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EXHIBIT 4.14
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WARRANT AGREEMENT
between
GOTHIC ENERGY CORPORATION
and
AMERICAN STOCK TRANSFER
& TRUST COMPANY,
AS WARRANT AGENT
Dated as of April 21, 1998
Warrants to Purchase 825,000 Common Shares
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TABLE OF CONTENTS
RECITALS................................................................... 1
AGREEMENT.................................................................. 1
1. DEFINITIONS...................................................... 1
2. WARRANT CERTIFICATES............................................. 8
2.1 Issuance of Warrants........................................ 8
2.2 Form, Denomination and Date of Warrants..................... 8
2.3 Execution and Delivery of Warrant Certificates.............. 9
2.4 Transfer and Exchange....................................... 11
2.5 Temporary Securities........................................ 12
2.6 Effective Registration...................................... 12
3. EXERCISE AND EXPIRATION OF WARRANTS.............................. 13
3.1 Right to Acquire Warrant Shares Upon Exercise............... 13
3.2 Exercise and Expiration of Warrants......................... 13
(a) Exercise of Warrants................................... 13
(b) Expiration of Warrants................................. 13
(c) Method of Exercise..................................... 13
(d) Partial Exercise....................................... 14
(e) Issuance of Warrant Shares............................. 14
(f) Time of Exercise....................................... 15
(g) Exercise of Certain Warrants Evidenced by Unit
Certificates........................................... 15
3.3 Application of Funds Upon Exercise of Warrants.............. 15
3.4 Payment of Taxes............................................ 16
3.5 Surrender of Certificates................................... 16
3.6 Shares Issuable............................................. 16
4. REGISTRATION RIGHTS.............................................. 16
5. DISSOLUTION, LIQUIDATION OR WINDING UP........................... 17
6. ADJUSTMENTS...................................................... 18
6.1 Adjustments................................................. 18
(a) Stock Dividends, Subdivisions and Combinations......... 18
(b) Certain Other Dividends and Distributions.............. 19
(c) Reclassifications...................................... 19
(d) Distribution of Warrants or Other Rights to Holders
of Common Shares....................................... 19
(e) Superseding Adjustment of Number of Warrant Shares
Into Which Each Warrant is Exercisable................. 20
(f) Other Provisions Applicable to Adjustments under
this Section........................................... 20
(g) Warrant Price Adjustment............................... 21
(h) Merger, Consolidation or Combination................... 21
(i) Compliance with Governmental Requirements.............. 22
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(j) Optional Tax Adjustment................................ 22
(k) Warrants Deemed Exercisable............................ 22
(l) Limitations on Certain Non-Stock Dividends............. 22
6.2 Notice of Adjustment........................................ 23
6.3 Statement on Warrant Certificates........................... 23
6.4 Fractional Interest......................................... 23
7. LOSS OR MUTILATION............................................... 24
8. RESERVATION AND AUTHORIZATION OF WARRANT SHARES.................. 24
9. WARRANT TRANSFER BOOKS........................................... 25
10. WARRANT HOLDERS.................................................. 26
10.1 Voting or Dividend Rights.................................. 26
10.2 Rights of Action........................................... 27
10.3 Treatment of Holders of Warrant Certificates............... 27
10.4 Communications to Holders.................................. 27
11. CONCERNING THE WARRANT AGENT..................................... 28
11.1 Nature of Duties and Responsibilities Assumed.............. 28
11.2 Right to Consult Counsel................................... 30
11.3 Compensation, Reimbursement and Indemnification............ 30
11.4 Warrant Agent May Hold Company Securities.................. 30
11.5 Resignation and Removal; Appointment of Successor.......... 31
11.6 Appointment of Countersigning Agent........................ 32
12. ADDITIONAL COVENANTS OF THE COMPANY.............................. 33
12.1 Reports to Holders......................................... 33
12.2 Compliance with Agreements................................. 33
12.3 Maintenance of Office...................................... 33
13. NOTICES.......................................................... 34
13.1 Notices Generally.......................................... 34
13.2 Required Notices to Holders................................ 35
13.3 Company Notices to Warrant Agent........................... 36
14. APPLICABLE LAW................................................... 36
15. PERSONS BENEFITING............................................... 36
16. COUNTERPARTS..................................................... 37
17. AMENDMENTS....................................................... 37
18. INSPECTION....................................................... 38
19. SUCCESSOR TO THE COMPANY......................................... 38
20. ENTIRE AGREEMENT................................................. 38
21. HEADINGS......................................................... 38
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EXHIBITS
A. Form of Face of Warrant Certificate................................... A-1
B. Form of Accredited Investor Transferee Certificate.................... B-1
C. Form of Legal Opinion on Transfer..................................... C-1
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of April 21, 1998 (the "Issue Date"), is
entered into between GOTHIC ENERGY CORPORATION, an Oklahoma corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST, a New York corporation, as
warrant agent (the "Warrant Agent").
RECITALS
A. This Agreement is entered into in connection with the offering by the
Company of 104,000 Units (the "Units") consisting of an aggregate of
$104,000,000 principal amount of 14-1/8% Senior Secured Discount Notes due May
1, 2006 (the "Notes") and 825,000 Common Stock Purchase Warrants (the
"Warrants"). Each of the Units consists of $1,000 principal amount of the Notes
and 7.933 Warrants, each Warrant to purchase one share of Common Stock, par
value $.01 per share (the "Common Stock"), of the Company. The Warrants and the
Notes are not detachable or separately transferable until the Unit Termination
Date (as defined below).
B. The Company proposes to issue 825,000 Warrants, as hereinafter
described, each to purchase at the Warrant Exercise Price (as defined below) one
share of Common Stock on or after the Separation Date (as defined below) and
prior to the Expiration Date (as defined below).
C. The Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to act on behalf of the Company, in connection
with the issuance of the Warrant Certificates (as defined below) and the other
matters provided herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. DEFINITIONS
"Accredited Investor" shall mean a Person that is an "accredited investor"
as that term is defined in Rule 501(a) under the Securities Act.
"Additional Common Shares" shall mean all Common Shares issued or issuable
by the Company after the date of this Agreement, other than the Warrant Shares.
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For purposes of this
definition, "control" (including, with correlative
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meanings, the terms controlling, "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
"Agreement" shall mean this Warrant Agreement, as the same may be amended,
modified or supplemented from time to time.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York are
authorized or obligated by law to close.
"Capital Stock" of any Person shall mean any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
capital stock, and any warrants, options or similar rights to acquire such
capital stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Equity Securities" shall mean any class or series of Common Shares
of the Company.
"Common Shares" shall mean (i) the common stock, par value $.01 per share,
of the Company, as constituted on the original issuance of the Warrants, (ii)
any Capital Stock into which such Common Shares may thereafter be changed and
(iii) any share of the Company of any other class issued to holders of such
Common Shares upon any reclassification thereof.
"Company" shall mean the company identified in the preamble hereof and its
successors and assigns.
"Company Order" shall mean a written request or order signed in the name of
the Company by its Chairman or any Co-Chairman of the Board, its Chief Executive
Officer, its President, any Vice President, and by its Treasurer, any Assistant
Treasurer, its Secretary or any Assistant Secretary, and delivered to the
Warrant Agent.
"Corporate Agency Office" shall have the meaning given such term in Section
9.
"Countersigning Agent" shall mean any Person authorized by the Warrant
Agent to act on behalf of the Warrant Agent to countersign Warrant Certificates.
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"Current Common Equityholder" shall mean any Person who is a holder of
Common Equity Securities on the date of this Agreement.
"Current Market Price" shall mean, with respect to any security on any
date:
(1) if the Company does not have a class of equity securities
registered under the Exchange Act, the value of such security (a) determined in
good faith in the most recently completed arm's-length transaction between the
Company and an unaffiliated third party in which such determination is necessary
and the closing of which occurs on such date or shall have occurred within the
six months preceding such date, (b) if no such transaction shall have occurred
on such date or within such six-month period, most recently determined as of a
date within the six months preceding such date by an Independent Financial
Expert using one or more valuation methods that such Independent Financial
Expert, in its best professional judgment, determines to be most appropriate but
without giving effect to the discount for any lack of liquidity of the security
or to the fact that the Company may not have any class of equity securities
registered under the Exchange Act and assuming that the Warrants are currently
exercisable (in the event of more than one such determination, the determination
for the later date shall be used) or (c) if no such determination shall have
been made within such six-month period, determined as of such date by an
Independent Financial Expert as described in (b) above, or
(2) if the Company does have a class of equity securities registered
under the Exchange Act, the average of the daily Market Prices of such security
for each Business Day during the period commencing ten (10) Business Days before
such date and ending on the date one day prior to such date or, if the Company
has had a class of equity securities registered under the Exchange Act for less
than thirty (30) consecutive Business Days before such date, then the average of
the daily Market Price for all of the Business Days before such date for which
daily Market Prices are available; provided, however, that in the event that the
Current Market Price per share of a security is determined during a period
following the announcement by the Company of (A) a dividend or distribution on
such a security payable in shares of such a security or securities convertible
into shares of such a security, or (B) any subdivision, combination or
reclassification of such security, and prior to the expiration of such thirty
(30) Business Day period before such date (or, if applicable, such lesser number
of Business Days before such date for which daily Market Prices are available)
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then in each such case,
Current Market Price shall be properly adjusted to take into account ex-dividend
trading.
"Effective Date" shall mean the date of declaration by the SEC of
effectiveness of the Warrants Shelf Registration Statement.
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"Effective Registration" shall mean that the Company shall have filed and
caused to become effective a Warrants Shelf Registration Statement under the
Securities Act for the sale of Warrants by the Holders.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Expiration Date" shall mean May 1, 2005 or such earlier date as determined
in accordance with Section 5.
"Holder" or "Warrantholder" shall mean any Person in whose name at the time
any Warrant Certificate is registered upon the Warrant Register.
"Indenture" shall mean the Indenture dated as of April 21, 1998, by and
among the Company and The Bank of New York, as trustee, relating to the Notes.
"Independent" shall mean a nationally recognized investment banking firm or
Person (as the case may be) (i) that does not then have, and for the ten years
immediately preceding such time has not had (and, in the case of a nationally
recognized investment banking firm, whose directors, officers, employees and
Affiliates do not then have, and for the ten years immediately preceding such
time have not had) a direct or indirect interest in the Company or any of its
Subsidiaries or Affiliates or any successor to any of them and (ii) that is not
then, and for the ten years immediately preceding such time was not (and, in the
case of a nationally recognized investment banking firm, whose directors,
officers, employees or Affiliates are not then, and for the ten years
immediately preceding such time were not) an employee, consultant, advisor,
director, officer or Affiliate (it being understood that the term "Independent"
when applied to a director of the Company, means a non-employee director of the
Company whose only relationship with the Company during the relevant period has
been as a director of the Company) of the Company, any of its Subsidiaries or
Affiliates or any successor to any of them.
"Independent Financial Expert" shall mean an Independent nationally
recognized investment banking firm with assets in excess of $1.0 billion
selected by a majority of the members of the Board of Directors (and by a
majority of the Independent members of the board, if any) of the Company.
"Market Price" shall mean (A) in the case of a security listed or admitted
to trading on any securities exchange, the closing price, regular way, on such
day, or if no sale takes place on such day, the average of the closing bid and
asked prices on such day, (B) in the case of a security not then listed or
admitted to trading on any securities exchange, the last reported sale price on
such day, or if no sale takes place on such day, the average of the closing bid
and asked
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prices on such day, as reported by a reputable quotation source designated by
the Company, (C) in the case of a security not then listed or admitted to
trading on any securities exchange and as to which no such reported sale price
or bid and asked prices are available, the average of the reported high bid and
low asked prices on such day, as reported by a reputable quotation service, or
The Wall Street Journal, Eastern Edition, or if such newspaper is no longer
published then in a newspaper of general circulation in the Borough of
Manhattan, City and State of New York, customarily published on each Business
Day, designated by the Company or if there shall be no bid and asked prices on
such day, the average of the high bid and low asked prices, as so reported, on
the most recent day (not more than thirty (30) days prior to the date in
question) for which prices have been so reported, and (D) if there are no bid
and asked prices reported during the thirty (30) days prior to the date in
question, the Current Market Value of the security shall be determined as if the
Company did not have a class of equity securities registered under the Exchange
Act.
"Non-Stock Dividend" shall mean any payment by the Company to all holders
of its Common Shares of any dividend, or any other distribution by the Company
to such holders, of any shares of Capital Stock of the Company, evidences of
indebtedness of the Company, cash or other assets (including rights, warrants or
other securities (of the Company or any other Person)), other than any dividend
or distribution (i) upon a merger or consolidation or sale to which Section
6.1(h) applies, (ii) of any Common Shares referred to in Section 6.1(a) or (iii)
of cash not in liquidation of the Company.
"Non-Surviving Combination" shall mean any merger, consolidation or other
business combination by the Company with one or more other entities in a
transaction in which the Company is not the surviving entity or becomes a
wholly-owned subsidiary of another entity.
"outstanding" shall mean, as of the time of determination, when used with
respect of any Warrants, all Warrants originally issued under this Agreement
except (i) Warrants that have been exercised pursuant to Section 3.2(a), (ii)
Warrants that have expired pursuant to Sections 3.2(b), 5 or 7 and (iii)
Warrants that have otherwise been acquired by the Company; provided, however,
that in determining whether the Holders of the requisite amount of the
outstanding Warrants have given any request, demand, authorization, direction,
notice, consent or waiver under the provisions of this Agreement, Warrants owned
by the Company or any Subsidiary or Affiliate of the Company or any Person that
is at such time a party to a merger or acquisition agreement with the Company
shall be disregarded and deemed not to be outstanding.
"Person" shall mean any individual, corporation (including a business
trust), partnership, joint venture, association, joint-stock company, trust,
estate, limited liability company, unincorporated association, unincorporated
organization, government or agency or political subdivision thereof or any other
entity.
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"Purchase Agreement" shall mean that Purchase Agreement, dated April 21,
1998, by and among the Company and the Purchasers, as such agreement may be
amended, modified or supplemented from time to time.
"Purchasers" shall mean the purchasers named in the Purchase Agreement.
"Qualified Institutional Buyer" shall have the meaning given such term in
Rule 144A under the Securities Act.
"Recipient" shall have the meaning given such term in Section 3.2(e).
"Registrar" shall have the meaning set forth in the Indenture.
"Restricted Warrants" shall have the meaning given such term in Section
2.2(b).
"Restricted Warrant Legend" shall mean the legend so designated on the
Warrant Certificate attached hereto as Exhibit A.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act.
"Separation Date" shall mean the date that is the earlier of (i) the date
on which the Exchange Offer Registration Statement is declared effective under
the Securities Act and (ii) October 23, 1998. The Company shall notify the
Warrant Agent promptly if the Separation Date occurs prior to October 23, 1998
in accordance with Section 13.3. The Company shall notify the Warrant Agent in
accordance with Section 13.3 if the Unit Termination Date occurs prior to
October 23, 1998.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" shall mean, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.
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"Voting Stock" shall mean, with respect to any Person, one or more classes
of the Capital Stock of such Person entitled to vote under ordinary
circumstances in the election of directors, managers or trustees of such Person.
"Units" shall have the meaning set forth in the Preamble.
"Unit Certificate" shall have the meaning set forth in the Indenture.
"Unit Termination Date" shall mean (i) October 23, 1998, or (ii) such
earlier date as determined under the Indenture.
"Warrant Agent" shall mean the warrant agent named in the preamble hereof
or the successor or successors of such Warrant Agent appointed in accordance
with the terms hereof.
"Warrant Certificates" shall mean those certain warrant certificates
evidencing the Warrants, substantially in the form of Exhibit A attached hereto.
"Warrant Price" shall mean the exercise price per Warrant Share, initially
set at $2.40, subject to adjustment as provided in Section 6.1(g).
"Warrant Register" shall have the meaning given such term in Section 9.
"Warrant Registration Rights Agreement" shall mean that certain Warrant
Registration Rights Agreement, dated as of April 21, 1998, by and among the
Company and the Purchasers, as such agreement may be amended, modified or
supplemented from time to time.
"Warrant Shares" shall mean the Common Shares issuable upon exercise of the
Warrants, the number of which is subject to adjustment from time to time in
accordance with Section 6.
"Warrants" shall mean those warrants issued hereunder to purchase initially
up to an aggregate of 825,000 Warrant Shares at the Warrant Price, subject to
adjustment pursuant to Section 6.
"Warrants Shelf Registration Statement" shall have the meaning given such
term in the Warrant Registration Rights Agreement.
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2. WARRANT CERTIFICATES
2.1 Issuance of Warrants
(a) An aggregate of 825,000 Warrants are deemed issued on the date of
this Agreement to the registered holders of Unit Certificates issued pursuant to
the Indenture on such date. Notwithstanding any provision of this Agreement to
the contrary, on or prior to the Unit Termination Date, the Warrants shall be
evidenced by the Unit Certificates issued pursuant to the terms of the Indenture
and the ownership of which shall be registered by the Registrar in accordance
with the Indenture.
(b) After the Unit Termination Date, the Warrant Agent shall issue
Warrant Certificates to each registered owner of Unit Certificates as of the
close of the Unit Termination Date, in the name and number (7.933 Warrants per
Unit) and in such form (global or definitive) as set forth on a list of
registered holders of Unit Certificates as of the close of the Unit Termination
Date furnished to the Warrant Agent by the Registrar pursuant to Section 2.15 of
the Indenture; provided that no Warrant Certificate shall be issued to holders
in respect of Unit Certificates that have been noted by the Warrant Agent as
having had the Warrants evidenced thereby exercised pursuant to Section 3.2(g)
hereof. Each Warrant Certificate issued pursuant to this paragraph (b) shall
evidence 7.933 Warrants multiplied by the number of Units specified as held by
the holder as set forth in the above list, and each Warrant evidenced thereby
shall represent the right, subject to the provisions contained herein and
therein, to purchase one Warrant Share, subject to adjustment as provided in
Section 6.
2.2 Form, Denomination and Date of Warrants
(a) The Unit Certificates shall be issued in the form provided in the
Indenture. Warrant Certificates shall be substantially in the form of Exhibit A
hereto. The Warrants shall be numbered, lettered or otherwise distinguished in
such manner or in accordance with such plans as the officers of the Company
executing the same may determine with the approval of the Warrant Agent. Each
Warrant shall be dated the date of its authentication. Any of the Warrants may
be issued with appropriate insertions, omissions, substitutions and variations,
and may have imprinted or otherwise reproduced thereon such legend or legends,
not inconsistent with the provisions of this Agreement, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or with
the rules of any securities market in which the Warrants are admitted to
trading, or to conform to general usage. All Warrants shall be otherwise
substantially identical except as to denomination and as provided herein.
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(b) Purchasers of Warrants will receive certificated Warrants bearing
the Restricted Warrant Legend ("Restricted Warrants"). Restricted Warrants will
bear the Restricted Warrant Legend unless removed in accordance with Section
2.4.
Upon the occurrence of an Effective Registration, all requirements with
respect to legends on Warrants will cease to apply, and certificated Warrants
without legends will be available to the Holders.
2.3 Execution and Delivery of Warrant Certificates
(a) Warrant Certificates evidencing the Warrants which may be
countersigned and delivered under this Agreement are limited to Warrant
Certificates evidencing 825,000 Warrants, except for Warrant Certificates
countersigned and delivered upon registration of transfer of, or in exchange
for, or in lieu of, one or more previously countersigned Warrant Certificates
pursuant to Sections 2.6, 3.2(d), 7 and 9.
(b) At any time and from time to time on or after the date of this
Agreement, Warrant Certificates evidencing the Warrants may be executed by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall, upon receipt of a Company Order and at the direction of the Company
set forth therein, countersign and deliver such Warrant Certificates to the
Company for issuance. The Warrant Agent is further hereby authorized to
countersign and deliver Warrant Certificates as required by this Section 2.3 or
by Sections 2.2, 2.6, 3.2(d), 7 or 9.
(c) The Warrant Certificates shall be executed in the corporate name
and on behalf of the Company by the Chairman (or any Co-Chairman) of the Board,
the Chief Executive Officer, the President or any one of the Vice Presidents of
the Company under corporate seal reproduced thereon and attested to by the
Secretary or one of the Assistant Secretaries of the Company, either manually or
by facsimile signature printed thereon. The Warrant Certificates shall be
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company whose signature shall have
been placed upon any of the Warrant Certificates shall cease to be such officer
of the Company before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates may, nevertheless, be countersigned
by the Warrant Agent and issued and delivered with the same force and effect as
though such person had not ceased to be such officer of the Company, and any
Warrant Certificate may be signed on behalf of the Company by such person as, at
the actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company, although at the date of the execution of this Agreement
any such person was not such an officer.
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(d) The Warrants are being offered and sold by the Company pursuant to
the Purchase Agreements. Warrants offered and sold to Qualified Institutional
Buyers shall be evidenced initially by a single, permanent Global Unit
Certificate in definitive, fully registered form with appropriate restrictive
legends set forth thereon (the "Global Unit Certificate") deposited with The
Bank of New York, as custodian for and registered in the name of the Depositary
or a nominee of the Depositary. The number of Warrants represented by such
Global Unit Certificate may from time to time be increased or decreased by
adjustments made on the records of the Registrar and the Depositary or its
nominee as provided in the Indenture. After the Unit Termination Date, a Warrant
Certificate issued in the name Depositary in respect of the Global Unit
Certificate shall be a single, permanent Global Warrant Certificate in
definitive, fully registered form with the Global Warrant Legend and Restricted
Warrant Legend set forth on the form of Warrant (the "Global Warrant") and
deposited with the Warrant Agent, as custodian for and registered in the name of
the Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Warrant Agent as hereinafter provided. The number of
Warrants represented by such Global Warrant may from time to time be increased
or decreased by adjustments made on the records of the Warrant Agent and the
Depositary or its nominee as hereinafter provided.
(e) This Section 2.3(e) shall apply only to the Global Warrant
deposited with or on behalf of the Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Agreement with respect to any Global Warrant
held on their behalf by the Depositary or under the Global Warrant, and the
Depositary may be treated by the Company, the Warrant Agent, and any agent of
the Company or the Warrant Agent as the absolute owner of the Global Warrant for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Warrant Agent, or any agent of the Company or the
Warrant Agent, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members the operation of customary practices governing the
exercise of the rights of a holder of any Warrant.
(f) Except as otherwise provided herein, owners of beneficial
interests in the Global Warrant will not be entitled to receive physical
delivery of certificated Warrants. After the Unit Termination Date, purchasers
of Warrants who are not Qualified Institutional Buyers, or holders of Unit
Certificates as of the Unit Termination Date and issued in definitive form, will
receive certificated Warrants bearing the Restricted Warrant Legend ("Restricted
Warrants"); provided, however, that upon transfer of such certificated Warrants
to a Qualified Institutional Buyer, such certificated Warrants will, until the
Global Warrant has previously been exchanged, be exchanged for an interest in
the Global Warrant pursuant to the provisions of Section 2.4
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hereof. Restricted Warrants will bear the Restricted Warrant Legend unless
removed in accordance with Section 2.4(b).
Upon the occurrence of an Effective Registration, all requirements with
respect to the Global Warrant and legends on Warrants will cease to apply, and
certificated Warrants without legends will be available to the Holders.
2.4 Transfer and Exchange
(a) If a holder of a Restricted Warrant wishes at any time to transfer
such Restricted Warrant to a Person who wishes to take delivery thereof in the
form of a Restricted Warrant, such holder may, subject to the restrictions on
transfer set forth herein and in such Restricted Warrant, cause the exchange of
such Restricted Warrants for one or more Restricted Warrants of any authorized
denomination or denominations and exercisable for the same aggregate number of
Warrant Shares. Upon receipt by the Warrant Agent at its Corporate Agency Office
of (1) such Restricted Warrant, duly endorsed as provided herein, (2)
instructions from such holder directing the Warrant Agent to authenticate and
deliver one or more Restricted Warrants exercisable for the same aggregate
number of Warrant Shares as the Restricted Warrant to be exchanged, such
instructions to contain the name or names of the designated transferee or
transferees, the authorized denomination or denominations of the Restricted
Warrants to be so issued and appropriate delivery instructions, (3) a
certificate in the form of Exhibit B attached hereto given by the Person
acquiring the Restricted Warrants, to the effect set forth therein, and (4) an
opinion of counsel to the transferor of such Restricted Warrant in the form of
Exhibit C hereto, to the effect set forth therein, then the Warrant Agent shall
cancel or cause to be canceled such Restricted Warrant and, concurrently
therewith, the Company shall execute, and the Warrant Agent shall authenticate
and deliver, one or more Restricted Warrants to the effect set forth therein, in
accordance with the instructions referred to above.
(b) If Warrants are issued upon the transfer, exchange or replacement
of Warrants bearing the Restricted Warrant Legend, or if a request is made to
remove such Restricted Warrant Legend, the Warrants so issued shall bear the
Restricted Warrant Legend, or the Restricted Warrant Legend shall not be
removed, as the case may be, unless (i) there is delivered to the Company
satisfactory evidence, which may include an opinion of counsel as may be
reasonably required by the Company to the effect that neither the Restricted
Warrant Legend nor the restrictions on transfer set forth therein are required
to ensure that transfers thereof comply with the provisions of the Securities
Act or, with respect to Restricted Warrants, that such Warrants are not
"restricted" within the meaning of Rule 144 under the Securities Act or (ii)
there is an Effective Registration with respect to the Warrants then in effect
or the Warrants as to which the Restricted Warrant Legend is sought to be
removed have been disposed of in accordance with the Warrants Shelf
Registration. Upon (i) provision of such satisfactory
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evidence, or (ii) notification by the Company to the Warrant Agent of an
Effective Registration with respect to the Warrants, the Warrant Agent, at the
direction of the Company, shall authenticate and deliver Warrant Certificates
that do not bear the Restricted Warrant Legend.
(c) No service charge shall be made to a Warrantholder for any
registration of transfer or exchange; provided, however, that the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates.
(d) The Warrant Agent shall use CUSIP numbers in notices of repurchase
or exchange as a convenience to Warrantholders; provided that any such notice
shall state that no representation is made as to the correctness or accuracy of
such numbers either as printed on the Warrants or as contained in any notice of
repurchase or exchange and that reliance may be placed only on the other
identification numbers printed on the Warrants. The Company will promptly notify
the Warrant Agent of any change in the CUSIP numbers.
2.5 Temporary Securities
Pending the preparation of definitive Warrants, the Company may
execute and the Warrant Agent shall authenticate and deliver temporary Warrants
(printed, lithographed, typewritten or otherwise reproduced, in each case in
form satisfactory to the Warrant Agent). Temporary Warrants shall be issuable as
registered Warrants, of any authorized denomination, and substantially in the
form of the definitive Warrants but with such omissions, insertions and
variations as may be appropriate for temporary Warrants, all as may be
determined by the Company with the concurrence of the Warrant Agent. Temporary
Warrants may contain such reference to any provisions of this Agreement as may
be appropriate. Every temporary Warrant shall be executed by the Company and be
authenticated by the Warrant Agent upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Warrants. Without
unreasonable delay the Company shall execute and shall furnish definitive
Warrants and thereupon temporary Warrants may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Company
for the purpose pursuant to Section 12.3, and the Warrant Agent shall
authenticate and deliver in exchange for such temporary Warrants definitive
Warrants of authorized denominations exercisable for a like number of Warrant
Shares. Until so exchanged the temporary Warrants shall be entitled to the same
benefits under this Agreement as definitive Warrants.
2.6 Effective Registration
In the event the Company has an Effective Registration, the Company
shall notify the Warrant Agent within two Business Days after the Effective
Date. Promptly after delivering
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to the Warrant Agent notice of the Effective Registration, the Company shall
cause to be delivered to the Warrant Agent certificates for Warrants without
legends and the Warrant Agent shall authenticate and deliver certificated
Warrants without legends to Holders presenting their certificated Warrants for
exchange to transferees of Warrants covered by the Warrants Shelf Registration
in the names and denominations specified by them.
3. EXERCISE AND EXPIRATION OF WARRANTS
3.1 Right to Acquire Warrant Shares Upon Exercise
Each Warrant Certificate (or prior to the Unit Termination Date, each
Unit Certificate) shall, when countersigned by the Warrant Agent, entitle the
Holder thereof, subject to the provisions thereof and of this Agreement, to
acquire from the Company, for each Warrant evidenced thereby, one Warrant Share
at the Warrant Price, subject to adjustment as provided in this Agreement. The
Warrant Price shall be adjusted from time to time as required by Section 6.1.
The Warrants are exercisable at any time after the Separation Date and on or
prior to the Expiration Date.
3.2 Exercise and Expiration of Warrants
(a) Exercise of Warrants. Subject to the terms and conditions set
forth herein, including, without limitation, the exercise procedure described in
Section 3.2(c), a Holder of a Warrant Certificate may exercise all or any whole
number of the Warrants evidenced thereby, on any Business Day from and after the
Separation Date until 5:00 p.m., New York City time, on the Expiration Date
(subject to earlier expiration pursuant to Section 5) for the Warrant Shares
purchasable thereunder. The Company shall notify the Warrant Agent promptly if
the Separation Date occurs prior to October 23, 1998 in accordance with Section
13.3.
(b) Expiration of Warrants. The Warrants shall terminate and become
void as of 5:00 P.M., New York time on the Expiration Date, subject to earlier
expiration in accordance with Section 5. In the event that the Warrants are to
expire by reason of Section 5, the term "Expiration Date" shall mean such
earlier date for all purposes of this Agreement.
(c) Method of Exercise. The Holder may exercise all or any of the
Warrants by either of the following methods:
(i) The Holder may deliver to the Warrant Agent at the Corporate
Agency Office (A) a written notice of such Holder's election to exercise
Warrants, duly executed by such Holder in the form set forth on the reverse of,
or attached to, such Warrant Certificate, which notice shall specify the number
of Warrant Shares to be purchased, (B) the Warrant
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Certificate evidencing such Warrants and (C) a sum equal to the aggregate
Warrant Price for the Warrant Shares into which such Warrants are being
exercised, which sum shall be paid in any combination elected by such Holder of
(x) official bank checks in New York Clearing House funds payable to the order
of the Company and delivered to the Warrant Agent at the corporate Agency
Office, or (y) wire transfers in immediately available funds to the account of
the Company at such banking institution as the Company shall have given notice
to the Warrant Agent and the Holders in accordance with Section 13.1(b); or
(ii) The Holder may also exercise all or any of the Warrants in a
"cashless" or "net-issue" exercise by delivering to the Warrant Agent at the
Corporate Agency Office (A) a written notice of such Holder's election to
exercise Warrants, duly executed by such Holder in the form set forth on the
reverse of, or attached to, such Warrant Certificate, which notice shall specify
the number of Warrant Shares to be delivered to such Holder and the number of
Warrant Shares with respect to which such Warrants are being surrendered in
payment of the aggregate Warrant Price for the Warrant Shares to be delivered to
the Holder, and (B) the Warrant Certificate evidencing such Warrants. For
purposes of this subparagraph (ii), each Warrant Share as to which such Warrants
are surrendered in payment of the aggregate Warrant Price will be attributed a
value equal to (x) the Current Market Price per share of Common Shares minus (y)
the then-current Warrant Price.
(d) Partial Exercise. If fewer than all the Warrants represented by a
Warrant Certificate are exercised, such Warrant Certificate shall be surrendered
and a new Warrant Certificate of the same tenor and for the number of Warrants
which were not exercised shall be executed by the Company. The Warrant Agent
shall countersign the new Warrant Certificate, registered in such name or names,
subject to the provisions of Section 9, as may be directed in writing by the
Holder, and shall deliver the new Warrant Certificate to the Person or Persons
in whose name such new Warrant Certificate is so registered. The Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrant Certificates duly executed on behalf of the Company for such purpose.
(e) Issuance of Warrant Shares. Upon surrender of a Warrant
Certificate evidencing Warrants in conformity with the foregoing provisions and
payment of the Warrant Price in respect of the exercise of one or more Warrants
evidenced thereby, the Warrant Agent shall, when such payment is received,
deliver to the Company the notice of exercise received pursuant to Section
3.2(c), and, in accordance with Section 3.3, deliver or deposit all funds
received as instructed in writing by the Company and advise the Company by
telephone at the end of such day of the amount of funds so deposited to its
account. The Company shall thereupon, as promptly as practicable, and in any
event within five Business Days after receipt by the Company of such notice of
exercise, execute or cause to be executed and deliver or cause to be delivered
to the Recipient (as defined below) a certificate or certificates representing
the
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aggregate number of Warrant Shares issuable upon such exercise (based upon the
aggregate number of Warrants so exercised), determined in accordance with
Section 3.6, together with an amount in cash in lieu of any fractional share(s)
determined in accordance with Section 6.4. The certificate or certificates so
delivered shall be, to the extent possible, in such denomination or
denominations as such Holder shall request in such notice of exercise and shall
be registered or otherwise placed in the name of, and delivered to, the Holder
or, subject to Section 2.2 and Section 3.4, such other Person as shall be
designated by the Holder in such notice (the Holder or such other Person being
referred to herein as the "Recipient").
(f) Time of Exercise. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date on which all requirements
set forth in Section 3.2(c) applicable to such exercise have been satisfied.
Subject to Section 6.1(f)(iv), certificate(s) evidencing the Warrant Shares
issued upon the exercise of such Warrant shall be deemed to have been issued
and, for all purposes of this Agreement, the Recipient shall, as between such
Person and the Company, be deemed to be and entitled to all rights of the holder
of record of such Warrant Shares as of such time.
(g) Exercise of Certain Warrants Evidenced by Unit Certificates. In
the event Warrants continue to be evidenced by Unit Certificates after the
Separation Date, a holder of a Unit Certificate may, from and after the
Separation Date but prior to 5:00 p.m., New York time on the Unit Termination
Date, exercise all (but not less than all) the Warrants evidenced thereby by
complying with Section 3.2 (c) hereof and delivering the Unit Certificate
evidencing the Warrants to the Warrant Agent in lieu of a Warrant Certificate. A
notation shall be placed on the Unit Certificate by the Warrant Agent indicating
that the Warrants evidenced by such Unit Certificate have been fully exercised
and accordingly such Warrants are no longer outstanding. The noted Unit
Certificate shall be delivered by the Warrant Agent to the offices of the
Registrar for cancellation and reissuance to the registered holder in the
appropriate form of Note. Registered holders of Unit Certificates as of the Unit
Termination Date shall also be entitled to exercise the Warrants to which they
are entitled prior to issuance of their Warrant Certificates pursuant to Section
2.1(b) by complying with Section 3.2(c) except that delivery of a Warrant
Certificate shall not be required, whereupon such registered holder shall be
entitled to receive a Warrant Certificate only with respect to any unexercised
Warrants. The Warrant Agent shall keep a record of Unit Certificates (by number
and registered holder) that have been properly tendered to the Warrant Agent for
Warrant exercise pursuant to this Section 3.2(g).
3.3 Application of Funds Upon Exercise of Warrants
Any funds delivered to the Warrant Agent upon exercise of any
Warrant(s) shall be held by the Warrant Agent in trust for the Company. The
Warrant Agent shall promptly deliver and pay to or upon the written order of the
Company all funds received by it upon the
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exercise of any Warrants by bank wire transfer to an account designated by the
Company or as the Warrant Agent otherwise may be directed in writing by the
Company.
3.4 Payment of Taxes
The Company shall pay any and all taxes (other than income taxes) and
other charges that may be payable in respect of the issue or delivery of Warrant
Shares on exercise of Warrants pursuant hereto. The Company shall not be
required, however, to pay any tax or other charge imposed in respect of any
transfer involved in the issue and delivery of any certificates for Warrant
Shares or payment of cash to any Recipient other than the Holder of the Warrant
Certificate surrendered upon the exercise of a Warrant, and in case of such
transfer or payment, the Warrant Agent and the Company shall not be required to
issue or deliver any certificate or pay any cash until (a) such tax or charge
has been paid or an amount sufficient for the payment thereof has been delivered
to the Warrant Agent or the Company or (b) it has been established to the
Company's satisfaction that any such tax or other charge that is or may become
due has been paid.
3.5 Surrender of Certificates
Any Warrant Certificate surrendered for exercise shall, if surrendered
to the Company, be delivered to the Warrant Agent, and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly canceled by
such Warrant Agent and shall not be reissued by the Company. The Warrant Agent
shall destroy such canceled Warrant Certificates and deliver its certificate of
destruction to the Company, unless the Company shall otherwise direct.
3.6 Shares Issuable
The number of Warrant Shares "issuable upon exercise" of Warrants at
any time shall be the number of Warrant Shares into which such Warrants are then
exercisable. The number of Warrant Shares "into which each Warrant is
exercisable" initially shall be one share, subject to adjustment as provided in
Section 6.1.
4. REGISTRATION RIGHTS
The Warrantholders and holders of Warrant Shares shall have the
registration rights provided for in the Warrant Registration Rights Agreement.
The Warrant Agent shall keep copies of the Warrant Registration Rights Agreement
available for inspection by the Holders during normal business hours at its
office. The Company shall supply the Warrant Agent from
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time to time with such numbers of copies of the Warrant Registration Rights
Agreement as the Warrant Agent may request.
5. DISSOLUTION, LIQUIDATION OR WINDING UP
If, on or prior to the Expiration Date, the Company (or any other Person
controlling the Company) shall propose a voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, the Company shall give
written notice thereof to the Warrant Agent and all Holders of Warrant
Certificates in the manner provided in Section 13 prior to the date on which
such transaction is expected to become effective or, if earlier, the record date
for such transaction. Such notice shall also specify the date as of which the
holders of record of the Common Shares shall be entitled to exchange their
shares for moneys, securities or other property deliverable upon such
dissolution, liquidation or winding up, as the case may be, on which date each
Holder of Warrant Certificates shall be entitled to receive the moneys,
securities or other property which such Holder would have been entitled to
receive had such Holder been the holder of record of the Warrant Shares into
which the Warrants were exercisable immediately prior to such dissolution,
liquidation or winding up (net of the then applicable Warrant Price) and the
rights to exercise the Warrants shall terminate.
In case of any such voluntary or involuntary dissolution, liquidation or
winding up of the Company, the Company shall deposit with the Warrant Agent any
moneys, securities or other property which the Holders are entitled to receive
under this Agreement, together with a Company Order as to the distribution
thereof. After receipt of such deposit from the Company and after any Holder has
surrendered a Warrant Certificate to the Warrant Agent, the Warrant Agent shall
make payment in the appropriate amount to such Person or Persons as it may be
directed in writing by the Holder surrendering such Warrant Certificate. The
Warrant Agent shall not be required to pay interest on any money deposited
pursuant to the provisions of this Section 5 except such as it shall agree with
the Company to pay thereon. Any moneys, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Section 5 shall be, and are hereby, assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
moneys, securities or other property shall have been deposited; provided that
moneys, securities or other property need not be segregated from other moneys,
securities or other property held by the Warrant Agent except to the extent
required by law.
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6. ADJUSTMENTS
6.1 Adjustments
The number of Warrant Shares into which each Warrant is exercisable
and the Warrant Price shall be subject to adjustment from time to time after the
Effective Date in accordance (and only in accordance) with the provisions of
this Section 6:
(a) Stock Dividends, Subdivisions and Combinations. In case at any
time or from time to time after the Effective Date the Company shall:
(i) pay to the holders of its Common Shares a dividend payable
in, or make any other distribution on any class of its capital stock in, Common
Shares (other than a dividend or distribution upon a merger or consolidation or
sale to which Section 6.1(h) applies);
(ii) subdivide its outstanding Common Shares into a larger number
of Common Shares (other than a subdivision upon a merger or consolidation or
sale to which Section 6.1(h) applies); or
(iii) combine its outstanding Common Shares into a smaller number
of Common Shares (other than a combination upon a merger or consolidation or
sale to which Section 6.1(h) applies);
then, (x) in the case of any such dividend or distribution, effective
immediately after the opening of business on the day after the date for the
determination of the holders of Common Shares entitled to receive such dividend
or distribution or (y) in the case of any subdivision or combination, effective
immediately after the opening of business on the day after the day upon which
such subdivision or combination becomes effective, the number of Warrant Shares
into which each Warrant is exercisable shall be adjusted to that number of
Warrant Shares determined by (A) in the case of any such dividend or
distribution, multiplying the number of Warrant Shares into which each Warrant
is exercisable at the opening of business on the day after the day for
determination by a fraction (not to be less than one), (1) the numerator of
which shall be equal to the sum of the number of Common Shares outstanding at
the close of business on such date for determination and the total number of
shares constituting such dividend or distribution and (2) the denominator of
which shall be equal to the number of Common Shares outstanding at the close of
business on such date for determination, or (B) in the case of any such
combination, by proportionately reducing, or, in the case of any such
subdivision, by proportionately increasing, the number of Warrant Shares into
which each Warrant is exercisable at the opening of business on the day after
the day upon which such subdivision or combination becomes effective.
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(b) Certain Other Dividends and Distributions. In case at any time or
from time to time after the Effective Date the Company shall effect a Non- Stock
Dividend (other than any dividend or distribution of any warrants, options or
rights referred to in Section 6.1(d)), then, and in each such case, effective
immediately after the opening of business on the day after the date for the
determination of the holders of Common Shares entitled to receive such
distribution, the number of Warrant Shares into which each Warrant is
exercisable shall be adjusted to that number determined by multiplying the
number of Warrant Shares into which each Warrant is exercisable immediately
prior to the close of business on the date of determination by a fraction, (i)
the numerator of which shall be the Current Market Price per Common Share on
such date of determination and (ii) the denominator of which shall be such
Current Market Price per Common Share minus the portion applicable to one Common
Share of the fair market value (as determined in good faith by the Board of
Directors of the Company) of such securities or other assets so distributed.
(c) Reclassifications. A reclassification of the Common Shares (other
than any such reclassification in connection with a merger or consolidation or
sale to which Section 6.1(h) applies) into Common Shares and shares of any other
class of stock shall be deemed a distribution by the Company to the holders of
its Common Shares of such shares of such other class of stock for the purposes
and within the meaning of Section 6.1(b) (and the effective date of such
reclassification shall be deemed to be "the date for the determination of the
holders of Common Shares entitled to receive such distribution" for the purposes
and within the meaning of Section 6.1(b)) and, if the outstanding number of
Common Shares shall be changed into a larger or smaller number of Common Shares
as a part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding Common Shares for the
purposes and within the meaning of Section 6.1(a) (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or combination becomes effective" for the purposes and within the meaning of
Section 6.1(a)).
(d) Distribution of Warrants or Other Rights to Holders of Common
Shares. In case at any time or from time to time after the Effective Date the
Company shall make a distribution to all holders of outstanding Common Shares of
any warrants, options or other rights to subscribe for or purchase any
Additional Common Shares or securities convertible into or exchangeable for
Additional Common Shares (other than a distribution of such warrants, options or
rights upon a merger or consolidation or sale to which Section 6.1(h) applies),
whether or not the rights to subscribe or purchase thereunder are immediately
exercisable, and the consideration per share for which Additional Common Shares
may at any time thereafter be issuable pursuant to such warrants or other rights
shall be less than the Current Market Price per Common Share on the date fixed
for determination of the holders of Common Shares entitled to receive such
distribution, then, and for each such case, effective immediately after the
opening of business on the day after the date for determination, the number of
Warrant Shares into which each Warrant
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is exercisable shall be adjusted to that number determined by multiplying the
number of Warrant Shares into which each Warrant is exercisable at the opening
of business on the day after such date for determination by a fraction (not less
than one), (i) the numerator of which shall be the number of Common Shares
outstanding at the close of business on such date for determination plus the
maximum number of Additional Common Shares issuable pursuant to all such
warrants or other rights and (ii) the denominator of which shall be the number
of Common Shares outstanding at the close of business on such date for
determination plus the number of Common Shares that the minimum consideration
received and receivable by the Company for the issuance of such maximum number
of Additional Common Shares pursuant to the terms of such warrants or other
rights would purchase at such Current Market Price.
(e) Superseding Adjustment of Number of Warrant Shares into Which Each
Warrant is Exercisable. In case at any time after any adjustment of the number
of Warrant Shares into which each Warrant is exercisable shall have been made
pursuant to Section 6.1(d) on the basis of the distribution of warrants or other
rights or after any new adjustment of the number of Warrant Shares into which
each Warrant is exercisable shall have been made pursuant to this Section
6.1(e), such warrants or rights shall expire, and all or a portion of such
warrants or rights shall not have been exercised, then, and in each such case,
upon the election of the Company by written notice to the Warrant Agent, such
previous adjustment in respect of such warrants or rights which have expired
without exercise shall be rescinded and annulled as to any then outstanding
Warrants, and the Additional Common Shares that were deemed for purposes of the
computations set forth in Section 6.1(d) to have been issued or sold by virtue
of such adjustment in respect of such warrants or rights shall no longer be
deemed to have been distributed.
(f) Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of Warrant Shares into which each Warrant is exercisable and to the
Warrant Price under this Section 6.1:
(i) Treasury Stock. The sale or other disposition (other than any
shares specified in the definition of "Additional Common Shares") of any issued
Common Shares owned or held by or for the account of the Company shall be deemed
an issuance or sale of Additional Common Shares for purposes of this Section 6.
The Company shall not pay any dividend on or make any distribution on Common
Shares held in the treasury of the Company. For the purposes of this Section
6.1, the number of Common Shares at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of Common Shares.
(ii) When Adjustments Are to be Made. The adjustments required
by Sections 6.1(a), 6.1(b) 6.1(c) and 6.1(d) shall be made whenever and as often
as any specified
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event requiring an adjustment shall occur, except that no adjustment of the
Warrant Shares into which each Warrant is exercisable that would otherwise be
required shall be made unless and until such adjustment either by itself or with
other adjustments not previously made increases or decreases the Warrant Shares
into which each Warrant is exercisable immediately prior to the making of such
adjustment by at least 1%. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) shall be carried forward and made as
soon as such adjustment, together with other adjustments required by Sections
6.1(a), 6.1(b), 6.1(c) and 6.1(d) and not previously made, would result in such
minimum adjustment.
(iii) Fractional Interests. In computing adjustments under this
Section 6, fractional interests in Common Shares shall be taken into account to
the nearest one-thousandth of a share.
(iv) Deferral of Issuance upon Exercise. In any case in which
this Section 6 shall require that an adjustment to the Warrant Shares into which
each Warrant is exercisable be made effective pursuant to Section 6.1(a)(i),
6.1(b) or 6.1(d) prior to the occurrence of a specified event and any Warrant is
exercised after the time at which the adjustment became effective but prior to
the occurrence of such specified event the Company may elect to defer until the
occurrence of such specified event the issuing to the Holder of the Warrant
Certificate evidencing such Warrant (or other Person entitled thereto) of, and
may delay registering such Holder or other Person as the recordholder of, the
Warrant Shares over and above the Warrant Shares issuable upon such exercise
determined in accordance with Section 3.6 on the basis of the Warrant Shares
into which each Warrant is exercisable prior to such adjustment determined in
accordance with Section 3.6; provided, however, that the Company shall deliver
to such Holder or other person a due xxxx or other appropriate instrument
evidencing the right of such Holder or other Person to receive, and to become
the record holder of, such Additional Common Shares, upon the occurrence of the
event requiring such adjustment.
(g) Warrant Price Adjustment. Whenever the number of Warrant Shares
into which a Warrant is exercisable is adjusted as provided in this Section 6.1,
the Warrant Price payable upon exercise of the Warrant shall simultaneously be
adjusted by multiplying such Warrant Price immediately prior to such adjustment
by a fraction, the numerator of which shall be the number of Warrant Shares into
which such Warrant was exercisable immediately prior to such adjustment, and the
denominator of which shall be the number of Warrant Shares into which such
Warrant was exercisable immediately thereafter.
(h) Merger, Consolidation or Combination. In the event the Company
merges, consolidates or otherwise combines with or into any Person, then, as a
condition of such merger, consolidation or combination, lawful and adequate
provisions shall be made whereby Warrantholders shall, in addition to their
other rights hereunder, thereafter have the right to
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purchase and receive upon the basis and upon the terms and conditions specified
in this Agreement upon exercise of the Warrants and in lieu of the Warrant
Shares immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
Common Shares equal to the number of Warrant Shares immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby,
and in any such case appropriate provision shall be made with respect to the
rights and interests of the Warrantholders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the number of
Warrant Shares) shall thereafter be applicable, as nearly as may be practicable,
in relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.
(i) Compliance with Governmental Requirements. Before taking any
action that would cause an adjustment reducing the Warrant Price below the then
par value of any of the Warrant Shares into which the Warrants are exercisable,
the Company will take any corporate action that may be necessary in order that
the Company may validly and legally issue fully paid and non-assessable Warrant
Shares at such adjusted Warrant Price.
(j) Optional Tax Adjustment. The Company may at its option, at any
time during the term of the Warrants, increase the number of Warrant Shares into
which each Warrant is exercisable, or decrease the Warrant Price, in addition to
those changes required by Section 6.1(a), 6.1(b), 6.1(c), 6.1(d) or 6.1(g), as
deemed advisable by the Board of Directors of the Company, in order that any
event treated for Federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the Recipients.
(k) Warrants Deemed Exercisable. For purposes solely of this Section
6, the number of Warrant Shares which the holder of any Warrant would have been
entitled to receive had such Warrant been exercised in full at any time or into
which any Warrant was exercisable at any time shall be determined assuming such
Warrant was exercisable in full at such time, although such Warrant may not be
exercisable in full at such time pursuant to Section 3.2(a).
(l) Limitations on Certain Non-Stock Dividends. The Company agrees
that it will not declare or pay any Non-Stock Dividend subject to Section 6.1(b)
hereof to the extent that the fair market value of the property or other assets
to be distributed in respect of one Common Share equals or exceeds the Current
Market Price per Common Share at the date of determination.
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6.2 Notice of Adjustment
Whenever the number of Warrant Shares into which a Warrant is
exercisable is to be adjusted, or the Warrant Price is to be adjusted, in either
case as herein provided, the Company shall compute the adjustment in accordance
with Section 6.1, and shall, promptly after such adjustment becomes effective,
cause a notice of such adjustment or adjustments to be given to all Holders in
accordance with Section 13.1(b) and shall deliver to the Warrant Agent a
certificate of the Chief Financial Officer of the Company setting forth the
number of Warrant Shares into which each Warrant is exercisable after such
adjustment, or the adjusted Warrant Price, as the case may be, and setting forth
in brief a statement of the facts requiring such adjustment and the computation
by which such adjustment was made. As provided in Section 11.1, the Warrant
Agent shall be entitled to rely on such certificate and shall be under no duty
or responsibility with respect to any such certificate, except to exhibit the
same from time to time to any Holder desiring an inspection thereof during
reasonable business hours.
6.3 Statement on Warrant Certificates
Irrespective of any adjustment in the number or kind of shares into
which the Warrants are exercisable, Warrant Certificates theretofore or
thereafter issued may continue to express the same price and number and kind of
shares initially issuable pursuant to this Agreement.
6.4 Fractional Interest
The Company shall not issue fractional Warrant Shares on the exercise
of Warrants. If Warrant Certificates evidencing more than one Warrant shall be
presented for exercise at the same time by the same Holder, the number of full
Warrant Shares which shall be issuable upon such exercise thereof shall be
computed on the basis of the aggregate number of Warrants so to be exercised. If
any fraction of a Warrant Share would, except for the provisions of this Section
6.4, be issuable on the exercise of any Warrant (or specified portion thereof),
the Company shall, in lieu of issuing any fractional Warrant Shares, pay an
amount in cash calculated by it to be equal to the then Current Market Price per
Common Share on the date of such exercise multiplied by such fraction computed
to the nearest whole cent. The Holders, by their acceptance of the Warrant
Certificates, expressly waive their right to receive any fraction of a Warrant
Share or a stock certificate representing a fraction of a Warrant Share.
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7. LOSS OR MUTILATION
Upon (i) receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and such security or indemnity as may be
required by them to save each of them harmless and (ii) surrender, in the case
of mutilation, of the mutilated Warrant Certificate to the Warrant Agent and
cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants evidenced thereby have been acquired by a bona
fide purchaser, the Company shall execute and upon its written request the
Warrant Agent shall countersign and deliver to the registered Holder of the
lost, stolen, destroyed or mutilated Warrant Certificate, in exchange therefor
or in lieu thereof, a new Warrant Certificate of the same tenor and for a like
aggregate number of Warrants. At the written request of such registered Holder,
the new Warrant Certificate so issued shall be retained by the Warrant Agent as
having been surrendered for exercise, in lieu of delivery thereof to such
Holder, and shall be deemed for purposes of Section 3.2 to have been surrendered
for exercise on the date the conditions specified in clauses (i) and (ii) of the
preceding sentence were first satisfied.
Upon the issuance of any new Warrant Certificate under this Section 7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the fees and expenses of the Warrant Agent and of counsel to the
Company) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this
Section 7 in lieu of any lost, stolen or destroyed Warrant Certificate shall
constitute an additional contractual obligation of the Company, whether or not
the allegedly lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly
executed and delivered hereunder.
The provisions of this Section 7 are exclusive and shall preclude (to the
extent lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, stolen, or destroyed Warrant Certificates.
8. RESERVATION AND AUTHORIZATION OF WARRANT SHARES
The Company shall at all times reserve and keep available, free from
preemptive rights, solely for issue upon the exercise of Warrants as herein
provided, such number of its authorized but unissued Warrant Shares deliverable
upon the exercise of Warrants as will be sufficient to permit the exercise in
full of all outstanding Warrants. The Company covenants that all Warrant Shares
will, at all times that Warrants are exercisable, be duly approved for listing
subject to
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official notice of issuance on each securities exchange, if any, on which the
Common Shares are then listed. The Company covenants that (i) all Warrant Shares
that may be issued upon exercise of Warrants shall upon issuance be duly and
validly authorized, issued and fully paid and non-assessable and free of
preemptive or similar rights and (ii) the stock certificates issued to evidence
any such Warrant Shares will comply with the Oklahoma General Corporation Act
and any other applicable law.
The Company hereby authorizes and directs its current and future transfer
agents for the Common Shares at all times to reserve stock certificates for such
number of authorized shares as shall be required for such purpose. The Warrant
Agent is hereby authorized to requisition from time to time from any such
transfer agents stock certificates required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement, and the Company
hereby authorizes and directs such transfer agents to comply with all such
requests of the Warrant Agent. The Company will supply such transfer agents with
duly executed stock certificates for such purposes. Promptly after the date of
expiration of all of the Warrants in accordance with Section 3.2(b), the Warrant
Agent shall certify to the Company the aggregate number of Warrants then
outstanding, and thereafter no Warrant Shares shall be reserved in respect of
such Warrants.
9. WARRANT TRANSFER BOOKS
The Warrant Agent will maintain an office (the "Corporate Agency Office")
in the United States of America, where Warrant Certificates may be surrendered
for registration of transfer or exchange and where Warrant Certificates may be
surrendered for exercise of Warrants evidenced thereby, which office is 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxxxx, on the date
hereof. The Warrant Agent will give prompt written notice to all Holders of
Warrant Certificates of any change in the location of such office.
The Warrant Certificates evidencing the Warrants shall be issued in
registered form only. The Company shall cause to be kept at the office of the
Warrant Agent designated for such purpose a warrant register (the "Warrant
Register") in which, subject to such reasonable regulations as the Warrant Agent
may prescribe and such regulations as may be prescribed by law, the Company
shall provide for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates as herein provided.
Subject to Section 2.4, upon surrender for registration of transfer of any
Warrant Certificate at the Corporate Agency Office, the Company shall execute,
and the Warrant Agent shall countersign and deliver, in the name of the
designated transferee or transferees, one or more new Warrant Certificates
evidencing a like aggregate number of Warrants.
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Subject to Section 2.4, (i) at the option of the Holder, Warrant
Certificates may be exchanged at the office of the Warrant Agent upon payment of
the charges hereinafter provided for other Warrant Certificates evidencing a
like aggregate number of Warrants and (ii) whenever any Warrant Certificates are
so surrendered for exchange, the Company shall execute, and the Warrant Agent
shall countersign and deliver, the Warrant Certificates of the same tenor and
evidencing the same number of Warrants as evidenced by the Warrant Certificates
surrendered by the Holder making the exchange.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.
Subject to Section 2.4, every Warrant Certificate surrendered for
registration of transfer or exchange shall (if so required by the Company or the
Warrant Agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Warrant Agent, duly
executed by the Holder thereof or his attorney duly authorized in writing.
The Warrant Agent shall, upon request of the Company from time to time,
deliver to the Company such reports of registered ownership of the Warrants and
such records of transactions with respect to the Warrants and the Warrant Shares
as the Company may request. The Warrant Agent shall also make available to the
Company for inspection by the Company's agents or employees, from time to time
as the Company may request, such original books of accounts and records
maintained by the Warrant Agent in connection with the issuance and exercise of
Warrants hereunder, such inspections to occur at the Corporate Agency Office
during normal business hours.
The Warrant Agent shall keep copies of this Agreement and any notices given
to Holders hereunder available for inspection by the Holders (or any holders of
Unit Certificates) during normal business hours at the Corporate Agency Office.
The Company shall supply the Warrant Agent from time to time with such numbers
of copies of this Agreement as the Warrant Agent may request.
10. WARRANT HOLDERS
10.1 Voting or Dividend Rights
Prior to the exercise of the Warrants, except as may be specifically
provided for herein, (i) no Holder of a Warrant Certificate, as such, shall be
entitled to any of the rights of a holder of Common Shares, including, without
limitation, the right to vote at or to receive any
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notice of any meetings of stockholders; (ii) the consent of any Holder shall not
be required with respect to any action or proceeding of the Company; (iii)
except as provided in Section 5, no Holder, by reason of the ownership or
possession of a Warrant or the Warrant Certificate representing the same, shall
have any right to receive any stock dividends, allotments or rights or other
distributions paid, allotted or distributed or distributable to the stockholders
of the Company prior to, or for which the relevant record date preceded, the
date of the exercise of such Warrant; and (iv) no Holder shall have any right
not expressly conferred by this Agreement or Warrant Certificate held by such
Holder.
10.2 Rights of Action
All rights of action against the Company in respect of this
Agreement, except rights of action vested in the Warrant Agent, are vested in
the Holders of the Warrant Certificates, and any Holder of any Warrant
Certificate, without the consent of the Warrant Agent or the Holder of any other
Warrant Certificate, may, in such Holder's own behalf and for such Holder's own
benefit, enforce and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, such
Holder's right to exercise, exchange or tender for purchase such Holder's
Warrants in the manner provided in this Agreement.
10.3 Treatment of Holders of Warrant Certificates
Every Holder of a Warrant Certificate, by accepting the same,
consents and agrees with the Company, with the Warrant Agent and with every
subsequent holder of such Warrant Certificate that, prior to due presentment of
such Warrant Certificate for registration of transfer, the Company and the
Warrant Agent may treat the Person in whose name the Warrant Certificate is
registered as the owner thereof for all purposes and as the Person entitled to
exercise the rights granted under the Warrants, and neither the Company, the
Warrant Agent nor any agent thereof shall be affected by any notice to the
contrary.
10.4 Communications to Holders
(a) If any Holder of a Warrant Certificate applies in writing to the
Warrant Agent and such application states that the applicant desires to
communicate with other Holders with respect to its rights under this Agreement
or under the Warrants, then the Warrant Agent shall, within five (5) Business
Days after the receipt of such application, and upon payment to the Warrant
Agent by such applicant of the reasonable expenses of preparing such list,
provide to such applicant a list of the names and addresses of all Holders of
Warrant Certificates as of the most recent practicable date.
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(b) Every Holder of Warrant Certificates, by receiving and holding
the same, agrees with the Company and the Warrant Agent that neither the Company
nor the Warrant Agent nor any agent of either of them shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 10.4(a).
11. CONCERNING THE WARRANT AGENT
11.1 Nature of Duties and Responsibilities Assumed
The Company hereby appoints the Warrant Agent to act as agent of the
Company as set forth in this Agreement. The Warrant Agent hereby accepts the
appointment as agent of the Company and agrees to perform that agency upon the
terms and conditions set forth in this Agreement and in the Warrant Certificates
or as the Company and the Warrant Agent may hereafter agree, by all of which the
Company and the Holders of Warrant Certificates, by their acceptance thereof,
shall be bound; provided, however, that the terms and conditions contained in
the Warrant Certificates are subject to and governed by this Agreement or any
other terms and conditions hereafter agreed to by the Company and the Warrant
Agent.
The Warrant Agent shall not, by countersigning Warrant Certificates
or by any other act hereunder, be deemed to make any representations as to
validity or authorization of (i) the Warrants or the Warrant Certificates
(except as to its countersignature thereon), (ii) any securities or other
property delivered upon exercise of any Warrant, (iii) the accuracy of the
computation of the number or kind or amount of stock or other securities or
other property deliverable upon exercise of any Warrant, (iv) the independence
of any Independent Financial Expert or (v) the correctness of any of the
representations of the Company made in such certificates that the Warrant Agent
receives. The Warrant Agent shall not at any time have any duty to calculate or
determine whether any facts exist that may require any adjustments pursuant to
Section 6 hereof with respect to the kind and amount of shares or other
securities or any property issuable to Holders upon the exercise of Warrants
required from time to time. The Warrant Agent shall have no duty or
responsibility to determine the accuracy or correctness of such calculation or
with respect to the methods employed in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or upon any adjustment
pursuant to Section 6 hereof, and it makes no representation with respect
thereto. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any Warrant
Shares or stock certificates or other securities or property upon the surrender
of any Warrant Certificate for the purpose of exercise or upon any adjustment
pursuant to Section 6 hereof or to comply with any of the covenants of the
Company contained in Section 12 hereof.
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The Warrant Agent shall not (i) be liable for any recital or statement
of fact contained herein or in the Warrant Certificates or for any action taken,
offered or omitted by it in good faith on the belief that any Warrant
Certificate or any other documents or any signatures are genuine or properly
authorized, (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificates or (iii) be liable for any act or omission in
connection with this Agreement except for its own gross negligence, bad faith or
willful misconduct.
The Warrant Agent is hereby authorized to accept and is protected in
accepting instructions with respect to the performance of its duties hereunder
by Company Order and to apply to any such officer named in such Company Order
for instructions (which instructions will be promptly given in writing when
requested), and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with the instructions in
any Company Order.
The Warrant Agent is hereby authorized to accept and is protected in
accepting, and may rely upon without otherwise verifying, the list of registered
holders of Unit Certificates as of the close of the Unit Termination Date as set
forth in Section 2.1(b) and related information furnished by the Registrar for
the purpose of determining those holders who are entitled to receive Warrant
Certificates, and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in reliance upon such lists and
information furnished by the Registrar.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, provided that reasonable care has
been exercised in the selection and in the continued employment of any such
attorney, agent or employee. The Warrant Agent shall not be under any obligation
or duty to institute, appear in or defend any action, suit or legal proceeding
in respect hereof, unless first indemnified to its satisfaction, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without such indemnity.
The Warrant Agent shall promptly notify the Company in writing of any claim made
or action, suit or proceeding instituted against it arising out of or in
connection with this Agreement.
The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to enable it to carry out or perform its duties under this Agreement.
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The Warrant Agent shall act solely as agent of the Company hereunder
and does not assume any obligation or relationship of agency or trust for or
with any of the Holders or any beneficial owners of Warrants. The Warrant Agent
shall not be liable except for the failure to perform such duties as are
specifically set forth herein or specifically set forth in the Warrant
Certificates, and no implied covenants or obligations shall be read into this
Agreement against the Warrant Agent whose duties and obligations shall be
determined solely by the express provisions hereof or the express provisions of
the Warrant Certificates.
11.2 Right to Consult Counsel
The Warrant Agent may at any time consult with legal counsel
satisfactory to it (who may be legal counsel for the Company), and the Warrant
Agent shall incur no liability or responsibility to the Company or to any Holder
for any action taken, suffered or omitted by it in good faith in accordance with
the opinion or advice of such counsel.
11.3 Compensation, Reimbursement and Indemnification
The Company agrees to pay the Warrant Agent from time to time
compensation for all fees and expenses relating to its services hereunder as the
Company and the Warrant Agent may agree from time to time and to reimburse the
Warrant Agent for reasonable expenses and disbursements, including reasonable
counsel fees and expenses incurred in connection with the execution and
administration of this Agreement. The Company further agrees to indemnify the
Warrant Agent for and save it harmless against any losses, liabilities or
reasonable expenses arising out of or in connection with the acceptance and
administration of this Agreement, including the reasonable costs, legal fees and
expenses of investigating or defending any claim of such liability, except that
the Company shall have no liability hereunder to the extent that any such loss,
liability or expense results from the Warrant Agent's own gross negligence, bad
faith or willful misconduct.
11.4 Warrant Agent May Hold Company Securities
The Warrant Agent, any Countersigning Agent and any stockholder,
director, officer or employee of the Warrant Agent or any Countersigning Agent
may buy, sell or deal in any of the Warrants or other securities of the Company
or its Affiliates, become pecuniarily interested in transactions in which the
Company or its Affiliates may be interested, contract with or lend money to the
Company or its Affiliates or otherwise act as fully and freely as though it were
not the Warrant Agent or the Countersigning Agent, respectively, under this
Agreement. Nothing herein shall preclude the Warrant Agent or any Countersigning
Agent from acting in any other capacity for the Company or for any other legal
entity.
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11.5 Resignation and Removal; Appointment of Successor
(a) The Warrant Agent may resign its duties and be discharged from
all further duties and liability hereunder (except liability arising as a result
of the Warrant Agent's own gross negligence or willful misconduct) after giving
thirty (30) days' prior written notice to the Company. The Company may remove
the Warrant Agent upon thirty (30) days' written notice, and the Warrant Agent
shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent shall, at the
expense of the Company, cause notice to be given in accordance with Section
13.1(b) to each Holder of a Warrant Certificate of said notice of resignation or
notice of removal, as the case may be. Upon such resignation or removal, the
Company shall appoint in writing a new Warrant Agent. If the Company shall fail
to make such appointment within a period of thirty (30) calendar days after it
has been notified in writing of such resignation by the resigning Warrant Agent
or after such removal, then the Holder of any Warrant Certificate may apply to
any court of competent jurisdiction for the appointment of a new Warrant Agent.
Any new Warrant Agent, whether appointed by the Company or by such a court,
shall be a corporation doing business under the laws of the United States or any
state thereof in good standing, authorized under such laws to act as Warrant
Agent, and is ordinarily in the business as a transfer agent for publicly held
securities. After acceptance in writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; but if for any reason it
shall be reasonably necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the reasonable
expense of the Company and shall be legally and validly executed and delivered
by the resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall file notice thereof with the resigning
or removed Warrant Agent. Failure to give any notice provided for in this
Section 11.5(a), however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Warrant Agent or the
appointment of a new Warrant Agent, as the case may be.
(b) Any corporation into which the Warrant Agent or any new Warrant
Agent may be merged, or any corporation resulting from any consolidation to
which the Warrant Agent or any new Warrant Agent shall be a party, shall be a
successor Warrant Agent under this Agreement without any further act, provided
that such corporation would be eligible for appointment as successor to the
Warrant Agent under the provisions of Section 11.5(a). Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be given in accordance with Section 13.1(b) to each Holder of a Warrant
Certificate at such Holder's last address as shown on the Warrant Register.
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11.6 Appointment of Countersigning Agent
(a) The Warrant Agent may appoint a Countersigning Agent or Agents
which shall be authorized to act on behalf of the Warrant Agent to countersign
Warrant Certificates issued upon original issue and upon exchange, registration
of transfer or pursuant to Section 7, and Warrant Certificates so countersigned
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. Wherever reference is made in this Agreement to the countersignature
and delivery of Warrant Certificates by the Warrant Agent or to Warrant
Certificates countersigned by the Warrant Agent, such reference shall be deemed
to include countersignature and delivery on behalf of the Warrant Agent by a
Countersigning Agent and Warrant Certificates countersigned by a Countersigning
Agent. Each Countersigning Agent shall be acceptable to the Company and shall at
the time of appointment be a corporation doing business under the laws of the
United States of America or any State thereof in good standing, authorized under
such laws to act as Countersigning Agent, and having a combined capital and
surplus of not less than $100,000,000. The combined capital and surplus of any
such new Countersigning Agent shall be deemed to be the combined capital and
surplus as set forth in the most recent annual report of its condition published
by such Countersigning Agent prior to its appointment, provided that such
reports are published at least annually pursuant to law or to the requirements
of a Federal or state supervising or examining authority.
(b) Any corporation into which a Countersigning Agent may be merged,
or any corporation resulting from any consolidation to which such Countersigning
Agent shall be a party, shall be a successor Countersigning Agent without any
further act, provided that such corporation would be eligible for appointment as
a new Countersigning Agent under the provisions of Section 11.6(a), without the
execution or filing of any paper or any further act on the part of the Warrant
Agent or the Countersigning Agent. Any such successor Countersigning Agent shall
promptly cause notice of its succession as Countersigning Agent to be given in
accordance with Section 13.1(b) to each Holder of a Warrant Certificate at such
Holder's last address as shown on the Warrant Register.
(c) A Countersigning Agent may resign at any time by giving thirty
(30) days' prior written notice thereof to the Warrant Agent and to the Company.
The Warrant Agent may at any time terminate the agency of a Countersigning Agent
by giving thirty (30) days' prior written notice thereof to such Countersigning
Agent and to the Company.
(d) The Warrant Agent agrees to pay to each Countersigning Agent from
time to time reasonable compensation for its services under this Section, and
the Warrant Agent shall be entitled to be reimbursed for such payments, subject
to the provisions of Section 11.3.
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(e) Any Countersigning Agent shall have the same rights and
immunities as those of the Warrant Agent set forth in Section 11.1.
12. ADDITIONAL COVENANTS OF THE COMPANY
12.1 Reports to Holders
(a) Whether or not required by Sections 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC (i) within ninety (90) days after the
end of the last fiscal year such annual reports as would be required by Sections
13 or 15(d) of the Exchange Act, (ii) within forty-five (45) days after the end
of each of the first three fiscal quarters of each fiscal year such quarterly
reports as would be required by Section 13 or 15(d) of the Exchange Act and
(iii) all other reports and information as would be required by Sections 13 or
15(d) of the Exchange Act. Within fifteen (15) days after the same shall be
filed with the SEC, the Company shall file with the Warrant Agent, and make
available to each Holder of Warrants, without cost to such Holder, copies of
such reports or other information. The provisions of this Section 12.1 shall
cease to apply to the Company upon the occurrence of a Non-Surviving Combination
provided the successor to the Company assumes the obligations of the Company
(including under this Section 12.1) in accordance with Section 19.
(b) The Company shall provide the Warrant Agent with a sufficient
number of copies of all reports and other documents and information that the
Warrant Agent may be required to deliver to the Holders of the Warrants under
this Section 12.1.
12.2 Compliance with Agreements
The Company shall comply in all material respects with the terms and
conditions of the Indenture and the Warrant Registration Rights Agreement.
12.3 Maintenance of Office
So long as any of the Warrants remain outstanding, the Company will
maintain in the City of New York the following: (a) an office or agency where
the Warrants may be presented for exercise, (b) an office or agency where the
Warrants may be presented for registration of transfer and for exchange as in
this Agreement provided and (c) an office or agency where notices and demands to
or upon the Company in respect of the Warrants or of this Agreement may be
served. The Company will give to the Warrant Agent written notice of the
location of any such office or agency and of any change of location thereof. The
Company hereby initially designates the office of the Warrant Agent at American
Stock Transfer & Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
such other location as the Company
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may designate upon notice from the Warrant Agent as the office or agency for
each such purpose. In case the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the Corporate Agency Office.
13. NOTICES
13.1 Notices Generally
(a) Any request, notice, direction, authorization, consent, waiver,
demand or other communication permitted or authorized by this Agreement to be
made upon, given or furnished to or filed with the Company or the Warrant Agent
by the other party hereto or by any Holder shall be sufficient for every purpose
hereunder if in writing (including telecopy communication) and telecopied or
delivered by hand (including by courier service) as follows:
If to the Company, to it at:
Gothic Energy Corporation
0000 Xxxxx Xxxxx Xxxxxx - Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, President
Telecopy No.: (000) 000-0000
or
If to the Warrant Agent, to it at:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
or, in either case, such other address as shall have been set forth in a notice
delivered in accordance with this Section 13.1(a).
All such communications shall, when so telecopied or delivered by
hand, be effective when telecopied with confirmation of receipt or received by
the addressee.
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Any Person that telecopies any communication hereunder to any Person
shall, on the same date as such telecopy is transmitted, also send, by first
class mail, postage prepaid and addressed to such Person as specified above, an
original copy of the communication so transmitted.
(b) Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Warrant Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made by a method approved by the Warrant
Agent as one which would be most reliable under the circumstances for
successfully delivering the notice to the addressees shall constitute a
sufficient notification for every purpose hereunder.
13.2 Required Notices to Holders
In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Common Shares or to make any other
distribution to the holders of its Common Shares for which an adjustment is
required to be made pursuant to Section 6, (ii) to distribute to the holders of
its Common Shares rights to subscribe for or to purchase any Additional Common
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Common Shares, (iv) to
effect any transaction described in Section 6.1(h) or (v) to effect the
liquidation, dissolution or winding up of the Company, then, and in each such
case, the Company shall cause to be filed with the Warrant Agent and shall give
to each Holder of a Warrant Certificate, in accordance with Section 13.1(b), a
notice of such proposed action or event. Such notice shall specify (x) the date
on which a record is to be taken for the purposes of such dividend or
distribution; and (y) the date on which such reclassification, transaction,
event, liquidation, dissolution or winding up is expected to become effective
and the date as of which it is expected that holders of Common Shares of record
shall be entitled to exchange their Common Shares for securities, cash or other
property deliverable upon such reclassification, transaction, event,
liquidation, dissolution or winding up. Such notice shall be given, in the case
of any action covered by clause (i) or (ii) above, at least
-35-
40
ten (10) days prior to the record date for determining holders of the Common
Shares for purposes of such action or, in the case of any action covered by
clauses (iii) through (v), at least twenty (20) days prior to the applicable
effective or expiration date specified above or, in any such case, prior to such
earlier time as notice thereof shall be required to be given pursuant to Rule
10b-17 under the Exchange Act, if applicable.
If at any time the Company shall cancel any of the proposed
transactions for which notice has been given under this Section 13.2 prior to
the consummation thereof, the Company shall give each Holder prompt notice of
such cancellation in accordance with Section 13.1(b) hereof.
13.3 Company Notices to Warrant Agent
The Company shall notify the Warrant Agent on or prior to the
occurrence of the Separation Date if the Separation Date occurs before October
23, 1998. The Company shall notify the Warrant Agent at least five Business Days
prior to the occurrence of the Unit Termination Date if the Unit Termination
Date will occur before October 23, 1998.
14. APPLICABLE LAW
THIS AGREEMENT, EACH WARRANT CERTIFICATE ISSUED HEREUNDER, EACH WARRANT
EVIDENCED THEREBY AND ALL RIGHTS ARISING HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE APPLICATION OF THE
LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
15. PERSONS BENEFITING
This Agreement shall be binding upon and inure to the benefit of the
Company and the Warrant Agent, and their respective successors and assigns and
the Holders from time to time of the Warrant Certificates. Nothing in this
Agreement is intended or shall be construed to confer upon any Person, other
than the Company, the Warrant Agent and the Holders of the Warrant Certificates,
any right, remedy or claim under or by reason of this Agreement or any part
hereof. Each Holder, by acceptance of a Warrant Certificate, agrees to all of
the terms and provisions of this Agreement applicable thereto.
-36-
41
16. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
17. AMENDMENTS
The Company and the Warrant Agent may, without the consent or concurrence
of the Holders of the Warrant Certificates, by supplemental agreement or
otherwise, amend this Agreement for the purpose of making any changes or
corrections in this Agreement that (i) are required to cure any ambiguity or to
correct or supplement any defective or inconsistent provision or clerical
omission or mistake or manifest error herein contained or (ii) add to the
covenants and agreements of the Company in this Agreement further covenants and
agreements of the Company thereafter to be observed, or surrender any rights or
powers reserved to or conferred upon the Company in this Agreement; provided,
however, that in either case, such amendment shall not adversely affect the
rights or interests of the Holders of the Warrant Certificates hereunder in any
material respect. This Agreement may otherwise be amended by the Company and the
Warrant Agent only with the consent of the Holders of a majority of the then
outstanding Warrants. Notwithstanding the foregoing, the consent of each Holder
of a Warrant affected shall be required for any amendment pursuant to which the
Warrant Price would be increased or the number of Warrant Shares purchasable
upon exercise of Warrants would be decreased (other than pursuant to adjustments
provided herein).
The Warrant Agent shall join with the Company in the execution and delivery
of any such amendment unless such amendment affects the Warrant Agent's own
rights, duties or immunities hereunder, in which case the Warrant Agent may, but
shall not be required to, join in such execution and delivery. Upon execution
and delivery of any amendment pursuant to this Section 17, such amendment shall
be considered a part of this Agreement for all purposes and every Holder of a
Warrant Certificate theretofore or thereafter countersigned and delivered
hereunder shall be bound thereby.
Promptly after the execution by the Company and the Warrant Agent of any
such amendment, the Company shall give notice to the Holders of Warrant
Certificates, setting forth in general terms the substance of such amendment, in
accordance with the provisions of Section 13.1(b). 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 amendment.
-37-
42
18. INSPECTION
The Warrant Agent shall cause a copy of this Agreement to be available at
all reasonable times at the Corporate Agency Office of the Warrant Agent for
inspection by the Holder of any Warrant Certificate. The Warrant Agent may
require such Holder to submit his Warrant Certificate for inspection by it.
19. SUCCESSOR TO THE COMPANY
So long as Warrants remain outstanding, the Company will not enter into any
Non-Surviving Combination unless the acquirer (or its parent company under any
triangular acquisition) shall expressly assume by a supplemental agreement,
executed and delivered to the Warrant Agent, in form reasonably satisfactory to
the Warrant Agent, the due and punctual performance of every covenant of this
Agreement on the part of the Company to be performed and observed and shall have
provided for exercise rights in accordance with Section 6.1(h). Upon the
consummation of such Non-Surviving Combination, the acquirer (or its parent
company under any triangular acquisition) shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Agreement
with the same effect as if such acquirer (or its parent company under any
triangular acquisition) had been named as the Company herein.
20. ENTIRE AGREEMENT
This Agreement sets forth the entire agreement of the parties hereto as to
the subject matter hereof and supersedes all previous agreements among all or
some of the parties hereto with respect thereto, whether written, oral or
otherwise.
21. HEADINGS
The descriptive headings of the several Sections of this Agreement are
inserted for convenience and shall not control or affect the meaning or
construction of any of the provisions hereof.
-38-
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
Gothic Energy Corporation
By:
----------------------------------------------
Xxxxxxx Xxxxx, President
American Stock Transfer & Trust Company
By:
----------------------------------------------
Name:
Title:
-39-
44
EXHIBIT A
FORM OF FACE OF WARRANT CERTIFICATE
[Restricted Warrant Legend]
[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. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("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"), AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY PERSON EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR")
OR (C) IS NOT A U.S. PERSON AND IS PURCHASING IN ACCORDANCE WITH REGULATION
S UNDER THE SECURITIES ACT AND HAS NOT ENGAGED IN, 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 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 IN
------------------------
/1/ Include this legend for Global Warrants.
Exhibit A, Page 1
45
THE UNITED STATES, (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE WHICH IS
TWO YEARS (OR SUCH SHORTER PERIOD AS COMPLIES WITH RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE
ISSUER WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION TERMINATION
DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO
THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE
PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A
WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (COPIES OF SUCH
FORM CAN BE OBTAINED FROM THE WARRANT AGENT), PROVIDED THAT CERTAIN HOLDERS
SPECIFIED IN THE WARRANT AGREEMENT MAY NOT TRANSFER THIS SECURITY 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 WARRANT AGREEMENT PRIOR TO
THE EXPIRATION OF THE "40-DAY RESTRICTED PERIOD" DESCRIBED ABOVE, A
CERTIFICATE (WHICH MAY BE OBTAINED FROM THE WARRANT AGENT ) IS DELIVERED BY
THE TRANSFEREE TO THE COMPANY AND THE WARRANT AGENT, (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
Exhibit A, Page 2
46
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 WARRANT AGENT 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
WARRANT CERTIFICATE
EVIDENCING
WARRANTS TO PURCHASE COMMON SHARES
(VALID ONLY IF COUNTERSIGNED BY THE WARRANT AGENT
AS PROVIDED HEREIN)
No. ______ _______________ Warrants
THIS CERTIFIES THAT, for value received, ________________________________
___________________________, or registered assigns, is the registered owner 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), and is entitled, subject to and
upon compliance with the provisions hereof and of the Warrant Agreement, at such
Holder's option, at any time when the Warrants evidenced hereby are exercisable,
to purchase from the Company one Warrant Share for each Warrant evidenced
hereby, at the purchase price of $2.40 per share (as adjusted from time to time,
the "Warrant Price"), payable in full at the time of purchase, the number of
Warrant Shares into which and the Warrant Price at which each Warrant shall be
exercisable, each being subject to adjustment as provided in Section 6 of the
Warrant Agreement.
The Holder of this Warrant Certificate may exercise all or any whole number
of the Warrants evidenced hereby, on any Business Day from and after the
Separation Date (as defined in the Warrant Agreement) until 5:00 P.M., New York
City time, on May 1, 2005 (subject to
Exhibit A, Page 3
47
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 further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless this Warrant Certificate has been countersigned by the Warrant Agent
by manual signature of an authorized officer on behalf of the Warrant Agent,
this Warrant Certificate shall not be valid for any purpose and no Warrant
evidenced hereby shall be exercisable.
Exhibit A, Page 4
48
IN WITNESS WHEREOF, the Company has caused this certificate to be duly
executed under its corporate seal.
GOTHIC ENERGY CORPORATION
[SEAL] By:
--------------------------------------------
Xxxxxxx X. Xxxxx, President
ATTEST:
Dated:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY, Warrant Agent
By:
---------------------------------------
Authorized Signature
Exhibit A, Page 5
49
[REVERSE OF WARRANT CERTIFICATE]
GOTHIC ENERGY CORPORATION
WARRANT CERTIFICATE
EVIDENCING
WARRANTS TO PURCHASE COMMON SHARES
1. General
The Warrants evidenced hereby are one of a duly authorized issue of
Warrants of the Company designated as its Warrants to Purchase Common Shares
("Warrants"), limited in aggregate number to 825,000 Warrants issued under and
in accordance with the Warrant Agreement, dated as of April 21, 1998 (the
"Warrant Agreement"), between the Company and American Stock Transfer & Trust
Company, as warrant agent (the "Warrant Agent", which term includes any
successor thereto permitted under the Warrant Agreement), to which Warrant
Agreement and all amendments thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Warrant Agent, the Holders of Warrant Certificates and the
owners of the Warrants evidenced thereby and of the terms upon which the Warrant
Certificates are, and are to be, countersigned and delivered. A copy of the
Warrant Agreement shall be available at all reasonable times at the office of
the Warrant Agent for inspection by the Holder hereof.
In the event of the exercise of less than all of the Warrants evidenced
hereby, a new Warrant Certificate of the same tenor and for the number of
Warrants which are not exercised shall be issued by the Company in the name or
upon the written order of the Holder of this Warrant Certificate upon the
cancellation hereof.
All Warrant Shares issuable by the Company upon the exercise of Warrants
shall, upon such issuance, be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive or similar rights. The Company shall pay
any and all taxes (other than income taxes) that may be payable in respect of
the issue or delivery of Warrant Shares on exercise of Warrants. The Company
shall not be required, however, to pay any tax or other charge imposed in
respect of any transfer involved in the issue and delivery of any certificates
for Warrant Shares or payment of cash to any Person other than the Holder of the
Warrant Certificate surrendered upon the exercise of a Warrant, and in case of
such transfer or payment, the Warrant Agent and the Company shall not be
required to issue or deliver any certificate or pay any cash until (a) such tax
or charge has been paid or an amount sufficient for the payment thereof has been
delivered to the Warrant Agent or to the Company or (b) it has been established
to the Company's satisfaction that any such tax or other charge that is or may
become due has been paid.
Exhibit A, Page 6
50
The Warrant Certificates are issuable only in registered form in
denominations of whole numbers of Warrants. Upon surrender at the office of the
Warrant Agent and payment of the charges specified herein and in the Warrant
Agreement, this Warrant Certificate may be exchanged for Warrant Certificates in
other authorized denominations or the transfer hereof may be registered in whole
or in part in authorized denominations to one or more designated transferees,
subject to the restrictions on transfer set forth herein and in the Warrant
Agreement; provided, however, that such other Warrant Certificates issued upon
exchange or registration of transfer shall evidence the same aggregate number of
Warrants as this Warrant Certificate. The Company shall cause to be kept at the
office of the Warrant Agent the Warrant Register in which, subject to such
reasonable regulations as the Warrant Agent may prescribe and such regulations
as may be prescribed by law, the Company shall provide for the registration of
Warrant Certificates and of transfers or exchanges of Warrant Certificates.
2. Expiration
Except as provided in the Warrant Agreement, all outstanding Warrants shall
expire and all rights of the Holders of Warrant Certificates evidencing such
Warrants shall terminate and cease to exist, as of 5:00 p.m., New York time, on
the Expiration Date. "Expiration Date" shall mean May 1, 2005, or such earlier
date as determined in accordance with the Warrant Agreement.
3. Registration Rights
The Warrantholders and the holders of Warrant Shares shall have the
registration rights provided for in the Warrant Registration Rights Agreement,
dated as of April 21, 1998 (the "Registration Rights Agreement"), by and among
the Company and the Purchasers named on the execution pages thereof. A copy of
the Registration Rights Agreement is on file at the office of the Warrant Agent.
4. Liquidation of the Company
If, on or prior to the Expiration Date, the Company (or any other Person
controlling the Company) shall propose a voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, each Warrantholder
shall receive the securities, money or other property which such Warrantholder
would have been entitled to receive had such Warrantholder been the holder of
record of the Warrant Shares into which the Warrants were exercisable
immediately prior to such dissolution, liquidation or winding up (net of the
then applicable Warrant Price), and the rights to exercise such Warrants shall
terminate.
Exhibit A, Page 7
51
5. Anti-Dilution Adjustments
The number of Warrant Shares issuable upon exercise of a Warrant shall be
adjusted on occurrence of certain events, including, without limitation, the
payment of a certain dividends on, or the making of a certain distributions in
respect of, the Common Shares, including the distribution of rights to purchase
Common Shares (or securities convertible into or exchangeable for Common Shares)
at a price below the Current Market Price. An adjustment shall also be made in
the event of a combination, subdivision or reclassification of the Common
Shares. Adjustments will be made whenever and as often as any specified event
requires an adjustment to occur.
6. Procedure for Exercising Warrant
Subject to the provisions hereof and of the Warrant Agreement, the Holder
of this Warrant Certificate may exercise all or any whole number of the Warrants
evidenced hereby by either of the following methods:
(A) The Holder may deliver to the Warrant Agent at the Corporate
Agency Office (i) a written notice of such Holder's election to exercise all or
a portion of the Warrants evidenced hereby, duly executed by such Holder in the
form set forth below, which notice shall specify the number of Warrant Shares to
be purchased, (ii) this Warrant Certificate and (iii) a sum equal to the
aggregate Warrant Price for the Warrant Shares into which the Warrants
represented by this Warrant Certificate are being exercised, which sum shall be
paid in any combination elected by such Holder of (x) certified or official bank
checks in New York Clearing House funds payable to the order of the Company and
delivered to the Warrant Agent at the Corporate Agency Office, or (y) wire
transfers in immediately available funds to the account of the Company at such
banking institution as the Company shall have given notice to the Warrant Agent
and the Holders in accordance with the Warrant Agreement; or
(B) The Holder may also exercise all or any of the Warrants in a
"cashless" or "net-issue" exercise by delivering to the Warrant Agent at the
Corporate Agency Office (i) a written notice of such Holder's election to
exercise all or a portion of the Warrants evidenced hereby, duly executed by
such Holder in the form set forth below, which notice shall specify the number
of Warrant Shares to be delivered to such Holder and the number of Warrant
Shares with respect to which Warrants represented by this Warrant Certificate
are being surrendered in payment of the aggregate Warrant Price for the Warrant
Shares to be delivered to the Holder, and (ii) this Warrant Certificate. For
purposes of this subparagraph (B), each Warrant Share as to which such Warrants
are surrendered in payment of the aggregate Warrant Price will be attributed a
value equal to (x) the Current Market Price per share of Common Shares minus (y)
the then-current Warrant Price.
Exhibit A, Page 8
52
7. Registered Holder
Prior to due presentment of this Warrant Certificate for registration of
transfer, the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent may treat the Person in whose name this Warrant Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Warrant Agent nor any such agent shall be affected by notice to the contrary.
8. Amendment
The Warrant Agreement permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Warrant Certificates under the Warrant
Agreement at any time by the Company and the Warrant Agent with the consent of
the Holders of Warrant Certificates evidencing a majority of the then
outstanding Warrants.
9. Status as Warrantholder
Prior to the exercise of the Warrants, except as may be specifically
provided for in the Warrant Agreement, (i) no Holder of a Warrant Certificate,
as such, shall be entitled to any of the rights of a holder of Common Shares of
the Company, including, without limitation, the right to vote at, or to receive
any notice of, any meetings of stockholders of the Company; (ii) the consent of
any Holder shall not be required with respect to any action or proceeding of the
Company; (iii) except as provided with respect to the dissolution, liquidation
or winding up of the Company, no Holder, by reason of the ownership or
possession of a Warrant or the Warrant Certificate representing the same, shall
have any right to receive any stock dividends, allotments or rights or other
distributions (except as specifically provided in the Warrant Agreement), paid,
allotted or distributed or distributable to the stockholders of the Company
prior to or for which the relevant record date preceded the date of the exercise
of such Warrant; and (iv) no Holder shall have any right not expressly conferred
by the Warrant Agreement or Warrant Certificate held by such Holder.
Notwithstanding anything herein to the contrary, if the Company declares and
pays any cash dividend or makes any distribution in cash in respect of its
Common Shares, it shall pay each Holder of Warrants an amount in cash equal to
the amount that such Holder would have received had it been a holder of record
of the Warrant Shares issuable upon exercise of its Warrants immediately prior
to the record date for such dividend or distribution.
Exhibit A, Page 9
53
10. Governing Law
THIS WARRANT CERTIFICATE, EACH WARRANT EVIDENCED THEREBY AND THE WARRANT
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS TO
THE EXTENT THAT APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
11. Definitions
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
Exhibit A, Page 10
54
FORM OF EXERCISE
In accordance with and subject to the terms and conditions hereof and of
the Warrant Agreement, the undersigned registered Holder of this Warrant
Certificate hereby irrevocably elects to exercise ____________________ Warrants
evidenced by this Warrant Certificate or represents that such Holder has
tendered the Warrant Price for each of the Warrants evidenced hereby being
exercised in the aggregate amount of $_________ in the indicated combination of:
(i) cash ($____________);
(ii) certified bank check payable to the order of the Company
($________);
(iii) official bank check in New York Clearing House funds payable to the
order of the Company ($_________); or
(iv) wire transfer in immediately available funds to the account
designated by the Company for such purpose ($________).
The undersigned requests that the Warrant Shares issuable upon exercise be
in fully registered form in such denominations and registered in such names and
delivered, together with any other property receivable upon exercise, in such
manner as is specified in the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
Dated: Name:
------------------- ------------------------------
------------------- (Please Print)
(Insert Social Security or Other
Identifying Number of Holder)Purchaser Address:
---------------------------
-----------------------------------
-----------------------------------
Signature
(Signature must conform in all
respects to name of Holder as
specified on the face of this
Warrant Certificate and must bear a
signature guarantee
Exhibit A, Page 11
55
by a bank, trust company or member
firm of a national securities
exchange.)
Signature Guaranteed:
Instructions (i) as to denominations and names of Warrant Shares issuable
upon exercise and as to delivery of such securities and any other property
issuable upon exercise and (ii) if applicable, as to Warrant Certificates
evidencing unexercised Warrants:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit A, Page 12
56
Assignment
(Form of Assignment To Be Executed If Holder Desires To Transfer Warrant
Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto
Please insert social security
or other identifying number
(Please print name and address including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________________ Attorney, to transfer said
Warrant Certificate on the books of the within-named Company with full power of
substitution in the premises.
Dated:
--------------------------------------------------
Signature
(Signature must conform in all respects to name of
Holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee by
a bank, trust company or member firm of a national
securities exchange.)
Signature Guaranteed:
Exhibit A, Page 13
57
EXHIBIT B
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers Pursuant to (S)2.4(a) of the Warrant Agreement)
______________, 199__
American Stock Transfer and Trust
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esquire
Re: Gothic Energy Corporation Warrants to Purchase Common Shares (the
"Warrants")
Reference is hereby made to the Warrant Agreement dated as of April 21,
1998 (the "Warrant Agreement") between Gothic Energy Corporation and American
Stock Transfer & Trust Company, as Warrant Agent. Capitalized terms used but not
defined herein shall have the meanings given them in the Warrant Agreement.
This letter relates to Warrants exercisable for an aggregate of _________
Common Shares ("Warrant Shares"), which Warrants are held in the name of [name
of transferor] (the "Transferor") to effect the transfer of the Warrants to the
undersigned.
In connection with such request, and in respect of such Warrants, we
confirm that:
1. We have received a copy of the Offering Memorandum, dated April 21,
1998, relating to the Units and such other information as we deem necessary in
order to make our investment decision.
2. We understand that the Units, Warrants and Warrant Shares 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 Units, Warrants or Warrant Shares 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 Units,
Exhibit B, Page 1
58
Warrants or Warrant Shares are eligible for resale pursuant to Rule 144A under
the Securities Act, to a person we reasonably believe is a Qualified
Institutional Buyer (as defined in Rule 144A) that purchases for its own account
or for the account of a Qualified Institutional Buyer to whom notice is given
that the transfer is being made in reliance on Rule 144A, (d) to an "Accredited
Investor" (as defined in Rule 501(a) under the Securities Act) (an "Accredited
Investor") that is purchasing for his own account or for the account of such an
Accredited Investor for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act,
(e) pursuant to the resale limitations provided by Rule 144 under the Securities
Act (if available), (f) outside the United States to a person who is not a U.S.
person in an offshore transaction meeting the requirements of Rule 904 of the
Securities Act, or (g) pursuant to any other 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 Units,
Warrants or Warrant Shares 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 Warrant Agent which shall provide, among other things, that the
transferee is an Accredited Investor and that it is acquiring such Units,
Warrants or Warrant Shares for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company
and the Warrant Agent reserve the right prior to any offer, sale or other
transfer prior to the Resale Restriction Termination Date of the Units, Warrants
or Warrant Shares 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 Warrant Agent.
3. We are an Accredited Investor or, if the transfer is of a
beneficial interest in the Global Warrant, a Qualified Institutional Buyer, in
either case purchasing for our own account or for the account of such an
Accredited Investor as to each of which we exercise sole investment discretion
and we are acquiring the Units, Warrants or Warrant Shares 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.
Exhibit B, Page 2
59
4. All of you are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
-------------------------------------------
(Name of Purchaser)
By:
--------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
-------------------------------------
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:
--------------------------------
Address:
-----------------------------
Taxpayer ID Number:
------------------
Exhibit B, Page 3
60
EXHIBIT C
FORM OF LEGAL
OPINION ON TRANSFER
______________________, 199___
American Stock & Transfer Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esquire
Re: Gothic Energy Corporation Warrants to Purchase Common Shares
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the sale by
______________ (the "Transferor") to _________________________ (the "Purchaser")
of Warrants to Purchase Common Shares exercisable for an aggregate of _________
Common Shares, par value $.01 per share, of Gothic Energy Corporation (the
"Warrants").
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 contained in the
Accredited Investor Transferee Certificate executed and delivered by the
Purchaser in connection with its purchase of the Warrants made by the parties
executing such document. We have also assumed that the sale of the Warrants 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
Purchaser of the Warrants does not require registration of such Warrants under
the Securities Act.
Very truly yours,
61
SUPPLEMENT TO WARRANT AGREEMENT
THIS SUPPLEMENT TO WARRANT AGREEMENT is made and entered into as of the
16th day of January, 2001, by and among CHESAPEAKE ENERGY CORPORATION, an
Oklahoma Corporation ("Chesapeake Energy") and AMERICAN STOCK TRANSFER & TRUST
COMPANY, a New York corporation, as Warrant Agent (" Warrant Agent").
RECITALS
WHEREAS, Gothic Energy Corporation ("Gothic Energy") and
Warrant Agent entered into that certain Warrant Agreement, dated as of April 21,
1998, under which Gothic Energy issued 825,000 Common Stock Purchase Warrants
(the "Warrant" and collectively referred to as the "Warrants"), each Warrant to
purchase one share of Gothic Energy common stock (the "Warrant Agreement"); and
WHEREAS, the Warrant Agent agreed to act on behalf of Gothic
Energy in connection with the Warrants; and
WHEREAS, Chesapeake Energy, Chesapeake Merger 2000 Corp.
("Sub"), and Gothic Energy entered into that certain Agreement and Plan of
Merger dated September 8, 2000, as amended by the First Amendment to Agreement
and Plan of Merger dated October 31, 2000 (the "Merger Agreement") providing for
the merger of Sub with and into Gothic Energy and pursuant to which Gothic
Energy will become a wholly owned subsidiary of Chesapeake Energy (the
"Merger"); and
WHEREAS, the Warrant Agreement provides that Gothic Energy
cannot enter into any Non-Surviving Combination unless the parent company under
any triangular acquisition expressly assumes by supplemental agreement, executed
and delivered to the Warrant Agent, the due and punctual performance of every
covenant of the Warrant Agreement on the part of Gothic Energy to be performed
and observed; and
WHEREAS, the Warrant Agreement provides that in the event
Gothic Energy merges with any company, then, as a condition to such merger,
lawful and adequate provisions must be made that give the Warrant Holders the
right to purchase and receive, upon exercise of the Warrants, such shares of
stock that are issued in exchange for a number of outstanding shares of common
stock equal to the number of shares of common stock that such Warrant Holder
could immediately theretofore purchase and receive upon exercise of the
Warrants; and
WHEREAS, the Merger was consummated on January 16, 2001 and as
part of the Merger Agreement, each issued and outstanding share of Gothic Energy
common stock will be converted into the right to receive a portion of a share of
Chesapeake Energy common stock equal to the exchange ratio of .1908;
WHEREAS, under the Merger Agreement, Chesapeake Energy agreed
to assume all of Gothic Energy's obligations under the Warrant Agreement and the
parties desire to supplement the Warrant Agreement to reflect such assumption;
and
62
WHEREAS, the parties further desire to supplement the Warrant
Agreement to reflect the number of shares of Chesapeake Energy common stock
acquirable upon exercise of the Warrant after the Merger and the exercise price
per share of Chesapeake Energy common stock after the Merger;
NOW, THEREFORE, for and in consideration of the recitals and
the mutual covenants and agreements set forth in the Warrant Agreement and this
Supplement, the parties hereby supplement the Warrant Agreement as follows:
1. Definitions. Unless the context otherwise requires or unless otherwise
expressly defined herein, the terms defined in the Warrant Agreement
will have the same meanings whenever used in this Supplement.
2. Assumption. Chesapeake Energy hereby assumes the due and punctual
performance of every covenant of the Warrant Agreement on the part of
Gothic Energy and agrees to perform all of Gothic Energy's covenants
and obligations under the Warrant Agreement, including the obligation
to deliver to the Holders such shares of stock, securities or assets
which the Holders are entitled to purchase in accordance with the terms
of the Warrant Agreement. Chesapeake Energy shall succeed to, and be
substituted for, and may exercise every right and power of Gothic
Energy under the Warrant Agreement.
3. Application of Exchange Ratio. Under the Merger Agreement, pursuant to
the Merger, each share of Gothic Energy common stock will be converted
into the right to receive .1908 of a share of Chesapeake Energy common
stock. Accordingly, upon exercise of a Warrant, a Holder will receive
.1908 of a share of Chesapeake Energy common stock for every one share
of Gothic Energy common stock that the Warrant Holder would have
received upon exercise of the Warrants immediately prior to the Merger.
The exercise price for each share of Chesapeake Energy common stock
under the Warrant Agreement will be equal to the exercise price for one
share of Gothic Energy common stock immediately prior to the Merger
divided by the exchange ratio. Prior to the Merger the exercise price
for one share of Gothic Energy common stock under the Warrant was $2.40
which, when divided by the exchange ratio, equals $12.58 per share of
Chesapeake Energy common stock.
4. Miscellaneous. It is further agreed as follows:
5.1 Effectiveness. This Supplement will become effective as of the
date first above written.
5.2 Ratification of Warrant Agreement. The Warrant Agreement as hereby
supplemented and each other document, instrument or agreement
executed in connection therewith are hereby ratified and confirmed
in all respects. Any reference to the Warrant Agreement in any
other document shall be deemed to be a reference to the Warrant
Agreement as hereby supplemented. The execution, delivery and
effectiveness of this Supplement shall not, except as expressly
provided herein, operate as a waiver of any obligation, right,
power or remedy of any party to the Warrant Agreement nor
constitute a waiver of any provision of the Warrant Agreement or
any other related documents.
63
5.3 Applicable Law. This Amendment will be governed in all respects,
including validity, interpretation and effect, by the laws of the
State of New York regardless of the laws that might otherwise
govern under applicable principals of conflicts of law thereof.
5.5 Full Force and Effect. In all respects, except as specifically
supplemented hereby, the Warrant Agreement remains in full force
and effect and unabated.
IN WITNESS WHEREOF, Chesapeake Energy has executed and
delivered this Supplement as of the date first above written.
CHESAPEAKE ENERGY CORPORATION, an
Oklahoma Corporation
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxx, Executive Vice President and
Chief
Financial Officer
