EXHIBIT 10.4
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GOTHIC PRODUCTION CORPORATION
as Issuer,
GOTHIC ENERGY CORPORATION
as Guarantor,
AND
THE BANK OF NEW YORK,
as Trustee
----------------------------
INDENTURE
DATED AS OF APRIL 21, 1998
----------------------------
$235,000,000.00
11_% SERIES A SENIOR SECURED NOTES DUE 2005
AND
11_% SERIES B SENIOR SECURED NOTES DUE 2005
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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.................................................................................. 23
Section 1.03 Incorporation by Reference of Trust Indenture Act.................................................. 23
Section 1.04 Rules of Construction.............................................................................. 24
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......................................................................... 26
Section 2.04 Paying Agent to Hold Money in Trust................................................................ 26
Section 2.05 Holder Lists....................................................................................... 27
Section 2.06 Transfer and Exchange.............................................................................. 27
Section 2.07 Replacement Securities............................................................................. 34
Section 2.08 Outstanding Securities............................................................................. 35
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
ARTICLE III Redemption.............................................................................................. 37
Section 3.01 Notice to Trustee.................................................................................. 37
Section 3.02 Selection of Securities to Be Redeemed............................................................. 37
Section 3.03 Notice of Redemption............................................................................... 37
Section 3.04 Effect of Notice of Redemption..................................................................... 38
Section 3.05 Deposit of Redemption Price........................................................................ 38
Section 3.06 Securities Redeemed in Part........................................................................ 39
Section 3.07 Optional Redemption................................................................................ 39
ARTICLE IV Covenants............................................................................................... 39
Section 4.01 Payment of Securities.............................................................................. 39
Section 4.02 SEC Reports........................................................................................ 40
Section 4.03 Compliance Certificates............................................................................ 40
Section 4.04 Maintenance of Office or Agency.................................................................... 41
Section 4.05 Corporate Existence................................................................................ 42
Section 4.06 Waiver of Stay, Extension or Usury Laws............................................................ 42
Section 4.07 Payment of Taxes and Other Claims.................................................................. 42
Section 4.08 Maintenance of Properties and Insurance............................................................ 42
Section 4.09 Limitation on Incurrence of Additional Indebtedness................................................ 43
Section 4.10 Limitation on Restricted Payments.................................................................. 44
Section 4.11 Limitation on Sale of Assets....................................................................... 45
Section 4.12 Limitation on Liens................................................................................ 47
Section 4.13 Limitation on Sale/Leaseback Transactions.......................................................... 47
Section 4.14 Limitation on Payment Restrictions Affecting Restricted Subsidiaries............................... 48
Section 4.15 Limitation on Issuances and Sales of Subsidiary Stock.............................................. 48
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Section 4.16 Limitation on Transactions with Affiliates......................................................... 49
Section 4.17 Change of Control.................................................................................. 49
Section 4.18 Limitation on Line of Business..................................................................... 50
Section 4.19 Impairment of Security Interest.................................................................... 51
Section 4.20 Separate Existence and Formalities................................................................. 51
Section 4.21 Third Party Consents............................................................................... 52
Section 4.22 Operations of GEC.................................................................................. 52
Section 4.23 Agreement Not to Petition.......................................................................... 52
Section 4.24 Additional Subsidiary Guarantees................................................................... 52
ARTICLE V Successor Corporation................................................................................... 53
Section 5.01 When GEC and 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............................................................... 59
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....................................................................... 64
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.......................................................................... 67
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..................................................................... 68
Section 8.03 Covenant Defeasance................................................................................ 68
Section 8.04 Conditions to Legal or Covenant Defeasance......................................................... 69
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............................................................................... 71
Section 8.07 Reinstatement...................................................................................... 71
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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................................. 75
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 Security Documents; Additional Collateral........................................... 78
Section 11.02 Recording, Opinions and Engineering Reports........................................................ 82
Section 11.03 Release of Collateral.............................................................................. 83
Section 11.04 Possession and Use of Collateral................................................................... 83
Section 11.05 Specified Releases of Collateral................................................................... 84
Section 11.06 Disposition of Collateral Without Release.......................................................... 85
Section 11.07 Form and Sufficiency of Release.................................................................... 86
Section 11.08 Purchaser Protected................................................................................ 86
Section 11.09 Authorization of Actions To Be Taken by the Trustee Under the Security Documents................... 86
Section 11.10 Authorization of Receipt of Funds by the Trustee Under the Security Documents...................... 87
Section 11.11 Rights of Chesapeake as to Certain Collateral...................................................... 87
Section 11.12 Additional Intercreditor Agreements................................................................ 87
ARTICLE XII Application of Trust Moneys............................................................................. 88
Section 12.01 "Trust Moneys" Defined............................................................................. 88
Section 12.02 Withdrawal of Net Cash Proceeds Following a Net Proceeds Offer..................................... 88
Section 12.03 Withdrawal of Trust Moneys for Payment of Bank Credit Facility or Investment in Oil and Gas
Related Assets..................................................................................... 89
Section 12.04 Withdrawal of Trust Moneys on Basis of Retirement of Securities.................................... 90
Section 12.05 Investment of Trust Moneys......................................................................... 90
ARTICLE XIII Miscellaneous........................................................................................... 90
Section 13.01 Trust Indenture Act Controls....................................................................... 90
Section 13.02 Notices............................................................................................ 91
Section 13.03 Communication by Holders with Other Holders........................................................ 91
Section 13.04 Certificate and Opinion as to Conditions Precedent................................................. 92
Section 13.05 Statements Required in Certificate or Opinion...................................................... 92
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Section 13.06 Rules by Trustee and Agents........................................................................ 92
Section 13.07 Legal Holidays..................................................................................... 92
Section 13.08 Governing Law...................................................................................... 93
Section 13.09 No Adverse Interpretation of Other Agreements...................................................... 93
Section 13.10 No Recourse Against Others......................................................................... 93
Section 13.11 Successors......................................................................................... 93
Section 13.12 Duplicate Originals................................................................................ 93
Section 13.13 Severability....................................................................................... 93
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INDENTURE, DEED OF TRUST, MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
PRODUCTION AND FINANCING STATEMENT, dated as of April 21, 1998, among GOTHIC
PRODUCTION CORPORATION, an Oklahoma corporation (the "Company"), and GOTHIC
ENERGY CORPORATION, an OklahomaWilliam X. Xxxxxx, P.A. (Xxxx)Financial Printing
GroupINDENTURE, DEED OF TRUST, MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
PRODUCTION AND FINANCING STATEMENT, dated as of April 21, 1998, among GOTHIC
PRODUCTION CORPORATION, an Oklahoma corporation (the "Company"), and GOTHIC
ENERGY CORPORATION, an Oklahoma corporation ("GEC") as the initial Guarantor,
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 11_% Series A
Senior Secured Notes due 2005 and the Company's 11_% Series B Senior Secured
Notes due 2005 (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
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"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
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
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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 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.
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"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 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 xxxxx, 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
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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.
"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
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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 Xxxxx'x 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 GEC's assets or 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 Owned Restricted Subsidiary of the Company which has
executed a Guarantee and the applicable Security Documents required by this
Indenture); (ii) the adoption of a plan relating to the liquidation or
dissolution of GEC or 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 GEC or 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 GEC or the Company (together with any new directors
whose election by such Board of Directors or whose nomination for election by
the shareholders of GEC or the Company, as the case may be, was approved by a
vote of 66-2/3% of the directors of GEC or the Company, as the case may be, 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 GEC or the
Company, as the case may be, then in office.
"Chesapeake" means Chesapeake Gothic Corp., an Oklahoma corporation,
together with its successors and assigns.
"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to, or purported to be subject to, the Lien of this Indenture or any of the
Security Documents. Notwithstanding anything herein or in any other
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Security Document, the Collateral shall not include the properties identified on
Exhibit H attached hereto, nor the products or proceeds therefrom.
"Collateral Account" means the collateral account established by the
Trustee pursuant to Section 12.01.
"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.
"Company Order" means a written order or request signed in the name of the
Company or any applicable Subsidiary by its President or Vice President, and by
its Treasurer, Assistant Treasurer, Secretary or any other officer so authorized
and delivered to the Trustee.
"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 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
-7-
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 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
-8-
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.
"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 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.
-9-
"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
GEC 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 GEC (other than to any Person who, prior to such private
placement, was a Subsidiary of GEC or any other Person controlled by GEC) 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.
"GEC" means Gothic Energy Corporation, an Oklahoma corporation.
"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.
"Guarantee" or "Guarantees" means (i) initially, the Guarantee given by GEC
herein and (ii) thereafter, any Guarantee issued by existing or future
Restricted Subsidiaries pursuant to Section 4.24 or Article X hereof.
"Guarantor" means (i) initially, GEC, (ii) each of the Restricted
Subsidiaries that becomes a guarantor of the Securities in compliance with the
provisions of Section 4.24 or Article X hereof and (iii) 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.
"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
-10-
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 xxxxxx, 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 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.
"Intercreditor Agreement" means (i) the Intercreditor Agreement dated as of
the Issue Date by and between Bank One, Texas, N.A., as agent under the New
Credit Facility, and the Trustee, and acknowledged by the Company and GEC, as
the same may be amended, supplemented or modified from time to time in
accordance with the terms thereof and hereof or (ii) any intercreditor agreement
entered into after the Issue Date in connection with another Bank Credit
Facility on terms substantially identical to the Intercreditor Agreement
referenced in (i) above. A copy of the Intercreditor Agreement referred in (i)
above is attached hereto as Exhibit I.
"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.
-11-
"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, 2002, in each case computed using a discount rate equal to the Treasury
Rate plus 50 basis points, over (ii) 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, 2002; 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 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, 2002.
"Make-Whole Price" means the greater of (i) the sum of the outstanding
principal amount and Make-Whole Amount of such Security, and (ii) the redemption
price of such Security on May 1, 2005, determined pursuant to this Indenture.
"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
-12-
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, 2005.
"Mortgage" means, collectively, the mortgages (or deeds of trust) now or
hereafter granted by the Company or any applicable Subsidiary Guarantor for the
benefit of the Trustee and the Holders, as the same may be amended, supplemented
or modified from time to time in accordance with the terms thereof and hereof.
The form of Mortgage filed on the Issue Date shall be substantially in the form
attached hereto as Exhibit G.
"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.
"New Credit Facility" means the Loan Agreement dated as of April 27, 1998
between the Company 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
-13-
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.
"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
-14-
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, 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)
-15-
by Standard & Poor's Ratings Services and P-1 (or higher) by Xxxxx'x 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 or (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 that are Guarantors 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 Section 4.24 or Article X of this
Indenture; and (xi) any interest rate hedging obligations so long as the related
Indebtedness constitutes a Bank Credit Facility or the Securities.
"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 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
-16-
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, 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; and (xx) Liens to secure Dollar-
Denominated Production Payments and Volumetric Production Payments.
"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,
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(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.
"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.
"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.
"Property" has the meaning assigned to such term in the Mortgages.
"PV-10" means the estimated future net cash flows from proved natural gas
and oil reserves computed using prices and costs at the applicable calculation
dates, discounted at 10%.
"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 the Registration Rights Agreement,
dated as of April 21, 1998, by and among the Company, the Guarantors and each of
the purchasers named on the signature pages thereto, as such agreement may be
amended, modified or supplemented from time to time.
"Released Interests" has the meaning provided in Section 11.5(b)(ii).
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"Released Trust Moneys" has the meaning provided in Section 12.03.
"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), (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, (c) as long as no Default or Event
of Default shall have accrued and be continuing under this Indenture, cash
dividends in an amount equal to the then required cash interest payments on the
Senior Secured Discount Notes and (d) to the extent necessary to permit GEC to
pay overhead, tax liabilities, legal, accounting or other professional fees and
expenses and any fees and expenses associated with registration statements filed
with the Commission and subsequent ongoing public reporting requirements, in
each case to the extent actually incurred by GEC in connection with acting as
holding company for the Company and its Subsidiaries); (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 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" mean Securities that bear or are required to bear
the Restricted Securities Legend.
"Restricted Securities Legend" means the legend set forth on the face of
the form of Security attached hereto as Exhibit A, pursuant to Section 2.06.
"Sale and Participation Agreement" means that certain Sale and
Participation Agreement between Chesapeake, GEC, Gothic Energy of Texas, Inc.
and the Company, dated as of March 31, 1998, as in effect on the Issue Date.
"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.
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"Secured Indebtedness" shall have the meaning set forth in the form of
Mortgage attached hereto as Exhibit G.
"Securities" or "Security" means the Company's 11_% Series A Senior Secured
Notes due 2005 and the Company's 11_% Series B Senior Secured Notes due 2005, as
either may be amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.
"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.
"Security Documents" means, collectively, the Mortgages and the
Intercreditor Agreement and all security agreements, mortgage, deeds of trust,
collateral assignments or other instruments evidencing or creating any security
interests in favor of the Trustee in all or any portion of the Collateral, in
each case as amended, supplemented or modified from time to time in accordance
with the terms thereof and hereof.
"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.
"Senior Secured Discount Notes" means GEC's 14_% Senior Secured Discount
Notes due 2006 to be issued pursuant to the Senior Secured Discount Note
Indenture.
"Senior Secured Discount Note Indenture" means the Indenture dated April
21, 1998 among GEC 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 11_% Series A Senior Secured
Notes due 2005 to be issued pursuant to this Indenture.
"Series B Securities" means the Company's 11_% Series B Senior Secured
Notes due 2005 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.
"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
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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.
"Third Party Consent Agreement" means any mineral lease, right-of-way,
easement or any farm-in, farm-out, joint operating, joint venture or area of
mutual interest agreement to which the Company, or any other Guarantor is a
party (i) that is included in the Collateral or relates to an asset included in
the Collateral, (ii) that requires the consent or approval of any Person (a) for
the creation, perfection, maintenance or protection of a valid security interest
in, or lien against, any of the Collateral in favor of the Trustee or (b) upon
foreclosure of the Trustee's lien, for the Trustee to acquire or sell, assign,
dispose of or otherwise transfer such mineral lease, right-of-way, easement or
farm-in, farm-out, joint operating, joint venture or area of mutual interest
agreement, or any right or interest of the Company or any other Guarantor
thereunder, or for the Trustee to exercise any or all of its rights or remedies
under any of the Security Documents and (iii) with respect to which such consent
or approval has not yet been obtained.
"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.
"Trust Moneys" shall have the meaning set forth in Section 12.01.
"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 the assets owned by the Company on the
Issue Date be transferred to or held by an Unrestricted Subsidiary. The Company
may designate any Subsidiary of the Company or of a Restricted Subsidiary
(including a newly acquired or newly
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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, GEC,
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 GEC, the Company nor any Restricted Subsidiary
guarantees any Indebtedness of such Subsidiary or otherwise directly or
indirectly provides any credit support to such Subsidiary, (vi) such Subsidiary
is a Person with respect to which neither GEC, 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.
"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
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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.
"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.
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"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 singular;
(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.
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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.
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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 $235 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 $235 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
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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
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(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
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
(D) 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 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:
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(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 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
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(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
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
(D) 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 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:
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(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 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 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
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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) 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, (D) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (F) 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.
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
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(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 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.
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(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).
(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.
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(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.
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.
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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.
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.
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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.
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.
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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.
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, 2002 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
---- ----------
2002.................... 105.563%
2003.................... 102.782%
2004 and thereafter..... 100.00%
Notwithstanding the foregoing, at any time prior to May 1, 2002, 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 GEC consummates one or more Equity Offerings on
or prior to May 1, 2001, GEC may, in its sole discretion, provide funds to the
Company to redeem, and the Company may redeem, up to 33-1/3% of the aggregate
principal amount of the Securities with all or a portion of the aggregate net
proceeds received by GEC from any such Equity Offering or Equity Offerings,
within 60 days of the closing of any such Equity Offering, at a redemption price
of 111.125% of the aggregate principal amount of the Securities so redeemed,
plus accrued and unpaid interest on the Securities so redeemed to the redemption
date; provided, however, that following such
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redemption, at least 66-2/3% of the aggregate principal amount of the Securities
remains outstanding.
Any redemption pursuant to this Section 3.07 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) GEC, within 15 days after GEC 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 GEC or the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that neither the Company nor GEC may be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, GEC 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 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
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(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 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 is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which 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.
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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 13.02. 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, GEC and the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its respective 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.
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Section IV.7 Payment of Taxes and Other Claims
GEC and 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 GEC, the Company or any
Restricted Subsidiary or upon the income, profits or property of GEC and 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 GEC, the Company or any Restricted Subsidiary; provided, however,
that GEC and 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) GEC and 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 GEC and the Company, for corporations similarly situated in the industry.
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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
that are Guarantors 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
that are Guarantors 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.
(d) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries shall in no event directly or indirectly guarantee any Indebtedness
of GEC (including, without limitation, Indebtedness outstanding under the Senior
Secured Discount Notes), provide any credit support to GEC nor have any direct
or indirect obligation (i) to subscribe for additional Capital Stock of GEC, or
(ii) to maintain or preserve GEC's financial condition or to cause GEC to
achieve any specified levels of operating results.
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
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(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 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).
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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, within 365 days after receipt of Net Cash Proceeds from any Asset Sale,
apply such Net Cash Proceeds to: (i) the repayment of Indebtedness of the
Company under the New Credit Facility (or any other Bank Credit Facility to the
extent secured by the assets of the Company or its Restricted Subsidiaries) 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 (provided
that such replacement assets are made subject to the Lien of the Security
Documents to the extent necessary to maintain compliance with Section 11.01
hereof); 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 365-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 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 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 tendered in such Net Proceeds Offer)
at a repurchase price of 100% of the principal amount 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.
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(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 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 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 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 (ii) of this Section 4.11(e)), and the Company will execute and the
Trustee will 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 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 be either (i) delivered by the Company to the Trustee and shall
be deposited in the Collateral Account in accordance with Article XII or (ii)
applied to temporarily reduce borrowings under any revolving
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credit facility constituting Senior Indebtedness of the Company or Senior
Indebtedness of a Restricted Subsidiary. Collateral Proceeds so deposited may be
withdrawn from the Collateral Account as set forth in Article XII.
(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.
(j) To the extent the Net Proceeds Offer is not fully subscribed to by
Holders, the Trustee shall release to the Company the unutilized portion of the
Net Cash Proceeds from the Lien of the Security Documents.
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; provided, that no
encumbrance or restriction shall limit the ability of any Restricted Subsidiary
to transfer cash to the Company except upon the occurrence of an event of
default under the Bank Credit Facility; (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 Security Documents. Except as set forth in this
Indenture and, subject to the Intercreditor Agreement and the New Credit
Facility (as in effect on the Issue Date), 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 the Company or any
Restricted Subsidiary of the Company to grant to the Trustee Liens on their
respective properties and assets.
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 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 continue to accrue interest at the stated rate; (4) that any
Security accepted for payment pursuant to
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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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Section IV.19 Impairment of Security Interest
Neither GEC, the Company nor any of its Subsidiaries shall grant to any
Person, or suffer any Person (other than the Company) to have (other than to the
Trustee on behalf of the Trustee and the Holders) any interest whatsoever in the
Collateral other than Liens securing the Bank Credit Facility and Liens
permitted by the Security Documents. Neither GEC, the Company nor any of its
Subsidiaries will enter into any agreement or instrument that by its terms
requires the proceeds received from any sale of Collateral to be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to this Indenture, the Securities and the Security
Documents.
Section IV.20 Separate Existence and Formalities
GEC and the Company each hereby covenants and agrees that:
(a) the Company's and its Subsidiaries' funds and other assets will
not be commingled with those of GEC;
(b) all actions taken by GEC, the Company and its Subsidiaries will be
taken pursuant to authority granted by the Board of Directors of GEC, the
Company and its Subsidiaries, to the extent required by law or GEC's, the
Company's and its Subsidiaries' Certificate of Incorporation or By-laws;
(c) the Company and its Subsidiaries will maintain records and books
of account separate from those of GEC in accordance with GAAP;
(d) GEC, the Company and its Subsidiaries will conduct their business
solely in their own name and will not knowingly or negligently mislead any other
Person as to the identity or authority of GEC, the Company and its Subsidiaries;
(e) all oral and written communications of GEC, the Company and its
Subsidiaries, including, without limitation, letters, invoices, purchase orders,
contracts, statements and applications, will be made solely in the name of GEC,
the Company and its Subsidiaries;
(f) GEC, the Company and its Subsidiaries will provide for all of its
operating expenses and liabilities from its own separate funds;
(g) GEC, the Company and its Subsidiaries will maintain correct
minutes of the meetings and other corporate proceedings of the owners of its
capital stock and the Board of Directors and otherwise comply with requisite
corporate formalities required by law; and
(h) except as set forth in the Guarantees and any Bank Credit
Facility, neither GEC, the Company nor any Subsidiary thereof will hold itself
out or knowingly permit itself to be held out as having agreed to pay or as
being liable for any Indebtedness of any such other Person.
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Section IV.21 Third Party Consents
The Company and its Subsidiaries shall use their best efforts to obtain, as
soon as reasonably practicable, all consents and approvals that may be required
under any Third Party Consent Agreement (i) for the creation, perfection,
maintenance or protection of a valid security interest in, or Lien against, any
of the Collateral in favor of the Trustee or (ii) upon foreclosure of the
Trustee's Lien, for the Trustee to acquire or sell, assign, dispose of or
otherwise transfer such Third Party Consent Agreement, or any right or interest
of the Company, or any Subsidiary thereunder, or for the Trustee to exercise any
or all of its rights or remedies under any of the Security Documents. The use
of its "best efforts" shall not require the Company to pay consideration for
such consents or approvals or to take actions other than use its good faith
efforts to request such consents and approvals. The Company shall not, and
shall not permit any of its Subsidiaries to, permit to exist as of the end of
any fiscal quarter any Third Party Consent Agreement if, after giving effect to
such Third Party Consent Agreement, the aggregate of all Third Party Consent
Agreements entered into after the date of this Indenture includes or relates to
properties constituting more than 25% of the net acreage owned or leased by the
Company or any of its Subsidiaries after the date of this Indenture.
Section IV.22 Operations of GEC
GEC shall neither (a) have any direct Subsidiaries other than the Company
nor (b) hold assets with a value in excess of $1 million (exclusive of its
interest in the Company) provided GEC may hold such assets as may be distributed
to it pursuant to this Indenture.
Section IV.23 Agreement Not to Petition
GEC agrees, for the benefit of the Holders of the Securities, not, prior to
the date which is one (1) year and one (1) day after the payment in full of all
indebtedness under the Indenture, the Securities and the Security Documents, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause the
Company or any Subsidiary to invoke, the process of any governmental authority
for the purpose of (a) commencing or sustaining a case against the Company or
any Restricted Subsidiary under any federal or state bankruptcy, insolvency or
similar law, (b) appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official for the Company or any
Restricted Subsidiary, or any substantial part of its respective property, or
(c) ordering the winding up or liquidation of the affairs of the Company of any
Restricted Subsidiary.
Section IV.24 Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries transfers or causes to
be transferred, in one transaction or a series of related transactions, any
property with a book value in excess of $1 million, to any Subsidiary that is
not a Guarantor, or if the Company or any of its Restricted Subsidiaries shall
organize, acquire or otherwise invest in another Subsidiary having total assets
with a book value in excess of $1 million, then the Company shall (a) cause such
transferee or acquiree or other Subsidiary to (i) execute and deliver to the
Trustee a Guarantee and (ii) execute the appropriate Security Documents to the
extent necessary to maintain compliance with Section 11.01 hereof, (b) deliver
to the Trustee an Opinion of Counsel that such Guarantee and Security
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Documents have been duly authorized, executed and delivered by such Subsidiary
and constitute the legal, valid, binding and enforceable obligations of such
Subsidiary and (c) designate such Subsidiary a Restricted Subsidiary.
Thereafter, such Subsidiary shall be a Guarantor for all purposes of this
Indenture.
ARTICLE V
Successor Corporation
Section V.1 When GEC and Company May Merge, etc.
Neither GEC nor the Company will consolidate with or merge with any Person
or convey, transfer or lease all or substantially all of its assets to any
Person, unless:
(1) GEC or the Company, as the case may be, survives such merger
or the Person formed by such consolidation or into which GEC or the
Company, as the case may be, is merged or that acquires by conveyance or
transfer, or which leases, all or substantially all of the assets of GEC or
the Company, as the case may be, 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 GEC or the Company, as the case may be, under the Indenture,
the Securities, the Security Documents and the Registration Rights
Agreement; GEC 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
Security Documents; and, in the case of the Company, the Company or such
surviving Person, as the case may be, is a direct Wholly-Owned Restricted
Subsidiary of GEC;
(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 GEC or the Company, as the case may be, 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, GEC or the Company, as the case may be, under
this Indenture with the same effect as if such successor had been named as GEC
or the Company, as the case may be, 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 Security Documents 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 GEC, the Company or any
Subsidiary (other than an Unrestricted Subsidiary provided that neither GEC
or 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 GEC, the Company or any
Subsidiary (other than an Unrestricted Subsidiary provided that neither GEC
or 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;
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(6) default in the performance, or breach of, any other covenant
or agreement of GEC, the Company or any Restricted Subsidiary in this
Indenture or any Security Document 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 GEC, the Company or any
Subsidiary (other than an Unrestricted Subsidiary provided that neither GEC
or 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 GEC, 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 GEC, the Company or any Subsidiary (other than an Unrestricted
Subsidiary provided that neither GEC, 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;
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(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 GEC, 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 GEC, 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 GEC, 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 GEC, 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 GEC, 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 GEC, 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 GEC, 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) GEC, the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
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(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 GEC, the Company or any Restricted Subsidiary in an
involuntary case or proceeding,
(b) appoints a Custodian of GEC, the Company or any Restricted
Subsidiary or for all or substantially all of its respective property,
or
(c) orders the liquidation of GEC, the Company or any
Restricted Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
(13) any of the Security Documents cease to be in full force and
effect (other than in accordance with their respective terms), or any of
the Security Documents cease to give the Trustee the Liens, rights, powers
and privileges purported to be created thereby, or any Security Document is
declared null and void, or the Company or any of its applicable Subsidiary
Guarantors denies any of its obligations under any Security Document or any
Collateral becomes subject to any Lien other than the Liens created or
permitted by the Security Documents or this Indenture; or
(14) the Company shall for any reason cease to be a direct Wholly
Owned Subsidiary of GEC; or the Company shall for any reason cease to be
the sole direct Subsidiary of GEC.
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 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, 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 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, subject to the Intercreditor
Agreement, the Security Documents. 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.
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 Security
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Documents (including without limitation the Intercreditor Agreement) and the
proceeds received upon realization of the Collateral shall be applied by the
Trustee in accordance with Section 6.10 hereof, (b) acknowledges and consents to
the terms of the Security Documents (including the Intercreditor Agreement) and
to the Trustee's performance of its agreements thereunder and (c) acknowledges
and consent to the restrictions and obligations imposed by the Intercreditor
Agreement on the Trustee.
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 any Security Document 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 Security Documents 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, subject to the Intercreditor Agreement:
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 each Security Document 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 any Security Document 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. Without limiting the foregoing and notwithstanding any other provision of
this Indenture or of the Security Documents, the Trustee shall not be obligated
to foreclose upon any Collateral or otherwise commence any Enforcement (as
defined in the Intercreditor Agreement) unless and until the Trustee (i)
receives (if requested by, but at no cost to, the Trustee) new environmental
reports pertaining to the Collateral that is the subject of such foreclosure or
Enforcement action and (ii) is satisfied with scope and the results of any such
environmental reports. The Company shall pay for any such environmental reports.
In the event the Company is unable or refuses to pay for such new environmental
reports, the Trustee shall promptly notify the Holders, who may (but who shall
not be obligated to) deposit with the Trustee sufficient funds to pay for the
new environmental reports.
(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:
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(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.
(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 Security Documents 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 Security Documents, 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
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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.
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 13.02 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 November 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
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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 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:
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(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 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.
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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 Security Documents, 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 applicable Security Document and of this
Indenture.
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 any Security Document or the validity or perfection, if any, of Liens granted
under this Indenture or Security Documents. 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 Security Documents.
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.
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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.
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, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23 and 4.24 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.
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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 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);
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(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.
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.
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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.
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 Security Documents 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
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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.
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 any Security
Document 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 any Security
Document (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;
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(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;
(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; o r
(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.
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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 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.
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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.
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
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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.
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,
GEC 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) 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.
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(b) 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 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
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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.
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.
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ARTICLE XI
Collateral and Security
Section XI.1 Collateral and Security Documents; Additional Collateral
(a) Mortgage. For and in consideration of the sum of $10.00 and other
good and valuable consideration, in hand paid by the Holders to the Company and
its Restricted Subsidiaries, the receipt and sufficiency of which are hereby
acknowledged and confessed, the Company and its Restricted Subsidiaries, subject
to the Intercreditor Agreement, do hereby GRANT, MORTGAGE, WARRANT, BARGAIN,
SELL, TRANSFER, ASSIGN and CONVEY unto Trustee for the benefit of the Holders,
with power of sale, all right, title and interest now or at any time hereafter
vested in the Company and its Restricted Subsidiaries in and to the following
described properties and interests, now owned or hereafter acquired by the
Company or any Restricted Subsidiary, wherever located, to wit:
(1) All oil, gas and mineral interests of every kind and
character;
(2) Any and all operating agreements (including so-called "working
interest units" created under operating agreements or otherwise),
communitization agreements, unitization agreements, pooling agreements,
declarations of pooled units, all units created under orders, regulations,
rules or other official acts of any federal, state or other governmental
body or regulatory agencies providing for pooling and unitization, spacing
orders or other well permits and other instruments, whether now or
hereafter made, and the units created thereby;
(3) Any and all oil, gas and mineral leases (herein collectively
referred to as the "Leases"), together with all right, title and interest
now or at any time hereafter vested in the Company or any Restricted
Subsidiary in and to any and all overriding royalty interests, mineral
interests, royalty interests, net profit interests, oil payments,
production payments and all other interests and properties of every kind
and character, together with any and all renewals, extensions,
substitutions, ratifications, supplements, amendments and replacements of
and for any of the Leases or other interests described or referred to
herein;
(4) All surface and subsurface personal property, equipment,
fixtures, hereditaments, improvements, easements, permits, licenses,
servitudes, surface leases and rights-of-way situated upon or used or
useful or held for use in connection with the exploration, development or
operation of the foregoing properties and interests, or the production,
treating, storing or transportation of oil, gas and other hydrocarbons
therefrom, including, without limitation, liquid extraction plants, plant
compressors, field gathering systems, valves, fittings, engines, boilers,
meters, cables, wires, towers, tubing and rods, casing, connections, tanks,
batteries, separators, lines, pumps, pipes, pipelines, platforms,
structures, buildings, sheds, loading docks, shipping facilities, oil
xxxxx, gas xxxxx, injection xxxxx, other xxxxx, fixtures, tools, machinery,
power lines, telephone and telegraph lines, and other appurtenances,
apparatus, appliances and property of every kind and character,
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movable or unmovable, together with all improvements, additions,
substitutions, replacements, accessions and attachments to any and all of
the foregoing properties;
(5) All oil, casinghead gas and gas sales, purchase, exchange and
processing contracts and agreements, and all other contracts, agreements
and instruments, whether now in existence or hereafter made, together with
any and all renewals, extensions, substitutions, ratifications,
supplements, amendments and replacements of or for any such contracts,
agreements and instruments;
(6) All oil, gas and other hydrocarbons, including, without
limitation, casinghead gas, condensate, distillate, liquid hydrocarbons,
gaseous hydrocarbons, and all products separated, settled and dehydrated
therefrom, and all products refined therefrom, including, without
limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline and natural gasoline, and all other minerals,
and the proceeds thereof, produced and to be produced from and which accrue
or are attributable to any of the above described or referenced properties
and interests, by virtue of the above described or referenced contracts,
agreements and instruments; and
(7) Any and all proceeds, rents, issues, profits, products,
revenues and other income arising from or by virtue of the sale, lease or
other disposition of, or from any insurance payable with respect to damage,
loss or destruction of the collateral described in subparagraphs (1)
through (6) above.
TO HAVE AND TO HOLD the Collateral, together with all the rights,
hereditaments and appurtenances in any way appertaining or belonging thereto,
unto Trustee and its successors and assigns for the uses and purposes
hereinafter set forth forever, for the equal and proportionate benefit and
security of the Holders.
The Company and each Restricted Subsidiary hereby binds itself and its
respective heirs, executors, legal representatives, successors and assigns to
warrant and forever defend all and singular, the Collateral, unto Trustee, and
its successors and assigns, forever, against every person whomsoever lawfully
claiming or to claim the same or any part thereof.
(b) Assignment of Production. In order further to secure the payment
of the Secured Indebtedness, the Company and each Restricted Subsidiary does
hereby TRANSFER, ASSIGN and CONVEY unto and in favor of the Trustee, subject to
the provisions of the Intercreditor Agreement, all of the interest of the
Company and each Restricted Subsidiary in the oil, gas, casinghead gas,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and other
minerals in and under, or which may be produced from, the Collateral, or
allocated thereto pursuant to pooling or unitization of the Leases or otherwise
(herein collectively referred to as the "Hydrocarbons"), together with all
accounts, contract rights, general intangibles, products and proceeds arising
from or derived from the sale, transfer or other disposition of such
Hydrocarbons.
(c) Security Agreement. With respect to all personal property and
fixtures comprising a part of the Collateral, together with all proceeds and
products thereof, this Indenture shall likewise be a security agreement, and for
a valuable consideration, the receipt and sufficiency of which are
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hereby acknowledged, and for the purpose of further securing payment and
performance of the Secured Indebtedness, the Company and each Restricted
Subsidiary hereby grants to Trustee, subject to the provisions of the
Intercreditor Agreement, a security interest in the Collateral including,
without limitation, all rights now owned and at any time hereafter acquired by
the Company and any Restricted Subsidiary in all (a) oil, gas and other minerals
produced from or allocated to the Collateral, (b) accounts, chattel paper and
general intangibles arising in connection with the sale or other disposition of
such production, or otherwise associated with the Collateral, (c) equipment,
materials, other personal property and fixtures at any time used on or in
connection with the Collateral or in connection with such production, and (d)
geological, geophysical, engineering, accounting, title, legal and other
technical or business data concerning the Collateral, and the Hydrocarbons which
are in the possession of the Company or any Restricted Subsidiary or in which
the Company or any Restricted Subsidiary can otherwise grant a security
interest, and all books, files, records, seismic, magnetic media and other forms
of recording or obtaining access to such data, together with all accessions,
additions, proceeds, products, replacements, substitutions and modifications to
or for any of the foregoing.
The Company and each Restricted Subsidiary hereby assigns to Trustee,
subject to the provisions of the Intercreditor Agreement, all of its respective
security interests and liens and other interests arising pursuant to or
perfected by any instrument to which it is a party affecting real property in
which it is an interest owner, as provided in any applicable law, by virtue of
the first sale of Hydrocarbons produced from the Collateral.
(d) In furtherance of the foregoing, in order to secure the Secured
Indebtedness the Company and the Trustee have simultaneously with the execution
of this Indenture entered into the Security Documents pursuant to which the
Company has granted to the Trustee or co-Trustee for the benefit of the Holders
a 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.
The Trustee is also authorized and directed to enter into the Intercreditor
Agreement.
(e) To the extent the Company or any of its Restricted Subsidiaries
grants any additional security interest in, or lien upon, any property or assets
to secure any obligations of the Company or its Restricted Subsidiaries under a
Bank Credit Facility, the Company or such Restricted Subsidiary shall
simultaneously grant a second priority security interest in such property or
assets upon terms which would provide the Trustee or, if necessary, a co-
Trustee, as collateral agent, substantially similar interests in such property
or assets vis-a-vis the agent and lenders under such Bank Credit Facility as
such parties have interests in the Collateral. The Company and its Restricted
Subsidiaries shall execute, and the Trustee is hereby authorized to execute,
such agreements and other instruments as are necessary to grant and perfect the
additional security interests contemplated hereby. Any additional or
supplemental Mortgages hereafter recorded to accomplish the foregoing shall be
in substantially the form attached hereto as Exhibit G.
(f) The Company shall, and shall cause its applicable Restricted
Subsidiaries to, take or cause to be taken all action required to (i) perfect,
maintain, preserve and protect the Lien on and security interest in the
Collateral granted by the Security Documents, including, without limitation,
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the filing of mortgages, deeds of trusts, supplemental mortgages and deeds of
trust, 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 Security Documents to all property comprising the
Collateral, such to ensure the perfection of such Liens, subject in priority
only to the Liens, if any, securing the Bank Credit Facility and (ii) grant
perfected Liens upon the properties of the Company and its Restricted
Subsidiaries to the Trustee to the extent required to ensure that at all times
the value of the Collateral subject to the Lien of the recorded Mortgages
constitutes not less than 90% of the PV-10 of all of the Company's and
Restricted Subsidiaries' oil and gas properties and interests. Any additional or
supplemental Mortgages hereafter recorded to accomplish the foregoing shall be
in substantially the form attached hereto as Exhibit G. The Company shall from
time to time promptly pay all recording and/or filing fees, charges and taxes
relating to this Indenture and the Security Documents, any amendments thereto
and any other instruments of further assurance required pursuant to the Security
Documents.
(g) Each Holder, by accepting a Security, agrees to all of the terms
and provisions of the Security Documents, as the same may be amended from time
to time pursuant to the provisions of the Security Documents and this Indenture.
Section XI.2 Recording, Opinions and Engineering Reports
(a) 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 Security
Documents 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 Security Documents and reciting the details of such action, and stating that
as to the security interests created pursuant to the Security Documents, 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.
(b) 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 Security Documents 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 Security Documents 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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(c) The Borrower shall furnish to the Trustee, as soon as possible but
in any event no later than April 1 of each year, beginning April 1, 1999, (i) an
engineering report prepared by an independent petroleum engineer which delivers
such reports pursuant to the New Credit Facility (and meeting the requirements
of independence set forth in Section 11.03(c)) setting forth the PV-10 of the
oil and gas properties and interests of the Company and its Restricted
Subsidiaries and (ii) an Officer's Certificate certifying that the Collateral
subject to the Lien of the recorded Mortgages constitutes not less than 90% of
the PV-10 of all of the oil and gas properties and interests of the Company and
its Restricted Subsidiaries. By October 1 of each year, beginning October 1,
1999, the Borrower shall furnish to the Trustee (i) an engineering report
prepared by Borrower's in-house engineering staff setting forth the PV-10 of all
of the oil and gas properties and interests of the Company and its Restricted
Subsidiaries and (ii) an Officer's Certificate certifying that the Collateral
subject to the Lien of the recorded Mortgages constitutes not less than 90% of
the PV-10 of all of the oil and gas properties and interests of the Company and
its Restricted Subsidiaries. The form and substance of such engineering reports
shall be that required to be delivered under the New Credit Facility (whether or
not the New Credit Facility is then in effect).
Section XI.3 Release of Collateral
(a) The Trustee, in its capacity as Trustee under the Security
Documents, shall not at any time release Collateral from the security interest
created by this Indenture and the Security Documents unless such release is in
accordance with the provisions of this Indenture and the Security Documents.
(b) 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 Security Documents shall be effective as against the Holders
of the Securities.
(c) The release of any Collateral from the terms of the Security
Documents 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 Security Documents. To the extent
applicable, the Company shall, and shall cause its applicable Subsidiary
Guarantors to, cause TIA (S) 314(d) relating to the release of property from the
Lien of the Security Documents and relating to the substitution therefor of any
property to be subjected to the Lien of the Security Documents to be complied
with. Any certificate or opinion required by TIA (S) 314(d) may be made by an
Officer of the Company or any applicable Subsidiary Guarantor, 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 GEC, the Company or any Subsidiary Guarantor or in any Affiliate of
GEC, the Company or of any Subsidiary Guarantor and (c) is not an officer,
employee, promoter, underwriter, trustee, partner or director or person
performing similar functions to any of the foregoing for GEC, the Company or any
Subsidiary Guarantor. 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 Possession and Use of Collateral
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Subject to and in accordance with the provisions of this Indenture and the
Security Documents, so long as no Event of Default shall have occurred and be
continuing, the Company and its applicable Subsidiary Guarantors shall have the
right to remain in possession and retain exclusive control of the Collateral
(other than Trust Moneys held by the Trustee), to operate, deplete, manage,
develop, lease, use, consume and enjoy the Collateral (other than Trust Moneys
held by the Trustee), to alter or repair any Collateral consisting of machinery
or equipment so long as such alterations and repairs do not diminish the value
thereof or impair the Lien of the Security Documents thereon and to collect,
receive, use, invest and dispose of the reversions, remainders, interest, rents,
lease payments, issues, profits, revenues, proceeds and other income thereof.
Section XI.5 Specified Releases of Collateral
(a) Satisfaction and Discharge; Defeasance. The Company and its
applicable Subsidiary Guarantors shall be entitled to obtain a full release of
all of the Collateral from the Liens of this Indenture and of the Security
Documents upon compliance with the conditions precedent set forth in Section
8.02 for satisfaction and discharge of this Indenture or for defeasance pursuant
to Section 8.04. Upon delivery by the Company and its applicable Subsidiary
Guarantors to the Trustee of an Officers' Certificate and an Opinion of Counsel,
each to the effect that such conditions precedent have been complied with (and
which may be the same Officers' Certificate and Opinion of Counsel required by
Article VIII), the Trustee shall forthwith take all necessary action (at the
request of and the expense of the Company) to release and reconvey to the
Company all of the Collateral, and shall deliver such Collateral in its
possession to the Company and its applicable Subsidiary Guarantors including,
without limitation, the execution and delivery of releases and satisfactions
wherever required.
(b) Dispositions of Collateral Permitted by Section 4.11. The Company
and its applicable Subsidiary Guarantors shall be entitled to obtain a release
of, and the Trustee shall release, items of Collateral (the "Released
Interests") subject to an Asset Sale upon compliance with the condition
precedent that the Company and its applicable Subsidiary Guarantors shall have
delivered to the Trustee the following:
(i) Company Order. A Company Order requesting release of Released
Interests, such Company Order (A) specifically describing the proposed
Released Interests, (B) specifying the value of such Released Interests on
a date within 60 days of the Company Order (the "Valuation Date"), (C)
stating that the purchase price to be received is at least equal to the
fair market value of the Released Interests, (D) stating that the release
of such Released Interests will not interfere with or impede the Trustee's
ability to realize the value of the remaining Collateral and will not
impair the maintenance and operation of the remaining Collateral, (E)
confirming the sale of, or an agreement to sell, such Released Interests in
a bona fide sale to a Person that is not an Affiliate of the Company or, in
the event that such sale is to be a Person that is such an Affiliate,
confirming that such sale is being made in accordance with Section 4.16,
(F) certifying that such Asset Sale complies with the terms and conditions
of Section 4.11 hereof and (G) in the event that there is to be a
substitution of property for the Collateral subject to the Asset Sale,
specifying the property intended to be substituted for the Collateral to be
disposed of;
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(ii) Officers' Certificate. An Officers' Certificate certifying
that (A) such Asset Sale covers only the Released Interests and complies
with the terms and conditions of an Asset Sale pursuant to Section 4.11,
(B) all Net Cash Proceeds from the sale of any of the Released Interests
will be applied pursuant to Section 4.11, (C) there is no Default or Event
of Default in effect or continuing on the date thereof, the Valuation Date
or the date of such Asset Sale, (D) the release of the Collateral will not
result in a Default or Event of Default hereunder and (E) all conditions
precedent to such release have been complied with; and
(iii) Compliance with TIA and Other Documentation. All
certificates, opinions and other documentation required by the TIA or
Section 11.03 of this Indenture, if any, and, in the event there is to be a
substitution of property for the Collateral subject to the Asset Sale, all
documentation necessary to effect the substitution of such new Collateral.
(c) Other Dispositions. The Company and its applicable Subsidiary
Guarantors shall be entitled to obtain a release of, and the Trustee shall
release, Released Interests subject to any sale, lease, transfer, exchange or
other disposition of the type identified in items (b), (c), (e), (g), (h) and
(i) of the definition of "Asset Sale" upon compliance with the condition
precedent that the Company and its applicable Subsidiary Guarantors shall have
delivered to the Trustee the following:
(i) Company Order. A Company Order requesting release of
Released Interests, such Company Order (A) specifically describing the
proposed Released Interests and (B) certifying that such transaction is not
an Asset Sale;
(ii) Officers' Certificate. An Officers' Certificate certify (A)
such transaction covers only the Released Interests, (B) such transaction
is not an Asset Sale, (C) there is no Default or Event of Default in effect
or continuing on the date thereof or the date of such transaction, (D) the
release of the Collateral will not result in a Default or Event of Default
hereunder and (E) all conditions precedent to such release have been
complied with; and
(iii) Compliance with TIA and Other Documentation. All
certificates, opinions and other documentation required by the TIA or
Section 11.03 of this Indenture, if any, and, in the event there is to be a
substitution of property for the Collateral subject to such transaction,
all documentation necessary to effect the substitution of such new
Collateral.
(d) Release by Trustee. Upon compliance by the Company or any
applicable Subsidiary Guarantor with the condition precedent set forth above,
the Trustee shall cause to be released and reconveyed to the Company or such
applicable Subsidiary Guarantor, the Released Interests.
Section XI.6 Disposition of Collateral Without Release
So long as no Event of Default shall have occurred and be continuing and
subject to the requirements of (S) 314 of the TIA, the Company and any
applicable Subsidiary Guarantor may, without any release or consent by the
Trustee, sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements or other similar property subject to the Lien of
the Security Documents, which (i) in any single transaction has a fair market
value of $25,000 (or if such $25,000 amount referred to in TIA (S) 314(d)(1)
increases then to such increased amount) or less or (ii) shall have become worn
out, obsolete or otherwise in need of replacement or repair;
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provided that, in the case of this clause (ii) such sale or other disposition is
in conjunction with a substantially concurrent transaction whereby additional
personal property is made subject to the Lien of the Security Documents.
Section XI.7 Form and Sufficiency of Release
In the event that the Company or any applicable Subsidiary Guarantor has
sold, exchanged, or otherwise disposed of or proposes to sell, exchange or
otherwise dispose of any portion of the Collateral that under the provisions of
Section 11.05 or 11.06 may be sold, exchanged or otherwise disposed of by the
Company or any applicable Subsidiary Guarantor, and the Company or such
applicable Subsidiary Guarantor requests the Trustee to furnish a written
disclaimer, release or quit-claim of any interest in such property under this
Indenture and the Security Documents, the Trustee, in its capacity as Trustee
under the Security Documents, shall execute, acknowledge and deliver to the
Company (in proper and recordable form) such an instrument promptly after
satisfaction of the conditions set forth herein for delivery of any such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released herefrom shall be entitled to
rely upon any release executed by the Trustee hereunder as sufficient for the
purpose of this Indenture and as constituting a good and valid release of the
property therein described from the Lien of this Indenture or of the Security
Documents.
Section XI.8 Purchaser Protected
No purchaser or grantee of any property or rights purporting to be released
herefrom shall be bound to ascertain the authority of the Trustee to execute the
release or to inquire as to the existence of any conditions herein prescribed
for the exercise of such authority; nor shall any purchaser or grantee or any
property or rights permitted by this Indenture to be sold or otherwise disposed
of by the Company or any applicable Subsidiary Guarantor be under any obligation
to ascertain or inquire into the authority of the Company or such applicable
Subsidiary Guarantor to make such sale or other disposition.
Section XI.9 Authorization of Actions To Be Taken by the Trustee Under the
Security Documents
Subject to the provisions of the Security Documents, (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 Security Documents 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 Security Documents 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).
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Section XI.10 Authorization of Receipt of Funds by the Trustee Under the
Security Documents
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders in accordance with the provisions of
Article XII and the other provisions of this Indenture.
Section XI.11 Rights of Chesapeake as to Certain Collateral
The Company, the Guarantor and the Trustee acknowledge that the Company's
interest in certain of the Collateral is subject to certain rights of Chesapeake
under the Sale and Participation Agreement as follows: (a) the assignment of an
undivided fifty percent (50%) of the properties covered by the Sale and
Participation Agreement, exclusive of the producing well bores as of March 31,
1998, and (b) the right of Chesapeake to acquire the residual interest of the
Company or its affiliates in future xxxxx to be drilled on the lands covered by
the Sale and Participation Agreement to the extent the Company, the Guarantor or
any affiliate of the foregoing does not elect to participate in such xxxxx.
Accordingly, the parties hereby agree: (x) that regardless of the order of
creation, attachment, filing or other means of perfection the mortgages, liens,
security interests and other encumbrances created by this Indenture, the
Security Documents or any instruments executed in connection therewith are
subject to and subordinate to Chesapeake's rights under clause (a) and (b)
above; (y) that if an interest in one (1) or more mortgaged properties included
in the Collateral is acquired by Chesapeake in accordance with the terms of the
Sale and Participation Agreement, any and all mortgages, liens, security
interests and other encumbrances created by this Indenture or the Security
Documents will be deemed terminated and released with respect to such mortgaged
property without any further action by any party to this instrument; and (z)
that the Trustee will execute and deliver any releases, termination statements,
documents and other instruments necessary to evidence the release and
termination of any and all mortgages, liens, security interests and other
encumbrances created by any of this Indenture or the Security Documents on any
interest acquired by Chesapeake in accordance with the terms of the Sale and
Participation Agreement. The parties agree that Chesapeake is a third party
beneficiary of this Section 11.11 and, upon any assignment by the Company or the
Guarantor to Chesapeake pursuant to the Sale and Participation Agreement,
Chesapeake will be entitled to directly enforce the provisions of this Section
11.11 against the Company, the Guarantor, and the Trustee, which includes the
filing of an action against any party which fails to comply with the terms of
this Section 11.11. The parties agree that the provisions of this Section 11.11
and the remedies provided to Chesapeake hereunder are in addition to any other
right or remedy available to Chesapeake under applicable law or the Sale and
Participation Agreement.
Section XI.12 Additional Intercreditor Agreements
If, after the Issue Date, the Company and/or its Restricted Subsidiaries
enter into a Bank Credit Facility secured by a lien on the oil and gas
properties of the Company or its Restricted Subsidiaries, the Company and its
Restricted Subsidiaries shall execute, and the Trustee is hereby authorized to
execute, an Intercreditor Agreement substantially identical to the Intercreditor
Agreement dated as of the Issue Date.
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ARTICLE XII
Application of Trust Moneys
Section XII.1 "Trust Moneys" Defined
All cash or Cash Equivalents received by the Trustee:
(a) upon the release of Collateral from the Lien of this Indenture
and/or the Security Documents, including investment earnings thereon; or
(b) pursuant to the provisions of any Mortgage; or
(c) as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee or any collection,
recovery, receipt, appropriation or other realization of or from all or any part
of the Collateral pursuant to this Indenture or any of the Security Documents or
otherwise; or
(d) for application under this Article XII as elsewhere provided in
this Indenture or the Security Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Security Documents;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee in violation of the Intercreditor Agreement or pursuant to Section 3.05,
and 3.07 or Article VIII or delivered to or received by the Trustee for
application in accordance with Section 6.10 hereof) shall be held by the Trustee
for the benefit of the Holders as a part of the Collateral and, upon any entry
upon or sale or other disposition of the Collateral or any part thereof pursuant
to enforcement of the Security Documents, said Trust Moneys shall be applied in
accordance with Section 6.10; but, prior to any such entry, sale or other
disposition, all or any part of the Trust Moneys may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in this
Article XII.
On the Issue Date there shall be established and, at all times hereafter
until this Indenture shall have terminated, there shall be maintained with the
Trustee an account which shall be entitled the "Collateral Account" (the
"Collateral Account"). The Collateral Account shall be established and
maintained by the Trustee at the Corporate Trust Office of the Trustee. All
Trust Moneys which are received by the Trustee shall be deposited in the
Collateral Account and thereafter shall be held, applied and/or disbursed by the
Trustee in accordance with the terms of this Article XII.
Section XII.2 Withdrawal of Net Cash Proceeds Following a Net Proceeds Offer
To the extent that any Trust Moneys consist of Net Cash Proceeds received
by the Trustee pursuant to the provisions of Section 4.11 hereof and a Net
Proceeds Offer has been made and completed in accordance therewith, such Trust
Moneys may be withdrawn by the Company or any applicable Subsidiary Guarantor
and shall be paid by the Trustee to the Company or such applicable Subsidiary
Guarantor (or as otherwise directed by the Company or such applicable Subsidiary
Guarantor) upon a Company Order to the Trustee and upon receipt by the Trustee
of the following:
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(a) Officers' Certificate. An Officers' Certificate, dated not more
than five days prior to the Purchase Date certifying:
(i) that no Event of Default exists; (ii) (A) that such Trust
Moneys constitute Net Cash Proceeds, (B) that pursuant to and in accordance
with Section 4.11, the Company or such applicable Subsidiary Guarantor has
made a Net Proceeds Offer, (C) the amount of money to be applied to the
repurchase of the Securities pursuant to the Net Proceeds Offer, (D) the
amount of money to be retained by the Company, and (E) the Purchase Date;
and (iii) that all conditions precedent and covenants herein provided for
relating to such application of Trust Moneys have been complied with and
such application will not violate the Intercreditor Agreement; and
(b) Compliance with TIA. All opinions, certificates and other
documentation required under the TIA, if any.
Upon compliance with the foregoing provisions of this Section 12.02 the
Trustee shall apply the Trust Moneys as directed and specified by such Company
Order.
Section XII.3 Withdrawal of Trust Moneys for Payment of Bank Credit Facility or
Investment in Oil and Gas Related Assets
To the extent that any Trust Moneys consist of Net Cash Proceeds received
by the Trustee pursuant to the provisions of Section 4.11 and the Company or any
applicable Subsidiary Guarantor intends to apply such proceeds toward repayment
of the New Credit Facility (or any other Bank Credit Facility to the extent
secured by the assets of the Company or its Restricted Subsidiaries) or invest
such Net Cash Proceeds in assets used in the Oil and Gas Business, in each case
consistent with the requirements of Section 4.11 (the "Released Trust Moneys"),
such Trust Money may be withdrawn by the Company or such applicable Subsidiary
Guarantor and shall be paid by the Trustee to the Company or such applicable
Subsidiary Guarantor (or as otherwise directed by the Company or such applicable
Subsidiary Guarantor) upon a Company Order to the Trustee and upon receipt by
the Trustee of the following:
(a) Officers' Certificate. An Officers' Certificate certifying that
(i) the release of the Released Trust Moneys complies with the terms and
conditions of Section 4.11 of this Indenture, (ii) there is no Default or Event
of Default in effect or continuing on the date thereof, (iii) the release of the
Released Trust Moneys will not result in a Default or Event of Default hereunder
and (iv) all conditions precedent to such release have been complied with and
such release will not violate the Intercreditor Agreement; and
(b) Compliance with TIA. All certificates, opinions and other
documentation required under the TIA, if any, and, in the case of the investment
of such proceeds in assets used in the Oil and Gas Business consistent with the
requirements of Section 4.11, all documentation necessary to subject such
property to a valid perfected Lien and security interest in favor of the Trustee
for the benefit of the Holders pursuant to the Security Documents, subject in
priority only to the Lien, if any, securing the New Credit Facility (or any
other Bank Credit Facility to the extent secured by the assets of the Company or
its Restricted Subsidiaries).
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Upon compliance with the foregoing provisions of this Indenture, the
Trustee shall apply the Released Trust Moneys as directed and specified by such
Company Order.
Section XII.4 Withdrawal of Trust Moneys on Basis of Retirement of Securities
Trust Moneys may be withdrawn by the Company to be applied to the
redemption and retirement of the Securities and shall be paid by the Trustee to
the Company (or as otherwise directed by the Company) upon a Company Order to
the Trustee and upon receipt by the Trustee of an Officers' Certificate, dated
not more than 30 days prior to the date of the application for the withdrawal
and payment of such Trust Moneys, certifying that (i) there is no Default or
Event of Default in effect or continuing on the date thereof and (ii) all
conditions precedent herein provided relating to such withdrawal and application
have been complied with and such withdrawal will not violate the Intercreditor
Agreement.
Upon compliance with the foregoing provisions of this Indenture, the
Trustee shall apply the Trust Moneys as directed and specified by such Company
Order.
Section XII.5 Investment of Trust Moneys
All or any part of any Trust Moneys held by the Trustee shall from time to
time be invested or reinvested by the Trustee in any Cash Equivalents pursuant
to the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Moneys shall be invested. Unless an Event of
Default occurs and is continuing, any interest on such Cash Equivalents (in
excess of any accrued interest paid at the time of purchase) that may be
received by the Trustee shall be forthwith paid to the Company. Such Cash
Equivalents shall be held by the Trustee as a part of the Collateral, subject to
the same provisions hereof as the cash used by it to purchase such Cash
Equivalents.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own negligent action, its own
negligent failure to act or its own willful misconduct in complying with this
Section 12.05.
ARTICLE XIII
Miscellaneous
Section XIII.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 XIII.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:
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If to the Company or any Guarantor:
Gothic Production Corporation
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attention: Secretary
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
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 XIII.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 XIII.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:
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(1) an Officers' Certificate (which shall include the statements
set forth in Section 13.05) 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 XIII.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.
Section XIII.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 XIII.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.
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Section XIII.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,
EXCEPT, AS TO SECTION 11.01, WHERE THE LAW OF ANOTHER JURISDICTION MANDATORILY
GOVERNS THE CREATION, PERFECTION OR PRIORITY OF ANY LIEN CREATED BY THIS
INDENTURE IN COLLATERAL OR ANY REMEDY WITH RESPECT THERETO.
Section XIII.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 XIII.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 XIII.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 XIII.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 XIII.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.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first written above.
COMPANY
GOTHIC PRODUCTION CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
GUARANTOR
GOTHIC ENERGY CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
TRUSTEE
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-00-
XXXXX XX XXXXX (S)
(S)
COUNTY OF DALLAS (S)
This instrument was acknowledged before me on April __, 1998 by Xxxxxxx
Xxxxx, President of Gothic Production Corporation, an Oklahoma corporation, on
behalf of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ______ day of April, 1998.
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires:
-------------------------------------------
Typed or Printed Name of Notary
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
This instrument was acknowledged before me on April __, 1998 by Xxxxxxx
Xxxxx, President of Gothic Energy Corporation, an Oklahoma corporation, on
behalf of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ______ day of April, 1998.
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires:
-------------------------------------------
Typed or Printed Name of Notary
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STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
This instrument was acknowledged before me on April ___, 1998, by
___________, ____________ of The Bank of New York, a New York banking
corporation, on behalf of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ______ day of April, 1998.
-------------------------------------------
Notary Public in and for the State of Texas
My Commission Expires:
-------------------------------------------
Typed or Printed Name of Notary
-97-
EXHIBIT A
EXHIBIT A
FORM OF SECURITY
GOTHIC PRODUCTION CORPORATION
11_% SERIES [A/B] SENIOR SECURED NOTE DUE 2005
[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), OR (B) 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) 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
A-1
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (D) PURSUANT TO THE RESALE
LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (F)
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 PRODUCTION CORPORATION
11_% SERIES [A/B] SENIOR SECURED NOTE DUE 2005
NO. $_________
CUSIP NO.________
Gothic Production Corporation, an Oklahoma corporation, promises to pay to
_______________ or registered assigns the principal sum of ____________________
Dollars on ________________, 2005.
Interest Payment Dates: May 1, and November 1, commencing November 1, 1998
Record Dates: April 15 and October 15
To the extent set forth in the Security Documents (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 Security Documents.
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 PRODUCTION CORPORATION
By:
-----------------------------------------
By:
-----------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the 11_%
Series [A/B] Senior Secured Notes due 2005 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 PRODUCTION CORPORATION
11_% SERIES [A/B] SENIOR SECURED NOTE DUE 2005
1. Interest. Gothic Production Corporation, an Oklahoma corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
11_% per annum from the Issue Date until maturity 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"), 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 the Issue Date;
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, interest shall accrue from
such next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be November 1, 1998. 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"), among the Company, the Guarantor 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 $235,000,000 aggregate principal amount.
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
A-5
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, 2002 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
---- ----------
2002........................... 105.563%
2003........................... 102.782%
2004 and thereafter............ 100.00%
Notwithstanding the foregoing, at any time prior to May 1, 2002, 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 GEC consummates one or more Equity Offerings on
or prior to May 1, 2001, GEC may, in its sole discretion, provide funds to the
Company to redeem, and the Company may redeem, up to 33-1/3% of the aggregate
principal amount of the Securities with all or a portion of the aggregate net
proceeds received by GEC from any such Equity Offering or Equity Offerings,
within 60 days of the closing of any such Equity Offering, at a redemption price
of 111.125% of the aggregate principal amount 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
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 in multiples of $1,000. Securities in denominations larger than $1,000
may be redeemed in part.
A-6
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, 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 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 GEC or 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, the Security Documents 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 Guarantor 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 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 GEC, the Company or any Restricted Subsidiary; (x) any
Security Document ceases to give the Trustee the Lien purported to be created
thereby; and (xi) the Company shall for any reason cease to be a direct Wholly
Owned Subsidiary of GEC. If any Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, except that (i) in the case of an Event of
Default
A-7
arising from certain events of bankruptcy, insolvency or reorganization
of GEC, the Company or any Restricted Subsidiary, the principal amount of the
Securities will become due and payable immediately without further action or
notice, and (ii) in the case of an Event of Default which relates to certain
payment defaults, acceleration or the exercise of certain enforcement rights
with respect to certain Indebtedness, any acceleration of the Securities will be
automatically rescinded if any such Indebtedness is repaid or if the default
relating to such Indebtedness is cured or waived and if the holders thereof have
accelerated such Indebtedness then such holders have rescinded their declaration
of acceleration or if in certain circumstances the proceedings or enforcement
action with respect to the Indebtedness that is the subject of such Event of
Default is terminated or rescinded. No Holder may pursue any remedy under the
Indenture unless the Trustee shall have failed to act after notice of an Event
of Default and written request by Holders of at least 25% in principal amount of
the Outstanding Securities, and the offer to the Trustee of indemnity reasonably
satisfactory to it; however, such provision does not affect the right to xxx 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, 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.
A-8
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 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000-0000.
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.
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.
A-9
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 Production
Corporation, 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000-0000,
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
PRINCIPAL AMOUNT PRINCIPAL AMOUNT FOLLOWING SUCH OF TRUSTEE OR
DATE OF OF THIS GLOBAL OF THIS GLOBAL DECREASE (OR SECURITIES
EXCHANGE SECURITY SECURITY INCREASE) CUSTODIAN
--------- ---------------- ---------------- --------------- -------------
-------------------
/2/ This should be included only if the Security is issued in global form.
X-00
XXXXXXX X-0
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.
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 GUARANTOR]
Attest: By:
------------------------ -------------------------
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 11_% Series [A/B] Senior
Secured Notes due 2005 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 NOTES
______________, 199__
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Gothic Production Corporation
11_% Series [A/B] Senior Secured Notes due 2005 (the "Securities")
------------------------------------------------------------------
Reference is hereby made to the Indenture dated as of April 21, 1998 (the
"Indenture") among Gothic Production Corporation, the Guarantors named therein
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) a Qualified Institutional Buyer, as such term is 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 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 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
B-2
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) 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, (D) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (F) 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.
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 Qualified Institutional Buyer, that,
prior to such transfer, furnishes to the Trustee a signed letter containing
certain representations and
B-3
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 Production Corporation
B-4
EXHIBIT C
FORM OF LEGAL OPINION ON TRANSFER
___________, _____
(Date)
Gothic Production Corporation
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Gothic Production Corporation
11_% Series [A/B] Senior Secured Notes due 2005
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 11_% Series [A/B] Senior Secured
Notes due 2005 of (the "Securities") of Gothic Production 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 PRODUCTION CORPORATION
This Officers' Certificate is provided pursuant to Section 4.03(a) of the
Indenture dated April 21, 1998 among Gothic Production Corporation (the
"Company"), the Guarantors named therein 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 PRODUCTION 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 Production Corporation
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate principal
amount of 11_% Senior Secured Notes due 2005 (the "Securities") of Gothic
Production 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) pursuant to the resale
limitations provided by Rule 144 under the Securities Act (if available), (e)
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 (f)
pursuant to any other available exemption from the registration requirements of
the Securities Act, subject in each of the foregoing cases to any requirement of
law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and to
compliance with any applicable state securities law. The
E-1
foregoing restrictions on sale will not apply subsequent to the Resale
Restriction Termination Date. 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) or (f) 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 a Qualified Institutional Buyer, purchasing for our own account
as to 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:
-----------------------------------
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:
---------------------------
Address:
------------------------
Taxpayer ID Number:
-------------
B-2
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 11_% Series [A/B] Senior
Secured Notes due 2005 (the "Securities") of Gothic Production 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
