EXHIBIT 10.7
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GOTHIC ENERGY CORPORATION
as Issuer,
AND
THE BANK OF NEW YORK,
as Trustee
____________________________
INDENTURE
DATED AS OF APRIL 21, 1998
____________________________
$104,000,000.00
14_% SERIES A SENIOR SECURED DISCOUNT NOTES DUE 2006
AND
14_% SERIES B SENIOR SECURED DISCOUNT NOTES DUE 2006
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TABLE OF CONTENTS
ARTICLE I Definitions And Incorporation By Reference..................1
Section 1.01 Definitions.................................................1
Section 1.02 Other Definitions..........................................22
Section 1.03 Incorporation by Reference of Trust Indenture Act..........23
Section 1.04 Rules of Construction......................................23
ARTICLE II The Securities.............................................24
Section 2.01 Form and Dating............................................24
Section 2.02 Execution and Authentication...............................25
Section 2.03 Registrar and Paying Agent.................................25
Section 2.04 Paying Agent to Hold Money in Trust........................26
Section 2.05 Holder Lists...............................................26
Section 2.06 Transfer and Exchange......................................26
Section 2.07 Replacement Securities.....................................34
Section 2.08 Outstanding Securities.....................................34
Section 2.09 Treasury Securities........................................35
Section 2.10 Temporary Securities.......................................35
Section 2.11 Cancellation...............................................35
Section 2.12 Defaulted Interest.........................................36
Section 2.13 Persons Deemed Owners......................................36
Section 2.14 CUSIP Numbers..............................................36
Section 2.15 Units and Unit Certificates................................36
ARTICLE III Redemption.................................................38
Section 3.01 Notice to Trustee..........................................38
Section 3.02 Selection of Securities to Be Redeemed.....................38
Section 3.03 Notice of Redemption.......................................38
Section 3.04 Effect of Notice of Redemption.............................39
Section 3.05 Deposit of Redemption Price................................39
Section 3.06 Securities Redeemed in Part................................40
Section 3.07 Optional Redemption........................................40
ARTICLE IV Covenants..................................................41
Section 4.01 Payment of Securities......................................41
Section 4.02 SEC Reports................................................41
Section 4.03 Compliance Certificates....................................41
Section 4.04 Maintenance of Office or Agency............................42
Section 4.05 Corporate Existence........................................43
Section 4.06 Waiver of Stay, Extension or Usury Laws....................43
Section 4.07 Payment of Taxes and Other Claims..........................43
Section 4.08 Maintenance of Properties and Insurance....................43
Section 4.09 Limitation on Incurrence of Additional Indebtedness........44
Section 4.10 Limitation on Restricted Payments..........................44
Section 4.11 Limitation on Sale of Assets...............................47
Section 4.12 Limitation on Liens........................................50
Section 4.13 Limitation on Sale/Leaseback Transactions..................50
Section 4.14 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries 50
Section 4.15 Limitation on Issuances and Sales of Subsidiary Stock......51
Section 4.16 Limitation on Transactions with Affiliates.................51
Section 4.17 Change of Control..........................................51
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Section 4.18 Limitation on Line of Business.............................53
ARTICLE V Successor Corporation......................................53
Section 5.01 When Company May Merge, etc................................53
Section 5.02 Successor Corporation Substituted..........................54
ARTICLE VI Defaults And Remedies......................................54
Section 6.01 Events of Default..........................................54
Section 6.02 Acceleration...............................................57
Section 6.03 Other Remedies.............................................58
Section 6.04 Waiver of Past Defaults....................................59
Section 6.05 Control by Majority........................................59
Section 6.06 Limitation on Remedies.....................................59
Section 6.07 Rights of Holders to Receive Payment.......................60
Section 6.08 Collection Suit by Trustee.................................60
Section 6.09 Trustee May File Proofs of Claim...........................60
Section 6.10 Priorities.................................................60
Section 6.11 Undertaking for Costs......................................61
ARTICLE VII Trustee....................................................61
Section 7.01 Duties of Trustee..........................................61
Section 7.02 Rights of Trustee..........................................62
Section 7.03 Individual Rights of Trustee...............................63
Section 7.04 Trustee's Disclaimer.......................................64
Section 7.05 Notice of Defaults.........................................64
Section 7.06 Reports by Trustee to Holders..............................64
Section 7.07 Compensation and Indemnity.................................64
Section 7.08 Replacement of Trustee.....................................65
Section 7.09 Successor Trustee by Merger, etc...........................66
Section 7.10 Eligibility; Disqualification..............................66
Section 7.11 Preferential Collection of Claims Against Company..........66
Section 7.12 Appointment of Co-Trustee..................................66
ARTICLE VIII Discharge Of Indenture.....................................67
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...67
Section 8.02 Legal Defeasance and Discharge.............................67
Section 8.03 Covenant Defeasance........................................68
Section 8.04 Conditions to Legal or Covenant Defeasance.................68
Section 8.05 Deposited Money and U.S. Government Securities to be Held
in Trust; Other Miscellaneous Provisions..................70
Section 8.06 Repayment to Company.......................................70
Section 8.07 Reinstatement..............................................71
ARTICLE IX Amendments, Supplements And Waivers........................71
Section 9.01 Without Consent of Holders.................................71
Section 9.02 With Consent of Holders....................................72
Section 9.03 Compliance with Trust Indenture Act........................73
Section 9.04 Revocation and Effect of Consents..........................73
Section 9.05 Notation on or Exchange of Securities......................74
Section 9.06 Trustee Protected..........................................74
Section 9.07 Restrictions on Payments for Amendments, Waivers and
Modifications.............................................74
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ARTICLE X Guarantees................................................75
Section 10.01 Unconditional Guarantee...................................75
Section 10.02 Guarantors May Consolidate, etc., on Certain Terms........76
Section 10.03 Addition of Guarantors....................................76
Section 10.04 Release of a Guarantor....................................77
Section 10.05 Limitation of Guarantor's Liability.......................77
Section 10.06 Contribution..............................................77
Section 10.07 Execution and Delivery of Guarantee.......................78
Section 10.08 Severability..............................................78
ARTICLE XI Collateral and Security...................................78
Section 11.01 Collateral and Pledge Agreement; Additional Collateral....78
Section 11.02 Recording and Opinions....................................79
Section 11.03 Release of Collateral.....................................80
Section 11.04 Certificates of the Company...............................80
Section 11.05 Certificates of the Trustee...............................81
Section 11.06 Authorization of Actions To Be Taken by the Trustee Under
the Pledge Agreement.....................................81
Section 11.07 Authorization of Receipt of Funds by the Trustee Under
the Pledge Agreement.....................................81
Section 11.08 Termination of Security Interest..........................81
ARTICLE XII Miscellaneous.............................................82
Section 12.01 Trust Indenture Act Controls..............................82
Section 12.02 Notices...................................................82
Section 12.03 Communication by Holders with Other Holders...............83
Section 12.04 Certificate and Opinion as to Conditions Precedent........83
Section 12.05 Statements Required in Certificate or Opinion.............83
Section 12.06 Rules by Trustee and Agents...............................84
Section 12.07 Legal Holidays............................................84
Section 12.08 Governing Law.............................................84
Section 12.09 No Adverse Interpretation of Other Agreements.............84
Section 12.10 No Recourse Against Others................................84
Section 12.11 Successors................................................84
Section 12.12 Duplicate Originals.......................................84
Section 12.13 Severability..............................................84
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INDENTURE, dated as of April 21, 1998, between GOTHIC ENERGY CORPORATION,
an Oklahoma corporation (the "Company") and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the holders of the Company's 14_% Series A
Senior Secured Discount Notes due 2006 and the Company's 14_% Series B Senior
Secured Discount Notes due 2006 (the "Series B Securities" and, collectively
with the Series A Securities, the "Securities" or each, a "Security"):
ARTICLE I
Definitions And Incorporation By Reference
Section I.1 Definitions
"Accreted Value" means, for each $1,000 face amount of Securities, as of
any date of determination prior to May 1, 2002, the sum of (i) the initial
offering price of each Security ($578.42) and (ii) that portion of the excess of
the principal amount of each Security over such initial offering price which
shall have been accreted thereon through such date, such amount to be so
accreted on a daily basis and compounded semi-annually on each May 1 and
November 1 at the rate of 14_ per annum from the Issue Date through the date of
determination.
"Adjusted Consolidated Net Tangible Assets" or "ACNTA" means (without
duplication), as of the date of determination, (a) the sum of (i) discounted
future net revenue from proved oil and gas reserves of the Company and its
consolidated Restricted Subsidiaries calculated in accordance with SEC
guidelines before any state or federal income taxes, as estimated by independent
petroleum engineers in a reserve report prepared as of the end of the Company's
most recently completed fiscal year, as increased by, as of the date of
determination, the discounted future net revenue of (A) estimated proved oil and
gas reserves of the Company and its consolidated Restricted Subsidiaries
attributable to any acquisition consummated since the effective date of such
initial or year-end reserve reports and (B) estimated oil and gas reserves of
the Company and its consolidated Restricted Subsidiaries attributable to
extensions, discoveries and other additions and upward revisions of estimates of
proved oil and gas reserves due to exploration, development or exploitation,
production or other activities conducted or otherwise occurring since the
effective date of such initial or year-end reserve reports which, in the case of
sub-clauses (A) and (B), would, in accordance with standard industry practice,
result in such increases, in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such initial or year-end reserve
reports), and decreased by, as of the date of determination, the discounted
future net revenue of (C) estimated proved oil and gas reserves of the Company
and its consolidated Restricted Subsidiaries produced or disposed of since the
effective date of such initial or year-end reserve reports and (D) reductions in
the estimated oil and gas reserves of the Company and its consolidated
Restricted Subsidiaries since the effective date of such initial or year-end
reserve reports attributable to downward revisions of estimates of proved oil
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and gas reserves due to exploration, development or exploitation, production or
other activities conducted or otherwise occurring since the effective date of
such initial or year-end reserve reports which would, in accordance with
standard industry practice, result in such revisions, in each case calculated in
accordance with SEC guidelines (utilizing the prices utilized in such initial or
year-end reserve reports); provided that, in the case of each of the
determinations made pursuant to sub-clauses (A) through (D) above, such
increases and decreases shall be as estimated by the Company's engineers, except
that if as a result of such acquisitions, dispositions, discoveries, extensions
or revisions, there is a Material Change and in connection with the incurrence
of Indebtedness under Section 4.09, all or any part of an increase in discounted
future net revenue resulting from the matters described in sub-clauses (A) and
(B) above are needed to permit the incurrence of such Indebtedness, then the
discounted future net revenue utilized for purposes of this clause (a) (i) shall
be confirmed in writing by independent petroleum engineers provided that, in the
event that the determinations made pursuant to sub-clauses (C) and (D) above,
when taken alone, would not cause a Material Change, then such written
confirmation need only cover the incremental additions to discounted future net
revenues resulting from the determinations made pursuant to sub-clauses (A) and
(B) above to the extent needed to permit the incurrence of such Indebtedness,
(ii) the capitalized costs that are attributable to oil and gas properties of
the Company and its consolidated Restricted Subsidiaries to which no proved oil
and gas reserves are attributed, based on the Company's books and records as of
a date no earlier than the date of the Company's latest annual or quarterly
financial statements plus the fair market value of any unproved properties
acquired since such date, (iii) the Net Working Capital on a date no earlier
than the date of the Company's latest annual or quarterly financial statements
and (iv) the greater of (I) the net book value on a date no earlier than the
date of the Company's latest annual or quarterly financial statements and (II)
the appraised value, as estimated by independent appraisers, of other tangible
assets (including Investments in unconsolidated Restricted Subsidiaries) of the
Company and its consolidated Restricted Subsidiaries, as of a date no earlier
than the date of the Company's latest audited financial statements, minus (b)
the sum of (i) minority interests, (ii) any net non-current portion of gas
balancing liabilities of the Company and its consolidated Restricted
Subsidiaries reflected in the Company's latest annual or quarterly financial
statements, (iii) the discounted future net revenue, calculated in accordance
with SEC guidelines (utilizing the prices utilized in the Company's initial or
year-end reserve reports), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Company and
its consolidated Restricted Subsidiaries with respect to Volumetric Production
Payments on the schedules specified with respect thereto, (iv) the discounted
future net revenue, calculated in accordance with SEC guidelines, attributable
to reserves subject to Dollar-Denominated Production Payments which, based on
the estimates of production included in determining the discounted future net
revenue specified in (a) (i) above (utilizing the same prices utilized in the
Company's initial or year-end reserve reports), would be necessary to fully
satisfy the payment obligations of the Company and its consolidated Restricted
Subsidiaries with respect to Dollar-Denominated Production Payments on the
schedules specified with respect thereto and (v) the discounted future net
revenue, calculated in accordance with SEC guidelines (utilizing the same prices
utilized in the Company's initial or year-end reserve reports), attributable to
reserves subject to participation interests, overriding royalty interests or
other interests of third parties, pursuant to participation, partnership, vendor
financing or other agreements then in effect, or which otherwise are required to
be delivered to third parties. If the Company changes its method of accounting
from
2
the full cost method to the successful efforts method or a similar method
of accounting, Adjusted Consolidated Net Tangible Assets will continue to be
calculated as if the Company was still using the full cost method of accounting.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser of
(i) the amount by which the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under the Guarantee
of such Guarantor at such date and (ii) the amount by which the present fair
saleable value of the assets of such Guarantor at such date exceeds the amount
that will be required to pay the probable liability of such Guarantor on its
debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such Person
under the Guarantee), excluding debt in respect of the Guarantee, as they become
absolute and matured.
"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 when used with respect to any specified Person means the power to direct
the management and policies of such Person directly or indirectly, whether
through the ownership of Voting Stock, by contract or otherwise; and the terms
controlling and controlled have meanings correlative to the foregoing; provided
that a corporation shall not be deemed an Affiliate of the Company solely by
reason of having a single common director with the Company who constitutes less
than a majority of the directors of either the Company and the other
corporation.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any sale, lease, transfer, exchange or other disposition
after the Issue Date having a fair market value of $1.0 million or more (or
series of sales, leases, transfers, exchanges or dispositions during any fiscal
year having an aggregate fair market value of such amount) of shares of Capital
Stock of a consolidated Restricted Subsidiary (other than directors' Qualifying
Shares), or of property or assets (including the creation of Dollar-Denominated
Production Payments and Volumetric Production Payments, other than Dollar-
Denominated Production Payments and Volumetric Production Payments created or
sold in connection with the financing of, and within 30 days after, the
acquisition of the properties subject thereto) or any interests therein (each
referred to for purposes of this definition as a disposition) by the Company or
any of its consolidated Restricted Subsidiaries, including any disposition by
means of a merger, consolidation or similar transaction (other than (a) by the
Company to a Wholly Owned consolidated Restricted Subsidiary or by a Restricted
Subsidiary to the Company or a Wholly Owned consolidated Restricted Subsidiary,
(b) a sale of oil, gas or other hydrocarbons or other mineral products in the
ordinary course of business of the Company's oil and gas production operations,
(c) any abandonment, farm-in, farm-out, lease and sub-lease of developed and/or
undeveloped properties made or entered into in the ordinary course of business
(but excluding (x) any sale of a net profits or overriding royalty interest, in
each case conveyed from or burdening proved developed or proved undeveloped
reserves and (y) any sale of hydrocarbons or other mineral products as a result
of the creation of Dollar-Denominated Production Payments or Volumetric
Production Payments, other
3
than Dollar-Denominated Production Payments and Volumetric Production Payments
created or sold in connection with the financing of, and within 30 days after,
the acquisition of the properties subject thereto), (d) the disposition of all
or substantially all of the assets of the Company in compliance with Article V
and Sale/Leaseback Transactions in compliance with Section 4.13, (e) the
provision of services and equipment for the operation and development of the
Company's oil and gas ▇▇▇▇▇, in the ordinary course of the Company's oil and gas
service businesses, notwithstanding that such transactions may be recorded as
asset sales in accordance with full cost accounting guidelines, (f) the issuance
by the Company of shares of its Capital Stock, (g) any trade or exchange by the
Company or any Wholly Owned Restricted Subsidiary of oil and gas properties for
other oil and gas properties owned or held by another Person provided that (i)
the fair market value of the properties traded or exchanged by the Company or
such Wholly Owned Restricted Subsidiary (including any cash or Cash Equivalents,
not to exceed 15% of such fair market value, to be delivered by the Company or
such Wholly Owned Restricted Subsidiary) is reasonably equivalent to the fair
market value of the properties (together with any cash or Cash Equivalents, not
to exceed 15% of such fair market value) to be received by the Company or such
Wholly Owned Restricted Subsidiary as determined in good faith by the Board of
Directors of the Company, which determination shall be certified by a resolution
of the Board of Directors delivered to the Trustee if such fair market value is
in excess of $5.0 million, provided that if such resolution indicates that such
fair market value is in excess of $10.0 million such resolution shall be
accompanied by a written appraisal by a nationally recognized investment banking
firm or appraisal firm, in each case specializing or having a speciality in oil
and gas properties, and (ii) such exchange is approved by a majority of
Disinterested Directors of the Company, (h) the sale, transfer or other
disposition in the ordinary course of business of oil and natural gas
properties, or interests therein, provided that such properties either (A) do
not have proved reserves attributed to them or (B) were purchased for the
purpose of offering such properties for resale or participations by other
Persons and (i) any transaction under the Sale and Participation Agreement (as
in effect on the Issue Date)).
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the present value of the total net amount of
rent required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the respective due dates thereof to such date at the rate of
interest per annum implicit in the terms of the lease. As used in the preceding
sentence, the net amount of rent under any lease for any such period shall mean
the sum of rental and other payments required to be paid with respect to such
period by the lessee thereunder excluding any amounts required to be paid by
such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease which is
terminable by the lessee upon payment of a penalty, such net amount of rent
shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the product of (x) the
number of years from such date to the date of each successive scheduled
principal payment of such Indebtedness multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
4
"Bank Credit Facility" means a revolving credit, term credit and/or letter
of credit facility, the proceeds of which are used for working capital and other
general corporate purposes to be entered into by one or more of the Company
and/or its Restricted Subsidiaries and certain financial institutions, as
amended, extended or refinanced from time to time. The New Credit Facility will
constitute a Bank Credit Facility.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors or the managing partner(s)
of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day on which the New York Stock Exchange, Inc. is
open for trading and which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock or partnership interests and any and all warrants, options and rights with
respect thereto (whether or not currently exercisable), including each class of
common stock and preferred stock of such Person.
"Capitalized Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 90 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) demand and time deposits and certificates of deposit or
acceptances with a maturity of 90 days or less of any financial institution that
is a member of the Federal Reserve System having combined capital and surplus
and undivided profits of not less than $500 million; (iii) commercial paper with
a maturity of 90 days or less issued by a corporation that is not an Affiliate
of the Company and is organized under the laws of any state of the United States
or the District of Columbia and rated at least A-1 by Standard & Poor's Ratings
Services at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any commercial bank
meeting the specifications of clause (ii) above; and (v) overnight bank deposits
and bankers' acceptances at any commercial bank meeting the qualifications
specified in clause (ii) above.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease or transfer, in one or a series of related transactions, of all or
substantially all of the Company's and its Restricted Subsidiaries assets
(determined on a consolidated basis) to any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) (other than to the Company or a
Wholly
5
Owned Restricted Subsidiary of the Company which has executed a Guarantee
required by this Indenture); (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the aggregate voting power of the Voting Stock
of the Company (for the purposes of this definition, such other Person shall be
deemed to beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other Person is the beneficial owner (as defined
above), directly or indirectly, of more than 35% of the voting power of the
Voting Stock of such parent corporation); or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the directors
of the Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Chesapeake" means Chesapeake Gothic Corp., an Oklahoma corporation,
together with its successors and assigns.
"Collateral" means the "Pledged Collateral," as defined in the Pledge
Agreement.
"Company" means the party named as such above, until a successor replaces
such Person in accordance with the terms of this Indenture, and thereafter means
such successor.
"Consolidated Interest Coverage Ratio" means, for any Reference Period, the
ratio on a pro forma basis of (a) the sum of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) Consolidated Tax Expense, (iv) depreciation
and depletion of the Company and its Restricted Subsidiaries, as determined in
accordance with GAAP on a consolidated basis plus (v) amortization of the
Company and its Restricted Subsidiaries including, without limitation,
amortization of capitalized debt issuance costs, as determined in accordance
with GAAP on a consolidated basis, in each case as determined for the Reference
Period to (b) Consolidated Interest Expense for such Reference Period; provided,
that, in calculating each of the items set forth in the foregoing (i)
acquisitions which occurred during the Reference Period or subsequent to the
Reference Period and on or prior to the date of the transaction giving rise to
the need to calculate the Consolidated Interest Coverage Ratio (the "Transaction
Date") shall be assumed to have occurred on the first day of the Reference
Period, (ii) the incurrence of any Indebtedness (including the issuance of the
Securities) or issuance of any Disqualified Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of such Reference Period, (iii) any
Indebtedness that had been outstanding during the Reference Period that has been
repaid on or prior to the Transaction Date shall be assumed to have been repaid
as of the first day of such Reference Period, (iv) the Consolidated Interest
Expense attributable to interest on any Indebtedness or dividends on any
Disqualified Stock bearing a floating interest (or dividend) rate shall be
computed on a pro forma basis as if the rate in effect on the Transaction Date
was the average rate in effect during the entire Reference Period and (v) in
determining the amount of Indebtedness pursuant to Section 4.09, the incurrence
of Indebtedness
6
or issuance of Disqualified Stock giving rise to the need to calculate the
Consolidated Interest Coverage Ratio and, to the extent the net proceeds from
the incurrence or issuance thereof are used to retire Indebtedness, the
application of the proceeds therefrom shall be assumed to have occurred on the
first day of the Reference Period.
"Consolidated Interest Expense" means, with respect to the Company and its
Restricted Subsidiaries, for the Reference Period, the aggregate amount (without
duplication) of (a) interest expensed in accordance with GAAP (including, in
accordance with the following sentence, interest attributable to Capitalized
Lease Obligations, but excluding interest attributable to Dollar-Denominated
Production Payments and amortization of deferred debt expense) during such
period in respect of all Indebtedness of the Company and its Restricted
Subsidiaries (including (i) amortization of original issue discount on any
Indebtedness (other than with respect to the Securities), (ii) the interest
portion of all deferred payment obligations, calculated in accordance with GAAP
and (iii) all commissions, discounts and other fees and charges owed with
respect to bankers' acceptance financings and currency and interest rate swap
arrangements, in each case to the extent attributable to such period), and (b)
dividend requirements of the Company and its Restricted Subsidiaries with
respect to any Preferred Stock or Disqualified Stock dividends (whether in cash
or otherwise (except dividends paid solely in shares of Capital Stock other than
Disqualified Stock)) paid (other than to the Company or any of its Restricted
Subsidiaries), declared, accrued or accumulated during such period, divided by
one minus the applicable actual (effective) combined federal, state, local and
foreign income tax rate of the Company and its Restricted Subsidiaries
(expressed as a decimal), on a consolidated basis, for the Reference Period
preceding the date of the transaction giving rise to the need to calculate
Consolidated Interest Expense, in each case to the extent attributable to such
period and excluding items eliminated in consolidation. For purposes of this
definition, (a) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (b) interest expense attributable to any Indebtedness represented by
the guarantee by the Company or a Restricted Subsidiary of the Company of an
obligation of another Person (other than the Company or any other Restricted
Subsidiary) shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall not be included in such Consolidated Net
Income: (a) any net income of any Person if such Person is not the Company or a
consolidated Restricted Subsidiary, except that (i) subject to the limitations
contained in clause (d) below, the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash or Cash Equivalents actually distributed by such
Person during such period to the Company or a Wholly Owned Restricted Subsidiary
as a dividend or other distribution (subject, in the case of a dividend or other
distribution to a Wholly Owned Restricted Subsidiary, to the limitations
contained in clause (c) below) and (ii) the Company's equity in a net loss of
any such Person for such period shall be included in determining such
Consolidated Net Income; (b) any net income (or loss) of any Person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction
for any period prior to the date of such acquisition; (c) the net income of any
Restricted Subsidiary to the
7
extent that the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, is prohibited;
(d) any gain (but not loss) realized upon the sale or other disposition of any
property, plant or equipment of the Company or any Restricted Subsidiary
(including pursuant to any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (but not
loss) realized upon the sale or other disposition of any Capital Stock of any
Person; (e) any gain (but not loss) from currency exchange transactions not in
the ordinary course of business consistent with past practice; (f) the
cumulative effect of a change in accounting principles; (g) to the extent
deducted in the calculation of net income, the non-cash charges associated with
the repayment of Indebtedness with the proceeds from the sale of the Securities
and the prepayment of any of the Securities; (h) any writedowns of noncurrent
assets; provided, however, that any ceiling limitation writedowns under SEC
guidelines shall be treated as capitalized costs, as if such writedowns had not
occurred; and (i) any gain (but not loss) attributable to extraordinary items.
"Consolidated Net Worth" means, with respect to the Company and its
Restricted Subsidiaries, as at any date of determination, the sum of Capital
Stock (other than Disqualified Stock) and additional paid-in capital plus
retained earnings (or minus accumulated deficit) minus all intangible assets,
including, without limitation, organization costs, patents, trademarks,
copyrights, franchises, research and development costs, and any amount reflected
in treasury stock, of the Company and its Restricted Subsidiaries determined on
a consolidated basis in accordance with GAAP.
"Consolidated Tax Expense" means, for any Reference Period, the provisions
for federal, state, local and foreign income taxes (including state franchise
taxes accounted for as income taxes in accordance with GAAP) of the Company and
its Restricted Subsidiaries for such Reference Period as determined on a
consolidated basis in accordance with GAAP; provided, that if for any Reference
Period the Company and its Restricted Subsidiaries has a federal, state, local
and foreign income tax benefit reported in accordance with GAAP, such benefit
shall be subtracted from the numerator of the Consolidated Interest Coverage
Ratio.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.12 of this
Indenture.
"Definitive Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A, that do not include the information
called for by footnotes 1 and 2 thereof, and do not have attached the additional
schedule referred to in footnote 3 thereof; provided that, on or prior to the
Unit Termination Date, the term "Global Security" shall mean the Units evidenced
by a Unit Certificate that does not include the information called for by
footnotes 1 and 2, and do not have attached the additional schedule referred to
in footnote 3 to, the form of Unit Certificate attached as Exhibit G hereto.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the
8
Securities, until a successor shall have been appointed and become such pursuant
to the applicable provision of this Indenture, and, thereafter, "Depositary"
shall mean or include such successor.
"Disinterested Director" means, with respect to an Affiliate Transaction or
series of related Affiliate Transactions, a member of the Board of Directors of
the Company who has no financial interest, and whose employer has no financial
interest, in such Affiliate Transaction or series of related Affiliate
Transactions.
"Disqualified Stock" means any Capital Stock of the Company or any
Restricted Subsidiary of the Company which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event or with the passage of time, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date or which is exchangeable or convertible into debt
securities of the Company or any Restricted Subsidiary of the Company, except to
the extent that such exchange or conversion rights cannot be exercised prior to
the Maturity Date.
"Dollar-Denominated Production Payments" mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Effective Registration" means the Company shall have (i) commenced the
Exchange Offer for the Securities pursuant to an effective registration
statement under the Securities Act or (ii) filed and caused to become effective
the Shelf Registration under the Securities Act for the sale of Securities by
Holders.
"Equity Offering" means any underwritten public offering of common stock of
the Company pursuant to a registration statement (other than Form S-8) filed
pursuant to the Securities Act or any private placement of Capital Stock (other
than Disqualified Stock) of the Company (other than to any Person who, prior to
such private placement, was a Subsidiary of the Company or any other Person
controlled by the Company) which offering or placement is consummated after the
Issue Date.
"Event of Default" shall have the meaning set forth in Section 6.1 of this
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder.
"Exchange Offer" shall have the meaning given such term in the Registration
Rights Agreement.
"GAAP" means generally accepted accounting principles as in effect in the
United States of America as of the Issue Date.
"GPC" means Gothic Production Corporation, an Oklahoma corporation.
9
"Global Security" means a Security that contains the language referred
to in footnotes 1 and 2 and the additional schedule referred to in footnote 3 to
the form of the Securities attached hereto as Exhibit A; provided that, on or
prior to the Unit Termination Date, the term "Global Security" shall mean the
Units evidenced by a Unit Certificate that contains the language referred to in
footnotes 1 and 2 and the additional schedule referred to in footnote 3 to the
form of Unit Certificate attached hereto as Exhibit G.
"Guarantee" or "Guarantees" means any Guarantee issued by existing or
future Restricted Subsidiaries pursuant to Article X hereof.
"Guarantor" means (i) each of the Restricted Subsidiaries that becomes a
guarantor of the Securities in compliance with the provisions of Article X
hereof and (ii) each of the Subsidiaries executing a supplemental indenture in
which such Subsidiary agrees to be bound by the terms of the Indenture; in each
case until such time, if any, as such Subsidiary is released from the Guarantee
pursuant to Section 10.04 hereof. As of the Issue Date, there are no
Guarantors.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" means, without duplication, with respect to any Person, (a)
all obligations of such Person (i) in respect of borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof), (ii) evidenced by bonds, notes, debentures or similar
instruments, (iii) representing the balance deferred and unpaid of the purchase
price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business), (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit; (b) all net obligations of such Person
under interest rate swap obligations, commodity swap obligations and foreign
currency ▇▇▇▇▇▇, except to the extent such net obligations are taken into
account in the determination of future net revenues from proved oil and gas
reserves for purposes of the calculation of Adjusted Consolidated Net Tangible
Assets; (c) all liabilities of others of the kind described in the preceding
clauses (a) or (b) that such Person has guaranteed or that are otherwise its
legal liability (including, with respect to any Production Payment, any
warranties or guaranties of production or payment by such Person with respect to
such Production Payment but excluding other contractual obligations of such
Person with respect to such Production Payment); (d) Indebtedness (as otherwise
defined in this definition) of another Person secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, the
amount of such obligations being deemed to be the lesser of (1) the full amount
of such obligations so secured and (2) the fair market value of such asset, as
determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a resolution of such Board; (e) with respect
to such Person, the liquidation preference or any mandatory redemption payment
obligations in respect of Disqualified Stock; (f) the aggregate preference in
respect of amounts payable on the issued and outstanding shares of Preferred
Stock of any of the Company's Restricted Subsidiaries in the event of any
voluntary or involuntary liquidation, dissolution or winding up (excluding any
such preference attributable to such shares of Preferred Stock that are owned by
such Person or any of its Restricted Subsidiaries; provided, that if such Person
is the Company, such exclusion shall be
10
for such preference attributable to such shares of Preferred Stock that are
owned by the Company or any of its Restricted Subsidiaries); and (g) any and all
deferrals, renewals, extensions, refinancings and refundings (whether direct or
indirect) of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses (a), (b), (c), (d), (e), (f)
or this clause (g), whether or not between or among the same parties. Subject to
clause (c) of the preceding sentence, neither Dollar-Denominated Production
Payments nor Volumetric Production Payments shall be deemed to be Indebtedness.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Investment" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of assets, Indebtedness, Capital Stock or other securities of any other
Person and (iv) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary course
of business) or advances on a balance sheet of such Person prepared in
accordance with GAAP.
"Issue Date" means the date on which the Securities are originally issued
under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statute or statutes) of any jurisdiction).
"Make-Whole Amount" means, with respect to a Security, an amount equal to
the excess, if any, of (i) the present value of the remaining interest, premium,
and principal payment due on such Security as if such Security were redeemed on
May 1, 2003, in each case computed using a discount rate equal to the Treasury
Rate plus 50 basis points, over (ii) (A) if prior to May 1, 2003, the Accreted
Value of such Security or (B) thereafter, the outstanding principal amount of
such Security. "Treasury Rate" is defined as the yield to maturity at the time
of the computation of United States Treasury securities with a constant maturity
(as compiled by and published in the most recent Federal Reserve Statistical
Release H.15(519), which has become publicly available at least two business
days prior to the date of the redemption notice or, if such Statistical Release
is no longer published, any publicly available source of similar market data)
most nearly equal to the then remaining maturity of the Securities assuming
redemption of the Securities on May 1, 2003; provided, however, that if the
Make-Whole Average Life of such Security is not equal to the constant maturity
of the United States Treasury security for which a weekly average yield is
given, the
11
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of the United
States Treasury securities for which such yields are given, except that if the
Make-Whole Average Life of such Securities is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used. "Make-Whole Average Life" means the
number of years (calculated to the nearest one-twelfth of a year) between the
date of redemption and May 1, 2003.
"Make-Whole Price" means the greater of (i) the sum of (A) (1) prior to May
1, 2003, the Accreted Value of such Security or (2) thereafter, the outstanding
principal amount of such Security and (B) Make-Whole Amount of such Security,
and (ii) prior to May 1, 2003 the Accreted Value, and thereafter the outstanding
principal amount, of such Security.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than either (i) 10% from the end
of the immediately preceding fiscal quarter in the estimated discounted future
net revenue from proved oil and gas reserves of the Company and its consolidated
Restricted Subsidiaries, or (ii) 20% from the end of the immediately preceding
year in the estimated discounted future net revenue from proved oil and gas
reserves of the Company and its consolidated Restricted Subsidiaries, in each
case calculated in accordance with clause (a) (i) of the definition of Adjusted
Consolidated Net Tangible Assets; provided, however, that the following will be
excluded from the calculation of Material Change: (a) any acquisitions of oil
and gas reserves made after the end of the immediately preceding year for which
the discounted future net revenues have been estimated by independent petroleum
engineers since the end of the preceding year and on which a report or reports
exist and (b) any disposition of properties existing at the beginning of the
current quarter or current year, as the case may be, for purposes of clause (i)
or clause (ii) above, that have been disposed of as provided in Section 4.11.
"Maturity Date" means May 1, 2006.
"Net Cash Proceeds" means (a) with respect to any Asset Sale or
Sale/Leaseback Transaction of any Person, an amount equal to aggregate cash
proceeds received (including any cash proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, and excluding any other consideration until such
time as such consideration is converted into cash) therefrom, in each case net
of all legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all federal, state or local taxes required to be accrued
as a liability as a consequence of such Asset Sale or Sale/Leaseback
Transaction, and (b) in the case of any sale by the Company of securities
pursuant to clauses (B) or (C) of Section 4.10(a)(iii), the amount of aggregate
net cash proceeds received by the Company, after payment of expenses,
commissions, discounts and any other transaction costs incurred in connection
therewith.
"Net Working Capital" means (i) all current assets of the Company and its
consolidated Restricted Subsidiaries, minus (ii) all current liabilities of the
Company and its consolidated Restricted Subsidiaries (including the net current
portion of gas balancing liabilities), except current liabilities included in
Indebtedness.
12
"New Credit Facility" means the Loan Agreement dated as of April 27, 1998
between GPC and Bank One, Texas, N.A., as amended from time to time.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Person as to which (a) neither the Company nor any Restricted
Subsidiary (i) provides credit support including any undertaking, agreement or
instrument which would constitute Indebtedness or (ii) is directly or indirectly
liable for such Indebtedness and (b) no default with respect to such
Indebtedness (including any rights which the holders thereof may have to take
enforcement action against such Person) would permit (upon notice, lapse of time
or both) any holder of any other Indebtedness (other than Non-Recourse
Indebtedness) of the Company or its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Notes Liquidated Damages" shall have the meaning given such term in the
Registration Rights Agreement.
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
such Person.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Officers or by an Officer and either a Secretary, Assistant
Secretary or Assistant Treasurer of such Person. One of the Officers signing an
Officers' Certificate given pursuant to Section 4.03(a) shall be the principal
executive, financial or accounting Officer of the Person delivering such
certificate.
"Oil and Gas Business" means the business of the exploration for, and
exploitation, development, production, processing (but not refining), marketing,
storage and transportation of, hydrocarbons, and other related energy and
natural resources businesses (including oil and gas services businesses related
to the foregoing).
"Oil and Gas Securities" means the Voting Stock of a Person primarily
engaged in the Oil and Gas Business, provided that such Voting Stock shall
constitute a majority of the Voting Stock of such Person in the event that such
Voting Stock is not registered under Section 12 of the Exchange Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or any Guarantor, if applicable) or the Trustee.
"Payment Default" shall have the meaning set forth in Section 6.01(4) of
this Indenture.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PBGC Plan" shall mean any employee pension benefit plan as defined in
Section 3(2) of ERISA sponsored by the Company or an ERISA Affiliate (excluding
any Multiemployer Plan and any Multiple Employer Plan) and which is subject to
Title IV of ERISA or Section 412 of the Code.
13
"Permitted Business Investments" means (i) Investments in assets used in
the Oil and Gas Business; (ii) the acquisition of Oil and Gas Securities; (iii)
the entry into operating agreements, joint ventures, processing agreements,
farmout agreements, development agreements, area of mutual interest agreements,
contracts for the sale, transportation or exchange of oil and natural gas,
unitization agreements, pooling arrangements, joint bidding agreements, service
contracts, partnership agreements (whether general or limited) or other similar
or customary agreements, transactions, properties, interests or arrangements,
and Investments and expenditures in connection therewith or pursuant thereto, in
each case made or entered into in the ordinary course of the Oil and Gas
Business, excluding solely for purposes of this clause (iii), however,
Investments in corporations; (iv) the acquisition of working interests, royalty
interests or mineral leases relating to oil and gas properties; (v) Investments
by the Company or any Wholly Owned Restricted Subsidiary in any Person which,
immediately prior to the making of such Investment, is a Wholly Owned Restricted
Subsidiary; (vi) Investments in the Company by any Wholly Owned Restricted
Subsidiary; (vii) Investments permitted under Section 4.11 and Section 4.13;
(viii) Investments in any Person the consideration for which consists of Capital
Stock (other than Disqualified Stock); and (ix) Investments constituting
obligations under hedging arrangements described in clause (viii) of the
definition of "Permitted Indebtedness".
"Permitted Company Refinancing Indebtedness" means Indebtedness of the
Company, the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Indebtedness of the Company, provided that (i) if the
Indebtedness (including the Securities) being renewed, extended, refinanced,
refunded or repurchased is pari passu with or subordinated in right of payment
to the Securities, then such Indebtedness is pari passu or subordinated in right
of payment to, as the case may be, the Securities at least to the same extent as
the Indebtedness being renewed, extended, refinanced, refunded or repurchased,
(ii) such Indebtedness is scheduled to mature no earlier than the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, and (iii) such
Indebtedness has an Average Life at the time such Indebtedness is incurred that
is equal to or greater than the Average Life of the Indebtedness being renewed,
extended, refinanced, refunded or repurchased; provided, further, that such
Indebtedness (to the extent that such Indebtedness constitutes Permitted Company
Refinancing Indebtedness) is in an aggregate principal amount (or, if such
Indebtedness is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the aggregate
principal amount then outstanding of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased (or if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased was issued at a price less than
the principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP).
"Permitted Financial Investments" means the following kinds of instruments
if, in the case of instruments referred to in clauses (i) through (iv) below, on
the date of purchase or other acquisition of any such instrument by the Company
or any Restricted Subsidiary, the remaining term to maturity is not more than
one year: (i) readily marketable obligations issued or unconditionally
guaranteed as to principal of and interest on by the United States of America or
by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America; (ii) repurchase obligations for
instruments of the type described in clause (i) for which delivery of the
instrument is made against payment; (iii) obligations (including, but not
limited to,
14
demand or time deposits, bankers' acceptances and certificates of deposit)
issued by a depository institution or trust company incorporated or doing
business under the laws of the United States of America, any state thereof or
the District of Columbia or a branch or subsidiary of any such depository
institution or trust company operating outside the United States, provided, that
such depository institution or trust company has, at the time of the Company's
or such Restricted Subsidiary's investment therein or contractual commitment
providing for such investment, capital surplus or undivided profits (as of the
date of such institution's most recently published financial statements) in
excess of $500 million; (iv) commercial paper issued by any corporation, if such
commercial paper has, at the time of the Company's or any Restricted
Subsidiary's investment therein or contractual commitment providing for such
investment, credit ratings of A-1 (or higher) by Standard & Poor's Ratings
Services and P-1 (or higher) by ▇▇▇▇▇'▇ Investors Services, Inc.; and (v) money
market mutual or similar funds having assets in excess of $500 million.
"Permitted Indebtedness" means (i) Indebtedness of the Company and its
Restricted Subsidiaries outstanding as of the Issue Date; (ii) Indebtedness of
the Company and its Restricted Subsidiaries that are, or will become, guarantors
under a Bank Credit Facility as the same may be amended, refinanced or replaced,
in a principal amount outstanding at any time not to exceed a principal amount
equal to the greater of (a) $25.0 million and (b) 10% of Adjusted Consolidated
Net Tangible Assets, plus related accrued interests and costs, less any Net Cash
Proceeds applied in accordance with Section 4.11(b) to repay or prepay such
Indebtedness that results in a permanent reduction in any revolving credit or
other commitment relating thereto or the maximum amount that may be borrowed
thereunder; (iii) other Indebtedness of the Company and its Restricted
Subsidiaries in a principal amount not to exceed $10.0 million at any one time
outstanding plus accrued interest thereon; (iv) Non-Recourse Indebtedness; (v)
Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of the
Company and Indebtedness of any Restricted Subsidiary of the Company to the
Company or another Wholly Owned Restricted Subsidiary of the Company; (vi)
Permitted Company Refinancing Indebtedness; (vii) Permitted Subsidiary
Refinancing Indebtedness; (viii) obligations under hedging arrangements that the
Company and its Restricted Subsidiaries enter into in the ordinary course of
business for the purpose of protecting their production against fluctuations in
oil and natural gas prices; (ix) Indebtedness under the Securities; (x)
Indebtedness of a Restricted Subsidiary pursuant to a Guarantee of the
Securities pursuant to Article X of this Indenture; (xi) any interest rate
hedging obligations so long as the related Indebtedness constitutes the Bank
Credit Facility or the Securities; and (xii) Indebtedness of the Company and its
Restricted Subsidiaries under the Senior Secured Note Indenture, the Senior
Secured Notes and the guarantees and security documents now or hereafter
executed and delivered in connection therewith.
"Permitted Investments" means Permitted Business Investments and Permitted
Financial Investments.
"Permitted Liens" means (i) Liens outstanding as of the Issue Date; (ii)
Liens now or hereafter securing a Bank Credit Facility, provided, such liens are
limited to securing Indebtedness in an amount not in excess of that permitted to
be incurred in accordance with clause (ii) of the
15
definition of "Permitted Indebtedness"; (iii) Liens now or hereafter securing
any interest rate hedging obligations so long as the related Indebtedness
constitutes the Bank Credit Facility or the Securities (or any Refinancing
Indebtedness of the Company in respect thereof); (iv) Liens securing
Indebtedness, the proceeds of which are used to refinance secured Indebtedness
of the Company or its Restricted Subsidiaries; provided, that such Liens extend
to or cover only the property or assets currently securing the Indebtedness
being refinanced; (v) Liens for taxes, assessments and governmental charges not
yet delinquent or being contested in good faith and for which adequate reserves
have been established to the extent required by GAAP; (vi) mechanics',
workmen's, materialmen's, operators' or similar Liens arising in the ordinary
course of business; (vii) Liens in connection with workers' compensation,
unemployment insurance or other social security, old age pension or public
liability obligations; (viii) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases, public or statutory obligations, surety, stay, appeal indemnity,
performance or other similar bonds, or other similar obligations arising in the
ordinary course of business; (ix) survey exceptions, encumbrances, easements or
reservations of, or rights of others for, rights of way, zoning or other
restrictions as to the use of real properties, and minor defects in title which,
in the case of any of the foregoing, were not incurred or created to secure the
payment of borrowed money or the deferred purchase price of property or
services, and in the aggregate do not materially adversely affect the value of
such properties or materially impair use for the purposes of which such
properties are held by the Company or any Restricted Subsidiaries; (x) Liens on,
or related to, properties to secure all or part of the costs incurred in the
ordinary course of business of exploration, drilling, development or operation
thereof; (xi) Liens on pipeline or pipeline facilities which arise out of
operation of law; (xii) judgment and attachment Liens not giving rise to an
Event of Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and for which adequate reserves have been made; (xiii) (a) Liens
upon any property of any Person existing at the time of acquisition thereof by
the Company or a Restricted Subsidiary, (b) Liens upon any property of a Person
existing at the time such Person is merged or consolidated with the Company or
any Restricted Subsidiary or existing at the time of the sale or transfer of any
such property of such Person to the Company or any Restricted Subsidiary, or (c)
Liens upon any property of a Person existing at the time such Person becomes a
Restricted Subsidiary; provided, that in each case such Lien has not been
created in contemplation of such sale, merger, consolidation, transfer or
acquisition, and provided that in each such case no such Lien shall extend to or
cover any property of the Company or any Restricted Subsidiary other than the
property being acquired and improvements thereon; (xiv) Liens on deposits to
secure public or statutory obligations or in lieu of surety or appeal bonds
entered into in the ordinary course of business; (xv) Liens in favor of
collecting or payor banks having a right of setoff, revocation, refund or
chargeback with respect to money or instruments of the Company or any Restricted
Subsidiary on deposit with or in possession of such bank; (xvi) purchase money
security interests granted in connection with the acquisition of assets in the
ordinary course of business and consistent with past practices, provided, that
(A) such Liens attach only to the property so acquired with the purchase money
indebtedness secured thereby and (B) such Liens secure only Indebtedness that is
not in excess of 100% of the purchase price of such assets; (xvii) Liens
reserved in oil and gas mineral leases for bonus or rental payments and for
compliance with the terms of such leases; (xviii) Liens arising under
partnership agreements, oil and gas leases, farm-out agreements, division
orders,
16
contracts for the sale, purchase, exchange, transportation or processing (but
not refining) of oil, gas or other hydrocarbons, unitization and pooling
declarations and agreements, development agreements, operating agreements, area
of mutual interest agreements, and other similar agreements which are customary
in the Oil and Gas Business; (xix) Liens securing obligations under hedging
arrangements that the Company or any Restricted Subsidiary enters into in the
ordinary course of business for the purpose of protecting its production against
fluctuations in oil and natural gas prices; (xx) Liens to secure Dollar-
Denominated Production Payments and Volumetric Production Payments; and (xxi)
Liens now or hereafter securing the Senior Secured Note Indenture and the Senior
Secured Notes.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Restricted Subsidiary, the net proceeds of which are used to renew, extend,
refinance, refund or repurchase outstanding Indebtedness of such Restricted
Subsidiary, provided that (i) if the Indebtedness (including any guarantee)
being renewed, extended, refinanced, refunded or repurchased is pari passu with
or subordinated in right of payment to the Guarantee, then such Indebtedness is
pari passu with or subordinated in right of payment to, as the case may be, the
Guarantee at least to the same extent as the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (ii) such Indebtedness is
scheduled to mature no earlier than the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, and (iii) such Indebtedness has an Average
Life at the time such Indebtedness is incurred that is equal to or greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, provided, further, that such Indebtedness (to the
extent that such Indebtedness constitutes Permitted Subsidiary Refinancing
Indebtedness) is in an aggregate principal amount (or, if such Indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP); provided, however, that a
Restricted Subsidiary shall not incur refinancing Indebtedness to renew, extend,
refinance, refund or repurchase outstanding Indebtedness of another Restricted
Subsidiary unless such Restricted Subsidiary is a Guarantor.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, estate, unincorporated organization or government
or any agency or political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the date of this
Indenture and attached as Exhibit H hereto, as such agreement may be amended,
modified or supplemented from time to time.
"Preferred Stock" as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated), which is preferred
as to the payment of dividends, or upon any voluntary or involuntary liquidation
or dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.
17
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article XI of Regulation S-X under the Securities Act.
"Reference Period" means, with respect to any Person, the four full
consecutive fiscal quarters ended with the last full fiscal quarter for which
financial information is available immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Securities or this
Indenture.
"Registration Rights Agreement" means, collectively, (i) the Registration
Rights Agreement of Notes, dated as of April 21, 1998, by and among the Company
and each of the purchasers named on the signature pages thereto, and (ii) the
Registration Rights Agreement of Warrants, dated as of April 21, 1998, by and
among the Company and each of the purchasers named on the signature pages
thereto, as each such agreement may be amended, modified or supplemented from
time to time.
"Restricted Payment" means, with respect to any Person, any of the
following: (i) any dividend or other distribution in respect of such Person's
Capital Stock (other than (a) dividends or distributions payable solely in
Capital Stock (other than Disqualified Stock) and (b) in the case of Restricted
Subsidiaries of the Company, dividends or distributions payable to the Company
or to a Restricted Subsidiary of the Company); (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock, or any option,
warrant, or other right to acquire shares of Capital Stock, of the Company or
any of its Restricted Subsidiaries (but excluding (a) any cashless exercise of
warrants or options or (b) payments in respect of cash elections or phantom
stock or similar awards under any director or employee benefit plan or
arrangement provided such payment is recorded as a compensation expense under
GAAP); (iii) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, of any Indebtedness which is subordinated in right of payment to the
Securities; and (iv) the making by such Person of any Investment other than a
Permitted Investment.
"Restricted Securities" mean Securities that bear or are required to bear
the Restricted Securities Legend.
"Restricted Subsidiary" means any Subsidiary, whether existing on or after
the date of this Indenture, unless such Subsidiary is an Unrestricted Subsidiary
or is designated as an Unrestricted Subsidiary pursuant to the terms of this
Indenture.
"Restricted Securities Legend" means the legend set forth on the face of
the form of Security attached hereto as Exhibit A (or prior to the Unit
Termination Date, Exhibit G), pursuant to Section 2.06.
"Sale and Participation Agreement" means that certain Sale and
Participation Agreement between Chesapeake, the Company, GPC and Gothic Energy
of Texas, Inc., dated as of March 31, 1998, as in effect on the Issue Date.
18
"Sale/Leaseback Transaction" means with respect to the Company or any of
its Restricted Subsidiaries, any arrangement with any Person providing for the
leasing by the Company or any of its Restricted Subsidiaries of any principal
property, acquired or placed into service more than 180 days prior to such
arrangement, whereby such property has been or is to be sold or transferred by
the Company or any of its Restricted Subsidiaries to such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" or "Security" means the Company's 14_% Series A Senior Secured
Discount Notes due 2006 and the Company's 14_% Series B Senior Secured Discount
Notes due 2006, as either may be amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture;
provided that on or prior to the Unit Termination Date, the term "Securities"
shall also include the Units.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred), unless such Indebtedness
is contractually subordinate or junior in right of payment of principal, premium
and interest to the Securities.
"Senior Indebtedness of a Restricted Subsidiary" means any Indebtedness of
such Restricted Subsidiary (whether outstanding on the date hereof or hereafter
incurred), unless such Indebtedness is contractually subordinate or junior in
right of payment of principal, premium and interest to the Guarantees.
"Separation Date" shall mean the earlier of (i) the date that a
registration statement filed in respect of the Exchange Offer is declared
effective by the SEC and (ii) October 23, 1998.
"Senior Secured Notes" means GPC's 11_% Senior Secured Notes due 2005 to be
issued pursuant to the Senior Secured Note Indenture.
"Senior Secured Note Indenture" means the Indenture dated April 21, 1998
among GPC, the Company and the trustee party thereto, as such agreement may be
amended, modified or supplemented from time to time.
"Series A Securities" means the Company's 14_% Series A Senior Secured
Discount Notes due 2006 to be issued pursuant to this Indenture.
"Series B Securities" means the Company's 14_% Series B Senior Secured
Discount Notes due 2006 to be issued pursuant to this Indenture and in the
Exchange Offer.
"Shelf Registration" shall have the meaning given such term in the
Registration Rights Agreement.
19
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and, when used with respect to any other
Indebtedness or any installment of interest thereon, means the date specified in
the instrument evidencing or governing such Indebtedness as the fixed date on
which the principal of such Indebtedness or such installment of interest is due
and payable.
"Subsidiary," means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more subsidiaries of such Person or by such Person and
one or more subsidiaries of such Person, (ii) a partnership in which such Person
or a subsidiary of such Person is, at the date of determination, a general or
limited partner of such partnership, but, in the case of any such limited
partner, only if such Person or its subsidiary is entitled to receive more than
50 percent of the assets of such partnership upon its dissolution, or (iii) any
other Person (other than a corporation or partnership) in which such Person, by
one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such Person.
"Subsidiary Guarantor" means any Subsidiary which is a Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trust Officer" means any officer or assistant officer within the corporate
trust department of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"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.
"Unrestricted Subsidiary" means (i) any Subsidiary of an Unrestricted
Subsidiary or (ii) any Subsidiary of the Company or of a Restricted Subsidiary
that is designated as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors in accordance with the requirements of the following
sentence; provided that in no event shall (i) the assets owned by GPC on the
Issue Date be transferred to or held by an Unrestricted Subsidiary and (ii) GPC
be an Unrestricted Subsidiary. The Company may designate any Subsidiary of the
Company or of a Restricted Subsidiary (including a newly acquired or newly
formed Subsidiary or any Restricted Subsidiary of the Company), to be an
Unrestricted Subsidiary by a resolution of the Board of Directors of the
Company, as evidenced by written notice thereof delivered to the Trustee, if
immediately after giving pro forma effect to such designation, (i) the Company
could incur at least $1.00 of additional Indebtedness pursuant to the provisions
of Section 4.09(a), (ii) the Company could make an additional Restricted Payment
of at least $1.00 pursuant to provisions of Section 4.10, (iii) such Subsidiary
does not own or hold any Capital Sock of, or any lien on any property of, the
Company or any Restricted Subsidiary, (iv) such Subsidiary is not liable,
directly or indirectly, with respect to any Indebtedness other than Non-Recourse
Indebtedness, (v) neither the Company nor any Restricted Subsidiary guarantees
any Indebtedness of such Subsidiary or otherwise directly or
20
indirectly provides any credit support to such Subsidiary, (vi) such Subsidiary
is a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation, (x) to subscribe for
additional Capital Stock, or (y) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified levels of operating
results and (vii) no Default or Event of Default would occur or be continuing
after giving effect to such designation. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date
pursuant to Section 4.09, the Company shall be in default of such covenant). The
Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if, immediately after giving effect to such
designation, (i) the Company could incur at least $1.00 of additional
Indebtedness pursuant to the provisions of Section 4.09(a) and (ii) no Default
or Event of Default shall have occurred and be continuing.
"U.S. Government Securities" means, as to any Person, securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof.
"U.S. Legal Tender" means such coin or currency of the United States as at
the time of payment shall be legal tender for the payment of public and private
debts.
"Units" shall mean a trading unit consisting of (i) $1,000 principal amount
of Series A Securities and (ii) 7.933 Warrants pursuant to the Warrant Agreement
and Section 2.15 hereof.
"Unit Certificate" shall mean a certificate of the Company substantially in
the form set forth in Exhibit G evidencing ownership by the Holder of Units.
"Unit Termination Date" shall have the meaning set forth in Section
2.15(c).
"Volumetric Production Payments" mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of contingency) to vote in the election of members of the Board
of Directors or other governing body of such person.
"Warrants" or "Warrant" shall mean all, or one of, the aggregate 825,000
Common Stock Purchase Warrants of the Company issued pursuant to the Warrant
Agreement.
21
"Warrant Agreement" shall mean that certain Warrant Agreement dated as of
April 21, 1998 between the Company and American Stock Transfer & Trust Company,
as Warrant Agent.
"Wholly Owned Subsidiary" means, as to any Person, a Subsidiary all of the
Capital Stock (other than directors' qualifying shares if applicable) of which
is owned by such Person or another Wholly Owned Subsidiary of such Person.
"Wholly Owned Restricted Subsidiary" means, as to any Person, any Wholly
Owned Subsidiary of such Person which is also a Restricted Subsidiary.
Section I.2 Other Definitions
Term Defined in Section
"Affiliate Transaction"............................................ 4.16
"Bankruptcy Law"................................................... 6.01
"Change of Control Offer".......................................... 4.17
"Change of Control Notice"......................................... 4.17
"Change of Control Payment Date"................................... 4.17
"Covenant Defeasance".............................................. 8.03
"Custodian"........................................................ 6.01
"Defaulted Interest"............................................... 2.12
"Excess Proceeds".................................................. 4.11
"Funding Guarantor"................................................10.06
"incur"............................................................ 4.09
"Legal Defeasance"................................................. 8.02
"Legal Holiday"....................................................13.07
"Net Proceeds Offer"............................................... 4.11
"Net Proceeds Offer Amount"........................................ 4.11
"Net Proceeds Payment Date"........................................ 4.11
"Paying Agent"..................................................... 2.03
"Payment Default".................................................. 6.01
"Payment Restriction".............................................. 4.14
"Period"........................................................... 4.11
"QIB".............................................................. 2.06
"Registrar"........................................................ 2.03
Section I.3 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms, if used in this Indenture, have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder.
22
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Guarantors and
any other obligor on the Securities or the Guarantees.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them therein.
Section I.4 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the s ingular;
(5) any gender used in this Indenture shall be deemed to include
the neuter, masculine or feminine genders;
(6) provisions apply to successive events and transactions; and
(7) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other Subdivision.
23
ARTICLE II
The Securities
Section II.1 Form and Dating
The Securities and the certificate of authentication, and the notation on
the Securities relating to the Guarantee and the certificate of authentication
relating to the Guarantee, shall be substantially in the forms of Exhibits A and
A-1, respectively. The Securities may also have such insertions, omissions,
substitutions and variations as are required or as may be permitted by or
consistent with this Indenture and, in this regard, Securities issued pursuant
to the Exchange Offer in accordance with Section 2.06(g) may be referred to as
Series B Securities on the face and reverse of the certificate and bear a CUSIP
number different from that applicable to Securities bearing a Restricted
Securities Legend. The provisions of Exhibits A and A-1 are part of this
Indenture. The Securities may have notations, legends and endorsements required
by law or stock exchange rule or usage. Restricted Securities shall bear the
Restricted Securities Legend, unless removed in accordance with Section 2.06.
The Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the Securities and the Guarantee
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Guarantors, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Securities offered and sold in reliance on Rule 144A under the Securities
Act will initially be issued only in the form of one or more Global Securities.
Securities offered and sold in reliance on any other exemption from registration
under the Securities Act will be issued only in the form of Definitive
Securities.
Securities issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto and the additional schedule referred to in footnote 3 thereto).
Securities issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto and the additional schedule referred to in footnote 3
thereto). Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
Subject to the provisions of Section 2.06, any Person having a beneficial
interest in a Global Security may exchange such beneficial interest, upon
request to the Trustee, for fully certificated Definitive Securities in
registered form.
24
Section II.2 Execution and Authentication
Two Officers of the Company shall sign the Securities on behalf of the
Company, and one Officer of each Guarantor shall sign the notation on the
Securities relating to the Guarantee of such Guarantor on behalf of such
Guarantor, in each case by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities either manually or by facsimile.
If an Officer of the Company or any Guarantor whose signature is on a
Security no longer holds that office at the time the Security is authenticated,
the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
or an authenticating agent manually signs the certificate of authentication on
the Security and the Guarantee. These signatures shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate Securities for
original issue in the aggregate principal amount of $104 million upon a written
order of the Company signed by two Officers of the Company. Subject to Section
2.07, the aggregate principal amount of Securities outstanding at any time may
not exceed $104 million. Each Security authenticated for original issuance
shall bear the Restricted Securities Legend.
The Trustee may appoint an authenticating agent to authenticate Securities.
An authenticating agent may authenticate Securities whenever the Trustee may do
so except on original issuance. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent and each
reference to authentication of the Securities includes authentication of the
Guarantee. An authenticating agent has the same rights as an Agent to deal with
the Company or its Affiliates.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
Section II.3 Registrar and Paying Agent
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. Where the Trustee is acting as or has been appointed
Registrar and/or Paying Agent, the Company may appoint one or more co-registrars
and one or more additional paying agents with the prior consent of the Trustee,
whose consent shall not be unreasonably withheld. The term "Paying Agent"
includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. Such agency agreement shall provide for
reasonable compensation for such services. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent and shall furnish
the Trustee with an executed counterpart of any such agency agreement. If the
Company fails to
25
maintain or act as Registrar or Paying Agent, the Trustee shall act as such and
shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be maintained by
the Company in the Borough of Manhattan, the City of New York. The Company
initially designates the Trustee as the Registrar and Paying Agent.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Securities Custodian with respect to the Global
Securities.
Section II.4 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent other than the Trustee to hold
in trust for the benefit of Holders or the Trustee all money held by such Paying
Agent for the payment of principal of, premium, if any, or interest on the
Securities (whether such money shall have been paid to it by the Company or any
Guarantor), and to notify the Trustee of any Default by the Company or any
Guarantor in making any such payment. While any such Default continues, the
Trustee may require the Paying Agent to pay all money held by it to the Trustee.
Except as provided in the immediately preceding sentence, 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 funds disbursed and, if the Company requires such payment,
the Company shall give prior notice to the Trustee and provide appropriate money
transfer instructions to the Paying Agent. Upon such payment over to the
Trustee and accounting for any funds disbursed, such Paying Agent (if other than
the Company or a Subsidiary) shall have no further liability for the money. If
the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold as
separate trust funds for the benefit of the Holders all money held by it as
Paying Agent.
Section II.5 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA (S)312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause to be furnished to the Trustee
at least ten Business Days prior to each semiannual 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 Holders, and the Company shall otherwise comply with TIA (S)312(a).
Section II.6 Transfer and Exchange
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar with the request:
(x) to register the transfer of the Definitive Securities,
or
26
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested
if its requirement for such transactions are met; provided, however, that
the Definitive Securities presented or surrendered for registration of
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly
executed by the Holder thereof or by his attorney, duly authorized in
writing; and
(ii) in the case of Restricted Securities that are Definitive
Securities, shall be accompanied by the following additional
information and documents, as applicable, upon which the Registrar may
conclusively rely:
(A) if such Restricted Securities are being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (in substantially the form of Exhibit B hereto); or
(B) if such Restricted Securities are being transferred (1)
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act or (2) pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests) or (3) pursuant to an effective registration statement
under the Securities Act, a certification to that effect from
such Holder (in substantially the form of Exhibit B hereto); or
(C) if such Restricted Securities are being transferred to
an "accredited investor," within the meaning of Rule 501(a) under
the Securities Act pursuant to a private placement exemption from
the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto) and a certification
from the applicable transferee (in substantially the form of
Exhibit E hereto);
(D) if such Restricted Securities are being transferred
pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests),
certifications to that effect from such Holder (in substantially
the form of Exhibits B and F hereto); or
(E) if such Restricted Securities are being transferred in
reliance on another exemption from the registration requirements
of the Securities Act (and based upon an opinion of counsel if
the Company or the Trustee so
27
requests), a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
(b) Restriction on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of
the requirements set forth below. Upon receipt by the Trustee of a
Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together
with:
(i) if such Definitive Security is a Restricted Security,
certification, substantially in the form of Exhibit B hereto, upon
which the Trustee may conclusively rely, that such Definitive Security
is being transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in accordance with Rule 144A
under the Securities Act; or
(ii) if such Definitive Security is a Restricted Security and is
being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (and based upon an
opinion of counsel if the Company or the Trustee so requests),
certifications to that effect from such Holder (in substantially the
form of Exhibits B and F hereto); and
(iii) whether or not such Definitive Security is a Restricted
Security, written instructions directing the Trustee to make, or
direct the Securities Custodian to make, an endorsement on the Global
Security to reflect an increase in the aggregate principal amount of
the Securities represented by the Global Security;
then the Trustee shall cancel such Definitive Security in accordance with
Section 2.11 hereof and cause, or direct the Securities Custodian to cause,
in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate
principal amount of Securities represented by the Global Security to be
increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate a new Global
Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Definitive
Security. Upon receipt by the Trustee of written instructions or such
other form of instructions as is customary for the Depositary, from
the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Security, and in the case of a
Restricted Security, the following additional information and
documents (all of
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which may be submitted by facsimile), upon which the Trustee may
conclusively rely:
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial
owner, a certification from such Person to that effect (in
substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred (1) to
a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act or (2) pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests) or (3) pursuant to an effective registration statement
under the Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred to an
"accredited investor," within the meaning of Rule 501(a) under
the Securities Act pursuant to a private placement exemption from
the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), a certification to that effect from such transferor
(in substantially the form of Exhibit B hereto) and a
certification from the applicable transferee (in substantially
the form of Exhibit E hereto); or
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests),
certifications to that effect from such transferor (in
substantially the form of Exhibits B and F hereto); or
(E) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act (and based upon an opinion of counsel if
the Company so requests), a certification to that effect from
such transferor (in substantially the form of Exhibit B hereto);
the Trustee or the Securities Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, cause the aggregate principal amount of Global Securities
to be reduced accordingly and, following such reduction, the Company
shall execute and the Trustee shall authenticate and deliver to the
transferee a Definitive Security in the appropriate principal amount.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.06(d) shall
be registered in such names and
29
in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Definitive
Securities to the Persons in whose names such Securities are so
registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Authentication of Definitive Securities in Absence of Depositary.
If at any time:
(i) the Depositary for the Securities notifies the Company that
the Depositary is unwilling or unable to continue as Depositary for
the Global Securities and a successor Depositary for the Global
Securities is not appointed by the Company within 90 days after
delivery of such notice;
(ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depositary to issue
Definitive Securities in lieu of all or a portion of the Global
Security (in which case the Company shall deliver Definitive
Securities within 30 days of such request); or
(iii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee will authenticate and make
available for delivery Definitive Securities, in an aggregate principal
amount equal to the principal amount of the Global Securities, in exchange
for such Global Securities and registered in such names as the Depositary
shall instruct the Trustee or the Company in writing.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor
or substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE
ACCOUNT OR BENEFIT OF ANY
30
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT
OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND, PRIOR TO THE
EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN RULE 903 OF
REGULATION S, WILL NOT OFFER OR SELL THESE SECURITIES IN THE UNITED STATES
OR TO A U.S. PERSON OR FOR THE ACCOUNT OF A U.S. PERSON WITHIN THE MEANING
OF RULE 902(o) OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS COMPLIES WITH RULE 144
UNDER THE SECURITIES ACT) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE
OF THIS SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF
THE ISSUER WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION
TERMINATION DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY,
EXCEPT (A) TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE
RESALE PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE
A WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (COPIES OF WHICH
MAY BE OBTAINED FROM THE TRUSTEE), PROVIDED THAT CERTAIN HOLDERS SPECIFIED
IN THE INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT TO THIS CLAUSE C PRIOR
TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" DESCRIBED ABOVE, (D)
OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN
TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE EXPIRATION OF THE "40-
DAY RESTRICTED PERIOD" DESCRIBED ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED
FROM THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, (E) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (G) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT
OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT
BE AT ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE
31
STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHICH THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL
BUYER, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION
TERMINATION DATE.
Each Security certificate evidencing the Global Securities also shall bear
the paragraph referred to in footnote 1 in the form of Security attached
hereto as Exhibit A.
(ii) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Restricted Security for a Definitive
Security that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Restricted
Security; and
(B) in the case of any Restricted Security represented by a
Global Security, such Restricted Security shall not be required
to bear the legend set forth in (i) above if all other interests
in such Global Security have been or are concurrently being sold
or transferred pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, but such Restricted Security shall continue to be
subject to the provisions of Section 2.06(c) hereof; provided,
however, that with respect to any request for an exchange of a
Restricted Security that is represented by a Global Security for
a Definitive Security that does not bear a legend set forth in
(i) above, which request is made in reliance upon Rule 144 under
the Securities Act, the Holder thereof shall certify in writing
to the Registrar that such request is being made pursuant to Rule
144 under the Securities Act (such certification to be
substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate Series B Securities in exchange for Series
A Securities accepted for exchange in the Exchange Offer, which Series
B Securities shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such
Securities, in each case unless the Holder of such Series A Securities
is either (A) a broker-dealer, (B) a
32
Person participating in the distribution of the Series A Securities or
(C) a Person who is an affiliate (as defined in Rule 144 under the
Securities Act) of the Company. The Company shall identify to the
Trustee such Holders of the Securities in a written certification
signed by an Officer of the Company and, absent certification from the
Company to such effect, the Trustee shall assume that there are no
such Holders.
(h) Cancellation and/or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to or retained and canceled by the Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Security is exchanged for Definitive Securities, redeemed, repurchased or
canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of
the Trustee to reflect such reduction.
(i) General Provisions with respect to Transfer and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange or redemption of Securities
(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 such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06 or 9.05 hereof).
(iii) The Trustee shall authenticate Definitive Securities and
Global Securities in accordance with the provisions of Section 2.02
hereof.
(iv) Notwithstanding any other provisions of this Indenture to
the contrary, the Company shall not be required to register the
transfer or exchange of a Security between the record date and the
next succeeding Interest Payment Date.
(v) Neither the Company nor the Trustee will have any
responsibility or liability for any aspect of the records relating to,
or payments made on account of, Securities by the Depositary, or for
maintaining, supervising or reviewing any records of the Depositary
relating to such Securities. Neither the Company nor the Trustee
shall be liable for any delay by the related Global Security Holder or
the Depositary in identifying the beneficial owners of the related
Securities and each such Person may conclusively rely on, and shall be
protected in relying on, instructions from such Global Security Holder
or the Depositary for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of
the Securities to be issued).
33
(vi) Neither the Trustee, the Securities Registrar nor the
Company shall be required (a) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of
Securities selected for redemption under Section 3.02 hereof and
ending at the close of business on the day of such mailing of the
relevant notice of redemption, or (b) to register the transfer of or
exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(vii) All Securities and the Guarantees, if any, noted thereon
issued upon any registration of transfer or exchange of Securities
shall be the valid obligations of the Company and the respective
Guarantors, if any, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
(viii) Each Holder of a Security agrees to indemnify the Company
and the Trustee against any liability that may result from the
transfer, exchange or assignment of such Holder's Security in
violation of any provision of this Indenture and/or applicable federal
or state securities law.
(ix) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security other than to
require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
Section II.7 Replacement Securities
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of the Trustee are met. An indemnity bond will be
required that is sufficient in the judgment of the Company, the Guarantors and
the Trustee to protect the Company, the Guarantors, the Trustee or any Agent
from any loss which any of them may suffer if a Security is replaced. The
Company may charge for its expenses (including fees and expenses of the Trustee)
in replacing a Security.
Section II.8 Outstanding Securities
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Security effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09, a Security does not
cease to be outstanding because the Company, the Guarantors or any of their
respective Subsidiaries or Affiliates holds the Security.
34
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section
4.01, it ceases to be outstanding and interest on it ceases to accrue.
Section II.9 Treasury Securities
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Guarantor 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 disregarded.
Section II.10 Temporary Securities
Until Definitive Securities are ready for delivery, the Company may prepare
and, upon written order of the Company, 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 delay, the Company
shall prepare and the Trustee shall authenticate and make available for delivery
Definitive Securities in exchange for a like principal amount of temporary
Securities surrendered to it. Until so exchanged, temporary Securities shall in
all respects be entitled to the same benefits under the Indenture as Definitive
Securities.
Section II.11 Cancellation
The Company or any Guarantor at any time may deliver Securities to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee shall cancel all Securities surrendered for registration, transfer,
exchange, payment or cancellation and shall return such canceled Securities to
the Company. Except as provided in Section 2.07, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
Securities that are redeemed by the Company, that are repurchased by the
Company pursuant to Section 4.11 or Section 4.17, or that are otherwise acquired
by the Company, will be surrendered to the Trustee for cancellation.
35
Section II.12 Defaulted Interest
If the Company defaults in a payment of interest on the Securities, it
shall pay, or cause the Paying Agent to pay, the defaulted interest in any
lawful manner (plus interest on such defaulted interest to the extent lawful)
(taken together, the "Defaulted Interest") to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the
Securities and in Section 4.01 hereof. At least 15 days before the special
record date, the Company shall mail to each Holder to be paid thereon a notice
stating the special record date, the payment date and the amount of Defaulted
Interest to be paid. In the event that the Company has elected to cause a
Paying Agent to pay the Defaulted Interest, the Company shall so notify the
Paying Agent at least 15 days before the special record date, which notice shall
also set forth the special record date, the payment date and the aggregate
amount of Defaulted Interest to be paid. At least five days before such payment
date, the Company shall deposit with the Paying Agent money sufficient to pay
all of the Defaulted Interest on the payment date therefor and instruct the
Paying Agent in writing to pay to specified Holders on the payment date. On the
payment date, the Paying Agent shall make the payments in accordance with the
Company's written instructions from funds deposited with the Paying Agent for
the purpose of making such Defaulted Interest payments.
Section II.13 Persons Deemed Owners
The Company, the Trustee, any Paying Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payments of principal of, premium, if any,
or interest on such Security and for all other purposes. None of the Company,
the Trustee, any Paying Agent or any authenticating agent shall be affected by
any notice to the contrary.
Section II.14 CUSIP Numbers
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
Section II.15 Units and Unit Certificates
36
Notwithstanding any provision of this Indenture to the contrary, on or
prior to the Unit Termination Date, all Securities issued or exchanged under
this Indenture shall consist of Units evidenced by Unit Certificates
substantially in the form set forth in Exhibit G hereto. Except as otherwise
provided in this Section 2.15, the Units and Unit Certificates shall be subject
to all of the provisions of this Indenture applicable to the Securities,
including without limitation provisions relating to exchange and transfer (and
restrictions on transfer) of Securities, the issuance of Definitive Securities
and Global Securities in exchange for outstanding Securities, and provisions
regarding payment on the Series A Securities of the Company constituting a part
of the Units evidenced by Unit Certificates. The following provisions shall
apply to the Units and the Unit Certificates:
(a) Unit Certificates duly executed by the Company (with the notation
of Guarantee duly executed by each Guarantor) and authenticated by the
Trustee or its agent in accordance with this Indenture shall constitute (i)
duly issued and outstanding Series A Securities of the Company in the
principal amount set forth on the Unit Certificate and (ii) number of
Warrants set forth on the Unit Certificate.
(b) For so long as the Units evidenced by Unit Certificates are
outstanding, (i) all payments made by the Company or any Guarantor to the
Trustee or any Paying Agent in respect of the Securities shall be deemed
made solely in respect of the Series A Securities and no part of such
payment shall be made in respect of the Warrants and (ii) all provisions
regarding redemption, retirement or defeasance under this Indenture, or any
offers of purchase pursuant to Sections 4.11 or 4.17 hereof, shall apply
solely to the Series A Securities constituting a part of the Units.
Neither the Trustee, any Paying Agent nor any Registrar shall be liable for
any payment made, or omitted to be made, in respect of the Warrants.
(c) The Company shall promptly notify the Trustee and the Registrar
(if not the Trustee) in writing of the occurrence of the Separation Date,
if such date occurs prior to October 23, 1998. After the earlier of (A)
October 23, 1998, (B) a date after the Separation Date designated by the
Company as the Unit Termination Date by at least five Business Days prior
written notice to the Registrar and the Depositary and (C) the date on
which all the Series A Securities evidenced by Unit Certificates shall
cease to be outstanding (such earlier date being herein referred to as the
"Unit Termination Date"), the Registrar shall (i) cease to issue Unit
Certificates for transfer or exchange for other Unit Certificates, (ii)
unless the Series A Securities have ceased to be outstanding, issue in the
appropriate principal amount Series A Securities in the proper form and
subject to the restrictions provided for in this Article II in transfer or
exchange for Unit Certificates, subject to the other terms of this
Indenture and (iii) deliver to the warrant agent under the Warrant
Agreement (at the direction of the Company) a list of Holders of Units
(including the registered name of such Holder, the number of Units held by
each Holder, the Unit Certificate numbers and an indication as to the
global or definitive form of such Unit Certificate) as of the close of the
Unit Termination Date for the purpose of permitting the warrant agent under
the Warrant Agreement to issue Warrant certificates to such Holders as of
the close of the Unit Termination Date. After the occurrence of the Unit
Termination Date, the outstanding Unit
37
Certificates shall cease to evidence the Warrants and shall solely
constitute outstanding Series A Securities. Neither the Trustee nor the
Registrar shall have any liability or responsibility for issuance of, or
failure to issue, Warrant certificates to any Holders of Units as of the
Unit Termination Date.
(d) The number of Warrants comprising part of a Unit shall not be
adjusted in the event a portion of the principal amount Series A Securities
constituting part of a Unit is redeemed, retired or defeased, or purchased
pursuant to Sections 4.11 or 4.17 hereof.
(e) In the event a Unit Certificate is delivered to the Registrar for
exchange or transfer bearing a notation of the warrant agent to the effect
that the Warrants evidenced thereby have been exercised, the Unit
Certificate shall cease to evidence ownership of Warrants and the Registrar
shall issue, in accordance with the other provisions of this Article II, a
Series A Security in exchange or transfer therefor.
ARTICLE III
Redemption
Section III.1 Notice to Trustee
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 6 or 7 of the Securities, it shall furnish to
the Trustee and the Registrar, at least 45 days but not more than 60 days before
the redemption date (unless the Trustee consents to a shorter period in
writing), an Officers' Certificate setting forth the redemption date, the
principal amount of Securities to be redeemed and the redemption price.
Section III.2 Selection of Securities to Be Redeemed
If less than all of the Securities are to be redeemed at any time, the
Trustee shall select the Securities to be redeemed in multiples of $1,000 pro
rata, by lot or, if the Securities are listed on any securities exchange, by any
other method that the Trustee considers fair and appropriate and that complies
with the requirements of such exchange. The Trustee shall make the selection
from outstanding Securities not previously called for redemption not less than
30 nor more than 60 days prior to the redemption date. 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 of $1,000 or whole 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 selected for redemption.
Section III.3 Notice of Redemption
(a) At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Securities to be redeemed at such Holder's registered address.
38
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the aggregate principal amount of Securities being redeemed;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
redemption price;
(6) that, unless the Company defaults in the payment of the
redemption price or accrued interest, interest on Securities called for
redemption ceases to accrue on and after the redemption date and the only
remaining right of the Holders is to receive payment of the redemption
prices in respect of the Securities upon surrender to the Paying Agent of
the Securities;
(7) 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 surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued;
(8) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(9) the CUSIP number of the Securities.
(b) At the Company's request, the Trustee shall give the notice of
redemption required in Section 3.03(a) in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the redemption date (unless the Trustee
consents to a shorter notice period in writing), an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in Section 3.03(a).
Section III.4 Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the redemption date
at the redemption price. Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus accrued interest to the redemption
date.
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Section III.5 Deposit of Redemption Price
Prior to the redemption date, the Company shall deposit with the Paying
Agent funds available on the redemption date sufficient to pay the redemption
price of, and accrued interest on, the Securities to be redeemed on that date.
The Paying Agent shall promptly return to the Company any money so deposited
which is not required for that purpose upon the written request of the Company,
except with respect to monies owed as obligations to the Trustee pursuant to
Article VII.
If any Security called for redemption shall not be so paid upon redemption
because of the failure of the Company to comply with the preceding paragraph,
interest will continue to be payable on the unpaid principal and premium, if
any, including from the redemption date until such principal and premium, if
any, is paid, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate provided in the Securities and in Section
4.01 hereof.
Section III.6 Securities Redeemed in Part
Upon surrender of a Security that is to be 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 aggregate amount to the unredeemed portion
of the Security surrendered.
Section III.7 Optional Redemption
The Securities will be redeemable, at the Company's option, in whole at any
time or in part from time to time, on and after May 1, 2003 at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the twelve-month period commencing on May 1 of the years set forth below,
plus, in each case, accrued interest thereon to the redemption date:
Year Percentage
---- ----------
2003......................... 107.063%
2004......................... 103.532%
2005......................... 100.00%
Notwithstanding the foregoing, at any time prior to May 1, 2003, the
Company may, at its option, redeem all or any portion of the Securities at the
Make-Whole Price plus accrued and unpaid interest thereon, if any, to the
redemption date. Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
40
In addition, in the event the Company consummates one or more Equity
Offerings on or prior to May 1, 2001, the Company may, in its sole discretion,
redeem up to 33-1/3% of the original aggregate principal amount of the
Securities with all or a portion of the aggregate net proceeds received by the
Company from any such Equity Offering or Equity Offerings, within 90 days of the
closing of any such Equity Offering, at a redemption price of 114.125% of the
Accreted Value of Securities so redeemed, plus accrued and unpaid interest on
the Securities so redeemed to the redemption date; provided, however, that
following such redemption, at least 66-2/3% of the original aggregate principal
amount of the Securities remains outstanding.
Any redemption pursuant to this Section 3.08 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
ARTICLE IV
Covenants
Section IV.1 Payment of Securities
The Company shall pay the principal of, premium, if any, and interest on,
the Securities on the dates and in the manner provided in the Securities and
this Indenture. Principal, premium and interest shall be considered paid on the
date due if the Trustee or Paying Agent holds on that date money deposited by
the Company designated for and sufficient to pay all principal, premium and
interest then due. All references to interest in this Indenture shall for all
purposes be deemed to include any additional interest payable as Notes
Liquidated Damages pursuant to the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal, and premium, if any,
at the rate borne by the Securities to the extent lawful; and it 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 same rate to the extent lawful.
Section IV.2 SEC Reports
(a) The Company, within 15 days after the Company files the same with the
SEC, shall deliver to Holders, copies of the annual reports and the information,
documents and other reports (or copies of any such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) that the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. Notwithstanding that the Company may not be required to remain subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the SEC (if the SEC will so accept) and provide the
Trustee and the Holders with such annual reports and such information, documents
and other reports specified in Sections 13 and 15(d) of the Exchange Act. The
Company and each Guarantor shall also comply with the provisions of TIA (S)
314(a).
(b) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice
41
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officers'
Certificates).
Section IV.3 Compliance Certificates
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate substantially in
the form of Exhibit D hereto, stating that a review of the activities of the
Company and the Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture and the Pledge Agreement, and further stating, as to each such
Officer signing such certificate, that, to the best of such Officer's knowledge,
the Company and each Guarantor has kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and the Pledge Agreement and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof or the Pledge Agreement (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge and what action the Company is taking
or proposes to take with respect thereto). Such Officers' Certificate shall
comply with TIA (S)314(a)(4). The Company hereby represents that, as of the
Issue Date, its fiscal year ends December 31, and hereby covenants that it shall
notify the Trustee at least 30 days in advance of any change in its fiscal year.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.02 shall be accompanied by a written
statement of the Company's independent public accountants (which shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Section 4.07 through Section 4.18 of this Indenture (to the extent such
provisions relate to accounting matters) or, if any such violation has occurred,
specifying the nature and period of existence thereof. Where such financial
statements are not accompanied by such a written statement, the Company shall
furnish the Trustee with an Officers' Certificate stating that any such written
statement would be contrary to the then current recommendations of the American
Institute of Certified Public Accountants.
(c) The Company and the Guarantors will, so long as any of the Securities
are outstanding, deliver to the Trustee within 10 Business Days of any Officer
becoming aware of any Default or Event of Default or default in the performance
of any covenant, agreement or condition contained in this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company or any Guarantor proposes to take with respect thereto.
42
Section IV.4 Maintenance of Office or Agency
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 12.02. If at any time the Company
shall fail to maintain any required office or agency or shall fail to furnish
the Trustee with the address thereof, such surrenders, presentations, notices
and demands may be made or served at the corporate trust office of the Trustee.
Subject to Section 2.03, the Company may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, the City of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section IV.5 Corporate Existence
Subject to Section 5.01 and Section 10.02, 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
Restricted Subsidiary and all rights (charter and statutory) and franchises of
the Company and the Restricted Subsidiaries; provided, that the Company shall
not be required to preserve the corporate existence of any Restricted
Subsidiary, or any such right or franchise, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section IV.6 Waiver of Stay, Extension or Usury Laws
The Company and each Guarantor covenants (to the extent that each 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 or other law, which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium, if any, or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company and each Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
43
Section IV.7 Payment of Taxes and Other Claims
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
Section IV.8 Maintenance of Properties and Insurance
(a) The Company shall cause all properties used or held for use in the
conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that there is no material adverse effect to the Company and its Restricted
Subsidiaries, taken as a whole; provided, however, that nothing in this Section
shall prevent the Company from discontinuing the operation or maintenance of any
such property, or disposing of it, if such discontinuance or disposal is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself and each
of its Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company, are adequate and appropriate for the conduct of the business of
the Company and such Restricted Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry.
44
Section IV.9 Limitation on Incurrence of Additional Indebtedness
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to issue, incur, assume, guarantee, become
liable, contingently or otherwise, with respect to or otherwise become
responsible for the payment of (collectively, "incur") any Indebtedness (other
than Permitted Indebtedness); provided, however, that if no Default or Event of
Default shall have occurred and be continuing at the time or as a consequence of
the incurrence of such Indebtedness, the Company or its Restricted Subsidiaries
may incur Indebtedness if, on a pro forma basis, after giving effect to such
incurrence and the application of the proceeds therefrom, both of the following
tests shall have been satisfied: (i) the Consolidated Interest Coverage Ratio
for the Reference Period immediately preceding the incurrence of such
Indebtedness is at least (a) 2.5-to-1.0 with respect to any date of incurrence
of additional Indebtedness occurring on or before May 1, 1999 or (b) 3.0-to-1.0
with respect to any date of incurrence of additional Indebtedness occurring
after May 1, 1999 and (ii) Adjusted Consolidated Net Tangible Assets would have
been equal to or greater than (A) 125% of Indebtedness of the Company and its
Restricted Subsidiaries on or before May 1, 1999 and (B) 150% of Indebtedness of
the Company and its Restricted Subsidiaries after May 1, 1999.
(b) Notwithstanding the foregoing, if no Default or Event of Default shall
have occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness, the Company and its Restricted Subsidiaries may
incur Permitted Indebtedness.
(c) Any Indebtedness of a Person existing at the time such Person becomes
a Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be incurred by such Restricted Subsidiary at the
time it becomes a Restricted Subsidiary.
Section IV.10 Limitation on Restricted Payments
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment, unless:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(ii) at the time of and immediately after giving effect to such
Restricted Payment, the Company would be able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.09(a); and
(iii) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
does not exceed the sum of (A) 50% of the Consolidated Net Income of the
Company and its Restricted Subsidiaries (or in the event such Consolidated
Net Income shall be a deficit, minus 100% of such deficit) during the
period (treated as one accounting period) subsequent to December 31, 1997
and ending on the last day of the fiscal quarter for which financial
information is available immediately preceding the date of such Restricted
Payment (less the aggregate amount of dividends described in clauses (i)
and (ii) of the following paragraph that are either (x) paid after the last
day of the fiscal quarter for which financial information is available
45
immediately preceding the date of such Restricted Payment or (y) declared
but not yet paid as of such date); (B) the aggregate Net Cash Proceeds
received by the Company after May 1, 1998 from any Person other than a
Restricted Subsidiary of the Company as a result of the issuance or sale of
Capital Stock of the Company (other than any Disqualified Stock), other
than in connection with the conversion of Indebtedness or Disqualified
Stock; (C) the aggregate Net Cash Proceeds received by the Company during
such period from any Person other than a Restricted Subsidiary of the
Company as a result of the issuance or sale of any Indebtedness or
Disqualified Stock to the extent that at the time the determination is made
such Indebtedness or Disqualified Stock, as the case may be, has been
converted into or exchanged for Capital Stock of the Company (other than
Disqualified Stock); (D) (i) in case any Unrestricted Subsidiary has been
redesignated a Restricted Subsidiary, an amount equal to the lesser of (x)
the book value (determined in accordance with GAAP) at the date of such
redesignation of the aggregate Investments made by the Company and its
Restricted Subsidiaries in such Unrestricted Subsidiary and (y) the fair
market value of such Investments in such Unrestricted Subsidiary at the
time of such redesignation, as determined in good faith by the Company's
Board of Directors, including a majority of the Company's Disinterested
Directors, whose determination shall be conclusive and evidenced by a
resolution of such Board; or (ii) in case any Restricted Subsidiary has
been redesignated an Unrestricted Subsidiary, minus the greater of (x) the
book value (determined in accordance with GAAP) at the date or
redesignation of the aggregate Investments made by the Company and its
Restricted Subsidiaries and (y) the fair market value of such Investments
in such Restricted Subsidiary a the time of such redesignation, as
determined in good faith by the Company's Board of Directors, including a
majority of the Company's Disinterested Directors, whose determination
shall be conclusive and evidenced by a resolution of such Board; and (E)
$2.5 million.
(b) Notwithstanding the foregoing, the above limitations will not prevent
(i) the payment of any dividend within 60 days after the date of declaration
thereof, if at such date of declaration such payment complied with the
provisions hereof; (ii) the payment of any dividend on any shares of Preferred
Stock of the Company issued and outstanding as of the Issue Date in accordance
with the terms of such Preferred Stock in effect at the Issue Date; (iii) any
dividend on shares of Capital Stock of the Company or any Restricted Subsidiary
payable solely in shares of Capital Stock (other than Disqualified Stock); (iv)
any dividend or other distribution payable from a Subsidiary to the Company or
any Restricted Subsidiary that is wholly owned directly or indirectly by the
Company; and (v) the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any Restricted
Subsidiary, in exchange for, or out of the aggregate net proceeds of a
substantially concurrent issue and sale (other than to a Restricted Subsidiary)
of shares of Capital Stock of the Company (other than Disqualified Stock),
provided however, that any such repurchase, redemption or other acquisition or
retirement may only be made with any Equity Proceeds remaining after the
Company's compliance with Section 4.10(c).
(c) Prior to the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any Restricted
Subsidiary, in exchange for, or out of the aggregate net proceeds (the "Equity
Proceeds") of a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Capital Stock of the Company (other than
46
Disqualified Stock) pursuant to Section 4.10(b)(v), the Company shall first be
obligated to repurchase pursuant to Section 3.07, or, at its option, make an
offer (the "Equity Proceeds Offer") to repurchase, the Securities having an
aggregate principal amount equal to the lesser of (i) the Equity Proceeds and
(ii) 33_% of the original aggregate principal amount of the Securities; provided
however, that following such redemption, at least 66_% of the original aggregate
principal amount of the Securities remains outstanding (such purchase to be made
on a pro rata basis if the amount available for such repurchase is less than the
principal amount of the Securities tendered in such Equity Proceeds Offer) at a
repurchase price of 100% of the principal amount thereof (or if such purchase
date is prior to May 1, 2002, of the Accreted Value thereof) plus accrued
interest, if any, to the date of repurchase.
(i) The Company shall commence an Equity Proceeds Offer by preparing
and mailing a notice to the Trustee, the Paying Agent and each Holder as of
such record date as the Company shall establish (upon written notice to the
Trustee). Notice of an Equity Proceeds Offer to purchase the Securities
will be made on behalf of the Company not less than 25 Business Days nor
more than 60 Business Days before the payment date of the Equity Proceeds
Offer (the ("Equity Proceeds Payment Date"), and shall set forth the Equity
Proceeds Offer Amount and the Equity Proceeds Payment Date and refer to and
summarize the material points contained in Sections 4.10(c)(i) and (ii)
hereof. Securities tendered to the Company pursuant to a Equity Proceeds
Offer will cease to accrue interest after the Equity Proceeds Payment Date.
For purposes of this covenant, the term "Equity Proceeds Offer Amount"
means the principal of outstanding Securities in an aggregate principal
amount equal to the lesser of (A) any remaining Equity Proceeds and (B)
33_% of the aggregate principal amount at maturity of the Securities
(rounded to the next lowest $1,000). If the Equity Proceeds 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 Holders who tender
Securities pursuant to the Equity Proceeds Offer.
(ii) On the Equity Proceeds Payment Date, the Company will (A) accept
for payment Securities or portions thereof pursuant to the Equity Proceeds
Offer in an aggregate principal amount equal to the Net Proceeds Offer
Amount or such lesser amount as has been tendered, (B) deposit with the
Paying Agent money sufficient to pay the repurchase price of all Securities
or portions thereof so tendered in an aggregate principal amount equal to
the Net Proceeds Offer Amount or such lesser amount, and (C) deliver or
cause to be delivered to the Trustee, Securities so accepted together with
an Officers' Certificate stating the amount of the Securities tendered or
portions thereof tendered to the Company. If the aggregate principal
amount of Securities tendered exceeds the Net Proceeds Offer Amount, the
Trustee will select the Securities to be repurchased (in integral multiples
of $1,000) on a pro rata basis based on the principal amount of Securities
so tendered and notify the Company, the Registrar and the Paying Agent.
The Paying Agent, upon instruction of the Company, will promptly mail or
deliver to Holders of Securities so accepted payment in an amount equal to
the repurchase price (representing those funds received pursuant to clause
(B) of this Section 4.10(c)(ii)), and the Company will execute and the
Trustee will
47
promptly authenticate and mail or make available for delivery to Holders a
new Security equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted will be promptly
mailed or delivered to the Holder thereof by the Company, or, if the
Company so directs the Trustee, by the Trustee on behalf of the Company at
the Company's expense. The Company will publicly announce the results of
the Equity Proceeds Offer on or as soon as practicable after the Equity
Proceeds Payment Date. For purposes of this Section 4.10, the Trustee will
act as the Paying Agent.
(iii) The Company will comply with Section 14 of the Exchange Act and
the provisions of Regulation 14E and any other tender offer rules under the
Exchange Act and any other federal and state securities laws, rules and
regulations which may then be applicable to any Equity Proceeds Offer.
Section IV.11 Limitation on Sale of Assets
(a) The Company will not, and will not permit any Restricted Subsidiary
to, make any Asset Sale unless:
(i) the Company (or its Restricted Subsidiary, as the case may be)
receives consideration at the time of such sale or other disposition at
least equal to the fair market value thereof (as determined in good faith
by the Company, which determination, with respect to Asset Sales or series
of related Asset Sales with proceeds valued at greater than $5.0 million,
shall be evidenced by a resolution duly adopted by the Company's Board of
Directors, including a majority of the Company's Disinterested Directors);
(ii) at least 85% of the proceeds from such Asset Sale consist of
cash or U.S. dollar denominated Cash Equivalents; and
(iii) the Net Cash Proceeds received by the Company (or its
Restricted Subsidiary, as the case may be) from such Asset Sale are applied
in accordance with paragraphs (b) or (c) hereof.
(b) The Company or Restricted Subsidiary effecting the Asset Sale shall
apply such Net Cash Proceeds, within 425 days after the receipt of such Net Cash
Proceeds, to: (i) the repayment of Indebtedness of the Company or any Restricted
Subsidiary under a Bank Credit Facility or the Senior Secured Indenture or other
Senior Indebtedness of the Company or Senior Indebtedness of a Restricted
Subsidiary, that results in a permanent reduction in any revolving credit or
other commitment relating thereto or the maximum principal amount that may be
borrowed thereunder in an amount equal to the principal amount so repaid; (ii)
make an Investment in assets used in the Oil and Gas Business in replacement of
the assets that were the subject of the Asset Sale giving rise to such Net Cash
Proceeds; or (iii) develop by drilling, completing and producing reserves from
the oil and gas properties of the Company and the Restricted Subsidiaries.
(c) If, upon completion of the 425-day period, the Net Cash Proceeds of
any Asset Sale less the aggregate amount applied by the Company and its
Restricted Subsidiaries during such period as described in clause (b) above,
together with any Net Cash Proceeds in excess of amounts similarly applied by
the Company and its Restricted Subsidiaries from any prior Asset Sale after the
date of
48
receipt of such Net Cash Proceeds (such aggregate constituting "Excess
Proceeds"), exceeds $5.0 million, then the Company will be obligated to make an
offer (the "Net Proceeds Offer") to repurchase the Securities (and any other
Senior Indebtedness of the Company or a Restricted Subsidiary in respect of
which such an offer to repurchase also is required to be made concurrently with
the Net Proceeds Offer) having an aggregate principal amount equal to the Excess
Proceeds (such purchase to be made on a pro rata basis if the amount available
for such repurchase is less than the principal amount of the Securities and
other Senior Indebtedness tendered in such Net Proceeds Offer) at a repurchase
price of 100% of the principal amount thereof (or if such purchase date is prior
to May 1, 2002, of the Accreted Value thereof) plus accrued interest, if any, to
the date of repurchase. Upon the completion of the Net Proceeds Offer, the
amount of Excess Proceeds will be reset to zero, subject to further increase
resulting from subsequent Asset Sales.
(d) The Company shall commence a Net Proceeds Offer by preparing and
mailing a notice to the Trustee, the Paying Agent and each Holder as of such
record date as the Company shall establish (upon written notice to the Trustee).
Notice of a Net Proceeds Offer to purchase the Securities will be made on behalf
of the Company not less than 25 Business Days nor more than 60 Business Days
before the payment date of the Net Proceeds Offer (the ("Net Proceeds Payment
Date"), and shall set forth the Net Proceeds Offer Amount and the Net Proceeds
Payment Date and refer to and summarize the material points contained in
Sections 4.11(d) and (e) hereof. Securities tendered to the Company pursuant to
a Net Proceeds Offer will cease to accrue interest after the Net Proceeds
Payment Date. For purposes of this covenant, the term "Net Proceeds Offer
Amount" means the principal of outstanding Securities in an aggregate principal
amount equal to any remaining Net Cash Proceeds (rounded to the next lowest
$1,000). If the Net Proceeds 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 Holders who tender Securities pursuant to the Net Proceeds Offer.
(e) On the Net Proceeds Payment Date, the Company will (i) accept for
payment Securities (and any other Senior Indebtedness of the Company or a
Restricted Subsidiary in respect of which such an offer to repurchase also is
required to be made concurrently with the Net Proceeds Offer) or portions
thereof pursuant to the Net Proceeds Offer in an aggregate principal amount
equal to the Net Proceeds Offer Amount or such lesser amount as has been
tendered, (ii) deposit with the Paying Agent money sufficient to pay the
repurchase price of all Securities and such other Senior Indebtedness or
portions thereof so tendered in an aggregate principal amount equal to the Net
Proceeds Offer Amount or such lesser amount, and (iii) deliver or cause to be
delivered to the Trustee, Securities so accepted together with an Officers'
Certificate stating the amount of the Securities and other such Senior
Indebtedness tendered or portions thereof tendered to the Company. If the
aggregate principal amount of Securities tendered exceeds the Net Proceeds Offer
Amount, the Trustee will select the Securities and such other Senior
Indebtedness to be repurchased (in integral multiples of $1,000) on a pro rata
basis based on the principal amount of Securities so tendered and notify the
Company, the Registrar and the Paying Agent. The Paying Agent, upon instruction
of the Company, will promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the repurchase price (representing those
funds received pursuant to clause (ii) of this Section 4.11(e)), and the Company
will execute and the Trustee will promptly
49
authenticate and mail or make available for delivery to Holders a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted will be promptly mailed or delivered
to the Holder thereof by the Company, or, if the Company so directs the Trustee,
by the Trustee on behalf of the Company at the Company's expense. The Company
will publicly announce the results of the Net Proceeds Offer on or as soon as
practicable after the Net Proceeds Payment Date. For purposes of this Section
4.11, the Trustee will act as the Paying Agent.
(f) The Company will comply with Section 14 of the Exchange Act and the
provisions of Regulation 14E and any other tender offer rules under the Exchange
Act and any other federal and state securities laws, rules and regulations which
may then be applicable to any Net Proceeds Offer.
(g) During the period between any Asset Sale and the application of the Net
Cash Proceeds therefrom in accordance with this covenant, all Net Cash Proceeds
shall, except as otherwise required by the Senior Secured Note Indenture, be
either (i) maintained in a segregated account and shall be invested in Permitted
Financial Investments or (ii) applied to temporarily reduce borrowings under any
revolving credit facility constituting Senior Indebtedness of the Company or
Senior Indebtedness of a Restricted Subsidiary.
(h) Notwithstanding the foregoing, the Company will not and will not permit
any Restricted Subsidiary to, directly or indirectly, make any Asset Sale of any
of the Capital Stock of a Restricted Subsidiary except pursuant to an Asset Sale
of all of the Capital Stock of such Restricted Subsidiary.
(i) If at any time any non-cash consideration received by the Company or
any Restricted Subsidiary of the Company, as the case may be, in connection with
any Asset Sale is converted into or sold or otherwise disposed of for cash, then
such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this Section 4.11.
Section IV.12 Limitation on Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than
Permitted Liens) upon any of their respective properties, whether owned on the
Issue Date or acquired after the Issue Date, or on any income or profits
therefrom, or assign or otherwise convey any right to receive income or profits
thereon.
Section IV.13 Limitation on Sale/Leaseback Transactions
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction unless (i) the
Company or such Restricted Subsidiary, as the case may be, would be able to
incur Indebtedness in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction or (ii) the Company or such
Restricted Subsidiary receives proceeds from such Sale/Leaseback Transaction at
least equal to the fair market value thereof (as determined in good faith by the
Company's Board of Directors, whose determination in good faith, evidenced by a
resolution of such Board shall be conclusive) and such proceeds are applied in
the same manner and to the same extent as Net Cash Proceeds and Excess Proceeds
from an Asset Sale.
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Section IV.14 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary of the Company to (i) pay dividends
or make any other distributions on its Capital Stock or on any other interest or
participation in the Company or a Restricted Subsidiary; (ii) pay any
Indebtedness owed to the Company or a Restricted Subsidiary of the Company;
(iii) make loans or advances to the Company or a Restricted Subsidiary of the
Company; or (iv) transfer any of its properties or assets to the Company or a
Restricted Subsidiary of the Company (each, a "Payment Restriction"), except for
(a) encumbrances or restrictions under a Bank Credit Facility or the Senior
Secured Note Indenture; provided, that no encumbrance or restriction shall limit
the ability of any Restricted Subsidiary to transfer cash to the Company in an
amount equal to the then required cash interest payments on the Securities
except upon the occurrence of a default or event of default under the Bank
Credit Facility or the Senior Secured Note Indenture; (b) consensual
encumbrances or consensual restrictions binding upon any Person at the time such
Person becomes a Restricted Subsidiary of the Company (unless the agreement
creating such consensual encumbrances or consensual restrictions was entered
into in connection with, or in contemplation of, such entity becoming a
Restricted Subsidiary); (c) consensual encumbrances or consensual restrictions
under any agreement that refinances or replaces any agreement described in
clauses (a) and (b) above, provided that the terms and conditions of any such
restrictions are in the aggregate no less favorable to the holders of the
Securities than those under the agreement so refinanced or replaced; (d)
customary non-assignment provisions in leases, purchase money financings and any
encumbrance or restriction due to applicable law; and (e) encumbrance or
restrictions existing under this Indenture and the Pledge Agreement.
Section IV.15 Limitation on Issuances and Sales of Subsidiary Stock
The Company (i) will not permit any Restricted Subsidiary to issue any
Preferred Stock (other than to the Company or a Restricted Subsidiary) and (ii)
will not permit any Person (other than the Company and/or one or more Restricted
Subsidiaries) to own any Capital Stock of any Restricted Subsidiary; provided,
however, that this covenant shall not prohibit (a) the issuance or sale of all,
but not less than all, of the issued and outstanding Capital Stock of any
Restricted Subsidiary owned by the Company or any of its Restricted Subsidiaries
in compliance with the other provisions of this Indenture, (b) the ownership by
directors of directors' qualifying shares or the ownership by foreign nationals
of Capital Stock of any Restricted Subsidiary, to the extent mandated by
applicable law or (c) customary non-assignment provisions in leases or purchase
money financings and any customary encumbrance or restriction relating to same.
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Section IV.16 Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
transactions (including, without limitation, the sale, purchase or lease of any
assets or properties or the rendering of any services) with any Affiliate or
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of
10% or more of the Company's common stock (other than with a Wholly Owned
Restricted Subsidiary of the Company) (an "Affiliate Transaction"), on terms
that are less favorable to the Company or such Subsidiary, as the case may be,
than would be available in a comparable transaction with an unrelated Person. In
addition, the Company will not, and will not permit any Restricted Subsidiary of
the Company to, enter into an Affiliate Transaction, or any series of related
Affiliate Transactions having a value of (a) more than $5.0 million, unless a
majority of the Board of Directors of the Company (including a majority of the
Company's Disinterested Directors) determines in good faith, as evidenced by a
resolution of such Board, that such Affiliate Transaction or series of related
Affiliate Transactions is fair to the Company and in compliance with the first
sentence of this Section 4.16; or (b) more than $10.0 million, unless the
Company receives a written opinion from a nationally recognized investment
banking firm that such transaction or series of transactions is fair to the
Company from a financial point of view.
Section IV.17 Change of Control
(a) Following the occurrence of any Change of Control, the Company shall
offer (a "Change of Control Offer") to repurchase all outstanding Securities at
a repurchase price equal to 101% of the aggregate principal amount of (or if
such date is prior to May 1, 2002, the Accreted Value of) the Securities, plus
accrued and unpaid interest to the date of repurchase. The Change of Control
Offer shall be deemed to have commenced upon mailing of the notice described in
the next succeeding paragraph and shall terminate 20 Business Days after its
commencement, unless a longer offering period is required by law. Promptly
after the termination of the Change of Control Offer (the "Change of Control
Payment Date"), the Company shall repurchase and mail or deliver payment for all
Securities tendered in response to the Change of Control Offer. If the Change
of Control Payment Date is on or after an interest payment record date and on or
before the related interest payment date, any accrued interest payable on such
interest payment date 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 Holders who tender Securities pursuant to the Change
of Control Offer.
(b) Within 10 Business Days after any Change of Control, the Company (with
written notice to the Trustee and the Paying Agent), or the Trustee at the
Company's request and expense, will mail or cause to be mailed to all Holders on
the date of the Change of Control a notice prepared by the Company (the "Change
of Control Notice") of the occurrence of such Change of Control and of the
Holders' rights arising as a result thereof. The Change of Control Notice will
contain all instructions and materials necessary to enable Holders to tender
their Securities to the Company. The Change of Control Notice, which shall
govern the terms of the Change of Control Offer, shall state: (1) that the
Change of Control Offer is being made pursuant to this Section 4.17; (2) the
repurchase price and the Change of Control Payment Date; (3) that any Security
not tendered will
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continue to accrue interest at the stated rate; (4) that any Security accepted
for payment pursuant to the Change of Control Offer shall cease to accrue
interest on the Change of Control Payment Date; (5) that Holders electing to
have a Security repurchased pursuant to any Change of Control Offer will be
required to surrender the Security, with the form entitled "Option of Holder to
Elect Repurchase" on the reverse of the Security completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice prior to termination of the Change of Control Offer; (6)
that Holders will be entitled to withdraw their election if the Company,
depositary or Paying Agent, as the case may be, receives, not later than the
expiration of the Change of Control Offer, or such longer period as may be
required by law, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder delivered for repurchase
and a statement that such Holder is withdrawing his election to have the
Security repurchased; and (7) that Holders whose Securities are repurchased only
in part will be issued Securities equal in principal amount to the unrepurchased
portion of the Securities surrendered.
(c) On the Change of Control Payment Date, the Company shall to the extent
lawful (i) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Notice, (ii) if the Company appoints a depositary or
Paying Agent, deposit with such depositary or Paying Agent money sufficient to
pay the repurchase price of all Securities or portions thereof so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the amount of the Securities or portions thereof tendered to
the Company. The depositary, the Company or the Paying Agent, as the case may
be, shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the repurchase price (representing those funds received pursuant
to clause (ii) of this Section 4.17(c)), and the Trustee shall promptly
authenticate and mail to each such Holder a new Security equal in principal
amount to any unrepurchased portion of the Security surrendered, if any,
provided that such Security will be in a principal amount of $1,000 or an
integral multiple thereof. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date. For purposes of this Section 4.17, the Trustee shall act
as the Paying Agent.
(d) The Company will comply with Section 14 of the Exchange Act and the
provisions of Regulation 14E and any other tender offer rules under the Exchange
Act and any other federal and state securities laws, rules and regulations which
may then be applicable to any Change of Control Offer.
Section IV.18 Limitation on Line of Business
The Company and the Restricted Subsidiaries will be operated in a manner
such that their business activities will be the Oil and Gas Business or an
Investment in any business or Person engaged in the Oil and Gas Business.
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ARTICLE V
Successor Corporation
Section V.1 When Company May Merge, etc.
The Company will not consolidate with or merge with any Person or convey,
transfer or lease all or substantially all of its assets to any Person, unless:
(1) the Company survives such merger or the Person formed by such
consolidation or into which the Company is merged or that acquires by
conveyance or transfer, or which leases, all or substantially all of the
assets of the Company is a corporation organized and existing under the
laws of the United States of America, any state thereof or the District of
Columbia and expressly assumes, by supplemental indenture, the due and
punctual payment of the principal of, premium, if any, and interest on, all
the Securities and the performance of every other covenant and obligation
of the Company under the Indenture, the Securities, the Pledge Agreement
and the Registration Rights Agreement; and the Company shall have taken all
steps necessary or reasonably requested by the Trustee to protect and
perfect the security interest granted or purported to be granted to the
Holders under the Pledge Agreement;
(2) immediately before and after giving effect to such transaction no
Default or Event of Default exists;
(3) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the Company (or the surviving or
transferee entity) is equal to or greater than the Consolidated Net Worth
of the Company immediately before such transaction; and
(4) immediately after giving effect to such transaction on a pro
forma basis, the Company (or the surviving or transferee entity) would be
able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the test described in Section 4.09(a).
In connection with any consolidation, merger, conveyance, transfer or lease
contemplated by this Section 5.01, the Company shall deliver to the Trustee
prior to the consummation of the proposed transaction an Officers' Certificate
to the foregoing effect and an Opinion of Counsel stating that all conditions
precedent to the proposed transaction and the execution and delivery of such
supplemental indenture have been complied with.
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Section V.2 Successor Corporation Substituted
Upon any consolidation, merger, lease, conveyance or transfer in accordance
with Section 5.01, the Trustee shall be notified by the Company and the
successor Person, and the successor Person formed by such consolidation or into
which the Company is merged or to which such lease, conveyance or transfer 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 had been named as the Company herein and thereafter (except in the
case of a lease) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture, the Securities, the Pledge
Agreement and the Registration Rights Agreement.
ARTICLE VI
Defaults And Remedies
Section VI.1 Events of Default
An "Event of Default" occurs upon:
(1) default by the Company or any Guarantor in the payment of
principal of, or premium, if any, on the Securities when due and payable at
maturity, upon repurchase pursuant to Section 4.11 or 4.17, upon
acceleration or otherwise;
(2) default by the Company or any Guarantor in the payment of any
installment of interest on the Securities when due and payable and
continuance of such default for 30 days;
(3) default by the Company or any Guarantor in the deposit of any
optional redemption payment, when and as due and payable pursuant to
Article III;
(4) default on any other Indebtedness of the Company or any Subsidiary
(other than an Unrestricted Subsidiary provided that neither the Company
nor any Restricted Subsidiary is liable, directly or indirectly, for such
Indebtedness) if either (A) such default results in the acceleration of the
maturity of any such Indebtedness having a principal amount of $10.0
million or more individually or, taken together with the principal amount
of any other such Indebtedness in default or the maturity of which has been
so accelerated, in the aggregate, or (B) such default results from the
failure to pay when due principal of, premium, if any, or interest on, any
other Indebtedness of the Company or any Subsidiary (other than an
Unrestricted Subsidiary provided that neither the Company nor any
Restricted Subsidiary is liable, directly or indirectly, for such
Indebtedness), after giving effect to any applicable grace period (a
"Payment Default") having a principal amount of $10.0 million or more
individually or, taken together with the principal amount of any other
Indebtedness under which there has been a Payment Default, in the
aggregate;
(5) default in the performance, or breach of, the covenants set forth
in Article V;
55
(6) default in the performance, or breach of, any other covenant or
agreement of the Company or any Restricted Subsidiary in this Indenture and
failure to remedy such default within a period of 30 days after written
notice thereof from the Trustee or Holders of at least 25% in principal
amount of the outstanding Securities;
(7) the commencement of proceedings, or the taking of any enforcement
action (including by way of set-off), by any holder of at least $10.0
million in aggregate principal amount of Indebtedness (including any
amounts owed pursuant to a judgment or order) of the Company or any
Subsidiary (other than an Unrestricted Subsidiary provided that neither the
Company nor any Restricted Subsidiary is liable, directly or indirectly,
for such Indebtedness), after a default under such Indebtedness, to retain
in satisfaction of such Indebtedness or to collect or seize, dispose of or
apply in satisfaction of such Indebtedness, property or assets of the
Company or its Restricted Subsidiaries having a fair market value in excess
of $10.0 million individually or in the aggregate; provided that if any
such proceedings or actions are terminated or rescinded, or such
Indebtedness is repaid or settled, such Event of Default under this
Indenture and any consequential acceleration of the Securities shall be
automatically rescinded, so long as (a) such rescission does not conflict
with any judgment or decree and (b) the holder of such Indebtedness shall
not have applied any such property or assets in satisfaction of such
Indebtedness;
(8) the entry by a court of one or more judgments or orders against
the Company or any Subsidiary (other than an Unrestricted Subsidiary
provided that neither the Company nor any Restricted Subsidiary is liable,
directly or indirectly, for such judgment or order) in an aggregate amount
equal to or in excess of cash and assets of $10.0 million individually or
in the aggregate (net of applicable insurance coverage by a third party
insurer which is acknowledged in writing by the insurance carrier) that has
not been vacated, discharged, satisfied or stayed pending appeal within 60
days from the entry thereof;
(9) the failure of a Guarantee to be in full force and effect (other
than a release of a Guarantee in accordance with Section 10.04) or any
Guarantor shall deny or disaffirm its obligations with respect thereto;
56
(10) if (i) any material "accumulated funding deficiency" (as defined
in Section 302 of ERISA or Section 412 of the Code), shall exist with
respect to any PBGC Plan or Multiple Employer Plan (unless a waiver or
extension is obtained under Section 412(d) or (e) of the Code and Sections
303 and 304 of ERISA), if such accumulated funding deficiency is a material
liability of the Company, any Guarantor or any other Subsidiary (other than
an Unrestricted Subsidiary provided that neither the Company nor any
Restricted Subsidiary is liable therefor, directly or indirectly), (ii) a
Reportable Event shall occur with respect to any PBGC Plan or Multiple
Employer Plan, which Reportable Event results in the non-appealable
termination of such PBGC Plan or Multiple Employer Plan for purposes of
Title IV of ERISA and gives rise to a material liability of the Company,
any Guarantor or any other Subsidiary (other than an Unrestricted
Subsidiary provided that neither the Company nor any Restricted Subsidiary
is liable therefor, directly or indirectly), (iii) proceedings to have a
trustee appointed have resulted in a trustee being appointed to terminate
or administer a PBGC Plan or Multiple Employer Plan which proceeding
results in the non-appealable termination of such PBGC Plan or Multiple
Employer Plan and gives rise to a material liability of the Company, any
Guarantor or any other Subsidiary (other than an Unrestricted Subsidiary
provided that neither the Company nor any Restricted Subsidiary is liable
therefor, directly or indirectly) with respect to such termination, (iv) a
PBGC Plan or Multiple Employer Plan has been terminated in a distress
termination under Section 4041(c) of ERISA and the Company, any Guarantor
or any other Subsidiary (other than an Unrestricted Subsidiary provided
that neither the Company nor any Restricted Subsidiary is liable therefor,
directly or indirectly) no longer may appeal such termination, (v) any
Multiemployer Plan is in reorganization or is insolvent and the
circumstances are such that such reorganization or insolvency results in a
material liability to the Company, any Guarantor or any other Subsidiary
(other than an Unrestricted Subsidiary provided that neither the Company
nor any Restricted Subsidiary is liable therefor, directly or indirectly),
(vi) there is a complete or partial withdrawal from a Multiemployer Plan
under circumstances that subjects the Company, any Guarantor or any other
Subsidiary (other than an Unrestricted Subsidiary provided that neither the
Company nor any Restricted Subsidiary is liable therefor, directly or
indirectly) to material liability, or (vii) any event or condition
described in (i) through (vi) above (determined without regard to whether
the event or condition taken alone would or could result in a material
liability) shall occur or exist with respect to a PBGC Plan, Multiple
Employer Plan or Multiemployer Plan which in combination with one or more
of any events described in (i) through (vi) above (determined without
regard to whether the event or condition taken alone would or could result
in a material liability) that subjects the Company, any Guarantor or any
other Subsidiary (other than an Unrestricted Subsidiary provided that
neither the Company nor any Restricted Subsidiary is liable therefor,
directly or indirectly) to any material tax, penalty or other liability
(for purposes of this paragraph (10) the term "material" and "material
liability" shall mean any tax, penalty or liability in excess of $5.0
million); or
(11) the Company or any Restricted Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
57
(b) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) admits in writing that it generally is unable to pay its
debts as the same become due; or
(12) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief (with respect to the petition commencing such
case) against the Company or any Restricted Subsidiary in an
involuntary case or proceeding,
(b) appoints a Custodian of the Company or any Restricted
Subsidiary or for all or substantially all of its respective property,
or
(c) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(13) the Company breaches any representation, warranty or agreement
set forth in the Pledge Agreement, or a default by the Company in the
performance of any covenant set forth in the Pledge Agreement occurs, or
the Company repudiates its obligations under the Pledge Agreement or any
material provision of the Pledge Agreement is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in
full force and effect; or
(14) GPC shall for any reason cease to be a direct Wholly Owned
Subsidiary of the Company.
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.
Section VI.2 Acceleration
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If an Event of Default (other than an Event of Default specified in clauses
(11) and (12)) under Section 6.01 occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the outstanding Securities may declare the unpaid principal (or, if prior to May
1, 2002, the Accreted Value) of (or the Change of Control purchase price if the
Event of Default includes failure to pay the Change of Control purchase price),
and premium, if any, and accrued and unpaid interest on, all the Securities then
outstanding to be due and payable, by a notice in writing to the Company (and to
the Trustee, if given by Holders), and upon any such declaration such principal
(or, if prior to May 1, 2002, the Accreted Value), premium, if any, and accrued
and unpaid interest shall become immediately due and payable, notwithstanding
anything contained in this Indenture or the Securities to the contrary. If an
Event of Default specified in clauses (11) or (12) above occurs, all unpaid
principal (or, if prior to May 1, 2002, the Accreted Value) of, and premium, if
any, and accrued interest on, the Securities then outstanding will become due
and payable, without any declaration or other act on the part of the Trustee or
any Holder.
The Holders of a majority in principal amount of the then outstanding
Securities, by written notice to the Company, the Guarantors and the Trustee,
may rescind and annul a declaration of acceleration and its consequences if (1)
the Company or any Guarantor has paid or deposited with such Trustee a sum
sufficient to pay (A) all overdue installments of interest on all the
Securities, (B) the principal of, and premium, if any, on any Securities that
have become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in the Securities, (C) to the
extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Securities, and (D) all
money paid or advanced by the Trustee thereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (2) all Events of Default, other than the non-payment of the
principal of any Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in the Indenture; and (3)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. No such rescission will affect any subsequent Event of
Default or impair any right consequent thereon.
Section VI.3 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may, but is
not obligated to, pursue, in its own name and as trustee of an express trust,
any available remedy by proceeding at law or in equity to collect the payment of
principal or interest on the Securities or to enforce the performance of any
provision of the Securities, this Indenture or the Pledge Agreement. If an
Event of Default specified under clauses (11) or (12) of Section 6.01 occurs
with respect to the Company at a time when the Company is the Paying Agent, the
Trustee shall automatically assume the duties of Paying Agent.
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 Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
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Each Holder, by accepting a Security, (a) acknowledges that the exercise of
remedies by the Trustee with respect to the Collateral is subject to the terms
and conditions of the Pledge Agreement and the proceeds received upon
realization of the Collateral shall be applied by the Trustee in accordance with
Section 6.10 hereof, and (b) acknowledges and consents to the terms of the
Pledge Agreement and to the Trustee's performance of its agreements thereunder.
Section VI.4 Waiver of Past Defaults
Subject to Sections 6.07 and 9.02, the Holders of at least a majority in
principal amount of Securities then outstanding by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default or Event of Default in payment of principal or interest on the
Securities, including any optional redemption payments or Change of Control or
Net Proceeds Offer payments.
Section VI.5 Control by Majority
The Holders of a majority in principal amount of the Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on such Trustee, provided that (1) such direction is not in conflict with any
rule of law or with this Indenture or the Pledge Agreement and (2) the Trustee
may take any other action deemed proper by such Trustee that is not inconsistent
with such direction.
Section VI.6 Limitation on Remedies
No Holder of any of the Securities will have any right to institute any
proceeding, judicial or otherwise, or for the appointment of a receiver or
trustee or pursue any remedy under this Indenture, unless:
(1) such Holder has previously given notice to the Trustee of a
continuing Event of Default,
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities have made written request to such Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee under the Indenture,
(3) such Holder or Holders have offered to such Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request,
(4) such Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any proceeding, and
(5) no direction inconsistent with such written request has been given
to such Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over other Holders.
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Section VI.7 Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the Holder of any
Securities will have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Securities on the stated
maturity therefor and to institute suit for the enforcement of any such payment,
and such right may not be impaired without the consent of such Holder, except to
the extent that the institution or prosecution of such suit or entry of judgment
therein would, under applicable law, result in the surrender, impairment or
waiver of the Lien of this Indenture and the Pledge Agreement upon the
Collateral.
Section VI.8 Collection Suit by Trustee
If an Event of Default in payment of principal, premium, if any, or
interest specified in Section 6.01(1), (2) or (3) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any Guarantor for the whole amount of principal, premium,
if any, and interest remaining unpaid with respect to the Securities, and
interest on overdue principal and premium, if any, and, to the extent lawful,
interest on overdue interest, and such further amounts as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation and expenses of the Trustee, its agents and counsel.
Section VI.9 Trustee May File Proofs of Claim
(a) The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, the
Guarantors, their creditors or their property and may collect and receive any
money or securities or other property payable or deliverable on any such claims
and to distribute the same.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section VI.10 Priorities
If the Trustee collects any money pursuant to this Article VI, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders 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
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
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Section VI.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
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 and
expenses, 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 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE VII
Trustee
Section VII.1 Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture and use the
same degree of care and skill in such exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth (or incorporated by reference) in this Indenture and no others.
(2) 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,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph (c) does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by an officer of the Trustee, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05, and the Trustee shall be entitled from time to
time to request such a direction.
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(d) Every provision of this Indenture and the Pledge Agreement that in any
way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall be under no obligation and 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. No provision of this Indenture or
the Pledge Agreement shall require the Trustee to expend or risk its own funds
or otherwise incur 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 to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(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.
(g) Subject to Sections 7.01 and 7.02, the Trustee shall not be required to
take notice, and shall not be deemed to have notice, of any Default or Event of
Default hereunder, except Events of Default described in paragraphs (1), (2) and
(3) of Section 6.01 hereof, unless the Trustee shall be notified specifically of
the Default or Event of Default in a written instrument or document delivered to
it by the Company or any Guarantor, or by the Holders of at least ten percent
(10%) of the aggregate principal amount of the Securities then outstanding. In
the absence of delivery of a notice satisfying those requirements, the Trustee
may assume that there is no Default or Event of Default, except as noted above.
Section VII.2 Rights of Trustee
Subject to Section 7.01:
(a) The Trustee may conclusively rely on and shall be fully protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney, to the extent reasonably required by such inquiry or
investigation at the sole expense of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel, at the Company's request, of its
selection and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(g) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Trust Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the principal corporate trust office of the Trustee, and such
notice references the Securities and this Indenture.
(h) Subject to Section 9.02 hereof, the Trustee may (but shall not be
obligated to), without the consent of the Holders, give any consent, waiver or
approval required under the Pledge Agreement or by the terms hereof with respect
to the Collateral, but shall not without the consent of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
outstanding (i) give any consent, waiver or approval or (ii) agree to any
amendment or modification of the Pledge Agreement, in each case, that shall have
a material adverse effect on the interests of any Holder. The Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any consent, waiver, approval, amendment or modification shall have a
material adverse effect on the interests of any Holder.
Section VII.3 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
Section VII.4 Trustee's Disclaimer
The Trustee makes no representation as to the value or condition of the
Collateral or any part thereof, or as to the title of the Company or any
Subsidiary thereto, or as to the security afforded thereby or hereby, or as to
the validity or genuineness of any Collateral pledged and deposited with the
Trustee, or the validity or adequacy of this Indenture or the Securities, it
shall not be accountable for the Company's use of the proceeds from the
Securities or any offering memorandum or solicitation documents, and it shall
not be responsible for any statement in the Securities other than its
certificate of authentication.
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Section VII.5 Notice of Defaults
If a Default occurs and is continuing and if it is actually known to a
Responsible Officer of the Trustee pursuant to Section 7.01(g), the Trustee
shall mail to each Holder pursuant to Section 12.02 a notice of the Default
within 90 days after it occurs. Except in the case of a Default in any payment
on any Security, the Trustee may withhold the notice if and so long as the board
of directors, executive committee or a trust committee of officers in good faith
determines that withholding the notice is in the interests of Holders.
Section VII.6 Reports by Trustee to Holders
Within 60 days after each November 15, beginning with the November 15,
following the date of this Indenture, the Trustee shall mail to each Holder a
brief report dated as of such May 15, that complies with TIA (S)313(a), but only
if such report is required in any year under TIA (S)313(a). The Trustee also
shall comply with TIA (S)(S)313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each stock exchange on which the Securities are listed. The
Company shall promptly notify the Trustee in writing when the Securities become
listed on any national securities exchange or of any delisting thereof.
Section VII.7 Compensation and Indemnity
The Company and the Guarantors jointly and severally agree to pay the
Trustee from time to time such compensation as shall be agreed in writing
between the Company and the Trustee for its services (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust). The Company and the Guarantors jointly and
severally agree to reimburse the Trustee upon request for all reasonable out-of-
pocket expenses, disbursements and advances incurred by it. Such expenses shall
include when applicable the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company and the Guarantors jointly and severally agree to indemnify
each of the Trustee and any predecessor Trustee against any and all loss,
liability, damage, claim or expenses, including taxes (other than taxes based on
the income of the Trustee) incurred by it arising out of or in connection with
the acceptance and administration of the trust and its duties hereunder as
Trustee, Registrar and/or Paying Agent, including the costs and expenses of
enforcing this Indenture against the Company (including with respect to this
Section 7.07) and of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company and the Guarantors of any claim
for which it may seek indemnity; however, unless the position of the Company is
materially prejudiced by such failure, the failure of the Trustee to promptly
notify the Company shall not limit its right to indemnification. The Company
shall defend each such claim and the Trustee shall cooperate in the defense.
The Trustee may retain separate counsel and the Company shall reimburse the
Trustee for the reasonable fees and expenses of such counsel if the Company is
advised by an Opinion of Counsel that the Trustee has separate defenses and that
separate representation is appropriate or if
65
the Trustee reasonably determines that such joint defense would otherwise
involve a conflict of interest. The Company need not pay for any settlement made
without its consent.
Neither the Company nor the Guarantors shall be obligated to reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee's breach of the applicable standard of care for its conduct
under Section 7.01.
To secure the payment obligations of the Company and the Guarantors in this
Section, the Trustee shall have a lien prior to that of the Holders of the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services after the occurrence
of any Event of Default specified in Sections 6.01(11) or (12), the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the satisfaction and
discharge or other termination of this Indenture.
Section VII.8 Replacement of Trustee
The Trustee may resign by so notifying the Company and the Guarantors. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee, in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting as Trustee hereunder.
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 Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company and the Guarantors. Immediately
after that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount
66
of the Securities may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. Any successor Trustee shall comply with TIA
(S)310(a)(5).
Section VII.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided such corporation or association shall be otherwise eligible and
qualified under this Article.
Section VII.10 Eligibility; Disqualification
This Indenture shall always have a Trustee which satisfies the requirements
of TIA (S)310(a)(1) and (5). The Trustee shall always have a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall also comply with TIA (S)310(b).
Section VII.11 Preferential Collection of Claims Against Company
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
Section VII.12 Appointment of Co-Trustee
If the Trustee deems it necessary or desirable in connection with the
Collateral and/or the enforcement of the Pledge Agreement, the Trustee may
appoint a co-Trustee with such powers of the Trustee as may be designated by the
Trustee at the time of such appointment (including acting as separate trustee of
any Collateral), and the Company shall, on request, execute and deliver to such
co-Trustee any deeds, conveyances or other instruments required by such co-
Trustee so appointed by the Trustee to more fully and certainly vest in and
confirm to such co-Trustee its rights, powers, trusts, duties and obligations
hereunder.
All rights (including rights to indemnification hereunder), powers, duties
and obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee or jointly by the Trustee
and such co-Trustees, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-Trustees. No Trustee or co-Trustee shall be personally liable by reason
of any act or omission of any other Trustee or co-Trustee hereunder. Any co-
Trustee appointed pursuant to this Section 7.12 may be removed by the Trustee
pursuant to the terms of this Agreement and may be removed and may resign
pursuant to the provisions of the Pledge Agreement and of this Indenture.
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A co-Trustee shall not be responsible for and makes no representation as to
the value or condition of the Collateral or any part thereof, or as to the title
of the Company thereto, or as to the security afforded thereby or hereby, or as
to the validity or genuineness of any Collateral pledged and deposited with such
co-Trustee, or the validity or adequacy of this Indenture or the Securities; a
co-Trustee shall not be accountable for the Company's use of the proceeds from
the Securities, and it shall not be responsible for any statement of the Company
in this Indenture or any document issued in connection with the sale of the
Securities or any statement in the Securities. A co-Trustee makes no
representations with respect to the effectiveness or adequacy of this Indenture
or the Pledge Agreement or the validity or perfection, if any, of Liens granted
under this Indenture or the Pledge Agreement. A co-Trustee shall not be
responsible for independently ascertaining or maintaining such validity or
perfection, if any, and shall be fully protected in relying upon certificates
and opinions delivered to it in accordance with the terms of this Indenture or
the Pledge Agreement.
ARTICLE VIII
Discharge Of Indenture
Section VIII.1 Option to Effect Legal Defeasance or Covenant Defeasance
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Securities, elect to exercise its rights pursuant to either Section 8.02 or
8.03 with respect to all outstanding Securities upon compliance with the
conditions set forth below in this Article VIII.
Section VIII.2 Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Securities on the date all
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive solely
from the trust fund described in Section 8.04, and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) the Company's
obligations with respect to such Securities under Sections 2.03, 2.04, 2.06,
2.07, 2.10 and 4.04, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith
(including, but not limited to, Section 7.07) and (d) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 with respect to the Securities.
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Section VIII.3 Covenant Defeasance
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company shall be released from its obligations under the
covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15, 4.16, 4.17 and 4.18 and Article V with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Securities shall
not be deemed outstanding for accounting purposes). For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Securities, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01(5) or Section 6.01(6), but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 of the option applicable to this Section 8.03, Sections 6.01(4)
through 6.01(14) shall not constitute Events of Default.
Section VIII.4 Conditions to Legal or Covenant Defeasance
The following shall be the conditions to application of either Section 8.02
or Section 8.03 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or cause to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article VIII applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
cash in U.S. Legal Tender in an amount, or (b) U.S. Government Securities
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, cash in U.S. Legal Tender in an amount,
or (c) a combination thereof, in such amounts, as will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge the principal of, premium,
if any, and interest on the outstanding Securities on the Maturity Date or
on the applicable redemption date, as the case may be, in accordance with
the terms of this Indenture and of such Securities; provided that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Securities to said payments with respect
to the Securities;
(b) In the case of an election under Section 8.02, the Company shall
have delivered to the Trustee an Opinion of Counsel confirming that (i) the
Company has received
69
from, or there has been published by, the Internal Revenue Service a ruling
or (ii) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) In the case of an election under Section 8.03, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as Subsection 6.01(11) or 6.01(12) is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument to which the Company is a party or by which the
Company is bound;
(f) In the case of any election under Section 8.02 or 8.03, the
Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of
preferring the Holders over other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 8.02 or the Covenant Defeasance under Section 8.03 (as the case may
be) have been complied with as contemplated by this Section 8.04.
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Section VIII.5 Deposited Money and U.S. Government Securities to be Held in
Trust; Other Miscellaneous Provisions
Subject to Section 8.06, all money and U.S. Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant
to Section 8.04 in respect of the outstanding Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company or a Guarantor, if any, acting as Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Securities deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the Company's request
any money or U.S. Government Securities held by it as provided in Section 8.04
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section VIII.6 Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security which is not subject to the last paragraph of Section
8.05 and has remained unclaimed for one year after such principal, and premium,
if any, or interest has become due and payable shall be paid to the Company on
its request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
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Section VIII.7 Reinstatement
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Securities in accordance with Section 8.02 or 8.03, as the case
may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining, or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03, as the case may
be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE IX
Amendments, Supplements And Waivers
Section IX.1 Without Consent of Holders
The Company, the Guarantors and the Trustee may amend or supplement this
Indenture, the Securities or the Pledge Agreement without notice to or consent
of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to reflect the addition or release of any Guarantor, as provided
for by this Indenture;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder in any material respect.
Upon the request of the Company and the Guarantors, accompanied by a Board
Resolution of the Company and of each Guarantor authorizing the execution of any
such supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall join with the Company and the
Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and make any further appropriate
agreements and stipulations that may be therein contained. After an amendment
or waiver under this Section becomes effective, the Company shall mail to the
Holders of each Security affected thereby a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
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Section IX.2 With Consent of Holders
Except as provided below in this Section 9.02, the Company, the Guarantors
and the Trustee may amend this Indenture, the Securities or the Pledge Agreement
with the written consent (including consents obtained in connection with a
tender offer or exchange offer for Securities or a solicitation of consents in
respect of Securities, provided that in each case such offer or solicitation is
made to all Holders of then outstanding Securities on equal terms) of the
Holders of at least one-half in aggregate principal amount of the then
outstanding Securities.
Upon the request of the Company and the Guarantors, accompanied by a Board
Resolution of the Company and each Guarantor authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of the Holders as aforesaid, and upon receipt by the Trustee of the
Opinion of Counsel described in Section 9.06, the Trustee shall join with the
Company and the Guarantors in the execution of such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities may waive compliance in a particular instance by the Company or the
Guarantors with any provision of this Indenture, the Securities or the Pledge
Agreement (including waivers obtained in connection with a tender offer or
exchange offer for Securities or a solicitation of consents in respect of
Securities, provided that in each case such offer or solicitation is made to all
Holders of the then outstanding Securities on equal terms). However, without
the consent of each Holder affected, an amendment or waiver under this Section
may not:
(1) reduce the percentage of principal amount of Securities whose
Holders must consent to an amendment, supplement or waiver of any provision
of this Indenture or the Securities;
(2) reduce the rate or change the time for payment of interest,
including defaulted interest, on the Securities;
(3) reduce the principal amount of any Security or change the Maturity
Date of the Securities;
(4) reduce the redemption price, including premium, if any, payable
upon the redemption of any Security or change the time at which any
Security may be redeemed;
(5) reduce the repurchase price, including premium, if any, payable
upon the repurchase of any Security pursuant to Sections 4.11 or 4.17, or
change the time at which any Security may or shall be repurchased
thereunder;
(6) waive a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Securities;
73
(7) make any Security payable in money other than that stated in the
Security;
(8) impair the right to institute suit for the enforcement of
principal of, premium, if any, or interest on any Security pursuant to
Sections 6.07 or 6.08, except as limited by Section 6.06;
(9) make any change in Section 6.04 or Section 6.07 or in this
sentence of this Section 9.02;
(10) affect the ranking, or with respect to Collateral, the priority
of the Securities or the Guarantees, in each case in a manner adverse to
the Holders; or
(11) release any Guarantor from any of its obligations under its
Guarantee or the Indenture otherwise than in accordance with the terms of
the Indenture.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.
Section IX.3 Compliance with Trust Indenture Act
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section IX.4 Revocation and Effect of Consents
A consent to an amendment, supplement or waiver by a Holder of a Security
shall bind the Holder 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, until an
amendment, supplement or waiver becomes effective, any such Holder or subsequent
Holder may revoke the consent as to its Security or portion of a Security. For
such revocation to be effective, the Trustee must receive the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.05, or (ii) such other
date as the Company shall designate. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent shall be valid or effective
for more than 90 days after such record date
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unless consent from the Holders of the principal amount of Securities required
hereunder for such amendment or waiver to be effective also shall have been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it makes a change described in any of clauses (1) through
(11) of Section 9.02. In that case the amendment, supplement or waiver shall
bind each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security.
Section IX.5 Notation on or Exchange of Securities
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section IX.6 Trustee Protected
The Trustee shall sign any amendment or supplement or waiver authorized
pursuant to this Article if the amendment or supplement or waiver does not
adversely affect the rights of the Trustee. If it does adversely affect the
rights of the Trustee, the Trustee may but need not sign it. In signing such
amendment or supplement or waiver the Trustee shall be entitled to receive, and
(subject to Article VII) shall be fully protected in conclusively relying upon,
an Opinion of Counsel and an Officer's Certificate stating that such amendment
or supplement or waiver is authorized or permitted by and complies with this
Indenture. The Company may not sign an amendment or supplement until the Boards
of Directors of the Company and the Guarantors approve it.
Section IX.7 Restrictions on Payments for Amendments, Waivers and
Modifications.
Notwithstanding any provision to the contrary in this Indenture 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, fees or otherwise, to
any Holder of any Security for or as an inducement to any consent, waiver or
amendment of any terms or provisions of the Security or the Indenture unless
such consideration is offered to be paid or agreed to be paid to all Holders of
the Securities which so consent, waive or agree to amend in the time period set
forth in any solicitation documents relating to such consent.
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ARTICLE X
Guarantees
Section X.1 Unconditional Guarantee
Each Guarantor hereby, jointly and severally, unconditionally guarantees
(such guarantee to be referred to herein as the "Guarantee") to each Holder and
to the Trustee the due and punctual payment of the principal of, premium, if
any, and interest on the Securities and all other amounts due and payable under
this Indenture and the Securities by the Company whether at maturity, by
acceleration, redemption, repurchase or otherwise, including, without
limitation, interest on the overdue principal of, premium, if any, and interest
on the Securities, to the extent lawful, all in accordance with the terms hereof
and thereof; subject, however, to the limitations set forth in Section 10.05.
Failing payment when due of any amount so guaranteed for whatever reason,
the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor hereby agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. To the
fullest extent permitted by law, each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and in this Guarantee.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Guarantor, any amount
paid by the Company or any Guarantor to the Trustee or such Holder with respect
to the Securities, this Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor agrees it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article VI, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.
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Section X.2 Guarantors May Consolidate, etc., on Certain Terms
(a) Subject to paragraph (b) of this Section 10.02, no Guarantor may
consolidate or merge with or into (whether or not such Guarantor is the
surviving Person) another corporation or Person unless (i) the Person formed by
or surviving any such consolidation or merger (if other than such Guarantor) is
a corporation organized and existing under the laws of the United States of
America, any state thereof, or the District of Columbia and expressly assumes
all the obligations of such Guarantor pursuant to a supplemental indenture, in a
form reasonably satisfactory to the Trustee, under the Securities and the
Indenture, (ii) immediately before and after giving effect to such transaction,
no Default or Event of Default exists, (iii) such Guarantor or the entity or
Person formed by or surviving any such consolidation or merger on a pro forma
basis will have Consolidated Net Worth (immediately after the transaction) equal
to or greater than the Consolidated Net Worth of such Guarantor immediately
preceding the transaction and (iv) the Company will, at the time of such
transaction after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable Reference Period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a). In
connection with any consolidation or merger contemplated by this Section 10.02,
the Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that all conditions precedent to the proposed
transaction and to execution and delivery of such supplemental indenture have
been complied with. This Section 10.02(a) will not prohibit a merger between
Guarantors or a merger between the Company and a Guarantor; provided, however,
GPC is prohibited from merging with or into the Company or any other Guarantor.
(b) In the event of a sale or other disposition of all or substantially all
of the assets of any Guarantor, by way of merger, consolidation or otherwise, or
a sale or other disposition of all of the Capital Stock of such Guarantor, then
such Guarantor (in the event of a sale or other disposition, by way of such a
merger, consolidation or otherwise, of all of the Capital Stock of such
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its Guarantees; provided
that the Net Cash Proceeds of such sale or other disposition are applied in
accordance with the provisions of the Indenture described under Section 4.11.
Section X.3 Addition of Guarantors
(a) Except to the extent prohibited by the terms of any Bank Credit
Facility or the Senior Secured Note Indenture, the Company agrees to cause each
Person that shall become a Restricted Subsidiary after the Issue Date to execute
and deliver a supplemental indenture pursuant to which such Subsidiary shall
guarantee the payment of the Securities pursuant to the terms hereof.
(b) Except to the extent prohibited by the terms of any Bank Credit
Facility or the Senior Secured Note Indenture, any Person that was not a
Guarantor on the Issue Date may become a Guarantor by executing and delivering
to the Trustee (i) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Guarantor and (ii) an
Opinion of Counsel and Officers' Certificate to the effect that such
supplemental indenture has been duly authorized and
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executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning creditors' rights and equitable principles as may be acceptable to
the Trustee in its discretion and provided that no opinion need be rendered
concerning the enforceability of the Guarantee).
Section X.4 Release of a Guarantor
Upon the sale or disposition of a Guarantor (or substantially all of its
assets), which in each case otherwise is effected in compliance with the terms
of this Indenture, including but not limited to the provisions of Section 10.02,
such Guarantor shall be deemed released from all of its Guarantee and related
obligations in this Indenture. The Trustee shall deliver an appropriate
instrument evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate and an Opinion of Counsel certifying
that such sale or other disposition was made by the Company in accordance with
the provisions of this Indenture. Any Guarantor not so released remains liable
for the full amount of principal of and interest on the Securities as provided
in this Article X.
Section X.5 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance of Securities under this Indenture
each Holder hereby confirms that it is the intention of all such parties that
the guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any federal or state law. To
effectuate the foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 10.06, result in the obligations of such Guarantor under the
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. This Section 10.05 is for the benefit of the creditors of
each Guarantor, and, for purposes of applicable fraudulent transfer and
fraudulent conveyance law, any Indebtedness of a Guarantor pursuant to a Bank
Credit Facility shall be deemed to have been incurred prior to the incurrence by
such Guarantor of its liability under the Guarantee.
Section X.6 Contribution
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by the Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Guarantor's obligations
with respect to the Guarantee.
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Section X.7 Execution and Delivery of Guarantee
To further evidence the Guarantees set forth in Section 10.01, each
Guarantor hereby agrees that a notation relating to such Guarantee, in
substantially the form of Exhibit A-1, shall be endorsed on each Security
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of one Officer of each Guarantor.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation relating to such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section X.8 Severability
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE XI
Collateral and Security
Section XI.1 Collateral and Pledge Agreement; Additional Collateral
(a) In order to secure the due and punctual payment of the principal of and
interest on the Securities when and as the same shall be due and payable,
whether on an Interest Payment Date, at maturity, by acceleration, purchase,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest (to the extent permitted by law), if any, on the Securities and the
performance of all other obligations of the Company to the Holders or the
Trustee under this Indenture and the Securities, the Company and the Trustee
have simultaneously with the execution of this Indenture entered into the Pledge
Agreement pursuant to which the Company has granted to the Trustee or co-Trustee
for the benefit of the Holders a first priority Lien on and security interest in
the Collateral. The Trustee and the Company hereby agree that the Trustee holds
the Collateral in trust for the benefit of the Holders pursuant to the terms of
this Indenture and the Security Documents.
(b) Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Pledge Agreement, as the same may be amended from time to time
pursuant to the provisions of the Pledge Agreement and this Indenture.
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(c) Except to the extent prohibited by the terms of any Bank Credit
Facility or the Senior Secured Note Indenture, the Company agrees to cause the
Capital Stock of each Person that shall become a direct Wholly Owned Restricted
Subsidiary of the Company after the Issue Date to be pledged pursuant to the
Pledge Agreement
Section XI.2 Recording and Opinions
(a) The Company shall take or cause to be taken all action required to
perfect, maintain, preserve and protect the Lien on and security interest in the
Collateral granted by the Pledge Agreement, including, without limitation, the
filing of financing statements, continuation statements and any instruments of
further assurance, in such manner and in such places as may be required by law
fully to preserve and protect the rights of the Holders and the Trustee under
this Indenture and the Pledge Agreement to all property comprising the
Collateral. The Company shall from time to time promptly pay all financing and
continuation statement recording and/or filing fees, charges and taxes relating
to this Indenture and the Pledge Agreement, any amendments thereto and any other
instruments of further assurance required pursuant to the Pledge Agreement.
(b) The Company shall furnish to the Trustee, at such time as required by
(S) 314(b) of the TIA, Opinion(s) of Counsel either (a) substantially to the
effect that, in the opinion of such counsel, this Indenture and the grant of a
security interest in the Collateral intended to be made by the Pledge Agreement
and all other instruments of further assurance, including, without limitation,
financing statements, have been properly recorded and filed to the extent
necessary to perfect the security interests in the Collateral created by the
Pledge Agreement and reciting the details of such action, and stating that as to
the security interests created pursuant to the Pledge Agreement, such recordings
and filings are the only recordings and filings necessary to give notice thereof
and that no re-recordings or refilings are necessary to maintain such notice
(other than as stated in such opinion), or (b) to the effect that, in the
opinion of such counsel, no such action is necessary to perfect such security
interests.
(c) To the extent required by the TIA the Company shall furnish to the
Trustee on April 15 in each year, beginning with April 15, 1999, an Opinion of
such counsel, dated as of such date, either (i) (A) stating that, in the opinion
of such counsel, action has been taken with respect to the recording, filing,
re-recording and refiling of all supplemental indentures, financing statements,
continuation statements and other documents as is necessary to maintain the Lien
of the Pledge Agreement and reciting with respect to the security interests in
the Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, and (B) stating that, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements, continuation statements and other documents have been executed and
filed that are necessary as of such date and during the succeeding 24 months
fully to maintain the security interest of the Holders and the Trustee hereunder
and under the Pledge Agreement with respect to the Collateral, or (ii) stating
that, in the opinion of such counsel, no such action is necessary to maintain
such Lien.
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Section XI.3 Release of Collateral
(a) Subject to subsections (b), (c) and (d) of this Section 11.03,
Collateral may be released from the Lien and security interest created by the
Pledge Agreements at any time or from time to time in accordance with the
provisions of the Pledge Agreements or as provided hereby.
(b) The Trustee, in its capacity as Trustee under the Pledge Agreement,
shall not at any time release Collateral from the security interest created by
this Indenture and the Pledge Agreement unless such release is in accordance
with the provisions of this Indenture and the Pledge Agreement.
(c) At any time when an Event of Default shall have occurred and be
continuing, no release of Collateral pursuant to the provisions of this
Indenture and the Pledge Agreement shall be effective as against the Holders of
the Securities.
(d) The release of any Collateral from the terms of the Pledge Agreement
shall not be deemed to impair the security under this Indenture in contravention
of the provisions hereof if and to the extent the Collateral is released
pursuant to this Indenture and the Pledge Agreement. To the extent applicable,
the Company shall cause TIA (S) 314(d) relating to the release of property from
the Lien of the Pledge Agreement and relating to the substitution therefor of
any property to be subjected to the Lien of the Pledge Agreement to be complied
with. Any certificate or opinion required by TIA (S) 314(d) may be made by an
Officer of the Company, except in cases where TIA (S) 314(d) requires that such
certificate or opinion be made by an independent Person, which Person shall be
an independent engineer, appraiser or other expert selected or approved by the
Trustee in the exercise of reasonable care. A Person is "independent" if such
Person (a) is in fact independent, (b) does not have any direct financial
interest or any material indirect financial interest in the Company or any
Subsidiary or in any Affiliate of the Company or of any Subsidiary and (c) is
not an officer, employee, promoter, underwriter, trustee, partner or director or
person performing similar functions to any of the foregoing for the Company or
any Subsidiary. The Trustee shall be entitled to receive and rely upon a
certificate provided by any such Person confirming that such Person is
independent within the foregoing definition.
Section XI.4 Certificates of the Company
The Company shall furnish to the Trustee, prior to each proposed release of
Pledged Collateral pursuant to the Pledge Agreement, (i) all documents required
by TIA (S) 314(d) and (ii) an Opinion of Counsel, which may be rendered by
internal counsel to the Company, to the effect that such accompanying documents
constitute all documents required by TIA (S) 314(d). The Trustee may, to the
extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such documents and such Opinion of Counsel.
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Section XI.5 Certificates of the Trustee
In the event that the Company wishes to release Pledged Collateral in
accordance with the Pledge Agreement and has delivered the certificates and
documents required by the Pledge Agreement and Sections 11.03 and 11.04 hereof,
the Trustee shall determine whether it has received all documentation required
by TIA (S) 314(d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section 11.04,
shall deliver a certificate to the Collateral Agent setting forth such
determination.
Section XI.6 Authorization of Actions To Be Taken by the Trustee Under the
Pledge Agreement
Subject to the provisions of the Pledge Agreement, (a) the Trustee may, in
its sole discretion and without the consent of the Holders, take all actions it
deems necessary or appropriate in order to (i) enforce any of the terms of the
Pledge Agreement and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company hereunder and (b) the Trustee shall
have power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any act that may
be unlawful or in violation of the Pledge Agreement or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including the
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
interest thereunder or be prejudicial to the interests of the Holders or of the
Trustee).
Section XI.7 Authorization of Receipt of Funds by the Trustee Under the Pledge
Agreement
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Pledge Agreement, and to make further
distributions of such funds to the Holders in accordance with the provisions of
this Indenture.
Section XI.8 Termination of Security Interest
Upon the payment in full of all Obligations of the Company under this
Indenture and the Securities, or upon Legal Defeasance, the Trustee shall, at
the request of the Company, deliver a certificate stating that such Obligations
have been paid in full, and release the Liens pursuant to this Indenture and the
Pledge Agreement.
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ARTICLE XII
Miscellaneous
Section XII.1 Trust Indenture Act Controls
Whether prior to or following the qualification of this Indenture under the
TIA, if any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of TIA (S) 318(c) upon an Indenture qualified under
the TIA, the imposed duties shall control under this Indenture.
Section XII.2 Notices
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by certified or registered mail (return receipt
requested), facsimile, telecopier or overnight air courier guaranteeing next day
delivery, addressed as follows:
If to the Company or any Guarantor:
Gothic Energy Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Trustee Administration
The Company, any Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if faxed or telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
Business Day delivery.
Any notice or communication mailed to a Holder shall be mailed by first-
class mail to the address for such Holder appearing on the registration books of
the Registrar and shall be sufficiently given to such Holder if so mailed within
the time prescribed. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
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If a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it. If the Company or any
Guarantor mails notice or communications to Holders, it shall mail a copy to the
Trustee and each Agent at the same time.
Section XII.3 Communication by Holders with Other Holders
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Securities. The Company,
the Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S) 312(c).
Section XII.4 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or such Guarantor,
as the case may be, shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 12.05) stating that, in the opinion of the signers, the
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with;
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, such conditions precedent have been complied with; and
(3) any Opinion of Counsel may assume the existence or non-existence
of facts necessary to support such Opinion unless such counsel has actual
knowledge that such assumption would be contrary to the actual facts.
Section XII.5 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each person making such certificate or opinion
has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such covenant or condition has been complied with.
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Section XII.6 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section XII.7 Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banks and
trust companies in the City of New York are not required by law or executive
order to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at the place on the next succeeding day that is not a Legal
Holiday, without additional interest.
Section XII.8 Governing Law
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section XII.9 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, any Guarantor or any other Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section XII.10 No Recourse Against Others
All liability described in paragraph 18 of the Securities of any director,
officer, employee or stockholder, as such, of the Company, the Guarantors or the
Trustee is waived and released.
Section XII.11 Successors
All agreements of the Company and the Guarantors in this Indenture, the
Securities and the Guarantees shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
Section XII.12 Duplicate Originals
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
instrument.
Section XII.13 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,
and a Holder shall have no claim therefor against any party hereto.
85
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first written above.
COMPANY
GOTHIC ENERGY CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRUSTEE
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
86
EXHIBIT A
FORM OF SECURITY
GOTHIC ENERGY CORPORATION
14_% SERIES [A/B] SENIOR SECURED DISCOUNT NOTE DUE 2006
[FACE OF SECURITY]
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York ("DTC")), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
AND, PRIOR TO THE EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN
RULE 903 OF REGULATION S, WILL NOT OFFER OR SELL THESE SECURITIES IN THE UNITED
STATES OR TO A U.S. PERSON OR FOR THE ACCOUNT OF A U.S. PERSON WITHIN THE
MEANING OF RULE 902(o) OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS COMPLIES WITH RULE 144 UNDER
THE SECURITIES ACT) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER
WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE")
RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER,
(B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE PROVISIONS OF RULE 144A UNDER
THE SECURITIES ACT, (C) TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A WRITTEN CERTIFICATION CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (COPIES OF WHICH MAY BE OBTAINED FROM THE TRUSTEE), PROVIDED THAT
CERTAIN
A-1
HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT TO THIS
CLAUSE C PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), (D) OUTSIDE
THE UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS
SPECIFIED IN THE INDENTURE PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED
PERIOD" DESCRIBED ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED FROM THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (E) PURSUANT TO THE
RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR
(G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT
OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE
AT ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL
NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
A-2
GOTHIC ENERGY CORPORATION
14_% SERIES [A/B] SENIOR SECURED DISCOUNT NOTE DUE 2006
NO. $_________
CUSIP NO.________
Gothic Energy Corporation, an Oklahoma corporation, promises to pay to
_______________ or registered assigns the principal sum of ____________________
Dollars on ________________, 2006.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
To the extent set forth in the Pledge Agreement (as defined in the
Indenture), payment hereon is secured by a valid, perfected security interest in
the Collateral (as defined in the below-mentioned Indenture), the terms of which
security interest are more fully set forth in the Pledge Agreement.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
[Seal] GOTHIC ENERGY CORPORATION
By:
--------------------------------
By:
--------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the 14_%
Series [A/B] Senior Secured Discount Notes due 2006 in [Definitive/Global]/1/
form referred to in the within-mentioned Indenture.
Dated:
-----------------
THE BANK OF NEW YORK
By:
--------------------------------
Authorized Signatory
-------------
/1/ If the Security is issued in global form, the term "Global" replaces the
term "Definitive"
A-4
[REVERSE OF SECURITY]
GOTHIC ENERGY CORPORATION
14_% SERIES [A/B] SENIOR SECURED DISCOUNT NOTE DUE 2006
1. Interest. Gothic Energy Corporation, an Oklahoma corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
14_% per annum and shall pay additional interest, if any, payable pursuant to
the Registration Rights Agreement referred to in the Indenture. The Company
will pay interest semiannually on May 1 and November 1 of each year (each an
"Interest Payment Date"), commencing November 1, 2002, or if any such day is not
a Business Day, on the next succeeding Business Day. Interest on the Securities
will accrue from the most recent Interest Payment Date on which interest has
been paid or, if no interest has been paid, from May 1, 2002; provided, that if
there is no existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date (but after May 1, 2002), interest shall accrue
from such next succeeding Interest Payment Date, except in the case of the
original issuance of Securities, in which case interest shall accrue from the
date of authentication. The Company shall pay interest on overdue principal and
premium, if any, from time to time on demand at a rate equal to the interest
rate on the Securities then in effect; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. All references
herein to interest shall include additional interest, if any, payable as Notes
Liquidated Damages pursuant to the Registration Rights Agreement.
2. Method of Payment. The Company will pay interest on the Securities to
the persons who are registered holders of Securities at the close of business on
the record date immediately preceding the Interest Payment Date, even if such
Securities are canceled after the record date and on or before the Interest
Payment Date. Holders must surrender Securities to the Paying Agent to collect
principal payments. The Company will pay principal of, premium, if any, and
interest on the Securities in money of the United States of America that at the
time of payment is legal tender for payment of public and private debts.
However, the Company may pay such amounts by check payable in such money. It
may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or co-
registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
4. Indenture. The Company issued the Securities under an Indenture, dated
as of April 21, 1998 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbb) as in effect on the date
of the Indenture. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders are referred to the
Indenture and such Act for a complete statement of such terms. The Securities
are limited to $104,000,000 aggregate principal amount.
A-5
5. Ranking and Guarantees. The Securities are general senior secured
obligations of the Company. The Company's obligation to pay principal, premium,
if any, and interest with respect to the Securities is unconditionally
guaranteed on a senior basis, jointly and severally, by the Guarantors pursuant
to Article X of the Indenture. Certain limitations to the obligations of the
Guarantors are set forth in further detail in the Indenture.
6. Optional Redemption. The Securities will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after May 1, 2003 at the following redemption prices (expressed as percentages
of the principal amount) if redeemed during the twelve-month period commencing
on May 1 of the year set forth below, plus, in each case, accrued interest
thereon to the redemption date:
Year Percentage
---- ----------
2003................................... 107.063%
2004................................... 103.532%
2005................................... 100.00%
Notwithstanding the foregoing, at any time prior to May 1, 2003, the
Company may, at its option, redeem all or any portion of the Securities at the
Make-Whole Price plus accrued and unpaid interest thereon, if any, to the
redemption date.
In addition, in the event the Company consummates one or more Equity
Offerings on or prior to May 1, 2001, the Company may, in its sole discretion,
redeem up to 33-1/3% of the original aggregate principal amount of the
Securities with all or a portion of the aggregate net proceeds received by the
Company from any such Equity Offering or Equity Offerings, within 90 days of the
closing of any such Equity Offering, at a redemption price of 114.125% of the
Accreted Value of the Securities so redeemed, plus accrued and unpaid interest
on the Securities so redeemed to the Redemption Date; provided, however, that
following such redemption, at least 66-2/3% of the original aggregate principal
amount of the Securities remains outstanding.
Any redemption pursuant to this paragraph 6 shall be made pursuant to the
provisions of Sections 3.01 through 3.07 of the Indenture.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the redemption date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the redemption date. In the event of redemption or purchase of
this Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
The Securities do not have the benefit of any sinking fund obligations.
7. Notice of Redemption. Notice of redemption will be mailed to the
Holder's registered address at least 30 days but not more than 60 days before
the redemption date to each Holder of Securities to be redeemed. If less than
all Securities are to be redeemed, the Trustee shall select pro rata, by lot or
in accordance with the rules of any securities exchange the Securities to be
redeemed
A-6
in multiples of $1,000. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption (unless the Company shall
default in the payment of the redemption price or accrued interest).
8. Change of Control Offer. In the event of a Change of Control, and
subject to certain conditions and limitations provided in the Indenture, the
Company will be obligated to make an offer to purchase, not more than 10
Business Days or less than 20 Business Days following the occurrence of a Change
of Control, all of the then outstanding Securities at a purchase price equal to
101% of the principal amount thereof (or if such date of purchase is prior to
May 1, 2002, the Accreted Value thereof), together with accrued and unpaid
interest to the Change of Control Purchase Date, all as provided in the
Indenture.
9. Net Proceeds Offer. In the event of Asset Sales, under certain
circumstances, the Company will be obligated to make a Net Proceeds Offer to
purchase all or a specified portion of each Holder's Securities at a purchase
price equal to 100% of the principal amount of (or if such date of purchase is
prior to May 1, 2002, the Accreted Value of) the Securities, together with
accrued and unpaid interest to the Net Proceeds Payment Date.
10. Restrictive Covenants. The Indenture imposes certain limitations on,
among other things, the ability of the Company to merge or consolidate with any
other Person or sell, lease or otherwise transfer all or substantially all of
its properties or assets, the ability of the Company or the Restricted
Subsidiaries to dispose of certain assets, to pay dividends and make certain
other distributions and payments, to make certain investments or redeem, retire,
repurchase or acquire for value shares of Capital Stock, to incur additional
Indebtedness or incur encumbrances against certain property and to enter into
certain transactions with Affiliates, all subject to certain limitations
described in the Indenture.
11. Defaults and Remedies. As set forth in the Indenture, an Event of
Default is generally (i) failure to pay principal upon maturity, redemption or
otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer), (ii) default for 30 days in payment of interest on any of the
Securities, (iii) default in the performance of agreements relating to mergers,
consolidations and sales of all or substantially all assets or the failure to
make or consummate a Change of Control Offer or a Net Proceeds Offer, (iv)
failure for 30 days after notice to comply with any other covenants in the
Indenture or the Securities; (v) certain payment defaults under, the
acceleration prior to the maturity of, and the exercise of certain enforcement
rights with respect to, certain Indebtedness of the Company, any Guarantor or
any other Subsidiary (other than an Unrestricted Subsidiary provided that
neither the Company nor any Restricted Subsidiary is liable, directly or
indirectly, for such Indebtedness); (vi) the failure of any Guarantee to be in
full force and effect or otherwise to be enforceable (except as permitted by the
Indenture); (vii) certain events giving rise to material ERISA liability; (viii)
certain final judgments against the Company, any Guarantor or other any other
Subsidiary (other than an Unrestricted Subsidiary provided that neither the
Company nor any Guarantor is liable, directly or indirectly, for such judgment)
in an aggregate amount of $10.0 million or more which remain unsatisfied and
either become subject to commencement or enforcement proceedings or remain
unstayed for a period of 60 days; (ix) certain events of bankruptcy, insolvency
or reorganization of the Company or any Restricted Subsidiary; (x) the Pledge
Agreement ceases to give the Trustee the Lien purported to be created thereby or
any default occurs thereunder; and (xi) GPC shall cease for any reason to be a
direct Wholly Owned
A-7
Subsidiary of the Company. If any Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Securities may declare the principal amount (or, if prior to May 1,
2002, the Accreted Value) of all the Securities to be due and payable
immediately, except that (i) in the case of an Event of Default arising from
certain events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary, the principal amount (or, if prior to May 1, 2002, the
Accreted Value) of the Securities will become due and payable immediately
without further action or notice, and (ii) in the case of an Event of Default
which relates to certain payment defaults, acceleration or the exercise of
certain enforcement rights with respect to certain Indebtedness, any
acceleration of the Securities will be automatically rescinded if any such
Indebtedness is repaid or if the default relating to such Indebtedness is cured
or waived and if the holders thereof have accelerated such Indebtedness then
such holders have rescinded their declaration of acceleration or if in certain
circumstances the proceedings or enforcement action with respect to the
Indebtedness that is the subject of such Event of Default is terminated or
rescinded. No Holder may pursue any remedy under the Indenture unless the
Trustee shall have failed to act after notice of an Event of Default and written
request by Holders of at least 25% in principal amount of the Outstanding
Securities, and the offer to the Trustee of indemnity reasonably satisfactory to
it; however, such provision does not affect the right to ▇▇▇ for enforcement of
any overdue payment on a Security by the Holder thereof. Subject to certain
limitations, Holders of a majority in principal amount of the Outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except
default in payment of principal, premium or interest) if it determines in good
faith that, withholding the notice is in the interest of the Holders. The
Company is required to file annual reports with the Trustee as to the absence or
existence of defaults.
12. Defeasance. The Indenture contains provisions for defeasance at any
time of (i) the entire indebtedness of the Company on this Security and (ii)
certain restrictive covenants and the related Defaults and Events of Default,
upon compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
13. Amendment, Modification and Waiver. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the Guarantor and
the rights of the Holders under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of one-half in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security. Without the consent of any Holder, the Company, the Guarantor
and the Trustee may amend or supplement the Indenture or the Securities to cure
any ambiguity, defect or inconsistency and to make certain other specified
changes and other changes that do not materially adversely affect the rights of
any Holder.
14. Obligation Absolute and Unconditional. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company,
A-8
which is absolute and unconditional, to pay the principal of (and premium, if
any, on) and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
15. Registration and Transfer. As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable on the Security register of the Company, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
16. Form. The Securities shall be issued either in global form or in
definitive registered form, without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
17. Taxes. No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
18. No Recourse Against Others. A director, officer, incorporator, or
stockholder of the Company or any Guarantor, as such, shall not have any
personal liability under this Security or the Indenture by reason of his or its
status as such director, officer, incorporator or stockholder. Each Holder, by
accepting this Security with the notation of Guarantee endorsed hereon, waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security with the notation of Guarantee
endorsed hereon.
19. Registered Owners. Prior to the time of due presentment of this
Security for registration of transfer, the Company, the Guarantor, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Company, the Guarantors, the Trustee
nor any agent shall be affected by notice to the contrary.
20. Definitions. All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The
Company will furnish to any Holder upon written request and without charge a
copy of the Indenture. Requests may be made to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders
thereof. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identifying information printed hereon.
A-9
22. Governing Law. This Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to applicable
principles of conflicts of laws to the extent that the application of the law of
another jurisdiction would be required thereby.
23. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor corporation will be released from those obligations.
24. Trustee Dealings with Company and Guarantors. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Guarantors or
their respective Subsidiaries or Affiliates with the same rights it would have
if it were not Trustee.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Gothic Energy
Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Secretary.
A-10
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________ as agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him or her.
--------------------------------------------------------------------------------
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Security)
Date:
------------------
Signature Guarantee:
------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-11
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.11 [_] Section 4.17 [_]
If you want to have only part of this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, state the amount in
integral multiples of $1,000:
$
------------
Date: Signature:
------------- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:
------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-12
SCHEDULE OF EXCHANGES OF GLOBAL SECURITY FOR
DEFINITIVE SECURITY/2/
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL AUTHORIZED
DECREASE IN INCREASE IN SECURITY SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT FOLLOWING SUCH TRUSTEE OR
OF THIS GLOBAL OF THIS GLOBAL DECREASE (OR SECURITIES
DATE OF EXCHANGE SECURITY SECURITY INCREASE) CUSTODIAN
---------------- ------------------ ---------------- ---------------- -----------
--------------
/2/ This should be included only if the Security is issued in global form.
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
Subject to the limitations and provisions set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in the Security upon which
this notation is endorsed and each hereinafter referred to as a "Guarantor,"
which term includes any successor or additional Guarantor under the Indenture)
have, jointly and severally, unconditionally guaranteed (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Securities,
and all other amounts payable under the Indenture and the Securities by the
Company whether at maturity, acceleration, redemption, repurchase or otherwise,
(b) the due and punctual payment of interest on the overdue principal of,
premium, if any, and interest on the Securities, to the extent lawful, (c) the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee, all in accordance with the terms set forth in the
Indenture, and (d) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise. Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
unless otherwise indicated.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
No stockholder, officer, director or incorporator, as such, past, present
or future, of the Guarantors shall have any personal liability under the
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.
Any Guarantor may be released from its Guarantee upon the terms and subject
to the conditions provided in the Indenture.
All terms used in this notation of Guarantee which are defined in the
Indenture referred to in this Security upon which this notation of Guarantee is
endorsed shall have the meanings assigned to them in such Indenture.
The Guarantee shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof and in the Indenture.
A-14
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
[NAME OF EACH SUBSIDIARY
GUARANTOR]
Attest: By:
------------------------- ----------------------------------
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 14_% Series [A/B] Senior
Secured Discount Notes due 2006 referred to in the within-mentioned Indenture.
Dated:
--------------------------
THE BANK OF NEW YORK
Trustee
By:
----------------------------------
Authorized Signatory
A-15
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR TRANSFER OF SERIES [A/B] SENIOR SECURED DISCOUNT NOTES
______________, 199__
The Bank of New York
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Trustee Administration
Re: Gothic Energy Corporation
14_% Series [A/B] Senior Secured Discount Notes due 2006
---------------------------------------------------------
(the "Securities")
------------------
Reference is hereby made to the Indenture dated as of April 21, 1998 (the
"Indenture") between Gothic Energy Corporation and The Bank of New York,
Trustee. Capitalized terms used but not defined herein shall have the meanings
given them in the Indenture.
This certificate relates to $_______________ aggregate principal amount of
Securities which are held in*
[_] book-entry
or
[_] definitive form
in the name of ______________________________________________ [name of
transferor] (the "Transferor"). The Transferor hereby requests that the
Securities be transferred to _____________________________________ [insert name
of transferee] (the "Transferee").
The Transferor hereby certifies that the Transferor is familiar with the
Indenture relating to the above-captioned Securities and further certifies
that*:
[_] such Securities (constituting either a Definitive Security in the
amount indicated above that is being exchanged for a beneficial interest in
the Global Security pursuant to Section 2.06(d) of the Indenture or a
beneficial interest in the amount indicated above in the Global Security
that is being transferred pursuant to Section 2.06(e) of the Indenture) are
being transferred to a Person that the Transferor reasonably believes is a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act; or
[_] the Transferor has requested by written order that the Trustee deliver
to the Transferee in exchange for a beneficial interest in the Global
Security held by the Depositary a Definitive Security or Securities in an
aggregate principal amount equal to such beneficial interest in the Global
Security (or the portion thereof indicated above) in accordance with
Section 2.06(f) of the Indenture, and*
[_] the Transferee is the Person designated by the Depositary as
being the beneficial owner of the interest in the Global
Security; or
B-1
[_] the Transferor reasonably believes the Transferee to be a
Qualified Institutional Buyer; or
[_] such transfer is being made in reliance on Rule 144 or Rule
904 or another exemption (specify:
______________________________________) from the registration
requirements of the Securities Act, and an opinion of counsel
accompanies this Certificate; or
[_] the Transferor has requested by written order that the Trustee exchange
or register the transfer of a Definitive Security or Securities for a
Definitive Security or Securities:
[_] to a Person the Transferor reasonably believes to be a Qualified
Institutional Buyer; or
[_] in reliance on Rule 144 or Rule 904 or another exemption (specify:
__________________________________) from the registration requirements
of the Securities Act, and an opinion of counsel accompanies the
Certificate.
In connection with such request, and in respect of such Securities, the
Transferee confirms that:
1. The Transferee understands that the Securities have not been and may
not be registered under the Securities Act, and are being sold to it in a
transaction that is exempt from the registration requirements of the Securities
Act.
2. The Transferee hereby represents that it is a corporation, partnership
or other entity or person having such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and the Transferee is (or any account for which it
is purchasing is) (check box, if applicable):
[_] an Accredited Investor or
[_] a Qualified Institutional Buyer,
as such terms are defined in the Securities Act, able to bear the economic risk
of investment in the Securities.
3. The Transferee undertakes that it is acquiring the Securities for its
own account (or for accounts as to which the Transferee exercises sole
investment discretion and has authority to make, and does make, the statements
contained in this certificate) and not with a view to any distribution of the
Securities, subject, nevertheless, to the understanding that the disposition of
its property shall at all times be and remain within the Transferee's control.
4. The Transferee acknowledges that it understands that the Securities
will be issued either as (a) a Global Security** and the Transferee will own a
beneficial interest therein or (b) a Definitive Security under which the
Securities will be delivered to the Transferee in registered form only and, in
either case, the Security will bear a legend substantially to the following
effect:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
B-2
LAWS AND MAY NOT BE REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE
ACCOUNT OR BENEFIT OF ANY PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT)
(AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
AND, PRIOR TO THE EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN
RULE 903 OF REGULATION S, WILL NOT OFFER OR SELL THE SECURITIES IN THE UNITED
STATES OR TO A U.S. PERSON OR FOR THE ACCOUNT OF A U.S. PERSON WITHIN THE
MEANING OF RULE 902(o) OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS COMPLIES WITH RULE 144 UNDER
THE SECURITIES ACT) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER
WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE")
RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER,
(B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE PROVISIONS OF RULE 144A UNDER
THE SECURITIES ACT, (C) TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A WRITTEN CERTIFICATION CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT
TRANSFER THIS NOTE PURSUANT TO THIS CLAUSE C PRIOR TO THE EXPIRATION OF THE "40-
DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S
UNDER THE SECURITIES ACT), (D) OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN
A U.S. PERSON IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT AND, IF SUCH TRANSFER IS BEING EFFECTED BY
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE EXPIRATION OF THE
"40-DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S
UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY
OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE,
(E) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE
FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY
OR THE PROPERTY OF SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHICH THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A
QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
B-3
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION
TERMINATION DATE.
and (c) such certificates will be reissued without the foregoing legend only in
the event of a disposition of the Securities in accordance with the provisions
of paragraph 5(c) or (d) below, or at the Transferee's request at such times as
the Transferee would be permitted to dispose of the Securities in accordance
with paragraph 5(d) below.
5. The Transferee agrees that in the event that at some future time it
wishes to dispose of any of the Securities, it will not do so unless:
(a) the Securities are sold to the Company or any Subsidiary thereof;
(b) the Securities are sold to an Accredited Investor or Qualified
Institutional Buyer, that, prior to such transfer, furnishes to the Trustee
a signed letter containing certain representations and agreements relating
to the restrictions on transfer of the Securities (the form of which letter
can be obtained from such Trustee);
(c) the Securities are sold pursuant to Rule 144 under the Securities
Act; or
(d) the Securities are sold pursuant to an effective registration
statement under the Securities Act.
Very truly yours,
---------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
---------------------------------
Dated: Title:
---------------,------ --------------------------------
--------------------------------------
[Insert Name of Transferee]
By:
-----------------------------------
Name:
---------------------------------
Dated: Title:
---------------,------ --------------------------------
cc: Gothic Energy Corporation
B-4
EXHIBIT C
FORM OF LEGAL OPINION ON TRANSFER
___________, _____
(Date)
Gothic Energy Corporation
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▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Secretary
The Bank of New York
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Attention: Corporate Trust Trustee Administration
Re: Gothic Energy Corporation
14_% Series [A/B] Senior Secured Discount Notes due 2006
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the sale by
_____________ (the "Transferor") to _____________ (the "Transferee") of
$_______________ aggregate principal amount of 14_% Series [A/B] Senior Secured
Discount Notes due 2006 of (the "Securities") of Gothic Energy Corporation.
We have examined such documents and records as we have deemed appropriate.
In our examination of the foregoing, we have assumed the authenticity of all
documents, the genuineness of all signatures and the due authorization,
execution and delivery of the aforementioned by each of the parties thereto. We
have further assumed the accuracy of the representations of the Transferee
contained in the Certificate Delivered Upon Exchange or Transfer of Senior Notes
executed and delivered by the Transferee and the Transferor in connection with
the sale of the Securities. We have also assumed that the sale of the
Securities to the Transferor was exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "Securities
Act").
Based on the foregoing, we are of the opinion that the sale to the
Transferee of the Securities does not require registration of such Securities
under the Securities Act and is authorized and permitted under the terms of the
Indenture.
Very truly yours,
C-1
EXHIBIT D
OFFICERS' CERTIFICATE OF NON-DEFAULT
------------------------------------
GOTHIC ENERGY CORPORATION
This Officers' Certificate is provided pursuant to Section 4.03(a) of the
Indenture dated April 21, 1998 between Gothic Energy Corporation (the "Company")
and The Bank of New York, as Trustee (the "Indenture").
A review of the activities of the Company and the Subsidiaries during the
preceding fiscal year ending [ , ], has been made under the
supervision of the Officers signing below with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under the
Indenture. In addition, each such Officer signing this certificate states that,
to the best of such Officer's knowledge, the Company and each Guarantor has
kept, observed, performed and fulfilled each and every covenant contained in the
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture, without regard to notice
requirements or periods of grace. This Officers' Certificate is intended to
comply with TIA 314(a)(4).
Additionally, each Officer signing below has read each covenant or
condition set forth in the Indenture and has made such examination or
investigation as is necessary, in the opinion of each such Officer, to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with, which examination or investigation was
conducted in the course of the Officers' routine operational management of the
Company. In the opinion of each such Officer, each such covenant or condition
has been complied with.
EXECUTED THIS __________ day of ______________________, _____.
GOTHIC ENERGY CORPORATION,
an Oklahoma corporation
*By:
-----------------------------------------
By:
-----------------------------------------
* This certificate must be signed by the principal executive, financial or
accounting Officer (as well as one other Officer).
D-1
EXHIBIT E
TRANSFEREE LETTER OF REPRESENTATION
-----------------------------------
Gothic Energy Corporation
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▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Secretary
The Bank of New York
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Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate principal
amount of 14_% Senior Secured Discount Notes due 2006 (the "Securities") of
Gothic Energy Corporation (the "Company"), we confirm that:
(A) We have received a copy of the Offering Memorandum, dated April 21,
1998, relating to the Securities and such other information as we deem necessary
in order to make our investment decision.
(B) We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities prior
to the date which is two years after the later of the date of original issue and
the last date on which the Company or any affiliate or the Company was the owner
of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) for so
long as the Securities are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a Qualified Institutional
Buyer (as defined in Rule 144A) that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an "Accredited Investor"
(as defined in Rule 501(a) under the Securities Act) (an "Accredited Investor")
that is purchasing for his own account or for the account of such an Accredited
Investor for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, (e)
pursuant to the resale limitations provided by Rule 144 under the Securities Act
(if available), (f) outside the United States to a person who is not a U.S.
person in an offshore transaction meeting the requirements of Rule 904 of the
Securities Act, or (g) pursuant to any other
E-1
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and to compliance with any
applicable state securities law. The foregoing restrictions on sale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (d)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee which shall provide, among other things, that the
transferee is an Accredited Investor and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clauses (d), (e), (f) or (g)
above to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Company and the Trustee.
(C) We are an Accredited Investor or, if the transfer is of a beneficial
interest in the Global Security, a Qualified Institutional Buyer, in either case
purchasing for our own account or for the account of such an Accredited Investor
as to each of which we exercise sole investment discretion and we are acquiring
the Securities for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act and
we have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investments for an indefinite period.
(D) All of you are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
------------------------------------------
(Name of Purchaser)
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Date:
-------------------------------------
E-2
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:
---------------------
Address:
-------------------------
Taxpayer ID Number:
---------------
E-3
EXHIBIT F
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
_____________, ____
The Bank of New York, as Registrar
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
In connection with our proposed sale of certain 14_% Series [A/B] Senior
Secured Discount Notes due 2006 (the "Securities") of Gothic Energy Corporation,
an Oklahoma corporation (the "Company"), we represent that:
(i) the offer of the Securities was not made to a person in the
United States;
(ii) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S under the U.S. Securities Act of 1933, as applicable; and
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
-----
[Name]
By:
-------------------------------------
Name:
Title:
Address:
F-1
EXHIBIT G
FORM OF UNIT CERTIFICATE
[FACE OF SECURITY]
No. No. of Units:_________
CUSIP NO.________
GOTHIC ENERGY CORPORATION
UNIT CERTIFICATE
EVIDENCING UNITS CONSISTING OF
$1,000 PRINCIPAL AMOUNT OF 14_% SERIES A SENIOR SECURED DISCOUNT NOTES DUE 2006
AND 7.933 COMMON STOCK PURCHASE WARRANTS
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York ("DTC")), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
AND, PRIOR TO THE EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN
RULE 903 OF REGULATION S, WILL NOT OFFER OR SELL THESE SECURITIES IN THE UNITED
STATES OR TO A U.S. PERSON OR FOR THE ACCOUNT OF A U.S. PERSON WITHIN THE
MEANING OF RULE 902(o) OF REGULATION S, (2) AGREES THAT
--------------
/1/ This paragraph should be included only if the Security is issued in global
form.
G-1
IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS
COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION
TERMINATION DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT
(A) TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE PROVISIONS OF RULE
144A UNDER THE SECURITIES ACT, (C) TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A WRITTEN CERTIFICATION CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (COPIES OF WHICH MAY BE OBTAINED FROM THE TRUSTEE), PROVIDED THAT
CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT
TO THIS CLAUSE C PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD"
(WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT),
(D) OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN
TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE EXPIRATION OF THE "40-DAY
RESTRICTED PERIOD" DESCRIBED ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED FROM THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (E)
PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE
FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY
OR THE PROPERTY OF SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHICH THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A
QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION
TERMINATION DATE.
G-2
Gothic Energy Corporation, an Oklahoma corporation (the "Company"), hereby
certifies that ____________________________ is the registered owner of
___________ Units, each Unit consisting of (i) $1,000 original principal amount
of 14_% Series A Senior Secured Discount Notes Due 2006 of the Company (the
"Series A Securities") and (ii) 7.933 Common Stock Purchase Warrants (the
"Warrants") issued by the Company pursuant to that certain Warrant Agreement
dated April 21, 1998 between the Company and American Stock Transfer & Trust
Company, as Warrant Agent (the "Warrant Agreement"). This Unit Certificate is
issued upon the terms and conditions set forth in that certain Indenture dated
April 21, 1998 between the Company and The Bank of New York, as Trustee (the
"Indenture"). Capitalized terms used in this Unit Certificate and not otherwise
defined herein shall have the meanings ascribed to them in the Indenture.
The Series A Security and Warrants evidenced by this Unit Certificate
cannot be detached or traded separately until the occurrence of the Unit
Termination Date as set forth in the Indenture. After the Unit Termination
Date, this Unit Certificate shall constitute only a Series A Security in the
original principal amount of $1,000 multiplied by the number of Units evidenced
hereby. Registered holders of this Unit Certificate as of the close of the Unit
Termination Date shall be entitled to receive Warrant Certificates for 7.933
Warrants per Unit evidenced hereby issued pursuant to the Warrant Agreement.
The following provisions shall apply to, and constitute, the Series A
Securities evidenced by this Unit Certificate:
GOTHIC ENERGY CORPORATION
14_% SERIES A SENIOR SECURED DISCOUNT NOTE DUE 2006
Gothic Energy Corporation, an Oklahoma corporation, promises to pay to the
above referenced holder of this Unit Certificate or registered assigns the
principal sum of Dollars equal to $1,000.00 multiplied by the number of Units
evidenced by this Unit Certificate, on May 1, 2006.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is hereby made to the further provisions of this Series A
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
G-3
The following provisions shall apply to, and constitute, the Warrants
evidenced by this Unit Certificate:
GOTHIC ENERGY CORPORATION
WARRANTS TO PURCHASE COMMON SHARES
THIS CERTIFIES THAT, for value received, the registered holder of this Unit
Certificate, or registered assigns, is the registered owner of a number of
Warrants to Purchase Common Shares of Gothic Energy Corporation, an Oklahoma
corporation (the "Company," which term includes any successor thereto under the
Warrant Agreement) such number of Warrants being equal to 7.933 multiplied by
the number of Units evidenced by this Unit Certificate, and is entitled, subject
to and upon compliance with the provisions hereof and of the Warrant Agreement,
at such Holder's option, at any time when the Warrants evidenced hereby are
exercisable, to purchase from the Company one Warrant Share for each Warrant
evidenced hereby, at the purchase price of $2.40 per share (as adjusted from
time to time, the "Warrant Price"), payable in full at the time of purchase, the
number of Warrant Shares into which and the Warrant Price at which each Warrant
shall be exercisable, each being subject to adjustment as provided in Section 6
of the Warrant Agreement.
By compliance with certain procedures set forth in the Warrant Agreement,
the Holder of this Unit Certificate may exercise all or any whole number of the
Warrants evidenced hereby, on any Business Day from and after the Separation
Date (as defined in the Warrant Agreement) until 5:00 p.m., New York City time,
on May 1, 2006 (subject to earlier expiration pursuant to Section 5 of the
Warrant Agreement, the "Expiration Date") for the Warrant Shares purchasable
hereunder.
Reference is hereby made to the Warrant Agreement, a copy of which can be
obtained from American Stock Transfer & Trust Company, as Warrant Agent, for
further provisions related to the Warrants, which provisions are incorporated
herein by reference.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
[Seal] GOTHIC ENERGY CORPORATION
By:
-------------------------------------
By:
-------------------------------------
G-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the Unit
Certificates evidencing one of the 14_% Series A Senior Secured Discount Notes
due 2006 referred to in the within-mentioned Indenture.
Dated: ________________
THE BANK OF NEW YORK
By:
-------------------------------
Authorized Signatory
G-5
[REVERSE OF SECURITY]
GOTHIC ENERGY CORPORATION
OTHER PROVISIONS RELATING TO THE
14_% Series A Senior Secured Discount Note due 2006
The following provisions shall apply to the Series A Securities evidenced
by this Unit Certificate. Unless otherwise stated, for purposes of these
provisions, reference to "Security" or "Securities" herein shall include only
the Series A Securities and Series B Securities.
1. Interest. Gothic Energy Corporation, an Oklahoma corporation (the
"Company"), promises to pay interest on the principal amount of the Security
evidenced hereby at 14_% per annum and shall pay additional interest, if any,
payable pursuant to the Registration Rights Agreement referred to in the
Indenture. The Company will pay interest semiannually on May 1 and November 1
of each year (each an "Interest Payment Date"), commencing November 1, 2002, or
if any such day is not a Business Day, on the next succeeding Business Day.
Interest on the Securities will accrue from the most recent Interest Payment
Date on which interest has been paid or, if no interest has been paid, from May
1, 2002; provided, that if there is no existing Default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date (but after
May 1, 2002), interest shall accrue from such next succeeding Interest Payment
Date, except in the case of the original issuance of Securities, in which case
interest shall accrue from the date of authentication. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand
at a rate equal to the interest rate on the Securities then in effect; it shall
pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. All references herein to interest shall include
additional interest, if any, payable as Notes Liquidated Damages pursuant to the
Registration Rights Agreement.
2. Method of Payment. The Company will pay interest on the Series A
Securities to the persons who are registered holders of Securities at the close
of business on the record date immediately preceding the Interest Payment Date,
even if such Series A Securities are canceled after the record date and on or
before the Interest Payment Date. Holders must surrender Securities to the
Paying Agent to collect principal payments. The Company will pay principal of,
premium, if any, and interest on the Securities in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay such amounts by check payable in
such money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or co-
registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
4. Indenture. The Company issued the Series A Securities under an
Indenture, dated as of April 21, 1998 (the "Indenture"), between the Company and
the Trustee. Capitalized terms
G-6
herein are used as defined in the Indenture unless otherwise defined herein. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbb) as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Series A Securities are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a complete statement of such terms. The Securities are limited to
$60,000,000 aggregate principal amount.
5. Ranking and Guarantees. The Series A Securities are general senior
secured obligations of the Company. Under certain circumstances, the Company's
obligation to pay principal, premium, if any, and interest with respect to the
Series A Securities may be unconditionally guaranteed on a senior basis, jointly
and severally, by the Guarantors pursuant to Article X of the Indenture.
Certain limitations to the obligations of the Guarantors are set forth in
further detail in the Indenture.
6. Optional Redemption. The Securities will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after May 1, 2003 at the following redemption prices (expressed as percentages
of the principal amount) if redeemed during the twelve-month period commencing
on May 1 of the year set forth below, plus, in each case, accrued interest
thereon to the redemption date:
Year Percentage
---- ----------
2003............................. 107.063%
2004............................. 103.532%
2005............................. 100.00%
Notwithstanding the foregoing, at any time prior to May 1, 2003, the
Company may, at its option, redeem all or any portion of the Securities at the
Make-Whole Price plus accrued and unpaid interest thereon, if any, to the
redemption date.
In addition, in the event the Company consummates one or more Equity
Offerings on or prior to May 1, 2002, the Company may, in its sole discretion,
redeem up to 33-1/3% of the original aggregate principal amount of the
Securities with all or a portion of the aggregate net proceeds received by the
Company from any such Equity Offering or Equity Offerings, within 90 days of the
closing of any such Equity Offering, at a redemption price of 114.125% of the
Accreted Value of the Securities so redeemed, plus accrued and unpaid interest
on the Securities so redeemed to the redemption date; provided, however, that
following such redemption, at least 66-2/3% of the original aggregate principal
amount of the Securities remains outstanding.
Any redemption pursuant to this paragraph 6 shall be made pursuant to the
provisions of Sections 3.01 through 3.07 of the Indenture.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the redemption date will be payable to the
Holders of Unit Certificates evidencing such Securities of record at the close
of business on the relevant Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in
G-7
accordance with the Indenture shall cease to bear interest from and after the
redemption date. In the event of redemption or purchase of this Security
evidenced by this Unit Certificate in part only, a new Unit Certificate
evidencing the Security or Securities for the unredeemed or unpurchased portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.
The Securities do not have the benefit of any sinking fund obligations.
7. Notice of Redemption. Notice of redemption will be mailed to the
Holder's registered address at least 30 days but not more than 60 days before
the redemption date to each Holder of Unit Certificates evidencing Securities to
be redeemed. If less than all Securities are to be redeemed, the Trustee shall
select pro rata, by lot or in accordance with the rules of any securities
exchange the Securities to be redeemed in multiples of $1,000. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest ceases to accrue on Securities or portions of them
called for redemption (unless the Company shall default in the payment of the
redemption price or accrued interest).
8. Change of Control Offer. In the event of a Change of Control of the
Company, and subject to certain conditions and limitations provided in the
Indenture, the Company will be obligated to make an offer to purchase, not more
than 10 Business Days or less than 20 Business Days following the occurrence of
a Change of Control of the Company, all of the then outstanding Securities at a
purchase price equal to 101% of the principal amount thereof (or if such date of
purchase is prior to May 1, 2002, the Accreted Value thereof), together with
accrued and unpaid interest to the Change of Control Purchase Date, all as
provided in the Indenture.
9. Net Proceeds Offer. In the event of Asset Sales, under certain
circumstances, the Company will be obligated to make a Net Proceeds Offer to
purchase all or a specified portion of each Holder's Securities at a purchase
price equal to 100% of the principal amount of (or if such date of purchase is
prior to May 1, 2002, the Accreted Value of) the Securities, together with
accrued and unpaid interest to the Net Proceeds Payment Date.
10. Restrictive Covenants. The Indenture imposes certain limitations on,
among other things, the ability of the Company to merge or consolidate with any
other Person or sell, lease or otherwise transfer all or substantially all of
its properties or assets, the ability of the Company or the Restricted
Subsidiaries to dispose of certain assets, to pay dividends and make certain
other distributions and payments, to make certain investments or redeem, retire,
repurchase or acquire for value shares of Capital Stock, to incur additional
Indebtedness or incur encumbrances against certain property and to enter into
certain transactions with Affiliates, all subject to certain limitations
described in the Indenture.
11. Defaults and Remedies. As set forth in the Indenture, an Event of
Default is generally (i) failure to pay principal upon maturity, redemption or
otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer), (ii) default for 30 days in payment of interest on any of the
Securities, (iii) default in the performance of agreements relating to mergers,
consolidations and sales of all or substantially all assets or the failure to
make or consummate a Change of Control Offer or a Net Proceeds Offer, (iv)
failure for 30 days after notice to comply with
G-8
any other covenants in the Indenture or the Securities; (v) certain payment
defaults under, the acceleration prior to the maturity of, and the exercise of
certain enforcement rights with respect to, certain Indebtedness of the Company,
any Guarantor or any other Subsidiary (other than an Unrestricted Subsidiary
provided that neither the Company nor any Restricted Subsidiary is liable,
directly or indirectly, for such Indebtedness); (vi) the failure of any
Guarantee to be in full force and effect or otherwise to be enforceable (except
as permitted by the Indenture); (vii) certain events giving rise to material
ERISA liability; (viii) certain final judgments against the Company, any
Guarantor or any other Subsidiary (other than an Unrestricted Subsidiary
provided that neither the Company nor any Guarantor is liable, directly or
indirectly, for such judgment) in an aggregate amount of $10.0 million or more
which remain unsatisfied and either become subject to commencement or
enforcement proceedings or remain unstayed for a period of 60 days; (ix) certain
events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary; (x) the Pledge Agreement ceases to give the Trustee the
Lien purported to be created thereby or any default occurs thereunder and (xi)
GPC shall cease for any reason to be a direct Wholly Owned Subsidiary of the
Company. If any Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in aggregate principal amount of the Outstanding
Securities may declare the principal amount (or, if prior to May 1, 2002, the
Accreted Value) of all the Securities to be due and payable immediately, except
that (i) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary, the principal amount (or, if prior to May 1, 2002, the Accreted
Value) of the Securities will become due and payable immediately without further
action or notice, and (ii) in the case of an Event of Default which relates to
certain payment defaults, acceleration or the exercise of certain enforcement
rights with respect to certain Indebtedness, any acceleration of the Securities
will be automatically rescinded if any such Indebtedness is repaid or if the
default relating to such Indebtedness is cured or waived and if the holders
thereof have accelerated such Indebtedness then such holders have rescinded
their declaration of acceleration or if in certain circumstances the proceedings
or enforcement action with respect to the Indebtedness that is the subject of
such Event of Default is terminated or rescinded. No Holder may pursue any
remedy under the Indenture unless the Trustee shall have failed to act after
notice of an Event of Default and written request by Holders of at least 25% in
principal amount of the Outstanding Securities, and the offer to the Trustee of
indemnity reasonably satisfactory to it; however, such provision does not affect
the right to ▇▇▇ for enforcement of any overdue payment on a Security by the
Holder thereof. Subject to certain limitations, Holders of a majority in
principal amount of the Outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing default (except default in payment of principal, premium or
interest) if it determines in good faith that, withholding the notice is in the
interest of the Holders. The Company is required to file annual reports with the
Trustee as to the absence or existence of defaults.
12. Defeasance. The Indenture contains provisions for defeasance at any
time of (i) the entire indebtedness of the Company on this Security and (ii)
certain restrictive covenants and the related Defaults and Events of Default,
upon compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
13. Amendment, Modification and Waiver. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and
G-9
obligations of the Company and the Guarantor and the rights of the Holders under
the Indenture at any time by the Company, the Guarantor and the Trustee with the
consent of the Holders of one-half in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security. Without the consent of any Holder, the
Company, the Guarantor and the Trustee may amend or supplement the Indenture or
the Securities to cure any ambiguity, defect or inconsistency and to make
certain other specified changes and other changes that do not materially
adversely affect the rights of any Holder.
14. Obligation Absolute and Unconditional. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any, on) and interest on this Security at
the times, place, and rate, and in the coin or currency, herein prescribed.
15. Registration and Transfer. As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Unit Certificate
is registerable on the Security register of the Company, upon surrender of this
Unit Certificate for registration of transfer at the office or agency of the
Company maintained for such purpose in the City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
16. Form. Prior to the Unit Termination Date, the Securities shall be
evidenced by Unit Certificates issued in either global form or in definitive
registered form, without coupons in whole Unit denominations. After the Unit
Termination Date, the Securities shall be issued either in global form or in
definitive registered form, without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, (i) the Unit Certificates are exchangeable for
multiple Unit Certificates issued for whole Units for the aggregate number of
Units evidenced by the exchanged Unit Certificate and (ii) after the Unit
Termination Date the Securities are exchangeable for a like aggregate principal
amount of Securities of a different authorized denomination, as requested by the
Holder surrendering the same.
17. Taxes. No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
18. No Recourse Against Others. A director, officer, incorporator, or
stockholder of the Company or any Guarantor, as such, shall not have any
personal liability under this Security or the
G-10
Indenture by reason of his or its status as such director, officer, incorporator
or stockholder. Each Holder, by accepting this Security with the notation of
Guarantee endorsed hereon, waives and releases all such liability. Such waiver
and release are part of the consideration for the issuance of this Security with
the notation of Guarantee endorsed hereon.
19. Registered Owners. Prior to the time of due presentment of this Unit
Certificate for registration of transfer, the Company, the Guarantor, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Unit Certificate is registered as the owner of Series A
Securities and Warrants evidenced hereby for all purposes, whether or not this
Security is overdue, and neither the Company, the Guarantors, the Trustee nor
any agent shall be affected by notice to the contrary.
20. Definitions. Except as otherwise provided herein, all terms used in
this Unit Certificate which are defined in the Indenture shall have the meanings
assigned to them in the Indenture. The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture. Requests may be
made to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Unit Certificates as a convenience to the
Holders thereof. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identifying information printed hereon.
22. Governing Law. This Unit Certificate and the Securities comprising
the Units shall be governed by and construed in accordance with the laws of the
State of New York, without regard to applicable principles of conflicts of laws
to the extent that the application of the law of another jurisdiction would be
required thereby.
23. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor corporation will be released from those obligations.
24. Trustee Dealings with Company and Guarantors. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Guarantors or
their respective Subsidiaries or Affiliates with the same rights it would have
if it were not Trustee.
G-11
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________ as agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him or her.
--------------------------------------------------------------------------------
Your Signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Security)
Date:
----------------
Signature Guarantee:
-----------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
G-12
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.11 [_] Section 4.17 [_]
If you want to have only part of this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, state the amount in
integral multiples of $1,000:
$
-------------
Date: Signature:
----------------- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:
-------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
G-13
SCHEDULE OF EXCHANGES OF GLOBAL SECURITY FOR
DEFINITIVE SECURITY/3/
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL AUTHORIZED
DECREASE IN INCREASE IN SECURITY SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT FOLLOWING SUCH TRUSTEE OR
OF THIS GLOBAL OF THIS GLOBAL DECREASE (OR SECURITIES
DATE OF EXCHANGE SECURITY SECURITY INCREASE) CUSTODIAN
---------------- ------------------ ---------------- ---------------- -----------
------------------
/3/ This should be included only if the Security is issued in global form.
G-14
FORM OF NOTATION ON UNIT CERTIFICATE
RELATING TO SUBSIDIARY GUARANTEE
Subject to the limitations and provisions set forth in the Indenture, the
Guarantors (as defined in the Indenture referred to in the Security upon which
this notation is endorsed and each hereinafter referred to as a "Guarantor,"
which term includes any successor or additional Guarantor under the Indenture)
have, jointly and severally, unconditionally guaranteed (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Series A
Securities and Series B Securities, and all other amounts payable under the
Indenture and the Series A Securities and Series B Securities by the Company
whether at maturity, acceleration, redemption, repurchase or otherwise, (b) the
due and punctual payment of interest on the overdue principal of, premium, if
any, and interest on the Series A Securities and Series B Securities, to the
extent lawful, (c) the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms set
forth in the Indenture, and (d) in case of any extension of time of payment or
renewal of any Series A Securities and Series B Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Capitalized terms used herein shall
have the meanings assigned to them in the Indenture unless otherwise indicated.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
No stockholder, officer, director or incorporator, as such, past, present
or future, of the Guarantors shall have any personal liability under the
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.
Any Guarantor may be released from its Guarantee upon the terms and subject
to the conditions provided in the Indenture.
All terms used in this notation of Guarantee which are defined in the
Indenture referred to in this Security upon which this notation of Guarantee is
endorsed shall have the meanings assigned to them in such Indenture.
The Guarantee shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall
G-15
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
[NAME OF EACH SUBSIDIARY
GUARANTOR]
Attest: By:
----------------------- -----------------------------------
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 14_% Series A Senior Secured
Discount Notes due 2006 evidenced by this Unit Certificate referred to in the
within-mentioned Indenture.
Dated:
------------------------
THE BANK OF NEW YORK
Trustee
By:
-----------------------------------
Authorized Signatory
G-16
EXHIBIT H
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
April 21, 1998, by Gothic Energy Corporation, an Oklahoma corporation (the
"Pledgor"), having its principal office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in favor of The Bank of New York, as collateral agent
(the "Collateral Agent"), having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West,
New York, New York 10286, for the trustee (the "Trustee") under the Indenture
(as defined below). Capitalized terms issued and not defined herein shall have
the meanings given to such terms in the Indenture.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of all of the issued
and outstanding shares of capital stock set forth on Schedule I hereto (the
"Pledged Shares") of Gothic Production Corporation, an Oklahoma corporation and
a direct Wholly Owned Subsidiary of Pledgor ("GPC"); and
WHEREAS, the Pledgor and The Bank of New York, as trustee, have entered
into that certain indenture dated as of April 21, 1998 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"Indenture"); and
WHEREAS, the terms of the Indenture requires that the Pledgor (i) pledge to
the Collateral Agent for the benefit of the Trustee, and grant to the Collateral
Agent for the benefit of the Trustee a security interest in, the Pledged
Collateral (as defined herein) and (ii) execute and deliver a pledge agreement
in order to secure the payment and performance by the Pledgor of all of the
Obligations of the Pledgor under the Indenture and the Securities (the
"Obligations").
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to induce
those who propose to become the Holders of the Securities to purchase such
Securities, the Pledgor and the Collateral Agent hereby enter into this
Agreement, and the Pledgor hereby agrees with the Collateral Agent for its
benefit and the benefit of such Trustee as follows:
SECTION 1. Pledge. Pledgor hereby pledges to the Collateral Agent for its
benefit and for the benefit of the Trustee, and grants to the Collateral Agent
for the benefit of the Trustee, a continuing first priority security interest in
all of its right, title and interest in the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares or any of the foregoing; and
(b) all additional shares of, and all securities convertible into and all
warrants, options or other rights to purchase, Capital Stock of GPC from time to
time acquired by the Pledgor in any manner, and the certificates representing
such additional shares and Capital Stock (any such additional shares and Capital
Stock and other items shall constitute part of the Pledged Shares under and as
defined in this Agreement), and all products and proceeds of any of the
foregoing, including, without limitation, all dividends, cash, options,
warrants, rights, instruments, subscriptions, and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the foregoing.
SECTION 2. Security for Obligations. This Agreement secures the prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration, by repurchase or otherwise) of all Obligations of the Pledgor
under the Indenture and the Securities (including, without limitation, the
Accreted Value of and premium, if any, on the Securities and any other
Obligations accruing after the date of any filing by the Pledgor of any petition
in bankruptcy or the commencement of any bankruptcy, insolvency or similar
proceeding with respect to the Pledgor).
SECTION 3. Delivery of Pledged Collateral. Pledgor hereby agrees that all
certificates or instruments representing or evidencing the Pledged Collateral
shall be immediately delivered to and held at all times by the Collateral Agent
pursuant hereto at the Collateral Agent's office in the State of New York and
shall be in suitable form for transfer by delivery, or issued in the name of
Pledgor and accompanied by instruments of transfer or assignment duly executed
in blank and undated, and in either case having attached thereto all requisite
Federal or state stock transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent. All securities, whether certificated,
uncertificated or book entry, if any, representing or evidencing the Pledged
Collateral shall be registered in the name of the Collateral Agent or any of its
nominees by book entry or in any other appropriate manner that is acceptable to
the Collateral Agent, so as to properly identify the interest of the Collateral
Agent therein. In addition, the Collateral Agent shall have the right, at any
time following the occurrence of an Event of Default (as defined in the
Securities or in the Indenture), in its discretion to transfer to or to register
in the name of the Collateral Agent or any of its nominees any or all of the
Pledged Collateral. The Collateral Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing all or any
portion of the Pledged Collateral for certificates or instruments of smaller or
larger denominations in the same aggregate amount.
SECTION 4. Representations and Warranties. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
Indenture. The Pledgor further represents and warrants, to the Collateral Agent
and for the benefit of the Holders, that:
(a) The execution, delivery and performance by the Pledgor of this
Agreement are within the Pledgor's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or bylaws of the Pledgor or of any agreement,
judgment, injunction,
order, decree or other instrument binding upon the Pledgor, or result in the
creation or imposition of any Lien on any assets of the Pledgor, other than the
Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable.
(c) The Pledged Shares constitute all of the authorized, issued and
outstanding Capital Stock of GPC and constitute all of the Capital Stock of GPC
beneficially owned by the Pledgor and there are no other instruments,
certificates, securities or other writings or chattel paper, evidencing or
representing any equity interest in GPC.
(d) The Pledgor is the legal, record and beneficial owner of the Pledged
Collateral, free and clear of any Lien or claims of any Person except for the
security interest created by this Agreement.
(e) The Pledgor has full power and authority to enter into this Agreement
and has the right to vote, pledge and grant a security interest in the Pledged
Collateral as provided by this Agreement.
(f) This Agreement has been duly executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms.
(g) Upon the delivery to the Collateral Agent of the Pledged Collateral and
(as to certain proceeds therefrom) the filing of Uniform Commercial Code (the
"UCC") financing statements, the pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Obligations for the benefit
of the Collateral Agent and the Holders, and enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of the
Pledged Collateral from the Pledgor.
(h) No consent of any other Person and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by the Pledgor of the
Pledged Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by laws affecting
the offering and sale of securities).
(i) No litigation, investigation or proceeding of or before any arbitrator
governmental authority is pending or, to the best knowledge of the Pledgor,
threatened by or against the Pledgor or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.
(j) The pledge of the Pledged Collateral pursuant to this Agreement is not
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of
Governors of the Federal Reserve System or other regulatory agency (including,
without limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System).
(k) All information set forth herein relating to the Pledged Collateral is
accurate and complete in all material respects.
SECTION 5. Further Assurance. Pledgor will at all times cause the
security interests granted pursuant to this Agreement to constitute valid
perfected first priority security interests in the Pledged Collateral,
enforceable as such against all creditors of Pledgor and (except as otherwise
specifically provided herein) any Persons purporting to purchase any Pledged
Collateral from Pledgor. The Pledgor will, promptly upon request by the
Collateral Agent, execute and deliver or cause to be executed and delivered, or
use its best efforts to procure, all stock powers, proxies, tax stamps,
assignments, instruments and other documents, all in form and substance
satisfactory to the Collateral Agent, deliver any instruments to the Collateral
Agent and take any other actions that are necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect, continue the perfection
of, or protect the first priority of the Collateral Agent's security interest
in, the Pledged Collateral, to protect the Pledged Collateral against the
rights, claims, or interests of third persons, to enable the Collateral Agent to
exercise or enforce its rights and remedies hereunder, or otherwise to effect
the purposes of this Agreement. The Pledgor also hereby authorizes the
Collateral Agent to file any financing or continuation statements with respect
to the Pledged Collateral without the signature of the Pledgor to the extent
permitted by applicable law. The Pledgor will pay all costs incurred in
connection with any of the foregoing.
SECTION 6. Voting Rights Dividends, Etc.
(a) So long as no Event of Default shall have occurred and be continuing
under the Indenture, the Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
Indenture; provided, however, that the Pledgor shall not exercise or shall
refrain from exercising any such right if such action would have a material
adverse effect on the value of the Pledged Collateral or any part thereof or be
inconsistent with or violate any provisions of this Agreement or the Indenture.
(b) So long as no Event of Default shall have occurred and be continuing
under the Indenture, and subject to the other terms and conditions of the
Indenture, the Pledgor shall be entitled to receive, and to utilize (subject to
the provisions of the Indenture) free and clear of the Lien of this Agreement,
all regular and ordinary cash dividends paid from time to time in respect of the
Pledged Shares; provided, however, that the Pledgor will be entitled to receive
dividends from GPC sufficient to permit the Pledgor to satisfy its and GPC's
ordinary course operating expenses whether or not an Event of Default shall have
occurred; provided further, however, that the Pledgor's right to receive and
utilize such dividends shall be subject to the terms and conditions of any Bank
Credit Facility and the Senior Secured Note Indenture.
(c) Any and all (i) dividends, other distributions, interest and principal
payments paid or payable in the form of instruments and/or other property (other
than cash dividends permitted
under Section 6(b) hereof) received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral, (ii) dividends and other
distributions paid or payable in cash in respect of any Pledged Shares in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-surplus, and (iii) cash
paid, payable or otherwise distributed in redemption of, or in exchange for, any
Pledged Collateral, shall in each case be forthwith delivered to the Collateral
Agent to hold as Pledged Collateral and shall, if received by the Pledgor, be
received in trust for the benefit of the Collateral Agent and the Holders, be
segregated from the other property and funds of the Pledgor and be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsements).
(d) The Collateral Agent shall execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
Sections 6(a) and 6(b) above.
(e) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, (i) all rights of the Pledgor to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 6(a) shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which, to the extent permitted by law, shall thereupon
have the sole right to exercise such voting and other consensual rights, and
(ii) all cash dividends and other distributions payable in respect of the
Pledged Collateral shall be paid to the Collateral Agent and the Pledgor's right
to receive such cash payments pursuant to Section 6(b) hereof shall immediately
cease, except as otherwise permitted pursuant to the provisions of Section 6(b)
hereof.
(f) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, the Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Collateral Agent may
reasonably request for the purpose of enabling the Collateral Agent to exercise
the voting and other rights that it is entitled to exercise pursuant to Section
6(e) above.
(g) All payments of interest, principal or premium and all dividends and
other distributions that are received by the Pledgor contrary to the provisions
of this Section 6 shall be received in trust for the benefit of the Collateral
Agent and the Holders, shall be segregated from the other property or funds of
the Pledgor and shall be forthwith delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsements).
SECTION 7. Covenants. The Pledgor hereby covenants and agrees with the
Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture. The Pledgor further covenants and agrees, from and after the
date of this Agreement and until the Obligations have been paid in full, as
follows:
(a) The Pledgor agrees that it will not (i) sell, assign, transfer, convey
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral without the
prior written consent of the Collateral Agent, (ii) create or permit to exist
any Lien upon or with respect to any of the Pledged Collateral, except for the
security interest granted under this Agreement, and at all times will be the
sole beneficial owner of the Pledged Collateral, (iii) enter into any agreement
or understanding that purports to or that may restrict or inhibit the Collateral
Agent's rights or remedies hereunder, including, without limitation, the
Collateral Agent's right to sell or otherwise dispose of the Pledged Collateral,
(iv) take any action, or permit the holding of any action by GPC, with respect
to the Pledged Collateral the taking of which would result in a material
impairment of the economic value of the Pledged Collateral as Collateral or a
violation of the Indenture or this Agreement, including, without limitation, the
issuance by GPC of any additional Capital Stock or promissory notes or the
issuance by GPC of any Indebtedness, in each case to Persons other than the
Pledgor, (v) permit GPC to merge or consolidate with or into another person or
entity or sell or transfer all or substantially all of its assets to another
person or entity, except as permitted by the Indenture as in effect on the Issue
Date, or (vi) fail to pay or discharge any tax, assessment or levy of any nature
not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment with regard to the Pledged Collateral.
(b) The Pledgor agrees that immediately upon becoming the beneficial owner
of any additional shares of Capital Stock, notes, or other securities of GPC
(including as a result of the merger or consolidation of GPC with or into
another entity) it will pledge and deliver to the Collateral Agent for its
benefit and the ratable benefit of the Holders and grant to the Collateral Agent
for its benefit and the ratable benefit of the Holders, a continuing first
priority security interest in such shares, notes, or other securities (as well
as instruments of transfer or assignment duly executed in blank and undated and
any necessary stock transfer tax stamps, all in form and substance satisfactory
to the Collateral Agent).
SECTION 8. Power of Attorney. In addition to all of the powers granted to
the Collateral Agent pursuant to Section 11.06 of the Indenture, the Pledgor
hereby appoints and constitutes the Collateral Agent as the Pledgor's attorney-
in-fact to exercise all of the following powers upon and at any time after the
occurrence of an Event of Default: (i) collection of proceeds of any Pledged
Collateral; (ii) conveyance of any item of Pledged Collateral to any purchaser
thereof; (iii) giving of any notices or recording of any Liens under Section 5
hereof; (iv) making of any payments or taking any acts under Section 9 hereof
and (v) paying or discharging taxes or Liens levied or placed upon or threatened
against the Pledged Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Collateral Agent in its
sole discretion, and such payments made by the Collateral Agent to become the
obligations of the Pledgor to the Collateral Agent, due and payable immediately
without demand. The Collateral Agent's authority hereunder shall include,
without limitation, the authority to endorse and negotiate, for the Collateral
Agent's own account, any checks or instruments in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document,
transfer title to any item of Pledged Collateral, sign the Pledgor's name on all
financing statements or any other documents deemed necessary or appropriate to
preserve, protect or perfect the security interest in the Pledged Collateral and
to file the same, prepare, file and sign the Pledgor's name on any notice of
Lien, and prepare, file and sign the Pledgor's name on a proof of claim in
bankruptcy or similar document against any creditor of the Pledgor, and to take
any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
SECTION 9. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 14 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being given in order to
preserve and protect the Collateral Agent's and the Holders' security interest
in and to the Pledged Collateral granted hereby and shall not be interpreted to,
and shall not, impose any duties on the Collateral Agent in connection
therewith. The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if the Pledged Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, it being understood that
the Collateral Agent shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 11. Subsequent Changes Affecting Collateral. The Pledgor
represents to the Collateral Agent and the Holders that the Pledgor has made its
own arrangements for keeping informed of changes or potential changes affecting
the Pledged Collateral (including, but not limited to, rights to convert, rights
to subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that the Collateral Agent and
the Holders shall have no responsibility or liability for informing the Pledgor
of any such changes or potential changes or for taking any action or omitting to
take any action with respect thereto. The Pledgor covenants that it will not,
without the prior written consent of the Collateral Agent, vote to enable, or
take any other action to permit, GPC to issue any Capital Stock or other
securities or to sell or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interests
granted under this Agreement. The Pledgor will defend the right, title and
interest of the Collateral Agent and the Holders in and to the Pledged
Collateral against the claims and demands of all Persons.
SECTION 12. Remedies upon Default.
(a) If any Event of Default shall have occurred and be continuing under the
Indenture, the Collateral Agent and the Holders shall have, in addition to all
other rights given by law or by this Agreement or the Indenture, all of the
rights and remedies with respect to the Pledged Collateral of a secured party
under the UCC as in effect in the State of New York at that time. The
Collateral Agent may, without notice and at its option, transfer or register,
and the Pledgor shall register or cause to be registered upon request therefor
by the Collateral Agent, the Pledged Collateral or any part thereof on the books
of GPC into the name of the Collateral Agent or the Collateral Agent's
nominee(s), with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, with respect to any
Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the Collateral Agent may sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Collateral Agent may
deem best, for cash or on credit or for future delivery, without assumption of
any credit risk. The purchaser of any or all Pledged Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever. Unless any of the Pledged Collateral threatens to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent will give Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial institutions
disposing of property similar to the Pledged Collateral shall be deemed to be
commercially reasonable. Any requirements of reasonable notice shall be met if
such notice is mailed to the Pledgor as provided below in Section 18(a), at
least ten days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived by the Pledgor. The Collateral Agent or any Holder
may, in its own name or in the name of a designee or nominee, buy any of the
Pledged Collateral at any public sale and, if permitted by applicable law, at
any private sale. All expenses (including court costs and reasonable attorneys'
fees and disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or other
disposition of the Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its right to sell
any or all of the Pledged Shares pursuant to Section 12(a) above, and if in the
opinion of counsel for the Collateral Agent it is necessary, or if in the
opinion of the Collateral Agent it is advisable, to have the Pledged Shares or
that portion thereof to be sold, registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), Pledgor will cause
GPC to (i) execute and deliver, and cause its directors and officers to execute
and deliver, all at GPC's expense, all such instruments and documents, and to do
or cause to be done all such other acts and things as may be necessary or, in
the opinion of the Collateral Agent, advisable to register such Pledged Shares
under the provisions of the Securities Act, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of 180 days from the date of the first public offering of
such Pledged Shares, or that portion thereof to be sold and (iii) make all
amendments thereto and/or to the related prospectus that, in the opinion of the
Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Pledgor agrees to cause
GPC to comply with the provisions of the securities or "Blue Sky" laws of any
jurisdiction that the Collateral Agent shall designate for the sale of the
Pledged Shares and to make available to GPC's security holders, as soon as
practicable, an earnings statement (which need not be audited) that will satisfy
the provisions of Section 11(a) of the Securities Act. The Pledgor will cause
GPC to furnish to the Collateral Agent such number of copies as the Collateral
Agent may reasonably request of each preliminary and final prospectus, to notify
the Collateral Agent promptly of the happening of any event as a result of which
any then effective prospectus includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements
therein not misleading in the light of then existing circumstances, and to cause
the Collateral Agent to be furnished with such number of copies as the
Collateral Agent may request of such supplement to or amendment of such
prospectus. The Pledgor will cause GPC, to the extent permitted by law, to
indemnify, defend and hold harmless the Collateral Agent and the Holders (and
their respective agents and controlling persons) from and against all losses,
liabilities, expenses or claims (including reasonable legal expenses and the
reasonable costs of investigation) that the Collateral Agent or the Holders (and
their respective agents and controlling persons) may incur under the Securities
Act or otherwise, insofar as such losses, liabilities, expenses or claims arise
out of or are based upon any alleged untrue statement of a material fact
contained in such registration statement (or any amendment thereto) or in any
preliminary or final prospectus (or any amendment or supplement thereto), or
arise out of or are based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such losses, liabilities, expenses or
claims arise solely out of or are based upon any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of the Collateral Agent. Pledgor will cause GPC to bear
all costs and expenses of carrying out its obligations hereunder.
(c) In view of the fact that Federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after an Event of Default, Pledgor agrees that upon the occurrence
or existence of any Event of Default, the Collateral Agent may, from time to
time, attempt to sell all or any part of the Pledged Collateral by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors who might be interested in purchasing the Pledged Collateral. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit GPC to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if GPC agrees to do so.
(d) The Pledgor further agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Collateral pursuant to this Section 12 valid and
binding and in compliance with any and all other applicable requirements of law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section 12 will cause irreparable injury to the Collateral Agent and the
Holders, that the Collateral Agent and the Holders have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 12 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Indenture.
(e) If the Collateral Agent deems it appropriate, the Collateral Agent
shall retain an investment bank to perform, or assist it in performing the
obligations set forth in Sections 12(b) and
12(c) hereof, whose usual and customary fees and expenses shall be paid by the
Pledgor in accordance with Section 14 hereof.
SECTION 13. Irrevocable Authorization and Instruction to GPC. The
Pledgor, will and hereby, authorizes and instructs GPC to comply with any
instruction received by GPC from the Collateral Agent that (i) states that an
Event of Default has occurred and (ii) is otherwise in accordance with the terms
of this Agreement, without any other or further instructions from the Pledgor,
and the Pledgor agrees that GPC shall be fully protected in so complying.
SECTION 14. Fees and Expenses. The Pledgor will upon demand pay to the
Collateral Agent the amount of any and all reasonable fees and expenses
(including, without limitation, the reasonable fees and disbursements of its
counsel, of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by the Collateral Agent) that the
Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders
hereunder, or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 15. Obligations Absolute. All rights of the Collateral Agent and
the Holders and the security interests created hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforce ability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense avail
able to, or a discharge of, the Pledgor in respect of the Obligations or of this
Agreement.
SECTION 16. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default under the Indenture, the proceeds of any sale
of, or other realization upon (other than the realization described in Section
6(b), in which case funds may be applied as permitted by such Section), all or
any part of the Pledged Collateral and any cash held shall be applied by the
Collateral Agent in the following order of priorities:
FIRST, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all reasonable expenses, liabilities
and advances incurred or made by the Collateral Agent in connection therewith,
and any other unreimbursed fees and expenses for which the Collateral Agent is
to be reimbursed pursuant to Section 14 hereof;
SECOND, to the ratable payment (based on the Accreted Value of Securities
deemed by the Indenture to be outstanding for purposes of waivers or consents at
the time of distribution) of unpaid Accreted Value of, and premium, if any, on
such outstanding Securities;
THIRD, to the ratable payment (based on the principal amount of Securities
deemed by the Indenture to be outstanding at the time of distribution) of all
other Obligations, until all Obligations shall have been paid in full; and
FINALLY, to payment to the Pledgor or its successors or assigns, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 17. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Pledged Collateral (whether now owned or
hereafter acquired) is in the form of an uncertificated security, the Pledgor
shall promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). The Pledgor further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Collateral
promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
(a) Notices. All notices, approvals, consents or other communications
required or desired to be given hereunder shall be in the form and manner as set
forth in Section 12.02 of the Indenture, and delivered to the addresses set
forth in such Section.
(b) Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Pledgor to the Collateral Agent to take any action or omit
to take any action under this Agreement, the Pledgor shall deliver to the
Collateral Agent an Officer's Certificate and/or an Opinion of Counsel in
accordance with the requirements of Section 12.04 of the Indenture.
(c) Adverse Interpretation of Other Agreements. This Agreement may not be
used to interpret another pledge, security or debt agreement of the Pledgor, GPC
or any subsidiary thereof. No such pledge, security or debt agreement may be
used to interpret this Agreement.
(d) Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
in that jurisdiction only such clause or provision, or part
thereof, and shall not in any manner affect such clause or provision in any
other jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
(e) No Recourse Against Others. No director, officer, employee,
stockholder or affiliate, as such, of the Pledgor or GPC shall have any
liability for any obligations of the Pledgor under this Agreement or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder, 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.
(f) Headings. The headings of the Articles and Sections of this Agreement
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.
(g) Counterpart Originals. This Agreement may be signed in two or more
counterparts. Each signed copy shall be an original, but all of them together
represent one and the same agreement. Each counterpart may be executed and
delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
(h) Benefits of Agreement. Nothing in this Agreement, express or implied,
shall give to any Person, other that the parties hereto and their successors
hereunder, and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Agreement.
(i) Amendments, Waivers and Consents. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the Pledgor from
any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture, necessary for
amendments or waivers of, or consents to any departure by the Pledgor from any
provision of the Indenture, as applicable, and neither the Collateral Agent nor
any Holder shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Collateral Agent or any Holder to exercise,
or delay in exercising, any right, power or privilege hereunder shall not
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Collateral
Agent or any Holder of Securities of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent or such Holder of Securities would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
(j) Interpretation of Agreement. Time is of the essence in each provision
of this Agreement of which time is an element. All terms not defined herein or
in any of the Indentures shall have the meaning set forth in the applicable UCC,
except where the context otherwise requires. To the extent a term or provision
of this Agreement conflicts with the Indenture and is not dealt with herein with
more specificity, the Indenture shall control with respect to the subject matter
of such term or provision. Acceptance of or acquiescence in a course of
performance rendered under this
Agreement shall not be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
(k) Continuance Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) remain in
full force and effect until the payment in full of all the Obligations and all
the fees and expenses owing to the Collateral Agent, (ii) be binding upon the
Pledgor, its successors and assigns, and (iii) inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent, the holders and their respective successors and assigns.
(l) Reinstatement. This Agreement shall continue to be effective or be
reinstated if at any time any amount received by the Collateral Agent or any
Holder of Securities in respect of the Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any Holder of
Securities upon the insolvency, bankruptcy dissolution, liquidation or
reorganization of the Pledgor or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for the Pledgor or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.
(m) Survival of Provisions. All representations, warranties and covenants
of the Pledgor contained herein shall survive the execution and delivery of this
Agreement, and shall terminate only upon the full and final payment and
performance by the Pledgor of the Obligations.
(n) Waivers. The Pledgor waives presentment and demand for payment of any
of the Obligations, protest and notice of dishonor or default with respect to
any of the Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
(o) Authority of the Collateral Agent.
(i) The Collateral Agent shall have and be entitled to exercise all
powers hereunder that are specifically granted to the Collateral Agent by
the terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or
in connection with the Pledged Collateral by or through agents or employees
and shall be entitled to retain counsel and to act in reliance upon the
advice of counsel concerning all such matters. Neither the Collateral
Agent nor any director, officer, employee, attorney or agent of the
Collateral Agent shall be responsible for the validity, effectiveness or
sufficiency hereof or of any document or security furnished pursuant
hereto. The Collateral Agent and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and
to have been signed or sent by the proper person or persons. The Pledgor
agrees to indemnify and hold harmless the Collateral Agent, the Holders and
any other Person from and against any and all costs, expenses (including
the reasonable fees and disbursements of counsel (including, the allocated
costs of inside counsel)), claims and liabilities incurred by the
Collateral Agent, the Holders or such Person hereunder, unless
such claim or liability shall be due to willful misconduct or gross
negligence on the part of the Collateral Agent, the Holders or such Person.
(ii) The Pledgor acknowledges that the rights and responsibilities of
the Collateral Agent under this Agreement with respect to any action taken
by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Collateral Agent and the Holders, be governed by the Indenture
and by such other Agreements with respect thereto as may exist from time to
time among them, but, as between the Collateral Agent and the Pledgor, the
Collateral Agent shall be conclusively presumed to be acting as agent for
the Holders with full and valid authority so to act or refrain from acting,
and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.
(p) Resignation or Removal of the Collateral Agent. Until such time as the
obligations shall have been paid in full, the Collateral Agent may at any time,
by giving written notice to the Pledgor and Holders, resign and be discharged of
the responsibilities hereby created, such resignation to become effective upon
(i) the appointment of a successor Collateral Agent and (ii) the acceptance of
such appointment by such successor Collateral Agent. As promptly as practicable
after the giving of any such notice, the Holders shall appoint a successor
Collateral Agent, which successor Collateral Agent shall be reasonably
acceptable to the Pledgor. If no successor Collateral Agent shall be appointed
and shall have accepted such appointment within 90 days after the Collateral
Agent gives the aforesaid notice of resignation, the Collateral Agent may apply
to any court of competent jurisdiction to appoint a successor Collateral Agent
to act until such time, if any, as a successor shall have been appointed as
provided in this Section 18(p). Any successor so appointed by such court shall
immediately and without further act be superseded by any successor Collateral
Agent appointed by the Holders, as provided in this Section 18(p).
Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising, or relating to events occurring,
before its resignation or removal.
(q) Release of Pledged Collateral; Termination of Agreement.
(i) Subject to the provisions of Section 18(l) hereof, this Agreement
shall terminate upon the earlier of (i) full and final payment and
performance of the Obligations (and upon receipt by the Collateral Agent of
the Pledgor's written certification that all such Obligations have been
satisfied) and payment in full of all fees and expenses owing by the
Pledgor to the Collateral Agent or (ii) the day after the Legal Defeasance
of all of the Obligations pursuant to Section 8.02 of the Indenture (other
than those surviving Obligations specified therein). At such time, the
Collateral Agent shall, at the request of the Pledgor, reassign and
redeliver to the Pledgor all of the Pledged Collateral hereunder that has
not been sold, disposed of, retained or applied by the Collateral Agent in
accordance with the terms hereof. Such reassignment and redelivery shall
be without warranty by or recourse to the Collateral Agent, except as to
the absence of any prior assignments by the Collateral Agent of its
interest in the Pledged Collateral, and shall be at the expense of the
Pledgor.
(ii) The Pledgor agrees that it will not, except as permitted by the
Indenture, sell or dispose of, or grant any option or warrant with respect
to, any of the Pledged Collateral.
(r) Final Expression. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
(s) Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Damages.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER THE
LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH (vi)
BELOW, THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS AGREE THAT ALL
DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE PLEDGOR WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE
DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS OWN
NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR ITS
PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT.
THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN
ANY PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL
AGENT. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH THE COLLATERAL AGENT HAS COMMENCED A PROCEEDING
DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iv) THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER GROUNDED
IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE PLEDGOR TO RECEIVE, FOR AND ON BEHALF
OF THE PLEDGOR, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE PLEDGOR,
BUT THE FAILURE OF THE PLEDGOR TO RECEIVE SUCH NOTICE AND COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PLEDGOR AT ITS
ADDRESS SET FORTH IN SECTION 12.02 OF THE INDENTURE, SUCH SERVICE TO BECOME
EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR
ANY HOLDER OF SECURITIES TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER JURISDICTION.
(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE COLLATERAL AGENT NOR
ANY HOLDER OF SECURITIES SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER
GROUNDED IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR
IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNTIL IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT
THAT IS BINDING ON THE COLLATERAL AGENT OR SUCH HOLDER OF SECURITIES, AS
THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON
THE PART OF THE COLLATERAL AGENT OR SUCH HOLDER OF SECURITIES, AS THE CASE
MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF
SECURITIES OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO
REPOSSESS THE PLEDGED COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE PLEDGED COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED
OF THE COLLATERAL AGENT OR ANY HOLDER OF SECURITIES IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR
LEVY UPON PLEDGED COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS, TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
COLLATERAL AGENT OR ANY HOLDER OF SECURITIES, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PAYMENT
INJUNCTION THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE
PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS.
(t) Acknowledgments. The Pledgor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(ii) neither the Collateral Agent (other than in its cash management
advisory role) nor any Holder of Securities has any fiduciary relationship
to the Pledgor, and the relationship between the Collateral Agent and the
Holders, on the one hand, and the Pledgor, on the other hand, is solely
that of a secured party and a creditor; and
(iii) no joint venture exists among the Holders or among the Pledgor
and the Holders.
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each caused
this Agreement to be duly executed and delivered as of the date first above
written.
PLEDGOR:
GOTHIC ENERGY CORPORATION,
an Oklahoma corporation
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
COLLATERAL AGENT:
THE BANK OF NEW YORK,
Collateral Agent
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
SCHEDULE I
PLEDGED SHARES
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SHARE
ISSUER NUMBER OF PLEDGED CERTIFICATE PERCENTAGE OF
SHARES NUMBER OUTSTANDING
--------------------------------------------------------------------------------
Gothic Production
Corporation 100 Shares 2 100%
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