EXHIBIT 10.6
SECURITIES PURCHASE AGREEMENT
Dated as of April 21, 1998
among
GOTHIC ENERGY CORPORATION
and
THE PURCHASERS NAMED HEREIN
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions............................................................... 1
Section 1.1. Definitions.......................................... 1
Section 1.2. Accounting Terms; Financial Statements............... 4
ARTICLE II
ISSUANCE OF UNITS; PURCHASE AND SALEOF UNITS; RIGHTS OF HOLD.............. 5
Section 2.1. Issuance of Units.................................... 5
Section 2.2. Purchase and Sale of Units........................... 5
Section 2.3. Rights of Holders of Units........................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES............................................ 6
Section 3.1. Representations and Warranties of the Company........ 6
Section 3.2. Representations and Warranties of the Purchasers..... 12
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING........................................... 13
Section 4.1. Conditions Precedent to Obligations of the Purchaser. 14
Section 4.2. Conditions Precedent to Obligations of the Company... 15
ARTICLE V
COVENANTS................................................................. 16
Section 5.1. Furnishing of Information............................ 16
Section 5.2. Use of Proceeds...................................... 16
Section 5.3. Tax Matters.......................................... 16
ARTICLE VI
INDEMNITY................................................................. 17
Section 6.1. Indemnity............................................ 17
Section 6.2. Contribution......................................... 19
Section 6.3. Registration Rights Agreement........................ 19
ARTICLE VII
MISCELLANEOUS............................................................. 19
Section 7.1. Home Office Payment................................. 19
Section 7.2. Survival of Provisions.............................. 20
Section 7.3. Termination......................................... 20
Section 7.4. No Waiver; Modifications in Writing................. 20
Section 7.5. Communications...................................... 21
Section 7.6. Costs, Expenses and Taxes........................... 21
Section 7.7. Determinations...................................... 21
Section 7.8. Execution in Counterparts........................... 21
Section 7.9. Binding Effect; Assignment.......................... 21
Section 7.10. Governing Law....................................... 22
Section 7.11. Severability of Provisions.......................... 22
Section 7.12. Headings............................................ 22
Schedule 3.1(d)(A) Subsidiaries
Schedule 3.1(d)(B) Options, Warrants, Convertible Securities, etc.
Exhibit 1 Form of Indenture
Exhibit 2 Form of Discount Notes Registration Rights Agreement
Exhibit 3 Form of Pledge Agreement
Exhibit 4 Form of Warrant Agreement
Exhibit 5 Form of Warrant Registration Rights Agreement
Exhibit 6 Form of Opinion of Company Counsel
Securities Purchase Agreement, dated as April 21, 1998 (this "Agreement"),
among Gothic Energy Corporation, an Oklahoma corporation (the "Company"), and
the purchasers named on the signature pages hereto (each a "Purchaser" and,
collectively, the "Purchasers").
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
controlling, "controlled by" and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified in accordance with the terms hereof and in effect.
"Basic Documents" means, collectively, the Discount Notes, the Indenture,
the Discount Notes Registration Rights Agreement, the Pledge Agreement, the
Warrant Registration Rights Agreement, the Warrant Agreement, the Warrants and
this Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York are
authorized or obligated by law to close.
"Change of Control" has the meaning specified in the Indenture.
"Closing" has the meaning provided therefor in Section 2.2 of this
Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Act.
"Common Stock" means the Common Stock of the Company, $.01 par value per
share.
"Company" has the meaning provided therefor in the introductory paragraph
of this Agreement.
"Default" means any event, act or condition which, with notice or lapse of
time or both, would constitute an Event of Default.
"Discount Notes" means the 14-1/8% Senior Secured Discount Notes due 2006
of the Company issued pursuant to the Indenture.
"Discount Notes Registration Rights Agreement" means the Registration
Rights Agreement relating to the Discount Notes, substantially in the form of
Exhibit 2 hereto.
"ERISA" has the meaning provided therefor in Section 3.1(t) of this
Agreement.
"Event of Default" means any event defined as an Event of Default in the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"Exchange Act Filings" means the Company's filings on Form 10-KSB for the
year ended December 31, 1997 filed under the Exchange Act.
"Exchange Offer Registration Statement" has the meaning specified in the
Discount Notes Registration Rights Agreement.
"Gothic Production Corporation" means Gothic Production Corporation, an
Oklahoma corporation and wholly-owned subsidiary of the Company.
"Indemnified Parties" has the meaning provided therefor in Section 6.1(b)
of this Agreement.
"Indemnifying Parties" has the meaning provided therefor in Section 6.1(b)
of this Agreement.
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"Indenture" means the Indenture relating to the Discount Notes,
substantially in the form of Exhibit 1 hereto.
"Information" shall have the meaning set forth in Section 2.1 of this
Agreement.
"Lien" means, with respect to any property or assets of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential, arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation (as defined in the
Indenture), conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" means, with respect to the Company and its
Subsidiaries, a material adverse effect on the business, condition (financial or
otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole; provided that, with respect to the Company,
"Material Adverse Effect" shall also mean a material adverse effect on the
ability of the Company to perform its obligations under this Agreement or any of
the other Basic Documents.
"Memorandum" means the Gothic Energy Corporation Confidential Private
Placement Memorandum, dated April 21, 1998, relating to the Units.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or other
legal entity.
"Pledge Agent" has the meaning specified in the Pledge Agreement.
"Pledge Agreement" means the Pledge Agreement relating to the Discount
Notes, substantially in the form of Exhibit 3 hereto.
"Proceeding" has the meaning provided therefor in Section 6.1(b) of this
Agreement.
"Purchaser" has the meaning provided therefor in the introductory paragraph
of this Agreement.
"Senior Secured Notes" means the 11-1/8% Senior Secured Notes due 2005 of
Gothic Production Corporation that are being offered by Gothic Production
Corporation concurrently with the offering of the Units.
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"State" means each of the states of the United States, the District of
Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having jurisdiction to
enforce such State's securities laws.
"Subsidiaries" means of any specified Person, any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which more
than 50% of the total voting power of the capital stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held by such first-named Person or any of its
Subsidiaries; or (ii) in the case of a partnership, joint venture, association
or other business entity, with respect to which such first-named Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes.
"Taxes" has the meaning provided therefor in Section 3.1(v) of this
Agreement.
"Time of Purchase" has the meaning provided therefor in Section 2.2 of this
Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission thereunder.
"Trustee" has the meaning provided therefor in the Indenture.
"Units" has the meaning provided therefor in Section 2.1 of this Agreement.
"Warrant Agent" has the meaning provided therefor in the Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement under which the Warrants
will be issued, substantially in the form of Exhibit 4 hereto.
"Warrant Registration Rights Agreement" means the Warrant Registration
Rights Agreement substantially in the form of Exhibit 5 hereto.
"Warrant Shares" has the meaning provided therefor in Section 2.1 of this
Agreement.
"Warrants" means the warrants to purchase shares of Common Stock of the
Company issued pursuant to the Warrant Agreement.
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Section 1.2. Accounting Terms; Financial Statements. All accounting
terms used herein not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with sound accounting practice.
The term "sound accounting practice" shall mean such accounting practice as, in
the opinion of the independent accountants regularly retained by the Company,
conforms at the time to generally accepted accounting principles in the United
States applied on a consistent basis except for changes with which such
accountants concur. All determinations to which accounting principles apply
shall be made in accordance with sound accounting practice.
ARTICLE II
ISSUANCE OF UNITS; PURCHASE AND SALE
OF UNITS; RIGHTS OF HOLDERS OF UNITS
Section 2.1. Issuance of Units. The Company has authorized the issuance
of up to 104,000 units (the "Units"), each consisting of $1,000 principal amount
of its Discount Notes and 7.933 Warrants. The Discount Notes and Warrants will
not be separately transferable until the earlier of (i) the effectiveness of the
Exchange Offer Registration Statement and (ii) 180 days from the date of
issuance of the Units. The Discount Notes will be issued pursuant to the
Indenture, and each Warrant will be issued pursuant to the Warrant Agreement.
The shares of Common Stock issuable upon exercise of the Warrants are referred
to herein as the "Warrant Shares."
The Units are being offered without being registered under the Act, in
reliance on exemptions therefrom, including the exemption provided by Section
4(2) of the Act.
In connection with the sale of the Units, the Company has provided the
Purchasers with certain information including the Memorandum, the Exchange Act
Filings and summaries of the terms of the Discount Notes and Warrants
(collectively, the "Information").
Section 2.2. Purchase and Sale of Units. Subject to the terms and
conditions herein set forth, the Company agrees that it will sell to each
Purchaser, and each Purchaser agrees that it will purchase, severally and not
jointly, from the Company at the Time of Purchase, the number of Units set forth
next to such Purchaser's name on the signature pages hereto at a purchase price
equal to $57,842 per Unit.
The purchase and sale of the Units pursuant to this Agreement will take
place at a closing (the "Closing") at the offices of the Company, or at such
other location as the parties may agree,
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at 10:00 A.M., New York time, on April 27, 1998. The time at which the Closing
is concluded is referred to herein as the "Time of Purchase."
Delivery of the Units to be purchased by the Purchasers pursuant to this
Agreement shall be made at the Closing by the Company (A)(i) delivering global
certificates representing the Units to The Depository Trust Company ("DTC") or
its agent and (ii) causing the DTC participant account designated by each
Purchaser to be credited with the Units purchased by such Purchaser or (B)
delivering definitive certificates representing the Units to such Purchaser, in
either case, against payment therefor in immediately available same day funds to
an account previously specified by the Company in writing.
The Company will bear all expenses of shipping the Units (including,
without limitation, insurance expenses) from New York City to such other places
within the United States of America or Canada as the Purchasers shall specify.
Any tax on the issuance of the Units will be paid by the Company at the Time of
Purchase pursuant to Section 7.6.
Section 2.3. Rights of Holders of Units. The holders of the Units shall
have such rights with respect to the registration thereof under the Act as are
set forth in the Discount Notes Registration Rights Agreement and the Warrant
Registration Rights Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company. The Company
represents and warrants to the Purchasers as follows:
(a) The Information provided to the Purchasers will not, at the Time of
Purchase, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements of the Company and its
Subsidiaries, together with related notes and schedules thereto, included in the
Exchange Act Filings fairly present in all material respects the financial
condition of the Company and its Subsidiaries as of the dates indicated and the
results of operations and cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein); and any
pro forma financial statements and the related notes thereto included in the
Memorandum or the Exchange
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Act Filings have been prepared using reasonable assumptions and in accordance
with the applicable requirements of the Act and include all adjustments
necessary to present fairly in all material respects the pro forma financial
information included in the Exchange Act Filings as at the respective dates and
for the respective periods indicated. Coopers & Xxxxxxx L.L.P., which reported
upon the audited financial statements and schedules included in the Exchange Act
Filings, is an independent public accounting firm as required by the Act and the
rules and regulations thereunder.
(c) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oklahoma. Each of the Company's
Subsidiaries is a corporation duly incorporated or organized, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation. Each of the Company and its Subsidiaries is duly qualified and
in good standing as a foreign corporation, and is authorized to do business, in
each jurisdiction in which the ownership or leasing of any property or the
nature of its business makes such qualification necessary and in which the
failure so to qualify would have a Material Adverse Effect.
(d) All of the issued and outstanding shares of capital stock of the
Company and its Subsidiaries are validly issued, fully paid and non-assessable
and were not issued in violation of any preemptive or similar rights. The
Company has no Subsidiaries other than those listed on Schedule 3.1(d)(A). All
of the capital stock of the Company's subsidiaries is owned by the Company,
free and clear of any Liens. Except as described on Schedule 3.1(d)(B), there
are no outstanding subscriptions, options, warrants, rights, convertible
securities or other binding agreements or commitments of any character
obligating the Company or its Subsidiaries to issue any securities other than
the Warrants. Except as described in Schedule 3.1(d)(C), no Person other than
the Purchasers has any rights to the registration of capital stock or other
securities of the Company, under the Act or otherwise. Except for the right of
Chesapeake Gothic Corp., a wholly owned subsidiary of Chesapeake Energy
Corporation, so long as it owns 50% or more of the Series B Preferred Stock (as
defined in the Memorandum), to designate a number of members for election to the
Board of Directors of the Company as will constitute not less than 20% of the
members of the Board of Directors or as disclosed in the Information, there is
no agreement, understanding or arrangement among the Company or its Subsidiaries
and its respective stockholders or any other person relating to the ownership or
disposition of any capital stock in the Company or any of its Subsidiaries, the
election of directors of the Company or any of its Subsidiaries or the
governance of the Company's or any such Subsidiary's affairs; and no such
agreements, arrangements or understandings will be breached or violated as a
result of the execution and delivery of, or the consummation of the transactions
contemplated by, this Agreement or the other Basic Documents. The Company has
reserved for issuance upon exercise of the Warrants shares of Common Stock
sufficient in number for exercise of all of the Warrants at the initial exercise
price, and the Warrant Shares will, upon issuance, be fully paid,
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non-assessable and free of preemptive rights and will not be subject to any
restrictions on the transfer thereof except for such restrictions set forth
herein and in the Warrant Agreement and under the Act.
(e) The Indenture has been duly authorized by the Company and, when
executed and delivered by the Company (assuming the due authorization, execution
and delivery by the Trustee), will constitute a valid and legally binding
agreement of the Company, enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors, rights and remedies generally and
(ii) general equitable principles, whether asserted in any action at law or in
equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought. At the Time of
Purchase, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act.
(f) The Discount Notes have been duly authorized and, when issued, executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Purchasers in accordance with the terms of this
Agreement, the Discount Notes will be entitled to the benefits of the Indenture
and will be valid and legally binding obligations of the Company, enforceable in
accordance with their terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors, rights and
remedies generally and (ii) general equitable principles, whether asserted in
any action at law or in equity, and that such enforceability may be subject to
the discretion of the court before which any proceedings therefor may be
brought.
(g) The Warrant Agreement has been duly authorized by the Company and, when
executed and delivered by the Company (assuming the due authorization, execution
and delivery by the Warrant Agent), will constitute a valid and legally binding
agreement of the Company, enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors, rights and remedies generally and
(ii) general equitable principles, whether asserted in any action at law or in
equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought.
(h) Each of this Agreement and the Discount Notes Registration Rights
Agreement has been duly authorized by the Company and, when executed and
delivered by the Company (assuming the due authorization, execution and delivery
by the Purchasers), will constitute a valid and legally binding agreement of the
Company, enforceable against it in accordance with
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its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights and remedies generally
and (ii) general equitable principles whether asserted in an action at law or in
equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought.
(i) The Pledge Agreement has been duly authorized by the Company and, when
executed and delivered by the Company (assuming the due authorization, execution
and delivery by the Pledge Agent), will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights and remedies generally
and (ii) general equitable principles, whether asserted in an action at law or
in equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought.
(j) The Warrant Registration Rights Agreement has been duly authorized by
the Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Purchasers), will constitute a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general equitable principles, whether
asserted in an action at law or in equity, and that such enforceability may be
subject to the discretion of the court before which any proceedings therefor may
be brought.
(k) The Warrants have been duly authorized by the Company and, when the
Warrants are executed by the Company and countersigned by the Warrant Agent in
accordance with the provisions of the Warrant Agreement and issued by the
Company to the Purchasers in accordance with the terms of this Agreement, the
Warrants will be entitled to the benefits of the Warrant Agreement and will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general equitable principles, whether asserted in an
action at law or in equity, and that such enforceability may be subject to the
discretion of the court before which any proceedings therefor may be brought.
(l) The Company has all requisite corporate power and authority to (i)
execute, deliver and perform its obligations under this Agreement and each of
the other Basic Documents, (ii) execute, deliver and perform its obligations
under all other agreements and instruments
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executed and delivered by the Company pursuant to or in connection with this
Agreement and each of the other Basic Documents and (iii) issue the Units
pursuant hereto in the manner and for the purpose contemplated by this
Agreement. The execution and delivery by the Company of this Agreement and each
of the other Basic Documents, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized by the
Company.
(m) Except as set forth in the Memorandum, subsequent to the date as of
which information is given in the Exchange Act Filings and immediately prior to
the Time of Purchase, there has not been (i) any event or condition that has had
or that would reasonably be expected to have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole, (ii) any transaction entered
into by the Company or any Subsidiary, other than in the ordinary course of
business, that is material to the Company and its Subsidiaries, taken as a
whole, or (iii) any dividend or distribution of any kind declared, paid or made
by the Company on its Common Stock that has not been approved by the Purchasers
in writing.
(n) There is no action, suit, investigation or proceeding, governmental or
otherwise, pending or, to the best knowledge of the Company, threatened to which
the Company or any of its Subsidiaries is or would be a party or of which the
properties of the Company or its Subsidiaries are or may be subject, that (i)
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance and sale of the Units by the Company or any of the other
transactions contemplated hereby, (ii) questions the legality or validity of any
such transactions or seeks to recover damages or obtain other relief in
connection with any such transactions or (iii) would have a Material Adverse
Effect.
(o) The execution, delivery and performance by the Company of this
Agreement and the other Basic Documents, and the issuance and sale by the
Company of the Units and the execution, delivery and performance by the Company
of all other agreements and instruments to be executed and delivered by the
Company pursuant hereto or thereto or in connection herewith or therewith, and
compliance by the Company with the terms and provisions hereof and thereof, do
not and will not (i) violate any provision of any law, rule or regulation
(including, without limitation, Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, decree,
determination or award presently in effect or in effect at the Time of Purchase
having applicability to the Company or any of its Subsidiaries, (ii) conflict
with or result in a breach of or constitute a default under the certificate of
incorporation or bylaws of the Company or any of the Subsidiaries, or, as of the
Time of Purchase, any indenture or loan or credit agreement, or any other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of the Subsidiaries or any of their
respective properties may be bound or affected, or (iii) except as contemplated
by this Agreement and the other Basic Documents or the Information, result in,
or require the creation or imposition of, any Lien upon or with respect to any
of the properties now owned or hereafter acquired by the
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Company or any of the Subsidiaries, except, in the case of (i), (ii) or (iii),
where such violation, conflict, default or creation or imposition of any Lien
would not (individually or in the aggregate) have a Material Adverse Effect.
(p) Each agreement or instrument executed and delivered by the Company in
connection with this Agreement (other than the Units and the other Basic
Documents) has been duly and validly authorized, executed and delivered by the
Company and constitutes or will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors, rights and remedies generally and
(ii) general equitable principles, whether asserted in an action at law or in
equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought.
(q) Immediately after giving effect to the consummation of the transactions
contemplated by this Agreement, neither the Company nor any of its Subsidiaries
(i) will be in violation of its respective certificate of incorporation or
bylaws, (ii) will be in default (nor will an event occur which with notice or
passage of time or both would constitute such a default) under or in violation
of any indenture or loan or credit agreement or any other material agreement or
instrument to which it is a party or by which it or any of its properties may be
bound or affected, (iii) will be in violation of any order of any court,
arbitrator or governmental body or subject to or party to any order of any court
or governmental authority arising out of any action, suit or proceeding under
any statute or other law respecting antitrust, monopoly, restraint of trade,
unfair competition or similar matters or (iv) will have violated or be in
violation of any such statute, rule or regulation of any governmental authority,
which default or violation (individually or in the aggregate) would (x) affect
the legality, validity or enforceability of this Agreement or any of the other
Basic Documents or (y) have a Material Adverse Effect.
(r) No authorization, consent, approval, license, qualification or formal
exemption from, nor any filing, declaration or registration with, any court,
governmental agency or regulatory authority or any securities exchange is
required (other than any filing seeking consent which may be, under certain
circumstances, required upon the exercise of the Warrants) in connection with
the execution, delivery or performance by the Company or any of its Subsidiaries
(to the extent they are a party thereto) of this Agreement or any of the other
Basic Documents, except (i) as may be required under state securities or "blue
sky" laws or the laws of any foreign jurisdiction in connection with the offer
and sale of the Units or (ii) as would not (individually or in the aggregate)
have a Material Adverse Effect. All such authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
which are required to have been obtained or made as of the Time of Purchase have
been obtained or made, as the case may be, and are in full force and effect and
not the subject of any pending
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or, to the knowledge of the Company, threatened attack by appeal or direct
proceeding or otherwise.
(s) The Company is not an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended, and the Company will not be immediately after the Time of
Purchase an "investment company" within the meaning or such Act.
(t) The execution and delivery of this Agreement and the other Basic
Documents and the sale of the Units to the Purchasers will not involve any non-
exempt prohibited transaction within the meaning of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code on the part of the Company or any of its Subsidiaries. The preceding
representation is made in reliance upon, and subject to the accuracy of, the
representation made in Section 3.2(b) as to the Purchasers. The Company does
not and, at and as of the Time of Purchase, the Company will not reasonably
expect to have any liability for any prohibited transaction or funding
deficiency or any complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan which is subject to ERISA and which is
required to be funded, to which the Company makes or ever has made a
contribution and in which any employee of the Company is or has ever been a
Participant with respect to such plans, the Company is and, at and as of the
Time of Purchase, the Company will be in compliance in all material respects
with all applicable provisions of ERISA.
(u) The Company and each of its Subsidiaries have good and valid title to,
or valid and enforceable leasehold interests in, all properties and assets
identified in the Memorandum or the Exchange Act Filings as owned by each of
them which are material to the business of the Company and its subsidiaries,
taken as a whole, free and clear of all Liens, except (i) such Liens as are
described in the Memorandum or the Exchange Act Filings or (ii) Liens created in
the ordinary course of business which are Permitted Liens (as defined in the
Indenture). All of the leases material to the business of the Company and the
Subsidiaries, taken as a whole, and under which the Company or any Subsidiary
holds properties described in the Memorandum or the Exchange Act Filings, are
valid and binding as leased by them, with such exceptions as are not material
and do not materially interfere with the use made and proposed to be made of
such properties by the Company and its Subsidiaries.
(v) All tax returns required to be filed by the Company or any of its
Subsidiaries in any jurisdiction (including foreign jurisdictions) have been so
filed and all taxes, assessments, fees and other charges including, without
limitation, withholding taxes, penalties, and interest ("Taxes") due or claimed
to be due have been paid, other than those Taxes being contested in good faith
and those Taxes for which adequate reserves or accruals have been established in
accordance with generally accepted accounting principles, except where the
failure to file such
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returns or to pay such Taxes is not reasonably likely to have, singly or in the
aggregate, a Material Adverse Effect. The Company knows of no actual or proposed
additional tax assessments for any fiscal period against the Company or any of
its Subsidiaries that, individually or in the aggregate, would have a Material
Adverse Effect.
(w) The Company and its Subsidiaries are the sole and exclusive owners or
licensees of all trade names, unregistered trademarks and service marks, brand
names, patents, registered and unregistered copyrights, registered trademarks
and service marks, and all applications for any of the foregoing, and all
permits, grants and licenses or other rights with respect thereto, the absence
of which would have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has been charged with any material infringement of any
intangible property of the character described above or been notified or advised
of any material claim of any other Person relating to any of the intangible
property which infringements or claims (individually or in the aggregate) would
have a Material Adverse Effect.
(x) The Company and its Subsidiaries are in material compliance with all
laws, rules and regulations applicable to the Company, and each such Subsidiary,
and the Company and its Subsidiaries own or possess and are operating in
compliance in all material respects with the terms, provisions, conditions,
restrictions and limitations contained in all licenses, franchises, approvals,
certificates and permits from all Federal, state, territorial, foreign and local
governmental and regulatory authorities which are necessary to own or lease
their respective properties and assets and to the conduct of their respective
businesses, except where the failure to comply with any of the foregoing would
not have a Material Adverse Effect. There are no citations or notices of
forfeiture or other proceedings pending or, to the best knowledge of the
Company, threatened or any basis therefor, which would lead to the revocation,
termination, suspension or non-renewal of any such license, franchise, approval,
certificate or permit the result of which would have a Material Adverse Effect.
There are no restrictions or limitations contained in any applicable license,
franchise, approval certificate or permit, or, to the best knowledge of the
Company, threatened or proposed in any pending or contemplated hearing,
proceeding or procedure, that would have a Material Adverse Effect.
(y) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Act) has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Act) which is or will be integrated
with the sale of the Units in a manner that would require the registration under
the Act of the Units or (ii) engaged in any form of general solicitation or
general advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Units or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
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(z) Assuming the accuracy of the Purchasers' representations and warranties
set forth in Section 3.2 hereof and the due performance by the Purchasers of the
covenants and agreements set forth in Section 3.2 hereof, the sale of the Units
to the Purchasers in the manner contemplated by this Agreement does not require
registration under the Act.
Section 3.2. Representations and Warranties of the Purchasers.
(a) Each Purchaser represents and warrants to, and covenants and agrees
with, the Company that (i) the Units to be acquired by it hereunder are being
acquired for its own account or an account with respect to which it exercises
sole investment discretion and it or any such account is a qualified
institutional buyer" as defined in Rule 144A of the Act ("QIB") or an
"Accredited Investor" as defined under Regulation D under the Act and has no
intention of distributing or reselling such Units or any part thereof in any
transaction which would be in violation of the securities laws of the United
States of America or any state; (ii) it acknowledges that none of the Units, the
Discount Notes, the Warrants or the Warrant Shares have been or will be
registered under the Act, subject, however, to the terms of the Discount Notes
Registration Rights Agreement and the Warrant Registration Rights Agreement and
that none of the Units, the Discount Notes, the Warrants or the Warrant Shares
may be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as set forth below; (iii) it shall not resell,
or otherwise transfer any of such Units, Discount Notes, the Warrants or the
Warrant Shares within two years after the original issuance of the Units except
(A) to the Company or any of its Subsidiaries, (B) inside the United States to a
QIB in compliance with Rule 144A, (C) inside the United States to an "Accredited
Investor" that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to the Company and/or the Trustee and the
Warrant Agent a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Units, the Discount Notes, the
Warrants or the Warrant Shares (D) outside the United States in compliance with
Rule 904 under the Act, (E) pursuant to any other exemption from registration
provided under the Act (if available) including Rule 144 thereunder or (F)
pursuant to an effective registration statement under the Act, and (iv) it will
gave to each person to whom it transfers the Units, the Discount Notes, the
Warrants or the Warrant Shares notice of any restrictions on transfer of such
Units, the Discount Notes, the Warrants and the Warrant Shares; and subject,
nevertheless, to the disposition of such Purchaser's property being at all times
within its control. If any Purchaser should in the future decide to dispose of
any of the Units, the Discount Notes, the Warrants or the Warrant Shares such
Purchaser understands and agrees that it may do so only in compliance with the
Act, as then in effect, and that stop-transfer instructions to that effect will
be in effect with respect to the Units, the Discount Notes, the Warrants and the
Warrant Shares. If any Purchaser should decide to transfer or otherwise dispose
of the Units, Discount Notes, the Warrants or the Warrant Shares such Purchaser
shall comply with the requirements set forth in the relevant Basic Documents.
Each Purchaser agrees to the imprinting, so long as required by the terms of the
relevant Basic
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Document, of (i) the applicable legends contained in the Indenture on each
certificate representing Discount Notes and (ii) the applicable legends
contained in the Warrant Agreement on each certificate representing Warrants or
Warrant Shares.
(b) If the Purchaser is an insurance company it also represents that no
part of the funds to be used to Purchase the Units to be purchased by it
constitutes or is deemed to constitute assets from an employee benefit plan (as
such term is defined below). If the Purchaser is not an insurance company it
also represents that no part of the funds to be used to purchase the Units to be
purchased by the Purchaser constitutes assets of any employee benefit plan,
except as otherwise disclosed in writing to the Company on or prior to the
Closing Date. As used in this Section 3.2(b), the term "employee benefit plan"
shall have the meaning assigned to such term in Section 3 of ERISA.
(c) The Purchaser also represents and warrants to the Company that (i) it
has received and reviewed the Information; (ii) it has authorized the purchase
of the Units; and (iii) the purchase of Units does not violate its charter,
bylaws, or other organizational documents or any law or regulation to which it
is subject.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Purchaser. The
obligation of each Purchaser to purchase the Units to be purchased by it
hereunder is subject, at the Time of Purchase, to the satisfaction of the
following conditions:
(a) The Purchasers shall have received an opinion, addressed to them in
form and substance reasonably satisfactory to the Purchasers and dated the Time
of Purchase, of Xxxxxxx X. Xxxxxx, P.A., counsel to the Company, substantially
in the form of Exhibit 6 hereto.
In rendering such opinion in accordance with Sections 4.1(a), such counsel
may rely as to factual matters upon certificates or other documents furnished by
officers and directors of the Company and representations of the Purchasers and
by government officials, and upon such other documents as such counsel deems
appropriate as a basis for its opinion. Such counsel may specify the
jurisdictions in which it is admitted to practice and that it is not admitted to
practice in any other jurisdiction and is not an expert in the law of any other
jurisdiction to the extent such opinion concerns the laws of any other such
jurisdiction such counsel may rely upon the opinion of counsel (reasonably
satisfactory to the Purchasers) admitted to practice in such jurisdiction. Any
opinion relied upon by such counsel as aforesaid shall be delivered to the
Purchasers
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together with the opinion of such counsel, which opinion shall state that such
counsel believes that it and the Purchasers' reliance thereon is justified.
(c) The representations and warranties made by the Company herein shall be
true and correct in all material respects (except for changes expressly provided
for in this Agreement) on and as of the Time of Purchase, with the same effect
as though such representations and warranties had been made on and as of the
Time of Purchase, and the Company shall have complied in all material respects
with all agreements as set forth in or contemplated hereunder and in the other
Basic Documents required to be performed by it at or prior to the Time of
Purchase.
(d) Except as set forth in the Memorandum, subsequent to the date of the
Exchange Act Filings, (i) there shall not have been any change, or any
development involving a prospective change, which has affected or may affect
materially and adversely the businesses, properties or prospects or the
financial condition or the results of operations of the Company and its
Subsidiaries, taken as a whole, and (ii) the Company and its Subsidiaries shall
have conducted their respective businesses only in the ordinary course.
(e) At the Time of Purchase and after giving effect to the consummation of
the transactions contemplated by this Agreement and the other Basic Documents,
there shall exist no Default or Event of Default.
(f) As to each Purchaser, the purchase of and payment for the Units by such
Purchaser hereunder or under the Warrant Agreement (i) shall not be prohibited
or enjoined (temporarily or permanently by any applicable law or governmental
regulation (including, without limitation, Regulation G, T, U or X of the Board
of Governors of such Federal Reserve System), (ii) shall not subject such
Purchaser to any penalty, or in its reasonable judgment, other onerous condition
under or pursuant to any applicable law or governmental regulation (provided,
however, that such regulation, law or onerous condition was not in effect at the
date of this Agreement), and (iii) shall be permitted by the laws and
regulations of the jurisdictions to which it is subject.
(g) At the Time of Purchase, the Purchasers shall have received a
certificate, dated the Time of Purchase, from the Company stating that the
conditions specified in Section 4.1(c), (d) and (e) have been satisfied or duly
waived at the Time of Purchase.
(h) Each of the Basic Documents shall be substantially in the form attached
hereto and the Basic Documents shall have been executed and delivered by all the
respective parties thereto and shall be in full force and effect.
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(i) The Chesapeake Transaction (as defined in the Memorandum) shall have
been consummated.
(j) The Company shall have entered into the Credit Facility (as defined in
the Memorandum).
(k) The Company shall have redeemed its Senior Redeemable Preferred Stock,
Series A, and 12 1/4% Senior Notes due 2004.
(l) The sale of $235,000,000 aggregate principal amount of Senior Secured
Notes pursuant to the Purchase Agreement, dated as of even date herewith, among
Gothic Production Corporation, the guarantors named therein and Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation and CIBC Xxxxxxxxxxx Corp. shall have
been consummated prior to or concurrently with the sale by the Company of the
Units pursuant to this Agreement.
(m) All proceedings taken in connection with the issuance of the Units and
the transactions contemplated by this Agreement and the other Basic Documents
and all documents and papers relating thereto shall be reasonably satisfactory
to the Purchasers. The Purchasers shall have received copies of such papers and
documents an they may reasonably request in connection therewith, all in form
and substance reasonably satisfactory to them.
(n) On or before the Time of Purchase, the Purchasers shall have received
such further documents, opinions, certificates and schedules or other instrument
relating to the business, corporate, legal and financial affairs of the Company
and its Subsidiaries as they may reasonably request.
Section 4.2. Conditions Precedent to Obligations of the Company. The
obligations of the Company to issue and sell the Units pursuant to this
Agreement are subject, at the Time of Purchase, to the satisfaction of the
following conditions:
(a) The representations and warranties made by the Purchasers herein shall
be true and correct in all material respects at and as of the Time of Purchase,
with the same effect as though such representations and warranties had been made
on and as of the Time of Purchase.
(b) The issuance or sale of the Units by the Company shall not be enjoined
under the laws of any jurisdiction to which the Company is subject (temporarily
or permanently) at the Time of Purchase.
(c) Each of the Basic Documents shall be satisfactory in form and substance
to the Company and shall have been executed and delivered by all respective
parties thereto and shall
-17-
be in full force and effect and counsel to the Company shall have received a
copy of each of such documents duly executed by such parties.
(d) The sale of $235,000,000 aggregate principal amount of Senior Secured
Notes pursuant to a Purchase Agreement, dated as of even date herewith, among
Gothic Production Corporation, the guarantors named therein and Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation and CIBC Xxxxxxxxxxx Corp. shall have
been consummated prior to or concurrently with the sale by the Company of the
Units pursuant to this Agreement.
(e) The Chesapeake Transaction (as defined in the Memorandum) shall have
been consummated.
(f) The Company shall have entered into the Credit Facility (as defined in
the Memorandum).
(g) The Company shall have redeemed the Senior Redeemable Preferred Stock,
Series A, and 12 1/4% Senior Notes due 2004.
ARTICLE V
COVENANTS
Section 5.1. Use of Proceeds. The Company will use the proceeds from
the issuance and sale of the Units in the manner specified in the Memorandum.
Section 5.2. Tax Matters. (a) The Company will make applicable
information return filings with respect to the Units with the Internal Revenue
Service and other governmental authorities, and will provide relevant taxpayer
copies to the holder of such Units.
(b) The Company will for federal income tax purposes withhold 31% (or such
other rate as appropriate under applicable law) for payments and other
distributions to holders of the Units who are or appear to be United States
persons (as defined in Section 7701(a)(30) of the Code), in respect of payments
or distributions treated as dividends or interest, unless the Company receives a
properly completed Form W-9 or other applicable form, certificate or document
prescribed by the Internal Revenue Service prior to a given payment or
distribution, certifying as to such holder's entitlement to an exemption from
any such withholding requirements.
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(c) The Company will for federal income tax purposes withhold from payments
or other distributions to holders of Units who are not or appear not to be
United States persons 30% (or such other rate as generally appropriate under
applicable law) in respect of payments or other distributions treated as
dividends or interest, unless the holder provides the Company with Form W-8,
Form 4224, Form 1001 or other applicable form, certificate or document
prescribed by the Internal Revenue Service (which has not expired or become
obsolete without the furnishing of an appropriate current replacement) properly
completed and certifying as to and/or otherwise evidencing such holder's
entitlement to an exemption from any such withholding requirements or to a
reduced note of withholding.
(d) Neither Section 5.3(b) nor Section 5.3(c) hereof shall require the
Company to apply an exemption or reduced rate of withholding during any period
when it shall have received notice or has knowledge that the residence or other
information previously provided on any applicable form, certificate or document
is incorrect and no corrected form, certificate or document as applicable has
been provided to the Company.
ARTICLE VI
INDEMNITY
Section 6.1. Indemnity.
(a) Indemnification by the Company. The Company agrees and covenants to
hold harmless and indemnify each Purchaser and each person, if any, who controls
each Purchaser within the meaning of Section 20 of the Exchange Act from and
against any losses, claims, damages, liabilities and expenses (including
expenses of investigation) to which such Purchaser or such controlling person
may become subject (i) arising out of or based upon any untrue statement or
alleged untrue statement of any material fact contained in the Information and
any amendments or supplements thereto or any documents filed with the Commission
or any State Commission or arising out of or based upon the omission or alleged
omission to state in the Information a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii)
arising out of, based upon or in any way related or attributed to claims,
actions or proceedings relating to this Agreement or the subject matter of this
Agreement or (iii) arising in any manner out of or in connection with any Person
being a Purchaser of the Units and relating to any action taken or omitted to be
taken by the Company; provided, however, that the Company shall not be liable
under this paragraph (a) for any amount paid in settlement of claims without its
written consent, which consent shall not be unreasonably withheld, or to the
extent that it is finally judicially determined that such losses, claims,
damages or liabilities arose primarily out of the gross negligence, willful
misconduct or bad faith of such
-19-
Purchaser. The Company further agrees to reimburse each Purchaser for any
reasonable legal and other expenses as they are incurred by it in connection
with investigating, preparing to defend or defending any lawsuits, claims or
other proceedings or investigations arising in any manner out of or in
connection with such Person being a Purchaser; provided that if the Company
reimburses any Purchaser hereunder for any expenses incurred in connection with
a lawsuit, claim or other proceeding for which indemnification is sought, such
Purchaser hereby agrees to refund such reimbursement of expenses to the extent
it is finally judicially determined that the losses, claims, damages or
liabilities arising out of or in connection with such lawsuit, claim or other
proceedings arose primarily out of the gross negligence, willful misconduct or
bad faith of such Purchaser or from a violation by such Purchaser of legal
requirements applicable to such Purchaser solely because of its character as a
particular type of regulated institution. The Company further agrees that the
indemnification, contribution and reimbursement commitments set forth in this
Article VI shall apply whether or not any Purchaser is a formal party to any
such lawsuits, claims or other proceedings. Notwithstanding the foregoing, the
Company shall not be liable to a party seeking indemnification under the
foregoing provisions of this paragraph (a) to the extent that any such losses,
claims, damages, liabilities or expenses arise out of or are based upon an
untrue statement or omission made in any of the documents referred to in this
paragraph (a) in reliance upon and in conformity with the information relating
to the party seeking indemnification furnished in writing by such party for
inclusion therein. The indemnity, contribution and expense reimbursement
obligations of the Company under this Article VI shall be in addition to any
liability the Company may otherwise have.
(b) Procedure. If any Person shall be entitled to indemnity hereunder (the
"Indemnified Parties"), such Indemnified Party shall give prompt notice
confirmed in writing to the party or parties from which such indemnity is sought
(the "Indemnifying Parties") of the commencement of any proceeding (a
"Proceeding") with respect to which such Indemnified Party seeks indemnification
or contribution pursuant hereto; provided, however, that the failure so to
notify the Indemnifying Parties shall not relieve the Indemnifying Parties from,
any obligation or liability except to the extent that the Indemnifying Parties
have been prejudiced materially by such failure. The Indemnifying Parties shall
have the right, exercisable by giving written notice to an Indemnified Party
promptly after the receipt of written notice from such Indemnified Party of such
Proceeding, to assume, at the Indemnifying Parties' expense, the defense of any
such Proceeding, with counsel reasonably satisfactory to such Indemnified Party;
provided, however, that an Indemnified Party or Parties (if more than one such
Indemnified Party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or parties unless (i) the Indemnifying Parties agree to
pay such fees and expenses; or (ii) the Indemnifying Parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (iii) the named parties to
any such Proceeding (including any impleaded
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parties) include both such Indemnified Party or parties and the Indemnifying
Party or an Affiliate of the Indemnifying Party and such Indemnified Parties,
and the Indemnifying Parties shall have been advised in writing by counsel that
there may be one or more material defenses available to such Indemnified Party
or parties that are different from or additional to those available to the
Indemnifying Parties, in which case, if such Indemnified Party or parties
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Parties, it being understood, however, that,
unless there exists a conflict among Indemnified Parties, the Indemnifying
Parties shall not in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than, one separate firm of attorneys (together with appropriate
local counsel, if any) at any time for such Indemnified Party or parties, or for
fees and expenses that are not reasonable. No Indemnified Party or parties will
settle any Proceedings without the written consent of the Indemnifying Party or
parties (but such consent will not be unreasonably withheld).
Section 6.2. Contribution. If for any reason the indemnification
provided for in Section 6.1 of this Agreement is unavailable to an Indemnified
Party, or insufficient to hold it harmless, in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnifying and Indemnified Parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying and Indemnified Parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying or
Indemnified Parties and each such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any reasonable
legal or other fees or expenses incurred by such party in connection with
investigating or defending any such claim.
The Company and each Purchaser agree that it would not be just and
equitable if contribution pursuant to the immediately preceding paragraph were
determined by any method of allocation which does not take into account the
equitable considerations referred to in such
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paragraph. No person guilty of fraudulent misrepresentation shall be entitled to
contribution from any Person.
Section 6.3. Registration Rights Agreement. Notwithstanding anything to
the contrary in this Article 6, the indemnification and contribution provisions
of the Discount Notes Registration Rights Agreement and the Warrant Registration
Rights Agreement shall govern any claim with respect thereto.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Home Office Payment. Subject to the Provisions of the
Basic Documents, the Company agrees that, so long as any original Purchaser
hereunder shall own securities purchased by it hereunder, the Company will make
any payments to such Purchaser of principal, premium or interest due on any Unit
or Discount Note not represented by a Global Certificate (and any liquidated
damages payments relating thereto pursuant to the Discount Notes Registration
Rights Agreement) by wire transfer in immediately available funds by 2:00 P.M.,
local time at the location in the United States of the Purchaser's account, on
the date of payment to such account as shall have been specified by separate
written notice to the Company by such Purchaser (providing sufficient
information with such wire transfer to identify the source and application of
the funds and requesting the bank to send a credit advice thereof to such
Purchaser), or to such other account or in such other similar manner as such
Purchaser may designate to the Company in writing.
Section 7.2. Survival of Provisions. The representations, warranties
and covenants of the Company and the Purchasers made herein, the indemnity and
contribution agreements contained herein and each of the provisions of Articles
V, VI and VII shall remain operative and in full force and effect regardless of
(a) any investigation made by or on behalf of the Company, the Purchasers or any
Indemnified Party, (b) acceptance of any of the Units and payment therefor or
(c) disposition of the Units by any Purchaser whether by redemption, exchange,
sale or otherwise. The respective agreements, covenants, indemnities and other
statements set forth in Article VII and Section 7.6 shall remain in full force
and effect regardless of any termination or cancellation of this Agreement.
Section 7.3. Termination. This Agreement may be terminated (as to the
party electing to so terminate it) an any time prior to the Time of Purchase:
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(a) by the Company if any of the conditions specified in Section 4.2 of
this Agreement have not been met or waived by the Company pursuant to the terms
of this Agreement;
(b) by the Purchasers if any of the conditions specified in Section 4.1 of
this Agreement have not been met or waived pursuant to the terms of this
Agreement.
Section 7.4. No Waiver; Modifications in Writing. (a) No failure or
delay on the part of the Company or any Purchaser in exercising any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Purchasers at law or in
equity or otherwise. Prior to the Time of Purchase, no amendment, modification,
termination or any provision or waiver of or consent to any departure by the
Company from any provision of this Agreement shall be effective unless signed in
writing by the party entitled to the benefit thereof. Except as otherwise
provided herein, after the Time of Purchase, no amendment, modification,
termination of any provision or waiver of or consent to any departure by the
Company from any provision of this Agreement shall be effective unless signed in
writing by or on behalf of the holders of a majority of the Units, or, after the
Separation Date (as defined in the Memorandum), the principal amount of Discount
Notes outstanding. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances.
(b) The Company has not paid or shall not pay, or has not caused or shall
not cause to be paid, directly or indirectly, any remuneration, whether by way
of interest, fee or otherwise, to any holder of any Units as consideration for
or as an inducement to the purchase by any holder of the Units.
Section 7.5. Communications. Unless otherwise provided herein, any
notice or other communications herein required or permitted to be given shall be
in writing and may be personally served, telecopied, telexed or sent by mail and
shall be deemed to have been given when delivered in person, upon receipt of
telecopy or telex against receipt of answer back or four Business Days after
depositing it in the mail registered or certified, with postage prepaid and
properly addressed; provided, however, that notices shall not be effective until
received. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered
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as provided in this Section 7.5) shall be set forth under each party's name on
the signature pages hereto.
Section 7.6. Costs, Expenses and Taxes. The Company agrees to pay all
costs and expenses in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of this Agreement and each of the
other Basic Documents, any amendment or supplement to or modification of any of
the foregoing and any and all other documents furnished pursuant hereto or
thereto or in connection herewith or therewith, and, except as limited by
Article VI, all costs and expenses (including, without limitation, reasonable
attorneys fees and expenses of Company counsel), if any, in connection with the
enforcement of this Agreement, the Units, or any other agreement furnished
pursuant hereto or thereto or in connection herewith or therewith. In addition,
the Company shall pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the execution and
delivery of this Agreement or any other Basic Document or the issuance of the
Units and shall save and hold the Purchasers harmless from and against any and
all liabilities with respect to or resulting from any delay in paying, or
omission to pay, such taxes.
Section 7.7. Determinations. All determinations to be made by the
Company or any Purchaser hereunder in its opinion or judgment or with its
approval or otherwise shall be made by it in its sole discretion.
Section 7.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when. so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 7.9. Binding Effect; Assignment. The rights and obligations of
any Purchaser under this Agreement may not be assigned to any other Person
except with the prior consent of the Company. Except as expressly provided in
this Agreement, this Agreement shall not be construed so as to confer any right
or benefit upon any Person other than the parties to this Agreement, and their
respective successors and assigns. This Agreement shall be binding upon the
Company and the Purchasers, and their successors and assigns.
Section 7.10. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
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Section 7.11. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 7.12. Headings. The Article and Section headings and Table of
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
GOTHIC ENERGY CORPORATION
By:
-----------------------------------------------
Xxxxxxx Xxxxx, President
Notice Address:
0000 Xxxxx Xxxxx Xxxxxx - Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
PURCHASER:
By:
-----------------------------------------------
Name:
Title:
Notice Address:
Telephone:
Telecopy:
Number of Units:
--------------------------------------------------------------
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SCHEDULE 3.1(d)(A)
SUBSIDIARIES
Gothic Production Corporation
SCHEDULE 3.1(d)(B)
OPTIONS, WARRANTS, CONVERTIBLE SECURITIES, ETC.
None
SCHEDULE 3.1(d)(c)
REGISTRATION RIGHTS
Reference is made to "Description of Capital Stock - Outstanding Warrants and
Options" in the Memorandum for a description of Registration Rights.
EXHIBIT 1
FORM OF INDENTURE
EXHIBIT 2
FORM OF DISCOUNT NOTES REGISTRATION RIGHTS AGREEMENT
EXHIBIT 3
FORM OF PLEDGE AGREEMENT
EXHIBIT 4
FORM OF WARRANT AGREEMENT
EXHIBIT 5
FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT
EXHIBIT 6
FORM OF OPINION OF COMPANY COUNSEL
