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EXHIBIT 2.8
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into effective the 23rd day of
February, 2001, between M. XXXXX XXXXXXX, formerly Xxxxxx, as Trustee of the M.
Xxxxx Xxxxxx 1992 Trust under Trust Agreement dated July 24, 1992 (the
"Seller"), CHESAPEAKE ENERGY CORPORATION, an Oklahoma Corporation (the "Parent")
and XXXXXX ACQUISITION CORP., an Oklahoma corporation (the "Buyer").
BACKGROUND:
A. The Seller owns six hundred seventy-five thousand (675,000) shares (the
"Shares") of common stock, par value $.01, of RAM Energy, Inc., a Delaware
corporation (the "Corporation") (the "RAM Common Stock").
B. The Buyer desires to acquire and the Seller desires to sell to the Buyer all
of the Seller's 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 hereinafter defined) absolute ownership of the Shares will be
transferred to the Buyer free and clear of all liens, claims and encumbrances.
2. Purchase Price. On the Closing Date, in consideration for the sale of the
Shares to the Buyer, the Buyer will pay to the Seller as provided in paragraph 8
of this Agreement $7.33 per Share (the "Purchase Price") payable in shares of
Parent common stock (the "CEC Stock"). The number of shares of CEC Stock
constituting the Purchase Price will be determined based on the Average Price
(as hereinafter defined) and is referred to herein as the "Purchase Price
Shares." The Purchase Price and the Purchase Price Shares deliverable with
respect thereto will be adjusted and paid as follows:
2.1 Closing Adjustments. On the Closing Date, the Purchase Price
will be decreased by the per Share amount of any cash
distributed or paid by the Corporation to the Seller with
respect to the Shares at any time after January 1, 2001, and
on or before the Closing Date. In addition to the foregoing
adjustments, any non-cash distributions made by the
Corporation with respect to the Shares after January 1, 2001,
and on or before the Closing Date will be assigned to and be
the sole property of the Buyer free and clear of all liens,
claims and encumbrances. To the extent received by the Seller,
the Seller agrees to hold such non-cash distribution in trust
for the Buyer and to deliver such distribution to the Buyer on
the Closing Date in the same form as received by the Seller.
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2.2 Average Price. The "Average Price" will be determined by
adding the daily closing price of the CEC Stock as reported in
The Wall Street Journal for the ten (10) consecutive trading
days commencing on the twelfth (12th) trading day prior to the
Closing Date and dividing the product by ten (10).
2.3 Registration Statement. The Buyer will use its best efforts to
cause Parent to: (a) file a registration statement under the
Securities Exchange Act of 1933 (the "33 Act") covering the
resale of the Purchase Price Shares (the "Registration
Statement") within sixty (60) days after the Closing Date; (b)
cause the Registration Statement to be declared effective by
the Securities and Exchange Commission ("SEC") within one
hundred twenty (120) days after the filing date of the
Registration Statement; and (c) cause the Registration
Statement to remain effective until the first anniversary of
the Closing Date. In connection with such registration, the
Seller agrees to furnish to Parent in writing the information
specified in Item 507 or 508 of Regulation S-K, as applicable,
of the 33 Act for use in connection with the registration
statement or any prospectus or preliminary prospectus included
therein. Such information will be provided promptly on
Parent's request and the Seller agrees to promptly furnish
additional information required to be disclosed in order to
make the information previously furnished to Parent by the
Seller not materially misleading.
2.4 Make Whole Payment. The Purchase Price will be adjusted if the
Selling Price (as hereinafter defined) is less than the
Average Price with the adjustment to be determined by
multiplying the difference between the Average Price and the
Selling Price by the number of Purchase Price Shares sold
during the Averaging Period (the "Adjustment Amount"). The
"Selling Price" will be determined by multiplying the Daily
Price for each Selling Day times the number of Purchase Price
Shares sold on such Selling Day, adding the sums for all
Selling Days during the Averaging Period and dividing the sum
by the total number of Purchase Price Shares sold during the
Averaging Period. As used in this paragraph: (a) "Daily Price"
means the closing price of the CEC Stock as reported in The
Wall Street Journal on each Selling Day; (b) "Selling Day"
means a trading day on which the Seller makes sales of any
Purchase Price Shares; and (c) "Averaging Period" means the
ninety (90) calendar day period commencing with the date the
registration of the Purchase Price Shares is declared
effective. Within three (3) business days after the earlier of
the date all of the Purchase Price Shares are sold or the end
of the Averaging Period, the Seller will furnish to the Buyer
a reconciliation of each sale of Purchase Price Shares. The
Seller and the Buyer acknowledge and agree that if the Average
Price exceeds the Selling Price, the Buyer will pay the
Adjustment Amount to the Seller by wire transfer of
immediately available funds within three (3) business days
after determination of the Adjustment Amount. If the Selling
Price exceeds the Average Price, no Purchase Price adjustment
will be made pursuant to this paragraph 2.4.
3. Representations and Warranties of the Seller. Certain representations and
warranties of the Seller are made to the best knowledge of the Seller. The Buyer
acknowledges and understands that the Seller does not own a controlling interest
in the Corporation, that the Seller is not an officer of the Corporation and
that all such representations as to the Corporation are made to the best of the
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Seller's actual knowledge as a non-controlling shareholder. As an inducement to
the Buyer to enter into this Agreement, the Seller represents and warrants to
the Buyer that as of the date of this Agreement and the Closing Date:
3.1 Ownership of Shares. The Seller has and will have on the
Closing Date good and marketable 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 has: (a) any interest in the
Shares, either of record or beneficially; (b) the right to
ownership or possession of the Shares; or (c) the right to
rescind, revoke, disaffirm, terminate or invalidate this
Agreement or the conveyance of the Shares.
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. There
are no shareholder agreements, options, warrants, calls,
rights, commitments or any other agreement of any character
obligating the Seller or burdening the Shares.
3.3 Consents and Approvals. Except as disclosed in Schedule "3.3"
attached hereto 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, lease or other agreement, instrument
or arrangement to which the Seller is a party or any of the
Shares is bound; (b) violate, conflict 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 Authority. The Seller is an individual, 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 transactions
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 its terms,
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 including, without
limitation, the right of any person to rescind, revoke,
disaffirm, terminate or invalidate this Agreement or the
conveyance of the Shares.
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3.5 Investment Intent. The Seller is acquiring the Purchase Price
Shares for investment purposes only and not with a view to or
in connection with a distribution within the meaning of the 33
Act. Accordingly the Seller acknowledges that the Purchase
Price Shares will not be sold, assigned, pledged or otherwise
transferred in the absence of an effective registration
statement under the 33 Act except in accordance with a valid
exemption from registration. The Seller understands and agrees
that the certificates representing the Purchase Price Shares
will have a legend imprinted thereon to the following effect:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER STATE SECURITIES LAWS. SUCH SHARES OF COMMON STOCK
MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
SECURITIES ACT COVERING THE TRANSFER OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM REGISTRATION
IS AVAILABLE OR THAT REGISTRATION UNDER SAID SECURITIES ACT IS
NOT REQUIRED."
3.6 Sophisticated Investor. The Seller: (a) is an "accredited
investor" as that term is defined in Regulation D promulgated
pursuant to the 33 Act; (b) has the knowledge and experience
in financial matters, business matters and investments to
evaluate the merits and risks of the transaction to be
consummated under this Agreement including, without
limitation, the determination of the value of the RAM Common
Stock and the CEC Stock; (c) has had the opportunity to review
the filings by Parent with the SEC and is aware that no
federal or state agency has made any findings or
determinations as to the fairness of this transaction; and (d)
in making the decision to enter into and consummate this
Agreement has relied on an independent investigation made by
the Seller or related representatives, including the Seller's
own professional tax and other advisors.
3.7 Powers of Attorney. There are no outstanding powers of
attorney or proxies relating to or affecting the Shares or the
Seller's interest in the Shares.
3.8 Full Disclosure; Limitations. This Agreement, any schedule
referenced in or attached to this Agreement, any document
furnished to the Buyer under this Agreement and the
information and documents furnished to the Buyer by the Seller
during the Buyer's due diligence does not contain any untrue
statement of a material fact and does not omit to state a
material fact necessary to make the statements made, in the
circumstances under which the statements were made, not
misleading except as set forth on Schedule 3.8 or as such
information shall become dated by the passage of time or made
inaccurate by events or acts not consciously known by the
Seller. All of the representations and warranties in paragraph
3 of this Agreement are true and correct as of the date made
and will be true and correct as of the Closing Date.
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4. Representations and Warranties of the Buyer. Each of the Buyer and the Parent
severally represent and warrant to the Seller as to itself that as of the date
of this Agreement and the Closing Date:
4.1 Formation and Authority. Each of the Buyer and the Parent is a
corporation duly formed and in good standing under the laws of
the State of Oklahoma. Each of the Buyer and the Parent is
duly authorized and empowered to execute, deliver and perform
this Agreement and all corporate and other action necessary
for the execution, delivery and performance of this Agreement
has been duly and validly taken by each of them.
4.2 Public Filings. The filings by Parent with the SEC (the
"Public Filings") which are available for public access are as
of the date of such filing accurate, complete and not
misleading.
4.3 Litigation and Claims. Except as set forth on Schedule "4.3"
or in the Public Filings, to the best knowledge of the Buyer
and the Parent as of the date hereof and as of the Closing
Date, there exists no actual or threatened litigation,
government proceedings or investigations, acquisition or
disposition of assets or businesses or other matters which
could materially adversely affect the value of the Purchase
Price Shares at or after the Closing Date.
4.4 Registration. Parent knows of no impediment to the filing
promptly after the Closing Date of the Registration Statement.
4.5 Other Corporation Negotiations. The Parent agrees that any
negotiations for the acquisition of debt of the Corporation or
RAM Common Stock (other than the Shares and the RAM Common
Stock owned by Xxxxxxx Xxxxxx Xxxxx) will be conducted by or
on behalf of the Parent. In the event Parent has entered into
or shall enter into negotiations and agreements for the
purchase or right to purchase RAM Common Stock (other than the
Shares and the RAM Common Stock owned by Xxxxxxx Xxxxxx Xxxxx)
or for the purchase or modification of any indebtedness,
including the Senior Notes, of the Corporation, such
negotiations and acquisitions shall be carried on and
concluded by the Parent so that there is not created thereby
any basis for a claim against the Seller on account of her
entering into and concluding the transactions set forth in
this Agreement.
4.6 Sophisticated Purchaser. Parent is engaged in the same
business as the Corporation, its employees, management,
consultants and experts understand the nature of business
carried on by the Corporation and Parent is in a position to
evaluate the merits and risks of the transaction to be
consummated under this Agreement including, without
limitation, the determination of the value of the RAM Common
Stock and the CEC Stock.
4.7 Full Disclosure. This Agreement, any schedule referenced in or
attached to this Agreement, any document furnished to the
Seller under this Agreement and the
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information and documents furnished to the Seller by Parent
and the Buyer during the Seller's due diligence does not
contain any untrue statement of a material fact and does not
omit to state a material fact necessary to make the statements
made, and the circumstances under which the statements were
made, not misleading, except as set forth on Schedule "4.6" or
as such information shall have become dated by the passage of
time or made inaccurate by events or acts not consciously
known by the management of Parent. All of the representations
and warranties in this paragraph 4 are true and correct as of
the date made and will be true and correct as of the Closing
Date.
5. Covenants. The parties agree to perform the following prior to the Closing
Date:
5.1 Access to Information. During the period commencing on the
date of this Agreement and ending twelve (12) days prior to
the Closing Date (the "Inspection Period"), the Seller will
afford the Buyer and the authorized representatives of the
Buyer, full access (as it relates to the Shares) during normal
business hours to the properties, books and records of the
Seller, the Seller's lawyers (except for privileged
communications or materials) and accountants to make such
investigation as the Buyer desires regarding the Shares. It is
understood that the Seller shall be providing no information
to the Buyer or Parent regarding the Corporation (other than
information regarding Seller's ownership of the Shares).
5.2 Inspection. During the Inspection Period, the Buyer and the
Seller will conduct such investigation and inspection (the
"Inspection") with respect to the properties, books, records,
legal documents, financial accounts, contracts, title records
and prospects of, (as to the Buyer) the Corporation, the
Corporation's business and the Shares as the Buyer deems
appropriate and, (as to the Seller) Parent, Parent's business
and the Purchase Price Shares. If (a) the Buyer determines, in
the Buyer's sole discretion, that the Corporation's business,
the Corporation, the subsidiaries of the Corporation (the
"Subsidiaries") or the Shares are unsatisfactory for any
reason whatsoever, (including, without implied limitation, any
adverse change) or (b) the Seller determines, in the Seller's
sole discretion, that Parent's business, Parent or the
Purchase Price Shares are unsatisfactory for any reason
whatsoever (including, without implied limitation, any adverse
change), then the party making such determination shall have
the option to terminate this Agreement by written notice to
the other party within ten (10) days following expiration of
the Inspection Period. To the extent that a party discovers or
determines during the Inspection Period that a warranty,
representation or covenant made by the other party in this
Agreement is or will become inaccurate or breached, but
nevertheless that discovery party elects not to terminate this
Agreement, the consummation of this Agreement on the Closing
Date shall be deemed a waiver of any rights or basis for claim
which may otherwise have existed with respect to such breached
or inaccurate representation, warranty or covenant.
5.3 Standstill. Until the earlier of the purchase of all of the
Shares or the termination of this Agreement, the Seller will
not: (a) enter into any agreement, arrangement or
understanding involving the sale, transfer, assignment,
redemption or other disposition
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of, or grant a security interest in or optional rights to
purchase or otherwise acquire any of the Shares; (b) directly
or indirectly, solicit, initiate or encourage any inquiries or
proposals from, negotiate with or provide any information to
any person other than the Buyer relating to any transaction
involving the sale or redemption of the Shares; or (c)
directly, for the Seller's own account, meet or negotiate with
any holders (the "Noteholders") of the RAM 11 1/2% Senior
Notes due 2008 (the "Senior Notes") with respect to any
proposed recapitalization or other transaction affecting the
Senior Notes.
5.4 Conditions. The Seller will use the Seller's best efforts to
cause the conditions in paragraphs 6 and 8 to be satisfied.
The Buyer and the Parent shall use their best efforts to cause
the conditions in paragraphs 7 and 8 to be satisfied.
6. Buyer's Conditions Precedent. The obligation of the Buyer to consummate the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver (subject to applicable law) at or prior to the Closing Date of each of
the following conditions: (a) no preliminary or permanent injunction or other
order will have been issued by any court of competent jurisdiction or any
regulatory body preventing consummation of the transactions contemplated by this
Agreement; (b) no action will have been commenced or threatened against the
Seller, the Corporation, any Subsidiary, the Buyer or any of their respective
affiliates, associates, officers or directors seeking damages arising from, to
prevent or challenge the transactions contemplated by this Agreement; (c) all
representations and warranties of the Seller contained herein will be true and
correct in all material respects on and as of the Closing Date; (d) the Seller
will have performed or satisfied on and as of the Closing Date, all obligations,
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by the Seller including the sale of all of the Shares; (e) all
actions, proceedings, instruments and documents required to carry out the
transactions contemplated hereby will have been satisfactory to the Buyer and
the Buyer's counsel, and the Seller will have delivered such additional
certificates and other documents as the Buyer reasonably requests including,
without limitation, such certificates of the Seller dated the Closing Date
evidencing compliance with the conditions set forth in this paragraph 6; (f)
there will have been no material adverse change in the business or condition of
the Corporation; (g) the Buyer will have obtained any necessary approvals or
clearance for this transaction required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976; (h) the Buyer will have completed the Buyer's due
diligence pursuant to paragraph 5.2 of this Agreement and not terminated this
Agreement; and (i) the Buyer will have acquired all of the RAM Common Stock
owned by Xxxxxxx Xxxxxx Xxxxx and/or an option to purchase such RAM Common
Stock.
7. Seller's Conditions Precedent. The obligation of the Seller to consummate the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver (subject to applicable law) at or prior to the Closing Date of each of
the following conditions: (a) no preliminary or permanent injunction or other
order will have been issued by any court of competent jurisdiction or any
governmental or regulatory body preventing consummation of the transactions
contemplated by this Agreement; (b) no action will have been commenced or
threatened against the Seller, the Corporation, the Buyer, Parent or any of
their respective affiliates, associates, officers or directors seeking damages
arising from, to prevent or to challenge the transactions contemplated by this
Agreement; (c) all representations and warranties of the Buyer and Parent
contained herein will be
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true and correct in all material respects on and as of the Closing Date; (d) the
Buyer and the Parent will have performed in all material respects all
obligations, agreements and conditions contained in this Agreement to be
performed or complied with by the Buyer and Parent; (e) the Buyer will have
acquired all of the RAM Common Stock owned by Xxxxxxx Xxxxxx Xxxxx and/or an
option to purchase such RAM Common Stock; (f) all actions, proceedings,
instruments and documents required to carry out the transactions contemplated
hereby will have been satisfactory to the Seller and the Seller's counsel and
the Buyer and the Parent will have delivered such additional certificates and
other documents as the Seller reasonably requests including, without limitation,
such certificates of the Buyer and the Parent dated as of the Closing Date
evidencing compliance with the conditions set forth in this paragraph 7; (g)
there will have been no material adverse change in the business or condition of
Parent; (h) the Buyer will have obtained any necessary approvals or clearance
for this transaction required by the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements
Act of 1976; and (i) the Seller will have completed the Seller's due diligence
pursuant to paragraph 5.2 of this Agreement and not terminated this Agreement.
8. The Closing. Unless extended as provided herein, this Agreement will be
consummated at 10:00 a.m. local time in the offices of Commercial Law Group,
P.C. on April 16, 2001 (the "Closing Date"). The parties may, by mutual consent,
change the Closing Date to any other date that they may agree upon.
8.1 Buyer's Deliveries. On the Closing Date, the Buyer will
deliver or cause to be delivered to an escrow agent selected
by the Buyer and acceptable to the Seller (the "Escrow Agent")
the following items (all documents will be duly executed,
acknowledged where required) (the "Buyer Closing Documents"):
8.1.1 CEC Stock. CEC Stock certificates evidencing the
Purchase Price Shares;
8.1.2 Evidence of Authority. Such corporate resolutions,
certificates of good standing, incumbency
certificates and other evidence of authority with
respect to the Buyer as might be reasonably requested
by the Seller; and
8.1.3 Additional Documents. Such additional documents as
might be reasonably requested by the Seller to
consummate this Agreement.
8.2 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"):
8.2.1 Shares. Each original stock certificate evidencing
the Shares, a completed and executed power separate
from certificate (with signature guaranteed to the
satisfaction of the Buyer) for the Shares and all
stock transfer tax stamps affixed;
8.2.2 Spousal Ratification. Such ratifications, waivers and
assignments from the spouse of the Seller who is not
a party to this Agreement as might be reasonably
requested by the Buyer;
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8.2.3 Other Shareholders. Such ratifications and waivers
from any party who owns or claims any right, title or
interest in and to any of the Shares as might be
reasonably requested by the Buyer; and
8.2.4 Additional Documents. Such additional documents as
might be reasonably requested by the Buyer to
consummate this Agreement.
8.3 Escrow Disbursement. Upon receipt by the Escrow Agent of the
Buyer Closing Documents and the Seller Closing Documents in
form and substance satisfactory to the Buyer, the Seller and
the Escrow Agent, the Escrow Agent will cause the Shares and
the related transfer documents to be delivered to the
Corporation or the Corporation's transfer agent for transfer
of the Shares for issuance in the name of the Buyer or the
Buyer's designee.
8.3.1 Distribution of Documents. Upon receipt by the Escrow
Agent of a stock certificate representing 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. In the
event the Escrow Agent has not received the Reissued
Certificate in accordance with the terms of this
Agreement and the Buyer has not waived such defect in
writing within ten (10) days after the Closing Date,
at any time thereafter, in the sole discretion of the
Buyer upon written notice to the Seller and the
Escrow Agent, the Escrow Agent will deliver the Buyer
Closing Documents to the Buyer and the Seller Closing
Documents to the Seller and each of the parties will
continue to have their respective rights under this
Agreement.
8.3.2 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 thereof, 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 this escrow, the undersigned jointly
and severally agree to indemnify and hold the Escrow
Agent harmless from all losses, costs, damages,
expenses and attorneys' fees suffered or incurred by
the Escrow Agent as a result thereof. The obligations
of the Escrow Agent under this Agreement will be
performed at the office of the Escrow Agent in
Oklahoma City, Oklahoma. For the services to be
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rendered hereunder, the Escrow Agent will be entitled
to a reasonable fee and reimbursement of all out of
pocket costs and expenses.
8.4 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 fees.
8.5 Risk of Loss. Effective on delivery of the Seller Closing
Documents to the Escrow Agent, 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 8.3
of this Agreement).
9. Indemnification. Conditioned on the consummation of the transaction
contemplated by this Agreement, the parties agree to indemnify each other as
follows:
9.1 Seller's Indemnity. The Seller agrees to pay, defend,
indemnify, reimburse and hold harmless the Buyer and the
Buyer's directors, officers, agents and employees (the "Buyer
Indemnified Parties") for, from and against any loss, damage,
diminution in value, claim, liability, debt, obligation or
expense (including interest, reasonable legal fees, and
expenses of litigation) incurred, suffered, paid by or
resulting to any of the Buyer Indemnified Parties and which
results from, arises out of or in connection with, is based
upon, or exists by reason of: (a) the execution, delivery,
validity and enforceability of this Agreement by the Seller;
(b) the Buyer not obtaining one hundred percent (100%)
ownership of the Shares for the Purchase Price for any reason
other than the negligence or inaction of the Buyer; or (c) any
breach or default in performance by the Seller of any covenant
or obligation set forth in this Agreement or the inaccuracy of
any warranty made by the Seller in this Agreement. In addition
to the foregoing, the Seller will pay to the Buyer Indemnified
Parties 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 Indemnified Parties 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 a Buyer Indemnified Party will be due
and payable by the Seller 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.
9.2 Buyer's Indemnity. The Buyer and the Parent severally agree to
pay, defend, indemnify, reimburse and hold harmless the Seller
and the Seller's agents, beneficiaries and employees (the
"Seller Indemnified Parties") for, from and against any loss,
damage, diminution in value, claim, liability, debt,
obligation or expense (including interest, reasonable legal
fees, and expenses of litigation) incurred, suffered, paid by
or resulting to any of the Seller Indemnified Parties and
which results from, arises out of or in connection with, is
based upon, or exists by reason of: (a) the execution,
delivery, validity and enforceability of this Agreement by the
Buyer or the Parent; (b) any action by the Buyer or the Parent
relating to (i) the acquisition or ownership of
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the Shares on or after the Closing Date, or (ii) the
negotiation or acquisition of any equity or debt instruments
issued by the Corporation (other than the Shares and the RAM
Common Stock acquired by the Buyer from Xxxxxxx Xxxxxx Xxxxx);
or (c) any breach or default in performance by the Buyer of
any covenant or obligation set forth in this Agreement or the
inaccuracy of any warranty of the Buyer or the Parent in this
Agreement. In addition to the foregoing, the Buyer will pay to
the Seller Indemnified Parties 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
Indemnified Parties 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
a Seller Indemnified Party will be due and payable by the
Buyer 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.
10. Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned by: (a) mutual consent of the Seller and
the Buyer; (b) the Buyer, if the Buyer is not in default and the conditions set
forth in paragraph 6 of this Agreement have not been satisfied by the Seller or
waived by the Buyer; (c) the Seller, if the Seller is not in default, and the
conditions set forth in paragraph 7 of this Agreement have not been satisfied or
waived by the Seller; (d) the Buyer or the Seller, pursuant to paragraph 5.2 of
this Agreement; or (e) the Seller, if the closing does not occur by March 31,
2001, for any reason. In the event of termination, written notice thereof will
be given to the other party or parties specifying the provision pursuant to
which such termination is made. On termination pursuant to this paragraph 10,
this Agreement will become void and have no effect and there will be no
liability hereunder on the part of the parties hereto.
11. 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.
12. 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 12 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.
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13. Miscellaneous. It is further agreed as follows:
13.1 Time. Time is of the essence of this Agreement.
13.2 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,
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: Xxx Xxxx, 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: M. Xxxxx Xxxxxxx, Trustee
0000 Xxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
With a copy to: C. Xxxxxxx Xxxxx, Esquire
000 Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
13.3 Representations and Warranties. The respective representations
and warranties 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. Such
representations and warranties will terminate as of the
Closing Date and will not survive the Closing Date.
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This paragraph 13.3 will have no effect on any other
obligation of the parties hereto, whether to be performed
before or after the Closing Date.
13.4 Cooperation. Prior to and at all times following the
termination 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 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.
13.5 Choice of Law. This Agreement will be interpreted, construed
and enforced in accordance with the laws of the State of
Oklahoma.
13.6 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.
13.7 Entire Agreement. This Agreement constitutes 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.
13.8 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.
13.9 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.
13.10 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 provisions as is possible and to be legal, valid
and enforceable.
13.11 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 attorneys' fees and disbursements
incurred by the prevailing party.
13.12 Waiver. Waiver of performance of any obligation or term
contained in this Agreement by any party, or waiver by one
party of the other'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.
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13.13 Brokerage. The Seller represents to the Buyer that the Seller
has dealt with no broker in connection herewith. The Seller
agrees to 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 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.
13.14 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.
13.15 Restricted Legend. The Buyer acknowledges that it is acquiring
the Shares for investment purposes 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 33 Act.
The Buyer will not sell, transfer or otherwise dispose of the
Shares without registration under the 33 Act and state
securities laws or qualification for exemptions therefrom. The
Buyer agrees that the Corporation may place a stop transfer
order with the Corporation's transfer agent, if any, with
respect to any noncomplying transfer of the certificates
representing any such Shares, which stop transfer order will
be removed upon compliance with the provisions hereof. The
Buyer agrees that each certificate representing the Shares may
be inscribed with a legend to the foregoing effect.
13.16 ACKNOWLEDGMENTS AND ADMISSIONS. THE PARTIES HEREBY REPRESENT,
WARRANT, ACKNOWLEDGE AND ADMIT THAT (A) EACH OF THEM HAS MADE
AN INDEPENDENT DECISION TO ENTER INTO THIS AGREEMENT, WITHOUT
RELIANCE ON ANY REPRESENTATION, WARRANTY, COVENANT OR
UNDERTAKING BY ANY OTHER PARTY, WHETHER WRITTEN, ORAL OR
IMPLICIT, OTHER THAN AS EXPRESSLY SET OUT IN THIS AGREEMENT OR
IN ANOTHER DOCUMENT EXECUTED BY THE OTHER PARTY AND DELIVERED
AFTER THE DATE HEREOF, (B) THERE ARE NO REPRESENTATIONS,
WARRANTIES, COVENANTS, UNDERTAKINGS OR AGREEMENTS BY ANY PARTY
AS TO THE PURCHASE OF SHARES EXCEPT AS EXPRESSLY SET OUT IN
THIS AGREEMENT, (C) THE PARTIES HAVE NO FIDUCIARY OBLIGATION
TOWARD THE OTHERS WITH RESPECT TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, (D) WITHOUT LIMITING ANY OF
THE FOREGOING, NO PARTY IS RELYING UPON ANY REPRESENTATION OR
COVENANT BY ANY OTHER PARTY, OR ANY REPRESENTATIVE THEREOF,
AND NO SUCH REPRESENTATION OR COVENANT HAS BEEN MADE, AS TO
THE PRESENT OR FUTURE VALUE OF THE SHARES OR THE CEC STOCK OR
ANY OTHER MATTERS RELATING TO THE TRANSACTION CONTEMPLATED BY
THIS AGREEMENT AND (E) EACH PARTY HAS RELIED UPON THE
TRUTHFULNESS OF THE ACKNOWLEDGMENTS IN THIS PARAGRAPH 13.16 IN
DECIDING TO EXECUTE AND DELIVER THIS AGREEMENT AND TO BECOME
OBLIGATED HEREUNDER.
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13.17 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.
13.18 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE
BUYER, PARENT 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 TRANSACTIONS
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, the Buyer and the Parent have
executed this Agreement effective as of the date first above written.
XXXXXX ACQUISITION CORP., an Oklahoma
corporation
By /s/ Xxxxxx X. XxXxxxxxx
-----------------------------------------------
Xxxxxx X. XxXxxxxxx, Chief Executive Officer
(the "Buyer")
/s/ M. Xxxxx Xxxxxxx
-------------------------------------------------
M. XXXXX XXXXXXX, formerly Xxxxxx, as Trustee of
the M. Xxxxx Xxxxxx 1992 Trust under Trust
Agreement dated July 24, 1992
(the "Seller")
CHESAPEAKE ENERGY CORPORATION, an
Oklahoma corporation
By /s/ Xxxxxx X. XxXxxxxxx
-----------------------------------------------
Xxxxxx X. XxXxxxxxx, Chief Executive Officer
(the "Parent")
The undersigned Escrow Agent executes this Agreement this __ day of ______,
2001, solely for the purpose of accepting the escrow pursuant to the provisions
of paragraph 7 of this Agreement and the Escrow Agent will not otherwise be
bound by any of the terms or conditions hereof.
By /s/ Xxxxxx X. Xxxx, Xx.
-----------------------------------------------
Name Xxxxxx X. Xxxx, Xx.
--------------------------------------------
Title
--------------------------------------------
(the "Escrow Agent")
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