SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
CHESAPEAKE ENERGY CORPORATION
_____________________________
(Name of Issuer)
Common Stock, par value $.01
_____________________________
(Title of Class of Securities)
165167 10 7
_____________
(CUSIP Number)
Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, Oklahoma 73102
(405) 232-3001
________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 10, 1997
_____________________
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box. [ ]
Note: Six (6) copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
CUSIP NO. 165167 10 7
(1) Names of Reporting Persons, Aubrey K. McClendon
S.S. or I.R.S. Identification ###-##-####
Nos. of Above Persons
(2) Check the Appropriate Box if (a) [x]
a Member of a Group (See (b) [ ]
Instructions)
(3) SEC Use Only
(4) Source of Funds (See Instruc- OO
tions)
(5) Check if Disclosure of Legal
Proceedings is Required Pur-
suant to Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organi- USA
zation
(7) Sole Voting Power 10,343,706
Number of Shares (8) Shared Voting Power 508,560
Beneficially
Owned by Each (9) Sole Dispositive 10,343,706
Reporting Person Power
With:
(10) Shared Dispositive 508,560
Power
(11) Aggregate Amount Beneficially 10,852,226
Owned by Each Reporting Person
(12) Check if the Aggregate Amount [ ]
in Row (11) Excludes Certain
Shares (See Instructions)
(13) Percent of Class Represented 15.45%
by Amount in Row (11)
(14) Type of Reporting Person (See IN
Instructions)
CUSIP NO. 165167 10 7
(1) Names of Reporting Persons, Chesapeake Investments,
S.S. or I.R.S. Identification an Oklahoma Limited
Nos. of Above Persons Partnership
73-1132104
(2) Check the Appropriate Box if (a) [x]
a Member of a Group (See (b) [ ]
Instructions)
(3) SEC Use Only
(4) Source of Funds (See Instruc- Not applicable
tions)
(5) Check if Disclosure of Legal
Proceedings is Required Pur-
suant to Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organi- Oklahoma
zation
(7) Sole Voting Power 0
Number of Shares (8) Shared Voting Power 508,560
Beneficially
Owned by Each (9) Sole Dispositive 0
Reporting Person Power
With:
(10) Shared Dispositive 508,560
Power
(11) Aggregate Amount Beneficially 508,560
Owned by Each Reporting Person
(12) Check if the Aggregate Amount [ ]
in Row (11) Excludes Certain
Shares (See Instructions)
(13) Percent of Class Represented .73%
by Amount in Row (11)
(14) Type of Reporting Person (See PN
Instructions)
CUSIP NO. 165167 10 7
(1) Names of Reporting Persons, Tom L. Ward
S.S. or I.R.S. Identification ###-##-####
Nos. of Above Persons
(2) Check the Appropriate Box if (a) [x]
a Member of a Group (See (b) [ ]
Instructions)
(3) SEC Use Only
(4) Source of Funds (See Instruc- OO
tions)
(5) Check if Disclosure of Legal
Proceedings is Required Pur-
suant to Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organi- USA
zation
(7) Sole Voting Power 9,239,942
Number of Shares (8) Shared Voting Power 1,846,860
Beneficially
Owned by Each (9) Sole Dispositive 9,239,942
Reporting Person Power
With:
(10) Shared Dispositive 1,846,860
Power
(11) Aggregate Amount Beneficially 11,086,802
Owned by Each Reporting Person
(12) Check if the Aggregate Amount [ ]
in Row (11) Excludes Certain
Shares (See Instructions)
(13) Percent of Class Represented 15.79%
by Amount in Row (11)
(14) Type of Reporting Person (See IN
Instructions)
CUSIP NO. 165167 10 7
(1) Names of Reporting Persons, TLW Investments, Inc.
S.S. or I.R.S. Identification 73-1215253
Nos. of Above Persons
(2) Check the Appropriate Box if (a) [x]
a Member of a Group (See (b) [ ]
Instructions)
(3) SEC Use Only
(4) Source of Funds (See Instruc- Not applicable
tions)
(5) Check if Disclosure of Legal
Proceedings is Required Pur-
suant to Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organi- Oklahoma
zation
(7) Sole Voting Power 0
Number of Shares (8) Shared Voting Power 1,846,860
Beneficially
Owned by Each (9) Sole Dispositive 0
Reporting Person Power
With:
(10) Shared Dispositive 1,846,860
Power
(11) Aggregate Amount Beneficially 1,846,860
Owned by Each Reporting Person
(12) Check if the Aggregate Amount [ ]
in Row (11) Excludes Certain
Shares (See Instructions)
(13) Percent of Class Represented 2.65%
by Amount in Row (11)
(14) Type of Reporting Person (See CO
Instructions)
CUSIP NO. 165167 10 7
Preliminary Statement
_____________________
This Amendment No. 1 restates and amends (i) the statement on
Schedule 13D dated February 4, 1993 filed by the group consisting
of Aubrey K. McClendon and Chesapeake Investments, an Oklahoma
Limited Partnership ("CI"), and (ii) the statement on Schedule 13D
dated February 4, 1993 by the group consisting of Tom L. Ward and
TLW Investments, Inc. ("TLW") (together, the "Schedule 13D"),
relating to the shares of common stock, par value $.01 per share,
of Chesapeake Energy Corporation, an Oklahoma corporation. Mr.
McClendon, CI, Mr. Ward and TLW are referred to herein as the
"Reporting Persons". The group consisting of Mr. McClendon and CI
and the group consisting of Mr. Ward and TLW each disclaim
beneficial ownership of the shares held by the other.
Item 1. Security and Issuer.
___________________
This statement relates to the common stock, par value $.01 per
share (the "Common Stock"), of Chesapeake Energy Corporation,
an Oklahoma corporation (the "Company") having its principal
executive offices at 6100 North Western Avenue, Oklahoma City,
Oklahoma 73118.
Item 2. Identity and Background.
_______________________
(a)-(c)
Aubrey K. McClendon
___________________
Mr. McClendon is the Chairman of the Board and Chief Executive
Officer of the Company, having a business address of 6100
North Western Avenue, Oklahoma City, Oklahoma 73118. The
Company is engaged in oil and gas exploration and development.
Chesapeake Investments
______________________
Chesapeake Investments, an Oklahoma Limited Partnership, is an
Oklahoma limited partnership, having a business address of
6100 North Western Avenue, Oklahoma City, Oklahoma 73118. Mr.
McClendon is the sole general partner of CI. CI is
principally engaged in the ownership of working interests in
oil and gas wells and leases.
Tom L. Ward
___________
Mr. Ward is the President and Chief Operating Officer of the
Company, having a business address of 6200 North Western
Avenue, Oklahoma City, Oklahoma 73118.
TLW Investments, Inc.
_____________________
TLW Investments, Inc., is an Oklahoma corporation having a
business address of 6200 North Western Avenue, Oklahoma City,
Oklahoma 73118. Mr. Ward is the sole shareholder, director,
and Chief Executive Officer of TLW. TLW is principally
engaged in the ownership of working interests in oil and gas
wells and leases.
(d) During the past five (5) years, no Reporting Person has
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the past five (5) years, no Reporting Person has
been a party to a civil proceeding of a judicial or an
administrative body of competent jurisdiction as a result of
which a Reporting Person is, or was, subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activity subject to, federal or state
securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
_________________________________________________
The Reporting Persons acquired more than 5% of the outstanding
Common Stock of the Company upon the formation and
capitalization of the Company effective January 1, 1992. As
the primary consideration for such shares, the Reporting
Persons conveyed to the Company certain oil and gas
properties, stock of various corporations which became wholly-
owned subsidiaries of the Company, and other real and personal
property.
This Amendment No. 1 reports the acquisition by (i) Mr.
McClendon of 730,750 shares of the Company's Common Stock, and
(ii) Mr. Ward of 730,750 shares of the Company's Common Stock,
all such shares being acquired in open market through
brokerage transactions. The investment cost (excluding
commission) of the 730,750 shares acquired by Mr. McClendon
was $14,792,814.00, consisting of funds borrowed by Mr.
McClendon pursuant to a lending arrangement with Morgan
Guaranty Trust Company of New York ("Morgan Guaranty"). The
investment cost (excluding commission) of the 730,750 shares
acquired by Mr. Ward was $14,792,814.00, consisting of funds
borrowed by Mr. Ward pursuant to a lending arrangement with
Morgan Guaranty.
Item 4. Purpose of Transaction.
______________________
Mr. McClendon and Mr. Ward acquired the shares of the
Company's Common Stock for purposes of investment. In the
future, either or both of the reporting persons may decide to
(i) purchase additional shares of Common Stock or (ii) dispose
of any or all of the Common Stock of the Company in any manner
permitted by applicable securities laws.
The reporting persons have no present plans or intentions
relating to the transactions described in subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
____________________________________
The aggregate percentage of shares of Common Stock reported as
beneficially owned by each Reporting Person is based upon
69,562,725 shares of Common Stock outstanding on January 31,
1997, as reported by the Company.
(a) The following table sets forth the aggregate number and
percentage of the class of Common Stock of the Company
identified pursuant to Item 1 beneficially owned by each
person named in Item 2:
Person Amount Percent
________ ________ _________
Aubrey K. McClendon 10,852,226 15.45%
Chesapeake Investments 508,560 .73%
Tom L. Ward 11,086,802 15.79%
TLW Investments 1,846,860 2.65%
____________________
This amount includes (i) 1,116 shares held on
behalf of Mr. McClendon in the Chesapeake Energy Corporation
Savings and Incentive Stock Bonus Plan and (ii) 666,000 shares
which Mr. McClendon has the right to acquire within sixty (60)
days pursuant to stock options granted by the Company.
This amount includes 508,560 shares owned of record
by CI, of which Mr. McClendon is the sole general partner. CI
and Mr. McClendon share voting and dispositive power over such
shares.
This amount includes (i) 2,752 shares held on
behalf of Mr. Ward in the Chesapeake Energy Corporation Savings
and Incentive Stock Bonus Plan, and (ii) 666,000 shares which Mr.
Ward has the right to acquire within sixty (60) days pursuant to
stock options granted by the Company.
This amount includes 1,846,860 shares owned of
record by TLW, of which Mr. Ward is the sole shareholder,
director, and Chief Executive Officer. TLW and Mr. Ward share
voting and dispositive power over such shares.
(b) The following table sets forth, for each person and
entity identified under paragraph (a), the number of shares of
Common Stock of the Company as to which the person has (1) the
sole power to vote or direct the voting, (2) shared power to
vote or direct the voting, (3) the sole power to dispose or to
direct the disposition, or (4) shared power to dispose or to
direct the disposition:
Sole Voting Shared Voting
and Power of and Power of
Person or Entity Disposition Disposition
________________ ______________ _____________
Aubrey K. McClendon 10,343,706 508,560
Chesapeake Investments 0 508,560
Tom L. Ward 9,239,942 1,846,860
TLW Investments 0 1,846,860
______________________
See footnote (1) under paragraph (a) of this Item 5.
See footnote (2) under paragraph (a) of this Item 5.
See footnote (3) under paragraph (a) of this Item 5.
See footnote (4) under paragraph (a) of this Item 5.
(c) During the past sixty (60) days from the date of this
Schedule 13D, the following transactions were effected in the
Common Stock of the Company by a Reporting Person:
Aubrey K. McClendon
___________________
Number Price,
of Shares Excluding
Date Acquired Commission
________ ___________ __________
02-06-97 49,400 $21.6688
02-07-97 50,600 $23.7731
02-10-97 530,750 $19.5823
02-11-97 50,000 $20.925
02-12-97 50,000 $21.598
Tom L. Ward
___________
Number Price,
of Shares Excluding
Date Acquired Commission
________ ___________ __________
02-06-97 49,400 $21.6688
02-07-97 50,600 $23.7731
02-10-97 530,750 $19.5823
02-11-97 50,000 $20.925
02-12-97 50,000 $21.598
The information set forth in this Amendment No. 1 as to the
par value and number of shares beneficially owned by each
Reporting Person reflects the Company's 2-for-1 stock split
effected on December 31, 1996.
(d) See Item 6, below.
(e) Not applicable.
Item 6. Contracts, Agreements, Underwritings or Relationships
With Respect to Securities of the Issuer.
_______________________________________________________
Mr. McClendon and Mr. Ward, as officers of the Company,
participate in the Company's 1992 Incentive Stock Option Plan,
1992 Nonstatutory Stock Option Plan, as amended, 1994 Stock
Option Plan, and 1996 Stock Option Plan.
Mr. McClendon has three separate lending agreements with
Morgan Guaranty, dated January 8, February 6, and February 13,
1997. Mr. McClendon also maintains lending arrangements with
Donaldson, Lufkin & Jenrette, dated November 22, 1996 and
Rauscher, Pierce & Refnes, Inc., dated February 25, 1994. A
portion of the shares of Common Stock owned by Mr. McClendon
is pledged as collateral for such loans. Each agreement
contains standard default and remedial provisions.
Mr. Ward has three separate lending agreements with Morgan
Guaranty, dated January 8, February 6, and February 13, 1997.
Mr. Ward also maintains lending arrangements with Donaldson,
Lufkin & Jenrette, dated November 22, 1996, and Rauscher,
Pierce & Refnes, Inc., dated October 25, 1991. A portion of
the shares of Common Stock owned by Mr. Ward is pledged as
collateral for such loans. Each agreement contains standard
default and remedial provisions.
Item 7. Materials to be Filed as Exhibits.
_________________________________
1. Limited Partnership Agreement of Chesapeake Investments, an
Oklahoma Limited Partnership, is filed as Exhibit E to the
Schedule 13D dated February 4, 1993 filed by Aubrey K.
McClendon and is incorporated herein by reference.
2. The Company's 1992 Incentive Stock Option Plan, as amended, is
incorporated herein by reference to Exhibit 10.1.1 to the
Company's Registration Statement on Form S-4, No. 33-93718,
filed June 23, 1995.
3. The Company's 1992 Nonstatutory Stock Option Plan, as amended,
is filed as Exhibit 10.1.2 to the Company's Quarterly Report
on Form 10-Q filed February 14, 1997, and is incorporated
herein by reference.
4. The Company's 1994 Stock Option Plan is filed as Exhibit
10.1.3 to the Company's Quarterly Report on Form 10-Q filed
February 14, 1997, and is incorporated herein by reference.
5. The Company's 1996 Stock Option Plan is filed as Exhibit B to
the Company's Proxy Statement for its 1996 Annual Meeting of
Shareholders filed November 6, 1996 and is incorporated herein
by reference.
6. Morgan Guaranty Trust Company of New York Demand Note, dated
February 6, 1997, executed by Aubrey K. McClendon.
7. Morgan Guaranty Trust Company of New York Demand Note, dated
February 6, 1997 executed by Tom L. Ward.
8. Morgan Guaranty Trust Company of New York Demand Note, dated
February 13, 1997, executed by Aubrey K. McClendon.
9. Morgan Guaranty Trust Company of New York Demand Note
executed by Tom L. Ward.
10. Joint Filing Agreement.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
DATED: March 7, 1997.
AUBREY K. MCCLENDON
Aubrey K. McClendon, an individual
CHESAPEAKE INVESTMENTS, AN OKLAHOMA
LIMITED PARTNERSHIP, an Oklahoma
Limited Partnership
AUBREY K. MCCLENDON
Aubrey K. McClendon, General Partner
TOM L. WARD
Tom L. Ward, an individual
TLW INVESTMENTS, INC., an Oklahoma
corporation
TOM L. WARD
Tom L. Ward, Chief Executive Officer
INDEX TO EXHIBITS
Exhibit No. Description Method of Filing
- ----------- ----------- ----------------
99.1 Limited Partnership Agreement of Incorporated herein by
Chesapeake Investments, an reference to Exhibit E to
Oklahoma Limited Partnership the Schedule 13D dated
February 4, 1993
99.2 The Company's 1992 Incentive Incorporated herein by
Stock Option Plan, as amended reference to Exhibit 10.1.1
to the Company's Registration
Statement on Form S-4,
No. 33-93718, filed
June 23, 1995
99.3 The Company's 1992 Nonstatutory Incorporated herein by
Stock Option Plan, as amended reference to Exhibit 10.1.2
to the Company's Quarterly
Report on Form 10-Q filed
February 14, 1997
99.4 The Company's 1994 Stock Option Incorporated herein by
Plan reference to Exhibit 10.1.3
to the Company's Quarterly
Report on Form 10-Q filed
February 14, 1997
99.5 The Company's 1996 Stock Option Incorporated herein by
Plan reference to Exhibit B to
the Company's Proxy
Statement for its 1996
Annual Meeting of Share-
holders filed November 6,
1996
99.6 Morgan Guaranty Trust Company Filed herewith electronically
of New York Demand Note, dated
February 6, 1997, executed by
Aubrey K. McClendon
99.7 Morgan Guaranty Trust Company Filed herewith electronically
of New York Demand Note, dated
February 6, 1997, executed by
Tom L. Ward
99.8 Morgan Guaranty Trust Company Filed herewith electronically
of New York Demand Note, dated
February 13, 1997, executed by
Aubrey K. McClendon
99.9 Morgan Guaranty Trust Company Filed herewith electronically
of New York Demand Note
executed by Tom L. Ward
99.10 Joint Filing Agreement Filed herewith electronically
DEMAND NOTE
____________
U.S. $ 2,500,000.00 Date: February 6, 1997
FOR VALUE RECEIVED, Aubrey K. McClendon (the "Borrower")
promises to pay to the order of MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (the "Bank"), ON DEMAND at its office at 60 Wall Street,
New York, New York 10260-0060, U.S.A. for the account of its
Lending Office (as hereinafter defined), in lawful money of the
United States of America in same day funds (or in such funds as may
from time to time become customary for the settlement of
international transactions in U.S. dollars), the lesser of (i) U.S.
$2,500,000.00 or (ii) the then-outstanding principal amount of each
loan (the "Loan" or "Loans") made by the Bank from time to the
Borrower hereunder. The Borrower shall pay interest on the unpaid
principal amount of each Loan until maturity on the dates and at a
rate per annum as hereinafter set forth. As used herein, "Lending
Office" means, (i) with regard to Loans bearing interest based on
the Prime Rate (as hereinafter defined) (collectively, "Domestic
Loans"), the office of the Bank located at 60 Wall Street, New
York, New York or such other office as the Bank may designate and
(ii) with regard to Loans bearing interest based on the Eurodollar
Rate (collectively, "Eurodollar Loans"), the Nassau (Bahamas)
office of the Bank or such other office as the Bank may designate.
Interest based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid
for actual days elapsed (including the first day but excluding the
last day). Interest based on the Eurodollar Rate shall be computed
on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last
day).
Each Eurodollar Loan shall bear interest at a rate per annum
(the "Eurodollar Rate") equal to the Adjusted Eurodollar Rate (as
hereinafter defined) plus 1.000% (the "Eurodollar Margin"), payable
on the last day of the Interest Period applicable thereto and, if
such interest Period is longer than three months, at intervals of
three months after the first date thereof. The "Adjusted
Eurodollar Rate" applicable to any Interest Period (as hereinafter
defined) means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the applicable London Interbank Offered Rate by (ii)
1.00 minus the Eurodollar Reserve Percentage. The "London
Interbank Offered Rate" applicable to any Interest Period means the
rate per annum at which deposits in U.S. dollars are offered to the
Bank in the London interbank market at approximately 11:00 a.m.
(London time) two business days prior to the first day of such
Interest Period in an amount approximately equal to the principal
amount of the Loan to which such Interest Period applies and for
the period of time comparable to such Interest Period. The
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the
interest rate on the Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-
United States office of the Bank to United States residents). The
Adjusted Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage. As used herein, the term "Interest Period" means the
period beginning on the date of each Eurodollar Loan and ending on
the numerically corresponding day in the calendar month one, three
and six months after such date; provided, that if an Interest
Period would otherwise end on a day which is not a business day it
shall be extended to the next succeeding business day unless such
business day falls in the next calendar month, in which case the
Interest Period shall end on the next preceding business day;
provided, further, that if the Bank shall not have received written
notice to the contrary from the Borrower at least five business
days prior the end of an Interest Period the Borrower shall be
deemed to have requested to select an Interest Period with a
duration equal to that then ending. As used herein, the term
"business day" means any day on which dealings in U.S. dollar
deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and foreign exchange
business in London and New York City. Notice by the Bank to the
Borrower of the rate of interest so determined shall be binding and
conclusive upon the Borrower in the absence of manifest error.
Each Domestic Loan shall bear interest payable on the last of
each month at a rate per annum for each day equal to the rate of
interest publicly announced by the Bank in New York City from time
to time as its Prime Rate (the "Prime Rate") for such day, plus
0.000%.
The Borrower shall pay interest on the unpaid principal amount
of each Loan after the maturity thereof and, to the extent
permitted by law, on accrued and unpaid interest until paid at a
rate per annum equal to the sum of 2% plus the Prime Rate.
If after the date of this Note any applicable rule, executive
order, decree, regulation or interpretation is amended, modified,
enacted or promulgated by any government or governmental authority
so as to (i) change the basis of taxation of payments to the Bank
or the Lending Office of the Bank extending a Eurodollar Loan (the
"Eurodollar Lending Office") in respect to the principal of and
interest on any Eurodollar Loan (except for changes in the rate of
taxation on the overall net income of the Bank by the United States
of America or the Eurodollar Lending Office of the Bank by the
jurisdiction in which such Lending Office is located), or (ii)
impose, modify or deem applicable any reserve, special deposit or
similar requirement against any of the assets of, deposits with or
for the account of, or credit extended by the Bank's Eurodollar
Lending Office, or (iii) impose on the Bank (or its Eurodollar
Lending Office) or the London interbank market any other conditions
affecting any Loan, the Loans or this Note, and the result of any
of the foregoing is to increase the cost to the Bank (or its
Eurodollar Lending Office) of agreeing to make or making, funding
or maintaining any Loan evidenced by this Note or would have the
effect of reducing the rate of return on the capital of the Bank or
any entity controlling the Bank (its "Parent") as a consequence of
agreeing to make any Loan, or to reduce the amount of any sum
receivable by the Bank (or its Eurodollar Lending Office) on this
Note, then the Borrower shall pay to the Bank or its Parent upon
demand such amount as will compensate the Bank or its Parent for
such additional cost or reduction in return. A certificate of the
Bank setting forth the basis for the determination of any amount
necessary to compensate the Bank or its Parent as aforesaid shall
be conclusive as to the determination of such amount in the absence
of manifest error.
If, after the date of this Note, the introduction of, or any
change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
or compliance by the Bank (or its Eurodollar Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for the
Bank (or its Eurodollar Lending Office) to make, maintain or fund
its Eurodollar Loans, the Bank forthwith shall so notify the
Borrower. Upon receipt of such notice, the Borrower shall prepay
in full the then outstanding principal amount of each Eurodollar
Loan, together with accrued interest thereon, either (a) on the
last day of the Interest Period applicable thereto if the Bank may
lawfully continue to maintain and fund such Loan to such day or (b)
immediately if the Bank may not lawfully continue to fund and
maintain such Loan to such day.
Eurodollar Loans may not be repaid at the Borrower's option on
a date other than the last day of an Interest Period. If, however,
the Borrower makes any payment of principal of any Eurodollar Loan
on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall reimburse the Bank on demand
for any loss or expense incurred by it as a result of the timing of
such payment, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties,
provided that the Bank shall have delivered to the Borrower a
certificate as to the amount of such loss, which certificate shall
be conclusive in the absence of manifest error.
Domestic Loans may be prepaid at any time without penalty or
premium.
The Borrower hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
Bank of its rights hereunder in any particular instance shall not
constitute a waiver of any right in any subsequent instance.
The holder of this Note shall, and is hereby authorized by the
Borrower to, endorse on the schedule forming a part hereof
appropriate notations evidencing the date and the amount of each
Loan made by the Bank, the date and amount of each payment and
principal, whether such Loan is a Domestic or Eurodollar Loan and,
in the case of Eurodollar Loans, the Eurodollar Rate applicable
thereto.
If this Note is not paid in full when due the Borrower agrees
to pay all costs and expenses of collection, including reasonable
attorney's fees.
To secure payment of this Note, the Borrower hereby transfers,
pledges, gives a security interest in and delivers to the Bank all
present and future contents of the Borrower's assets held in
Custody Account C89394 at 50% margin, all proceeds and products
thereof, accessions thereto and substitutions therefor (the
"Collateral").
Upon the nonpayment of any amount when due hereunder, the
holder shall have the rights and remedies provided in the Uniform
Commercial Code in force in New York at the date of execution of
this Note and in addition to, in substitution for, in modification
of, or in conjunction with those rights and remedies, the holder or
its agents may, in its discretion, sell, assign and deliver all or
any part of the Collateral at any broker's board or at public or
private sale without notice or advertisement, and bid and become
purchasers at any public sale or at any broker's board, and, if
notice to the Borrower is required by law, give written notice to
the Borrower five days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the
Collateral will be made by mailing such notice to the address
designated by the Borrower with the Borrower's signature below.
The Borrower agrees that the proceeds of the disposition of the
Collateral may be applied by the holder to the satisfaction of the
liabilities of the Borrower to the holder in any order of
preference which the holder, in its sole discretion, chooses, and
that the excess, if any, shall be returned to the Borrower, which
shall continue liable to the holder for any deficiency remaining
with interest thereon. The waiver of remedying of any default
shall not operate as a waiver of the default remedies or any other
prior or subsequent default.
The undersigned, if more than one, shall be jointly and
severally liable hereunder and the term "Borrower" shall mean the
undersigned or any one or more of them and their heirs, executors,
administrators, successors and assigns.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH. THE
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH.
Signature:
AUBREY K. MCCLENDON _____________________________
Aubrey K. McClendon
Address: Post Office Box 18496 Address: ________________
Oklahoma City, OK 73154 ________________
and
c/o Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, OK 73102
Custodial Agreement relating to Account C89394 omitted.
DEMAND NOTE
____________
U.S. $ 2,500,000.00 Date: February 6, 1997
FOR VALUE RECEIVED, Tom L. Ward (the "Borrower") promises to
pay to the order of MORGAN GUARANTY TRUST COMPANY OF NEW YORK (the
"Bank"), ON DEMAND at its office at 60 Wall Street, New York, New
York 10260-0060, U.S.A. for the account of its Lending Office (as
hereinafter defined), in lawful money of the United States of
America in same day funds (or in such funds as may from time to
time become customary for the settlement of international
transactions in U.S. dollars), the lesser of (i) U.S. $2,500,000.00
or (ii) the then-outstanding principal amount of each loan (the
"Loan" or "Loans") made by the Bank from time to the Borrower
hereunder. The Borrower shall pay interest on the unpaid principal
amount of each Loan until maturity on the dates and at a rate per
annum as hereinafter set forth. As used herein, "Lending Office"
means, (i) with regard to Loans bearing interest based on the Prime
Rate (as hereinafter defined) (collectively, "Domestic Loans"), the
office of the Bank located at 60 Wall Street, New York, New York or
such other office as the Bank may designate and (ii) with regard to
Loans bearing interest based on the Eurodollar Rate (collectively,
"Eurodollar Loans"), the Nassau (Bahamas) office of the Bank or
such other office as the Bank may designate.
Interest based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid
for actual days elapsed (including the first day but excluding the
last day). Interest based on the Eurodollar Rate shall be computed
on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last
day).
Each Eurodollar Loan shall bear interest at a rate per annum
(the "Eurodollar Rate") equal to the Adjusted Eurodollar Rate (as
hereinafter defined) plus 1.000% (the "Eurodollar Margin"), payable
on the last day of the Interest Period applicable thereto and, if
such interest Period is longer than three months, at intervals of
three months after the first date thereof. The "Adjusted
Eurodollar Rate" applicable to any Interest Period (as hereinafter
defined) means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the applicable London Interbank Offered Rate by (ii)
1.00 minus the Eurodollar Reserve Percentage. The "London
Interbank Offered Rate" applicable to any Interest Period means the
rate per annum at which deposits in U.S. dollars are offered to the
Bank in the London interbank market at approximately 11:00 a.m.
(London time) two business days prior to the first day of such
Interest Period in an amount approximately equal to the principal
amount of the Loan to which such Interest Period applies and for
the period of time comparable to such Interest Period. The
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the
interest rate on the Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-
United States office of the Bank to United States residents). The
Adjusted Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage. As used herein, the term "Interest Period" means the
period beginning on the date of each Eurodollar Loan and ending on
the numerically corresponding day in the calendar month one, three
and six months after such date; provided, that if an Interest
Period would otherwise end on a day which is not a business day it
shall be extended to the next succeeding business day unless such
business day falls in the next calendar month, in which case the
Interest Period shall end on the next preceding business day;
provided, further, that if the Bank shall not have received written
notice to the contrary from the Borrower at least five business
days prior the end of an Interest Period the Borrower shall be
deemed to have requested to select an Interest Period with a
duration equal to that then ending. As used herein, the term
"business day" means any day on which dealings in U.S. dollar
deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and foreign exchange
business in London and New York City. Notice by the Bank to the
Borrower of the rate of interest so determined shall be binding and
conclusive upon the Borrower in the absence of manifest error.
Each Domestic Loan shall bear interest payable on the last of
each month at a rate per annum for each day equal to the rate of
interest publicly announced by the Bank in New York City from time
to time as its Prime Rate (the "Prime Rate") for such day, plus
0.000%.
The Borrower shall pay interest on the unpaid principal amount
of each Loan after the maturity thereof and, to the extent
permitted by law, on accrued and unpaid interest until paid at a
rate per annum equal to the sum of 2% plus the Prime Rate.
If after the date of this Note any applicable rule, executive
order, decree, regulation or interpretation is amended, modified,
enacted or promulgated by any government or governmental authority
so as to (i) change the basis of taxation of payments to the Bank
or the Lending Office of the Bank extending a Eurodollar Loan (the
"Eurodollar Lending Office") in respect to the principal of and
interest on any Eurodollar Loan (except for changes in the rate of
taxation on the overall net income of the Bank by the United States
of America or the Eurodollar Lending Office of the Bank by the
jurisdiction in which such Lending Office is located), or (ii)
impose, modify or deem applicable any reserve, special deposit or
similar requirement against any of the assets of, deposits with or
for the account of, or credit extended by the Bank's Eurodollar
Lending Office, or (iii) impose on the Bank (or its Eurodollar
Lending Office) or the London interbank market any other conditions
affecting any Loan, the Loans or this Note, and the result of any
of the foregoing is to increase the cost to the Bank (or its
Eurodollar Lending Office) of agreeing to make or making, funding
or maintaining any Loan evidenced by this Note or would have the
effect of reducing the rate of return on the capital of the Bank or
any entity controlling the Bank (its "Parent") as a consequence of
agreeing to make any Loan, or to reduce the amount of any sum
receivable by the Bank (or its Eurodollar Lending Office) on this
Note, then the Borrower shall pay to the Bank or its Parent upon
demand such amount as will compensate the Bank or its Parent for
such additional cost or reduction in return. A certificate of the
Bank setting forth the basis for the determination of any amount
necessary to compensate the Bank or its Parent as aforesaid shall
be conclusive as to the determination of such amount in the absence
of manifest error.
If, after the date of this Note, the introduction of, or any
change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
or compliance by the Bank (or its Eurodollar Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for the
Bank (or its Eurodollar Lending Office) to make, maintain or fund
its Eurodollar Loans, the Bank forthwith shall so notify the
Borrower. Upon receipt of such notice, the Borrower shall prepay
in full the then outstanding principal amount of each Eurodollar
Loan, together with accrued interest thereon, either (a) on the
last day of the Interest Period applicable thereto if the Bank may
lawfully continue to maintain and fund such Loan to such day or (b)
immediately if the Bank may not lawfully continue to fund and
maintain such Loan to such day.
Eurodollar Loans may not be repaid at the Borrower's option on
a date other than the last day of an Interest Period. If, however,
the Borrower makes any payment of principal of any Eurodollar Loan
on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall reimburse the Bank on demand
for any loss or expense incurred by it as a result of the timing of
such payment, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties,
provided that the Bank shall have delivered to the Borrower a
certificate as to the amount of such loss, which certificate shall
be conclusive in the absence of manifest error.
Domestic Loans may be prepaid at any time without penalty or
premium.
The Borrower hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
Bank of its rights hereunder in any particular instance shall not
constitute a waiver of any right in any subsequent instance.
The holder of this Note shall, and is hereby authorized by the
Borrower to, endorse on the schedule forming a part hereof
appropriate notations evidencing the date and the amount of each
Loan made by the Bank, the date and amount of each payment and
principal, whether such Loan is a Domestic or Eurodollar Loan and,
in the case of Eurodollar Loans, the Eurodollar Rate applicable
thereto.
If this Note is not paid in full when due the Borrower agrees
to pay all costs and expenses of collection, including reasonable
attorney's fees.
To secure payment of this Note, the Borrower hereby transfers,
pledges, gives a security interest in and delivers to the Bank all
present and future contents of the Borrower's assets held in
Custody Account C89395 at 50% margin, all proceeds and products
thereof, accessions thereto and substitutions therefor (the
"Collateral").
Upon the nonpayment of any amount when due hereunder, the
holder shall have the rights and remedies provided in the Uniform
Commercial Code in force in New York at the date of execution of
this Note and in addition to, in substitution for, in modification
of, or in conjunction with those rights and remedies, the holder or
its agents may, in its discretion, sell, assign and deliver all or
any part of the Collateral at any broker's board or at public or
private sale without notice or advertisement, and bid and become
purchasers at any public sale or at any broker's board, and, if
notice to the Borrower is required by law, give written notice to
the Borrower five days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the
Collateral will be made by mailing such notice to the address
designated by the Borrower with the Borrower's signature below.
The Borrower agrees that the proceeds of the disposition of the
Collateral may be applied by the holder to the satisfaction of the
liabilities of the Borrower to the holder in any order of
preference which the holder, in its sole discretion, chooses, and
that the excess, if any, shall be returned to the Borrower, which
shall continue liable to the holder for any deficiency remaining
with interest thereon. The waiver of remedying of any default
shall not operate as a waiver of the default remedies or any other
prior or subsequent default.
The undersigned, if more than one, shall be jointly and
severally liable hereunder and the term "Borrower" shall mean the
undersigned or any one or more of them and their heirs, executors,
administrators, successors and assigns.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH. THE
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH.
Signature:
TOM L. WARD _______________________________
Tom L. Ward
Address: Post Office Box 54525 Address: ________________
Oklahoma City, OK 73154 ________________
and
c/o Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, OK 73102
Custodial Agreement relating to Account C89395 omitted.
DEMAND NOTE
____________
U.S. $ 16,500,000.00 Date: ___________, 199_
FOR VALUE RECEIVED, Aubrey K. McClendon (the "Borrower")
promises to pay to the order of MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (the "Bank"), ON DEMAND at its office at 60 Wall Street,
New York, New York 10260-0060, U.S.A. for the account of its
Lending Office (as hereinafter defined), in lawful money of the
United States of America in same day funds (or in such funds as may
from time to time become customary for the settlement of
international transactions in U.S. dollars), the lesser of (i) U.S.
$16,500,000.00 or (ii) the then-outstanding principal amount of
each loan (the "Loan" or "Loans") made by the Bank from time to the
Borrower hereunder. The Borrower shall pay interest on the unpaid
principal amount of each Loan until maturity on the dates and at a
rate per annum as hereinafter set forth. As used herein, "Lending
Office" means, (i) with regard to Loans bearing interest based on
the Prime Rate (as hereinafter defined) (collectively, "Domestic
Loans"), the office of the Bank located at 60 Wall Street, New
York, New York or such other office as the Bank may designate and
(ii) with regard to Loans bearing interest based on the Eurodollar
Rate (collectively, "Eurodollar Loans"), the Nassau (Bahamas)
office of the Bank or such other office as the Bank may designate.
Interest based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid
for actual days elapsed (including the first day but excluding the
last day). Interest based on the Eurodollar Rate shall be computed
on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last
day).
Each Eurodollar Loan shall bear interest at a rate per annum
(the "Eurodollar Rate") equal to the Adjusted Eurodollar Rate (as
hereinafter defined) plus 1.000% (the "Eurodollar Margin"), payable
on the last day of the Interest Period applicable thereto and, if
such interest Period is longer than three months, at intervals of
three months after the first date thereof. The "Adjusted
Eurodollar Rate" applicable to any Interest Period (as hereinafter
defined) means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the applicable London Interbank Offered Rate by (ii)
1.00 minus the Eurodollar Reserve Percentage. The "London
Interbank Offered Rate" applicable to any Interest Period means the
rate per annum at which deposits in U.S. dollars are offered to the
Bank in the London interbank market at approximately 11:00 a.m.
(London time) two business days prior to the first day of such
Interest Period in an amount approximately equal to the principal
amount of the Loan to which such Interest Period applies and for
the period of time comparable to such Interest Period. The
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the
interest rate on the Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-
United States office of the Bank to United States residents). The
Adjusted Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage. As used herein, the term "Interest Period" means the
period beginning on the date of each Eurodollar Loan and ending on
the numerically corresponding day in the calendar month one, three
and six months after such date; provided, that if an Interest
Period would otherwise end on a day which is not a business day it
shall be extended to the next succeeding business day unless such
business day falls in the next calendar month, in which case the
Interest Period shall end on the next preceding business day;
provided, further, that if the Bank shall not have received written
notice to the contrary from the Borrower at least five business
days prior the end of an Interest Period the Borrower shall be
deemed to have requested to select an Interest Period with a
duration equal to that then ending. As used herein, the term
"business day" means any day on which dealings in U.S. dollar
deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and foreign exchange
business in London and New York City. Notice by the Bank to the
Borrower of the rate of interest so determined shall be binding and
conclusive upon the Borrower in the absence of manifest error.
Each Domestic Loan shall bear interest payable on the last of
each month at a rate per annum for each day equal to the rate of
interest publicly announced by the Bank in New York City from time
to time as its Prime Rate (the "Prime Rate") for such day, plus
0.000%.
The Borrower shall pay interest on the unpaid principal amount
of each Loan after the maturity thereof and, to the extent
permitted by law, on accrued and unpaid interest until paid at a
rate per annum equal to the sum of 2% plus the Prime Rate.
If after the date of this Note any applicable rule, executive
order, decree, regulation or interpretation is amended, modified,
enacted or promulgated by any government or governmental authority
so as to (i) change the basis of taxation of payments to the Bank
or the Lending Office of the Bank extending a Eurodollar Loan (the
"Eurodollar Lending Office") in respect to the principal of and
interest on any Eurodollar Loan (except for changes in the rate of
taxation on the overall net income of the Bank by the United States
of America or the Eurodollar Lending Office of the Bank by the
jurisdiction in which such Lending Office is located), or (ii)
impose, modify or deem applicable any reserve, special deposit or
similar requirement against any of the assets of, deposits with or
for the account of, or credit extended by the Bank's Eurodollar
Lending Office, or (iii) impose on the Bank (or its Eurodollar
Lending Office) or the London interbank market any other conditions
affecting any Loan, the Loans or this Note, and the result of any
of the foregoing is to increase the cost to the Bank (or its
Eurodollar Lending Office) of agreeing to make or making, funding
or maintaining any Loan evidenced by this Note or would have the
effect of reducing the rate of return on the capital of the Bank or
any entity controlling the Bank (its "Parent") as a consequence of
agreeing to make any Loan, or to reduce the amount of any sum
receivable by the Bank (or its Eurodollar Lending Office) on this
Note, then the Borrower shall pay to the Bank or its Parent upon
demand such amount as will compensate the Bank or its Parent for
such additional cost or reduction in return. A certificate of the
Bank setting forth the basis for the determination of any amount
necessary to compensate the Bank or its Parent as aforesaid shall
be conclusive as to the determination of such amount in the absence
of manifest error.
If, after the date of this Note, the introduction of, or any
change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
or compliance by the Bank (or its Eurodollar Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for the
Bank (or its Eurodollar Lending Office) to make, maintain or fund
its Eurodollar Loans, the Bank forthwith shall so notify the
Borrower. Upon receipt of such notice, the Borrower shall prepay
in full the then outstanding principal amount of each Eurodollar
Loan, together with accrued interest thereon, either (a) on the
last day of the Interest Period applicable thereto if the Bank may
lawfully continue to maintain and fund such Loan to such day or (b)
immediately if the Bank may not lawfully continue to fund and
maintain such Loan to such day.
Eurodollar Loans may not be repaid at the Borrower's option on
a date other than the last day of an Interest Period. If, however,
the Borrower makes any payment of principal of any Eurodollar Loan
on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall reimburse the Bank on demand
for any loss or expense incurred by it as a result of the timing of
such payment, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties,
provided that the Bank shall have delivered to the Borrower a
certificate as to the amount of such loss, which certificate shall
be conclusive in the absence of manifest error.
Domestic Loans may be prepaid at any time without penalty or
premium.
The Borrower hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
Bank of its rights hereunder in any particular instance shall not
constitute a waiver of any right in any subsequent instance.
The holder of this Note shall, and is hereby authorized by the
Borrower to, endorse on the schedule forming a part hereof
appropriate notations evidencing the date and the amount of each
Loan made by the Bank, the date and amount of each payment and
principal, whether such Loan is a Domestic or Eurodollar Loan and,
in the case of Eurodollar Loans, the Eurodollar Rate applicable
thereto.
If this Note is not paid in full when due the Borrower agrees
to pay all costs and expenses of collection, including reasonable
attorney's fees.
To secure payment of this Note, the Borrower hereby transfers,
pledges, gives a security interest in and delivers to the Bank all
present and future contents of the Borrower's assets held in
Custody Account C89394 at 50% margin, all proceeds and products
thereof, accessions thereto and substitutions therefor (the
"Collateral").
Upon the nonpayment of any amount when due hereunder, the
holder shall have the rights and remedies provided in the Uniform
Commercial Code in force in New York at the date of execution of
this Note and in addition to, in substitution for, in modification
of, or in conjunction with those rights and remedies, the holder or
its agents may, in its discretion, sell, assign and deliver all or
any part of the Collateral at any broker's board or at public or
private sale without notice or advertisement, and bid and become
purchasers at any public sale or at any broker's board, and, if
notice to the Borrower is required by law, give written notice to
the Borrower five days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the
Collateral will be made by mailing such notice to the address
designated by the Borrower with the Borrower's signature below.
The Borrower agrees that the proceeds of the disposition of the
Collateral may be applied by the holder to the satisfaction of the
liabilities of the Borrower to the holder in any order of
preference which the holder, in its sole discretion, chooses, and
that the excess, if any, shall be returned to the Borrower, which
shall continue liable to the holder for any deficiency remaining
with interest thereon. The waiver of remedying of any default
shall not operate as a waiver of the default remedies or any other
prior or subsequent default.
The undersigned, if more than one, shall be jointly and
severally liable hereunder and the term "Borrower" shall mean the
undersigned or any one or more of them and their heirs, executors,
administrators, successors and assigns.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH. THE
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH.
Signature:
AUBREY K. MCCLENDON
_______________________________
Aubrey K. McClendon 2/13/97
Address: Post Office Box 18496 Address: ________________
Oklahoma City, OK 73154 ________________
and
c/o Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, OK 73102
Custodial Agreement relating to Account C89394 omitted.
DEMAND NOTE
____________
U.S. $ 16,500,000.00 Date: ___________, 199_
FOR VALUE RECEIVED, Tom L. Ward (the "Borrower") promises to
pay to the order of MORGAN GUARANTY TRUST COMPANY OF NEW YORK (the
"Bank"), ON DEMAND at its office at 60 Wall Street, New York, New
York 10260-0060, U.S.A. for the account of its Lending Office (as
hereinafter defined), in lawful money of the United States of
America in same day funds (or in such funds as may from time to
time become customary for the settlement of international
transactions in U.S. dollars), the lesser of (i) U.S.
$16,500,000.00 or (ii) the then-outstanding principal amount of
each loan (the "Loan" or "Loans") made by the Bank from time to the
Borrower hereunder. The Borrower shall pay interest on the unpaid
principal amount of each Loan until maturity on the dates and at a
rate per annum as hereinafter set forth. As used herein, "Lending
Office" means, (i) with regard to Loans bearing interest based on
the Prime Rate (as hereinafter defined) (collectively, "Domestic
Loans"), the office of the Bank located at 60 Wall Street, New
York, New York or such other office as the Bank may designate and
(ii) with regard to Loans bearing interest based on the Eurodollar
Rate (collectively, "Eurodollar Loans"), the Nassau (Bahamas)
office of the Bank or such other office as the Bank may designate.
Interest based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid
for actual days elapsed (including the first day but excluding the
last day). Interest based on the Eurodollar Rate shall be computed
on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last
day).
Each Eurodollar Loan shall bear interest at a rate per annum
(the "Eurodollar Rate") equal to the Adjusted Eurodollar Rate (as
hereinafter defined) plus 1.000% (the "Eurodollar Margin"), payable
on the last day of the Interest Period applicable thereto and, if
such interest Period is longer than three months, at intervals of
three months after the first date thereof. The "Adjusted
Eurodollar Rate" applicable to any Interest Period (as hereinafter
defined) means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the applicable London Interbank Offered Rate by (ii)
1.00 minus the Eurodollar Reserve Percentage. The "London
Interbank Offered Rate" applicable to any Interest Period means the
rate per annum at which deposits in U.S. dollars are offered to the
Bank in the London interbank market at approximately 11:00 a.m.
(London time) two business days prior to the first day of such
Interest Period in an amount approximately equal to the principal
amount of the Loan to which such Interest Period applies and for
the period of time comparable to such Interest Period. The
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of
"Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the
interest rate on the Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-
United States office of the Bank to United States residents). The
Adjusted Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage. As used herein, the term "Interest Period" means the
period beginning on the date of each Eurodollar Loan and ending on
the numerically corresponding day in the calendar month one, three
and six months after such date; provided, that if an Interest
Period would otherwise end on a day which is not a business day it
shall be extended to the next succeeding business day unless such
business day falls in the next calendar month, in which case the
Interest Period shall end on the next preceding business day;
provided, further, that if the Bank shall not have received written
notice to the contrary from the Borrower at least five business
days prior the end of an Interest Period the Borrower shall be
deemed to have requested to select an Interest Period with a
duration equal to that then ending. As used herein, the term
"business day" means any day on which dealings in U.S. dollar
deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and foreign exchange
business in London and New York City. Notice by the Bank to the
Borrower of the rate of interest so determined shall be binding and
conclusive upon the Borrower in the absence of manifest error.
Each Domestic Loan shall bear interest payable on the last of
each month at a rate per annum for each day equal to the rate of
interest publicly announced by the Bank in New York City from time
to time as its Prime Rate (the "Prime Rate") for such day, plus
0.000%.
The Borrower shall pay interest on the unpaid principal amount
of each Loan after the maturity thereof and, to the extent
permitted by law, on accrued and unpaid interest until paid at a
rate per annum equal to the sum of 2% plus the Prime Rate.
If after the date of this Note any applicable rule, executive
order, decree, regulation or interpretation is amended, modified,
enacted or promulgated by any government or governmental authority
so as to (i) change the basis of taxation of payments to the Bank
or the Lending Office of the Bank extending a Eurodollar Loan (the
"Eurodollar Lending Office") in respect to the principal of and
interest on any Eurodollar Loan (except for changes in the rate of
taxation on the overall net income of the Bank by the United States
of America or the Eurodollar Lending Office of the Bank by the
jurisdiction in which such Lending Office is located), or (ii)
impose, modify or deem applicable any reserve, special deposit or
similar requirement against any of the assets of, deposits with or
for the account of, or credit extended by the Bank's Eurodollar
Lending Office, or (iii) impose on the Bank (or its Eurodollar
Lending Office) or the London interbank market any other conditions
affecting any Loan, the Loans or this Note, and the result of any
of the foregoing is to increase the cost to the Bank (or its
Eurodollar Lending Office) of agreeing to make or making, funding
or maintaining any Loan evidenced by this Note or would have the
effect of reducing the rate of return on the capital of the Bank or
any entity controlling the Bank (its "Parent") as a consequence of
agreeing to make any Loan, or to reduce the amount of any sum
receivable by the Bank (or its Eurodollar Lending Office) on this
Note, then the Borrower shall pay to the Bank or its Parent upon
demand such amount as will compensate the Bank or its Parent for
such additional cost or reduction in return. A certificate of the
Bank setting forth the basis for the determination of any amount
necessary to compensate the Bank or its Parent as aforesaid shall
be conclusive as to the determination of such amount in the absence
of manifest error.
If, after the date of this Note, the introduction of, or any
change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof
or compliance by the Bank (or its Eurodollar Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for the
Bank (or its Eurodollar Lending Office) to make, maintain or fund
its Eurodollar Loans, the Bank forthwith shall so notify the
Borrower. Upon receipt of such notice, the Borrower shall prepay
in full the then outstanding principal amount of each Eurodollar
Loan, together with accrued interest thereon, either (a) on the
last day of the Interest Period applicable thereto if the Bank may
lawfully continue to maintain and fund such Loan to such day or (b)
immediately if the Bank may not lawfully continue to fund and
maintain such Loan to such day.
Eurodollar Loans may not be repaid at the Borrower's option on
a date other than the last day of an Interest Period. If, however,
the Borrower makes any payment of principal of any Eurodollar Loan
on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall reimburse the Bank on demand
for any loss or expense incurred by it as a result of the timing of
such payment, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties,
provided that the Bank shall have delivered to the Borrower a
certificate as to the amount of such loss, which certificate shall
be conclusive in the absence of manifest error.
Domestic Loans may be prepaid at any time without penalty or
premium.
The Borrower hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
Bank of its rights hereunder in any particular instance shall not
constitute a waiver of any right in any subsequent instance.
The holder of this Note shall, and is hereby authorized by the
Borrower to, endorse on the schedule forming a part hereof
appropriate notations evidencing the date and the amount of each
Loan made by the Bank, the date and amount of each payment and
principal, whether such Loan is a Domestic or Eurodollar Loan and,
in the case of Eurodollar Loans, the Eurodollar Rate applicable
thereto.
If this Note is not paid in full when due the Borrower agrees
to pay all costs and expenses of collection, including reasonable
attorney's fees.
To secure payment of this Note, the Borrower hereby transfers,
pledges, gives a security interest in and delivers to the Bank all
present and future contents of the Borrower's assets held in
Custody Account C89395 at 50% margin, all proceeds and products
thereof, accessions thereto and substitutions therefor (the
"Collateral").
Upon the nonpayment of any amount when due hereunder, the
holder shall have the rights and remedies provided in the Uniform
Commercial Code in force in New York at the date of execution of
this Note and in addition to, in substitution for, in modification
of, or in conjunction with those rights and remedies, the holder or
its agents may, in its discretion, sell, assign and deliver all or
any part of the Collateral at any broker's board or at public or
private sale without notice or advertisement, and bid and become
purchasers at any public sale or at any broker's board, and, if
notice to the Borrower is required by law, give written notice to
the Borrower five days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the
Collateral will be made by mailing such notice to the address
designated by the Borrower with the Borrower's signature below.
The Borrower agrees that the proceeds of the disposition of the
Collateral may be applied by the holder to the satisfaction of the
liabilities of the Borrower to the holder in any order of
preference which the holder, in its sole discretion, chooses, and
that the excess, if any, shall be returned to the Borrower, which
shall continue liable to the holder for any deficiency remaining
with interest thereon. The waiver of remedying of any default
shall not operate as a waiver of the default remedies or any other
prior or subsequent default.
The undersigned, if more than one, shall be jointly and
severally liable hereunder and the term "Borrower" shall mean the
undersigned or any one or more of them and their heirs, executors,
administrators, successors and assigns.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH. THE
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
AGREEMENT RECEIVED BY THE BANK IN CONNECTION HEREWITH.
Signature:
TOM L. WARD
Tom L. Ward _____________________________
Address: Post Office Box 54525 Address: ________________
Oklahoma City, OK 73154 ________________
and
c/o Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, OK 73102
Custodial Agreement relating to Account C89395 omitted.
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to
the joint filing with each other of the attached statement on
Schedule 13D and to all amendments to such statement and that such
statement and all amendments to such statement is made on behalf of
each of them.
IN WITNESS WHEREOF, the undersigned hereby execute this
agreement on March 7, 1997.
AUBREY K. MCCLENDON
Aubrey K. McClendon, an individual
CHESAPEAKE INVESTMENTS, AN OKLAHOMA
LIMITED PARTNERSHIP, an Oklahoma
limited parntership
AUBREY K. MCCLENDON
Aubrey K. McClendon, General Partner
TOM L. WARD
Tom L. Ward, an individual
TLW INVESTMENTS, Inc., an Oklahoma
corporation
TOM L. WARD
Tom L. Ward, Chief Executive Officer