EXHIBIT "1"
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into effective the 12th day of December, 2001,
between XXXXX X. XXXXXXX, an individual (the "Seller"), and CHESAPEAKE ENERGY
CORPORATION, an Oklahoma corporation (the "Buyer").
BACKGROUND:
A. The Seller owns Ninety Thousand Two Hundred Thirty-One (90,231) shares of
common stock, par value $.01 (the "Common Stock"), of Canaan Energy Corporation,
an Oklahoma corporation (the "Corporation").
B. The Buyer desires to acquire and the Seller desires to sell to the Buyer the
Ninety Thousand Two Hundred Thirty-One (90,231) shares of Common Stock owned by
the Seller together with all distributions with respect to such shares of Common
Stock having a record date or received after the date of this Agreement
(collectively, the "Shares") on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Sale Agreement. Subject to the terms and conditions of this Agreement, the
Buyer agrees to purchase and the Seller agrees to sell the Shares. On the
Closing Date (as hereafter defined) absolute ownership of the Shares will be
transferred to the Buyer free and clear of all liens, claims and encumbrances
other than restrictions that are imposed under applicable federal and state
securities laws or reflected by legends on the certificates evidencing the
Shares as permitted under paragraph 4 of this Agreement.
2. Purchase Price. On the Closing Date, in consideration for the sale of the
Shares to the Buyer, the Buyer will pay in immediately available funds an amount
equal to Twelve Dollars ($12.00) multiplied by the number of Shares (the
"Purchase Price"). The Purchase Price is equal to One Million Eighty-Two
Thousand Seven Hundred Seventy-Two Dollars ($1,082,772.00).
3. Representations and Warranties. As an inducement to the Buyer to enter into
this Agreement, the Seller represents and warrants to the Buyer that as of the
execution of this Agreement and the Closing Date (as hereafter defined):
3.1 Ownership of Shares. The Seller has and will have good and valid title
to the Shares free and clear of all liens, encumbrances, charges,
equities, proxies, voting trusts, restrictions, agreements, rights of
first refusal and imperfections of title other than those items listed
at Schedule "3.1" attached as a part hereof. No person or entity other
than the Buyer or a person claiming by, through or under the Buyer
will have after the Closing Date: (a) any interest in the Shares,
either of record or beneficially; (b) the right to own, vote or
possess the Shares; or (c) the right to rescind, revoke, disaffirm,
terminate or invalidate this Agreement or the conveyance of the
Shares.
The Seller has taken all actions necessary under the Shareholder's
Agreement (as defined on Schedule "3.1" of this Agreement) to convey
the Shares to the Buyer and to satisfy any right of first refusal in
favor of the Corporation. The Corporation declined to acquire the
Shares in accordance with the Shareholder's Agreement.
3.2 No Assumption of Obligations. Except as set forth in Schedule "3.2"
attached as a part hereof, the execution and consummation of this
Agreement by the Buyer will not obligate the Buyer with respect to (or
result in the assumption by the Buyer of) any obligation of the Seller
under or with respect to any liability, agreement or commitment
relating to the Shares, including, without limitation, any shareholder
agreement or similar agreement relating to the Shares or regulating
the business, affairs, properties or finances of the Corporation.
3.3 Consents and Approvals. Except as disclosed in Schedule "3.3" attached
as a part hereof, the execution, delivery, performance and
consummation of this Agreement does not and will not: (a) violate,
conflict with or constitute a default or an event that, with notice or
lapse of time or both, would be a default, breach or violation under
any term or provision of any instrument, agreement, contract,
commitment, license, promissory note, conditional sales contract,
indenture, mortgage, deed of trust, trust agreement, lease, formation
document or other agreement, instrument or arrangement to which the
Seller is a party or is bound; (b) violate, conflict with or
constitute a breach of any statute, regulation or judicial or
administrative order, award, judgment or decree to which the Seller is
a party or is bound; or (c) result in the creation, imposition or
continuation of any adverse claim or interest, or any lien,
encumbrance, charge, equity or restriction of any nature whatsoever,
on or affecting the Seller or the Shares.
3.4 Litigation. Except as listed in Schedule "3.4" attached as a part
hereof, there is no: (1) action, suit or proceeding relating to the
Shares or the Seller's interest in the Shares pending or threatened in
writing; or (2) proceeding, investigation, charge, audit or inquiry
threatened in writing or pending before or by any federal, state,
municipal or other governmental court, department, commission, board,
bureau, agency or instrumentality which might result in an adverse
effect on title to the Shares or the Seller's interest in the Shares.
3.5 Authority. The Seller has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and has adequate
power, authority and legal right to enter into, execute, deliver and
perform this Agreement and to consummate the transaction contemplated
hereby. This Agreement is legal, valid and binding with respect to the
Seller and is enforceable in accordance with its terms. On execution,
delivery and performance of this Agreement in accordance with the
terms of this Agreement, the Buyer will receive ownership of one
hundred percent (100%) of the Shares free of all claims, liens,
encumbrances, obligations and liabilities of any kind. The foregoing
expressly: (1) excludes restrictions that are imposed under applicable
federal and state securities laws or reflected by legends on the
certificates evidencing the Shares, the provisions of the
Corporation's Certificate of Incorporation
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or the provisions of the Corporation's bylaws; and (2) includes,
without limitation, the right of any person to rescind, revoke,
disaffirm, terminate or invalidate this Agreement or the conveyance of
the Shares.
3.6 Exclusion. The Buyer has not made any representation or warranty to
the Seller other than those made expressly in paragraph 10 of this
Agreement in favor of the Seller. Without limiting the generality of
the foregoing the Buyer has not made to the Seller any representation
or warranty with respect to the operation, future revenue, expenses or
success of the Corporation, financial condition or other matter
regarding the Corporation.
4. Conditions. On or before the date the Closing Date, the Buyer will conduct
such investigation and inspection with respect to the Seller's title to the
Shares as the Buyer deems appropriate. If the Reissued Certificate (as hereafter
defined) cannot be issued within a reasonable period of time after the Closing
Date as a result of the following or if the Buyer determines that (1) the
certificates evidencing the Shares contain a legend other than as set forth in
Schedule "4" attached as a part hereof or (2) any of the Seller's
representations and warranties under this Agreement are untrue as of such date,
then the Buyer will have the option to terminate this Agreement by written
notice to the Seller or to provide written notice to the Seller setting forth
the Buyer's objections. If the Seller is unable to satisfy the Buyer's
objections, the Buyer will have the option to waive such objections or to
terminate this Agreement by written notice to the Seller and direct the Escrow
Agent (as hereafter defined) to return the Seller Closing Documents to the
Seller and return the Buyer Closing Documents to the Buyer. On termination of
this Agreement as provided under this paragraph 4 all parties will be released
from any and all obligations under this Agreement.
5. The Closing. This Agreement will be consummated as follows:
5.1 Buyer's Deliveries. On or before January 3, 2002 (the "Closing Date"),
the Buyer will deliver or cause to be delivered to Xxxxxxx Xxxxxx
Xxxxx & Xxxxxxx, as escrow agent (the "Escrow Agent"), the following
items (all documents will be duly executed and acknowledged where
required) (the "Buyer Closing Documents"):
5.1.1 Purchase Price. The Purchase Price for the Shares in immediately
available funds; and
5.1.2 Additional Documents. Such additional documents as might be
reasonably requested by the Seller to consummate this Agreement.
5.2 Seller's Deliveries. On the Closing Date, the Seller will deliver or
cause to be delivered to the Escrow Agent the following items (all
documents will be duly executed and acknowledged where required) (the
"Seller Closing Documents"):
5.2.1 Shares. Each original stock certificate evidencing the Shares
and a completed and executed stock power separate from
certificate with signature guaranteed; and
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5.2.2 Additional Documents. Such additional documents as might be
reasonably requested by the Buyer to consummate this Agreement.
5.3 Escrow Disbursement. On the Closing Date, the parties will take the
following actions:
5.3.1 Transfer. The Escrow Agent will cause the certificates
evidencing the Shares and the related transfer documents to be
submitted to the Corporation or the Corporation's transfer agent
with instructions for: (a) transfer of the Shares to and for
issuance in the name of the Buyer or the Buyer's designee; (b)
the delivery of the Reissued Certificate (as hereafter defined)
to the Escrow Agent; and (c) the delivery of the certificate
evidencing Common Stock in excess of the Shares to the Seller.
In the event that any distributions or dividends are declared or
received with respect to the Shares the Seller will deliver such
distribution to the Escrow Agent to be held as part of the
Shares and delivered in accordance with the terms of this
Agreement.
5.3.2 Distribution of Documents. On receipt by the Escrow Agent of a
stock certificate evidencing the Shares in the name of the Buyer
or the Buyer's designee (the "Reissued Certificate") in strict
accordance with the terms of this Agreement, the Escrow Agent
will: (a) deliver the Seller Closing Documents (including the
Reissued Certificate) to the Buyer; and (b) deliver the Buyer
Closing Documents to the Seller together with any excess Common
Stock not previously returned to the Seller as provided in
paragraph 5.3.1 of this Agreement. If this Agreement is
terminated in accordance with paragraph 4 of this Agreement the
Buyer Closing Documents and the Seller Closing Documents will be
delivered in accordance therewith. All interest earned on the
funds held by the Escrow Agent will be paid to the party that
receives the funds representing the Purchase Price.
5.3.3 Escrow Agent Matters. The duties and obligations of the Escrow
Agent will be determined solely by the express provisions of
this Agreement and the Escrow Agent will not be liable except
for the performance of the duties and obligations specifically
set out in this Agreement. The Escrow Agent acts hereunder as a
depository only, and is not responsible or liable for the
sufficiency, correctness, genuineness or validity of the subject
matter of the escrow, or any part thereof, or for the form or
execution of the Buyer Closing Documents and the Seller Closing
Documents, or for the identity or authority of any person. The
Escrow Agent will not be responsible for any failure or
inability of any party to this Agreement or of anyone else, to
deliver cash, papers, letters or other documents to the Escrow
Agent or otherwise honor any of the provisions of this
Agreement. In the event the Escrow Agent becomes involved in
litigation in connection with the escrow, the Seller and the
Buyer jointly and severally agree to indemnify and hold the
Escrow Agent harmless from all losses, costs, damages, expenses
and attorney fees suffered or incurred by the Escrow Agent as a
result thereof. The obligations of the
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Escrow Agent under this Agreement will be performed at the
office of the Escrow Agent in Oklahoma City, Oklahoma. For the
services to be rendered hereunder, the Escrow Agent will be
entitled to reimbursement of all out of pocket costs and
expenses.
5.4 Costs. The Seller will pay the Seller's attorney fees, the Buyer will
pay the Buyer's attorney fees and the Seller and the Buyer will each
pay fifty percent (50%) of the Escrow Agent's costs.
5.5 Risk of Loss. Effective on the Closing Date, beneficial ownership and
the risk of loss of the Shares will pass from the Seller to the Buyer
subject to the rights of the Buyer under paragraph 4 of this
Agreement.
6. Seller's Indemnification. The Seller agrees to pay, defend, indemnify,
reimburse and hold harmless the Buyer for, from and against any loss, damage,
claim, liability, debt, obligation or expense (including interest, reasonable
legal fees, and expenses of litigation) incurred, suffered, paid by or resulting
to the Buyer and which results from, arises out of or in connection with, is
based upon, or exists by reason of: (1) any misrepresentation of facts regarding
title to the Shares contained in paragraphs 3.1, 3.2, 3.3 and 3.5 of this
Agreement; or (2) any breach or default in performance by the Seller of any
covenant or obligation set forth in this Agreement. However, the foregoing
indemnification obligation will not apply to claims based solely on matters not
set forth in clauses (a) and (b) of this paragraph. In addition to the
foregoing, the Seller will pay to the Buyer interest on the amount of any loss,
damage, claim, liability, debt, obligation or expense the payment of which is or
becomes due to the Buyer by the Seller, such interest to be at a floating rate
of interest equal to the prime rate published from time to time in The Wall
Street Journal. Claims for indemnification involving the payment of money by the
Seller to the Buyer will be paid within ten (10) days after notification
thereof. Claims for indemnification involving amounts due to third parties will
be promptly paid by the Seller when due, subject to the Seller's right to
contest the same in good faith.
7. Buyer's Indemnification. The Buyer agrees to pay, defend, indemnify,
reimburse and hold harmless the Seller for, from and against any loss, damage,
claim, liability, debt, obligation or expense (including interest, reasonable
legal fees, and expenses of litigation) incurred, suffered, paid by or resulting
to the Seller and which results from, arises out of or in connection with, is
based upon, or exists by reason of any: (1) misrepresentation by the Buyer of
the facts contained in paragraphs 10.1 or 10.2 of this Agreement; or (2) breach
or default in performance by the Buyer of any covenant or obligation set forth
in this Agreement. However, the foregoing indemnification obligation will not
apply to claims based solely on matters not set forth in clauses (a) and (b) of
this paragraph. In addition to the foregoing, the Buyer will pay to the Seller
interest on the amount of any loss, damage, claim, liability, debt, obligation
or expense the payment of which is or becomes due to the Seller by the Buyer,
such interest to be at a floating rate of interest equal to the prime rate
published from time to time in The Wall Street Journal. Claims for
indemnification involving the payment of money by the Buyer to the Seller will
be paid within ten (10) days after notification thereof. Claims for
indemnification involving amounts due to third parties will be promptly paid by
the Buyer when due, subject to the Buyer's right to contest the same in good
faith.
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8. Indemnification Procedures. Each claim for indemnification under paragraph 6
or 7 of this Agreement (a "Claim") will be subject to the provisions of this
paragraph. Any party seeking indemnification under this Agreement will promptly
notify the indemnifying party in writing of the existence of such Claim and the
particulars of the Claim. The indemnifying party may at its option undertake the
defense of the Claim and select counsel to defend the Claim subject to the
indemnified party's reasonable approval of such counsel. Failure by a party to
give prompt notice of a Claim will not affect the indemnifying party's
obligations hereunder except to the extent the indemnifying party is materially
prejudiced by the indemnified party's failure to provide such notice. If the
indemnifying party, within thirty (30) days after notice of any such Claim, or
such shorter period as is reasonably required, fails to diligently and
competently assume the defense of such Claim, the indemnified party will have
the right, but not the obligation, to undertake the defense, compromise or
settlement of such Claim on behalf of and for the account and risk, and at the
expense, of the indemnifying party. Anything in this paragraph to the contrary
notwithstanding, the indemnifying party is prohibited from entering into a
settlement or compromise of any action, suit or proceeding or consent to the
entry of any judgment: (a) which does not include as an unconditional term
thereof the delivery by the claimant or plaintiff to the indemnified party of a
written release from all liability in respect of such action, suit or
proceeding; or (b) for other than monetary damages to be paid by the
indemnifying party without the prior written consent of the indemnified party,
which consent will not be unreasonably withheld.
9. Default. If a party fails to perform any obligation contained in this
Agreement, the party claiming default will serve written notice to the other
party specifying the nature of such default and demanding performance. If such
default has not been cured within ten (10) days after receipt of such default
notice, the nondefaulting party will be entitled to exercise all remedies
arising at law or in equity by reason of such default, including, without
limitation, specific performance of this Agreement.
10. Buyer's Representations. The Buyer represents and warrants to the Seller as
follows:
10.1 Authority. The Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma and has
taken all necessary action to authorize the execution, delivery and
performance of this Agreement and has adequate power, authority and
legal right to enter into, execute, deliver and perform this Agreement
and to consummate the transaction contemplated hereby. This Agreement
is legal, valid and binding with respect to the Buyer and is
enforceable in accordance with its terms. The execution, delivery,
performance and consummation of this Agreement does not and will not
violate, conflict with or constitute a breach of any statute,
regulation or judicial or administrative order, award, judgment or
decree to which the Buyer is a party or is bound.
10.2 Restricted Legend. The Buyer is acquiring the Shares for investment
purposes only for the Buyer's own account and not with a view to, or
for resale in connection with, any distribution of such Shares within
the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). The Shares will not be sold, transferred or otherwise disposed
of by the Buyer without registration under the Securities Act and
state securities laws or qualification for exemptions therefrom. The
Buyer agrees that the
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Corporation may place a stop transfer order with the Corporation's
transfer agent, if any, with respect to any noncomplying transfer of
any certificate representing any of the Shares, which stop transfer
order will be removed upon compliance with the provisions hereof. The
legend will consist of the following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
IN A TRANSACTION IN WHICH RULE 145 UNDER THE SECURITIES ACT OF
1933 APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A
REGISTRATION STATEMENT UNDER SAID ACT OR AN EXEMPTION FROM SUCH
REGISTRATION.
10.3 Exclusion. The Seller has not made to the Buyer any representation or
warranty other than those made expressly in this paragraph 3 in favor
of the Buyer. Without limiting the generality of the foregoing the
Seller has not made to the Buyer any representation or warranty with
respect to the operation, future revenue, expenses or success of the
Corporation, financial condition or other matter regarding the
Corporation.
11. Arbitration. Any dispute under this Agreement will be submitted to binding
arbitration to be conducted in Oklahoma City, Oklahoma, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except
that there will be one arbitrator selected by the Buyer, one arbitrator selected
by the Seller, and a third arbitrator selected by those two arbitrators. The
arbitrators will be instructed and empowered to take reasonable steps to
expedite the arbitration and the arbitrators' judgment will be final and binding
upon the parties subject solely to challenge on the grounds of fraud or gross
misconduct. The arbitration will be held in Oklahoma County, Oklahoma. Judgment
upon any verdict in arbitration may be entered in any court of competent
jurisdiction. Unless otherwise expressly set forth in this Agreement, the
procedures specified in this paragraph 11 will be the sole and exclusive
procedures for the resolution of disputes and controversies between the parties
arising out of or relating to this Agreement. Notwithstanding the foregoing, a
party may seek a preliminary injunction or other provisional judicial relief if
in such party's judgment such action is necessary to avoid irreparable damage or
to preserve the status quo.
12. Miscellaneous. It is further agreed as follows:
12.1 Time. Time is of the essence of this Agreement.
12.2 Notices. Any notice, demand or communication required or permitted to
be given by any provision of this Agreement will be in writing and
will be deemed to have been given and received when delivered
personally or by telefacsimile to the party designated to receive such
notice, or on the date following the day sent by overnight courier, or
on the third (3rd) business day after the same is sent by certified
mail,
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postage and charges prepaid, directed to the following addresses or to
such other or additional addresses as any party might designate by
written notice to the other parties:
To the Buyer: Xx. Xxxxxx X. XxXxxxxxx
Chesapeake Energy Corporation
0000 Xxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
With a copy to: Xxxxxxx Self, Esquire
Commercial Law Group, P.C.
2725 Oklahoma Tower
000 Xxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
To the Seller: Xx. Xxxxx X. Xxxxxxx
0000 X.X. Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx, Esquire
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
1600 Bank of Oklahoma Plaza
000 Xxxxxx X. Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
12.3 Representations and Warranties. The respective representations,
warranties and covenants of the Seller and the Buyer contained herein
or in any certificates or other documents delivered prior to or at the
Closing Date will not be deemed waived or otherwise affected by any
investigation made by any party hereto. Each and every representation
and warranty of the Seller and the Buyer contained herein will survive
the Closing Date and will not be terminated or extinguished. This
paragraph 12.3 will have no effect on any other obligation of the
parties hereto, whether to be performed before or after the Closing
Date.
12.4 Cooperation. Prior to termination of this Agreement and at all times
following the consummation of this Agreement, the parties agree to
execute and deliver, or cause to be executed and delivered, such
documents and do, or cause to be done, such other
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acts and things as might reasonably be requested by any party to this
Agreement to assure that the benefits of this Agreement are realized
by the parties.
12.5 Choice of Law. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of Oklahoma.
12.6 Headings. The paragraph headings contained in this Agreement are for
reference purposes only and are not intended to affect in any way the
meaning or interpretation of this Agreement.
12.7 Entire Agreement. This Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and
there are no agreements, understandings, warranties or
representations except as set forth herein.
12.8 Assignment. It is agreed that the parties may not assign such party's
rights nor delegate such party's duties under this Agreement without
the express written consent of the other parties to this Agreement.
12.9 Amendment. Neither this Agreement, nor any of the provisions hereof
can be changed, waived, discharged or terminated, except by an
instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.
12.10 Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under any present or future law,
the remainder of this Agreement will not be affected thereby. It is
the intention of the parties that if any such provision is held to be
illegal, invalid or unenforceable, there will be added in lieu
thereof a provision as similar in terms to such provision as is
possible and to be legal, valid and enforceable.
12.11 Attorney Fees. If any party institutes an action or proceeding
against any other party relating to the provisions of this Agreement,
the party to such action or proceeding which does not prevail will
reimburse the prevailing party therein for the reasonable expenses of
attorney fees and disbursements incurred by the prevailing party.
12.12 Waiver. Waiver of performance of any obligation or term contained in
this Agreement by any party, or waiver by one party of the other
party's default hereunder will not operate as a waiver of performance
of any other obligation or term of this Agreement or a future waiver
of the same obligation or a waiver of any future default.
12.13 Brokerage. The Seller represents to the Buyer that the Seller has
dealt with no broker in connection with the transaction contemplated
hereby. The Seller agrees to indemnify and hold the Buyer harmless
from any claim for brokerage commissions asserted by any other party
as a result of dealings with the Seller. The Buyer represents to the
Seller that the Buyer has dealt with no broker in connection with the
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transaction contemplated hereby. The Buyer agrees to indemnify and
hold the Seller harmless from any claim for brokerage commissions
asserted by any party as a result of dealings with the Buyer.
12.14 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be an original instrument, but all
of which will constitute one agreement.
12.15 JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.16 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE BUYER AND
THE SELLER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH, (B) WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS
DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE TRANSACTION CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH. AS
USED IN THIS PARAGRAPH, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY
HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
HERETO.
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IN WITNESS WHEREOF, the Seller and the Buyer have executed this Agreement
effective as of the date first above written.
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
XXXXX X. XXXXXXX, individually
(the "Seller")
CHESAPEAKE ENERGY CORPORATION, an
Oklahoma corporation
By /s/ Xxxxxx X. XxXxxxxxx
--------------------------------------------
Xxxxxx X. XxXxxxxxx, Chief Executive Officer
(the "Buyer")
The undersigned Escrow Agent executes this Agreement this 13th day of
December, 2001, solely for the purpose of accepting the escrow pursuant to the
provisions of paragraph 5 of this Agreement and the Escrow Agent will not
otherwise be bound by any of then terms or conditions hereof.
XXXXXXX XXXXXX XXXXX & XXXXXXX
By /s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxxx, Esquire
(the "Escrow Agent")
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SCHEDULE "3.1"
Ownership of Shares
1. The Shareholders Agreement dated effective ___________ __, 2000 among
Canaan Energy Corporation, Xxx X. Xxxxxxx, Xxxx Xxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx Family Limited Partnership, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Black, as Trustee of the Xxxxxxx X. Black Revocable
Trust and Xxxxxxx Xxxxxxx.
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SCHEDULE "3.2"
Assumed Obligations
Any applicable provisions of the Corporation's Certificate of Incorporation
or Bylaws.
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SCHEDULE "3.3"
Consents and Approvals
1) The Shareholders Agreement dated effective ___________ ___, 2000 among
Canaan Energy Corporation, Xxx X. Xxxxxxx, Xxxx Xxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx Family Limited Partnership, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Black, as Trustee of the Xxxxxxx X. Black Revocable
Trust and Xxxxxxx Xxxxxxx.
2) Applicable federal and states securities laws.
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SCHEDULE "3.4"
Litigation
None.
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SCHEDULE "4"
Legends
ANY SALE, ASSIGNMENT, TRANSFER OR OTHER DISTRIBUTION OF COMMON STOCK
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND SUBJECT TO THE
TERMS AND PROVISIONS OF THE SHAREHOLDER'S AGREEMENT BETWEEN CANAAN
ENERGY CORPORATION AND HOLDER THEREOF AND CERTAIN OTHER PARTIES. ANY
TRANSFEREE, INCLUDING A LENDER, TAKING THE COMMON STOCK REPRESENTED BY
THIS CERTIFICATE AS COLLATERAL, IS SUBJECT TO ALL THE RESTRICTIONS AND
DUTIES CONTAINED IN SUCH AGREEMENT. A COPY OF SUCH AGREEMENT IS ON
FILE WITH THE SECRETARY OF THE COMPANY. BY ACCEPTANCE OF THIS
CERTIFICATE, THE HOLDER HEREOF AGREES TO BE BOUND BY THE TERMS OF SUCH
AGREEMENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION IN WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933 APPLIES
AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE
REQUIREMENTS OF RULE 145 OR PURSUANT TO REGISTRATION STATEMENT UNDER
SAID ACT OR AN EXEMPTION FROM SUCH REGISTRATION.
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