EXHIBIT 4.1
Execution Copy
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GOTHIC ENERGY CORPORATION
as Issuer,
GOTHIC ENERGY OF TEXAS, INC.,
GOTHIC GAS CORPORATION
as Guarantors,
AND
THE BANK OF NEW YORK,
as Trustee
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INDENTURE
DATED AS OF SEPTEMBER 9, 1997
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$100,000,000.00
12 1/4% SERIES A SENIOR NOTES DUE 2004
AND
12 1/4% SERIES B SENIOR NOTES DUE 2004
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
310(a)(1)....................................... 7.10
(a)(2)....................................... 7.10
(a)(3)....................................... N.A.
(a)(4)....................................... N.A.
(a)(5)....................................... 7.08; 7.10
(b)....................................... 7.08; 7.10
(c)....................................... N.A.
311(a)....................................... 7.11
(b)....................................... 7.11
(c)....................................... N.A.
312(a)....................................... 2.05
(b)....................................... 11.03
(c)....................................... 11.03
313(a)....................................... 7.06
(b)(1)....................................... N.A.
(b)(2)....................................... 7.06
(c)....................................... 7.06; 11.02
(d)....................................... 7.06
314(a)....................................... 4.02; 4.03;
11.02
(b)....................................... N.A.
(c)(1)....................................... 11.04
(c)(2)....................................... 11.04
(c)(3)....................................... N.A.
(d)....................................... N.A.
(e)....................................... 11.05
(f)....................................... N.A.
315(a)....................................... 7.01(b)
(b)....................................... 7.05; 11.02
(c)....................................... 7.01(a)
(d)....................................... 7.01(c)
(e)....................................... 6.11
316(a)(last sentence)................................ 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.02; 6.04;
9.02
(a)(2)....................................... N.A.
(b)....................................... 6.07
(c)....................................... 9.04
317(a)(1)....................................... 6.08
(a)(2)....................................... 6.09
(b)....................................... 2.04
318(a)....................................... 11.01
318(c)....................................... 11.01
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N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of
this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions And Incorporation By Reference
SECTION 1.01 Definitions..................................................1
SECTION 1.02 Other Definitions...........................................21
SECTION 1.03 Incorporation by Reference of Trust Indenture Act...........22
SECTION 1.04 Rules of Construction.......................................22
ARTICLE II The Securities
SECTION 2.01 Form and Dating.............................................23
SECTION 2.02 Execution and Authentication................................24
SECTION 2.03 Registrar and Paying Agent..................................24
SECTION 2.04 Paying Agent to Hold Money in Trust.........................25
SECTION 2.05 Holder Lists................................................25
SECTION 2.06 Transfer and Exchange.......................................26
SECTION 2.07 Replacement Securities......................................34
SECTION 2.08 Outstanding Securities......................................34
SECTION 2.09 Treasury Securities.........................................34
SECTION 2.10 Temporary Securities........................................34
SECTION 2.11 Cancellation................................................35
SECTION 2.12 Defaulted Interest..........................................35
SECTION 2.13 Persons Deemed Owners.......................................35
SECTION 2.14 CUSIP Numbers...............................................36
SECTION 2.15 Units and Unit Certificates.................................36
ARTICLE III Redemption
SECTION 3.01 Notice to Trustee...........................................37
SECTION 3.02 Selection of Securities to Be Redeemed......................37
SECTION 3.03 Notice of Redemption........................................38
SECTION 3.04 Effect of Notice of Redemption..............................39
SECTION 3.05 Deposit of Redemption Price.................................39
SECTION 3.06 Securities Redeemed in Part.................................39
SECTION 3.07 Equity Offering Redemption..................................39
ARTICLE IV Covenants
SECTION 4.01 Payment of Securities.......................................40
SECTION 4.02 SEC Reports.................................................40
SECTION 4.03 Compliance Certificates.....................................41
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SECTION 4.04 Maintenance of Office or Agency.............................42
SECTION 4.05 Corporate Existence.........................................42
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.....................43
SECTION 4.07 Payment of Taxes and Other Claims...........................43
SECTION 4.08 Maintenance of Properties and Insurance.....................43
SECTION 4.09 Limitation on Incurrence of Additional Indebtedness.........44
SECTION 4.10 Limitation on Restricted Payments...........................44
SECTION 4.11 Limitation on Sale of Assets................................45
SECTION 4.12 Limitation on Liens Securing Indebtedness...................48
SECTION 4.13 Limitation on Sale/Leaseback Transactions...................48
SECTION 4.14 Limitation on Payment Restrictions Affecting Subsidiaries...48
SECTION 4.15 Limitation on Issuances and Sales of Subsidiary Stock.......49
SECTION 4.16 Limitation on Transactions with Affiliates..................49
SECTION 4.17 Change of Control...........................................50
SECTION 4.18 Limitation on Line of Business..............................51
ARTICLE V Successor Corporation
SECTION 5.01 When Company May Merge, etc.................................51
SECTION 5.02 Successor Corporation Substituted...........................52
ARTICLE VI Defaults And Remedies
SECTION 6.01 Events of Default...........................................52
SECTION 6.02 Acceleration................................................55
SECTION 6.03 Other Remedies..............................................56
SECTION 6.04 Waiver of Past Defaults.....................................56
SECTION 6.05 Control by Majority.........................................56
SECTION 6.06 Limitation on Remedies......................................56
SECTION 6.07 Rights of Holders to Receive Payment........................57
SECTION 6.08 Collection Suit by Trustee..................................57
SECTION 6.09 Trustee May File Proofs of Claim............................57
SECTION 6.10 Priorities..................................................58
SECTION 6.11 Undertaking for Costs.......................................58
ARTICLE VII Trustee
SECTION 7.01 Duties of Trustee...........................................59
SECTION 7.02 Rights of Trustee...........................................60
SECTION 7.03 Individual Rights of Trustee................................61
SECTION 7.04 Trustee's Disclaimer........................................61
SECTION 7.05 Notice of Defaults..........................................61
SECTION 7.06 Reports by Trustee to Holders...............................62
SECTION 7.07 Compensation and Indemnity..................................62
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SECTION 7.08 Replacement of Trustee......................................63
SECTION 7.09 Successor Trustee by Merger, etc............................64
SECTION 7.10 Eligibility; Disqualification...............................64
SECTION 7.11 Preferential Collection of Claims Against Company...........64
ARTICLE VIII Discharge Of Indenture
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance....64
SECTION 8.02 Legal Defeasance and Discharge..............................64
SECTION 8.03 Covenant Defeasance.........................................65
SECTION 8.04 Conditions to Legal or Covenant Defeasance..................65
SECTION 8.05 Deposited Money and U.S. Government Securities to be Held
in Trust; Other Miscellaneous Provisions....................67
SECTION 8.06 Repayment to Company........................................67
SECTION 8.07 Reinstatement...............................................68
ARTICLE IX Amendments, Supplements And Waivers
SECTION 9.01 Without Consent of Holders..................................68
SECTION 9.02 With Consent of Holders.....................................69
SECTION 9.03 Compliance with Trust Indenture Act.........................70
SECTION 9.04 Revocation and Effect of Consents...........................70
SECTION 9.05 Notation on or Exchange of Securities.......................71
SECTION 9.06 Trustee Protected...........................................71
ARTICLE X Guarantees
SECTION 10.01 Unconditional Guarantee.....................................72
SECTION 10.02 Guarantors May Consolidate, etc., on Certain Terms..........73
SECTION 10.03 Addition of Guarantors......................................73
SECTION 10.04 Release of a Guarantor......................................74
SECTION 10.05 Limitation of Guarantor's Liability.........................74
SECTION 10.06 Contribution................................................75
SECTION 10.07 Execution and Delivery of Guarantee.........................75
SECTION 10.08 Severability................................................75
ARTICLE XI Miscellaneous
SECTION 11.01 Trust Indenture Act Controls................................76
SECTION 11.02 Notices.....................................................76
SECTION 11.03 Communication by Holders with Other Holders.................77
SECTION 11.04 Certificate and Opinion as to Conditions Precedent..........77
SECTION 11.05 Statements Required in Certificate or Opinion...............77
SECTION 11.06 Rules by Trustee and Agents.................................78
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SECTION 11.07 Legal Holidays..............................................78
SECTION 11.08 Governing Law...............................................78
SECTION 11.09 No Adverse Interpretation of Other Agreements...............78
SECTION 11.10 No Recourse Against Others..................................78
SECTION 11.11 Successors..................................................78
SECTION 11.12 Duplicate Originals.........................................79
SECTION 11.13 Severability................................................79
EXHIBIT A Face of Security ................................................A-1
Reverse of Security .............................................A-4
Assignment Form ................................................A-10
Form of Option of Holder to Elect Purchase .....................A-11
Schedule of Exchanges of Global Security for Definitive
Security .......................................................A-12
Form of Notation on Security Relating to Subsidiary Guarantee ..A-13
EXHIBIT B Certificate to be Delivered upon Exchange or Transfer of Senior
Notes............................................................B-1
EXHIBIT C Form of Legal Opinion on Transfer................................C-1
EXHIBIT D Officers' Certificate of Nondefault..............................D-1
EXHIBIT E Transferee Letter of Representation..............................E-1
EXHIBIT F Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S ........................................F-1
EXHIBIT G Form of Unit Certificate.........................................G-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of this Indenture.
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INDENTURE, dated as of September 9, 1997, among GOTHIC ENERGY
CORPORATION, an Oklahoma corporation (the "Company"), and GOTHIC ENERGY OF
TEXAS, INC., an Oklahoma corporation ("GE-TX"), GOTHIC GAS CORPORATION, an
Oklahoma corporation ("Gothic Gas") as the initial Guarantors, 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 12 1/4% Series
A Senior Notes due 2004 and the Company's 12 1/4% Series B Senior Notes due 2004
(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 1.1 Definitions.
"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 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 (or for the initial periods prior to the
availability of such reserve report for December 31, 1997, the summary reserve
report of Xxx Xxxxxxx and Associates, Inc. included as Annex A to that certain
Confidential Offering Memorandum of the Company, dated September 2, 1997,
relating to the offering of the Securities), 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 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 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 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 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
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, (iii) the Net Working
Capital on a date no earlier than the date of the Company's latest annual or
quarterly financial statements and (iv) the greater of (I) the net book value on
a date no earlier than the date of the Company's latest annual or quarterly
financial statements and (II) the appraised value, as estimated by independent
appraisers, of other tangible assets (including Investments in unconsolidated
Subsidiaries) of the Company and its consolidated 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 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 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 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
2
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
Subsidiary 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.
"Amended Revised Credit Facility" means the Amended Loan Agreement
between the Company and Bank One, Texas, N.A., as amended from time to time.
"Asset Sale" means any sale, lease, transfer, exchange or other
disposition 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 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 Subsidiaries, including any disposition by means of a merger,
consolidation or similar transaction (other than (a) by the Company to a Wholly
Owned consolidated Subsidiary or by a Subsidiary to the Company or a Wholly
Owned consolidated 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
3
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 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 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 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 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, and (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 (i) do not have proved reserves
attributed to them or (ii) were purchased for the purpose of offering such
properties for resale or participations by other Persons).
"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.
4
"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 Subsidiaries and certain financial institutions, as amended,
extended or refinanced from time to time. The Amended Credit Facility will
constitute a Bank Credit Facility.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors or the managing partner(s)
of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day on which the New York Stock Exchange, Inc
is open for trading and which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock or partnership interests and any and all warrants, options and rights with
respect thereto (whether or not currently exercisable), including each class of
common stock and preferred stock of such Person.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 90 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 90 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million; (iii)
commercial paper with a maturity of 90 days or less issued by a corporation that
is not an Affiliate of the Company and is organized under the laws of any state
of the United States or the District of Columbia and rated at least A-1 by
Standard & Poor's Ratings Services at least P-1 by 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)
5
above entered into with any commercial bank meeting the specifications of clause
(ii) above; and (v) overnight bank deposits and bankers' acceptances at any
commercial bank meeting the qualifications specified in clause (ii) above.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of all
or substantially all of the Company's assets to any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act); (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company; (iii) the
acquisition, directly or indirectly, by any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the aggregate
voting power of the Voting Stock of the Company (for the purposes of this
definition, such other Person shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation, if such other
Person is the beneficial owner (as defined above), directly or indirectly, of
more than 35% of the voting power of the Voting Stock of such parent
corporation); or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office.
"Company" means the party named as such above, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"Consolidated Interest Coverage Ratio" means, for any Reference Period,
the ratio on a pro forma basis of (a) the sum of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense, (iii) Consolidated Tax Expense, (iv)
depreciation and depletion of the Company and its Subsidiaries, as determined in
accordance with GAAP on a consolidated basis plus (v) amortization of the
Company and its 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 Notes) 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
6
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 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 Subsidiaries
(including (i) amortization of original issue discount on any Indebtedness
(other than with respect to the Securities), (ii) the interest portion of all
deferred payment obligations, calculated in accordance with GAAP and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptance financings and currency and interest rate swap arrangements, in each
case to the extent attributable to such period), and (b) dividend requirements
of the Company and its 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 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 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 Subsidiary of the
Company of an obligation of another Person (other than the Company or any other
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 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
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 Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other
7
distribution to a Wholly Owned 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
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (c) the net income of any Subsidiary to the extent
that the payment of dividends or the making of distributions by such 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 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 non current assets; provided, however, that
any ceiling limitation writedowns under SEC guidelines shall be treated as
capitalized costs, as if such writedowns had not occurred; and (i) any gain (but
not loss) attributable to extraordinary items.
"Consolidated Net Worth" means, with respect to the Company and its
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 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 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 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.
"Definitive Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A, that do not include the information
called for by footnotes 1 and 2 thereof, and do not have attached the additional
schedule referred to in footnote 3 thereof; provided that, on or prior to the
Unit Termination Date, the term "Global Security" shall mean the Units evidenced
by a Unit Certificate that does not include the information called for by
footnotes 1 and 2, and do not have attached the additional schedule referred to
in footnote 3 to, the form of
8
Unit Certificate attached as Exhibit G hereto.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the 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
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 Subsidiary of the Company, except to the extent that such
exchange or conversion rights cannot be exercised prior to the Maturity Date.
"Dollar-Denominated Production Payments" mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Effective Registration" means the Company shall have (i) commenced the
Exchange Offer for the Securities pursuant to an effective registration
statement under the Securities Act or (ii) filed and caused to become effective
the Shelf Registration under the Securities Act for the sale of Securities by
Holders.
"Equity Offering" means any underwritten public offering of common
stock of the Company pursuant to a registration statement (other than Form S-8)
filed pursuant to the Securities Act or any private placement of Capital Stock
(other than Disqualified Stock) of the Company (other than to any Person who,
prior to such private placement, was a Subsidiary of the Company or any other
Person controlled by the Company) which offering or placement is consummated
after the Issue Date.
"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
9
of America as of the Issue Date.
"GE-TX" means Gothic Energy of Texas, Inc., an Oklahoma corporation and
wholly owned subsidiary of the Company.
"Global Security" means a Security that contains the language referred
to in footnotes 1 and 2 and the additional schedule referred to in footnote 3 to
the form of the Securities attached hereto as Exhibit A; provided that, on or
prior to the Unit Termination Date, the term "Global Security" shall mean the
Units evidenced by a Unit Certificate that contains the language referred to in
footnotes 1 and 2 and the additional schedule referred to in footnote 3 to the
form of Unit Certificate attached hereto as Exhibit G.
"Gothic Gas" means Gothic Gas Corporation, an Oklahoma corporation and
wholly owned subsidiary of the Company.
"Guarantee" or "Guarantees" means (i) initially, the Guarantee given by
GE-TX and Gothic Gas herein and (ii) thereafter, any Guarantee issued by
existing or future Subsidiaries pursuant to Article X hereof.
"Guarantor" means (i) initially, each of GE-TX and Gothic Gas, (ii)
each of the Subsidiaries that becomes a guarantor of the Notes in compliance
with the provisions of 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 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
10
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
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
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 Subsidiaries); and (g) any and all deferrals,
renewals, extensions, refinancings and refundings (whether direct or indirect)
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a), (b), (c), (d), (e), (f) or this
clause (g), whether or not between or among the same parties. Subject to clause
(c) of the preceding sentence, neither Dollar-Denominated Production Payments
nor Volumetric Production Payments shall be deemed to be Indebtedness.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Investment" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of assets, Indebtedness, Capital Stock or other securities of any other
Person and (iv) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary course
of business) or advances on a balance sheet of such Person prepared in
accordance with GAAP.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statute or statutes) of any jurisdiction).
11
"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
Subsidiaries, or (ii) 20% from the end of the immediately preceding year (or
from June 30, 1997 on a pro forma basis, in the case of a date prior to the
availability of the reserve report for December 31, 1997) in the estimated
discounted future net revenue from proved oil and gas reserves of the Company
and its consolidated 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 September 1, 2004.
"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 in each case net of all Indebtedness which is secured by such
assets, in accordance with the terms of any Lien upon or with respect to such
assets, or which must, by its terms or in order to obtain a necessary consent to
such Asset Sale or Sale/Leaseback Transaction or by applicable law, be repaid
out of the proceeds from such Asset Sale or Sale/Leaseback Transaction and which
is actually so repaid 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 Subsidiaries, minus (ii) all current liabilities of the Company
and its consolidated Subsidiaries (including the net current portion of gas
balancing liabilities), except current liabilities included in Indebtedness.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Person as to which (a) neither the Company nor any 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
12
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 Subsidiaries to declare a default on such other Indebtedness
or cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"Notes Liquidated Damages" shall have the meaning given such term in
the Registration Rights Agreement.
"Officer" means, with respect to any Person, the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer or the Treasurer
of such Person.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either a Secretary,
Assistant Secretary or Assistant Treasurer of such Person. One of the Officers
signing an Officers' Certificate given pursuant to Section 4.03(a) shall be the
principal executive, financial or accounting Officer of the Person delivering
such certificate.
"Oil and Gas Business" means the business of the exploration for, and
exploitation, development, production, processing (but not refining), marketing,
storage and transportation of, hydrocarbons, and other related energy and
natural resources businesses (including oil and gas services businesses related
to the foregoing).
"Oil and Gas Securities" means the Voting Stock of a Person primarily
engaged in the Oil and Gas Business, provided that such Voting Stock shall
constitute a majority of the Voting Stock of such Person in the event that such
Voting Stock is not registered under Section 12 of the Exchange Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or any Guarantor, if applicable) or the Trustee.
"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
13
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 Subsidiary in any Person which, immediately prior to the making of such
Investment, is a Wholly Owned Subsidiary; (vi) Investments in the Company by any
Wholly Owned 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 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,
14
that such depository institution or trust company has, at the time of the
Company's or such 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 Subsidiary's
investment therein or contractual commitment providing for such investment,
credit ratings of A-1 (or higher) by Standard & Poor's Ratings Services and P-1
(or higher) by 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
Subsidiaries outstanding as of the Issue Date; (ii) Indebtedness of the Company
and its 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 $30.0
million, 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 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 Subsidiary of the Company and
Indebtedness of any Subsidiary of the Company to the Company or another Wholly
Owned Subsidiary of the Company; (vi) Permitted Company Refinancing
Indebtedness; (vii) Permitted Subsidiary Refinancing Indebtedness; (viii)
obligations under hedging arrangements that the Company and its 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; and (x) Indebtedness of a Subsidiary pursuant
to a Guarantee of the Securities pursuant to Article X of this Indenture.
"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; (iii) Liens now or
hereafter securing any interest rate hedging obligations so long as the related
Indebtedness (a) constitutes Senior Indebtedness or (b) is, or is permitted to
be under this Indenture, secured by a Lien on the same property securing such
interest rate obligations; (iv) Liens now or hereafter securing any interest
rate hedging obligations so long as the related Indebtedness (a) constitutes the
Securities (or any Refinancing Indebtedness of the Company in respect thereof)
or (b) is, or is permitted to be under this Indenture, secured by a Lien on the
same property securing such interest rate hedging obligations; (v) Liens
securing Indebtedness, the proceeds of which are used to refinance secured
Indebtedness of the Company or its Subsidiaries; provided, that such Liens
extend to or cover only the property or assets currently securing the
Indebtedness being refinanced; (vi) 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;
15
(vii) mechanics', workmen's, materialmen's, operators' or similar Liens arising
in the ordinary course of business; (viii) Liens in connection with workers'
compensation, unemployment insurance or other social security, old age pension
or public liability obligations; (ix) 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; (x) survey exceptions, encumbrances, easements or
reservations of, or rights of others for, rights of way, zoning or other
restrictions as to the use of real properties, and minor defects in title which,
in the case of any of the foregoing, were not incurred or created to secure the
payment of borrowed money or the deferred purchase price of property or
services, and in the aggregate do not materially adversely affect the value of
such properties or materially impair use for the purposes of which such
properties are held by the Company or any Subsidiaries; (xi) 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; (xii) Liens on pipeline or pipeline facilities which arise out of
operation of law; (xiii) 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; (xiv) (a) Liens upon
any property of any Person existing at the time of acquisition thereof by the
Company or a Subsidiary, (b) Liens upon any property of a Person existing at the
time such Person is merged or consolidated with the Company or any Subsidiary or
existing at the time of the sale or transfer of any such property of such Person
to the Company or any Subsidiary, or (c) Liens upon any property of a Person
existing at the time such Person becomes a 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 Subsidiary
other than the property being acquired and improvements thereon; (xv) 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; (xvi) 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
Subsidiary on deposit with or in possession of such bank; (xvii) 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; (xviii) Liens
reserved in oil and gas mineral leases for bonus or rental payments and for
compliance with the terms of such leases; (xix) 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; (xx) Liens securing obligations under hedging
arrangements that the Company or any 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
16
(xxi) Liens to secure Dollar-Denominated Production Payments and Volumetric
Production Payments.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of
any Subsidiary, the net proceeds of which are used to renew, extend, refinance,
refund or repurchase outstanding Indebtedness of such Subsidiary, provided that
(i) if the Indebtedness (including any guarantee) being renewed, extended,
refinanced, refunded or repurchased is pari passu with or subordinated in right
of payment to the Guarantee, then such Indebtedness is pari passu with or
subordinated in right of payment to, as the case may be, the Guarantee at least
to the same extent as the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, (ii) such Indebtedness is scheduled to mature no
earlier than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and (iii) such Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the Average Life of
the Indebtedness being renewed, extended, refinanced, refunded or repurchased,
provided, further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Subsidiary Refinancing Indebtedness) is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP); provided, however, that a Subsidiary shall not incur refinancing
Indebtedness to renew, extend, refinance, refund or repurchase outstanding
Indebtedness of another Subsidiary unless such 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.
"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
17
terms of the Securities or this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of Sepember 9, 1997, 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.
"Restricted Payment" means, with respect to any Person, any of the
following: (i) any dividend or other distribution in respect of such Person's
Capital Stock (other than (a) dividends or distributions payable solely in
Capital Stock (other than Disqualified Stock) and (b) in the case of
Subsidiaries of the Company, dividends or distributions payable to the Company
or to a Subsidiary of the Company); (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock, or any option,
warrant, or other right to acquire shares of Capital Stock, of the Company or
any of its 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 Notes; and (iv) the making by such
Person of any Investment other than a Permitted Investment.
"Restricted Securities" mean Securities that bear or are required to
bear the Restricted Securities Legend.
"Restricted Securities Legend" means the legend set forth on the face
of the form of Security attached hereto as Exhibit A (or prior to the Unit
Termination Date, Exhibit G), pursuant to Section 2.06.
"Sale/Leaseback Transaction" means with respect to the Company or any
of its Subsidiaries, any arrangement with any Person providing for the leasing
by the Company or any of its 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
Subsidiaries to such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" or "Security" means the Company's 12 1/4% Series A Senior
Notes due 2004 and the Company's 12 1/4% Series B Senior Notes due 2004, as
either may be amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture; provided that on or
prior to the Unit Termination Date, the term "Securities" shall also include the
Units.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and
18
regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred), unless such Indebtedness
is contractually subordinate or junior in right of payment of principal, premium
and interest to the Securities.
"Senior Indebtedness of a Guarantor" means any Indebtedness of such
Guarantor (whether outstanding on the date hereof or hereafter incurred), unless
such Indebtedness is contractually subordinate or junior in right of payment of
principal, premium and interest to the Guarantees.
"Separation Date" shall mean the earlier of (i) the date that a
registration statement filed in respect of the Exchange Offer is declared
effective by the SEC and (ii) March 8, 1998.
"Series A Securities" means the Company's 12 1/4% Series A Senior Notes
due 2004 to be issued pursuant to this Indenture.
"Series B Securities" means the Company's 12 1/4% Series B Senior Notes
due 2004 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
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.
"Subordinated Indebtedness of a Guarantor" means any Indebtedness of
such Guarantor (whether outstanding on the date hereof or hereafter incurred)
which is contractually subordinate or junior in right of payment of principal,
premium and interest to the Guarantees.
"Subordinated Indebtedness of the Company" means any Indebtedness of
the Company (whether outstanding on the date hereof or hereafter incurred) which
is contractually subordinate or junior in right of payment of principal, premium
and interest to the Securities.
"Subsidiary" means any subsidiary of the Company. A subsidiary of any
Person means (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
19
Person is, at the date of determination, a general or limited partner of such
partnership, but 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, 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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trust Officer" means any officer or assistant officer within the
corporate trust department of the Trustee assigned by the Trustee to administer
its corporate trust matters.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"U.S. Government Securities" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof.
"U.S. Legal Tender" means such coin or currency of the United States as
at the time of payment shall be legal tender for the payment of public and
private debts.
"Units" shall mean a trading unit consisting of (i) $1,000 principal
amount of Series A Securities and (ii) 14 Warrants pursuant to the Warrant
Agreement and Section 2.15 hereof.
"Unit Certificate" shall mean a certificate of the Company
substantially in the form set forth in Exhibit G evidencing ownership by the
Holder of Units.
"Unit Termination Date" shall have the meaning set forth in Section
2.15(c).
"Volumetric Production Payments" mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of contingency) to vote in the election of members of the Board
of Directors or other governing body of such person.
"Warrants" or "Warrant" shall mean all, or one of, the aggregate
1,400,000 Common Stock Purchase Warrants of the Company issued pursuant to the
Warrant Agreement.
20
"Warrant Agreement" shall mean that certain Warrant Agreement dated as
of September 9, 1997 between the Company and American Stock Transfer & Trust
Company, as Warrant Agent.
"Wholly Owned Subsidiary" means a Subsidiary all of the Capital Stock
(other than directors' qualifying shares if applicable) of which is owned by the
Company or another Wholly Owned 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
"Event of Default"....................................... 6.01
"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.
21
"indenture security holder" means a Holder.
"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 1.4 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.
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
22
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.
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.
23
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 $100 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 $100 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 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.
24
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 ss.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 ss.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
(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
25
such transactions are met; provided, however, that the Definitive Securities
presented or surrendered for registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Registrar
duly executed by the Holder thereof or by his attorney, duly authorized
in writing; and
(ii) in the case of Restricted Securities that are
Definitive Securities, shall be accompanied by the following additional
information and documents, as applicable, upon which the Registrar may
conclusively rely:
(A) if such Restricted Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect (in substantially the form of
Exhibit B hereto); or
(B) if such Restricted Securities are being
transferred (1) to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2) pursuant to an
exemption from registration in accordance with Rule 144 under
the Securities Act (and based upon an opinion of counsel if
the Company or the Trustee so requests) or (3) pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or
(C) if such Restricted Securities are being
transferred to an institutional "accredited investor," within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from
the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto) and a
certification from the applicable transferee (in substantially
the form of Exhibit E hereto);
(D) if such Restricted Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), certifications to that effect from such Holder (in
substantially the form of Exhibits B and F hereto); or
(E) if such Restricted Securities are being
transferred in reliance on another exemption from the
registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
26
(b) Restriction on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Restricted
Security, certification, substantially in the form of Exhibit B hereto,
upon which the Trustee may conclusively rely, that such Definitive
Security is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act; or
(ii) if such Definitive Security is a Restricted
Security and is being transferred pursuant to an exemption from
registration in accordance with Rule 904 under the Securities Act (and
based upon an opinion of counsel if the Company or the Trustee so
requests), certifications to that effect from such Holder (in
substantially the form of Exhibits B and F hereto); and
(iii) whether or not such Definitive Security is a
Restricted Security, written instructions directing the Trustee to
make, or direct the Securities Custodian to make, an endorsement on the
Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security;
then the Trustee shall cancel such Definitive Security in accordance with
Section 2.11 hereof and cause, or direct the Securities Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Securities Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If no
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate a new Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Security for
a Definitive Security.
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange such beneficial interest for
a Definitive Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person
having a
27
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
(B) if such beneficial interest is being
transferred (1) to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2) pursuant to an
exemption from registration in accordance with Rule 144 under
the Securities Act (and based upon an opinion of counsel if
the Company or the Trustee so requests) or (3) pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being
transferred to an institutional "accredited investor," within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from
the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), a certification to that effect from such transferor
(in substantially the form of Exhibit B hereto) and a
certification from the applicable transferee (in substantially
the form of Exhibit E hereto); or
(D) if such beneficial interest is being
transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so
requests), certifications to that effect from such transferor
(in substantially the form of Exhibits B and F hereto); or
(E) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company so requests), a
certification to that effect from such transferor (in
substantially the form of Exhibit B hereto);
the Trustee or the Securities Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, cause the aggregate principal amount of Global Secutities 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
28
such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Securities to the Persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.06), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
Depositary. If at any time:
(i) the Depositary for the Securities notifies the
Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor Depositary for the
Global Securities is not appointed by the Company within 90 days after
delivery of such notice;
(ii) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depositary
to issue Definitive Securities in lieu of all or a portion of the
Global Security (in which case the Company shall deliver Definitive
Securities within 30 days of such request); or
(iii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Securities under this Indenture,
then the Company will execute, and the Trustee will authenticate and make
available for delivery Definitive Securities, in an aggregate principal amount
equal to the principal amount of the Global Securities, in exchange for such
Global Securities and registered in such names as the Depositary shall instruct
the Trustee or the Company in writing.
(g) Legends.
(i) Except as permitted by the following paragraph
(ii), each Security certificate evidencing the Global Securities and
the Definitive Securities (and all Securities issued in exchange
therefor or substitution thereof) shall bear a legend in substantially
the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY
NOT BE REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT
OF ANY PERSON EXCEPT
29
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) WHICH IS AN
INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS PURCHASING IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT AND, PRIOR TO THE EXPIRATION OF THE 40-DAY
RESTRICTED PERIOD PROVIDED FOR IN RULE 903 OF REGULATION S, WILL NOT OFFER OR
SELL THESE SECURITIES IN THE UNITED STATES OR TO A U.S. PERSON OR FOR THE
ACCOUNT OF A U.S. PERSON WITHIN THE MEANING OF RULE 902(o) OF REGULATION S, (2)
AGREES THAT IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD AS COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE LATER OF
THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (THE
"RESALE RESTRICTION TERMINATION DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
SECURITY, EXCEPT (A) TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE
RESALE PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (COPIES OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE), PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE
INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT TO THIS CLAUSE C PRIOR TO THE
EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" DESCRIBED ABOVE, (D) OUTSIDE THE
UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT
AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE
INDENTURE PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" DESCRIBED
ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED FROM THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (E) PURSUANT TO THE RESALE
LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (G)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE AT
ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE
30
STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHICH THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL
NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
Each Security certificate evidencing the Global Securities also shall bear the
paragraph referred to in footnote 1 in the form of Security attached hereto as
Exhibit A.
(ii) Upon any sale or transfer of a Restricted
Security (including any Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Restricted Security
that is a Definitive Security, the Registrar shall permit the
Holder thereof to exchange such Restricted Security for a
Definitive Security that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of such
Restricted Security; and
(B) in the case of any Restricted Security
represented by a Global Security, such Restricted Security
shall not be required to bear the legend set forth in (i)
above if all other interests in such Global Security have been
or are concurrently being sold or transferred pursuant to Rule
144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, but such
Restricted Security shall continue to be subject to the
provisions of Section 2.06(c) hereof; provided, however, that
with respect to any request for an exchange of a Restricted
Security that is represented by a Global Security for a
Definitive Security that does not bear a legend set forth in
(i) above, which request ismade in reliance upon Rule 144
under the Securities Act, the Holder thereof shall certify in
writing to the Regisstrar 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
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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.
(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
32
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.
(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
33
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.
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.
34
SECTION II.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay, or cause the Paying Agent to pay, the defaulted interest in any
lawful manner (plus interest on such defaulted interest to the extent lawful)
(taken together, the "Defaulted Interest") to the persons who are Holders on a
subsequent special record date, in each case at the rate provided in the
Securities and in Section 4.01 hereof. At least 15 days before the special
record date, the Company shall mail to each Holder to be paid thereon a notice
stating the special record date, the payment date and the amount of Defaulted
Interest to be paid. In the event that the Company has elected to cause a Paying
Agent to pay the Defaulted Interest, the Company shall so notify the Paying
Agent at least 15 days before the special record date, which notice shall also
set forth the special record date, the payment date and the aggregate amount of
Defaulted Interest to be paid. At least five days before such payment date, the
Company shall deposit with the Paying Agent money sufficient to pay all of the
Defaulted Interest on the payment date therefor and instruct the Paying Agent in
writing to pay to specified Holders on the payment date. On the payment date,
the Paying Agent shall make the payments in accordance with the Company's
written instructions from funds deposited with the Paying Agent for the purpose
of making such Defaulted Interest payments.
SECTION 2.13 Persons Deemed Owners.
The Company, the Trustee, any Paying Agent and any authenticating agent
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payments of principal of, premium, if
any, or interest on such Security and for all other purposes. None of the
Company, the Trustee, any Paying Agent or any authenticating agent shall be
affected by any notice to the contrary.
SECTION II.14 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
SECTION II.15 Units and Unit Certificates.
Notwithstanding any provision of this Indenture to the contrary, on or
prior to the Unit Termination Date, all Securities issued or exchanged under
this Indenture shall consist of Units evidenced by Unit Certificates
substantially in the form set forth in Exhibit G hereto. Except as
35
otherwise provided in this Section 2.15, the Units and Unit Certificates shall
be subject to all of the provisions of this Indenture applicable to the
Securities, including without limitation provisions relating to exchange and
transfer (and restrictions on transfer) of Securities, the issuance of
Definitive Securities and Global Securities in exchange for outstanding
Securities, and provisions regarding payment on the Series A Securities of the
Company constituting a part of the Units evidenced by Unit Certificates. The
following provisions shall apply to the Units and the Unit Certificates:
(a) Unit Certificates duly executed by the Company (with the
notation of Guarantee duly executed by each Guarantor) and authenticated by the
Trustee or its agent in accordance with this Indenture shall constitute (i) duly
issued and outstanding Series A Securities of the Company in the principal
amount set forth on the Unit Certificate and (ii) number of Warrants set forth
on the Unit Certificate.
(b) For so long as the Units evidenced by Unit Certificates
are outstanding, (i) all payments made by the Company or any Guarantor to the
Trustee or any Paying Agent in respect of the Securities shall be deemed made
solely in respect of the Series A Securities and no part of such payment shall
be made in respect of the Warrants and (ii) all provisions regarding redemption,
retirement or defeasance under this Indenture, or any offers of purchase
pursuant to Sections 4.11 or 4.17 hereof, shall apply solely to the Series A
Securities constituting a part of the Units. Neither the Trustee, any Paying
Agent nor any Registrar shall be liable for any payment made, or omitted to be
made, in respect of the Warrants.
(c) The Company shall promptly notify the Trustee and the
Registrar (if not the Trustee) in writing of the occurrence of the Separation
Date, if such date occurs prior to March 8, 1998. After the earlier of (A) Xxxxx
0, 0000, (X) a date after the Separation Date designated by the Company as the
Unit Termination Date by at least five Business Days prior written notice to the
Registrar and the Depositary and (C) the date on which all the Series A
Securities evidenced by Unit Certificates shall cease to be outstanding (such
earlier date being herein referred to as the "Unit Termination Date"), the
Registrar shall (i) cease to issue Unit Certificates for transfer or exchange
for other Unit Certificates, (ii) unless the Series A Securities have ceased to
be outstanding, issue in the appropriate principal amount Series A Securities in
the proper form and subject to the restrictions provided for in this Article II
in transfer or exchange for Unit Certificates, subject to the other terms of
this Indenture and (iii) deliver to the warrant agent under the Warrant
Agreement (at the direction of the Company) a list of Holders of Units
(including the registered name of such Holder, the number of Units held by each
Holder, the Unit Certificate numbers and an indication as to the global or
definitive form of such Unit Certificate) as of the close of the Unit
Termination Date for the purpose of permitting the warrant agent under the
Warrant Agreement to issue Warrant certificates to such Holders as of the close
of the Unit Termination Date. After the occurrence of the Unit Termination Date,
the outstanding Unit Certificates shall cease to evidence the Warrants and shall
solely constitute outstanding Series A Securities. Neither the Trustee nor the
Registrar shall have any liability or responsibility for issuance of, or failure
to issue, Warrant certificates to any Holders of Units as of the Unit
Termination Date.
36
(d) The number of Warrants comprising part of a Unit shall not
be adjusted in the event a portion of the principal amount Series A Securities
constituting part of a Unit is redeemed, retired or defeased, or purchased
pursuant to Sections 4.11 or 4.17 hereof.
(e) In the event a Unit Certificate is delivered to the
Registrar for exchange or transfer bearing a notation of the warrant agent to
the effect that the Warrants evidenced thereby have been exercised, the Unit
Certificate shall cease to evidence ownership of Warrants and the Registrar
shall issue, in accordance with the other provisions of this Article II, a
Series A Security in exchange or transfer therefor.
ARTICLE III
Redemption
SECTION III.1 Notice to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 6 or 7 of the Securities, it shall furnish to
the Trustee and the Registrar, at least 45 days but not more than 60 days before
the redemption date (unless the Trustee consents to a shorter period in
writing), an Officers' Certificate setting forth the redemption date, the
principal amount of Securities to be redeemed and the redemption price.
SECTION III.2 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed at any time, the
Trustee shall select the Securities to be redeemed in multiples of $1,000 pro
rata, by lot or, if the Securities are listed on any securities exchange, by any
other method that the Trustee considers fair and appropriate and that
complies with the requirements of such exchange. The Trustee shall make the
selection from outstanding Securities not previously called for redemption not
less than 30 nor more than 60 days prior to the redemption date. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them it selects
shall be in amounts of $1,000 or whole multiples of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities selected for redemption.
SECTION III.3 Notice of Redemption.
(a) At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities to be redeemed at such Holder's registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
37
(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.
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
38
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 Equity Offering Redemption.
In the event the Company consummates one or more Equity Offerings on or
prior to September 1, 1998, the Company may redeem, in its sole discretion, up
to $25.0 million of the aggregate principal amount of the Securities with all or
a portion of the aggregate net proceeds received by the Company from any such
Equity Offering or Equity Offerings, within 60 days of the closing of any such
Equity Offering, at a redemption price of 112.25% of the aggregate principal
amount of Securities so redeemed, plus accrued and unpaid interest on the
Securities so redeemed to the redemption date; provided, however, that following
such redemption, at least $75.0 million 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
39
be deemed to include any additional interest payable as Notes Liquidated Damages
pursuant to the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal, and premium, if any,
at the rate borne by the Securities to the extent lawful; and it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION IV.2 SEC Reports.
(a) The Company, within 15 days after it files the same with
the SEC, shall deliver to Holders, copies of the annual reports and the
information, documents and other reports (or copies of any such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC (if the SEC will so accept) and provide
the Trustee and the Holders with such annual reports and such information,
documents and other reports specified in Sections 13 and 15(d) of the Exchange
Act. The Company and each Guarantor shall also comply with the provisions of
TIA (S) 314(a).
(b) The Company may request the Trustee on behalf of the
Company at the Company's expense to mail the foregoing to Holders. In such case,
the Company shall provide the Trustee with a sufficient number of copies of all
reports and other documents and information that the Trustee may be required to
deliver to Holders under this Section.
(c) 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.
(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
40
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 ss.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.
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 11.02. 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
41
an office or agency in the Borough of Manhattan, the City of New York, for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION IV.5 Corporate Existence.
Subject to Section 5.01 and Section 10.02, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each Subsidiary and all rights (charter and statutory) and franchises of the
Company and the Subsidiaries; provided, that the Company shall not be required
to preserve the corporate existence of any 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.
SECTION IV.7 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION IV.8 Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or held for
use in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment
42
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
Subsidiaries, taken as a whole; provided, however, that nothing in this Section
shall prevent the Company from discontinuing the operation or maintenance of any
such property, or disposing of it, if such discontinuance or disposal is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for
itself and each of its 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 Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry.
SECTION IV.9 Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of its
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 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 September 1, 1998
or (b) 3.0-to-1.0 with respect to any date of incurrence of additional
Indebtedness occurring after September 1, 1998 and (ii) Adjusted Consolidated
Net Tangible Assets would have been equal to or greater than (A) 125% of
Indebtedness of the Company and its Subsidiaries on or before September 1, 1998,
(B) 150% of Indebtedness of the Company and its Subsidiaries after September 1,
1998 and on or before September 1, 2001 and (C) 175% of Indebtedness of the
Company and its Subsidiaries after September 1, 2001.
(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 Subsidiaries that are
Guarantors may incur Permitted Indebtedness.
(c) Any Indebtedness of a Person existing at the time such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be
43
incurred by such Subsidiary at the time it becomes a Subsidiary.
SECTION IV.10 Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment, unless:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of or immediately after giving
effect to such Restricted Payment;
(ii) at the time of and immediately after giving
effect to such Restricted Payment, the Company would be able to incur
at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.09(a); and
(iii) immediately after giving effect to such
Restricted Payment, the aggregate of all Restricted Payments declared
or made after the Issue Date does not exceed the sum of (A) 50% of the
Consolidated Net Income of the Company and its 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 June 30, 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 during such period from any Person other than a
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; and (C) the aggregate Net Cash Proceeds received by the Company
during such period from any Person other than a 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).
(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 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 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
44
any class of Capital Stock of the Company or any Subsidiary, in exchange for, or
out of the aggregate net proceeds of a substantially concurrent issue and sale
(other than to a Subsidiary) of shares of Capital Stock of the Company (other
than Disqualified Stock).
SECTION IV.11 Limitation on Sale of Assets.
(a) The Company will not, and will not permit any Subsidiary
to, make any Asset Sale unless:
(i) the Company (or its 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 75% 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 Subsidiary, as the case may be) from such Asset Sale are
applied in accordance with paragraphs (b) or (c) hereof.
(b) The Company may apply such Net Cash Proceeds, within 365
days after receipt of Net Cash Proceeds from any Asset Sale, to: (i) the
repayment of Indebtedness of the Company under a Bank Credit Facility or other
Senior Indebtedness of the Company or Senior Indebtedness of a Guarantor, that
results in a permanent reduction in any revolving credit or other commitment
relating thereto or the maximum principal amount that may be borrowed thereunder
in an amount equal to the principal amount so repaid; (ii) make an Investment in
assets used in the Oil and Gas Business in replacement of the assets that were
the subject of the Asset Sale giving rise to such Net Cash Proceeds; or (iii)
develop by drilling, completing and producing reserves from the oil and gas
properties of the Company and the 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
during such period as described in clauses (b) (i), (ii) or (iii) above,
together with any Net Cash Proceeds in excess of amounts similarly applied by
the Company from any prior Asset Sale after the date of receipt of such Net Cash
Proceeds (such aggregate constituting "Excess Proceeds"), exceeds $5 million,
then the Company will be obligated to make an offer (the "Net Proceeds Offer")
to repurchase the Securities (and any other Senior Indebtedness in respect of
which such an offer to repurchase also is required to be made concurrently with
the Net Proceeds Offer) having an aggregate principal amount equal to the Excess
Proceeds (such purchase to be made on a pro rata basis if the amount available
for such repurchase is less than the principal amount of the Securities and
other Senior Indebtedness tendered in such Net Proceeds Offer) at a repurchase
price of 100% of
45
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.
(d) The Company shall commence a Net Proceeds Offer by
preparing and mailing a notice to the Trustee, the Paying Agent and each Holder
as of such record date as the Company shall establish (upon written notice to
the Trustee). Notice of a Net Proceeds Offer to purchase the Securities will be
made on behalf of the Company not less than 25 Business Days nor more than 60
Business Days before the payment date of the Net Proceeds Offer (the ("Net
Proceeds Payment Date"), and shall set forth the Net Proceeds Offer Amount and
the Net Proceeds Payment Date and refer to and summarize the material points
contained in Sections 4.11(d) and (e) hereof. Securities tendered to the Company
pursuant to a Net Proceeds Offer will cease to accrue interest after the Net
Proceeds Payment Date. For purposes of this covenant, the term "Net Proceeds
Offer Amount" means the principal of outstanding Securities in an aggregate
principal amount equal to any remaining Net Cash Proceeds (rounded to the next
lowest $1,000). If the Net Proceeds Payment Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the Net
Proceeds Offer.
(e) On the Net Proceeds Payment Date, the Company will (i)
accept for payment Securities and any other Senior Indebtedness in respect of
which such an offer to repurchase is required to be made concurrently with the
Net Proceeds Offer or portions thereof pursuant to the Net Proceeds Offer in an
aggregate principal amount equal to the Net Proceeds Offer Amount or such lesser
amount as has been tendered, (ii) deposit with the Paying Agent money sufficient
to pay the repurchase price of all Securities and such other Senior Indebtedness
or portions thereof so tendered in an aggregate principal amount equal to the
Net Proceeds Offer Amount or such lesser amount, and (iii) deliver or cause to
be delivered to the Trustee, Securities so accepted together with an Officers'
Certificate stating the amount of the Securities or portions thereof tendered to
the Company. If the aggregate principal amount of Securities and such other
Senior Indebtedness tendered exceeds the Net Proceeds Offer Amount, the Trustee
will select the Securities and other Senior Indebtedness to be repurchased (in
integral multiples of $1,000) on a pro rata basis based on the principal amount
of Securities and other Senior Indebtedness 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
46
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) maintained in a segregated account and
shall be invested in Permitted Financial Investments or (ii) applied to
temporarily reduce borrowings under any revolving credit facility constituting
Senior Indebtedness of the Company or Senior Indebtedness of a Guarantor.
(h) Notwithstanding the foregoing, the Company will not and
will not permit any Subsidiary to, directly or indirectly, make any Asset Sale
of any of the Capital Stock of a Subsidiary except pursuant to an Asset Sale of
all of the Capital Stock of such Subsidiary.
SECTION IV.12 Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens (other than Permitted Liens)
upon any of their respective properties securing (i) any Indebtedness of the
Company, unless the Securities are equally and ratably secured or (ii) any
Indebtedness of any Guarantor, unless the Guarantees are equally and ratably
secured; provided, that if such Indebtedness is expressly subordinated to the
Securities or the Guarantees, the Lien securing such Indebtedness will be
subordinated and junior to any Lien securing the Securities or the Guarantees,
with the same relative priority as such Subordinated Indebtedness of the Company
or Subordinated Indebtedness of a Subsidiary that is a Guarantor will have with
respect to the Securities or the Guarantees, as the case may be.
SECTION IV.13 Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of its Subsidiaries to,
enter into any Sale/Leaseback Transaction unless (i) the Company or such
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 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.
SECTION IV.14 Limitation on Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
directly or
47
indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any 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 Subsidiary; (ii) pay any Indebtedness owed to the Company or a
Subsidiary of the Company; (iii) make loans or advances to the Company or a
Subsidiary of the Company; or (iv) transfer any of its properties or assets to
the Company or a 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
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 Subsidiary of the Company (unless the agreement creating such consensual
encumbrances or consensual restrictions was entered into in connection with, or
in comtemplation of, such entity becoming a 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; and (d) customary non-assignment provisions in leases,
purchase money financings and any encumbrance or restriction due to applicable
law.
SECTION IV.15 Limitation on Issuances and Sales of Subsidiary Stock.
The Company (i) will not permit any Subsidiary to issue any Preferred
Stock (other than to the Company or a Subsidiary) and (ii) will not permit any
Person (other than the Company and/or one or more Subsidiaries) to own any
Capital Stock of any 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 Subsidiary owned by the Company or any of
its Subsidiaries in compliance with the other provisions of this Indenture, (b)
the issuance or sale of (A) not more than 5 percent in the aggregate of the
issued and outstanding Capital Stock of any Subsidiary (calculated on a fully
diluted basis) by the Company or any Subsidiary or (B) more than 5 percent of
the issued and outstanding Capital Stock of any Subsidiary if immediately
following such issuance and sale (calculated on a fully diluted basis) the
Company and all Subsidiaries will collectively own 95% or more of the
Consolidated Total Assets of the Company, and in the case of either (A) or (B),
immediately following such issuance and sale, the Company or one or more
Subsidiaries will collectively hold the voting power to elect a majority of the
directors of the Subsidiary and such power is not subject to dilution or
limitation, by the terms of such Capital Stock, by agreement, by passage of time
or the occurrence of any future event, (c) the ownership by directors of
directors' qualifying shares or the ownership by foreign nationals of Capital
Stock of any Subsidiary, to the extent mandated by applicable law or (d)
customary non-assignment provisions in leases or purchase money financings and
any customary encumbrance or restriction relating to same.
SECTION IV.16 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries to,
directly or
48
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 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 Subsidiary of the Company to, enter into an
Affiliate Transaction, or any series of related Affiliate Transactions having a
value of (a) more than $1.0 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 the Change of Control Offer
shall cease to accrue
49
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 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.
ARTICLE V
Successor Corporation
50
SECTION V.1 When Company May Merge, etc.
The Company will not consolidate with or merge with any Person or
convey, transfer or lease all or substantially all of its assets to any Person,
unless:
(1) the Company survives such merger or the Person formed by
such consolidation or into which the Company is merged or that acquires
by conveyance or transfer, or which leases, all or substantially all of
the assets of the Company is a corporation organized and existing under
the laws of the United States of America, any state thereof or the
District of Columbia and expressly assumes, by supplemental indenture,
the due and punctual payment of the principal of, premium, if any, and
interest on, all the Securities and the performance of every other
covenant and obligation of the Company under the Indenture;
(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.
SECTION V.2 Successor Corporation Substituted.
Upon any consolidation, merger, lease, conveyance or transfer in
accordance with Section 5.01, the Trustee shall be notified by the Company and
the successor Person, and the successor Person formed by such consolidation or
into which the Company is merged or to which such lease, conveyance or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein and thereafter (except in the
case of a lease) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Securities.
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ARTICLE VI
Defaults And Remedies
SECTION VI.1 Events of Default.
An "Event of Default" occurs upon:
(1) default by the Company or any Guarantor in the payment of
principal of, or premium, if any, on the Securities when due and
payable at maturity, upon repurchase pursuant to Section 4.11 or 4.17,
upon acceleration or otherwise;
(2) default by the Company or any Guarantor in the payment of
any installment of interest on the Securities when due and payable and
continuance of such default for 30 days;
(3) default by the Company or any Guarantor in the deposit of
any optional redemption payment, when and as due and payable pursuant
to Article III;
(4) default on any other Indebtedness of the Company or any
Subsidiary if either (A) such default results in the acceleration of
the maturity of any such Indebtedness having a principal amount of $5.0
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 such Indebtedness, after giving effect to any
applicable grace period (a "Payment Default"), having a principal
amount of $5.0 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;
(6) default in the performance, or breach of, any other
covenant or agreement of the Company or any Subsidiary in this
Indenture and failure to remedy such default within a period of 30 days
after written notice thereof from the Trustee or Holders of at least
25% in principal amount of the outstanding Securities;
(7) the commencement of proceedings, or the taking of any
enforcement action (including by way of set-off), by any holder of at
least $5.0 million in aggregate principal amount of Indebtedness
(including any amounts owed pursuant to a judgment or order) of the
Company or any Subsidiary, after a default under such Indebtedness, to
retain in satisfaction of such Indebtedness or to collect or seize,
dispose of or apply in satisfaction of such Indebtedness, property or
assets of the Company or its Subsidiaries having a fair
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market value in excess of $5.0 million individually or in the
aggregate; provided that if any such proceedings or actions are
terminated or rescinded, or such Indebtedness is repaid or settled,
such Event of Default under this Indenture and any consequential
acceleration of the Securities shall be automatically rescinded, so
long as (a) such rescission does not conflict with any judgment or
decree and (b) the holder of such Indebtedness shall not have applied
any such property or assets in satisfaction of such Indebtedness;
(8) the entry by a court of one or more judgments or orders
against the Company or any Subsidiary in an aggregate amount equal to
or in excess of cash and assets of $5.0 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 by a Guarantor 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;
(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, (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 give rise to a material liability of the Company, (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 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 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, (vi) there is a complete or
partial withdrawal from a Multiemployer Plan under circumstances that
subjects the Company 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 to any
material tax, penalty or other liability (for
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purposes of this paragraph (10) the term "material" and "material
liability" shall mean any tax, penalty or liability in excess of $5.0
million); or
(11) the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
1) commences a voluntary case or proceeding,
2) consents to the entry of an order for
relief against it in an involuntary case or proceeding,
3) consents to the appointment of a
Custodian of it or for all or substantially all of its
property,
4) makes a general assignment for the
benefit of its creditors, or
5) 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:
1) is for relief (with respect to the
petition commencing such case) against the Company or any
Subsidiary in an involuntary case or proceeding,
2) appoints a Custodian of the Company or
any Subsidiary or for all or substantially all of its
respective property, or
3) orders the liquidation of the Company or
any Subsidiary, and the order or decree remains unstayed and
in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION VI.2 Acceleration.
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
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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 or this Indenture. 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.
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
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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 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.
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.
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SECTION VI.8 Collection Suit by Trustee.
If an Event of Default in payment of principal, premium, if any, or
interest specified in Section 6.01(1), (2) or (3) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any Guarantor for the whole amount of principal, premium,
if any, and interest remaining unpaid with respect to the Securities, and
interest on overdue principal and premium, if any, and, to the extent lawful,
interest on overdue interest, and such further amounts as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation and expenses of the Trustee, its agents and counsel.
SECTION VI.9 Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, the Guarantors, their creditors or their property and may collect and
receive any money or securities or other property payable or deliverable on any
such claims and to distribute the same.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION VI.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
SECTION VI.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit
57
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
58
the Trustee shall be entitled from time to time to request such a
direction.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(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 shall require the Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Subject to Sections 7.01 and 7.02, the Trustee shall not
be required to take notice, and shall not be deemed to have notice, of any
Default or Event of Default hereunder, except Events of Default described in
paragraphs (1), (2) and (3) of Section 6.01 hereof, unless the Trustee shall be
notified specifically of the Default or Event of Default in a written instrument
or document delivered to it by the Company or any Guarantor, or by the Holders
of at least ten percent (10%) of the aggregate principal amount of the Notes
then outstanding. In the absence of delivery of a notice satisfying those
requirements, the Trustee may assume that there is no Default or Event of
Default, except as noted above.
SECTION VII.2 Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely on and shall be
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.
(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.
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(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 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.
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 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 known to the Trustee
pursuant to Section 7.01(g), the Trustee shall mail to each Holder pursuant to
Section 11.02 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.
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SECTION VII.6 Reports by Trustee to Holders.
Within 60 days after each May 15, beginning with the May 15, following
the date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 15, that complies with TIA (S)313(a), but only if such
report is required in any year under TIA (S)313(a). The Trustee also shall
comply with TIA (S)(S)313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange on which the Securities are listed.
The Company shall promptly notify the Trustee in writing when the Securities
become listed on any national securities exchange or of any delisting thereof.
SECTION VII.7 Compensation and Indemnity.
The Company and the Guarantors jointly and severally agree to pay the
Trustee from time to time such compensation as shall be agreed in writing
between the Company and the Trustee for its services (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust). The Company and the Guarantors jointly and
severally agree to reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred by it. Such expenses
shall include when applicable the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company and the Guarantors jointly and severally agree to indemnify
each of the Trustee and any predecessor Trustee against any and all loss,
liability, damage, claim or expenses, including taxes (other than taxes based on
the income of the Trustee) incurred by it arising out of or in connection with
the acceptance and administration of the trust and its duties hereunder as
Trustee, Registrar and/or Paying Agent, including the costs and expenses of
enforcing this Indenture against the Company (including with respect to this
Section 7.07) and of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company and the Guarantors of any claim
for which it may seek indemnity; however, unless the position of the Company is
materially prejudiced by such failure, the failure of the Trustee to promptly
notify the Company shall not limit its right to indemnification. The Company
shall defend each such claim and the Trustee shall cooperate in the defense. The
Trustee may retain separate counsel and the Company shall reimburse the Trustee
for the reasonable fees and expenses of such counsel if the Company is advised
by an Opinion of Counsel that the Trustee has separate defenses and that
separate representation is appropriate or if 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.
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To secure the payment obligations of the Company and the Guarantors in this
Section, the Trustee shall have a lien prior to that of the Holders of the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services after the occurrence of
any Event of Default specified in Sections 6.01(11) or (12), the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the satisfaction and
discharge or other termination of this Indenture.
SECTION VII.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company and the Guarantors. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee, in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting as Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the Securities may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company and the Guarantors. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Holder.
If a successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount 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.
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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.
ARTICLE VIII
Discharge Of Indenture
SECTION VIII.1 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Securities, elect to exercise its rights pursuant to either Section 8.02 or
8.03 with respect to all outstanding Securities upon compliance with the
conditions set forth below in this Article VIII.
SECTION VIII.2 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Securities on the date all
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder:
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(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 and 4.18 and Article V with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Securities shall
not be deemed outstanding for accounting purposes). For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Securities, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01(5) or Section 6.01(6), but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 of the option applicable to this Section 8.03, Sections 6.01(4)
through 6.01(12) shall not constitute Events of Default.
SECTION VIII.4 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to application of either Section 8.02 or
Section 8.03 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or cause to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 who shall agree to comply with the provisions of this Article VIII
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) cash in U.S. Legal Tender
in an amount, or (b) U.S. Government Securities which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment,
cash in U.S. Legal Tender in an amount, or (c) a
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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);
(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
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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.
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.
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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 or the Securities without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to reflect the addition or release of any Guarantor, as provided for by
this Indenture;
(4) to comply with any requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
(5) to make any change that would provide any additional benefit or rights to
the Holders or that does not adversely affect the rights of any Holder in any
material respect.
Upon the request of the Company and the Guarantors, accompanied by a Board
Resolution of the Company and of each Guarantor authorizing the execution of any
such supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall join with the Company and the
Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and make any further appropriate
agreements and stipulations that may be therein contained. After an amendment or
waiver under this Section becomes effective, the Company shall mail to the
Holders of each Security affected thereby a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION IX.2 With Consent of Holders.
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Except as provided below in this Section 9.02, the Company, the Guarantors and
the Trustee may amend this Indenture or the Securities 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 a two-thirds
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 or the Securities (including
waivers obtained in connection with a tender offer or exchange offer for
Securities or a solicitation of consents in respect of Securities, provided that
in each case such offer or solicitation is made to all Holders of the then
outstanding Securities on equal terms). However, without the consent of each
Holder affected, an amendment or waiver under this Section may not:
(1) reduce the percentage of principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this Indenture
or the Securities;
(2) reduce the rate or change the time for payment of interest, including
defaulted interest, on the Securities;
(3) reduce the principal amount of any Security or change the Maturity Date
of the Securities;
(4) reduce the redemption price, including premium, if any, payable upon the
redemption of any Security or change the time at which any Security may be
redeemed;
(5) reduce the repurchase price, including premium, if any, payable upon the
repurchase of any Security pursuant to Sections 4.11 or 4.17, or change the time
at which any Security may or shall be repurchased thereunder;
(6) waive a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Securities;
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(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; or
(9) make any change in Section 6.04 or Section 6.07 or in this sentence of
this Section 9.02.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.
SECTION IX.3 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION IX.4 Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of a Security
shall bind the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However, until an
amendment, supplement or waiver becomes effective, any such Holder or subsequent
Holder may revoke the consent as to its Security or portion of a Security. For
such revocation to be effective, the Trustee must receive the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.05, or (ii) such other
date as the Company shall designate. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent shall be valid or effective
for more than 90 days after such record date 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.
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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
(9) 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 relying upon, an Opinion of
Counsel stating that such amendment or supplement or waiver is authorized or
permitted by and complies with this Indenture. The Company may not sign an
amendment or supplement until the Boards of Directors of the Company and the
Guarantors approve it.
SECTION 9.07 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
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punctual payment of the principal of, premium, if any, and interest on the
Securities and all other amounts due and payable under this Indenture and the
Securities by the Company whether at maturity, by acceleration, redemption,
repurchase or otherwise, including, without limitation, interest on the overdue
principal of, premium, if any, and interest on the Securities, to the extent
lawful, all in accordance with the terms hereof and thereof; subject, however,
to the limitations set forth in Section 10.05.
Failing payment when due of any amount so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. To the fullest extent
permitted by law, each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities, this Indenture and in this Guarantee. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor, any amount paid by
the Company or any Guarantor to the Trustee or such Holder with respect to the
Securities, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article VI, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.
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
71
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.
(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
Subsidiary after the Issue Date to execute and deliver a supplemental indenture
pursuant to which such Subsidiary shall guarantee the payment of the Securities
pursuant to the terms hereof.
(b) 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
72
its Guarantee and related obligations in this Indenture. The Trustee shall
deliver an appropriate instrument evidencing such release upon receipt of a
request by the Company accompanied by an Officers' Certificate and an Opinion of
Counsel certifying that such sale or other disposition was made by the Company
in accordance with the provisions of this Indenture. Any Guarantor not so
released remains liable for the full amount of principal of and interest on the
Securities as provided in this Article X.
SECTION X.5 Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance of Securities under this Indenture each
Holder hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any federal or state law. To
effectuate the foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 10.06, result in the obligations of such Guarantor under the
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. This Section 10.05 is for the benefit of the creditors of
each Guarantor, and, for purposes of applicable fraudulent transfer and
fraudulent conveyance law, any Indebtedness of a Guarantor pursuant to a Bank
Credit Facility shall be deemed to have been incurred prior to the incurrence by
such Guarantor of its liability under the Guarantee.
SECTION X.6 Contribution.
In order to provide for just and equitable contribution among the Guarantors,
the Guarantors agree, inter se, that in the event any payment or distribution is
made by any Guarantor (a "Funding Guarantor") under the Guarantee, such Funding
Guarantor shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each Guarantor (including the
Funding Guarantor) for all payments, damages and expenses incurred by the
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
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.
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If an Officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of any Guarantee set forth in this
Indenture on behalf of the Guarantor.
SECTION X.8 Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE XI
Miscellaneous
SECTION XI.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 XI.2 Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by certified or registered mail (return receipt
requested), facsimile, telecopier or overnight air courier guaranteeing next day
delivery, addressed as follows:
If to the Company or any Guarantor:
Gothic Energy Corporation
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attention: Secretary
If to the Trustee:
The Bank of New York
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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 XI.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 XI.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the Trustee
to take any action under this Indenture, the Company or such Guarantor, as the
case may be, shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 11.05) 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
75
assumption would be contrary to the actual facts.
SECTION XI.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 XI.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 XI.7 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banks and trust
companies in the City of New York are not required by law or executive order to
be open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at the place on the next succeeding day that is not a Legal Holiday,
without additional interest.
SECTION XI.8 Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION XI.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
76
agreement may not be used to interpret this Indenture.
SECTION XI.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 XI.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 XI.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 XI.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.
77
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, as of the date first written above.
GOTHIC ENERGY CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
GUARANTORS
GOTHIC ENERGY OF TEXAS, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
GOTHIC GAS CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
EXHIBIT A
FORM OF SECURITY
GOTHIC ENERGY CORPORATION
___% SERIES [A/B] SENIOR NOTE DUE 2004
[FACE OF SECURITY]
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York ("DTC")), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) WHICH IS AN INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND, PRIOR TO THE
EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN RULE 903 OF
REGULATION S, WILL NOT OFFER OR SELL THESE SECURITIES IN THE UNITED STATES OR TO
A U.S. PERSON OR FOR THE ACCOUNT OF A U.S. PERSON WITHIN THE MEANING OF RULE
902(o) OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE WHICH IS
TWO YEARS (OR SUCH SHORTER PERIOD AS COMPLIES WITH RULE 144 UNDER THE SECURITIES
ACT) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THE
LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF
THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") RESELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER, (B) TO A PERSON THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
---------------
/1/ This paragraph should be included only if the Security is issued in
global form.
A-1
INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE PROVISIONS OF RULE 144A UNDER
THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A WRITTEN CERTIFICATION CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (COPIES OF WHICH MAY BE OBTAINED FROM THE TRUSTEE), PROVIDED
THAT CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS NOTE
PURSUANT TO THIS CLAUSE C PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED
PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE
SECURITIES ACT), (D) OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN A U.S.
PERSON IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT AND, IF SUCH TRANSFER IS BEING EFFECTED BY
CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE EXPIRATION OF THE
"40-DAY RESTRICTED PERIOD" DESCRIBED ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED
FROM THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE,
(E) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE
FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY
OR THE PROPERTY OF SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHICH THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS NOT A
QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION
TERMINATION DATE.
GOTHIC ENERGY CORPORATION
12 1/4% SERIES [A/B] SENIOR NOTE DUE 2004
NO. $_________
CUSIP NO.________
Gothic Energy Corporation, an Oklahoma corporation, promises to pay to
__________________________ or registered assigns the principal sum of
A-2
____________________ Dollars on September 1, 2004.
Interest Payment Dates: March 1, and September 1, commencing
March 1, 1998
Record Dates: February 15 and August 15
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
[Seal] GOTHIC ENERGY CORPORATION
By:
-----------------------
By:
-----------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the 12 1/4%
Series [A/B] Senior Notes due 2004 in [Definitive/Global]/2/ form referred to in
the within-mentioned Indenture.
Dated: ________________
THE BANK OF NEW YORK
By:
---------------------------
Authorized Signatory
---------------
/2/ If the Security is issued in global form, the term "Global" replaces the
term "Definitive"
A-4
[REVERSE OF SECURITY]
GOTHIC ENERGY CORPORATION
12 1/4% SERIES [A/B] SENIOR NOTE DUE 2004
1. Interest. Gothic Energy Corporation, an Oklahoma corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
12 1/4% 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 March 1 and
September 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 March 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 September 9, 1997 (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
A-5
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 $100,000,000 aggregate principal
amount.
5. Ranking and Guarantees. The Securities are general senior unsecured
obligations of the Company. The Company's obligation to pay principal, premium,
if any, and interest with respect to the Securities is unconditionally
guaranteed on a senior basis, jointly and severally, by the Guarantors pursuant
to Article X of the Indenture. Certain limitations to the obligations of the
Guarantors are set forth in further detail in the Indenture.
6. Optional Redemption. Securities are subject to redemption, at the
option of the Company, in whole in part, upon not less than 30 or more than 60
days' notice, in the event the Company consummates one or more Equity Offerings
on or prior to September 1, 1998, the Company may, in its sole discretion,
redeem up to $25.0 million of the aggregate principal amount of the Securities
with all or a portion of the aggregate net proceeds received by the Company from
any such Equity Offering or Equity Offerings, within 60 days of the closing of
any such Equity Offering, at a redemption price of 112.5% 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 $75.0 million of the aggregate principal
amount of the Securities remains outstanding. Any redemption pursuant to this
paragraph 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. 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).
A-6
8. Change of Control Offer. In the event of a Change of Control of the
Company, and subject to certain conditions and limitations provided in the
Indenture, the Company will be obligated to make an offer to purchase, not more
than 10 Business Days or less than 30 Business Days following the occurrence of
a Change of Control of the Company, all of the then outstanding Securities at a
purchase price equal to 101% of the principal amount thereof, 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 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 Subsidiaries to
dispose of certain assets, to pay dividends and make certain other distributions
and payments, to make certain investments or redeem, retire, repurchase or
acquire for value shares of Capital Stock, to incur additional Indebtedness or
incur encumbrances against certain property and to enter into certain
transactions with Affiliates, all subject to certain limitations described in
the Indenture.
11. Defaults and Remedies. As set forth in the Indenture, an Event of
Default is generally (i) failure to pay principal upon maturity, redemption or
otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer), (ii) default for 30 days in payment of interest on any of the
Securities, (iii) default in the performance of agreements relating to mergers,
consolidations and sales of all or substantially all assets or the failure to
make or consummate a Change of Control Offer or a Net Proceeds Offer, (iv)
failure for 30 days after notice to comply with any other covenants in the
Indenture or the Securities; (v) certain payment defaults under, the
acceleration prior to the maturity of, and the exercise of certain enforcement
rights with respect to, certain Indebtedness of the Company or any Guarantor in
an aggregate principal amount in excess of $5.0 million; (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 in an aggregate amount of $5.0 million or more
which remain unsatisfied and either become subject to commencement or
enforcement proceedings or remain unstayed for a period of 60 days; and (ix)
certain events of bankruptcy, insolvency or reorganization of the Company or any
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or
the holders of at least 25% in aggregate principal amount of the Outstanding
Securities may declare the principal amount of all the Securities to be due and
payable immediately, except that (i) in the case of an Event of Default arising
from certain events of bankruptcy, insolvency or reorganization of the Company
or any Subsidiary, the principal amount of the Securities will become due and
payable immediately without further action or
A-7
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 two-thirds 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)
A-8
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
15. Registration and Transfer. As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable on the Security register of the Company, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
16. Form. The Securities shall be issued either in global form or in
definitive registered form, without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
17. Taxes. No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
18. No Recourse Against Others. A director, officer, incorporator, or
stockholder of the Company or any Guarantor, as such, shall not have any
personal liability under this Security or the Indenture by reason of his or its
status as such director, officer, incorporator or stockholder. Each Holder, by
accepting this Security with the notation of Guarantee endorsed hereon, waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security with the notation of Guarantee
endorsed hereon.
19. Registered Owners. Prior to the time of due presentment of this
Security for registration of transfer, the Company, the Guarantor, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Company, the Guarantors, the Trustee
nor any agent shall be affected by notice to the contrary.
20. Definitions. All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The
Company will furnish to any Holder upon written request and without charge a
copy of the Indenture. Requests may be made to the Company at 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
A-9
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.
23. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor corporation will be released from those obligations.
24. Trustee Dealings with Company and Guarantors. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Guarantors or
their respective Subsidiaries or Affiliates with the same rights it would have
if it were not Trustee.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Gothic Energy
Corporation, 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000-0000,
Attention: Secretary.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. 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.
--------------------------------------------------------------------------------
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/3/
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
DATE OF EXCHANGE AMOUNT OF DECREASE AMOUNT OF INCREASE PRINCIPAL AMOUNT OF SIGNATURE OF
------------------ IN PRINCIPAL IN PRINCIPAL THIS GLOBAL SECURITY AUTHORIZED
AMOUNT AMOUNT OF THIS FOLLOWING SUCH SIGNATORY
OF THIS GLOBAL GLOBAL SECURITY DECREASE (OR OF TRUSTEE OR
SECURITY ------------------ INCREASE) SECURITIES
------------------ --------------------- CUSTODIAN
-------------
------------------------------------------------------------------------------------------------
---------------
/3/ 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
A-14
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 SUBSIDIARY
GUARANTOR]
Attest: By:
-------------------- --------------------------------
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 12 1/4% Series [A/B] Senior
Notes due 2004 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 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 Energy Corporation
% Series [A/B] Senior Notes due 2004 (the "Securities")
-----------------------------------------------------------------
Reference is hereby made to the Indenture dated as of September 9, 1997
(the "Indenture") among Gothic Energy 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
---------------
* check applicable box
B-1
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
[_] 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
---------------
* Check applicable box.
B-2
is (or any account for which it is purchasing is) (check box, if applicable):
[_] an Institutional Accredited Investor or
[_] a Qualified Institutional Buyer,
as such terms are defined in the Securities Act, able to bear the economic risk
of investment in the Securities.
3. The Transferee undertakes that it is acquiring the Securities for its
own account (or for accounts as to which the Transferee exercises sole
investment discretion and has authority to make, and does make, the statements
contained in this certificate) and not with a view to any distribution of the
Securities, subject, nevertheless, to the understanding that the disposition of
its property shall at all times be and remain within the Transferee's control.
4. The Transferee acknowledges that it understands that the Securities
will be issued either as (a) a Global Security/**/ and the Transferee will own a
beneficial interest therein or (b) a Definitive Security under which the
Securities will be delivered to the Transferee in registered form only and, in
either case, the Security will bear a legend substantially to the following
effect:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) WHICH IS AN INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND, PRIOR TO THE
EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN RULE 903 OF
REGULATION S, WILL NOT OFFER OR SELL THE NOTES 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)
---------------
* Check applicable box.
B-3
TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE PROVISIONS OF RULE
144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A WRITTEN CERTIFICATION
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE
INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT TO THIS CLAUSE C PRIOR TO THE
EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), (D) OUTSIDE THE UNITED
STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND, IF
SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE
INDENTURE PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED
BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (E) PURSUANT TO THE RESALE
LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (G)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE AT
ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE
PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING 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.
B-4
5. The Transferee agrees that in the event that at some future time it
wishes to dispose of any of the Securities, it will not do so unless:
(a) the Securities are sold to the Company or any Subsidiary thereof;
(b) the Securities are sold to an Institutional Accredited Investor or
Qualified Institutional Buyer, that, prior to such transfer, furnishes to the
Trustee a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Securities (the form of which
letter can be obtained from such Trustee);
(c) the Securities are sold pursuant to Rule 144 under the Securities
Act; or
(d) the Securities are sold pursuant to an effective registration
statement under the Securities Act.
Very truly yours,
----------------------------------
[Insert Name of Transferor]
By:
-------------------------------
Name:
-----------------------------
Dated: , Title:
-------------------- ----- ----------------------------
----------------------------------
[Insert Name of Transferee]
By:
-------------------------------
Name:
-----------------------------
B-5
Dated: , Title:
-------------------- ----- ----------------------------
cc: Gothic Energy Corporation
B-6
EXHIBIT C
FORM OF LEGAL OPINION ON TRANSFER
___________, _____
(Date)
Gothic Energy 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 Energy Corporation
12 1/4% Series [A/B] Senior Notes due 2004
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 12 1/4% Series [A/B] Senior Notes
due 2004 of (the "Securities").
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 NONDEFAULT
-----------------------------------
GOTHIC ENERGY CORPORATION
This Officers' Certificate is provided pursuant to Section 4.03(a) of the
Indenture dated September 9, 1997 among Gothic Energy 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 ENERGY CORPORATION,
an Oklahoma corporation
*By:
-----------------------------
By:
-----------------------------
* This certificate must be signed by the principal executive, financial or
accounting Officer (as well as one other Officer).
D-1
EXHIBIT E
TRANSFEREE LETTER OF REPRESENTATION
-----------------------------------
Gothic Energy Corporation
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 12 1/4% Senior Notes due 2004 (the "Securities") of Gothic Energy
Corporation (the "Company"), we confirm that:
(A) We have received a copy of the Offering Memorandum, dated September 2,
1997, relating to the Securities and such other information as we deem necessary
in order to make our investment decision.
(B) We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities prior
to the date which is two years after the later of the date of original issue and
the last date on which the Company or any affiliate or the Company was the owner
of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) for so
long as the Securities are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a Qualified Institutional
Buyer (as defined in Rule 144A) that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an "Accredited Investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) which
is an institution (an "Institutional Accredited Investor") that is purchasing
for his own account or for the account of such an Institutional Accredited
Investor for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, (e)
pursuant to the resale limitations provided by Rule 144 under the Securities Act
(if available), (f) outside the United States to a person who is not a U.S.
E-1
person in an offshore transaction meeting the requirements of Rule 904 of the
Securities Act, or (g) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities law. The
foregoing restrictions on sale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (d) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee which shall provide, among other things, that the transferee is an
Institutional Accredited Investor and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clauses (d), (e), (f) or (g)
above to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Company and the Trustee.
(C) We are an Institutional Accredited Investor or, if the transfer is of a
beneficial interest in the Global Security, a Qualified Institutional Buyer, in
either case purchasing for our own account or for the account of such an
Institutional Accredited Investor as to each of which we exercise sole
investment discretion and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Securities, and we and any accounts
for which we are acting are each able to bear the economic risk of our or its
investments for an indefinite period.
(D) All of you are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
-------------------------------
(Name of Purchaser)
By:
----------------------------
Name:
-----------------------
Title:
----------------------
Date:
--------------------------
E-2
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:
-------------------------------
Address:
----------------------------
Taxpayer ID Number:
-----------------
E-3
EXHIBIT F
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
_____________, ____
The Bank of New York, as Registrar
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
In connection with our proposed sale of certain 12 1/4% Series [A/B] Senior
Notes due 2004 (the "Securities") of Gothic Energy Corporation, an Oklahoma
corporation (the "Company"), we represent that:
(i) the offer of the Securities was not made to a person in
the United States;
(ii) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S under the U.S. Securities Act of 1933, as
applicable; and
(iv) the transaction is not part of a plan or scheme to
evade the registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
----------------------------------------
[Name]
By:
-------------------------------------
Name:
Title:
Address:
F-1
EXHIBIT G
FORM OF UNIT CERTIFICATE
[FACE OF SECURITY]
NO. NO. OF UNITS:_________
CUSIP NO.________
GOTHIC ENERGY CORPORATION
UNIT CERTIFICATE
EVIDENCING UNITS CONSISTING OF
$1,000 PRINCIPAL AMOUNT OF 12 1/4% SERIES A SENIOR NOTES DUE 2004
AND 14 COMMON STOCK PURCHASE WARRANTS
[Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York ("DTC")), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY
NOT BE REOFFERED, SOLD OR OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT
OF ANY PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) WHICH IS AN INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS PURCHASING IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND, PRIOR TO THE
EXPIRATION OF THE 40-DAY RESTRICTED PERIOD PROVIDED FOR IN RULE 903 OF
REGULATION S, WILL NOT OFFER OR SELL THESE SECURITIES IN THE UNITED STATES OR TO
A U.S. PERSON OR FOR THE
---------------
/1/ This paragraph should be included only if the Security is issued in
global form.
G-1
ACCOUNT OF A U.S. PERSON WITHIN THE MEANING OF RULE 902(o) OF REGULATION S, (2)
AGREES THAT IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD AS COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE LATER OF
THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (THE
"RESALE RESTRICTION TERMINATION DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
SECURITY, EXCEPT (A) TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE
RESALE PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (COPIES OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE), PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE
INDENTURE MAY NOT TRANSFER THIS NOTE PURSUANT TO THIS CLAUSE C PRIOR TO THE
EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), (D) OUTSIDE THE UNITED
STATES TO A PERSON OTHER THAN A U.S. PERSON IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND, IF
SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE
INDENTURE PRIOR TO THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" DESCRIBED
ABOVE, A CERTIFICATE WHICH MAY BE OBTAINED FROM THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (E) PURSUANT TO THE RESALE
LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (G)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE AT
ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE
PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL
NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
G-2
Gothic Energy Corporation, an Oklahoma corporation (the "Company"),
hereby certifies that ____________________________ is the registered owner of
___________ Units, each Unit consisting of (i) $1,000 original principal amount
of 12 1/4% Series A Senior Notes Due 2004 of the Company (the "Series A
Securities") and (ii) 14 Common Stock Purchase Warrants (the "Warrants") issued
by the Company pursuant to that certain Warrant Agreement dated September 9,
1997 between the Company and American Stock Transfer & Trust Company, as Warrant
Agent (the "Warrant Agreement"). This Unit Certificate is issued upon the terms
and conditions set forth in that certain Indenture dated September 9, 1997 among
the Company, each of Gothic Energy of Texas, Inc. and Gothic Gas Corporation, as
Guarantors and The Bank of New York, as Trustee (the "Indenture"). Capitalized
terms used in this Unit Certificate and not otherwise defined herein shall have
the meanings ascribed to them in the Indenture.
The Series A Security and Warrants evidenced by this Unit Certificate
cannot be detached or traded separately until the occurrence of the Unit
Termination Date as set forth in the Indenture. After the Unit Termination Date,
this Unit Certificate shall constitute only a Series A Security in the original
principal amount of $1,000 multiplied by the number of Units evidenced hereby.
Registered holders of this Unit Certificate as of the close of the Unit
Termination Date shall be entitled to receive Warrant Certificates for 14
Warrants per Unit evidenced hereby issued pursuant to the Warrant Agreement.
The following provisions shall apply to, and constitute, the Series A
Securities evidenced by this Unit Certificate:
GOTHIC ENERGY CORPORATION
12 1/4% SERIES A SENIOR NOTE DUE 2004
Gothic Energy Corporation, an Oklahoma corporation, promises to pay to
the above referenced holder of this Unit Certificate or registered assigns the
principal sum of Dollars equal to $1,000.00 multiplied by the number of Units
evidenced by this Unit Certificate, on September 1, 2004.
Interest Payment Dates: March 1, and September 1, commencing March 1,
1998
Record Dates: February 15 and August 15
Reference is hereby made to the further provisions of this Series A
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
G-3
The following provisions shall apply to, and constitute, the Warrants
evidenced by this Unit Certificate:
GOTHIC ENERGY CORPORATION
WARRANTS TO PURCHASE COMMON SHARES
THIS CERTIFIES THAT, for value received, the registered holder of this
Unit Certificate, or registered assigns, is the registered owner of a number of
Warrants to Purchase Common Shares of Gothic Energy Corporation, an Oklahoma
corporation (the "Company," which term includes any successor thereto under the
Warrant Agreement) such number of Warrants being equal to 14 multiplied by the
number of Units evidenced by this Unit Certificate, and is entitled, subject to
and upon compliance with the provisions hereof and of the Warrant Agreement, at
such Holder's option, at any time when the Warrants evidenced hereby are
exercisable, to purchase from the Company one Warrant Share for each Warrant
evidenced hereby, at the purchase price of $3.00 per share (as adjusted from
time to time, the "Warrant Price"), payable in full at the time of purchase, the
number of Warrant Shares into which and the Warrant Price at which each Warrant
shall be exercisable, each being subject to adjustment as provided in Section 6
of the Warrant Agreement.
By compliance with certain procedures set forth in the Warrant
Agreement, the Holder of this Unit Certificate may exercise all or any whole
number of the Warrants evidenced hereby, on any Business Day from and after the
Separation Date (as defined in the Warrant Agreement) until 5:00 p.m., New York
City time, on September 1, 2004 (subject to earlier expiration pursuant to
Section 5 of the Warrant Agreement, the "Expiration Date") for the Warrant
Shares purchasable hereunder.
Reference is hereby made to the Warrant Agreement, a copy of which can
be obtained from American Stock Transfer & Trust Company, as Warrant Agent, for
further provisions related to the Warrants, which provisions are incorporated
herein by reference.
G-4
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
[Seal] GOTHIC ENERGY CORPORATION
By:
-----------------------
By:
-----------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Bank of New York, as Trustee, certifies that this is one of the Unit
Certificates evidencing one of the 12 1/4% Series A Senior Notes due 2004
referred to in the within-mentioned Indenture.
Dated: ________________
THE BANK OF NEW YORK
By:
---------------------------
Authorized Signatory
G-5
[REVERSE OF SECURITY]
GOTHIC ENERGY CORPORATION
OTHER PROVISIONS RELATING TO THE
12 1/4% SERIES A SENIOR NOTE DUE 2004
The following provisions shall apply to the Series A Securities evidenced by
this Unit Certificate. Unless otherwise stated, for purposes of these
provisions, reference to "Security" or "Securities" herein shall include only
the Series A Securities and Series B Securities.
1. Interest. Gothic Energy Corporation, an Oklahoma corporation
(the "Company"), promises to pay interest on the principal amount of the
Security evidenced hereby at 12 1/4% 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 March 1 and September 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
March 1, 1998. The Company shall pted Damages pursuant to the Registration
Rights Agreement.
2. Method of Payment. The Company will pay interest on the Series A
Securities to the persons who are registered holders of Securities at the close
of business on the record date immediately preceding the Interest Payment Date,
even if such Series A Securities are canceled after the record date and on or
before the Interest Payment Date. Holders must surrender Securities to the
Paying Agent to collect principal payments. The Company will pay principal of,
premium, if any, and interest on the Securities in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay such amounts by check payable in
such money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without notice. The Company or any of its Subsidiaries may act
as Paying Agent or Registrar.
4. Indenture. The Company issued the Series A Securities under an
Indenture, dated as of September 9, 1997 (the "Indenture"), among the Company,
the Guarantor and the Trustee.
G-6
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 Series A
Securities are subject to all such terms, and Holders are referred to the
Indenture and such Act for a complete statement of such terms. The Securities
are limited to $100,000,000 aggregate principal amount.
5. Ranking and Guarantees. The Series A Securities are general
senior unsecured obligations of the Company. The Company's obligation to pay
principal, premium, if any, and interest with respect to the Series A 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. Series A Securities are subject to
redemption, at the option of the Company, in whole in part, upon not less than
30 or more than 60 days' notice, in the event the Company consummates one or
more Equity Offerings on or prior to September 1, 1998, the Company may, in its
sole discretion, redeem up to $25.0 million of the aggregate principal amount of
the Series A Securities with all or a portion of the aggregate net proceeds
received by the Company from any such Equity Offering or Equity Offerings,
within 60 days of the closing of any such Equity Offering, at a redemption price
of 112.5% of the aggregate principal amount of the Securities so redeemed, plus
accrued and unpaid interest on the Series A Securities so redeemed to the
Redemption Date; provided, however, that following such redemption, at least
$75.0 million of the aggregate principal amount of the Series A Securities
remains outstanding. Any redemption pursuant to this paragraph shall be made
pursuant to the provisions of Sections 3.01 through 3.07 of the Indenture.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of Unit Certificates evidencing such Securities of record at the close
of business on the relevant Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in accordance with the Indenture shall cease to bear interest from and
after the Redemption Date. In the event of redemption or purchase of this
Security evidenced by this Unit Certificate in part only, a new Unit Certificate
evidencing the Security or Securities for the unredeemed or unpurchased portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.
The Securities do not have the benefit of any sinking fund obligations.
7. Notice of Redemption. Notice of redemption will be mailed to the
Holder's registered address at least 30 days but not more than 60 days before
the redemption date to each Holder of Unit Certificates evidencing Securities to
be redeemed. If less than all Securities are to be redeemed, the Trustee shall
select pro rata, by lot or in accordance with the rules of any securities
exchange the Securities to be redeemed in multiples of $1,000. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date,
G-7
interest ceases to accrue on Securities or portions of them called for
redemption (unless the Company shall default in the payment of the redemption
price or accrued interest).
8. Change of Control Offer. In the event of a Change of Control of
the Company, and subject to certain conditions and limitations provided in the
Indenture, the Company will be obligated to make an offer to purchase, not more
than 10 Business Days or less than 30 Business Days following the occurrence of
a Change of Control of the Company, all of the then outstanding Securities at a
purchase price equal to 101% of the principal amount thereof, 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 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 Subsidiaries to
dispose of certain assets, to pay dividends and make certain other distributions
and payments, to make certain investments or redeem, retire, repurchase or
acquire for value shares of Capital Stock, to incur additional Indebtedness or
incur encumbrances against certain property and to enter into certain
transactions with Affiliates, all subject to certain limitations described in
the Indenture.
11. Defaults and Remedies. As set forth in the Indenture, an Event
of Default is generally (i) failure to pay principal upon maturity, redemption
or otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer), (ii) default for 30 days in payment of interest on any of the
Securities, (iii) default in the performance of agreements relating to mergers,
consolidations and sales of all or substantially all assets or the failure to
make or consummate a Change of Control Offer or a Net Proceeds Offer, (iv)
failure for 30 days after notice to comply with any other covenants in the
Indenture or the Securities; (v) certain payment defaults under, the
acceleration prior to the maturity of, and the exercise of certain enforcement
rights with respect to, certain Indebtedness of the Company or any Guarantor in
an aggregate principal amount in excess of $5.0 million; (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 in an aggregate amount of $5.0 million or more
which remain unsatisfied and either become subject to commencement or
enforcement proceedings or remain unstayed for a period of 60 days; and (ix)
certain events of bankruptcy, insolvency or reorganization of the Company or any
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or
the holders of at least 25% in aggregate principal amount of the Outstanding
Securities may declare the principal amount of all the Securities to be due and
payable immediately, except that (i) in the case of an Event of Default arising
from certain events of bankruptcy, insolvency or reorganization of the Company
or any Subsidiary, the principal
G-8
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 two-thirds 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
G-9
prescribed.
15. Registration and Transfer. As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Unit
Certificate is registerable on the Security register of the Company, upon
surrender of this Unit Certificate for registration of transfer at the office or
agency of the Company maintained for such purpose in the City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
16. Form. Prior to the Unit Termination Date, the Securities shall
be evidenced by Unit Certificates issued in either global form or in definitive
registered form, without coupons in whole Unit denominations. After the Unit
Termination Date, the Securities shall be issued either in global form or in
definitive registered form, without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, (i) the Unit Certificates are exchangeable for
multiple Unit Certificates issued for whole Units for the aggregate number of
Units evidenced by the exchanged Unit Certificate and (ii) after the Unit
Termination Date the Securities are exchangeable for a like aggregate principal
amount of Securities of a different authorized denomination, as requested by the
Holder surrendering the same.
17. Taxes. No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
18. No Recourse Against Others. A director, officer, incorporator,
or stockholder of the Company or any Guarantor, as such, shall not have any
personal liability under this Security or the Indenture by reason of his or its
status as such director, officer, incorporator or stockholder. Each Holder, by
accepting this Security with the notation of Guarantee endorsed hereon, waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security with the notation of Guarantee
endorsed hereon.
19. Registered Owners. Prior to the time of due presentment of this
Unit Certificate for registration of transfer, the Company, the Guarantor, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Unit Certificate is registered as the owner of Series A
Securities and Warrants evidenced hereby for all purposes, whether or not this
Security is overdue, and neither the Company, the Guarantors, the Trustee nor
any agent shall be affected by notice to the contrary.
20. Definitions. Except as otherwise provided herein, all terms used
in this Unit Certificate which are defined in the Indenture shall have the
meanings assigned to them in the Indenture. The Company will furnish to any
Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx 00000-0000.
G-10
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Unit Certificates as a convenience to the
Holders thereof. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identifying information printed hereon.
22. Governing Law. This Unit Certificate and the Securities comprising
the Units shall be governed by and construed in accordance with the laws of the
State of New York, without regard to applicable principles of conflicts of laws
to the extent that the application of the law of another jurisdiction would be
required thereby.
23. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor corporation will be released from those obligations.
24. Trustee Dealings with Company and Guarantors. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Guarantors or
their respective Subsidiaries or Affiliates with the same rights it would have
if it were not Trustee.
G-11
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
(Insert assignee's social security or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint as agent to transfer this Security on the books of
the Company. The agent may substitute another to act for him.
Your Signature:
(Sign exactly as your name appears on the other side of this Security)
Date:
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
G-12
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.11 [_] Section 4.17 [_]
If you want to have only part of this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, state the amount in
integral multiples of $1,000:
$
--------------------
Date: Signature:
------- ----------------------------
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
G-13
SCHEDULE OF EXCHANGES OF GLOBAL SECURITY FOR
DEFINITIVE SECURITY2
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
DATE OF EXCHANGE AMOUNT OF DECREASE AMOUNT OF INCREASE PRINCIPAL AMOUNT OF SIGNATURE OF
IN PRINCIPAL IN PRINCIPAL THIS GLOBAL SECURITY AUTHORIZED
AMOUNT AMOUNT OF THIS FOLLOWING SUCH SIGNATORY
OF THIS GLOBAL GLOBAL SECURITY DECREASE (OR OF TRUSTEE OR
SECURITY INCREASE) SECURITIES
CUSTODIAN
--------
2 This should be included only if the Security is issued in global
form.
G-14
FORM OF NOTATION ON UNIT CERTIFICATE
RELATING TO SUBSIDIARY GUARANTEE
Subject to the limitations and provisions set forth in the Indenture,
the Guarantors (as defined in the Indenture referred to in the Security upon
which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor or additional Guarantor under the
Indenture) have, jointly and severally, unconditionally guaranteed (a) the due
and punctual payment of the principal of, premium, if any, and interest on the
Series A Securities and Series B Securities, and all other amounts payable under
the Indenture and the Series A Securities and Series B Securities by the Company
whether at maturity, acceleration, redemption, repurchase or otherwise, (b) the
due and punctual payment of interest on the overdue principal of, premium, if
any, and interest on the Series A Securities and Series B Securities, to the
extent lawful, (c) the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms set
forth in the Indenture, and (d) in case of any extension of time of payment or
renewal of any Series A Securities and Series B Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Capitalized terms used herein shall have
the meanings assigned to them in the Indenture unless otherwise indicated.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantors shall have any personal liability under the
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.
Any Guarantor may be released from its Guarantee upon the terms and
subject to the conditions provided in the Indenture.
All terms used in this notation of Guarantee which are defined in the
Indenture referred to in this Security upon which this notation of Guarantee is
endorsed shall have the meanings assigned to them in such Indenture.
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
G-15
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
[NAME OF EACH SUBSIDIARY
GUARANTOR]
Attest: By:
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 12 1/4% Series A Senior
Notes due 2004 evidenced by this Unit Certificate referred to in the
within-mentioned Indenture.
Authenticated:
Dated:
THE BANK OF NEW YORK
Trustee
By:
Authorized Signatory
G-16
