Chief Financial
John R. Alden Officer, Swift Energy
Company
/s/ ALTON D. HECKAMAN, JR. Vice President and November 18, 1996
- --------------------------------------------- Controller, Swift Energy
Alton D. Heckaman, Jr. Company
/s/ VIRGIL N. SWIFT* Vice Chairman of the November 18, 1996
- --------------------------------------------- Board, Executive Vice
Virgil N. Swift President -- Business
Development Swift Energy
Company
/s/ G. ROBERT EVANS* Director, Swift Energy November 18, 1996
- --------------------------------------------- Company
G. Robert Evans
/s/ RAYMOND O. LOEN* Director, Swift Energy November 18, 1996
- --------------------------------------------- Company
Raymond O. Loen
/s/ CLYDE W. SMITH, JR.* Director, Swift Energy November 18, 1996
- --------------------------------------------- Company
Clyde W. Smith, Jr.
/s/ HENRY C. MONTGOMERY* Director, Swift Energy November 18, 1996
- --------------------------------------------- Company
Henry C. Montgomery
/s/ HAROLD J. WITHROW* Director, Swift Energy November 18, 1996
- --------------------------------------------- Company
Harold J. Withrow
/s/ JOHN R. ALDEN
- ---------------------------------------------
*John R. Alden,
Attorney-in-Fact pursuant
to power of attorney contained in original
filing of this Registration Statement.
</TABLE>
II-4
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
**1 -- Form of Underwriting Agreement
++4 -- Form of Indenture between Swift Energy Company and Bank One,
Columbus, N.A.
++5 -- Opinion of Jenkens & Gilchrist, A Professional Corporation, regarding
legality
++8 -- Opinion of Jenkens & Gilchrist, A Professional Corporation, regarding
tax matters
**12 -- Statement of ratio of earnings to fixed charges
23(a) -- Consent of Jenkens & Gilchrist, a Professional Corporation (contained
in its opinion filed as Exhibits 5 and 8)
**23(b) -- Consent of Arthur Andersen LLP
**23(c) -- Consent of H.J. Gruy and Associates, Inc.
**24 -- Power of Attorney (a power of attorney pursuant to which amendments
to the Registration Statement may be filed is included on the
signature pages hereof)
**25 -- Statement of Eligibility of Bank One, Columbus, N.A., as trustee
99(a) -- The summary report of H.J. Gruy and Associates, Inc. report dated
February 19, 1996 pertaining to the Company's proved oil and gas
reserves as of December 31, 1995 (incorporated by reference from
Exhibit 99(a) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
99(b) -- Summary report of H.J. Gruy and Associates, Inc. dated February 17,
1995 pertaining to the Company's proved oil and gas reserves as of
December 31, 1994 (incorporated by reference from Exhibit 99(a) to
the Company's Annual Report on Form 10-K for the year ended December
31, 1994)
99(c) -- Summary report of Gruy Engineering Corporation dated February 14,
1994 pertaining to the Company's proved oil and gas reserves as of
December 31, 1993 (incorporated by reference from Exhibit 28(a) to
the Company's Annual Report on Form 10-K for the year ended December
31, 1993)
</TABLE>
- ---------------
++ Filed herewith
** Filed previously
<PAGE> 1
SWIFT ENERGY COMPANY
as Company
--------------------------------------------
__% Convertible Subordinated Notes Due 2006
--------------------------------------------
INDENTURE
Dated as of November ___, 1996
--------------------------------------------
BANK ONE, COLUMBUS, N.A.
as Trustee
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
Definitions and Incorporation by Reference...............................1
SECTION 1.01. Definitions..............................................1
SECTION 1.02. Other Definitions........................................6
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........7
SECTION 1.04. Rules of Construction....................................7
ARTICLE II
The Securities...........................................................8
SECTION 2.01. Form and Dating..........................................8
SECTION 2.02. Execution and Authentication.............................9
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.............9
SECTION 2.04. Paying Agent to Hold Money in Trust.....................10
SECTION 2.05. Noteholder Lists........................................10
SECTION 2.06. Transfer and Exchange...................................10
SECTION 2.07. Replacement Securities..................................11
SECTION 2.08. Outstanding Securities..................................11
SECTION 2.09. Treasury Securities.....................................11
SECTION 2.10. Temporary Securities....................................11
SECTION 2.11. Cancellation............................................12
SECTION 2.12. Defaulted Interest......................................13
ARTICLE III
Redemption..............................................................13
SECTION 3.01. Notices to Trustee......................................13
SECTION 3.02. Selection of Securities to be Redeemed..................13
SECTION 3.03. Notice of Redemption....................................14
SECTION 3.04. Effect of Notice of Redemption..........................14
SECTION 3.05. Deposit and Payment of Redemption Price.................14
SECTION 3.06. Securities Redeemed in Part.............................15
SECTION 3.07. Optional Redemption.....................................15
SECTION 3.08. Designated Event........................................15
SECTION 3.09. Designated Event Repurchase.............................15
-ii-
<PAGE> 3
ARTICLE IV
Covenants...............................................................17
SECTION 4.01. Payment of Securities...................................17
SECTION 4.02. SEC Reports.............................................18
SECTION 4.03. Compliance Certificate..................................18
SECTION 4.04. Stay, Extension and Usury Laws..........................19
SECTION 4.05. Corporate Existence.....................................19
SECTION 4.06. Taxes...................................................19
ARTICLE V
Conversion..............................................................19
SECTION 5.01. Conversion Privilege....................................19
SECTION 5.02. Conversion Procedure....................................20
SECTION 5.03. Fractional Shares.......................................20
SECTION 5.04. Taxes on Conversion.....................................21
SECTION 5.05. Company to Provide Stock................................21
SECTION 5.06. Adjustment of Conversion Price..........................21
SECTION 5.07. No Adjustment...........................................25
SECTION 5.08. Other Adjustments.......................................25
SECTION 5.09. Adjustments for Tax Purposes............................25
SECTION 5.10. Adjustments by the Company..............................25
SECTION 5.11. Notice of Adjustment....................................25
SECTION 5.12. Notice of Certain Transactions..........................26
SECTION 5.13. Effect of Reclassifications, Consolidations, Mergers
or Sales on Conversion Privilege........................26
SECTION 5.14. Trustee's Disclaimer....................................27
ARTICLE VI
Subordination...........................................................27
SECTION 6.01. Agreement to Subordinate................................27
SECTION 6.02. No Payment on Securities if Senior Debt in Default......27
SECTION 6.03. Distribution on Acceleration of Securities;
Dissolution and Reorganization; Subrogation of
Securities..............................................28
SECTION 6.04. Reliance by Senior Debt on Subordination Provisions.....32
SECTION 6.05. No Waiver of Subordination Provisions...................32
SECTION 6.06. Trustee's Relation to Senior Debt.......................32
SECTION 6.07. Other Provisions Subject Hereto.........................33
-iii-
<PAGE> 4
ARTICLE VII
Successors..............................................................33
SECTION 7.01. Merger, Consolidation or Sale of Assets.................33
SECTION 7.02. Successor Corporation Substituted.......................34
ARTICLE VIII
Defaults and Remedies...................................................34
SECTION 8.01. Events of Default.......................................34
SECTION 8.02. Acceleration............................................36
SECTION 8.03. Other Remedies..........................................36
SECTION 8.04. Waiver of Past Defaults.................................36
SECTION 8.05. Control by Majority.....................................37
SECTION 8.06. Limitation on Suits.....................................37
SECTION 8.07. Rights of Noteholders to Receive Payment................37
SECTION 8.08. Collection Suit by Trustee..............................37
SECTION 8.09. Trustee May File Proofs of Claim........................38
SECTION 8.10. Priorities..............................................38
SECTION 8.11. Undertaking for Costs...................................38
ARTICLE IX
Trustee.................................................................38
SECTION 9.01. Duties of Trustee.......................................38
SECTION 9.02. Rights of Trustee.......................................39
SECTION 9.03. Individual Rights of Trustee............................40
SECTION 9.04. Trustee's Disclaimer....................................40
SECTION 9.05. Notice of Defaults......................................40
SECTION 9.06. Reports by Trustee to Noteholders.......................40
SECTION 9.07. Compensation and Indemnity..............................40
SECTION 9.08. Replacement of Trustee..................................41
SECTION 9.09. Successor Trustee by Merger, Etc........................42
SECTION 9.10. Eligibility; Disqualification...........................42
SECTION 9.11. Preferential Collection of Claims Against Company.......42
SECTION 9.12. Sections Applicable to Registrar, Paying Agent and
Conversion Agent........................................42
ARTICLE X
Discharge of Indenture..................................................43
SECTION 10.01. Termination of Company's Obligations...................43
SECTION 10.02. Repayment to Company...................................43
-iv-
<PAGE> 5
ARTICLE XI
Amendments, Supplements and Waivers.....................................43
SECTION 11.01. Without Consent of Noteholders.........................43
SECTION 11.02. With Consent of Noteholders............................44
SECTION 11.03. Compliance with Trust Indenture Act....................45
SECTION 11.04. Revocation and Effect of Consents......................45
SECTION 11.05. Notation on or Exchange of Securities..................46
SECTION 11.06. Trustee Protected......................................46
ARTICLE XII
Miscellaneous...........................................................46
SECTION 12.01. Trust Indenture Act Controls...........................46
SECTION 12.02. Notices................................................47
SECTION 12.03. Communication by Noteholders with Other Noteholders....47
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.....47
SECTION 12.05. Statements Required in Certificate or Opinion..........47
SECTION 12.06. Rules by Trustee and Agents............................48
SECTION 12.07. Legal Holidays.........................................48
SECTION 12.08. No Recourse Against Others.............................48
SECTION 12.09. Counterparts...........................................48
SECTION 12.10. Variable Provisions....................................48
SECTION 12.11. GOVERNING LAW..........................................50
SECTION 12.12. No Adverse Interpretation of Other Agreements..........50
SECTION 12.13. Successors.............................................50
SECTION 12.14. Severability...........................................50
SECTION 12.15. Table of Contents, Headings, Etc.......................50
SIGNATURES..............................................................
EXHIBIT A FORM OF CONVERTIBLE SUBORDINATED NOTE
-v-
<PAGE> 6
CROSS-REFERENCE TABLE*
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
310(a)(1)........................................7.10
(a)(2)...........................................7.10
(a)(3)...........................................N.A.
(a)(4)...........................................N.A.
(b)........................................7.08, 7.10
(c)..............................................N.A.
311(a)...........................................7.11
(b)..............................................7.11
(c)..............................................N.A.
312(a)...........................................2.05
(b).............................................10.03
(c).............................................10.03
313(a)...........................................7.06
(b)(1)...........................................N.A.
(b)(2)...........................................7.06
(c)..............................................7.06
(d)..............................................7.06
314(a).....................................4.02, 4.03
(b)................................................NA
(c)(1)..........................................10.04
(c)(2)..........................................10.04
(c)(3)...........................................N.A.
(d)..............................................N.A.
(e)..............................................N.A.
(f)..............................................N.A.
315(a)........................................7.01(b)
(b)..............................................7.05
(c)...........................................7.01(a)
(d)...........................................7.01(c)
(e)..............................................6.11
316(a) (last sentence)...........................2.09
(a)(1)(A)........................................6.05
(a)(1)(B)........................................6.04
(a)(2)...........................................N.A.
(b)..............................................6.07
(c)..............................................9.04
317(a)(1)........................................6.08
(a)(2)...........................................6.09
(b)..............................................2.04
318(a)...........................................N.A.
N.A. means not applicable.
---------------
*This Cross-Reference Table is not part of the Indenture.
-vi-
<PAGE> 7
INDENTURE dated as of November ___, 1996 between Swift Energy
Company, a Texas corporation (the "Company"), and Bank One, Columbus, N.A., a
national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Noteholders of the Company's
__% Convertible Subordinated Notes due 2006 (the "Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions. "Affiliate" of any specified person
means any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by, and "under common control with"), as
used with respect to any person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting securities or
by agreement or otherwise; provided, however, that beneficial ownership of 10%
or more of the voting securities of a person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent, Conversion Agent
or co-registrar.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board.
"Board Resolution" means a duly authorized resolution of the
Board of Directors.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of equity
interests in any entity, including, without limitation, corporate stock and
partnership interests.
"Change of Control" means any event where: (i) any "person" or
"group" (as such terms are used in Section 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of shares representing more than 50% of the combined voting
power of the then outstanding securities entitled to vote generally in elections
of directors of the Company ("Voting Stock"), (ii) the Company consolidates with
or merges into any other corporation, or any other corporation merges into the
Company, and, in the case of any such transaction, the outstanding Common Stock
of the Company is reclassified into or exchanged for any other property or
security, unless the stockholders of the Company immediately before such
transaction own, directly or indirectly immediately following such transaction,
at least a majority of the combined voting power of the outstanding voting
securities of the corporation
-1-
<PAGE> 8
resulting from such transaction in substantially the same proportion as their
ownership of the Voting Stock immediately before such transaction, (iii) the
Company conveys, transfers or leases more than 66 2/3% of its assets (other than
to a wholly-owned subsidiary of the Company) or (iv) any time the Continuing
Directors do not constitute a majority of the Board of Directors of the Company
(or, if applicable, a successor corporation to the Company); provided, that a
Change of Control shall not be deemed to have occurred if either (i) the last
sale price of the Common Stock for any five trading days during the ten trading
days immediately preceding the Change of Control is at least equal to 110% of
the Conversion Price in effect on the date of such Change of Control or (ii) at
least 90% of the consideration (excluding cash payments for fractional shares)
in the transaction or transactions constituting the Change of Control consists
of shares of common stock that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States.
"Common Stock" means the common stock of the Company as the
same exists at the date of the execution of this indenture or as such stock may
be constituted from time to time.
"Company" means the party named as such above until a
successor replaces it in accordance with Article VII and thereafter means the
successor.
"Continuing Directors" means as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such board at the time of such
nomination or election.
"Daily Market Price" means the price of a share of Common
Stock on the relevant date, determined (a) on the basis of the last reported
sale price regular way or, if no sale price is reported, the average of the
average bid and average asked prices on such day of the Common Stock on the New
York Stock Exchange Composite Tape or, in the event shares of Common Stock are
not listed on the New York Stock Exchange, on the principal natural securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
Stock Market or by the National Quotation Bureau Incorporated. In the absence of
such quotations, the Board of Directors shall be entitled to determine the Daily
Market Price on the basis of such quotations as it considers appropriate.
"Default" means any event that is, or with the passage of time
or the giving of notice or both, would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Event" means the occurrence of a Change of
Control or a Termination of Trading.
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"Designated Senior Debt" means any Senior Debt which, at the
date of determination, has an aggregate principal amount outstanding of, or
commitments to lend up to, at least $25 million and is specifically designated
by the Company in the instrument evidencing or governing such Senior Debt as
"Designated Senior Debt" for purposes of this Indenture (provided, that such
instrument may place limitations and conditions on the right of such Senior Debt
to exercise the rights of Designated Senior Debt).
"Excess Payment" means the excess of (a) the aggregate of the
cash and fair market value of other consideration paid by the Company or any of
its subsidiaries with respect to the shares acquired in a tender offer or other
negotiated transaction over (b) the Daily Market Price of such acquired shares
on the Trading Day immediately after giving effect to the completion of such
tender offer or other negotiated transaction.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect as of the date of preparation of a
financial statement or the date that a particular action is taken or an event
occurs, as applicable.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness. "Guaranteed" has a correlative meaning to "Guarantee".
"Indebtedness" means, with respect to any person, all
obligations, whether or not contingent, of such person (i) (a) for borrowed
money (including, but not limited to, any indebtedness secured by a security
interest, mortgage or other lien on the assets of such person which is (1) given
to secure all or part of the purchase price of property subject thereto, whether
given to the vendor of such property or to another, or (2) existing on property
at the time of acquisition thereof), (b) evidenced by a note, debenture, bond or
other written instrument, (c) under a lease required to be capitalized on the
balance sheet of the lessee under GAAP or under any lease or related document
(including a purchase agreement) which provides that such person is
contractually obligated to purchase or to cause a third party to purchase such
leased property, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances, (e) with respect to indebtedness secured by a mortgage,
pledge, lien, encumbrance, charge or adverse claim affecting title or resulting
in an encumbrance to which the property or assets of such person are subject,
whether or not the obligation secured thereby shall have been assumed or
Guaranteed by or shall otherwise be such person's legal liability, (f) in
respect of the balance of deferred and unpaid purchase price of any property or
assets, and (g) under interest rate or currency swap agreements, cap, floor and
collar agreements, spot and forward contracts and similar agreements and
arrangements; (ii) with respect to any obligation of
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others of the type described in the preceding clause (i) or under clause (iii)
below, assumed by or Guaranteed in any manner by such person or in effect
guaranteed by such person through an agreement to purchase (including, without
limitation, "take or pay" and similar arrangements), contingent or otherwise
(and the obligations of such person under any such assumptions, Guarantees or
other such arrangements); and (iii) any and all deferrals, renewals, extensions,
refinancings and refundings of, or amendments, modifications or supplements to,
any of the foregoing.
"Indenture" means this Indenture, as amended from time to
time.
"Issuance Date" means the date on which the Securities are
first authenticated and issued.
"Material Subsidiary" means any Subsidiary of the Company
which is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the Securities Act and the Exchange Act (as such Regulation is in effect
on the date hereof).
"Noteholder" or "holder" means a person in whose name a
Security is registered.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Chairman of the Board, the President, the
Treasurer or a Vice President of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock Company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal" of a debt security means the principal of the
security plus the premium, if any, on the security.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Debt.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described on the first page
hereof issued, authenticated and delivered under this Indenture.
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"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, interest on and other
amounts due on Indebtedness of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed or Guaranteed by the
Company; unless, in the instrument creating or evidencing or pursuant to which
Indebtedness is outstanding, it is expressly provided that such Indebtedness is
not senior in right of payment to the Securities. Senior Debt includes, with
respect to the obligations described above, interest accruing, pursuant to the
terms of such Senior Debt, on or after the filing of any petition in bankruptcy
or for reorganization relating to the Company, whether or not post- filing
interest is allowed in such proceeding, at the rate specified in the instrument
governing the relevant obligation. Notwithstanding anything to the contrary in
the foregoing, Senior Debt shall not include: (a) Indebtedness of or amounts
owed by the Company for compensation to employees, or for goods, services or
materials purchased in the ordinary course of business; (b) Indebtedness of the
Company to a Subsidiary of the Company; or (c) any liability for Federal, state,
local or other taxes owed or owing by the Company.
"Subsidiary" means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by any person or one or more of the
other Subsidiaries of that person or a combination thereof.
"Termination of Trading" means an event where the Common Stock
(or other common stock into which the Securities are then convertible) is not
listed for trading on a United States national securities exchange or an
established automated over-the-counter trading market in the United States.
"Trading Day" shall mean (A) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national securities exchange, a day on which the New York Stock Exchange or
another national securities exchange is open for business, (B) if the applicable
security is quoted on the Nasdaq Stock Market, a day on which trades may be made
thereon or (c) if the applicable security is not so listed, admitted for trading
or quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S. Code ss.ss.77aaa- 77bbbb) as in effect on the date of execution of this
Indenture; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor.
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"Trust Officer", when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any senior vice president, any vice
president, any assistant vice president, the secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer, the controller, any assistant controller, or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time are such officers, respectively, and
also means, with respect to a particular corporate trust matter, any officer to
whom such corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Agent Members".....................................2.01
"Bankruptcy Law"....................................8.01
"Commencement Date".................................3.09
"Conversion Agent".................................2.03
"Conversion Date"..................................5.02
"Conversion Price".................................5.01
"Conversion Shares"................................5.06
"Current Market Price" .............................5.06
"Custodian".........................................8.01
"Designated Event Payment"..........................3.08
"Designated Event Payment Date".....................3.09
"Designated Event Repurchase".......................3.08
"Distribution Date".................................5.06
"Distribution Record Date"..........................5.06
"Euroclear".........................................2.01
"Event of Default"..................................8.01
"Global Security"...................................2.01
"Legal Holiday"....................................12.07
"Officer"..........................................12.10
"Paying Agent".....................................21.03
"Payment Blockage Notice"...........................6.02
"Payment Blockage Period"...........................6.02
"Payment Default"...................................8.01
"Purchase Date".....................................5.06
"Redemption Price"..................................3.04
"Registrar".........................................2.03
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"Repurchase Amount" ................................3.09
"Rights"............................................5.06
"Tender Period".....................................3.09
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture
have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Securities means the Company or any other
obligor on the Securities.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by Trust Indenture Act reference to another statute
or defined by SEC rule under the Trust Indenture Act have the meanings so
assigned to them.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP consistently applied;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words
in the plural include the singular; and
(e) provisions apply to successive events and
transactions.
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ARTICLE II
The Securities
SECTION 2.01. Form and Dating. The Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each, Security shall be dated
the date of its authentication. The terms and provisions of the Securities set
forth in Exhibit A are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Securities. Securities shall be issued in the form
of one or more, permanent global Securities in definitive, fully registered form
without interest coupons with the Global Securities Legend set forth in Exhibit
A hereto (each, a "Global Security"), which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, at its New
York office, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.01(b) shall
apply only to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver initially one or more Global
Securities that (a), shall be registered in the name of Cede & Co. or other
nominee of such Depositary and (b) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions or held by the Trustee
as custodian for the Depositary pursuant to a FAST Balance Certificate Agreement
between the Depositary and the Trustee.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of
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customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in
Section 2.10, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities.
SECTION 2.02. Execution and Authentication. Two Officers
shall sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
indenture.
Upon a written order of the Company signed by two officers,
the Trustee shall authenticate the Securities for original issue up to an
aggregate principal amount of $115,000,000. The aggregate principal amount of
Securities outstanding at any time shall not exceed such amount except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain in the Borough of Manhattan, City of New York, State
of New York (i) an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), (ii) an office or agency
where Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for conversion ("Conversion
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint the Registrar, the Paying Agent
and the Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Company may change any Paying Agent, Registrar,
co-registrar or Conversion Agent without prior notice to any Noteholder by
providing 30 days' written notice to the current Paying Agent, Registrar,
co-registrar or Conversion Agent. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as
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Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such. The
Company or any of its Affiliates may act as Paying Agent, Registrar,
co-registrar or Conversion Agent. As provided in Section 12.10 hereof, the
Company initially appoints the Trustee as Paying Agent, Registrar and
Conversion Agent.
SECTION 2.04. Paying Agent to Hold Money in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Noteholders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and to account for any money disbursed by it. Upon payment over
to the Trustee, the Paying Agent (if other than the Company or an Affiliate of
the Company) shall have no further liability for the money. If the Company or an
Affiliate of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Noteholders all money held by it as
Paying Agent.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders.
SECTION 2.06. Transfer and Exchange. Where Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Securities of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.01, 2.10, 3.06
or 11.05 hereof) .
The Company shall not be required (i) to issue, register the
transfer of, or exchange Securities during a period beginning at the opening of
business 15 days before the day of any selection of Securities for redemption
under Section 3.02 hereof and ending at the close of business on the day of
selection, or (ii) to exchange or register the transfer of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
Notwithstanding any provision to the contrary herein, so long
as a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in
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whole or in part, or of any beneficial interest therein, shall only be made in
accordance with Section 2-01(b).
SECTION 2.07. Replacement Securities. If the holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken
or if such Security is mutilated and is surrendered to the Trustee, the Company
shall issue and the Trustee shall authenticate a replacement Security if the
Trustee's and the Company's requirements are met. If required by the Trustee or
the Company, an indemnity bond must be sufficient in the judgment of both to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Every replacement Security is an obligation of the Company.
SECTION 2.08. Outstanding Securities. The Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by those delivered to it for cancellation, and those
described in this Section as not outstanding.
If a Security is replaced, paid or purchased pursuant to
Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced, paid or purchased Security is held
by a bona fide purchaser.
If Securities are considered paid under Section 4.01 hereof,
they cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
SECTION 2.09. Treasury Securities. In determining whether the
Noteholders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a Trust
Officer of the Trustee actually knows are so owned shall be so considered as
not outstanding.
SECTION 2.10. Temporary Securities. (a) Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable
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delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
(b) A Global Security deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.01 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities only if such transfer complies with Section 2.06 and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time such Depositary ceases to
be a "clearing agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing and the Registrar has
received a request from the Depositary to issue certificated Securities in lieu
of all or a portion of the Global Security (in which case the Company shall
deliver certificated Securities within 30 days of such request.
(c) Any Global Security that is transferable to the beneficial
owners thereof in the form of certificated Securities pursuant to this Section
2.10 shall be surrendered by the Depositary to the Trustee located in The City
of New York, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount at maturity of Securities of authorized denominations in the form of
certificated Securities. Any portion of a Global Security transferred pursuant
to this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in such
names as the Depositary shall direct.
(d) Subject to the provisions of Section 2.10(c), the
registered holder of a Global Security may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a holder is entitled to take under this
Indenture or the Securities.
(e) In the event of the occurrence of either of the events
specified in Section 2.10(b), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
SECTION 2.11. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar, Paying Agent
and Conversion Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, redemption, conversion, exchange or payment.
The Trustee shall promptly cancel all Securities surrendered for registration of
transfer, redemption, conversion, exchange, payment, replacement or cancellation
and shall dispose of canceled Securities as the Company directs. The Company may
not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation or that any holder has converted.
SECTION 2.12. Defaulted Interest. If the Company fails to
make a payment of interest on the Securities, it shall pay such defaulted
interest, plus any interest payable on the defaulted interest, in any lawful
manner. It may pay such defaulted interest, plus any such interest payable on
it, to the persons who are Noteholders on a subsequent special record date. The
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Company shall fix any such record date and payment date. At least 15 days before
any such record date, the Company shall mail to Noteholders a notice that states
the record date, payment date, and amount of such interest to be paid.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to Section 3.07 hereof, it shall notify the Trustee
of the redemption date and the principal amount of Securities to be redeemed.
The Company shall give the notice provided for in this Section 3.01 at least 20
days before the redemption date (unless a shorter notice period shalt be
satisfactory to the Trustee).
SECTION 3.02. Selection of Securities to be Redeemed. If less
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate. The Trustee shall make the
selection not more than 60 days and not less than 15 days before the redemption
date from Securities outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them it
selects shall be in amounts cf $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be called
for redemption.
If any Security selected for partial redemption is converted
in part after such selection, the converted portion of such Security shall be
deemed (so far as may be) to be the portion to be selected for redemption. The
Securities (or portions thereof) so selected shall be deemed duly selected for
redemption for all purposes hereof, notwithstanding that any such Security is
converted in whole or in part before the mailing of the notice of redemption.
Upon any redemption of less than all the Securities, the Company and the Trustee
may treat as outstanding any securities surrendered for conversion during the
period 15 days next preceding the mailing of a notice of redemption and need not
treat as outstanding any Security authenticated and delivered during such period
in exchange for the unconverted portion of any Security converted in part during
such period.
SECTION 3.03. Notice of Redemption. At least 15 days but not
more than 60 days before a redemption date, the Company shall mail a notice of
redemption to each holder whose Securities are to be redeemed at such holder's
registered address.
The notice shall identify the Securities to be redeemed and
shall state:
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(a) the redemption date;
(b) the Redemption Price;
(c) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after
the redemption date, upon cancellation of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion will
be issued in the name of the holder thereof;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price plus
accrued interest;
(f) that, unless the Company defaults in making payment of the
Redemption Price or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
called for redemption ceases to accrue on and after the redemption
date.
Such notice shall also state the current Conversion Price and
the date on which the right to convert such Securities or portions thereof into
Common Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of
redemptions in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date at the price (the "Redemption Price") set forth in the
Security.
SECTION 3.05. Deposit and Payment of Redemption Price. (a) On
or before the redemption date, the Company shall deposit with the Trustee or
with the Paying Agent in immediately available funds an amount sufficient to pay
the Redemption Price of and accrued interest up to but not including the
redemption date on all Securities to be redeemed on that date (subject to the
right of holders of record on the relevant record date to receive interest due
on an interest payment date) unless theretofore converted into Common Stock
pursuant to the provisions hereof. The Trustee or the Paying Agent shall return
to the Company any money not required for that purpose.
(b) Upon surrender of any Security selected for redemption in
accordance with the notice of redemption, the Paying Agent shall mail or deliver
to the holder thereof on the redemption
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date the Redemption Price, together with accrued and unpaid interest as provided
in this Section 3.05.
SECTION 3.06. Securities Redeemed in Part. Upon cancellation
of a Security that is redeemed in part, the Company shall issue and the Trustee
shall authenticate for the holder at the expense of the Company a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption. The Company may redeem all
or any portion of the Securities, upon the terms and at the redemption prices
set forth in each of the Securities. Any redemption pursuant to this Section
3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06
hereof.
SECTION 3.08. Designated Event. (a) Upon the occurrence of a
Designated Event, each holder of Securities shall have the right, in accordance
with this Section 3.08 and Section 3.09 hereof, to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such holder's Securities pursuant to the terms of Section 3.09 (the "Designated
Event Repurchase") at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon up to but not including the
Designated Event Payment Date (the "Designated Event Payment").
(b) Within 30 days following any Designated Event, the Company
shall mail to each holder the notice provided by Section 3.09(e).
SECTION 3.09. Designated Event Repurchase. (a) In the
event that, pursuant to Section 3.08 hereof, the Company shall commence a
Designated Event Repurchase, the Company shall follow the procedures in this
Section 3.09.
(b) The Designated Event Repurchase shall be made pursuant to
an offer that remains open for a period specified by the Company which shall be
no less than 30 days and no more than 40 days following the date of the
mailing of notice in accordance with Section 3.09(e) hereof (the "Commencement
Date"), except to the extent that a longer period is required by applicable law
(the "Tender Period"). Upon the expiration of the Tender Period (the
"Designated Event Payment Date"), the Company shall purchase the principal
amount of Securities required to be purchased pursuant to Section 3.08 hereof
(the "Repurchase Amount").
(c) If the Designated Event Payment Date is on or after an
interest payment record date and on or before the related interest payment date,
any accrued interest will be paid to the person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Noteholders who tender Securities pursuant to the
Designated Event Repurchase.
(d) The Company shall provide the Trustee with notice of the
Designated Event Repurchase at least ten days before the Commencement
Date.
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(e) On or before the Commencement Date, the Company or the
Trustee (at the expense of the Company) shall send, by first class mail, a
notice to each of the Noteholders, which shall govern the terms of the
Designated Event Repurchase and shall state:
(i) that the Designated Event Repurchase is being made
pursuant to this Section 3.09 and Section 3.08 hereof and that all
Securities tendered will be accepted for payment;
(ii) the Designated Event Payment, the Tender Period
(specifying particularly the last day on which Securities may be
tendered for purchase) and the Designated Event Payment Date;
(iii) that any Security or portion thereof not tendered or
accepted for purchase will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the
Designated Event Payment, any Security or portion thereof accepted for
purchase pursuant to the Designated Event Repurchase shall cease to
accrue interest after the Designated Event Payment Date;
(v) that Noteholders electing to have a Security or portion
thereof purchased pursuant to any Designated Event Repurchase will be
required to surrender the Security, with the form entitled "Option of
Noteholder To Elect Purchase" on the reverse of the Security completed,
to the Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Designated
Event Payment Date;
(vi) that Noteholders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Designated Event
Payment Date, or such longer period as may be required by law, a letter
or a telegram, telex or facsimile transmission (receipt of which is
confirmed and promptly followed by a letter) setting forth the name of
the Noteholder, the principal amount of the Security or portion thereof
the Noteholder delivered for purchase and a statement that such
Noteholder is withdrawing his election to have the Security or portion
thereof purchased;
(vii) that Noteholders whose Securities are being purchased
only in part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof; and
(viii) any other procedures that Noteholders must follow in
order to have their Notes repurchased.
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Each Noteholder electing to have a Security or portion
thereof purchased shall comply with the procedures set forth in the notice.
In addition, the notice shall contain all instructions and
materials that the Company shall reasonably deem necessary to enable such
Noteholders to tender Securities pursuant to the Designated Event Repurchase.
(f) At least one Business Day prior to the Designated Event
Payment Date, the Company shall irrevocably deposit with the Trustee or a Paying
Agent in immediately available funds an amount equal to the Repurchase Amount to
be held for payment in accordance with the terms of this Section 3.09. On the
Designated Event Payment Date, the Company shall, to the extent lawful, (i)
accept for purchase the Securities or portions thereof tendered pursuant to the
Designated Event Repurchase, (ii) deliver or cause to be delivered to the
Trustee Securities so accepted and (iii) deliver to the Trustee an Officers'
Certificate stating such Securities or portions thereof have been accepted for
payment by the Company in accordance with the terms of this Section 3.09. The
Paying Agent shall promptly (but in any case not later than ten (10) calendar
days after the Designated Event Payment Date) mail or deliver to each tendering
Noteholder an amount equal to the purchase price of the Securities tendered by
such Noteholder, and the Trustee shall promptly authenticate and mail or deliver
to such Noteholders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered, if any; provided, that each new Security
shall be in a principal amount of $1,000 or an integral multiple thereof. Any
Securities not so accepted shall be promptly mailed or delivered by or on behalf
of the Company to the holder thereof. The Company will publicly announce the
results of the Designated Event Repurchase on, or as soon as practicable after,
the Designated Event Payment Date.
(g) The Designated Event Repurchase shall be made by the
Company in compliance with all applicable provisions of the Exchange Act, and
all applicable tender offer rules promulgated thereunder.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities. Principal and interest shall be considered paid on
the date due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay all
principal and interest then due and such Paying Agent is not prohibited from
paying such money to the Noteholders on that date pursuant to the terms of this
Indenture. To the extent lawful, the Company shall pay interest (including
postpetition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
rate borne by the Securities, compounded semiannually.
Interest on any Security which is payable shall be paid to
the person in whose name that Security is registered at the close of business
on the payment date. The Company, the Trustee, the Paying Agent and the
Conversion Agent may treat the person in whose name any Security is registered
as the owner of such Security for the purpose of receiving payment thereof or
an account thereof and for all other purposes whatsoever.
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SECTION 4.02. SEC Reports. Whether or not required by the
rules and regulations of the SEC, so long as any Securities are outstanding, the
Company will file with the SEC and, if requested, furnish to the Trustee and to
the holders of Securities all quarterly and annual financial information
required to be contained in a filing with the SEC on Forms 10-Q and 10-K,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to annual information only, a report
thereon by the Company's certified independent accountants.
SECTION 4.03. Compliance Certificate. The Company shall
deliver to the Trustee, within 90 days after the end of each fiscal year of the
Company, an Officers' Certificate stating that a review of the activities of
the Company and its subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under,
and complied with the covenants and conditions contained in, this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company has kept, observed, performed and fulfilled
each and every covenant, and complied with the covenants and conditions
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge) and that to the best of his
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal or of interest, if any, on the Securities
are prohibited.
One of the Officers signing such Officers' Certificate shall
be either the Company's principal executive officer, principal financial officer
or principal accounting officer.
The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of:
(a) any Default, Event of Default or default in the
performance of any covenant, agreement or condition contained in
this Indenture; or
(b) any event of default under any other mortgage,
indenture or instrument as that term is used in Section 8.01(f),
an Officers' Certificate specifying such Default, Event of Default or default.
SECTION 4.04. Stay, Extension and Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law,
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<PAGE> 25
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.05. Corporate Existence. Subject to Article VII
hereof, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Material Subsidiary of the Company in
accordance with the respective organizational documents of each such subsidiary
and the rights (charter and statutory), licenses and franchises of the
Company and such subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any Material Subsidiary, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its subsidiaries taken as a
whole and that the loss thereof is not adverse in any material respect to the
Noteholders.
SECTION 4.06. Taxes. The Company shall, and shall cause each
of its subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
ARTICLE V
Conversion
SECTION 5.01. Conversion Privilege. A holder of a Security may
convert the principal amount thereof (or any portion thereof that is an integral
multiple of $1,000) into fully paid and nonassessable shares of Common Stock of
the Company at any time after 90 days following the date of original issuance
thereof and prior to the close of business (New York time) on the date of the
Security's maturity at the Conversion Price then in effect, except that, with
respect to any Security called for redemption, such conversion right shall
terminate at the close of business on the Business Day immediately preceding the
redemption date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured). The number of shares of Common Stock
issuable upon conversion of a Security is determined by dividing the principal
amount of the Security converted or to be converted by the conversion price in
effect on the Conversion Date (the "Conversion Price").
The initial Conversion Price is stated in paragraph 10 of the
Securities and is subject to adjustment as provided in this Article V.
Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it. A holder of
Securities is not entitled to any rights of a holder of Common Stock until such
holder of securities has converted such Securities into Common Stock, and only
to the extent that such Securities are deemed to have been converted into Common
Stock under this Article 5.
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SECTION 5.02. Conversion Procedure. To convert a Security, a
holder must satisfy the requirements in paragraph 10 of the Securities. The date
on which the holder satisfies all of those requirements is the conversion date
(the "Conversion Date"). As soon as practicable after the Conversion Date, the
Company shall deliver to the holder through the Conversion Agent a certificate
for the number of whole shares of Common Stock issuable upon the conversion and
a check for any fractional share determined pursuant to Section 5.03. The person
in whose name the certificate is registered shall become the stockholder of
record on the Conversion Date and, as of such date, such person's rights as a
Noteholder shall cease; provided, however, that no surrender of a Security on
any date when the stock transfer books of the Company shall be closed shall be
effective to constitute the person entitled to receive the shares of Common
Stock upon such conversion as the stockholder of record of such shares of Common
Stock on such date, but such surrender shall be effective to constitute the
person entitled to receive such shares of Common Stock as the stockholder of
record thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; provided further, however, that
such conversion shall be at the Conversion Price in effect on the date that such
Security shall have been surrendered for conversion, as if the stock transfer
books of the Company had not been closed.
No payment or adjustment will be made for accrued and unpaid
interest on a converted Security or for dividends or distributions on shares of
Common Stock issued upon conversion of a Security, but if any holder surrenders
a Security for conversion on or after an interest payment record date and on or
before the related interest payment date, then, notwithstanding such
conversion, the interest payable on such interest payment date shall be paid to
the holder of such Security on such record date. In such event, such Security,
when surrendered for conversion, must be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
interest payment date on the portion so converted.
If a holder converts more than one Security at the same time,
the number of whole shares of Common Stock issuable upon the conversion shall be
based on the total principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the
Trustee shall authenticate for the holder a new Security equal in principal
amount to the unconverted portion of the Security surrendered.
SECTION 5.03. Fractional Shares. The Company will not issue
fractional shares of Common Stock upon conversion of a Security. In lieu
thereof, the Company will pay an amount in cash based upon the Daily Market
Price of the Common Stock on the trading day prior to the Conversion Date.
SECTION 5.04. Taxes on Conversion. The issuance of
certificates for shares of Common Stock upon the conversion of any Security
shall be made without charge to the converting Noteholder for such certificates
or for any tax in respect of the issuance of such certificates, and such
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certificates shall be issued in the respective names of, or in such names as may
be directed by, the holder or holders of the converted Security; provided,
however, that in the event that certificates for shares of Common Stock are to
be issued in a name other than the name of the holder of the Security converted,
such Security, when surrendered for conversion, shall be accompanied by an
instrument of transfer, in form satisfactory to the Company, duly executed by
the registered holder thereof or his duly authorized attorney; and provided
further, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the holder of the
converted Security, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or is
not applicable.
SECTION 5.05. Company to Provide Stock. The Company shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of issuance upon
conversion of Securities as herein provided, a sufficient number of shares of
Common Stock to permit the conversion of all outstanding Securities into shares
of Common Stock.
All shares of Common Stock which may be issued upon conversion
of the Securities shall be duly authorized, validly issued, fully paid and
nonassessable when so issued.
SECTION 5.06. Adjustment of Conversion Price. The
Conversion Price shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock to holders of Common Stock, (ii) make a distribution in shares of
Common Stock to holders of Common Stock, (iii) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares of Common
Stock or (iv) combine or reclassify its outstanding shares of Common Stock into
a smaller number of shares of Common Stock, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock which he would have owned immediately following
such action had such Securities been converted immediately prior thereto. Any
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision or combination.
(b) In case the Company shall issue rights or warrants to
substantially all holders of Common Stock entitling them (for a period
commencing no earlier than the record date for the determination of holders of
Common Stock entitled to receive such rights or warrants and expiring not more
than 45 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into or exchangeable for Common Stock)
at a price per share less than the Current Market Price on such record date, the
Conversion Price shall be adjusted so that the same
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shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction of which (i) the numerator
shall be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering price of
the offered shares of Common stock (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current Market Price,
and (ii) the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock offered (or into which the convertible securities so offered are
convertible). Such adjustments shall become effective immediately after such
record date.
(c) In case the Company shall distribute to substantially all
holders of Common Stock shares of any class of Capital Stock of the Company
other than Common Stock, evidences of indebtedness or other assets (other than
cash dividends), or shall distribute to substantially all holders of Common
Stock rights or warrants to subscribe for securities (other than those
securities referred to in subsection (b) above), then in each such case the
Conversion Price 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 such distribution by a fraction of which (i) the numerator shall be
the Current Market Price on the record date mentioned below less the then fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and described in a Board
Resolution) of the portion of the assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock, and (ii) the
denominator shall be such Current Market Price. Such adjustment shall become
effective immediately after the record date for the determination of the
holders of Common Stock entitled to receive such distribution. Notwithstanding
the foregoing, in the event that the Company shall distribute rights or
warrants to subscribe for securities (other than the rights or warrants
referred to in subsection (b) above) ("Rights") pro rata to holders of Common
Stock, the Company may, in lieu of making any adjustment pursuant to this
Section 5.06, make proper provision so that each holder of a Security who
converts such Security (or any portion thereof) after the record date for such
distribution and prior to the expiration or redemption of the Rights shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion (the "Conversion Shares"), a number of
Rights to be determined as follows: (i) if such conversion occurs on or prior
to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at
any time distribute to substantially all holders of its Common Stock cash
(excluding any cash that is distributed as part of a distribution requiring a
Conversion Price adjustment pursuant to paragraph (c) of this Section) in an
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aggregate amount that, together with the sum of (x) the aggregate amount of any
other distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 5% of the product of the Current Market Price on the
Distribution Record Date times the number of shares of Common Stock outstanding
on the Distribution Record Date (excluding shares held in the treasury of the
Company), the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying such Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction contemplated by
this paragraph (d) by a fraction of which (i) the numerator shall be the Current
Market Price on the Distribution Record Date less the amount of such cash and
other consideration (including any Excess Payments) so distributed applicable to
one share (based on the pro rata portion of the aggregate amount of such cash
and other consideration (including any Excess Payments), divided by the shares
of Common Stock outstanding on the Distribution Record Date of Common Stock and
(ii) the denominator shall be such Current Market Price on the Distribution
Record Date, such reduction to become effective immediately prior to the opening
of business on the day following the Distribution Record Date.
(e) In case a tender offer or other negotiated transaction
made by the Company or any Subsidiary of the Company for all or any portion of
the Common Stock shall be consummated, if an Excess Payment is made in respect
of such tender offer or other negotiated transaction and the amount of such
Excess Payment, together with the sum of (x) the aggregate amount of all Excess
Payments plus (y) the aggregate amount of all distributions to all holders of
the Common Stock made in cash, in each case made within the 12 months preceding
the date of payment of such current negotiated transaction consideration or
expiration of such current tender offer, as the case may be (the "Purchase
Date"), and as to which no adjustment pursuant to paragraph (c) or paragraph (d)
of this Section or this paragraph (e) has been made, exceeds 5% of the product
of the Current Market Price on the Purchase Date times the number of shares of
Common Stock outstanding (including any tendered shares but excluding any shares
held in the treasury of the Company) on the Purchase Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this paragraph
(e) by a fraction of which (i) the numerator shall be the Current Market Price
on the Purchase Date less the amount of such Excess Payments and such cash
distributions, if any, applicable to one share (based on the pro rata portion of
the aggregate amount of such Excess Payments and such cash distributions,
divided by the shares of Common Stock outstanding on the Purchase Date) of
Common Stock and (ii) the denominator shall be the Current Market Price on the
Purchase Date, such reduction to become effective immediately prior to the
opening of business on the day following the Purchase Date.
(f) In case the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share (or
having a conversion or exchange price per share) that is less than the Current
Market Price (but excluding, among other things, issuances: (1) pursuant to any
bona fide plan for the benefit of employees, directors or consultants of the
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Company now or hereafter in effect; (2) to acquire all or any portion of a
business in an arm's-length transaction between the Company and an unaffiliated
third party including, if applicable, issuances upon exercise of options or
warrants assumed in connection with such transaction; (3) in a bona fide public
offering pursuant to a firm commitment underwriting or sales at the market
pursuant to a continuous offering stock program; (4) pursuant to the exercise of
warrants, rights (including, without limitation, earnout rights) or options, or
upon the conversion of convertible securities, which are issued and outstanding
on the date hereof, or which may be issued in the future for fair value and with
an exercise price or conversion price at least equal to the Current Market Price
at the time of such issuance), then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the
Conversion Price by a fraction of which (i) the numerator shall be (A) the
number of shares of Common Stock outstanding on the record date or issuance
date, as applicable, plus a number determined by (B) multiplying the number of
additional shares of Common Stock offered or issuable upon conversion or
exchange times the offering, conversion or exchange price per share of
additional shares and dividing the product thereof by the Current Market Price
on the record date or issuance date, as applicable, and (ii) the denominator
shall be the number of shares of Common Stock outstanding on the record date or
issuance date, as applicable, plus the number of additional shares of Common
Stock offered or issuable upon conversion or exchange. Such adjustment shall be
made whenever any such securities are issued and shall become effective on the
date of such issuance.
(g) The Current Market Price per share of Common Stock on any
date (the "Current Market Price") shall be deemed to be the average of the Daily
Market Prices for the shorter of (i) 30 consecutive Business Days ending on the
last full trading day on the exchange or market referred to in determining such
Daily Market Prices prior to the time of determination or (ii) the period
commencing on the date next succeeding the first public announcement of the
issuance of such rights or such warrants or such other distribution or such
negotiated transaction through such last full trading day on the exchange or
market referred to in determining such Daily Market Prices prior to the time of
determination.
(h) In any case in which this Section 5.06 shall require that
an adjustment be made immediately following a record date for an event, the
Company may elect to defer, until such event, issuing to the holder of any
Security converted after such record date the shares of Common Stock and other
Capital Stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other Capital Stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence of the right to receive such shares.
SECTION 5.07. No Adjustment. No adjustment in the Conversion
Price shall be required until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 5.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article V shall be made to the nearest cent or to the nearest
one-hundredth
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of a share, as the case may be. No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value or no par
value of the Common Stock.
SECTION 5.08. Other Adjustments. (a) In the event that, as a
result of an adjustment made pursuant to Section 5.06 above, the holder of any
Security thereafter surrendered for conversion shall become entitled to receive
any shares of Capital Stock of the Company other than shares of its Common
Stock, thereafter the Conversion Price of such other shares so receivable upon
conversion of any Securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article V.
(b) In the event that shares of Common Stock are not delivered
after the expiration of any of the rights or warrants referred to in Section
5.06(b) and Section 5.06(c) hereof, the Conversion Price shall be readjusted to
the Conversion Price which would otherwise be in effect had the adjustment made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered.
SECTION 5.09. Adjustments for Tax Purposes. The Company may,
at its option, make such reductions in the Conversion Price, in addition to
those required by Section 5.06 above, as it determines to be advisable in order
that any stock dividend, subdivision of shares, distribution of rights to
purchase stock or securities or distribution of securities convertible into or
exchangeable for stock made by the Company to its stockholders will not be
taxable to the recipients thereof.
SECTION 5.10. Adjustments by the Company. The Company from
time to time may, to the extent permitted by law, reduce the Conversion Price by
any amount for any period of at least 20 days, in which case the Company shall
give at least 15 days' notice of such reduction in accordance with Section 5.11,
if the Board of Directors has made a determination that such reduction would be
in the best interests of the Company, which determination shall be conclusive.
SECTION 5.11. Notice of Adjustment. Whenever the Conversion
Price is adjusted, the Company shall promptly mail to Noteholders at the
addresses appearing on the Registrar's books a notice of the adjustment and file
with the Trustee an Officers' Certificate briefly stating the facts requiring
the adjustment and the manner of computing it. The certificate shall be
conclusive evidence of the correctness of such adjustment.
SECTION 5.12. Notice of Certain Transactions. In the
event that:
(1) the Company takes any action which would require an
adjustment in theConversion Price;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 5.13; or
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(3) there is a dissolution or liquidation of the Company;
a holder of a Security may wish to convert such Security into shares of Common
Stock prior to the record date for or the effective date of the transaction so
that he may receive the rights, warrants, securities or assets which a holder of
shares of Common Stock on that date may receive. Therefore, the Company shall
mail to Noteholders at the addresses appearing on the Registrar's books and to
the Trustee a notice stating the proposed record or effective date, as the case
may be. The Company shall mail the notice at least 15 days before such date;
however, failure to mail such notice or any defect therein shall not affect the
validity of any transaction referred to in clause (1), (2) or (3) of this
Section 5.12.
SECTION 5.13. Effect of Reclassifications, Consolidations,
Mergers or Sales on Conversion Privilege. If any of the following shall occur,
namely: (i) any reclassification or change of outstanding shares of Common Stock
issuable upon conversion of Securities (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation or merger to
which the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or 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) in, outstanding shares of Common Stock or (iii) any sale or
conveyance of all or substantially all of the property or business of the
Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture in form satisfactory to the
Trustee providing that the holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of shares of stock
and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Price provided for in this
Article V. The foregoing, however, shall not in any way affect the right a
holder of a Security may otherwise have, pursuant to clause (ii) of the last
sentence of subsection (c) of Section 5.06, to receive Rights upon conversion of
a Security. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the holders of the Securities as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing. The
provision of this Section 5.13 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
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In the event the Company shall execute a supplemental
indenture pursuant to this Section 5.13, the Company shall promptly file with
the Trustee an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or securities or property (including cash)
receivable by holders of the Securities upon the conversion of their Securities
after any such reclassification, change, consolidation, merger, sale or
conveyance and any adjustment to be made with respect thereto.
SECTION 5.14. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article V should be made, how it should
be made or what such adjustment should be, but may accept as conclusive evidence
of the correctness of any such adjustment, and shall be protected in relying
upon the Officers' Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 5.11. The Trustee makes
no representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 5.13, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.13.
ARTICLE VI
Subordination
SECTION 6.01. Agreement to Subordinate. The Company, for
itself and its successors, and each Noteholder, by his acceptance of Securities,
agree that the payment of the principal of or interest on or any other amounts
due on the Securities is subordinated in right of payment, to the extent and in
the manner stated in this Article VI, to the prior payment in full of all
existing and future Senior Debt.
SECTION 6.02. No Payment on Securities if Senior Debt in
Default. Anything in this Indenture to the contrary notwithstanding, no payment
on account of principal of or redemption of, interest on or other amounts due on
the Securities (including the making of a deposit pursuant to Section 8.01), and
no redemption, purchase, or other acquisition of the Securities, shall be made
by or on behalf of the Company (i) unless full payment of amounts then due for
principal and interest and of all other amounts then due on all Senior Debt has
been made or duly provided for pursuant to the terms of the instrument governing
such Senior Debt, (ii) if, at the time of such payment, redemption, purchase or
other acquisition, or immediately after giving effect thereto, there shall exist
under any Senior Debt, or any agreement pursuant to which any Senior Debt is
issued, any default, which default shall not have been cured or waived and which
default shall have resulted in the full
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amount of such Senior Debt being declared due and payable or (iii) if, at the
time of such payment, redemption, purchase or other acquisition, the Company and
the Trustee shall have received written notice (a "Payment Blockage Notice")
from an authorized representative of the holders of Designated Senior Debt that
there exists under such Designated Senior Debt, or any agreement pursuant to
which such Designated Senior Debt is issued, any default, which default shall
not have been cured or waived, permitting the holders thereof to declare any
amounts of such Designated Senior Debt due and payable, but only for the period
(the "Payment Blockage Period") commencing on the date of receipt of the Payment
Blockage Notice by each of the Company and the Trustee and ending (unless
earlier terminated by notice given to the Company and the Trustee by an
authorized representative of the holders of such Designated Senior Debt) on the
earlier of (a) the date on which such event of default shall have been cured or
waived or (b) 180 days from the receipt of the Payment Blockage Notice by each
of the Company and the Trustee. Notwithstanding the provisions described in the
immediately preceding sentence (other than in clauses (i) and (ii)), unless the
holders of such Designated Senior Debt or the authorized representative of such
holders shall have accelerated the maturity of such Designated Senior Debt, the
Company may resume payments on the Securities after the end of such Payment
Blockage Period. Not more than one Payment Blockage Notice in any consecutive
365-day period will be effective for purposes of clause (iii) of the second
preceding sentence, irrespective of the number of defaults with respect to
Senior Debt during such period.
In the event that, notwithstanding the provisions of this
Section 6.02, payments are made by or on behalf of the Company in contravention
of the provisions of this Section 6.02, such payments shall be held by the
Trustee, any Paying Agent or the holders, as applicable, in trust for the
benefit of, and shall be paid over to and delivered to, the Representative of
the holders of Senior Debt or the trustee under the indenture or other agreement
(if any), pursuant to which any instruments evidencing any Senior Debt may have
been issued for application to the payment of all Senior Debt ratably according
to the aggregate amounts remaining unpaid to the extent necessary to pay all
Senior Debt in full in accordance with the terms of such Senior Debt, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
The Company shall give prompt written notice to the Trustee
and any Paying Agent of any default or event of default under any Senior Debt or
under any agreement pursuant to which any Senior Debt may have been issued.
SECTION 6.03. Distribution on Acceleration of Securities;
Dissolution and Reorganization; Subrogation of Securities. (a) If the Securities
are declared due and payable because of the occurrence of an Event of Default,
the Company shall give prompt written notice to the holders of all Senior Debt
or to the trustee(s) for such Senior Debt of such acceleration. The Company may
not pay the principal of or interest on or any other amounts due on the
Securities until five days after such holders or trustee(s) of Senior Debt
receive such notice and, thereafter, the Company may pay the principal of or
interest on or any other amounts due on the Securities only if the provisions of
this Article VI permit such payment.
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(b) Upon (i) any acceleration of the principal amount due on
the Securities because of an Event of Default or (ii) any distribution of assets
of the Company upon any dissolution, winding up, liquidation or reorganization
of the Company (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or any other dissolution,
winding up, liquidation or reorganization of the Company):
(1) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, the interest thereon and any
other amounts due thereon before the holders are entitled to receive payment on
account of the principal of or interest on or any other amounts due on the
Securities;
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article with respect to the Securities, to the payment in full
without diminution or modification by such plan of all Senior Debt), to which
the holders or the Trustee would be entitled except for the provisions of this
Article, shall be paid by the liquidating trustee or agent or other person
making such a payment or distribution, directly to the holders of Senior Debt
(or their representatives(s) or trustee(s) acting on their behalf), ratably
according to the aggregate amounts remaining unpaid on account of the principal
of or interest on and other amounts due on the Senior Debt held or represented
by each, to the extent necessary to make payment in full of all Senior Debt
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article with respect to the
Securities, to the payment in full without diminution or modification by such
plan of Senior Debt), shall be received by the Trustee or the holders before all
Senior Debt is paid in full, such payment or distribution shall be held in trust
for the benefit of, and be paid over to upon request by a holder of the Senior
Debt, the holders of the Senior Debt remaining unpaid (or their representatives)
or trustee(s) acting on their behalf, ratably as aforesaid, for application to
the payment of such senior Debt until all such Senior Debt shall have been said
in full, after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.
Subject to the payment in full of all Senior Debt, the holders
of the Securities shall be subrogated to the rights of the holders of Senior
Debt: to receive payments or distributions of cash, property or securities of
the Company applicable to the Senior Debt until the principal of and interest
on the Securities shall be paid in full and, for purposes of such subrogation,
no such payments or distributions to the holders of Senior Debt of cash,
property or securities which otherwise would
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have been payable or distributable to holders shall, as between the Company, its
creditors other than the holders of Senior Debt, and the holders, be deemed to
be a payment by the Company to or on account of the Senior Debt, it being
understood that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the holders, on the one hand, and
the holders of Senior Debt, on the other hand.
Nothing contained in this Article VI or elsewhere in this
Indenture or in the Securities is intended to or shall (i) impair, as between
the Company and its creditors other than the holders of Senior Debt, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with the terms of the Securities,
(ii) affect the relative rights of the holders and creditors of the Company
other than holders of Senior Debt or, as between the Company and the Trustee,
the obligations of the Company to the Trustee, or (iii) prevent the Trustee or
the holders from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article VI of the holders of Senior Debt in respect of cash, property and
securities of the Company received upon the exercise of any such remedy.
Upon distribution of assets of the Company referred to in this
Article VI, the Trustee, subject to the provisions of Section 9.01 hereof, and
the holders shall be entitled to rely upon a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the holders for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Debt and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
VI. The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt. Nothing contained in this Article VI or elsewhere in
this Indenture, or in any of the Securities, shall prevent the good faith
application by the Trustee of any moneys which were deposited with it hereunder,
prior to its receipt of written notice of facts which would prohibit such
application, for the purpose of the payment of or on account of the principal of
or interest on, the Securities unless, prior to the date on which such
application is made by the Trustee, the Trustee shall be charged with actual
notice under Section 6.03(d) hereof of the facts which would prohibit the making
of such application.
(c) The provisions of this Article VI shall not be applicable
to any cash, properties or securities received by the Trustee or by any holder
when received as a holder of Senior Debt and nothing in Section 9.11 hereof or
elsewhere in this Indenture shall deprive the Trustee or such holder of any of
its rights as such holder.
(d) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment of money to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article VI. The Trustee, subject to the provisions of
Section 9.01 hereof, shall be entitled to assume that no such fact exists unless
the Company or any holder of Senior Debt or any trustee therefor has given
notice thereof to the Trustee. Notwithstanding the provisions of this Article VI
or any other provisions of this Indenture,
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the Trustee shall not be charged with knowledge of the existence of any fact
which would prohibit the making of any payment of moneys to or by the Trustee in
respect of the Securities pursuant to the provisions in this Article VI, unless,
and until three Business Days after the Trustee shall have received written
notice thereof from the Company or any holder or holders of Senior Debt or from
any trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01 hereof, shall be entitled in
all respects conclusively to assume that no such facts exist; provided that if
on a date not less than three Business Days immediately preceding the date upon
which, by the terms hereof, any such moneys may become payable for any purpose
(including, without limitation, the principal of or interest on any Security),
the Trustee shall not have received with respect to such moneys the notice
provided for in this Section 6.03(d), then anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a person representing himself to be a
holder of Senior Debt (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of Senior Debt (or a trustee on behalf of
any such holder or holders). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article VI, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article VI , and, if such evidence is not
furnished, the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment; nor shall
the Trustee be charged with knowledge of the curing or waiving of any default of
the character specified in Section 6.02 hereof or that any event or any
condition preventing any payment in respect of the Securities shall have ceased
to exist, unless and until the Trustee shall have received written notice to
such effect.
(e) The provisions of this Section 6.03 applicable to the
Trustee shall (unless the context requires otherwise) also apply to any Paying
Agent for the Company.
SECTION 6.04. Reliance by Senior Debt on Subordination
Provisions. Each holder of any Security by his acceptance thereof acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration for each holder of any Senior Debt,
whether such Senior Debt was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt. Notice of any default in the payment of
any Senior Debt, except as expressly stated in this Article VI, and notice of
acceptance of the provisions hereof are hereby expressly waived. Except as
otherwise expressly provided herein, no waiver, forbearance or release by any
holder of Senior Debt under such Senior
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Debt or under this Article VI shall constitute a release of any of the
obligations or liabilities of the Trustee or holders of the Securities provided
in this Article VI.
SECTION 6.05. No Waiver of Subordination Provisions. Except as
otherwise expressly provided herein, no right of any present or future holder of
any Senior Debt to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of, or notice to, the Trustee or the holders of the
Securities, without incurring responsibility to the holders of the Securities
and without impairing or releasing the subordination provided in this Article VI
or the obligations hereunder of the holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise dispose of any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any person liable in any manner for the
collection of Senior Debt; and (iv) exercise or refrain from exercising any
rights against the Company or any other person.
SECTION 6.06. Trustee's Relation to Senior Debt. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article VI in respect of any Senior Debt at any time held by it, to the same
extent as any holder of Senior Debt, and nothing in Section 9.11 hereof or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations,
as are specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not owe any fiduciary duty to
the holders of Senior Debt but shall have only such obligations to such holders
as are expressly set forth in this Article VI.
Each holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article VI and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding up or liquidation or
reorganization under any applicable bankruptcy law of the Company (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of such holder's Securities in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt in the form required in such
proceedings prior to 30 days before the expiration of the time to file such
claims or proofs, then any holder or holders of Senior Debt or their
representative or representatives shall have the right to
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demand, sue for, collect, receive and receipt for the payments and distributions
in respect of the Securities which are required to be paid or delivered to the
holders of Senior Debt as provided in this Article VI and to file and prove all
claims therefor and to take all such other action in the name of the holders or
otherwise, as such holders of Senior Debt or representative thereof may
determine to be necessary or appropriate for the enforcement of the provisions
of this Article VI.
SECTION 6.07. Other Provisions Subject Hereto. Expect as
expressly stated in this Article VI, notwithstanding anything contained in this
Indenture to the contrary, all the provisions of this Indenture and the
Securities are subject to the provisions of this Article VI. However, nothing in
this Article VI shall apply to or adversely affect the claims of, or payment to,
the Trustee pursuant to Section 9.07. Notwithstanding the foregoing, the failure
to make a payment on account of principal of or interest on the Securities by
reason of any provision of this Article VI shall not be construed as preventing
the occurrence of an Event of Default under Section 8.01.
ARTICLE VII
Successors
SECTION 7.01. Merger, Consolidation or Sale of Assets. The
Company may not consolidate or merge with or into any Person (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets, or
permit any Person to consolidate with or merge into the Company or sell, convey,
transfer or lease all or substantially all of its properties and assets to the
Company, unless:
(a) the Company is the surviving corporation or the entity or
the person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia;
(b) the entity or person formed by or surviving any such
consolidation or merger (if other than the Company) assumes all the
Obligations of the Company under the Securities and the Indenture,
pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee;
(c) such sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the Company's
properties or assets shall be as an entirety or virtually as an
entirety to one Person and such Person shall have assumed all the
Obligations of the Company under the Securities and the Indenture,
pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee;
(d) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Company as a result of such transaction
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as having been incurred by the Company at the time of such
transaction) no Default or Event of Default exists; and
(e) the Company or such person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such transaction and the supplemental indenture comply
with the Indenture and that all conditions precedent in the Indenture
relating to such transaction have been satisfied.
SECTION 7.02. Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 7.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
person has been named as the Company herein; provided, however, that the
predecessor Company in the case of a sale, assignment, transfer, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest on the Securities.
ARTICLE VIII
Defaults and Remedies
SECTION 8.01. Events of Default. An "Event of Default"
occurs if:
(a) the Company defaults in the payment of interest on any
Security when the same becomes due and payable, whether or not such
payments shall be prohibited by Article VI, and the Default continues
for a period of 30 days after the date due and payable;
(b) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at maturity, upon
redemption or otherwise, whether or not such payment shall be
prohibited by Article VI;
(c) failure to deposit the Redemption Price as provided in
Section 3.05 or the Repurchase Amount as provided in Section 3.09;
(d) failure to pay when and as due the Redemption Price as
provided in Section 3.05 or the Repurchase Amount as provided in
Section 3.09;
(e) the Company fails to observe or perform any other covenant
or agreement contained in this Indenture or the Securities, required by
it to be performed and the Default continues for a period of 60 days
after the receipt of written notice from the Trustee to the
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Company or from the holders of 25% in aggregate principal amount of the
then outstanding Securities to the Company and the Trustee stating that
such notice is a "Notice of Default";
(f) there is a default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company
or any Subsidiary of the Company (or the payment of which is Guaranteed
by the Company or any Subsidiary of the Company), whether such
Indebtedness or Guarantee now exists or is created after the Issuance
Date, which default (i) is caused by a failure to pay when due
principal of or interest on such Indebtedness within the grace period
provided for in such Indebtedness (which failure continues beyond any
applicable grace period) (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such indebtedness, together with
the principal amount of any other such Indebtedness under which there
is a Payment Default or the maturity of which has been so accelerated,
aggregates $25 million or more;
(g) a final, non-appealable judgment or final, non-appealable
judgments (other than any judgment as to which a reputable insurance
company has accepted full liability) for the payment of money are
entered by a court or courts of competent jurisdiction against the
Company or any Material Subsidiary of the Company and remain
undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
judgments exceeds $25 million;
(h) the Company or any Material Subsidiary pursuant to or
within the meaning of any Bankruptcy Law: (i) commences a voluntary
case, (ii) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor, (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property, (iv) makes a general assignment for the benefit of its
creditors, or (v) makes the admission in writing that it generally is
unable to pay its debts as the same become due; or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company or any Material Subsidiary of the Company in an involuntary
case, (ii) appoints a Custodian of the Company or any Material
Subsidiary of the Company or for all or substantially all of its
property, and the order or decree remains unstayed and in effect for 60
days, or (iii) orders the liquidation of the Company or any Material
Subsidiary of the Company, and the order or decree remains unstayed and
in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
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SECTION 8.02. Acceleration. If an Event of Default (other than
an Event of Default specified in clauses (h) and (i) of Section 8.01 hereof)
occurs and is continuing, the Trustee by notice to the Company, or the
Noteholders of at least 25% in principal amount of the then outstanding
Securities by notice to the Company and the Trustee, may declare all the
Securities to be due and payable. Upon such declaration, the principal of,
premium, if any, and accrued and unpaid interest on the Securities shall be due
and payable immediately. If an Event of Default specified in clause (h) or (i)
of Section 8.01 hereof occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Noteholder. The Noteholders of a majority in aggregate
principal amount of the then outstanding Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration.
SECTION 8.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 8.04. Waiver of Past Defaults. The Noteholders of a
majority in aggregate principal amount of the then outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences except a continuing Default or Event of Default in the payment of
the Redemption Price or the Repurchase Amoung or the principal of, or interest
on, any Security. When a Default or Event of Default is waived, it is cured and
ceases; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 8.05. Control by Majority. The holders of a majority
in principal amount of the then outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of other Noteholders, or would involve the
Trustee in personal liability.
SECTION 8.06. Limitation on Suits. A Noteholder may
individually pursue any remedy with respect to this Indenture or the
Securities only if:
(a) the Noteholder gives to the Trustee notice of a
continuing Event of Default;
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(b) the Noteholders of at least 25%r in principal amount
of the then outstanding Securities make a request to the Trustee to
pursue the remedy;
(c) such Noteholder or Noteholders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 8.07. Rights of Noteholders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any holder
of a Security to receive payment of principal and interest on the Security, on
or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Noteholder made pursuant
to this Section.
SECTION 8.08. Collection Suit by Trustee. If an Event of
Default specified in Section 8.01(a) or (b) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount of principal and interest remaining
unpaid on the Securities and interest on overdue principal and interest and such
further amount as shall be sufficient to cover the costs and, to the extent
lawful, expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 8.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Noteholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property. Nothing contained herein shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Noteholder thereof, or to authorize the Trustee
to vote in respect of the claim of any Noteholder in any such proceeding.
SECTION 8.10. Priorities. If the Trustee collects any
money pursuant to this Article VIII, it shall pay out the money in the
following order:
First: to the Trustee for amounts due under Section
9.07 hereof;
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Second: to the holders of Senior Debt to the extent required
by Article VI;
Third: to Noteholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Securities for principal and interest, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12 hereof, the
Trustee may fix a record date and payment date for any payment to Noteholders
made pursuant to this Section.
SECTION 8.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys, fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a holder pursuant to Section 8.06 hereof, or a
suit by holders of more than 10% in principal amount of the then outstanding
Securities.
ARTICLE IX
Trustee
SECTION 9.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i)
the Trustee need perform only those duties that are specifically set forth in
this Indenture and no others and (ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that: (i) this paragraph does not limit the effect of
paragraph (b) of this Section 9.01; (ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts and (iii) the
Trustee shall not be liable with respect to any action
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it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 8.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.01.
No provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 9.02. Rights of Trustee. (a) The Trustee may rely
on any document reasonably believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
(unless other evidence be herein specifically prescribed) may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and nominees and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action that it
takes or omits to take in good faith, without negligence or wilful misconduct,
and that it reasonably believes to be authorized or within its rights or powers.
(e) The Trustee shall not be charged with knowledge of any
Event of Default under subsection(e), (f) or (g) of Section 8.01 or of the
identity of any Material Subsidiary unless either (1) a Trust Officer assigned
to its Institutional Investor Services Group shall have actual knowledge
thereof, or (2) the Trustee shall have received notice thereof in accordance
with Section 12.02 hereof from the Company or any holder.
SECTION 9.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 9.10 and 9.11 hereof.
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SECTION 9.04. Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities; it shall not be accountable for the Company's use of the proceeds
from any Securities authenticated and delivered by the Trustee in conformity
with the provisions of this Indenture; and it shall not be responsible for any
statement of the Company in the Indenture or any statement in the Securities
other than its authentication.
SECTION 9.05. Notice of Defaults. If a Default or Event of
Default occurs and is continuing and if it is actually known to the Trustee, the
Trustee shall mail to Noteholders a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment on any Security, the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 9.06. Reports by Trustee to Noteholders. Within 60
days after the reporting date stated in Section 12.10, the Trustee shall mail to
Noteholders a brief report dated as of such reporting date that complies with
Trust Indenture Act ss. 313(a) if and to the extent required by such ss.313(a).
The Trustee also shall comply with Trust Indenture Act ss. 313(b)(2) and shall
transmit by mail all reports as required by Trust Indenture Act ss. 313(c).
A copy of each report at the time of its mailing to
Noteholders shall be filed with the SEC and each stock exchange on which the
Securities are listed. The Company shall notify the Trustee when the Securities
are listed on any stock exchange.
SECTION 9.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable and duly documented disbursements,
expenses and advances incurred or made by it. Such disbursements and expenses
may include the reasonable and duly documented disbursements, compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its officers,
directors, employees and all other agents against any loss or liability incurred
by it except as set forth in the next paragraph. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable and duly
documented fees, disbursements and expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence, wilful
misconduct or bad faith.
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To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except money or property held in trust to pay
principal and interest on particular Securities, any Redemption Price or the
Repurchase Amount.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 8.01(h) or (i) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 9.07 shall survive the
termination of this Indenture, as provided by Section 10.01 hereof.
SECTION 9.08. Replacement of Trustee. A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee's acceptance of appointment as provided in this
Section.
The Trustee may resign by so notifying the Company. The holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in Trust
Indenture Act ss. 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
holders of a majority in principal amount of the then outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the holders of at least 10% in principal amount of the then
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in Trust Indenture Act
ss. 310(b), any Noteholder who has been a bona
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fide holder of a Security for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, the
Company shall promptly pay all amounts due and payable to the retiring Trustee
pursuant to Section 9.07 hereof and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Noteholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 9.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 9.08, the
Company's obligations under Section 9.07 hereof shall continue for the benefit
of the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
SECTION 9.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 9.10. Eligibility; Disqualification. This Indenture
shall always have a Trustee who satisfies the requirements of Trust Indenture
Act ss. 310(a)(1) and (5). The Trustee shall always have a combined capital and
surplus as stated in Section 12.10 hereof. The Trustee is subject to Trust
Indenture Act ss. 310(b).
SECTION 9.11. Preferential Collection of Claims Against
Company. The Trustee is subject to Trust Indenture Act ss. 311(a), excluding any
creditor relationship listed in Trust Indenture Act ss. 311(b). A Trustee who
has resigned or been removed shall be subject to Trust Indenture Act ss. 311(a)
to the extent indicated therein.
SECTION 9.12. Sections Applicable to Registrar, Paying Agent
and Conversion Agent. The term "Trustee" as used in Sections 9.01, 9.02, 9.03,
9.04 and 9.07 hereof shall (unless the context requires otherwise) be construed
as extending to and including the Trustee acting in its capacity, if any, as
Registrar, Paying Agent and Conversion Agent.
ARTICLE X
Discharge of Indenture
SECTION 10.01. Termination of Company's Obligations. This
Indenture shall cease to be of further effect (except that the Company's
obligations under Sections 9.07 and 10.02 hereof shall survive) when all
outstanding Securities theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder.
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Thereupon, the Trustee upon request of the Company, shall
acknowledge in writing the discharge of the Company's obligations under this
Indenture, except for those surviving obligations specified above.
SECTION 10.02. Repayment to Company. The Trustee and the
Paying Agent shall promptly pay to the Company upon request any excess money or
securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Company shall have first caused
notice of such payment to the Company to be mailed to each Noteholder entitled
to such payment no less than 30 days prior to such payment. After payment to the
Company, the Trustee and the Paying Agent shall have no further liability with
respect to such money and Noteholders entitled to the money must look to the
Company for payment as general creditors unless any applicable abandoned
property law designates another person.
ARTICLE XI
Amendments, Supplements and Waivers
SECTION 11.01. Without Consent of Noteholders. The Company
and the Trustee may amend or supplement this Indenture or the Securities
without the consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 5.13 and 7.01 hereof;
(c) to provide for uncertificated Securities in addition to
certificated Securities;
(d) to make any change that does not adversely affect the
legal rights hereunder of any Noteholder;
(e) to qualify this Indenture under the Trust Indenture Act or
to comply with the requirements of the SEC in order to maintain the
qualification of the Indenture under the Trust Indenture Act; or
(f) to make any change that provides any additional rights
or benefits to the holders of Securities.
An amendment under this Section 11.01 may not make any change
that adversely affects the rights under Article VI of any holder of Senior Debt
then outstanding unless the holders of such
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Senior Debt (or any group or representative thereof authorized to give a
consent) consent to such change.
SECTION 11.02. With Consent of Noteholders. Subject to Section
8.07 hereof, the Company and the Trustee may amend or supplement this Indenture
or the Securities with the written consent (including consents obtained in
connection with any tender offer or exchange offer for Securities) of the
Noteholders of at least a majority in aggregate principal amount of the then
outstanding Securities. Subject to Sections 8.04 and 8.07 hereof, the
Noteholders of a majority in aggregate principal amount of the Securities then
outstanding may also by their written consent (including consents obtained in
connection with any tender offer or exchange offer for Securities) waive any
existing Default as provided in Section 8.04 or waive compliance in a particular
instance by the Company with any provision of this Indenture or the Securities.
However, without the consent of each Noteholder affected, an amendment,
supplement or waiver under this Section may not (with respect to any Securities
held by a nonconsenting Noteholder):
(a) reduce the amount of Securities whose holders must
consent to an amendment, supplement or waiver of any provision of
this Indenture;
(b) reduce the rate of or change the time for payment of
interest on any Security;
(c) reduce the principal of or change the stated maturity of
any Security or alter the redemption provisions with respect thereto;
(d) make any Security payable in money other than that stated
in the Security;
(e) make any change in Section 2.03, 8.04, 8.07 or 11.02
hereof (this sentence);
(f) waive a default in the payment of the Designated Event
Payment or the principal of, or interest on, any Security (other than
as provided in Section 8.04);
(g) waive a redemption payment payable on any Security or a
default is the payment thereof;
(h) make any change that adversely affects the right of
Noteholders to require the Company to repurchase Securities upon the
occurrence of a Designated Event;
(i) make any change in Articles V or VI hereof that adversely
affects the interests of the Noteholders; or
(j) impair the right to institute suit for the enforcement
of any payment on or with respect to the Securities.
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To secure a consent of the Noteholders under this Section
11.02, it shall not be necessary for the Noteholders to approve the particular
form of any proposed amendment, supplement or waiver, but it shall be sufficient
if such consent approves the substance thereof.
An amendment under this Section 11.02 may not make any change
that adversely affects the rights under Article VI of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of Securities or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or agreed to be paid to all holders of the Securities that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
After an amendment, supplement or waiver under this Section
11.02 becomes effective, the Company shall mail to Noteholders a notice briefly
describing the amendment or waiver.
SECTION 11.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall be set forth in a
supplemental indenture that complies with the Trust Indenture Act as then in
effect.
SECTION 11.04. Revocation and Effect of Consents. Until an
amendment, supplement or waiver becomes effective, a consent to it by a holder
of a Security is a continuing consent by the Noteholder and every subsequent
holder of a Security or portion of a Security that evidences the same debt as
the consenting holder's Security, even if notation of the consent is not made on
any Security. However, any such Noteholder or subsequent Noteholder may revoke
the consent as to such holder's Security or portion of a Security if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the holders of the requisite principal
amount of Securities have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Noteholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
holders of the principal amount of Securities required hereunder for such
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amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective it
shall bind every Noteholder, unless it is of the type described in any of
clauses (a) through (i) of Section 11.02 hereof. In such case, the amendment or
waiver shall bind each Noteholder who has consented to it and every subsequent
Noteholder that evidences the same debt as the consenting holder's Security.
SECTION 11.05. Notation on or Exchange of Securities. The
Trustee may place an appropriate notation about an amendment or waiver on any
Security thereafter authenticated. The Company in exchange for all Securities
may issue, and the Trustee shall authenticate, new Securities that reflect the
amendment or waiver.
SECTION 11.06. Trustee Protected. Upon the request of the
Company accompanied by a resolution of its Board of Directors authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Noteholders, if required by the provisions of Section 11.02 hereof, and upon
receipt by the Trustee of any documents required by the Trustee and provided in
Section 9.02 hereof, the Trustee shall join with the Company in the execution
of such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
ARTICLE XII
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies, or conflicts with another provision which
is automatically deemed to be incorporated in this Indenture by the Trust
Indenture Act, the incorporated provision shall control.
SECTION 12.02. Notices. Any notice or communication by the
Company or the Trustee to the other is duly given if in writing and delivered in
person or mailed by first-class mail or sent by facsimile (in the case of the
Company, the Trustee, the Paying Agent, the Registrar or the Conversion Agent)
to the other's address stated in Section 12.10 hereof. The Company, the Trustee,
the Paying Agent, the Registrar or the Conversion Agent by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Noteholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it shall be deemed given on the date mailed,
whether or not the addressee receives it.
If the Company mails a notice or communication to Noteholders,
it shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
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In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by the Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
SECTION 12.03. Communication by Noteholders with Other
Noteholders. Noteholders may communicate pursuant to Trust Indenture Act ss.
312(b) with other Noteholders with respect to their rights under this Indenture
or the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of Trust Indenture Act ss. 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 4.03)
shall include:
(a) a statement that the person signing such certificate
or rendering such opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, such
person has made such examination or investigation as is necessary to
enable such person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
SECTION 12.06. Rules by Trustee and Agents. The Trustee
may make reasonable rules for action by, or a meeting of, Noteholders. The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.
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SECTION 12.07. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions in the State of New
York are not required to be open. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period. If any other operative date for purposes of this Indenture shall occur
on a Legal Holiday then for all purposes the next succeeding day that is not a
Legal Holiday shall be such operative date.
SECTION 12.08. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Noteholder by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
SECTION 12.09. Counterparts. This Indenture may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
SECTION 12.10. Variable Provisions. "Officer" means the
Chairman of the Board, the President, any Vice President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Company initially appoints the Trustee as Paying Agent,
Registrar, Conversion Agent and authenticating agent and the Trustee hereby
accepts such appointments.
The first certificate pursuant to Section 4.03 hereof shall be
for the fiscal year ending on December 31, 1996.
The reporting date for Section 9.06 hereof is March 15 of
each year. The first reporting date is March 15, 1997.
The Trustee shall always have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report
of condition.
The Company's address is: Swift Energy Company
16825 Northchase Drive, Suite 400
Houston, Texas 77060
Telephone Number: (281) 874-2700
Facsimile Number: (281) 874-2701
The Trustee's address is: Bank One, Columbus, N.A.
100 East Broad Street
Columbus, Ohio 43271-0181
-48-
<PAGE> 55
Attention: Corporation Trust Administration
Telephone Number: (614) 248-5811
Facsimile Number: (614) 248-5195
SECTION 12.11. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE
OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 12.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.13. Successors. All agreements of the Company
in this Indenture and the Securities shall bind its successor. All agreements
of the Trustee in this Indenture shall bind its successor.
SECTION 12.14. Severability. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 12.15. Table of Contents, Headings, Etc. The Table of
Contents, Cross- Reference Table, and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
SWIFT ENERGY COMPANY,
as Company,
By: _____________________________________
Name:
Title:
BANK ONE, COLUMBUS, N.A., as Trustee,
By: ____________________________________
Name:
Title:
-49-
<PAGE> 56
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
A-1
<PAGE> 57
No.
Cusip No. ___________
SWIFT ENERGY COMPANY
___% CONVERTIBLE SUBORDINATED NOTE
DUE 2006
SWIFT ENERGY COMPANY
Swift Energy Company, a Texas corporation (the "Company") promises to
pay to or registered __________________________________________________________
assigns, the principal sum [indicated on Schedule A hereof]* [of Dollars]** on
_________________ November ___, 2006.
Interest Payment Dates: April 15 and October 15,
commencing April 15, 1997
Record Dates: March 31 and September 30
Reference is hereby made to the further provisions of this
Convertible Note set forth on the reverse hereof which further provisions shall
for all purposes have the same effect as if set forth at this place.
- ---------------------------
* Applicable to Global Securities only.
** Applicable to certificated Securities only.
A-2
<PAGE> 58
IN WITNESS WHEREOF, Swift Energy Company has caused this Convertible
Note to be signed manually or by facsimile by its duly authorized officer and a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated:_________________
SWIFT ENERGY COMPANY
By:______________________________
[Seal]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the ___%
Convertible Subordinated Notes
due 2006 described in the
within-mentioned Indenture.
BANK ONE, COLUMBUS, N.A., as Trustee,
By:____________________________________
Authorized officer
A-3
<PAGE> 59
[FORM OF REVERSE OF NOTE]
SWIFT ENERGY COMPANY
___% Convertible Subordinated Note Due 2006
1. Interest. Swift Energy Company, a Texas corporation (the
"Company"), is the issuer of this ___% Convertible Subordinated Note due 2006
(the "Convertible Note"). The Company promises to pay interest on the
Convertible Notes in cash semiannually on each April 15 and October 15,
commencing on April 15, 1997, to holders of record on the immediately preceding
March 31 and September 30.
Interest on the Convertible Notes will accrue from the most
recent date to which interest has been paid, or if no interest has been paid,
from November , 1996. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the rate borne by the Convertible Notes, compounded annually.
2. Method of Payment. The Company will pay interest on the Convertible
Notes (except defaulted interest) to the persons who are registered holders of
the Convertible Notes at the close of business on the record date for the next
interest payment date even though Convertible Notes are cancelled after the
record date and on or before the interest payment date. The Noteholder hereof
must surrender Convertible Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a holder's registered
address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice to any
Noteholder. The Company or any of its Affiliates may act in any such capacity.
4. Indenture. The Company issued the Convertible Notes under an
indenture, dated as of November ___, 1996 (the "Indenture"), between the Company
and Bank One, Columbus, N.A., as Trustee. The terms of the Convertible Notes
include those stated in the Indenture and those made part of the Indenture by
the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect
on the date of the Indenture. The Convertible Notes are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
Noteholders are referred to the Indenture and such Act for a statement of such
terms. The Convertible Notes are unsecured obligations of the Company limited to
(except as otherwise provided in the Indenture) up to an aggregate principal
amount of $115,000,000, and are subordinated in right of payment to all existing
and future Senior Debt of the Company as provided in the Indenture. Any holder
of this Convertible Note shall be deemed to have
A-4
<PAGE> 60
agreed to and be bound by all the terms and conditions contained in the
Indenture applicable to a holder of a Convertible Note.
5. Optional Redemption. The Convertible Notes are not subject to
redemption at the Company's option prior to November ___, 1999. On such date and
thereafter, the Convertible Notes will be subject to redemption at the option of
the Company, in whole or in part (in any integral multiple of $1,000), upon not
less than 15 nor more than 60 days prior notice by mail at the following
redemption prices (expressed as percentages of the principal amount set forth
below), if redeemed during the 12-month period beginning November of the
years indicated:
Year Redemption
- ---- Price
----------
1999..............................................
2000..............................................
2001..............................................
2002..............................................
2003..............................................
2004..............................................
2005..............................................
, in each case together with accrued interest up to but not including the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on an interest payment date) . On or after
the redemption date, interest will cease to accrue on the Convertible Notes, or
portion thereof, called for redemption.
6. Notice of Redemption. Notice of redemption will be mailed at least
15 days but not more than 60 days before the redemption date to each holder of
the Convertible Notes to be redeemed at his address of record. The Convertible
Notes in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000. In the event of a redemption of less than all of
the Convertible Notes, the Convertible Notes will be chosen for redemption by
the Trustee in accordance with the Indenture. Unless the Company defaults in
making such redemption payment, or the Paying Agent is prohibited from making
such payment pursuant to the Indenture, interest ceases to accrue on the
Convertible Notes or portions of them called for redemption on and after the
redemption date.
If this Convertible Note is redeemed subsequent to a record
date with respect to any interest payment date specified above and on or prior
to such interest payment date, then any accrued interest will be paid to the
person in whose name this Convertible Note is registered at the close of
business on such record date.
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<PAGE> 61
7. Mandatory Redemption. The Company will not be required to make
mandatory redemption payments with respect to the Convertible Notes. There
are no sinking fund payments with respect to the Convertible Notes.
8. Repurchase at Option of Holder. If there is a Designated Event, the
Company shall be required to offer to purchase on the Designated Event Payment
Date all outstanding Convertible Notes at a purchase price equal to 101% of the
principal amount thereof on the date of purchase, plus accrued and unpaid
interest to the Designated Event Payment Date. Holders of Convertible Notes that
are subject to an offer to purchase will receive a notice of a Designated
Event Repurchase from the Company prior to any related Designated Event Payment
Date and may elect to have such Convertible Notes or portions thereof in
authorized denominations purchased by completing the form entitled "Option of
Noteholder To Elect Purchase" appearing below. Noteholders have the right to
withdraw their election by delivering a written notice of withdrawal to the
Paying Agent in accordance with the terms of the Indenture.
9. Subordination. The payment of the principal of, interest on or any
other amounts due on the Convertible Notes is subordinated in right of payment
to all existing and future Senior Debt of the Company, as described in the
Indenture. Each Noteholder, by accepting a Convertible Note, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
10. Conversion. The holder of any Convertible Note has the right,
exercisable at any time after 90 days following the date of original issuance
thereof and prior to the close of business (New York time) on the date of the
Convertible Note's maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into shares of Common
Stock at the initial Conversion Price of $_____ per share, subject to adjustment
under certain circumstances, except that if a Convertible Note is called for
redemption, the conversion right will terminate at the close of business on the
Business Day immediately preceding the date fixed for redemption.
To convert a Convertible Note, a holder must (1) complete and
sign a notice of election to convert substantially in the form set forth below,
(2) surrender the Convertible Note to a Conversion Agent, (3) furnish
appropriate endorsements or transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar tax, if required. Upon
conversion, no adjustment or payment will be made for interest or dividends, but
if any Noteholder surrenders a Convertible Note for conversion on or after an
interest payment record date and on or before the related 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
Note on such record date. In such event, such Convertible Note, when
surrendered for conversion, must be accompanied by payment in funds acceptable
to the Company of an amount equal to the interest payable on such interest
payment date on the portion so converted. The number of shares of Common Stock
issuable upon conversion of a Convertible Note is determined by dividing the
principal amount of the Convertible Note converted by the
A-6
<PAGE> 62
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest.
A Note in respect of which a holder has delivered an "Option
of Noteholder to Elect Purchase" form appearing below, exercising the option of
such holder to require the Company to purchase such Note, may be converted only
if the notice of exercise is withdrawn as provided above and in accordance with
the terms of the Indenture. The above description of conversion of the
Convertible Notes is qualified by reference to, and is subject in its entirety
by, the more complete description thereof contained in the Indenture.
11. Denominations, Transfer, Exchange. The Convertible Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Convertible Notes may be registered, and
Convertible Notes may be exchanged, as provided in the Indenture. The Registrar
may require a Noteholder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Convertible Note or portion of a Convertible Note selected
for redemption (except the unredeemed portion of any Convertible Note being
redeemed in part). Also, it need not exchange or register the transfer of any
Convertible Note for a period of 15 days before a selection of Convertible Notes
to be redeemed.
12. Persons Deemed Owners. Except as provided in paragraph 2 of this
Convertible Note, the registered Noteholder of a Convertible Note may be
treated as its owner for all purposes.
13. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its request. After that, Noteholders of Convertible
Notes entitled to the money must look to the Company for payment, unless an
abandoned property law designates another person, and all liability of the
Trustee and the Paying Agent with respect to such money shall cease.
14. Defaults and Remedies. The Convertible Notes shall have the Events
of Default as set forth in Section 8.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the Noteholders of at least 25% in
aggregate principal amount of the then outstanding Convertible Notes by notice
to the Company and the Trustee may declare all the Convertible Notes to be due
and payable immediately, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all unpaid principal and
interest accrued on the Convertible Notes shall become due and payable
immediately without further action or notice. Upon acceleration as described in
either of the preceding sentences, the subordination provisions of the Indenture
preclude any payment being made to Noteholders for at least 5 days except as
otherwise provided in the Indenture.
The Noteholders of a majority in principal amount of the
Convertible Notes then outstanding by written notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of a redemption payment or the Repurchase Amount
principal or interest that has become due solely because of the acceleration.
Noteholders may not enforce the
A-7
<PAGE> 63
Indenture or the Convertible Notes except as provided in the Indenture. Subject
to certain limitations, Noteholders of a majority in principal amount of the
then outstanding Convertible Notes issued under the Indenture may direct the
Trustee in its exercise of any trust or power. The Company must furnish
compliance certificates to the Trustee annually. The above description of Events
of Default and remedies is qualified by reference to, and subject in its
entirety by, the more complete description thereof contained in the Indenture.
15. Amendments, Supplements and Waivers. Subject to certain exceptions,
the Indenture or the Convertible Notes may be amended or supplemented with the
consent of the Noteholders of at least a majority in principal amount of the
then outstanding Convertible Notes (including consents obtained in connection
with a tender offer or exchange offer for Convertible Notes), and any existing
default may be waived with the consent of the Noteholders of a majority in
principal amount of the then outstanding Convertible Notes including consents
obtained in connection with a tender offer or exchange offer for Convertible
Notes. Without the consent of any Noteholder, the Indenture or the Convertible
Notes may be amended, among other things, to cure any ambiguity, defect or
inconsistency, to provide for assumption of the Company's obligations to
Noteholders, to make any change that does not adversely affect the rights of any
Noteholder and to comply with the requirements of the SEC in order to maintain
the qualification of the Indenture under the Trust Indenture Act.
16. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Convertible Notes and
may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee, subject to certain limitations provided for
in the Indenture and in the Trust Indenture Act. Any Agent may do the same with
like rights.
17. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Convertible Notes or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder, by accepting a Convertible Note, waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Convertible Notes.
18. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THE INDENTURE AND THE CONVERTIBLE NOTES, WITHOUT
REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
19. Authentication. The Convertible Notes shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee
or an authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for tenants by the entireties), JT TEN (for joint tenants with right of
survivorship and not as tenants in common), CUST (for Custodian), and U/G/M/A
(for Uniform Gifts to Minors Act).
A-8
<PAGE> 64
21. Definitions. Capitalized terms not defined in this Convertible
Note have the meaning given to them in the Indenture.
The Company will furnish to any Noteholder of the Convertible
Notes upon written request and without charge a copy of the Indenture. Request
may be made to:
Swift Energy Company
16825 Northchase Drive, Suite 400
Houston, Texas 77060
Attention of: John R. Alden
A-9
<PAGE> 65
ASSIGNMENT FORM
To assign this Convertible Note, fill in the form below:
(I) or (we) assign and transfer this Convertible Note to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
agent to transfer this Convertible Note on the books of the Company. The
agent may substitute another to act for him.
Your Signature:______________________________________________________
(Sign exactly as your name appears on the other side
of this Convertible Note)
Date:_____________________
Signature Guarantee: *** ___________________________________________
***Signature must be Guaranteed by a commercial bank, trust Company or member
firm of the New York Stock Exchange.
A-10
<PAGE> 66
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount at maturity of this Global Security shall
be $_________. The following increases or decreases in the principal amount of
this Global Security have been made:
<TABLE>
<CAPTION>
AMOUNT OF
INCREASE IN
PRINCIPAL AMOUNTS
OF THIS GLOBAL AMOUNT OF PRINCIPAL AMOUNT SIGNATURE OF
SECURITY INCLUDING DECREASE IN OF THIS GLOBAL AUTHORIZED OFFICER
UPON EXERCISE OF PRINCIPAL AMOUNT SECURITY FOLLOWING OF TRUSTEE OR
THE OVER-ALLOTMENT OF THIS GLOBAL SUCH DECREASE OR SECURITIES
DATE MADE OPTION SECURITY INCREASE CUSTODIAN
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
======================================================================================================================
</TABLE>
A-11
<PAGE> 67
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Convertible Note or a portion
thereof repurchased by the Company pursuant to Sections 3.08 and 3.09 of the
Indenture, check the box: |_|
If the purchase is in part, indicate the portion (in
denominations of $1,000 or any integral multiple thereof) to be purchased:
Your Signature: ____________________________________________________
(Sign exactly as your name appears on the other side
of this Convertible Note)
Date: ___________________
Signature Guarantee: * ______________________________
- --------------------
*Signature must be Guaranteed by a commercial bank, trust Company or member firm
of the New York Stock Exchange.
A-12
<PAGE> 68
ELECTION TO CONVERT
To Swift Energy Company:
The undersigned owner of this Convertible Note hereby
irrevocably exercises the option to convert this Convertible Note, or the
portion below designated, into Common Stock of SWIFT ENERGY COMPANY in
accordance with the terms of the Indenture referred to in this Convertible Note,
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 Note
to be converted ($1,000 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: *____________________
- -----------------------
*Signature must be Guaranteed by a commercial bank, trust Company or member firm
of the New York Stock Exchange.
A-13
<PAGE> 1
EXHIBIT 5
JENKENS & GILCHRIST
A Professional Corporation
1100 Louisiana
Suite 1800
Houston, Texas 77002
November 18, 1996
Swift Energy Company
Suite 400
16825 Northchase Drive
Houston, Texas 77060
Re: Opinion as to Legality of Organization and Certain Securities
of Swift Energy Company
Gentlemen:
We have acted as counsel to Swift Energy Company, a Texas corporation
(the "Company") in connection with the registration under the Securities Act of
1933, as amended ("Securities Act"), of i) Convertible Subordinated Notes Due
2006 (the "Notes") in the principal amount of $115,000,000 (including
$15,000,000 principal amount of Notes issuable upon exercise of an
over-allotment option granted to the Underwriters) and ii) an indeterminate
number of shares of the Company's Common Stock, par value $.01 per share,
issuable upon conversion of the Notes (the "Conversion Shares"). The terms and
conditions of such offering are described in a Prospectus (the "Prospectus"),
contained in a Registration Statement (File number 333-14785), as amended (the
"Registration Statement"), on Form S-3 filed with the Securities and Exchange
Commission (the "Commission").
We have examined (i) the Prospectus and the Registration Statement,
(ii) a form of Indenture proposed to be entered into between the Company and
Bank One, Columbus, N.A., as Trustee, pertaining to the Notes, (iii) the
Articles of Incorporation of the Company, as amended, and the bylaws and
corporate proceedings of the Company, and (iv) such other records, documents,
opinions, and instruments as in our judgment are necessary or appropriate to
enable us to render this opinion. We have made such legal and factual
determination as we have deemed relevant.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas;
<PAGE> 2
Swift Energy Company
November 18, 1996
Page 2
2. when the Indenture has been duly executed and delivered by
the officers authorized by the Board of Directors of the
Company or a duly authorized committee thereof to execute and
deliver the same, it will constitute a legal, valid and
binding instrument of the Company, enforceable against the
Company in accordance with its terms;
3. the Notes are duly authorized, and when executed and
authenticated in the manner set forth in the Indenture and
when sold, issued to and paid for by the Underwriters will be
legal, valid and binding obligations of the Company, entitled
to the benefits provided by the Indenture, and enforceable in
accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, general equitable principles and other laws
relating to or affecting the enforcement of creditors' rights;
and
4. the Conversion Shares issuable upon conversion of the Notes
have been duly authorized and reserved for issuance upon such
conversion and, when issued upon such conversion in accordance
with the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to reference being made to our firm under the
caption "Legal Matters" in the Prospectus. We also consent to the filing of
this opinion with state securities officials in connection with the
registration of the Notes and the Conversion Shares under applicable state
securities laws. In giving this consent, this firm does not thereby admit that
it comes into the category of persons whose consent is required under Section 7
of the Securities Act or the rules and regulations of the Commission
promulgated thereunder.
Sincerely yours,
JENKENS & GILCHRIST,
A Professional Corporation
By: /s/ DONALD W. BRODSKY
----------------------------------
Donald W. Brodsky
Authorized Signatory on
Behalf of the Corporation
<PAGE> 1
EXHIBIT 8
JENKENS & GILCHRIST
A Professional Corporation
1100 Louisiana
Suite 1800
Houston, Texas 77002
November 18, 1996
Swift Energy Company
16825 Northchase Drive, Suite 400
Houston, Texas 77060
Gentlemen:
We have acted as tax counsel to Swift Energy Company, a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of (i) Convertible Subordinated Notes due
2006 (the "Notes") in the principal amount of $115,000,000 (including
$15,000,000 principal amount of Notes issuable upon exercise of an
over-allotment option granted to the underwriters) and (ii) an indeterminate
number of shares of the Company's common stock, par value $.01 per share,
issuable upon conversion of the Notes (the "Conversion Shares").
In connection with this representation, we have examined the following
documents and instruments;
a. a Registration Statement on Form S-3 (the
"Registration Statement") including the Prospectus contained
therein, filed with the Securities Exchange Commission (the
"Commission") on October 24, 1996, pertaining to the
registration of the Notes and the Conversion Shares;
b. Pre-Effective Amendment No. 1 to the Registration
Statement filed with the Commission November 4, 1996,
including the Prospectus contained therein dated November 4,
1996;
c. Pre-Effective Amendment No. 2 to the Registration
Statement to be filed with the Commission November 19, 1996;
and
d. a form of Indenture proposed to be entered into
between the Company and Bank One, Columbus, N.A., as Trustee,
pertaining to the Notes.
<PAGE> 2
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified, of such documents
and records of the Company and such statutes, regulations and other instruments
as we have deemed necessary or advisable for the purposes of this opinion. In
rendering this opinion we have relied upon the facts and disclosures set forth
in the Registration Statement and the Indenture regarding the offering and
terms of the Notes and Conversion Shares issuable upon conversion of the Notes.
We have not independently verified the accuracy of such representations or the
matters set forth in such documents or records. As to certain facts material
to this opinion, we have assumed that all signatures on all documents presented
to use are genuine, that all documents submitted to us as originals are
accurate and complete, that all information submitted to us is accurate and
complete, and that all persons executing and delivering originals or copies of
documents examined by us are competent to execute and deliver such documents.
Based on the foregoing, this firm is of the opinion that the
discussion in the Registration Statement under the caption "Certain United
States Tax Considerations" is an accurate summary of the material federal
income tax consequences related to the issuance of the Notes. This firm's
opinion is based on the provisions of the Internal Revenue Code of 1986, as
amended, proposed regulations which have not yet taken effect and which may not
be finally adopted in their current form, and regulations, rulings and judicial
decisions now in effect, all of which are subject to change. Any such changes
may be retroactive with respect to transactions entered into prior to the date
of such changes and could modify this firm's opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. Consent is also given to the reference to this firm
under the caption "Legal Matters." In giving this consent, this firm does not
thereby admit that it comes into the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Commission promulgated thereunder.
Respectfully submitted,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ ANDRIUS R. KONTRIMAS
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Andrius R. Kontrimas
Authorized Signatory
