1
EXHIBIT 4.3
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CHESAPEAKE ENERGY CORPORATION
as Issuer,
THE SUBSIDIARY GUARANTORS,
as Guarantors,
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
____________________________
INDENTURE
DATED AS OF APRIL 1, 1998
____________________________
$500,000,000
SERIES A AND SERIES B
9 5/8% SENIOR NOTES DUE 2005
____________________________
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CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.03; 12.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 12.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02; 6.04; 9.02
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
-------------------------
N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of
this Indenture.
3
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.03. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
THE SENIOR NOTES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.13. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.02. Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.07. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.08. Equity Offering Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.09. Optional Redemption at Make-Whole Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.03. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.04. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.05. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.06. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 4.07. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.08. Maintenance of Properties and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.09. Limitation on Incurrence of Additional Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.10. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.11. Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.12. Limitation on Liens Securing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.13. Limitation on Sale/Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.14. Limitation on Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.15. Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.16. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.06. Limitation on Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.09. Successor Trustee by Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.02. Legal Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.04. Conditions to Legal or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.05. Deposited Money and U.S. Government Securities to be Held in Trust; Other Miscellaneous Provisions . 45
SECTION 8.06. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.04. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.05. Notation on or Exchange of Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.06. Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.02. Subsidiary Guarantors May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . . 49
SECTION 10.03. Addition of Subsidiary Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.04. Release of a Subsidiary Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.05. Limitation of Subsidiary Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.06. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.07. Execution and Delivery of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.08. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.03. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.04. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.09. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.12. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
EXHIBIT A FORM OF SENIOR NOTE X-0
XXXXXXX X-0 FORM OF NOTATION ON SENIOR NOTE RELATING
TO GUARANTEE X-0-0
XXXXXXX X-0 FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE
OF NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY B-1
EXHIBIT C OFFICER'S CERTIFICATE OF NON-DEFAULT . . . . . . . . . . . . . . . . . . . . . . . C-1
_________________
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
a part of this Indenture.
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INDENTURE, dated as of April 1, 1998, among CHESAPEAKE ENERGY
CORPORATION, an Oklahoma corporation (the "Company"), the SUBSIDIARY GUARANTORS
listed as signatories hereto, and United States Trust Company of New York, a
New York corporation, as Trustee.
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the holders of the Company's
Series A and Series B 9 5/8% Senior Notes due 2005:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Adjusted Consolidated EBITDA" means the Consolidated Net
Income of the Company and its Restricted Subsidiaries for the Reference Period,
(a) increased (to the extent deducted in determining Consolidated Net Income)
by the sum, without duplication, of: (i) all income and state franchise taxes
of the Company and its Restricted Subsidiaries paid or accrued according to
GAAP for such period (other than income taxes attributable to extraordinary,
unusual or non-recurring gains or losses); (ii) all interest expense of the
Company and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period (including amortization of original issue discount); (iii)
depreciation and depletion of the Company and its Restricted Subsidiaries; (iv)
amortization of the Company and its Restricted Subsidiaries including, without
limitation, amortization of capitalized debt issuance costs; (v) any loss
realized in accordance with GAAP upon the sale or other disposition of any
property, plant or equipment of the Company or its Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any loss realized
in accordance with GAAP upon the sale or other disposition of any Capital Stock
of any Person; (vi) any loss realized in accordance with GAAP from currency
exchange transactions not in the ordinary course of business consistent with
past practice; (vii) any loss realized in accordance with GAAP attributable to
extraordinary items; (viii) any charges associated solely with the prepayment
of any Indebtedness; and (ix) any other non-cash charges to the extent deducted
from Consolidated Net Income and (b) decreased (to the extent included in
determining Consolidated Net Income) by the sum of (i) the amount of deferred
revenues that are amortized during the Reference Period and are attributable to
reserves that are subject to Volumetric Production Payments and (ii) amounts
recorded in accordance with GAAP as repayments of principal and interest
pursuant to Dollar-Denominated Production Payments.
"Adjusted Consolidated EBITDA Coverage Ratio" means, for any
Reference Period, the ratio on a pro forma basis of (a) Adjusted Consolidated
EBITDA for the Reference Period to (b) Adjusted Consolidated Interest Expense
for such Reference Period; provided, that, in calculating Adjusted Consolidated
EBITDA and Adjusted Consolidated Interest Expense (i) acquisitions which
occurred during the Reference Period or subsequent to the Reference Period and
on or prior to the date of the transaction giving rise to the need to calculate
the Adjusted Consolidated EBITDA Coverage Ratio (the "Transaction Date") shall
be assumed to have occurred on the first day of the Reference Period, (ii) the
incurrence of any Indebtedness (including the issuance of the Securities) or
issuance of any Disqualified Stock during the Reference Period or subsequent to
the Reference Period and on or prior to the Transaction Date shall be assumed
to have occurred on the first day of such Reference Period, (iii) any
Indebtedness that had been outstanding during the Reference Period that has
been repaid on or prior to the Transaction Date shall be assumed to have been
repaid as of the first day of such Reference Period, (iv) the Adjusted
Consolidated Interest Expense attributable to interest on any Indebtedness or
dividends on any Disqualified Stock bearing a floating interest (or dividend)
rate shall be computed on a pro forma basis as if the rate in effect on the
Transaction Date were the average rate in effect during the entire Reference
Period and (v) in determining the amount of Indebtedness pursuant to Section
4.09, the incurrence of Indebtedness or issuance of Disqualified Stock giving
rise to the need to calculate the Adjusted Consolidated EBITDA Coverage Ratio
and, to the extent the net proceeds from the incurrence or issuance thereof are
used to retire Indebtedness, the application of the proceeds therefrom shall be
assumed to have occurred on the first day of the Reference Period.
"Adjusted Consolidated Interest Expense" means, with respect
to the Company and its Restricted Subsidiaries, for the Reference Period, the
aggregate amount (without duplication) of (a) interest expensed in accordance
with GAAP (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations, but excluding interest
attributable to Dollar-Denominated Production Payments and amortization of
deferred debt
8
expense) during such period in respect of all Indebtedness of the Company and
its Restricted Subsidiaries (including (i) amortization of original issue
discount on any Indebtedness (other than with respect to the Existing Notes and
the Securities), (ii) the interest portion of all deferred payment obligations,
calculated in accordance with GAAP, and (iii) all commissions, discounts and
other fees and charges owed with respect to bankers' acceptance financings and
currency and interest rate swap arrangements, in each case to the extent
attributable to such period), and (b) dividend requirements of the Company and
its Restricted Subsidiaries with respect to any Preferred Stock dividends
(whether in cash or otherwise (except dividends paid solely in shares of
Qualified Stock)) paid (other than to the Company or any of its Restricted
Subsidiaries), declared, accrued or accumulated during such period, divided by
one minus the applicable actual combined federal, state, local and foreign
income tax rate of the Company and its Subsidiaries (expressed as a decimal),
on a consolidated basis, for the four quarters immediately preceding the date
of the transaction giving rise to the need to calculate Consolidated Interest
Expense, in each case to the extent attributable to such period and excluding
items eliminated in consolidation. For purposes of this definition, (a)
interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by the Company to be the rate of interest
implicit in such Capitalized Lease Obligation in accordance with GAAP and (b)
interest expense attributable to any Indebtedness represented by the guarantee
by the Company or a Restricted Subsidiary of the Company of an obligation of
another Person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, (a) the sum of (i) discounted
future net revenue from proved oil and gas reserves of the Company and its
Restricted Subsidiaries calculated in accordance with SEC guidelines before any
state or federal income taxes, as estimated by independent petroleum engineers
in a reserve report prepared as of the end of the Company's most recently
completed fiscal year, as increased by, as of the date of determination, the
discounted future net revenue of (A) estimated proved oil and gas reserves of
the Company and its Restricted Subsidiaries attributable to any acquisition
consummated since the date of such year-end reserve report, and (B) estimated
proved oil and gas reserves of the Company and its Restricted Subsidiaries
attributable to extensions, discoveries and other additions and upward
revisions of estimates of proved oil and gas reserves due to exploration,
development or exploitation, production or other activities conducted or
otherwise occurring since the date of such year-end reserve report, which, in
the case of sub-clauses (A) and (B), would, in accordance with standard
industry practice, result in such increases as calculated in accordance with
SEC guidelines (utilizing the prices utilized in such year-end reserve report),
and decreased by, as of the date of determination, the discounted future net
revenue of (C) estimated proved oil and gas reserves of the Company and its
Restricted Subsidiaries produced or disposed of since the date of such year-end
reserve report and (D) reductions in the estimated oil and gas reserves of the
Company and its Restricted Subsidiaries since the date of such year-end reserve
report attributable to downward revisions of estimates of proved oil and gas
reserves due to exploration, development or exploitation, production or other
activities conducted or otherwise occurring since the date of such year-end
reserve report which, in the case of sub-clauses (C) and (D), would, in
accordance with standard industry practice, result in such decreases as
calculated in accordance with SEC guidelines (utilizing the prices utilized in
such year-end reserve report); provided that, in the case of each of the
determinations made pursuant to clauses (A) through (D), such increases and
decreases shall be as estimated by the Company's engineers, (ii) the
capitalized costs that are attributable to oil and gas properties of the
Company and its Restricted Subsidiaries to which no proved oil and gas
reserves are attributable, based on the Company's books and records as of a
date no earlier than the date of the Company's latest annual or quarterly
financial statements, (iii) the Net Working Capital on a date no earlier than
the date of the Company's latest annual or quarterly financial statements and
(iv) the greater of (I) the net book value on a date no earlier than the date
of the Company's latest annual or quarterly financial statements and (II) the
appraised value, as estimated by independent appraisers, of other tangible
assets (including Investments in unconsolidated Subsidiaries) of the Company
and its Restricted Subsidiaries, as of a date no earlier than the date of the
Company's latest audited financial statements, minus (b) the sum of (i)
minority interests, (ii) any gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's latest annual or quarterly
financial statements, (iii) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the prices utilized in the Company's
year-end reserve report), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Company and
its Restricted Subsidiaries with respect to Volumetric Production Payments on
the schedules specified with respect thereto, (iv) the discounted future net
revenue, calculated in accordance with SEC guidelines, attributable to reserves
subject to Dollar-Denominated Production Payments which, based on the estimates
of production included in determining the discounted future net revenue
specified in (a) (i) above (utilizing the same prices utilized in the Company's
year-end
-2-
9
reserve report), would be necessary to fully satisfy the payment obligations of
the Company and its Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments on the schedules specified with respect thereto and (v) the
discounted future net revenue, calculated in accordance with SEC guidelines
(utilizing the same prices utilized in the Company's year-end reserve report),
attributable to reserves subject to participation interests, overriding royalty
interests or other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or which
otherwise are required to be delivered to third parties. If the Company
changes its method of accounting from the full cost method to the successful
efforts method or a similar method of accounting, Adjusted Consolidated Net
Tangible Assets will continue to be calculated as if the Company were still
using the full cost method of accounting.
"Adjusted Net Assets of a Subsidiary Guarantor" at any date
shall mean the lesser of (i) the amount by which the fair value of the property
of such Subsidiary Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date),
but excluding liabilities under the Guarantee of such Subsidiary Guarantor at
such date and (ii) the amount by which the present fair saleable value of the
assets of such Subsidiary Guarantor at such date exceeds the amount that will
be required to pay the probable liability of such Subsidiary Guarantor on its
debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Subsidiary Guarantor in respect of the obligations of
such Subsidiary under the Guarantee), excluding debt in respect of the
Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any sale, lease, transfer, exchange or
other disposition (or series of related sales, leases, transfers, exchanges or
dispositions) having a fair market value of $1,000,000 or more of shares of
Capital Stock of a Restricted Subsidiary (other than directors' qualifying
shares), or of property or assets (including the creation of Dollar-Denominated
Production Payments and Volumetric Production Payments, other than
Dollar-Denominated Production Payments and Volumetric Production Payments
created or sold in connection with the financing of, and within 30 days after,
the acquisition of the properties subject thereto) or any interests therein
(each referred to for purposes of this definition as a "disposition") by the
Company or any of its Restricted Subsidiaries, including any disposition by
means of a merger, consolidation or similar transaction (other than (a) by the
Company to a Wholly Owned Restricted Subsidiary or by a Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary, (b) a sale of oil, gas or
other hydrocarbons or other mineral products in the ordinary course of business
of the Company's oil and gas production operations, (c) any abandonment,
farm-in, farm-out, lease and sub-lease of developed and/or undeveloped
properties made or entered into in the ordinary course of business, but
excluding (x) any sale of a net profits or overriding royalty interest, in each
case conveyed from or burdening proved developed or proved undeveloped reserves
and (y) any sale of hydrocarbons or other mineral products as a result of the
creation of Dollar-Denominated Production Payments or Volumetric Production
Payments, other than Dollar-Denominated Production Payments and Volumetric
Production Payments created or sold in connection with the financing of, and
within 30 days after, the acquisition of the properties subject thereto), (d)
the disposition of all or substantially all of the assets of the Company in
compliance with Article Five, (e) Sale/Leaseback Transactions in compliance
with Section 4.13, (f) the provision of services and equipment for the
operation and development of the Company's oil and gas xxxxx, in the ordinary
course of the Company's oil and gas service businesses, notwithstanding that
such transactions may be recorded as asset sales in accordance with full cost
accounting guidelines, and (g) the issuance by the Company of shares of its
Capital Stock).
"Attributable Indebtedness" means, with respect to any
particular lease under which any Person is at the time liable and at any date
as of which the amount thereof is to be determined, the present value of the
total net amount of rent required to be paid by such Person under the lease
during the primary term thereof, without giving effect
-3-
10
to any renewals at the option of the lessee, discounted from the respective due
dates thereof to such date at the rate of interest per annum implicit in the
terms of the lease. As used in the preceding sentence, the "net amount of rent"
under any lease for any such period shall mean the sum of rental and other
payments required to be paid with respect to such period by the lessee
thereunder excluding any amounts required to be paid by such lessee on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges. In the case of any lease which is terminable by the lessee
upon payment of a penalty, such net amount of rent shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the product
of (x) the number of years from such date to the date of each successive
scheduled principal payment of such Indebtedness multiplied by (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means a revolving credit, term credit
and/or letter of credit facility, the proceeds of which are used for working
capital and other general corporate purposes to be entered into by one or more
of the Company and/or its Restricted Subsidiaries and certain financial
institutions, as amended, extended or refinanced from time to time.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any committee of the Board of Directors of
such Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors or the managing
partner(s) of such Person and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security represented by a Global
Security and registered in the name of the nominee of the Depositary.
"Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading and which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
corporate stock or partnership interests and any and all warrants, options and
rights with respect thereto (whether or not currently exercisable), including
each class of common stock and preferred stock of such Person.
"Capitalized Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under a lease of
property, real or personal, that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the Company's assets to any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act), other
than to Permitted Holders; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act), other than Permitted Holders, of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act, except that such Person shall be
deemed to have beneficial ownership of all shares that any such Person has the
right to acquire, whether such right is exercisable immediately or only after
passage of time) of more than 50% of the aggregate voting power of the Voting
Stock of the Company; provided, however, that the Permitted Holders
beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company than such other Person and do
not have the right or ability by voting power, contract or otherwise to elect
or designate
-4-
11
for election a majority of the Board of Directors of the Company (for the
purposes of this definition, such other Person shall be deemed to beneficially
own any Voting Stock of a specified corporation held by a parent corporation,
if such other Person is the beneficial owner (as defined above), directly or
indirectly, of more than 35% of the voting power of the Voting Stock of such
parent corporation and the Permitted Holders beneficially own (as defined in
this proviso), directly or indirectly, in the aggregate a lesser percentage of
the voting power of the Voting Stock of such parent corporation and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of such parent
corporation); or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of 66-2/3% of the directors of the Company then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then
in office.
"Company" means the party named as such above, until a
successor replaces such Person in accordance with the terms of this Indenture,
and thereafter means such successor.
"Consolidated Net Income" of the Company means, for any
period, the aggregate net income (or loss) of the Company and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall not be included in such
Consolidated Net Income: (a) any net income of any Person if such Person is not
the Company or a Restricted Subsidiary, except that (i) subject to the
limitations contained in clause (d) below, the Company's equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash or cash equivalents
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (c) below) and (ii) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income; (b) any
net income (or loss) of any Person acquired by the Company or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisition; (c) the net income of any Restricted Subsidiary to the extent that
the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, is prohibited; (d) any gain
(but not loss) realized upon the sale or other disposition of any property,
plant or equipment of the Company or any Restricted Subsidiary (including
pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain (but not loss)
realized upon the sale or other disposition of any Capital Stock of any Person;
(e) any gain (but not loss) from currency exchange transactions not in the
ordinary course of business consistent with past practice; (f) the cumulative
effect of a change in accounting principles; (g) to the extent deducted in the
calculation of net income, the non-cash charges associated with the repayment
of Indebtedness with the proceeds from the sale of the Securities and the
prepayment of any of the Securities; and (h) any writedowns of non-current
assets; provided, however, that any "ceiling limitation" writedowns under SEC
guidelines shall be treated as capitalized costs, as if such writedowns had not
occurred; and (i) any gain (but not loss) attributable to extraordinary items.
"Consolidated Tangible Net Worth" means, with respect to the
Company and its Restricted Subsidiaries, as at any date of determination, the
sum of Capital Stock (other than Disqualified Stock) and additional paid-in
capital plus retained earnings (or minus accumulated deficit) minus all
intangible assets, including, without limitation, organization costs, patents,
trademarks, copyrights, franchises, research and development costs, and any
amount reflected in treasury stock, of the Company and its Restricted
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Currency Hedge Obligations" means, at any time as to the
Company and its Restricted Subsidiaries, the obligations of such Person at such
time that were incurred in the ordinary course of business pursuant to any
foreign currency exchange agreement, option or futures contract or other
similar agreement or arrangement designed to protect against or manage such
Person's or any of its Subsidiaries' exposure to fluctuations in foreign
currency exchange rates.
"Default" means any event which is, or after notice or passage
of time would be, an Event of Default.
-5-
12
"Definitive Securities" means Securities that are in the form
of the Securities attached hereto as Exhibit A, that do not include the
information called for by footnotes 1 and 2 thereof.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Securities, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disinterested Director" means, with respect to an Affiliate
Transaction or series of related Affiliate Transactions, a member of the Board
of Directors of the Company who has no financial interest, and whose employer
has no financial interest, in such Affiliate Transaction or series of related
Affiliate Transactions.
"Disqualified Stock" means any Capital Stock of the Company or
any Restricted Subsidiary of the Company which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event or with the passage of time, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date or which is exchangeable or convertible into debt
securities of the Company or any Restricted Subsidiary of the Company, except
to the extent that such exchange or conversion rights cannot be exercised prior
to the Maturity Date.
"Distribution Compliance Period" has the meaning specified in
Section 2.06.
"Dollar-Denominated Production Payments" mean production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"8 1/2% Notes" means the Company's 8 1/2% Series B Senior
Notes due 2012 issued pursuant to the Existing 8 1/2% Note Indenture.
"Equity Offering" means any underwritten public offering of
common stock of the Company pursuant to a registration statement filed pursuant
to the Securities Act or any private placement of Capital Stock (other than
Disqualified Stock) of the Company (other than to any Person who, prior to such
private placement, was an Affiliate of the Company) which offering or placement
is consummated after the Issue Date, excluding Preferred Shares issued in the
Preferred Stock Offering.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
"Exchange Offer" means the registration by the Company under
the Securities Act of all the Series B Notes pursuant to a registration
statement under which the Company offers each Holder of Series A Notes the
opportunity to exchange all Series A Notes held by such Holder for Series B
Notes in an aggregate principal amount equal to the aggregate principal amount
of Series A Notes held by such Holder, all in accordance with the terms and
conditions of the Registration Rights Agreement.
"Existing 8 1/2% Note Indenture" means the Indenture relating
to the 8 1/2% Notes, dated as of March 15, 1997, among the Company, as issuer,
the subsidiary guarantors named therein, as guarantors, and the United States
Trust Company of New York, as trustee, as same may be amended or supplemented.
"Existing 9 1/8% Note Indenture" means the Indenture, dated as
of April 1, 1996, among the Company, as issuer, the subsidiary guarantors named
therein, as guarantors, and the United States Trust Company of New York, as
trustee, as the same may be amended or supplemented.
"Existing Notes" means (i) the 10 1/2% Notes, (ii) the 9 1/8%
Notes, (iii) the 7 7/8% Notes and (iv) the 8 1/2% Notes.
-6-
13
"Existing 7 7/8% Note Indenture" means the Indenture relating
to the 7 7/8% Notes, dated as of March 15, 1997, among the Company, as issuer,
the subsidiary guarantors named therein, as guarantors, and the United States
Trust Company of New York, as trustee, as the same may be amended or
supplemented.
"Existing 10 1/2% Note Indenture" means the Indenture, dated
as of May 15, 1995, among the Company, as issuer, the subsidiary guarantors
named therein, as guarantors, and the United States Trust Company of New York,
as trustee, as the same may be amended or supplemented.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Issue Date.
"Global Security" means a Security that is in the form of the
Security attached hereto as Exhibit A that contains the language referred to in
footnotes 1 and 2 thereof.
"Guarantee" means, individually and collectively, the
guarantees given by the Subsidiary Guarantors pursuant to Article Ten hereof,
including a notation in the Securities substantially in the form attached
hereto as Exhibit A-1.
"Holder" means a Person in whose name a Security is registered
on the Registrar's books.
"Indebtedness" means, without duplication, with respect to any
Person, (a) all obligations of such Person (i) in respect of borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (ii) evidenced by bonds, notes,
debentures or similar instruments, (iii) representing the balance deferred and
unpaid of the purchase price of any property or services (other than accounts
payable or other obligations arising in the ordinary course of business), (iv)
evidenced by bankers' acceptances or similar instruments issued or accepted by
banks, (v) for the payment of money relating to a Capitalized Lease Obligation,
or (vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of such
Person under Interest Rate Hedging Agreements, Oil and Gas Hedging Contracts
and Currency Hedge Obligations, except to the extent such net obligations are
taken into account in the determination of future net revenues from proved oil
and gas reserves for purposes of the calculation of Adjusted Consolidated Net
Tangible Assets; (c) all liabilities of others of the kind described in the
preceding clauses (a) or (b) that such Person has guaranteed or that are
otherwise its legal liability (including, with respect to any Production
Payment, any warranties or guaranties of production or payment by such Person
with respect to such Production Payment but excluding other contractual
obligations of such Person with respect to such Production Payment); (d)
Indebtedness (as otherwise defined in this definition) of another Person
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person, the amount of such obligations being deemed to be
the lesser of (1) the full amount of such obligations so secured, and (2) the
fair market value of such asset, as determined in good faith by the Board of
Directors of such Person, which determination shall be evidenced by a Board
Resolution, (e) with respect to such Person, the liquidation preference or any
mandatory redemption payment obligations in respect of Disqualified Stock; (f)
the aggregate preference in respect of amounts payable on the issued and
outstanding shares of Preferred Stock of any of the Company's Restricted
Subsidiaries in the event of any voluntary or involuntary liquidation,
dissolution or winding up (excluding any such preference attributable to such
shares of Preferred Stock that are owned by such Person or any of its
Restricted Subsidiaries; provided, that if such Person is the Company, such
exclusion shall be for such preference attributable to such shares of Preferred
Stock that are owned by the Company or any of its Restricted Subsidiaries); and
(g) any and all deferrals, renewals, extensions, refinancings and refundings
(whether direct or indirect) of, or amendments, modifications or supplements
to, any liability of the kind described in any of the preceding clauses (a),
(b), (c), (d), (e), (f) or this clause (g), whether or not between or among the
same parties. Subject to clause (c) of the preceding sentence, neither
Dollar-Denominated Production Payments nor Volumetric Production Payments shall
be deemed to be Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
-7-
14
"Initial Purchasers" means, collectively, Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, Bear, Xxxxxxx & Co. Inc., Xxxxxx Brothers
Inc., X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. Incorporated.
"Interest Rate Hedging Agreements" means, with respect to the
Company and its Restricted Subsidiaries, the obligations of such Persons under
(i) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements and (ii) other agreements or arrangements designed to
protect any such Person or any of its Subsidiaries against fluctuations in
interest rates.
"Investment" of any Person means (i) all investments by such
Person in any other Person in the form of loans, advances or capital
contributions, (ii) all guarantees of Indebtedness or other obligations of any
other Person by such Person, (iii) all purchases (or other acquisitions for
consideration) by such Person of assets, Indebtedness, Capital Stock or other
securities of any other Person and (iv) all other items that would be
classified as investments (including, without limitation, purchases of assets
outside the ordinary course of business) or advances on a balance sheet of such
Person prepared in accordance with GAAP.
"Issue Date" means April 22, 1998.
"Lien" means, with respect to any Person, any mortgage,
pledge, lien, encumbrance, easement, restriction, covenant, right-of-way,
charge or adverse claim affecting title or resulting in an encumbrance against
real or personal property of such Person, or a security interest of any kind
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option, right of first refusal or other similar
agreement to sell, in each case securing obligations of such Person and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statute or statutes) of any jurisdiction).
"Make-Whole Amount" with respect to a Security means an amount
equal to the excess, if any, of (i) the present value of the remaining
interest, premium and principal payments due on such Security as if such
Security were redeemed on May 1, 2002, computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (ii) the outstanding principal
amount of such Security. As used herein, "Treasury Rate" is defined as the
yield to maturity at the time of the computation of United States Treasury
securities with a constant maturity (as compiled by and published in the most
recent Federal Reserve Statistical Release H.15 (519), which has become
publicly available at least two Business Days prior to the date of the
redemption notice or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then
remaining maturity of the Securities assuming redemption of the Securities on
May 1, 2002; provided, however, that if the Make-Whole Average Life of such
Security is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Make-Whole Average Life of such
Securities is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used. As used herein, "Make-Whole Average Life" means the number of
years (calculated to the nearest one-twelfth) between the date of redemption
and May 1, 2002.
"Maturity Date" means May 1, 2005.
"Net Available Proceeds" means, with respect to any Asset Sale
or Sale/ Leaseback Transaction of any Person, cash proceeds received (including
any cash proceeds received by way of deferred payment of principal pursuant to
a note or installment receivable or otherwise, but only as and when received,
and excluding any other consideration until such time as such consideration is
converted into cash) therefrom, in each case net of all legal, title and
recording tax expenses, commissions and other fees and expenses incurred, and
all federal, state or local taxes required to be accrued as a liability as a
consequence of such Asset Sale or Sale/ Leaseback Transaction, and in each case
net of all Indebtedness which is secured by such assets, in accordance with the
terms of any Lien upon or with respect to such assets, or which must, by its
terms or in order to obtain a necessary consent to such Asset Sale or Sale/
Leaseback Transaction or by applicable law, be repaid out of the proceeds from
such Asset Sale or Sale/Leaseback Transaction and which is actually so repaid.
-8-
15
"Net Cash Proceeds" means, in the case of any sale by the
Company of securities pursuant to clauses (B) or (C) of Section 4.10(a)(iii),
the aggregate net cash proceeds received by the Company, after payment of
expenses, commissions, discounts and any other transaction costs incurred in
connection therewith.
"Net Working Capital" means (i) all current assets of the
Company and its Restricted Subsidiaries, minus (ii) all current liabilities of
the Company and its Restricted Subsidiaries, except current liabilities
included in Indebtedness.
"9 1/8% Notes" means the Company's 9 1/8% Senior Notes due
2006 issued pursuant to the Existing 9 1/8% Note Indenture.
"Non-Recourse Indebtedness" means Indebtedness or that portion
of Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the
Company nor any other Subsidiary (other than a Non-Recourse Subsidiary) (i)
provides credit support, including any undertaking, agreement or instrument
which would constitute Indebtedness or (ii) is directly or indirectly liable
for such Indebtedness and (b) no default with respect to such Indebtedness
(including any rights which the holders thereof may have to take enforcement
action against a Non-Recourse Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness (other than Non-Recourse
Indebtedness) of the Company or its Subsidiaries (other than a Non-Recourse
Subsidiary) to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary or an Affiliate
(i) established for the purpose of acquiring or investing in property securing
Non-Recourse Indebtedness, (ii) substantially all of the assets of which
consist of property securing Non-Recourse Indebtedness, and (iii) which shall
have been designated as a Non-Recourse Subsidiary by a Board Resolution adopted
by the Board of Directors of the Company, as evidenced by an Officers'
Certificate delivered to the Trustee. The Company may redesignate any
Non-Recourse Subsidiary of the Company to be a Subsidiary other than a
Non-Recourse Subsidiary by a Board Resolution adopted by the Board of Directors
of the Company, as evidenced by an Officers' Certificate delivered to the
Trustee, if, after giving effect to such redesignation, the Company could
borrow $1.00 of additional Indebtedness pursuant to Section 4.09(a) (such
redesignation being deemed an incurrence of additional Indebtedness (other than
Non-Recourse Indebtedness)).
"Officer" means, with respect to any Person, the Chairman of
the Board, the President, any Vice President, the Chief Financial Officer or
the Treasurer of such Person.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either a Secretary,
Assistant Secretary or Assistant Treasurer of such Person. One of the Officers
signing an Officers' Certificate given pursuant to Section 4.03(a) shall be the
principal executive, financial or accounting officer of the Person delivering
such certificate.
"Oil and Gas Business" means the business of the exploration
for, and exploitation, development, production, processing (but not refining),
marketing, storage and transportation of, hydrocarbons, and other related
energy and natural resource businesses (including oil and gas services
businesses related to the foregoing).
"Oil and Gas Hedging Contracts" means any oil and gas purchase
or hedging agreements, and other agreement or arrangement, in each case, that
is designed to provide protection against price fluctuations of oil, gas or
other commodities.
"Oil and Gas Securities" means the Voting Stock of a Person
primarily engaged in the Oil and Gas Business, provided that such Voting Stock
shall constitute a majority of the Voting Stock of such Person in the event
that such Voting Stock (i) is not registered under Section 12 of the Exchange
Act and (ii) is not of a corporation that is not a reporting issuer in any of
the provinces of Canada or, even if such corporation is such a reporting
issuer, such Voting Stock is not of a class of securities that is traded on any
of the Alberta, Montreal, Ontario or Toronto Securities Exchange.
-9-
16
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company (or any Subsidiary Guarantor, if
applicable) or the Trustee.
"Permitted Business Investments" means (i) Investments in
assets used in the Oil and Gas Business; (ii) the acquisition of Oil and Gas
Securities; (iii) the entry into operating agreements, joint ventures,
processing agreements, farm-out agreements, development agreements, area of
mutual interest agreements, contracts for the sale, transportation or exchange
of oil and natural gas, unitization agreements, pooling arrangements, joint
bidding agreements, service contracts, partnership agreements (whether general
or limited) or other similar or customary agreements, transactions, properties,
interests or arrangements, and Investments and expenditures in connection
therewith or pursuant thereto, in each case made or entered into in the
ordinary course of the Oil and Gas Business, excluding, however, Investments in
corporations; (iv) the acquisition of working interests, royalty interests or
mineral leases relating to oil and gas properties; (v) Investments by the
Company or any Wholly Owned Restricted Subsidiary in any Person which,
immediately prior to the making of such Investment, is a Wholly Owned
Restricted Subsidiary; (vi) Investments in the Company by any Wholly Owned
Restricted Subsidiary; (vii) Investments permitted under Section 4.11 or
Section 4.13; (viii) Investments in any Person the consideration for which
consists of Qualified Stock and (ix) any other Investments in an amount not to
exceed 10% of Adjusted Consolidated Net Tangible Assets determined as of the
date of the making or incurrence of such Investment at any one time
outstanding.
"Permitted Company Refinancing Indebtedness" means
Indebtedness of the Company, the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the
Company, provided that (i) if the Indebtedness (including the Securities) being
renewed, extended, refinanced, refunded or repurchased is pari passu with or
subordinated in right of payment to the Securities, then such Indebtedness is
pari passu or subordinated in right of payment to, as the case may be, the
Securities at least to the same extent as the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (ii) such Indebtedness is
scheduled to mature no earlier than the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, and (iii) such Indebtedness has an Average
Life at the time such Indebtedness is incurred that is equal to or greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased; provided, further, that such Indebtedness (to the
extent that such Indebtedness constitutes Permitted Company Refinancing
Indebtedness) is in an aggregate principal amount (or, if such Indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP).
"Permitted Financial Investments" means the following kinds of
instruments if, in the case of instruments referred to in clauses (i)-(iv)
below, on the date of purchase or other acquisition of any such instrument by
the Company or any Subsidiary, the remaining term to maturity is not more than
one year; (i) readily marketable obligations issued or unconditionally
guaranteed as to principal of and interest thereon by the United States of
America or by any agency or authority controlled or supervised by and acting as
an instrumentality of the United States of America; (ii) repurchase obligations
for instruments of the type described in clause (i) for which delivery of the
instrument is made against payment; (iii) obligations (including, but not
limited to, demand or time deposits, bankers' acceptances and certificates of
deposit) issued by a depositary institution or trust company incorporated or
doing business under the laws of the United States of America, any state
thereof or the District of Columbia or a branch or subsidiary of any such
depositary institution or trust company operating outside the United States,
provided, that such depositary institution or trust company has, at the time of
the Company's or such Subsidiary's investment therein or contractual commitment
providing for such investment, capital surplus or undivided profits (as of the
date of such institution's most recently published financial statements) in
excess of $500,000,000; (iv) commercial paper issued by any corporation, if
such commercial paper has, at the time of the Company's or any Subsidiary's
investment therein or contractual commitment providing for such investment,
credit ratings of A-1 (or higher) by Standard & Poor's Corporation and P-1 (or
higher) by Xxxxx'x Investors Services, Inc.; and (v) money market mutual or
similar funds having assets in excess of $500,000,000.
"Permitted Holders" means Xxxxxx X. XxXxxxxxx and Xxx X. Xxxx
and their respective Affiliates.
-10-
17
"Permitted Indebtedness" means (i) Indebtedness of the Company
and its Restricted Subsidiaries under a Bank Credit Facility as the same may be
amended, refinanced, or replaced, in a principal amount outstanding at any time
not to exceed the greater of (a) $300 million and (b) $100 million plus 20% of
Adjusted Consolidated Net Tangible Assets, less any Net Available Proceeds
applied in accordance with Section 4.11(b) hereof to repay or prepay such
Indebtedness which repayment or prepayment results in a permanent reduction in
any revolving credit or other commitment relating thereto or the maximum amount
that may be borrowed thereunder; (ii) Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Issue Date; (iii) other Indebtedness
of the Company and its Restricted Subsidiaries in a principal amount not to
exceed $25 million at any one time outstanding; (iv) Non-Recourse Indebtedness;
(v) Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of
the Company and Indebtedness of any Restricted Subsidiary of the Company to the
Company or another Wholly Owned Restricted Subsidiary of the Company; (vi)
Permitted Company Refinancing Indebtedness; (vii) Permitted Subsidiary
Refinancing Indebtedness; (viii) obligations of the Company and its Restricted
Subsidiaries under Currency Hedge Obligations, Oil and Gas Hedging Contracts or
Interest Rate Hedging Agreements; (ix) Indebtedness under the Securities; and
(x) Indebtedness of a Subsidiary pursuant to a Guarantee of the Securities in
accordance with Article Ten of this Indenture.
"Permitted Investments" means Permitted Business Investments
and Permitted Financial Investments.
"Permitted Liens" means (i) Liens existing on the Issue Date;
(ii) Liens under a Bank Credit Facility; provided, however, such Liens are
limited to Proved Developed Properties of the Company and its Subsidiaries and
such Liens secure Indebtedness in an amount not in excess of that permitted to
be incurred in accordance with clause (i) of the definition of "Permitted
Indebtedness"; (iii) Liens now or hereafter securing any Interest Rate Hedging
Agreements so long as the related Indebtedness (a) constitutes the Existing
Notes or the Securities (or any Permitted Company Refinancing Indebtedness in
respect thereof) or (b) is, or is permitted to be under this Indenture, secured
by a Lien on the same property securing such interest rate hedging obligations;
(iv) Liens securing Permitted Company Refinancing Indebtedness or Permitted
Subsidiary Refinancing Indebtedness; provided, that such Liens extend to or
cover only the property or assets currently securing the Indebtedness being
refinanced; (v) Liens for taxes, assessments and governmental charges not yet
delinquent or being contested in good faith and for which adequate reserves
have been established to the extent required by GAAP; (vi) mechanics',
worker's, materialmen's, operators' or similar Liens arising in the ordinary
course of business; (vii) Liens in connection with worker's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations; (viii) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment
of money), leases, public or statutory obligations, surety, stay, appeal,
indemnity, performance or other similar bonds, or other similar obligations
arising in the ordinary course of business; (ix) survey exceptions,
encumbrances, easements or reservations of, or rights of others for, rights of
way, zoning or other restrictions as to the use of real properties, and minor
defects in title which, in the case of any of the foregoing, were not incurred
or created to secure the payment of borrowed money or the deferred purchase
price of property or services, and in the aggregate do not materially adversely
affect the value of such properties or materially impair use for the purposes
of which such properties are held by the Company or any Restricted
Subsidiaries; (x) Liens on, or related to, properties to secure all or part of
the costs incurred in the ordinary course of business of exploration, drilling,
development or operation thereof; (xi) Liens on pipeline or pipeline facilities
which arise out of operation of law; (xii) judgment and attachment Liens not
giving rise to an Event of Default or Liens created by or existing from any
litigation or legal proceeding that are currently being contested in good faith
by appropriate proceedings and for which adequate reserves have been made;
(xiii) (a) Liens upon any property of any Person existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary, (b) Liens upon
any property of a Person existing at the time such Person is merged or
consolidated with the Company or any Restricted Subsidiary or existing at the
time of the sale or transfer of any such property of such Person to the Company
or any Restricted Subsidiary, or (c) Liens upon any property of a Person
existing at the time such Person becomes a Restricted Subsidiary; provided,
that in each case such Lien has not been created in contemplation of such sale,
merger, consolidation, transfer or acquisition, and provided that in each such
case no such Lien shall extend to or cover any property of the Company or any
Restricted Subsidiary other than the property being acquired and improvements
thereon; (xiv) Liens on deposits to secure public or statutory obligations or
in lieu of surety or appeal bonds entered into in the ordinary course of
business; (xv) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or instruments
of the Company or any Subsidiary on deposit with or in possession of such bank;
(xvi) purchase money security interests granted in connection with the
acquisition of assets in the ordinary course of business and consistent
-11-
18
with past practices, provided, that (A) such Liens attach only to the property
so acquired with the purchase money indebtedness secured thereby and (B) such
Liens secure only Indebtedness that is not in excess of 100% of the purchase
price of such assets; (xvii) Liens reserved in oil and gas mineral leases for
bonus or rental payments and for compliance with the terms of such leases;
(xviii) Liens arising under partnership agreements, oil and gas leases,
farm-out agreements, division orders, contracts for the sale, purchase,
exchange, transportation or processing (but not refining) of oil, gas or other
hydrocarbons, unitization and pooling declarations and agreements, development
agreements, operating agreements, area of mutual interest agreements, and other
similar agreements which are customary in the Oil and Gas Business; (xix)
Liens securing obligations of the Company or any of its Restricted Subsidiaries
under Currency Hedge Obligations or Oil and Gas Hedging Contracts; and (xx)
Liens to secure Dollar-Denominated Production Payments and Volumetric
Production Payments.
"Permitted Subsidiary Refinancing Indebtedness" means
Indebtedness of any Restricted Subsidiary, the net proceeds of which are used
to renew, extend, refinance, refund or repurchase outstanding Indebtedness of
such Restricted Subsidiary, provided that (i) if the Indebtedness (including
the Guarantees) being renewed, extended, refinanced, refunded or repurchased is
pari passu with or subordinated in right of payment to the Guarantees, then
such Indebtedness is pari passu with or subordinated in right of payment to, as
the case may be, the Guarantees at least to the same extent as the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, (ii) such
Indebtedness is scheduled to mature no earlier than the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, and (iii) such
Indebtedness has an Average Life at the time such Indebtedness is incurred that
is equal to or greater than the Average Life of the Indebtedness being renewed,
extended, refinanced, refunded or repurchased; provided, further, that such
Indebtedness (to the extent that such Indebtedness constitutes Permitted
Subsidiary Refinancing Indebtedness) is in an aggregate principal amount (or,
if such Indebtedness is issued at a price less than the principal amount
thereof, the aggregate amount of gross proceeds therefrom is) not in excess of
the aggregate principal amount then outstanding of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased (or if the Indebtedness
being renewed, extended, refinanced, refunded or repurchased was issued at a
price less than the principal amount thereof, then not in excess of the amount
of liability in respect thereof determined in accordance with GAAP); provided,
however, that a Restricted Subsidiary shall not incur refinancing Indebtedness
to renew, extend, refinance, refund or repurchase outstanding Indebtedness of
the Company or another Subsidiary.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Preferred Shares" means the 4,600,000 shares (which includes
600,000 shares subject to purchase pursuant to an over-allotment option) of 7%
Cumulative Convertible Preferred Stock of the Company having a par value of
$0.01 per share and a liquidation preference of $50 per share issued by the
Company and offered for sale pursuant to the Preferred Stock Offering.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated),
which is preferred as to the payment of dividends, or upon any voluntary or
involuntary liquidation or dissolution of such corporation, over shares of
Capital Stock of any other class of such corporation.
"Preferred Stock Offering" means the private placement of
Preferred Shares, which placement was effected concurrently with the private
placement of the Series A Notes.
"Production Payments" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article Eleven of Regulation S-X under the Securities Act.
"Proved Developed Properties" means working interests, royalty
interests, and other interests in oil, gas or mineral leases or other interests
in oil, gas or mineral properties to which reserves are attributed which may
properly be categorized as proved developed reserves under Regulation S-X under
the Securities Act; together with all contracts, agreements and contract rights
which cover, affect or otherwise relate to such interests; all hydrocarbons
-12-
19
and all payments of any type in lieu of production; all improvements, fixtures,
equipment, information, data and other property used in connection therewith or
in connection with the treating, handling, storing, processing, transporting or
marketing of such hydrocarbons; all insurance policies relating thereto or to
the operation thereof; all personal property related thereto; and all proceeds
thereof.
"Qualified Institutional Buyer" or "QIB" shall have the
meaning specified in Rule 144A under the Securities Act.
"Qualified Stock" means any Capital Stock that is not
Disqualified Stock.
"Reference Period" means, with respect to any Person, the
period of four consecutive fiscal quarters ending with the last full fiscal
quarter for which financial information is available immediately preceding any
date upon which any determination is to be made pursuant to the terms of the
Securities or this Indenture.
"Registration Rights Agreement" means the A/B Exchange
Registration Rights Agreement, dated as of April 22, 1998, by and among the
Company, the Subsidiary Guarantors and each of the purchasers named on the
signature pages thereto, as such agreement may be amended, modified or
supplemented from time to time.
"Restricted Payment" means, with respect to any Person, any of
the following: (i) any dividend or other distribution in respect of such
Person's Capital Stock (other than (a) dividends or distributions payable
solely in Capital Stock (other than Disqualified Stock) (b) in the case of
Restricted Subsidiaries of the Company, dividends or distributions payable to
the Company or to a Restricted Subsidiary of the Company and (c) in the case of
the Company, cash dividends payable on the Preferred Shares); (ii) the
purchase, redemption or other acquisition or retirement for value of any
Capital Stock, or any option, warrant, or other right to acquire shares of
Capital Stock, of the Company or any of its Restricted Subsidiaries; (iii) the
making of any principal payment on, or the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, of any
Indebtedness which is subordinated in right of payment to the Securities; and
(iv) the making by such Person of any Investment other than a Permitted
Investment.
"Restricted Security" has the meaning provided in Rule
144(a)(3) under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that,
immediately after giving effect to such designation, the Company could incur at
least $1.00 in additional Indebtedness pursuant to Section 4.09(a). As of the
Issue Date, all of the Company's Subsidiaries other than Chesapeake Energy
Marketing, Inc. (which shall constitute an Unrestricted Subsidiary as of the
Issue Date) shall be Restricted Subsidiaries.
"Sale/Leaseback Transaction" means with respect to the Company
or any of its Restricted Subsidiaries, any arrangement with any Person
providing for the leasing by the Company or any of its Restricted Subsidiaries
of any principal property, acquired or placed into service more than 180 days
prior to such arrangement, whereby such property has been or is to be sold or
transferred by the Company or any of its Restricted Subsidiaries to such
Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series A Notes and the Series B Notes
issued pursuant to this Indenture, as the same may be amended or supplemented
from time to time.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with
respect to the Global Securities and any successor entity thereto.
"Senior Indebtedness" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter incurred), unless such
Indebtedness is contractually subordinate or junior in right of payment of
principal, premium and interest to the Securities.
-13-
20
"Senior Indebtedness of a Subsidiary Guarantor" means any
Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue
Date or thereafter incurred), unless such Indebtedness is contractually
subordinate or junior in right of payment of principal, premium and interest to
the Guarantees.
"Series A Notes" means the Company's 9 5/8% Series A Senior
Notes due 2005, as the same may be amended or supplemented from time to time in
accordance with the terms thereof, that are issued pursuant to this Indenture.
"Series B Notes" means the Company's 9 5/8% Series B Senior
Notes due 2005, as the same may be amended or supplemented from time to time in
accordance with the terms thereof, that are issued pursuant to this Indenture
in exchange for the Series A Notes in the Exchange Offer.
"7 7/8% Notes" means the Company's 7 7/8% Series B Senior
Notes due 2004 issued pursuant to the Existing 7 7/8% Note Indenture.
"Subordinated Indebtedness of a Subsidiary Guarantor" means
any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue
Date or thereafter incurred) which is contractually subordinate or junior in
right of payment of principal, premium and interest to the Guarantees.
"Subordinated Indebtedness of the Company" means any
Indebtedness of the Company (whether outstanding on the Issue Date or
thereafter incurred) which is contractually subordinate or junior in right of
payment of principal, premium and interest to the Securities.
"Subsidiary" means any subsidiary of the Company. A
"subsidiary" of any Person means (i) a corporation a majority of whose Voting
Stock is at the time, directly or indirectly, owned by such Person, by one or
more subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person, (ii) a partnership in which such Person or a subsidiary of such
Person is, at the date of determination, a general or limited partner of such
partnership, but only if such Person or its subsidiary is entitled to receive
more than 50 percent of the assets of such partnership upon its dissolution, or
(iii) any other Person (other than a corporation or partnership) in which such
Person, directly or indirectly, at the date of determination thereof, has (x)
at least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such Person.
"Subsidiary Guarantor" means (i) each of the Subsidiaries that
becomes a guarantor of the Securities in compliance with the provisions of
Article Ten of this Indenture and (ii) each of the Subsidiaries executing a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture.
"10 1/2% Notes" means the Company's 10 1/2% Senior Exchange
Notes due 2002 issued pursuant to the Existing 10 1/2% Note Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 9.03.
"Trust Officer" means any officer or assistant officer within
the corporate trust department of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary or (b) any Subsidiary of the Company or of a Restricted
Subsidiary that is designated as an Unrestricted Subsidiary by a resolution
adopted
-14-
21
by the Board of Directors in accordance with the requirements of the following
sentence. The Company may designate any Subsidiary of the Company or of a
Restricted Subsidiary (including a newly acquired or newly formed Subsidiary or
any Restricted Subsidiary of the Company), to be an Unrestricted Subsidiary by
a resolution of the Board of Directors of the Company, as evidenced by written
notice thereof delivered to the Trustee, if immediately after giving effect to
such designation, (i) the Company could incur $1.00 of additional Indebtedness
pursuant to Section 4.09(a), (ii) the Company could make an additional
Restricted Payment of $1.00 pursuant to Section 4.10(a), (iii) such Subsidiary
does not own or hold any Capital Stock of, or any lien on any property of, the
Company or any Restricted Subsidiary and (iv) such Subsidiary is not liable,
directly or indirectly, with respect to any Indebtedness other than
Unrestricted Subsidiary Indebtedness. As of the Issue Date, Chesapeake Energy
Marketing, Inc. is an Unrestricted Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Person means
Indebtedness of such Person (a) as to which neither the Company nor any
Restricted Subsidiary is directly or indirectly liable (by virtue of the
Company's or such Restricted Subsidiary's being the primary obligor, or
guarantor of, or otherwise liable in any respect on, such Indebtedness), (b)
which, with respect to Indebtedness incurred after the Issue Date by the
Company or any Restricted Subsidiary, upon the occurrence of a default with
respect thereto, does not result in, or permit any holder of any Indebtedness
of the Company or any Restricted Subsidiary to declare a default on such
Indebtedness of the Company or any Restricted Subsidiary and (c) which is not
secured by any assets of the Company or of any Restricted Subsidiary.
"U.S. Government Securities" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof.
"U.S. Legal Tender" means such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of
public and private debts.
"Volumetric Production Payments" mean production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Voting Stock" means, with respect to any Person, securities
of any class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or only so long as no senior class of stock has
voting power by reason of contingency) to vote in the election of members of
the Board of Directors or other governing body of such Person.
"Wholly Owned Restricted Subsidiary" means a Restricted
Subsidiary all the Capital Stock (other than directors' qualifying shares, if
applicable) of which is owned by the Company or another Wholly Owned Restricted
Subsidiary.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . . 4 .15
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 .01
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . 4 .16
"Change of Control Notice" . . . . . . . . . . . . . . . . . . . . . . . 4 .16
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . . . . 4 .16
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . 8 .03
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 .01
"Defaulted Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . 2 .12
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 .01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 .11
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
"incur" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 .09
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 .02
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07
"Make-Whole Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 .09
"Net Proceeds Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . 4 .11
"Net Proceeds Offer Amount" . . . . . . . . . . . . . . . . . . . . . . 4 .11
"Net Proceeds Payment Date" . . . . . . . . . . . . . . . . . . . . . . 4 .11
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 .03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 .01
"Payment Restriction" . . . . . . . . . . . . . . . . . . . . . . . . . 4 .14
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 .03
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms, if used in this Indenture, have the following
meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, the
Subsidiary Guarantors and any other obligor on the Securities or the
Guarantees.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
have the meanings assigned to them therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) any gender used in this Indenture shall be
deemed to include the neuter, masculine or feminine genders;
(6) provisions apply to successive events and
transactions; and
(7) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision.
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ARTICLE TWO
THE SENIOR NOTES
SECTION 2.01. Form and Dating.
The Securities and the certificate of authentication, and the
notation on the Securities relating to the Guarantee, shall be substantially in
the forms of Exhibits A and A-1, respectively. The Securities may also have
such insertions, omissions, substitutions and variations as are required or as
may be permitted by or consistent with this Indenture. The provisions of
Exhibits A and A-1 are part of this Indenture. The Securities may have
notations, legends and endorsements required by law or stock exchange rule or
usage. The Company shall approve the form of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the Securities and the
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Subsidiary
Guarantors, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Securities offered and sold in their initial distribution in
reliance on Rule 144A under the Securities Act and other than in reliance on
Rule 144A under the Securities Act or Regulation S shall be issued in the form
of one or more Global Securities (collectively, and, together with their
Successor Securities, the "Restricted Global Security") in fully registered
form without interest coupons, substantially in the form of Security set forth
in Exhibit A hereto, with such applicable legends as are provided for in
Exhibit A except as otherwise permitted herein. Such Restricted Global
Security shall be registered in the name of the Depositary or its nominee and
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided, for
credit by the Depositary to the respective accounts of beneficial owners of the
securities represented thereby (or such other accounts as they may direct).
SECTION 2.02. Execution and Authentication.
Two Officers of the Company shall sign the Securities on
behalf of the Company, and one Officer of each Subsidiary Guarantor shall sign
the notation on the Securities relating to the Guarantee of such Subsidiary
Guarantor on behalf of such Subsidiary Guarantor, in each case by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer of the Company or any Subsidiary Guarantor whose
signature is on a Security no longer holds that office at the time such
Security is authenticated, such Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate
Securities for original issue in the aggregate principal amount of $500,000,000
upon a written order of the Company signed by two Officers of the Company. The
aggregate principal amount of Senior Notes outstanding at any time may not
exceed $500,000,000.
Series B Notes may be issued only in exchange for a like
principal amount of Series A Notes pursuant to an Exchange Offer.
The principal and interest on Book-Entry Securities shall be
payable to the Depositary or its nominee, as the case may be, as the sole
registered owner and the sole holder of the Book-Entry Securities represented
thereby. The principal and interest on Securities in certificated form shall
be payable at the office of the Paying Agent.
The Trustee may appoint an authenticating agent to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so except on original issuance. Each reference in
this Indenture
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to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or its Affiliates.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
If the Securities are to be issued in the form of one or more
Global Securities, then the Company shall execute and the Trustee shall
authenticate and deliver one or more Global Securities that shall represent and
shall be in minimum denominations of $1,000.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where the
Securities may be presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be presented for
payment (the "Paying Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. Where the Trustee is acting as
or has been appointed Registrar and/or Paying Agent, the Company may appoint
one or more co- registrars and one or more additional paying agents with the
prior consent of the Trustee, whose consent shall not be unreasonably withheld.
The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. Such agency agreement shall
provide for reasonable compensation for such services. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent and
shall furnish the Trustee with an executed counterpart of any such agency
agreement. If the Company fails to maintain or act as Registrar or Paying
Agent, the Trustee shall act as such and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be
maintained by the Company in the Borough of Manhattan, the City of New York.
The Company initially designates the Trustee as the Registrar and Paying Agent.
The Company initially appoints The Depositary Trust Company
("DTC") to act as Depositary with respect to the Global Securities. Cede & Co.
has been appointed as the nominee of DTC.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Securities Custodian with respect to
the Global Securities.
SECTION 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to hold in trust for the benefit of Holders or the Trustee all money
held by such Paying Agent for the payment of principal of, premium, if any, or
interest on the Securities (whether such money shall have been paid to it by
the Company or any Subsidiary Guarantor), and to notify the Trustee of any
Default by the Company or any Subsidiary Guarantor in making any such payment.
While any such Default continues, the Trustee may require the Paying Agent to
pay all money held by it to the Trustee. Except as provided in the immediately
preceding sentence, the Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed and,
if the Company requires such payment, the Company shall give prior notice to
the Trustee and provide appropriate money transfer instructions to the Paying
Agent. Upon such payment over to the Trustee and accounting for any funds
disbursed, such Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate and hold as separate trust funds for the
benefit of the Holders all money held by it as Paying Agent.
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SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish or cause to be
furnished to the Trustee at least 10 Business Days prior to each semiannual
interest payment date, and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders, and the Company shall otherwise
comply with TIA Section 312(a).
SECTION 2.06. Transfer and Exchange.
(a) Exchange of Beneficial Interests in Global Security
for Certificated Security. Beneficial interests in a Global Security may,
subject to the restrictions on the transferability of the Securities, be
exchanged for certificated Securities upon request but only upon at least 20
days' prior written notice given to the Trustee by or on behalf of the
Depositary (in accordance with the Depositary's customary procedures) and will
bear the applicable legends set forth in Exhibit A hereto.
(b) Surrender for Exchange of Global Securities. If any
Global Security is to be exchanged for other Securities or canceled in whole,
it shall be surrendered by or on behalf of the Depositary or its nominee to the
Trustee, as Registrar, for exchange or cancellation as provided in this Article
Two. If any Global Security is to be exchanged for other Securities or
cancelled in part, or if another Security is to be exchanged in whole or in
part for a beneficial interest in any Global Security, such Global Security
shall be so surrendered for exchange or cancellation as provided in this
Article Two or, if the Trustee is acting as custodian for the Depositary or its
nominee (or is party to a similar arrangement) with respect to such Global
Security, the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or cancelled, or the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, in each case by means of an appropriate
adjustment made on the records of the Trustee, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representatives to make a corresponding adjustment to its records
(including by crediting or debiting any Agent Member's account as necessary to
reflect any transfer or exchange of a beneficial interest). Upon any such
surrender or adjustment of a Global Security, the Trustee shall, subject to
this Article Two, authenticate and deliver any Securities issuable in exchange
for such Global Security (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the Depositary or its
authorized representative. Upon the request of the Trustee in connection with
the occurrence of any of the events specified in the preceding paragraph or in
clause (k) below, the Company shall promptly make available to the Trustee a
reasonable supply of Securities that are not in the form of Global Securities.
The Trustee shall be entitled to rely upon any order, direction or request of
the Depositary or its authorized representative which is given or made pursuant
to this Article Two if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(c) Proxies by Registered Holder. Subject to the
provisions in the legends required by this Indenture, the registered Holder may
grant proxies and otherwise authorize any Person, including Agent Members, and
Persons who may hold interests in Agent Members to take any action that such
Holder is entitled to take under this Indenture.
(d) Interests of Agent Members and Depositary in Global
Security. Neither Agent Members nor any other Person on whose behalf Agent
Members may act shall have any rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary or under the Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practice governing the
exercise of the rights of a Holder of any Security.
(e) Transfers of Securities. Upon presentation for
transfer and exchange of any Security at the office of the Trustee, as
Registrar, located in The City of New York, accompanied by a written instrument
of transfer
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or exchange in the form approved by the Company (it being understood that,
until notice to the contrary is given to Holders of Securities, the Company
shall be deemed to have approved the form of instrument of transfer or
exchange, if any, printed on any Security), executed by the registered Holder,
in person or by such Holder's attorney thereunto duly authorized in writing,
and upon compliance with this Section 2.06, such Security shall be transferred
upon the Register, and a new Security shall be authenticated and issued in the
name of the transferee. Notwithstanding any provision to the contrary herein
or in the Securities, transfers of a Global Security, in whole or in part, and
transfers of interests therein of the kind described in this Section 2.06,
shall only be made in accordance with this Section 2.06. Transfers and
exchanges subject to this Section 2.06 shall also be subject to the other
provisions of this Indenture that are not inconsistent with this Section 2.06.
(f) General. A Global Security may not be transferred,
in whole or in part, to any Person other than the Depositary or a nominee
thereof, and no such transfer to any such other Person may be registered;
provided, however, that this clause (f) shall not prohibit any transfer of a
Security that is issued in exchange for a Global Security but is not itself a
Global Security. No transfer of a Security to any Person shall be effective
under this Indenture or the Securities unless and until such Security has been
registered in the name of such Person. Nothing in this clause (f) shall
prohibit or render ineffective any transfer of a beneficial interest in a
Global Security effected in accordance with the other provisions of this
Section 2.06.
(g) Other Exchanges. Securities that are not Global
Securities may be exchanged (on transfer or otherwise) for Securities that are
not Global Securities or for beneficial interests in a Global Security (if any
is then outstanding) only in accordance with such procedures (including the
certification requirements intended to insure that transfers of beneficial
interests in a Global Security comply with Rule 144A under the Securities Act),
as may from time to time be adopted by the Company and the Trustee.
(h) Transfers of Certificated Securities. When
Securities in certificated form are presented to the Registrar with a request
to register the transfer of such Securities or to exchange such Securities for
an equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or its attorney
duly authorized in writing. To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.02, 2.10, 3.07 or 9.05). The Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in part.
(i) Exchange of Certificated Series A Notes for
Book-Entry Security. If a Series A Note is a Restricted Security in
certificated form, then as provided in this Indenture and subject to the
limitations herein set forth, the Holder, provided it is a Qualified
Institutional Buyer, may exchange such Security for a Global Security by
instructing the Trustee to arrange for such Series A Note to be represented by
a beneficial interest in a Global Security in accordance with the customary
procedures of the Depositary.
(j) Execution and Authentication of Certificated
Securities. Upon any exchange provided for in Section 2.06(a), the Company
shall execute and the Trustee shall authenticate, and deliver to the person
specified by the Depositary a new Series A Note or Notes registered in such
names and in such authorized denominations as the Depositary, pursuant to the
instructions of the beneficial owner of the Securities requesting the exchange,
shall instruct the Trustee. Thereupon, the beneficial ownership of such Global
Security shown on the records maintained by the Depositary or its nominee shall
be reduced by the amounts so exchanged and an appropriate endorsement be made
by and on behalf of the Trustee on the Global Security. Any such exchange
shall be effected through the Depositary in accordance with the procedures of
the Depositary therefor.
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(k) Registration of Global Security in Name Other than
Depositary. Notwithstanding the foregoing, no Global Security shall be
registered for transfer or exchange, or authenticated and delivered, whether
pursuant to this Section, Section 2.07, 2.10 or 3.06 or otherwise, in the name
of a person other than the Depositary for such Global Security or its nominee
until (i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act,
and a successor depositary is not appointed by the Company within 30 days, (ii)
the Company executes and delivers to the Trustee a Company Order that all such
Global Securities shall be exchangeable or (iii) there shall have occurred and
be continuing an Event of Default. Upon the occurrence in respect of any
Global Security representing the Securities of any one or more of the
conditions specified in clause (i), (ii) or (iii) of the preceding sentence,
such Global Security may be registered for transfer or exchange for Securities
registered in the names of, authenticated and delivered to, such persons as the
Trustee or the Depositary, as the case may be, shall direct.
(l) Delivery of Securities Upon Transfer or Exchange of
Global Security. Except as provided above, any Security authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
any Global Security, whether pursuant to this Section 2.07, 2.10 or 3.06 or
otherwise, shall also be a Global Security and bear the legend specified in
footnote 1 to Exhibit A.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the requirements of the Trustee are met. An indemnity
bond may be required by the Trustee, the Company or any Subsidiary Guarantor
that is sufficient in the judgment of the Company, the Subsidiary Guarantors
and the Trustee to protect the Company, the Subsidiary Guarantors, the Trustee
or any Agent from any loss which any of them may suffer if a Security is
replaced. The Company may charge for its expenses (including fees and expenses
of the Trustee) in replacing a Security.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09, a Security does not cease to be outstanding because the Company,
the Subsidiary Guarantors or any of their respective Subsidiaries or Affiliates
holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Securities is held by a bona fide purchaser.
If the principal amount of any Security is considered paid
under Section 4.01, it ceases to be outstanding and interest on it ceases to
accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, any Subsidiary Guarantor or an Affiliate of
the Company shall be considered as though they are not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded.
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SECTION 2.10. Temporary Securities.
Until Definitive Securities are ready for delivery, the
Company may prepare and, upon written order of the Company, the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate and deliver
Definitive Securities in exchange for a like principal amount of temporary
Securities surrendered to it. Until so exchanged, temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
Definitive Securities.
SECTION 2.11. Cancellation.
The Company or any Subsidiary Guarantor at any time may
deliver Securities to the Trustee for cancellation. The Registrar and Paying
Agent shall forward to the Trustee any Securities surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Securities
surrendered for registration, transfer, exchange, payment or cancellation and
shall destroy canceled Securities unless the Company directs their return to
the Company. Except as provided in Section 2.07, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
Securities that are redeemed by the Company, that are
repurchased by the Company pursuant to Section 4.11 or Section 4.16, or that
are otherwise acquired by the Company, will be surrendered to the Trustee for
cancellation.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay, or cause the Paying Agent to pay, the defaulted
interest in any lawful manner (plus interest on such defaulted interest to the
extent lawful) (taken together, the "Defaulted Interest") to the persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 4.01 hereof. At least 15 days before
the special record date, the Company shall mail to each Holder a notice stating
the special record date, the payment date and the amount of Defaulted Interest
to be paid. In the event that the Company has elected to cause a Paying Agent
to pay the Defaulted Interest, the Company shall so notify the Paying Agent at
least 15 days before the special record date, which notice shall also set forth
the special record date, the payment date and the aggregate amount of Defaulted
Interest to be paid. At least five days before such payment date, the Company
shall deposit with the Paying Agent money sufficient to pay all of the
Defaulted Interest on the payment date therefor and instruct the Paying Agent
in writing to pay to specified Holders on the payment date. On the payment
date, the Paying Agent shall make the payments in accordance with the Company's
written instructions from funds deposited with the Paying Agent for the purpose
of making such Defaulted Interest payments.
SECTION 2.13. Persons Deemed Owners.
The Company, the Trustee, any Paying Agent and any
authenticating agent may treat the Person in whose name any Security
(including, without limitation, any Global Security) is registered as the owner
of such Security for the purpose of receiving payments of principal of,
premium, if any, or interest on such Security and for all other purposes. None
of the Company, the Trustee, any Paying Agent or any authenticating agent shall
be affected by any notice to the contrary.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notice to Trustee.
If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Paragraphs 6, 7 or 8 of the Securities, it
shall furnish to the Trustee and the Registrar, at least 45 days but not more
than 60 days before the redemption date (unless the Trustee consents to a
shorter period in writing), an Officers' Certificate
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setting forth the redemption date, the principal amount of Securities to be
redeemed and the redemption price, including the detail of the calculation of
the Make-Whole Price, if applicable.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed at any
time, the Trustee shall select the Securities to be redeemed pro rata, by lot
or, if the Securities are listed on any securities exchange, by any other
method that the Trustee considers fair and appropriate and that complies with
the requirements of such exchange; provided, however, that no Securities with a
principal amount of $1,000 or less will be redeemed in part. The Trustee shall
make the selection from outstanding Securities not previously called for
redemption not less than 30 nor more than 45 days prior to the redemption date.
Securities and portions of them it selects shall be in amounts of $1,000 or
whole multiples of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption. The Trustee shall notify the Company promptly of the Securities
or portions of Securities selected for redemption.
SECTION 3.03. Notice of Redemption.
(a) At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities to be redeemed at such Holder's registered
address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the aggregate principal amount of Securities
being redeemed;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in
such notice to collect the redemption price;
(6) that, unless the Company defaults in the
payment of the redemption price or accrued interest, interest
on Securities called for redemption ceases to accrue on and
after the redemption date and the only remaining right of the
Holders is to receive payment of the redemption prices in
respect of the Securities upon surrender to the Paying Agent
of the Securities;
(7) if any Security is being redeemed in part,
the portion of the principal amount of such Security to be
redeemed and that, after the redemption date, upon surrender
of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion will be issued in the
name of the Holder thereof upon cancellation of the Security
or Securities being redeemed;
(8) the paragraph of the Securities pursuant to
which the Securities called for redemption are being redeemed;
and
(9) the CUSIP number of the Securities.
(b) At the Company's request, the Trustee shall give the
notice of redemption required in Section 3.03(a) in the Company's name and at
the Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the redemption date (unless the Trustee
consents to a shorter notice period in writing), an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in Section 3.03(a).
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03, Securities called for redemption become due and payable on the redemption
date at the redemption price. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued and unpaid
interest to the redemption date.
SECTION 3.05. Deposit of Redemption Price.
Prior to the redemption date, the Company shall deposit with
the Paying Agent funds available on the redemption date sufficient to pay the
redemption price of, and accrued and unpaid interest on, the Securities to be
redeemed on that date. The Paying Agent shall promptly return to the Company
any money so deposited which is not required for that purpose upon the written
request of the Company, except with respect to monies owed as obligations to
the Trustee pursuant to Article Seven.
If any Security called for redemption shall not be so paid
upon redemption because of the failure of the Company to comply with the
preceding paragraph, interest will continue to be payable on the unpaid
principal and premium, if any, including from the redemption date until such
principal and premium, if any, is paid, and, to the extent lawful, on any
interest not paid on such unpaid principal, in each case at the rate provided
in the Securities and in Section 4.01 hereof.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part,
the Company shall issue and the Trustee shall authenticate for the Holder, at
the expense of the Company, a new Security equal in aggregate amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption.
Except as set forth in Sections 3.08 and 3.09 hereof, the
Company shall not have the option to redeem the Securities prior to May 1,
2002. The Securities may be redeemed at the option of the Company, in whole or
from time to time in part, at any time on or after May 1, 2002, at the
redemption prices set forth below (expressed as a percentage of the principal
amount of the Securities to be redeemed), together with accrued and unpaid
interest on the Securities so redeemed to the redemption date, if redeemed
during the 12-month period commencing on May 1 of the years indicated below:
Redemption
Year Price
---- ----------
2002 . . . . . . . . . . . . . . . . . . . . 104.813%
2003 . . . . . . . . . . . . . . . . . . . . 102.406%
2004 and thereafter . . . . . . . . . . . . 100.000%
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.08. Equity Offering Redemption.
In the event the Company consummates one or more Equity
Offerings on or prior to May 1, 2001, the Company may redeem, in its sole
discretion, up to $167,000,000 of the aggregate principal amount of the
Securities with all or a portion of the aggregate net proceeds received by the
Company from any such Equity Offering or Equity Offerings at a redemption price
of 109.625% of the aggregate principal amount of the Securities so redeemed,
plus accrued and unpaid interest on the Securities so redeemed to the
redemption date; provided, however, that (i) the date of any such redemption
occurs within the 90-day period after the Equity Offering in respect of which
such redemption
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is made and (ii) following each such redemption, at least $333,000,000 of the
aggregate principal amount of the Securities remains outstanding.
Any redemption pursuant to this Section 3.08 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.09. Optional Redemption at Make-Whole Price.
At any time prior to May 1, 2002, the Company may, at its
option, redeem all or any portion of the Securities at the "Make-Whole Price"
(hereinafter defined) plus accrued and unpaid interest on the Securities so
redeemed to the date of redemption. For purposes hereof, the term "Make-Whole
Price" means the greater of (i) the sum of (A) the outstanding principal amount
of the Securities to be redeemed plus (B) the Make-Whole Amount and (ii) the
redemption price (expressed as a percentage of the principal amount) of the
Securities on May 1, 2002 set forth in Section 3.07.
Any redemption pursuant to this Section 3.09 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of, premium, if any, and
interest on, the Securities on the dates and in the manner provided in the
Securities and this Indenture. Principal, premium and interest shall be
considered paid on the date due if the Trustee or Paying Agent holds on that
date money deposited by the Company designated for and sufficient to pay all
principal, premium and interest then due. All references to interest in this
Indenture shall for all purposes be deemed to include any additional interest
payable as liquidated damages pursuant to the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal, and
premium, if any, at the rate borne by the Securities to the extent lawful; and
it shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. SEC Reports.
(a) The Company, within 15 days after it files the same
with the SEC, shall deliver to Holders, copies of the annual reports and the
information, documents and other reports (or copies of any such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC and provide Holders with such annual
reports and such information, documents and other reports specified in Sections
13 and 15(d) of the Exchange Act. The Company and each Subsidiary Guarantor
shall also comply with the provisions of TIA Section 314(a).
(b) The Company may request the Trustee on behalf of the
Company at the Company's expense to mail the foregoing to Holders. In such
case, the Company shall provide the Trustee with a sufficient number of copies
of all reports and other documents and information that the Trustee may be
required to deliver to Holders under this Section.
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SECTION 4.03. Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company, an Officers' Certificate
substantially in the form of Exhibit J hereto, stating that a review of the
activities of the Company and the Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that, to the best of such Officer's knowledge, the
Company and each Subsidiary Guarantor has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which such Officer may
have knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of such Officer's knowledge, after
reasonable inquiry, no event has occurred and remains in existence by reason of
which payments on account of the principal of, premium, if any, or interest, if
any, on the Securities are prohibited or, if such event has occurred, a
description of the event and what action the Company and the Subsidiary
Guarantors are taking or propose to take with respect thereto. Such Officers'
Certificate shall comply with TIA Section 314(a)(4). The Company hereby
represents that, as of the Issue Date, its fiscal year ends December 31, and
hereby covenants that it shall notify the Trustee at least 30 days in advance
of any change in its fiscal year.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.02 shall be
accompanied by a written statement of the Company's independent public
accountants (which shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Sections 4.07, 4.09, 4.10, 4.11 or 4.15
of this Indenture (to the extent such provisions relate to accounting matters)
or, if any such violation has occurred, specifying the nature and period of
existence thereof. Where such financial statements are not accompanied by such
a written statement, the Company shall furnish the Trustee with an Officers'
Certificate stating that any such written statement would be contrary to the
then current recommendations of the American Institute of Certified Public
Accountants.
(c) The Company and the Subsidiary Guarantors will, so
long as any of the Securities are outstanding, deliver to the Trustee forthwith
upon any Officer becoming aware of any Default or Event of Default or default
in the performance of any covenant, agreement or condition contained in this
Indenture, an Officers' Certificate specifying such Default or Event of Default
and what action the Company or any Subsidiary Guarantor proposes to take with
respect thereto.
SECTION 4.04. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 11.02. If at any time the
Company shall fail to maintain any required office or agency or shall fail to
furnish the Trustee with the address thereof, such surrenders, presentations,
notices and demands may be made or served at the corporate trust office of the
Trustee.
Subject to Section 2.03, the Company may also from time to
time designate one or more other offices or agencies where the Securities may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
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SECTION 4.05. Corporate Existence.
The Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Subsidiary and all rights
(charter and statutory) and franchises of the Company and the Subsidiaries;
provided, that the Company shall not be required to preserve the corporate
existence of any Subsidiary, or any such right or franchise, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.06. Waiver of Stay, Extension or Usury Laws.
The Company and each Subsidiary Guarantor covenants (to the
extent that each may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension, or usury law or other law, which would prohibit or forgive
the Company or any Subsidiary Guarantor from paying all or any portion of the
principal of, premium, if any, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each of the Company and the Subsidiary Guarantors
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 4.07. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary and
(b) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 4.08. Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or held
for use in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any such property, or disposing of it, if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct of its
business and not disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided,
for itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry.
SECTION 4.09. Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries, directly or indirectly, to issue, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to or
otherwise become responsible for the payment of (collectively, "incur") any
Indebtedness; provided, however, that if no Default
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or Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness, the Company or its
Restricted Subsidiaries may incur Indebtedness if, on a pro forma basis, after
giving effect to such incurrence and the application of the proceeds therefrom,
either of the following tests shall have been satisfied: (i) the Adjusted
Consolidated EBITDA Coverage Ratio would have been at least 2.25 to 1.0; or
(ii) Adjusted Consolidated Net Tangible Assets would have been equal to or
greater than 200% of Indebtedness of the Company and its Restricted
Subsidiaries.
(b) Notwithstanding the foregoing, if no Default or Event
of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness, the Company and its
Restricted Subsidiaries may incur Permitted Indebtedness.
(c) Any Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary.
SECTION 4.10. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted
Payment, unless:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of or immediately after
giving effect to such Restricted Payment;
(ii) at the time of and immediately after giving
effect to such Restricted Payment, the Company would be able
to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section 4.09(a); and
(iii) immediately after giving effect to such
Restricted Payment, the aggregate of all Restricted Payments
declared or made after the Issue Date does not exceed the sum
of (A) 50% of the Consolidated Net Income of the Company and
its Restricted Subsidiaries (or in the event such Consolidated
Net Income shall be a deficit, minus 100% of such deficit)
during the period (treated as one accounting period)
subsequent to March 31, 1998 and ending on the last day of the
fiscal quarter immediately preceding the date of such
Restricted Payment; (B) the aggregate Net Cash Proceeds, and
the fair market value of property other than cash (as
determined in good faith by the Company's Board of Directors,
including a majority of the Company's Disinterested Directors,
and evidenced by a resolution of such Board), received by the
Company during such period from any Person other than a
Subsidiary of the Company as a result of the issuance or sale
of Capital Stock of the Company (other than any Disqualified
Stock and other than Preferred Shares issued in the Preferred
Stock Offering), other than in connection with the conversion
of Indebtedness or Disqualified Stock; (C) the aggregate Net
Cash Proceeds, and the fair market value of property other
than cash (as determined in good faith by the Company's Board
of Directors and evidenced by a resolution of such Board),
received by the Company during such period from any Person
other than a Subsidiary of the Company as a result of the
issuance or sale of any Indebtedness or Disqualified Stock to
the extent that at the time the determination is made such
Indebtedness or Disqualified Stock, as the case may be, has
been converted into or exchanged for Capital Stock of the
Company (other than Disqualified Stock); (D)(i) in case any
Unrestricted Subsidiary has been redesignated a Restricted
Subsidiary, an amount equal to the lesser of (x) the book
value (determined in accordance with GAAP) at the date of such
redesignation of the aggregate Investments made by the Company
and its Restricted Subsidiaries in such Unrestricted
Subsidiary and (y) the fair market value of such Investments
in such Unrestricted Subsidiary at the time of such
redesignation, as determined in good faith by the Company's
Board of Directors, including a majority of the Company's
Disinterested Directors, whose determination shall be
conclusive and evidenced by a resolution of such Board; or
(ii) in case any Restricted Subsidiary has been redesignated
an Unrestricted Subsidiary, minus the greater of (x) the book
value (determined in accordance with GAAP) at the date of
redesignation of the aggregate Investments made by the
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Company and its Restricted Subsidiaries in such Restricted
Subsidiary and (y) the fair market value of such Investments
in such Restricted Subsidiary at the time of such
redesignation, as determined in good faith by the Company's
Board of Directors, including a majority of the Company's
Disinterested Directors, whose determination shall be
conclusive and evidenced by a resolution of such Board; and
(E) $25,000,000.
(b) Notwithstanding the foregoing, the above limitations
will not prevent (i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment complied
with the provisions hereof; (ii) the purchase, redemption, acquisition or
retirement of any shares of Capital Stock of the Company in exchange for, or
out of the net proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of, other shares of Capital Stock (other
than Disqualified Stock) of the Company; and (iii) any dividend or other
distribution payable from a Subsidiary to the Company or any Restricted
Subsidiary.
SECTION 4.11. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Sale unless:
(i) the Company (or its Restricted Subsidiaries, as
the case may be) receives consideration at the time of such
sale or other disposition at least equal to the fair market
value thereof (as determined in good faith by the Company's
Board of Directors and evidenced by a resolution of such
Board, including a majority of the Company's Disinterested
Directors, in the case of any Asset Sales or series of related
Asset Sales having a fair market value of $20,000,000 or
greater);
(ii) at least 75% of the proceeds from such Asset
Sale consist of cash, cash equivalents or property, equipment,
leasehold interests or other assets used in the Oil and Gas
Business; and
(iii) the Net Available Proceeds received by the
Company (or its Restricted Subsidiaries, as the case may be)
from such Asset Sale are applied in accordance with paragraphs
(b) or (c) hereof.
(b) The Company may apply such Net Available Proceeds
within 365 days after receipt of Net Available Proceeds from any Asset Sale,
to: (i) the repayment of Indebtedness of the Company under a Bank Credit
Facility or other Senior Indebtedness, including any mandatory redemption or
repurchase or optional redemption of the Existing Notes or the Securities; (ii)
make an Investment in assets used in the Oil and Gas Business; or (iii) develop
by drilling the Company's oil and gas reserves.
(c) If, upon completion of the 365-day period referred to
above, any portion of the Net Available Proceeds of any Asset Sale shall not
have been applied by the Company as described in clauses (i), (ii) or (iii) of
the immediately preceding paragraph and such remaining Net Available Proceeds,
together with any remaining net cash proceeds from any prior Asset Sale (such
aggregate constituting "Excess Proceeds"), exceed $15,000,000, then the Company
will be obligated to make an offer (the "Net Proceeds Offer") to purchase the
Securities and any other Senior Indebtedness in respect of which such an offer
to purchase is required to be made concurrently with the Net Proceeds Offer
having an aggregate principal amount equal to the Excess Proceeds (such
purchase to be made on a pro rata basis if the amount available for such
repurchase is less than the principal amount of the Senior Notes and other
Senior Indebtedness tendered in such Net Proceeds Offer) at a purchase price of
100% of the principal amount thereof plus accrued and unpaid interest on the
Securities and other Senior Indebtedness so repurchased to the date of
repurchase. Upon the completion of the Net Proceeds Offer, the amount of Excess
Proceeds will be reset to zero.
(d) The Company shall commence a Net Proceeds Offer by
preparing and mailing a notice to the Trustee, the Paying Agent and each Holder
as of such record date as the Company shall establish (upon written notice to
the Trustee). Notice of a Net Proceeds Offer to purchase the Securities will
be made on behalf of the Company not less than 25 Business Days nor more than
60 Business Days before the payment date of the Net Proceeds Offer (the "Net
Proceeds Payment Date"), and shall set forth the Net Proceeds Offer Amount and
the Net Proceeds Payment Date and refer to and summarize the material points
contained in Sections 4.11(d) and (e) hereof. Securities tendered to the
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Company pursuant to a Net Proceeds Offer will cease to accrue interest after
the Net Proceeds Payment Date. For purposes of this covenant, the term "Net
Proceeds Offer Amount" means the principal of outstanding Securities in an
aggregate principal amount equal to any remaining Net Available Proceeds
(rounded to the next lowest $1,000). If the Net Proceeds Payment Date is on or
after an interest payment record date and on or before the related interest
payment date, any accrued interest payable on such interest payment date will
be paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Net Proceeds Offer.
(e) On the Net Proceeds Payment Date, the Company will
(i) accept for payment Securities and any other Senior Indebtedness in respect
of which such an offer to purchase is required to be made concurrently with the
Net Proceeds Offer or portions thereof pursuant to the Net Proceeds Offer in
an aggregate principal amount equal to the Net Proceeds Offer Amount or such
lesser amount as has been tendered, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Securities and such other Senior
Indebtedness or portions thereof so tendered in an aggregate principal amount
equal to the Net Proceeds Offer Amount or such lesser amount, including any
accrued and unpaid interest thereon, and (iii) deliver or cause to be delivered
to the Trustee, Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof tendered to the Company. If the
aggregate principal amount of Securities and such other Senior Indebtedness
tendered exceeds the Net Proceeds Offer Amount, the Trustee will select the
Securities and other Senior Indebtedness to be purchased (in integral multiples
of $1,000) on a pro rata basis based on the principal amount of Securities and
other Senior Indebtedness so tendered and notify the Company, the Registrar and
the Paying Agent. The Paying Agent, upon instruction of the Company, will
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the purchase price (representing those funds received pursuant
to clause (ii) of this Section 4.11(e)), and the Company will execute and the
Trustee will promptly authenticate and mail or make available for delivery to
Holders a new Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted will be promptly
mailed or delivered to the Holder thereof by the Company, or, if the Company so
directs the Trustee, by the Trustee on behalf of the Company at the Company's
expense. The Company will publicly announce the results of the Net Proceeds
Offer on or as soon as practicable after the Net Proceeds Payment Date. For
purposes of this Section 4.11, the Trustee will act as the Paying Agent.
(f) The Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other federal and state securities laws,
rules and regulations which may then be applicable to any Net Proceeds Offer.
(g) During the period between any Asset Sale and the
application of the Net Available Proceeds therefrom in accordance with this
covenant, all Net Available Proceeds shall be maintained in a segregated
account and shall be invested in Permitted Financial Investments.
(h) Notwithstanding the foregoing, the Company will not
and will not permit any Restricted Subsidiary to, directly or indirectly, make
any Asset Sale of any of the Capital Stock of a Restricted Subsidiary except
pursuant to an Asset Sale of all of the Capital Stock of such Restricted
Subsidiary.
SECTION 4.12. Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens
(other than Permitted Liens) upon any of their respective properties securing
(i) any Indebtedness of the Company, unless the Securities are equally and
ratably secured or (ii) any Indebtedness of any Restricted Subsidiary, unless
the Guarantees are equally and ratably secured; provided, that if such
Indebtedness is expressly subordinated to the Securities or the Guarantees, the
Lien securing such Indebtedness will be subordinated and junior to any Lien
securing the Securities or the Guarantees, with the same relative priority as
such Subordinated Indebtedness of the Company or Subordinated Indebtedness of a
Restricted Subsidiary will have with respect to the Securities or the
Guarantees, as the case may be.
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SECTION 4.13. Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, enter into any Sale/Leaseback Transaction with any
Person (other than the Company or any Wholly Owned Restricted Subsidiary)
unless (i) the Company or such Restricted Subsidiary, as the case may be, would
be able to incur Indebtedness in a principal amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction in accordance with
Section 4.09 or (ii) the Company or such Restricted Subsidiary receives
proceeds from such Sale/Leaseback Transaction at least equal to the fair market
value thereof (as determined in good faith by the Company's Board of Directors,
whose determination in good faith, evidenced by a resolution of such Board
shall be conclusive) and such proceeds are applied in the same manner and to
the same extent as Net Available Proceeds and Excess Proceeds from an Asset
Sale.
SECTION 4.14. Limitation on Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any Restricted Subsidiary of the Company to (i)
pay dividends or make any other distributions on its Capital Stock or on any
other interest or participation in the Company or a Restricted Subsidiary, (ii)
pay any Indebtedness owed to the Company or a Restricted Subsidiary of the
Company; (iii) make loans or advances to the Company or a Restricted Subsidiary
of the Company; or (iv) transfer any of its properties or assets to the Company
or a Restricted Subsidiary of the Company (each, a "Payment Restriction"),
except for (a) encumbrances or restrictions under a Bank Credit Facility;
provided, that any Payment Restrictions thereunder (other than, with respect to
(iv) above, customary restrictions in security agreements or other loan
documents thereunder securing or governing Indebtedness of a Restricted
Subsidiary) may be imposed only upon the acceleration of the maturity of the
Indebtedness thereunder; (b) consensual encumbrances or consensual restrictions
binding upon any Person at the time such Person becomes a Restricted Subsidiary
of the Company (unless the agreement creating such consensual encumbrances or
consensual restrictions was entered into in connection with, or in
contemplation of, such entity becoming a Restricted Subsidiary); (c) consensual
encumbrances or consensual restrictions under any agreement that refinances or
replaces any agreement described in clauses (a) and (b) above, provided that
the terms and conditions of any such restrictions are in the aggregate no less
favorable to the holders of the Securities than those under the agreement so
refinanced or replaced; and (d) customary non-assignment provisions in leases,
purchase money financings and any encumbrance or restriction due to applicable
law.
SECTION 4.15. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any transaction
or series of transactions (including, without limitation, the sale, purchase or
lease of any assets or properties or the rendering of any services) with any
Affiliate or beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of 10% or more of the Company's common stock (other than with a
Wholly Owned Restricted Subsidiary of the Company) (an "Affiliate
Transaction"), on terms that are less favorable to the Company or such
Restricted Subsidiary, as the case may be, than would be available in a
comparable transaction with an unrelated Person. In addition, the Company will
not, and will not permit any Restricted Subsidiary of the Company to, enter
into an Affiliate Transaction, or any series of related Affiliate Transactions
having a value of (a) more than $5,000,000 unless a majority of the Board of
Directors of the Company (including a majority of the Company's Disinterested
Directors) determines in good faith, as evidenced by a resolution of such
Board, that such Affiliate Transaction or series of related Affiliate
Transactions is fair to the Company; or (b) more than $25,000,000, unless the
Company receives a written opinion from a nationally recognized investment
banking firm with total assets in excess of $1.0 billion that such transaction
or series of transactions is fair to the Company from a financial point of
view.
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SECTION 4.16. Change of Control.
(a) Following the occurrence of any Change of Control,
the Company shall offer (a "Change of Control Offer") to purchase all
outstanding Securities at a purchase price equal to 101% of the aggregate
outstanding principal amount of the Securities, plus accrued and unpaid
interest on the Securities so purchased to the date of purchase. The Change of
Control Offer shall be deemed to have commenced upon mailing of the notice
described in the next succeeding paragraph and shall terminate 20 Business Days
after its commencement, unless a longer offering period is required by law.
Promptly after the termination of the Change of Control Offer (the "Change of
Control Payment Date"), the Company shall purchase and mail or deliver payment
for all Securities tendered in response to the Change of Control Offer. If the
Change of Control Payment Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest
payable on such interest payment date will be paid to the Person in whose name
a Security is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Securities pursuant
to the Change of Control Offer.
(b) Within 15 days after any Change of Control, the
Company (with notice to the Trustee and the Paying Agent), or the Trustee at
the Company's request and expense, will mail or cause to be mailed to all
Holders on the date of the Change of Control a notice prepared by the Company
(the "Change of Control Notice") of the occurrence of such Change of Control
and of the Holders' rights arising as a result thereof. The Change of Control
Notice will contain all instructions and materials necessary to enable Holders
to tender their Securities to the Company. The Change of Control Notice, which
shall govern the terms of the Change of Control Offer, shall state: (1) that
the Change of Control Offer is being made pursuant to this Section 4.16; (2)
the purchase price and the Change of Control Payment Date; (3) that any
Security not tendered will continue to accrue interest at the stated rate; (4)
that any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest on the Change of Control Payment Date; (5) that
Holders electing to have a Security purchased pursuant to any Change of Control
Offer will be required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Security completed,
to the Company, a depositary, if appointed by the Company, or a Paying Agent at
the address specified in the notice prior to termination of the Change of
Control Offer; (6) that Holders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Change of Control Offer, or such longer period
as may be required by law, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security the
Holder delivered for purchase and a statement that such Holder is withdrawing
its election to have the Security purchased; and (7) that Holders whose
Securities are purchased only in part will be issued Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(c) On the Change of Control Payment Date, the Company
shall, to the extent permitted by applicable law, (i) accept for payment
Securities or portions thereof tendered pursuant to the Change of Control
Notice, (ii) if the Company appoints a depositary or Paying Agent, deposit with
such depositary or Paying Agent money sufficient to pay the purchase price of
all Securities or portions thereof so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof tendered to the Company. The depositary, the
Company or the Paying Agent, as the case may be, shall promptly mail to the
Holders of Securities so accepted payment in an amount equal to the purchase
price (representing those funds received pursuant to clause (ii) of this
Section 4.16(c)), and the Trustee shall promptly authenticate and mail to each
such Holder a new Security equal in principal amount to any unpurchased portion
of the Security surrendered; provided that each such new Security will be in a
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section 4.16, the Trustee shall act as the Paying Agent.
(d) The Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other federal and state securities laws,
rules and regulations which may then be applicable to any offer by the Company
to purchase the Securities at the option of the Holders upon a Change of
Control.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into
any Person or sell, convey, lease, transfer or otherwise dispose of all or
substantially all of its assets to any Person, unless:
(1) the Company survives such merger or the
Person formed by such consolidation or into which the Company
is merged or that acquires by sale, conveyance, transfer or
other disposition, or which leases, all or substantially all
of the assets of the Company is a corporation organized and
existing under the laws of the United States of America, any
state thereof or the District of Columbia, or Canada or any
province thereof, and expressly assumes, by supplemental
indenture, the due and punctual payment of the principal of,
premium, if any, and interest on, all the Securities and the
performance of every other covenant and obligation of the
Company under this Indenture;
(2) immediately before and after giving effect to
such transaction no Default or Event of Default exists;
(3) immediately after giving effect to such
transaction on a pro forma basis, the Consolidated Tangible
Net Worth of the Company (or the surviving or transferee
entity) is equal to or greater than the Consolidated Tangible
Net Worth of the Company immediately before such transaction;
and
(4) immediately after giving effect to such
transaction on a pro forma basis, the Company (or the
surviving or transferee entity) would be able to incur $1.00
of additional Indebtedness under the test described in Section
4.09(a) (other than Permitted Indebtedness).
In connection with any consolidation, merger, sale,
conveyance, lease, transfer or other disposition contemplated by this Section
5.01, the Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, merger, lease, conveyance or transfer
in accordance with Section 5.01, the Trustee shall be notified by the Company
and the successor Person, and the successor Person formed by such consolidation
or into which the Company is merged or to which such lease, conveyance or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor had been named as the Company herein and thereafter
(except in the case of a lease) the predecessor corporation will be relieved of
all further obligations and covenants under this Indenture and the Securities.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs upon:
(1) default by the Company or any Subsidiary
Guarantor in the payment of principal of, or premium, if any,
on the Securities when due and payable at maturity, upon
repurchase pursuant to Section 4.11 or 4.16, upon acceleration
or otherwise;
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(2) default by the Company or any Subsidiary
Guarantor in the payment of any installment of interest on the
Securities when due and payable and continuance of such
default for 30 days;
(3) default by the Company or any Subsidiary
Guarantor in the deposit of any optional redemption payment,
when and as due and payable pursuant to Article Three;
(4) default on any other Indebtedness (other than
Non-Recourse Indebtedness and Unrestricted Subsidiary
Indebtedness) of the Company, any Subsidiary Guarantor or any
other Subsidiary (other than a Non-Recourse Subsidiary or an
Unrestricted Subsidiary) if either (A) such default results in
the acceleration of the maturity of any such Indebtedness
having a principal amount of $10.0 million or more
individually or, taken together with the principal amount of
any other such Indebtedness the maturity of which has been so
accelerated, in the aggregate, or (B) such default results
from the failure to pay when due principal of, premium, if
any, or interest on, any such Indebtedness, after giving
effect to any applicable grace period (a "Payment Default"),
having a principal amount of $10.0 million or more
individually or, taken together with the principal amount of
any other Indebtedness under which there has been a Payment
Default, in the aggregate;
(5) default in the performance, or breach of, the
covenants set forth in Section 4.10 and Article V, or in the
performance, or breach of, any other covenant or agreement of
the Company or any Subsidiary Guarantor in this Indenture and
failure to remedy such default within a period of 45 days
after written notice thereof from the Trustee or Holders of
25% of the principal amount of the outstanding Securities;
(6) the entry by a court of one or more judgments
or orders for the payment of money against the Company, any
Subsidiary Guarantor or any other Subsidiary (other than a
Non-Recourse Subsidiary or an Unrestricted Subsidiary,
provided that neither the Company nor any Restricted
Subsidiary is liable, directly or indirectly, for such
judgment or order) in an aggregate amount in excess of $10.0
million (net of applicable insurance coverage by a third party
insurer which is acknowledged in writing by such insurer) that
has not been vacated, discharged, satisfied or stayed pending
appeal within 60 days from the entry thereof;
(7) a Guarantee by a Subsidiary Guarantor shall
cease to be in full force and effect (other than a release of
a Guarantee in accordance with Section 10.04) or any
Subsidiary Guarantor shall deny or disaffirm its obligations
with respect thereto;
(8) the Company or any Subsidiary (other than a
Non-Recourse Subsidiary or an Unrestricted Subsidiary)
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or
proceeding,
(B) consents to the entry of an order
for relief against it in an involuntary case or
proceeding,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of
its property,
(D) makes a general assignment for the
benefit of its creditors, or
(E) admits in writing that it generally
is unable to pay its debts as the same become due; or
(9) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
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(A) is for relief (with respect to the
petition commencing such case) against the Company or
any Subsidiary (other than a Non-Recourse Subsidiary
or an Unrestricted Subsidiary) in an involuntary case
or proceeding,
(B) appoints a Custodian of the Company
or any Subsidiary (other than a Non- Recourse
Subsidiary or an Unrestricted Subsidiary) or for all
or substantially all of its property, or
(C) orders the liquidation of the
Company or any Subsidiary (other than a Non- Recourse
Subsidiary or an Unrestricted Subsidiary),
and the order or decree remains unstayed and in effect for 60
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in clauses (8) or (9)) under Section 6.01 occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than 25% of
the principal amount of the outstanding Securities may declare the unpaid
principal of and premium, if any, or the Change of Control purchase price if
the Event of Default includes failure to pay the Change of Control purchase
price, and accrued and unpaid interest on, all the Securities then outstanding
to be due and payable, by a notice in writing to the Company (and to the
Trustee, if given by Holders), and upon any such declaration such principal,
premium, if any, and accrued and unpaid interest shall become immediately due
and payable, notwithstanding anything contained in this Indenture or the
Securities to the contrary. If an Event of Default specified in clauses 8 or 9
above occurs, all unpaid principal of, and premium, if any, and accrued and
unpaid interest on, the Securities then outstanding will become due and
payable, without any declaration or other act on the part of the Trustee or any
Holder.
The Holders of a majority of the principal amount of the
outstanding Securities, by written notice to the Company, the Subsidiary
Guarantors and the Trustee, may rescind and annul a declaration of acceleration
and its consequences if (1) the Company or any Subsidiary Guarantor has paid or
deposited with such Trustee a sum sufficient to pay (A) all overdue
installments of interest on all the Securities, (B) the principal of, and
premium, if any, on any Securities that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in the Securities, (C) to the extent that payment of such
interest is lawful, interest on the defaulted interest at the rate or rates
prescribed therefor in the Securities, and (D) all money paid or advanced by
the Trustee thereunder and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel; (2) all Events of Default,
other than the non-payment of the principal of any Securities that have become
due solely by such declaration of acceleration, have been cured or waived as
provided in this Indenture; and (3) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction. No such rescission
will affect any subsequent Event of Default or impair any right consequent
thereon.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may, but is not obligated to, pursue, in its own name and as trustee of an
express trust, any available remedy by proceeding at law or in equity to
collect the payment of principal or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture. If an
Event of Default specified under clauses (8) or (9) of Section 6.01 occurs with
respect to the Company at a time when the Company is the Paying Agent, the
Trustee shall automatically assume the duties of Paying Agent.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in exercising any
right or
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remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of at least a
majority of the principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a Default or Event of Default in payment of principal or interest on the
Securities, including any optional redemption payments or Change of Control or
Net Proceeds Offer payments.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on such Trustee, provided that (1) such direction
is not in conflict with any rule of law or with this Indenture and (2) the
Trustee may take any other action deemed proper by such Trustee that is not
inconsistent with such direction.
SECTION 6.06. Limitation on Remedies.
No Holder of any of the Securities will have any right to
institute any proceeding, judicial or otherwise, or for the appointment of a
receiver or trustee or pursue any remedy under this Indenture, unless:
(1) such Holder has previously given notice to
the Trustee of a continuing Event of Default,
(2) the Holders of not less than 25% of the
principal amount of the outstanding Securities have made
written request to such Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee
under this Indenture,
(3) such Holder or Holders have offered to such
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request,
(4) such Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any proceeding, and
(5) no direction inconsistent with such written
request has been given to such Trustee during such 60-day
period by the Holders of a majority of the principal amount of
the outstanding Securities.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over other Holders.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
Holder of any Securities will have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Securities on the stated maturity therefor and to institute suit for the
enforcement of any such payment, and such right may not be impaired without the
consent of such Holder.
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SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium, if
any, or interest specified in Section 6.01(1), (2) or (3) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any Subsidiary Guarantor for the whole
amount of principal, premium, if any, and interest remaining unpaid with
respect to the Securities, and interest on overdue principal and premium, if
any, and, to the extent lawful, interest on overdue interest, and such further
amounts as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation and expenses of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Holders allowed in any judicial proceedings
relative to the Company, the Subsidiary Guarantors, their creditors or their
property and may collect and receive any money or securities or other property
payable or deliverable on any such claims and to distribute the same.
(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such rights and powers vested in it by
this Indenture and use the same degree of care and skill in such exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties
that are specifically set forth (or incorporated by reference)
in this Indenture and no others.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine such certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph (c) does not limit the effect
of paragraph (b) of this Section.
(2) The Trustee shall not be liable for any error
of judgment made in good faith by an officer of the Trustee,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect
to action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05, and the Trustee shall be entitled from time to time to
request such a direction.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall be under no obligation and may
refuse to perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense. No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if it shall
have reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on and shall be protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney, to the extent reasonably required by such inquiry or
investigation.
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(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Subsidiaries or Affiliates with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities or any prospectus,
offering or solicitation documents, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Holder pursuant to Section 11.02 a
notice of the Default within 90 days after it occurs. Except in the case of a
Default in any payment on any Security, the Trustee may withhold the notice if
and so long as the board of directors, executive committee or a trust committee
of officers in good faith determines that withholding the notice is in the
interests of Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each April 1, beginning with the April 1
following the date of this Indenture, the Trustee shall mail to each Holder a
brief report dated as of such April 1 that complies with TIA Section 313(a),
but only if such report is required in any year under TIA Section 313(a). The
Trustee also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee in writing when the Securities
become listed on any national securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company and the Subsidiary Guarantors jointly and
severally agree to pay the Trustee from time to time reasonable compensation
for its services (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust). The
Company and the Subsidiary Guarantors jointly and severally agree to reimburse
the Trustee upon request for all reasonable out-of-pocket expenses,
disbursements and advances incurred by it. Such expenses shall include when
applicable the reasonable compensation and expenses of the Trustee's agents and
counsel.
The Trustee shall not be under any obligation to institute any
suit, or take any remedial action under this Indenture, or to enter any
appearance or in any way defend any suit in which it may be a defendant, or to
take any steps in the execution of the trusts created hereby or thereby or in
the enforcement of any rights and powers under this Indenture, until it shall
be indemnified to its satisfaction against any and all reasonable expenses,
disbursements and
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advances incurred or made by the Trustee in accordance with any provisions of
this Indenture, including compensation for services, costs, expenses, outlays,
counsel fees and other disbursements, and against all liability not due to its
negligence or willful misconduct. The Company and the Subsidiary Guarantors
jointly and severally agree to indemnify the Trustee against any loss,
liability or expenses incurred by it arising out of or in connection with the
acceptance and administration of the trust and its duties hereunder as Trustee,
Registrar and/or Paying Agent, including the costs and expenses of enforcing
this Indenture against the Company (including with respect to this Section
7.07) and of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company and the Subsidiary Guarantors of any claim for
which it may seek indemnity; however, unless the position of the Company is
prejudiced by such failure, the failure of the Trustee to promptly notify the
Company shall not limit its right to indemnification. The Company shall defend
each such claim and the Trustee shall cooperate in the defense. The Trustee
may retain separate counsel and the Company shall reimburse the Trustee for the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent.
Neither the Company nor the Subsidiary Guarantors shall be
obligated to reimburse any expense or indemnify against any loss or liability
incurred by the Trustee through the Trustee's negligence or willful misconduct.
To secure the payment obligations of the Company and the
Subsidiary Guarantors in this Section, the Trustee shall have a claim prior to
that of the Holders of the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of and
interest on particular Securities. The Trustee's right to receive payment of
any amounts due under this Section 7.07 shall not be subordinate to any other
liability or Indebtedness of the Company.
When the Trustee incurs expenses or renders services after the
occurrence of any Event of Default specified in Sections 6.01(8) or (9), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company and the
Subsidiary Guarantors. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee, in writing. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section
7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee becomes incapable of acting as
Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company and the Subsidiary
Guarantors. Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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If the Trustee fails to comply with Section 7.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee. Any successor Trustee shall comply
with TIA Section 310(a)(5).
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee; provided such corporation or association shall be otherwise
eligible and qualified under this Article.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall also comply
with TIA Section 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
with respect to the Securities, elect to exercise its rights pursuant to either
Section 8.02 or 8.03 with respect to all outstanding Securities upon compliance
with the conditions set forth below in this Article Eight.
SECTION 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.02, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date all conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Section 8.04, and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Securities
under Sections 2.03, 2.04, 2.06, 2.07, 2.10 and 4.04, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith (including, but not limited to, Section
7.07) and (d) this Article Eight. Subject to compliance with this Article
Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 with
respect to the Securities.
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SECTION 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, the Company shall be released from its
obligations under the covenants contained in the second sentence of Section
4.02, Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, and
4.16 and Article Five with respect to the outstanding Securities on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01(5), but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 of the
option applicable to this Section 8.03, Sections 6.01(4) through 6.01(9) shall
not constitute Events of Default.
SECTION 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to application of either
Section 8.02 or Section 8.03 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or cause
to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 who shall agree to comply with the provisions of
this Article Eight applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a) cash in
U.S. Legal Tender in an amount, or (b) non-callable U.S. Government Securities
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, cash in U.S. Legal Tender in an amount, or
(c) a combination thereof, in such amounts, as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge the principal of, premium, if any, and interest
on the outstanding Securities on the Maturity Date or on the applicable
redemption date, as the case may be, of such principal or installment of
principal, premium, if any, or interest and in accordance with the terms of
this Indenture and of such Securities; provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such non-
callable U.S. Government Securities to said payments with respect to the
Securities.
(b) In the case of an election under Section 8.02, the
Company shall have delivered to the Trustee an Opinion of Counsel confirming
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) since the date hereof, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) In the case of an election under Section 8.03, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the outstanding Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit
or, insofar as Subsection 6.01(8) or 6.01(9) is concerned, at any time in the
period
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ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company is
a party or by which the Company is bound;
(f) In the case of any election under Section 8.02 or
8.03, the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Legal Defeasance under
Section 8.02 or the Covenant Defeasance under Section 8.03 (as the case may be)
have been complied with as contemplated by this Section 8.04.
SECTION 8.05. Deposited Money and U.S. Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06, all money and non-callable U.S.
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 in respect of the outstanding
Securities shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Securities and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company or a
Subsidiary Guarantor, if any, acting as Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or
non-callable U.S. Government Securities deposited pursuant to Section 8.04 or
the principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the Company's request any money or non-callable U.S. Government
Securities held by it as provided in Section 8.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a)), are in excess of the amount thereof
which would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Security which is not subject to the last
paragraph of Section 8.05 and has remained unclaimed for one year after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Securities shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
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SECTION 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or non-callable U.S. Government Securities in accordance with
Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining, or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03, as the case may be; provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Holder:
(1) to cure any ambiguity, defect or
inconsistency;
(2) to comply with Section 5.01;
(3) to reflect the addition or release of any
Subsidiary Guarantor, as provided for by this Indenture;
(4) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA; or
(5) to make any change that would provide any
additional benefit or rights to the Holders or that does not
adversely affect the rights of any Holder in any material
respect.
Upon the request of the Company and the Subsidiary Guarantors,
accompanied by a Board Resolution of the Company and of each Subsidiary
Guarantor authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall join with the Company and the Subsidiary Guarantors in the
execution of any supplemental indenture authorized or permitted by the terms of
this Indenture and make any further appropriate agreements and stipulations
that may be therein contained. After an amendment or waiver under this Section
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.02. With Consent of Holders.
Except as provided below in this Section 9.02, the Company,
the Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities with the written consent (including consents obtained in connection
with a tender offer or exchange offer for Securities or a solicitation of
consents in respect of Securities, provided that in each case such offer or
solicitation is made to all Holders of then outstanding Securities on equal
terms) of the Holders of at least a majority of the principal amount of the
outstanding Securities.
Upon the request of the Company and the Subsidiary Guarantors,
accompanied by a Board Resolution of the Company and each Subsidiary Guarantor
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders as aforesaid,
and upon receipt by the Trustee of the
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Opinion of Counsel described in Section 9.06, the Trustee shall join with the
Company and the Subsidiary Guarantors in the execution of such supplemental
indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
The Holders of a majority of the principal amount of the
outstanding Securities may waive compliance in a particular instance by the
Company or the Subsidiary Guarantors with any provision of this Indenture or
the Securities (including waivers obtained in connection with a tender offer or
exchange offer for Securities or a solicitation of consents in respect of
Securities, provided that in each case such offer or solicitation is made to
all Holders of the then outstanding Securities on equal terms). However,
without the consent of each Holder affected, an amendment or waiver under this
Section may not:
(1) reduce the percentage of principal amount of
Securities whose Holders must consent to an amendment,
supplement or waiver of any provision of this Indenture or the
Securities;
(2) reduce the rate or change the time for
payment of interest, including default interest, on the
Securities;
(3) reduce the principal amount of any Security
or change the Maturity Date of the Securities;
(4) reduce the redemption price, including
premium, if any, payable upon the redemption of any Security
or change the time at which any Security may be redeemed;
(5) reduce the repurchase price, including
premium, if any, payable upon the repurchase of any Security
pursuant to Sections 4.11 or 4.16, or change the time at which
any Security may or shall be repurchased thereunder;
(6) waive a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on
the Securities;
(7) make any Security payable in money other than
that stated in the Security;
(8) impair the right to institute suit for the
enforcement of principal of, premium, if any, or principal on
any Security pursuant to Sections 6.07 or 6.08, except as
limited by Section 6.06; or
(9) make any change in Section 6.04 or Section
6.07 or in this sentence of this Section 9.02.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of this Indenture (and the obligation of
the Company to obtain any such consent otherwise required from such Holder) may
be subject to the requirement that such Holder shall have been the Holder of
record of any Securities with respect to which such consent is required or
sought as of a date identified by the Trustee in a notice furnished to Holders
in accordance with the terms of this Indenture.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
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SECTION 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of
a Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security.
However, until an amendment, supplement or waiver becomes effective, any such
Holder or subsequent Holder may revoke the consent as to its Security or
portion of a Security. For such revocation to be effective, the Trustee must
receive the notice of revocation before the date the amendment, supplement or
waiver becomes effective.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment or waiver. If the Company elects to fix a record date for such
purpose, the record date shall be fixed at (i) the later of 30 days prior to
the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05, or (ii) such other date as the Company shall designate. If a record date
is fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment or waiver or to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No consent
shall be valid or effective for more than 90 days after such record date unless
consent from the Holders of the principal amount of Securities required
hereunder for such amendment or waiver to be effective also shall have been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it makes a change described in any of clauses
(1) through (9) of Section 9.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Senior Notes.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
SECTION 9.06. Trustee Protected.
The Trustee shall sign any amendment or supplement or waiver
authorized pursuant to this Article if the amendment or supplement or waiver
does not adversely affect the rights of the Trustee. If it does adversely
affect the rights of the Trustee, the Trustee may but need not sign it. In
signing such amendment or supplement or waiver the Trustee shall be entitled to
receive, and (subject to Article Seven) shall be fully protected in relying
upon, an Opinion of Counsel stating that such amendment or supplement or waiver
is authorized or permitted by and complies with this Indenture. The Company
may not sign an amendment or supplement until the Boards of Directors of the
Company and the Subsidiary Guarantors approve it.
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby, jointly and severally, fully
and unconditionally guarantees, as principal obligor and not only as surety
(such guarantee to be referred to herein as the "Guarantee"), to each Holder
and to the Trustee the due and punctual payment of the principal of, premium,
if any, and interest on the Securities and all other amounts due and payable
under this Indenture and the Securities by the Company whether at maturity, by
acceleration, redemption, repurchase or otherwise, including, without
limitation, interest on the overdue principal of,
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premium, if any, and interest on the Securities, to the extent lawful, all in
accordance with the terms hereof and thereof; subject, however, to the
limitations set forth in Section 10.05.
Failing payment when due of any amount so guaranteed for
whatever reason, the Subsidiary Guarantors will be jointly and severally
obligated to pay the same immediately. Each Subsidiary Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Securities or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Securities with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and in this Guarantee. If any Holder or the Trustee is required by
any court or otherwise to return to the Company, any Subsidiary Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Subsidiary Guarantor, any amount paid by the Company or
any Subsidiary Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Six for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Six, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Subsidiary
Guarantor for the purpose of this Guarantee.
SECTION 10.02. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Subject to paragraph (b) of this Section 10.02, no
Subsidiary Guarantor may consolidate or merge with or into (whether or not such
Subsidiary Guarantor is the surviving entity or Person) another corporation,
entity or Person unless (i) the entity or Person formed by or surviving any
such consolidation or merger (if other than such Subsidiary Guarantor) assumes
all the obligations of such Subsidiary Guarantor pursuant to a supplemental
indenture, in a form reasonably satisfactory to the Trustee, under the
Securities and this Indenture, (ii) immediately after such transaction, no
Default or Event of Default exists, (iii) such Subsidiary Guarantor or the
entity or Person formed by or surviving any such consolidation or merger will
have Consolidated Tangible Net Worth (immediately after the transaction) equal
to or greater than the Consolidated Tangible Net Worth of such Subsidiary
Guarantor immediately preceding the transaction and (iv) the Company will, at
the time of such transaction after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable Reference Period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to
Section 4.09(a). In connection with any consolidation or merger contemplated
by this Section 10.02, the Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture. This
Section 10.02(a) will not prohibit a merger between Subsidiary Guarantors or a
merger between the Company and a Subsidiary Guarantor.
(b) In the event of a sale or other disposition of all or
substantially all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of such Subsidiary Guarantor, then such Subsidiary Guarantor (in
the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the Capital Stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Subsidiary
Guarantor) will be released and relieved of any obligations under its
Guarantees; provided that in the event such sale or disposition constitutes an
Asset Sale, the Net Available Proceeds of such sale or other disposition are
applied in accordance with the provisions of this Indenture described under
Section 4.11.
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SECTION 10.03. Addition of Subsidiary Guarantors.
(a) The Company agrees to cause each Subsidiary that
shall become a Restricted Subsidiary after the Issue Date to execute and
deliver a supplemental indenture pursuant to which such Restricted Subsidiary
shall guarantee the payment of the Securities pursuant to the terms hereof.
(b) Any Person that was not a Subsidiary Guarantor on the
Issue Date may become a Subsidiary Guarantor by executing and delivering to the
Trustee (i) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Subsidiary Guarantor and
(ii) an Opinion of Counsel and Officers' Certificate to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid and binding obligation of such Person (subject to
such customary exceptions concerning creditors' rights and equitable principles
as may be acceptable to the Trustee in its discretion and provided that no
opinion need be rendered concerning the enforceability of the Guarantee).
SECTION 10.04. Release of a Subsidiary Guarantor.
Upon the sale or disposition of a Subsidiary Guarantor (or
substantially all of its assets), which is otherwise in compliance with the
terms of this Indenture, including but not limited to the provisions of Section
10.02, such Subsidiary Guarantor shall be deemed released from all of its
Guarantee and related obligations in this Indenture. The Trustee shall deliver
an appropriate instrument evidencing such release upon receipt of a request by
the Company accompanied by an Officers' Certificate and an Opinion of Counsel
certifying that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture. Any Subsidiary Guarantor not
so released remains liable for the full amount of principal of and interest on
the Securities as provided in this Article Ten.
SECTION 10.05. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor, and by its acceptance hereof each
Holder, hereby confirms that it is the intention of all such parties that the
guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute
a fraudulent transfer or conveyance for purposes of any federal, state or
foreign law. To effectuate the foregoing intention, the Holders and each
Subsidiary Guarantor hereby irrevocably agree that the obligations of each
Subsidiary Guarantor under the Guarantee shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Guarantee or
pursuant to Section 10.06, result in the obligations of such Subsidiary
Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal, state or foreign law. This Section 10.05 is
for the benefit of the creditors of each Subsidiary Guarantor, and, for
purposes of applicable fraudulent transfer and fraudulent conveyance law, any
Indebtedness of a Subsidiary Guarantor pursuant to a Bank Credit Facility shall
be deemed to have been incurred prior to the incurrence by such Subsidiary
Guarantor of its liability under the Guarantee.
SECTION 10.06. Contribution.
In order to provide for just and equitable contribution among
the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Guarantee, such Funding Guarantor shall be
entitled to a contribution from each other Subsidiary Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by the
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Guarantee.
SECTION 10.07. Execution and Delivery of Guarantee.
To further evidence the Guarantees set forth in Section 10.01,
each Subsidiary Guarantor hereby agrees that a notation relating to such
Guarantee, in substantially the form of Exhibit A-1, shall be endorsed on each
Security
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authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of one Officer of each Subsidiary Guarantor.
Each of the Subsidiary Guarantors hereby agrees that its
Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation relating to
such Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on
this Indenture or a Security no longer holds that office at the time the
Trustee authenticates such Security or at any time thereafter, such Subsidiary
Guarantor's Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantor.
SECTION 10.08. Severability.
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, that portion of such provision that is not invalid,
illegal or unenforceable shall remain in effect, and the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
Whether prior to or following the qualification of this
Indenture under the TIA, if any provision of this Indenture limits, qualifies,
or conflicts with the duties imposed by operation of TIA Section 318(c) upon
an indenture qualified under the TIA, the imposed duties shall control under
this Indenture.
SECTION 11.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by certified or registered mail
(return receipt requested), facsimile, telecopier or overnight air courier
guaranteeing next day delivery, addressed as follows:
If to the Company or any Subsidiary Guarantor:
Chesapeake Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
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The Company or any Subsidiary Guarantor or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
All notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if faxed or telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication mailed to a Holder shall be mailed
by first-class mail to the address for such Holder appearing on the
registration books of the Registrar and shall be sufficiently given to such
Holder if so mailed within the time prescribed. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. If the
Company or any Subsidiary Guarantor mails notice or communications to Holders,
it shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any
Subsidiary Guarantor to the Trustee to take any action under this Indenture,
the Company or such Subsidiary Guarantor, as the case may be, shall furnish to
the Trustee:
(1) an Officers' Certificate (which shall include
the statements set forth in Section 11.05) stating that, in
the opinion of the signers, the conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, such conditions precedent have been
complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of each such
person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether or not, in the
opinion of each such person, such covenant or condition has
been complied with.
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SECTION 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for actions taken by, or
meetings or consents of, Holders. The Registrar or Paying Agent may make
reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which
banks and trust companies in the City of New York are not required by law or
executive order to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at the place on the next succeeding day that is
not a Legal Holiday, without additional interest.
SECTION 11.08. Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE
EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company, any Subsidiary Guarantor or any other
Subsidiary. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
All liability described in Paragraph 20 of the Securities of
any director, officer, employee or stockholder, as such, of the Company, the
Subsidiary Guarantors or the Trustee is waived and released.
SECTION 11.11. Successors.
All agreements of the Company and the Subsidiary Guarantors in
this Indenture, the Securities and the Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 11.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same instrument.
SECTION 11.13. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
CHESAPEAKE ENERGY CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Chairman and Chief
Executive Officer
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: /s/ XXXXX X. XXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
59
CHESAPEAKE OPERATING, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
SUBSIDIARY GUARANTORS
CHESAPEAKE ENERGY LOUISIANA CORPORATION
CHESAPEAKE ACQUISITION CORPORATION
CHESAPEAKE MID-CONTINENT CORP.
CHESAPEAKE GOTHIC CORP.
CHESAPEAKE MERGER CORP.
HUGOTON ENERGY CORPORATION
HUGOTON EXPLORATION CORPORATION
CHESAPEAKE CANADA CORPORATION
HEC TRADING COMPANY
AMGAS CORPORATION
XXXXXXX GATHERING, INC.
For each of the above:
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
CHESAPEAKE EXPLORATION LIMITED
PARTNERSHIP CHESAPEAKE LOUISIANA, L.P.
For each of the above:
By: Chesapeake Operating, Inc.,
General Partner
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice
President
60
ANSON GAS MARKETING, an Oklahoma General
Partnership
MID-CONTINENT GAS PIPELINE COMPANY
For each of the above:
By: Chesapeake Mid-Continent Corp.,
General Partner
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
61
EXHIBIT A
[FACE OF SECURITY]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OR A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
[THIS SECURITY (OR ITS PREDECESSOR) AND ANY GUARANTEE THEREOF HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY), (D) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.](2)
____________________________
(1) This paragraph should be included in any Global Security.
(2) This paragraph shall be included only if this Security is a
Restricted Security.
A-1
62
CHESAPEAKE ENERGY CORPORATION
9 5/8% SERIES [A/B] SENIOR NOTE DUE 2005
No. $_________
CUSIP No.000000XX0
Chesapeake Energy Corporation, an Oklahoma corporation, promises to
pay to _______________________ or registered assigns the principal sum of
_________________ Dollars on April _______, 2005
Interest Payment Dates: May 1 and November 1, commencing November 1,
1998
Record Dates: April 15 and October 15
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
[Corporate Seal] CHESAPEAKE ENERGY CORPORATION
By:
---------------------------
By:
---------------------------
Trustee's Certificate of Authentication:
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee, certifies that this is one of the [Global]3
Securities referred to in the within-mentioned Indenture.
By
-----------------------------
Authorized Signatory
____________________________
(3) If the Security is issued in global form, the term Global
replaces the term Definitive.
A-2
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[REVERSE OF SECURITY]
CHESAPEAKE ENERGY CORPORATION
9 5/8% SERIES [A/B] SENIOR NOTE DUE 2005
1. Interest. Chesapeake Energy Corporation, an Oklahoma
corporation (the "Company"), promises to pay interest on the principal amount
of this Security at 9 5/8% per annum from the Issue Date until maturity. The
Company will pay interest semiannually on May 1 and November 1 of each year
(each an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Securities will accrue from
the most recent Interest Payment Date on which interest has been paid or, if no
interest has been paid, from the Issue Date; provided, that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be November 1, 1998. The Company shall pay interest on
overdue principal and premium, if any, from time to time on demand at a rate
equal to the interest rate on the Securities then in effect; it shall pay
interest on overdue installments of interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months. All references herein to interest shall include additional
interest, if any, payable as liquidated damages pursuant to the Registration
Rights Agreement.
2. Method of Payment. The Company will pay interest on
the Securities to the persons who are registered holders of Securities at the
close of business on the record date immediately preceding the Interest Payment
Date, even if such Securities are canceled after the record date and on or
before the Interest Payment Date. Holders must surrender Securities to the
Paying Agent to collect principal payments. The Company will pay principal of,
premium, if any, and interest on the Securities in money of the United States
of America that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay such amounts by check payable
in such money. It may mail an interest check to a Holder's registered address.
Notwithstanding the foregoing, the Company shall pay or cause to be paid all
amounts payable with respect to Restricted Securities or non-DTC eligible
Securities by wire transfer of Federal funds to the account specified by the
Holders of such Securities or, if no such account is specified, by check to
each such Holder's address. If this Security is a Global Security, all
payments in respect of this Security will be made to the Depositary or its
nominee by wire transfer of immediately available funds to the account(s)
specified by the Depositary or its nominee and in accordance with customary
procedures established from time to time by the Depositary.
3. Paying Agent and Registrar. Initially, the Trustee
will act as Paying Agent and Registrar. The Company may change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Securities under
an Indenture, dated as of April 1, 1998 (the "Indenture"), among the Company,
the Subsidiary Guarantors and the Trustee. Capitalized terms herein are used
as defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
complete statement of such terms. The Securities are limited to $500,000,000
aggregate principal amount.
5. Ranking and Guarantees. The Securities are general
senior unsecured obligations of the Company. The Company's obligation to pay
principal, premium, if any, and interest with respect to the Securities is
unconditionally guaranteed on a senior basis, jointly and severally, by the
Subsidiary Guarantors pursuant to Article Ten of the Indenture. Certain
limitations to the obligations of the Subsidiary Guarantors are set forth in
further detail in the Indenture.
A-3
64
6. Optional Redemption. At any time on or after May 1,
2002, the Company may, at its option, redeem all or any portion of the
Securities at the redemption prices (expressed as a percentage of the principal
amount of the Securities to be redeemed) set forth below, plus, in each case,
accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the 12-month period beginning May 1 of the years indicated
below:
Year Percentage
---- ----------
2002 . . . . . . . . . . . . . . 104.813 %
2003 . . . . . . . . . . . . . . 102.406 %
2004 and thereafter . . . . . . . 100.000 %
Any redemption pursuant to this Paragraph 6 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 of the Indenture.
7. Equity Offering Redemption. In the event the Company
consummates one or more Equity Offerings on or prior to May 1, 2001, the
Company may, in its sole discretion, redeem up to $167,000,000 of the aggregate
principal amount of the Securities with all or a portion of the aggregate net
proceeds received by the Company from any such Equity Offering or Equity
Offerings at a redemption price of 109.625% of the aggregate principal amount
of Securities so redeemed, plus accrued and unpaid interest on the Securities
so redeemed to the redemption date; provided, however, that (i) the date of any
such redemption occurs within the 90-day period after the Equity Offering in
respect of which such redemption is made and (ii) following each such
redemption, at least $333,000,000 of the aggregate principal amount of the
Securities remains outstanding. Any redemption pursuant to this Paragraph 7
shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the
Indenture.
8. Redemption at Make-Whole Price. At any time prior to
May 1, 2002, the Company may, at its option, redeem all or any portion of the
Securities at the Make-Whole Price plus accrued and unpaid interest on the
Securities so redeemed to the date of redemption. Any redemption pursuant to
this Paragraph 8 shall be made pursuant to the provisions of Sections 3.01
through 3.06 of the Indenture.
9. Notice of Redemption. Notice of redemption will be
mailed to the Holder's registered address at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed.
If less than all Securities are to be redeemed, the Trustee shall select pro
rata, by lot or, if the Securities are listed on any securities exchange, by
any other method that the Trustee considers fair and appropriate and that
complies with the requirements of such exchange, the Securities to be redeemed
in multiples of $1,000; provided, however, that no Securities with a principal
amount of $1,000 or less will be redeemed in part. Securities in denominations
larger than $1,000 may be redeemed in part. On and after the redemption date,
interest ceases to accrue on Securities or portions of them called for
redemption (unless the Company shall default in the payment of the redemption
price or accrued interest).
10. Change of Control Offer. In the event of a Change of
Control of the Company, the Company shall be required to make an offer to
purchase all or any portion of each Holder's Securities, at 101% of the
principal amount thereof, plus accrued and unpaid interest to the date of
purchase.
11. Net Proceeds Offer. In the event of certain Asset
Sales (and Sale/Leaseback Transactions), the Company may be required to make a
Net Proceeds Offer to purchase all or any portion of each Holder's Securities,
at 100% of the principal amount thereof, plus accrued and unpaid interest to
the Net Proceeds Payment Date.
12. Restrictive Covenants. The Indenture imposes certain
limitations on, among other things, the ability of the Company to merge or
consolidate with any other Person or sell, lease or otherwise transfer all or
substantially all of its properties or assets, the ability of the Company or
the Restricted Subsidiaries to dispose of assets, to pay dividends and make
certain other distributions and payments, to make certain investments or
redeem, retire, repurchase or acquire for value shares of Capital Stock, to
incur additional Indebtedness or incur encumbrances against
A-4
65
certain property and to enter into certain transactions with Affiliates, all
subject to certain limitations described in the Indenture.
13. Denominations, Transfer, Exchange. The Securities
shall be issued in global form or in accordance with Section 2.06(f) of the
Indenture, in definitive registered form, without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption. Also, it need not transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
14. Persons Deemed Owners. The registered Holder of a
Security may be treated as the owner of it for all purposes and neither the
Company, any Subsidiary Guarantor, the Trustee nor any Agent shall be affected
by notice to the contrary.
15. Unclaimed Money. If money for the payment of principal
or interest remains unclaimed for one year, the Trustee or Paying Agent will
pay the money back to the Company at its request. After that, all liability of
the Trustee and such Paying Agent with respect to such money shall cease.
16. Amendment, Supplement, Waiver. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority of the outstanding principal
amount of the Securities, and any past default or noncompliance with any
provision may be waived with the consent of the Holders of a majority in
principal amount of the Securities. Without the consent of any Holder, the
Company may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency or to make any change that
does not adversely affect the rights of any Holder.
17. Successor Corporation. When a successor corporation
assumes all the obligations of its predecessor under the Securities and the
Indenture, the predecessor corporation will be released from those obligations.
18. Defaults and Remedies. An Event of Default generally
is: default by the Company or any Subsidiary Guarantor for 30 days in payment
of interest on the Securities; default by the Company or any Subsidiary
Guarantor in payment of principal of, or premium, if any, on the Securities;
failure by the Company to make any offer to purchase; default by the Company or
any Subsidiary Guarantor in the deposit of any optional redemption payment when
due and payable; defaults resulting in acceleration prior to maturity of
certain other Indebtedness or resulting from payment defaults under certain
other Indebtedness; failure by the Company or any Subsidiary Guarantor for 45
days after notice to comply with any of its other agreements in the Indenture;
certain final judgments against the Company or Subsidiaries; a failure of any
Guarantee of a Subsidiary Guarantor to be in full force and effect or denial by
any Subsidiary Guarantor of its obligations with respect thereto; and certain
events of bankruptcy or insolvency. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately, except that
in the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization relating to the Company, all outstanding
Securities shall become due and payable immediately without further action or
notice. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities may
direct the Trustee in its exercise of any trust or power. The Company must
furnish an annual compliance certificate to the Trustee.
19. Trustee Dealings with Company and Subsidiary
Guarantors. The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Subsidiary Guarantors or their respective Subsidiaries or
Affiliates with the same rights it would have if it were not Trustee.
X-0
00
00. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company, any Subsidiary Guarantor or
the Trustee shall not have any liability for any obligations of the Company,
any Subsidiary Guarantor or the Trustee under the Securities or the Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Security.
21. Authentication. This Security shall not be valid until
the Trustee or an authenticating agent signs the certificate of authentication
on the other side of this Security.
22. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (=tenants in common), TEN
ENT (=tenants by the entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company will cause CUSIP numbers to be printed on the Securities as a
convenience to Holders of the Securities. No representation is made as to the
accuracy of such numbers as printed on the Securities and reliance may be
placed only on the other identification numbers printed hereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Chesapeake Energy Corporation, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000, Attention: Chief Financial Officer.
A-6
67
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
-------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________ as agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
-------------------------------------------------------------------------------
Your Signature:
--------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Date:
---------------
Signature Guarantee:
--------------------
A-7
68
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the
appropriate box:
Section 4.11 [ ] Section 4.16 [ ]
If you want to have only part of this Security purchased by the
Company pursuant to Section 4.11 or Section 4.16 of the Indenture, state the
amount in integral multiples of $1,000:
$
----------------
Date: Signature:
--------------------- --------------------------
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guarantee:
-----------------------------------------------------------
A-8
69
EXHIBIT A-1
FORM OF NOTATION ON SECURITY
RELATING TO GUARANTEE
Each Subsidiary Guarantor (as defined in the Indenture), jointly and
severally, has unconditionally guaranteed, as principal obligor and not only as
a surety, to the Holder of this Security the due and punctual payment in United
States dollars of the principal of, premium, if any, and interest (including
liquidated damages, if any, payable pursuant to the Registration Rights
Agreement) on the Securities, and all other amounts due and payable under the
Indenture and the Securities by the Company, whether at maturity, by
acceleration, redemption, repurchase or otherwise, including, without
limitation, the due and punctual payment of interest on the overdue principal
of, premium, if any, and interest on the Securities, to the extent lawful, all
in accordance with the terms of Article Ten of the Indenture. Capitalized
terms used herein but not defined shall have the meanings ascribed to them in
the Indenture, dated as of April 1, 1998 (the "Indenture") among Chesapeake
Energy Corporation, an Oklahoma corporation, the Subsidiary Guarantors named
therein and United States Trust Company of New York, as trustee (the
"Trustee"), or in the Securities of which this Guarantee is a part.
The obligations of the Subsidiary Guarantors pursuant to the Guarantee
are subject to the terms and limitations set forth in Article Ten of the
Indenture, and reference is made thereto for the precise terms of the
Guarantee.
CHESAPEAKE OPERATING, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
CHESAPEAKE ENERGY LOUISIANA CORPORATION
CHESAPEAKE ACQUISITION CORPORATION
CHESAPEAKE MID-CONTINENT CORP.
CHESAPEAKE GOTHIC CORP.
CHESAPEAKE MERGER CORP.
HUGOTON ENERGY CORPORATION
HUGOTON EXPLORATION CORPORATION
CHESAPEAKE CANADA CORPORATION
HEC TRADING COMPANY
AMGAS CORPORATION
XXXXXXX GATHERING, INC.
For each of the above:
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
A-1-1
70
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP
CHESAPEAKE LOUISIANA, L.P.
For each of the above:
By: Chesapeake Operating, Inc., General
Partner
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
ANSON GAS MARKETING, an Oklahoma General
Partnership MID-CONTINENT GAS PIPELINE
COMPANY
For each of the above:
By: Chesapeake Mid-Continent Corp.,
General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
A-1-2
71
EXHIBIT B
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF NON-GLOBAL
RESTRICTED SECURITY TO RESTRICTED GLOBAL SECURITY
United States Trust Company of New York,
as Trustee
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Chesapeake Energy Corporation
9 5/8% Senior Notes due 2005 (the "Securities")
Reference is hereby made to the Indenture, dated as of April 1, 1998
(the "Indenture"), among Chesapeake Energy Corporation, as Issuer, the
Subsidiary Guarantors and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $____________ principal amount of Restricted
Securities held in definitive form (CUSIP No. 000000XX0) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or Rule 144 under
the United States Securities Act of 1933, as amended (the "Securities Act") and
accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule
144A:
(A) the Securities are being transferred to a
person that the Transferor reasonably believes is purchasing
the Securities for its own account, or for one or more
accounts with respect to which such Person exercises sole
investment discretion;
(B) such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule
144A; and
(C) the Securities have been transferred in a
transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any state of
the United States; or
(2) if the transfer has been effected pursuant to Rule
144:
(A) more than one year (or such shorter period as
set forth in Rule 144(d) or any amendment thereto) has elapsed
since the date of the closing of the initial placement of the
Securities pursuant to the Purchase Agreement; and
(B) the Securities have been transferred in a
transaction permitted by Rule 144 and made in accordance with
any applicable securities laws of any state of the United
States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party
B-1
72
in such proceeding. This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer and the Initial Purchasers.
Dated:
-----------------
[Insert Name of Transferor]
By:
-------------------------------------
Name:
Title:
CC: Chesapeake Energy Corporation
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73
EXHIBIT C
OFFICERS' CERTIFICATE OF NON-DEFAULT
CHESAPEAKE ENERGY CORPORATION
This Officers' Certificate is provided pursuant to Section 4.03(a) of the
Indenture dated April 1, 1998 among Chesapeake Energy Corporation (the
"Company"), the Subsidiary Guarantors named therein and United States Trust
Company of New York, as Trustee (the "Indenture").
A review of the activities of the Company and the Subsidiaries during the
preceding fiscal year ended December 31, _________ has been made under the
supervision of the Officers signing below with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
the Indenture. In addition, each such Officer signing this certificate states
that, to the best of such Officer's knowledge, the Company and each Subsidiary
Guarantor has kept, observed, performed and fulfilled each and every covenant
contained in the Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of the Indenture.
After reasonable inquiry, to the best of each such Officer's knowledge, no
event has occurred and remains in existence by reason of which payments on
account of the principal of, premium, if any, or interest, if any, on the
Securities are prohibited. This Officers' Certificate is intended to comply
with TIA 314(a)(4).
Additionally, each Officer signing below has read each covenant or condition
set forth in the Indenture and has made such examination or investigation as is
necessary, in the opinion of each such Officer, to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, which examination or investigation was conducted in the course
of the Officers' routine operational management of the Company. In the opinion
of each such Officer, each such covenant or condition has been complied with.
EXECUTED THIS __________ day of ______________________, _________.
CHESAPEAKE ENERGY CORPORATION,
a Delaware corporation
*By:
------------------------------------
------------------------------------
By:
------------------------------------
------------------------------------
-----------------
* This certificate must be signed by the principal executive, financial or
accounting officer (as well as one other Officer).
C-1
