Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into effective as of the 31st day of March, 2003, by and among Pioneer
Drilling Company, a Texas corporation (the "Company"), and WEDGE Energy
Services, L.L.C., a Delaware limited liability company ("Wedge"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ("White"), and Chesapeake Energy Corporation ("Chesapeake" and, together
with Wedge and White, the "Investors").
W I T N E S S E T H:
WHEREAS, Wedge has previously acquired from the Company an aggregate of
7,232,007 shares of the common stock, par value $0.10 per share, of the Company
("Common Stock");
WHEREAS, Wedge and White have previously acquired from the Company
$28,000,000 in aggregate principal amount of 6.75% convertible subordinated
debentures of the Company (the "6.75% Debentures"), which are currently
convertible into shares of Common Stock at a conversion rate of $4.31 per share;
WHEREAS, in connection with prior transactions between the Company and
Wedge, the Company and Wedge have entered into a Registration Rights Agreement
dated as of May 16, 2001 (the "Existing RRA");
WHEREAS, the Company and Wedge desire that this Agreement shall
supercede the Existing RRA; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company is issuing to Chesapeake 5,333,333 shares of Common Stock
pursuant to a Common Stock Purchase Agreement of even date herewith, and, in
connection with that issuance, the Company has agreed to provide Chesapeake with
registration rights as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the parties
hereto hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. As used in this Agreement, the
following definitions shall apply:
"AFFILIATE" means, as to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries or
otherwise, controls, is controlled by or is under common control with the
specified Person. This definition uses "control" to mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Agreement, as the same may be amended,
modified or supplemented from time to time pursuant to the provisions hereof.
"CHESAPEAKE" has the meaning the preamble hereto specifies.
"COMMISSION" means the Securities and Exchange Commission and
any successor thereto as the federal agency administering the Securities Act.
"COMMON STOCK" has the meaning the recitals hereto specify.
"COMPANY" has the meaning the preamble hereto specifies.
"DEMANDING HOLDER" means, in connection with any Demand
Registration, any Holder who has (acting alone or together with any other
Holders) duly made the request for such Demand Registration in accordance with
the provisions of Section 2(a).
"DEMAND REGISTRATION" has the meaning Section 2(a) specifies.
"EXCHANGE ACT" means, at any time, the Securities Exchange Act
of 1934, as amended, and any successor federal statute, and the rules and
regulations of the Commission thereunder, as in effect at that time.
"EXEMPT OFFERING" means any offering by the Company of shares
of Common Stock (i) in connection with or pursuant to any benefit, compensation,
incentive or savings plan or program in which any of the officers, directors,
employees or independent contractors of the Company or any of its subsidiaries
participate, (ii) as consideration in any business combination or other
acquisition transaction, (iii) as the securities into or for which other equity
or debt securities are convertible or exchangeable, or as the securities that
may be acquired by the exercise of options, warrants or other rights, in each
case at a conversion, exchange or exercise price representing a premium over the
trading price of the Common Stock at the time of the offering, (iv) made under
Regulation S under the Securities Act (or any similar provision then in force)
or (v) made only to existing holders of securities issued by the Company.
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Exhibit 99.2
"EXISTING RRA" has the meaning the recitals hereto specify.
"HOLDER" means at any time any Person then owning Registrable
Securities and having the rights and obligations of a Holder hereunder and which
(i) is an Investor or (ii) has been assigned those rights and obligations under
Section 10.
"INDEMNIFIED PARTY" has the meaning Section 7(c) specifies.
"INDEMNIFYING PARTY" has the meaning Section 7(c) specifies.
"INVESTORS" has the meaning the preamble hereto specifies.
"LOCKUP PERIOD" has the meaning Section 4 specifies.
"PERSON" means any natural Person, any unincorporated
organization or association, and any partnership, limited liability company,
corporation, estate, trust, nominee, custodian or other individual or entity.
"PIGGYBACK REGISTRATION" has the meaning Section 3(a)
specifies.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement with
the Commission in compliance with the Securities Act.
"REGISTRABLE SECURITIES" means: (i) any shares of Common Stock
held by Wedge or Chesapeake as of the date hereof; and (ii) any shares of Common
Stock hereafter acquired by any of the Investors directly from the Company
(whether in exchange for or on conversion of 6.75% Debentures or other
securities of the Company or otherwise); PROVIDED, HOWEVER, that Registrable
Securities shall not include any share of Common Stock if (A) a registration
statement covering that share has been filed and becomes effective under the
Securities Act and its Holder distributes it by means of that effective
registration statement, (B) its Holder distributes it to the public under Rule
144 or (C) at any time after the date hereof its Holder is neither an
"affiliate" (as that term is defined in Rule 144) of the Company nor a holder of
more than 5% of the total number of shares of Common Stock then outstanding and
such Holder may distribute such share to the public in the United States without
its being registered for resale under the Securities Act and without being
subject to the volume limitations of Rule 144.
"REGISTRATION EXPENSES" means all expenses incurred by the
Company in complying with registration obligations hereunder, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders who are the holders of a majority of Registrable Securities being
registered, blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration. Registration Expenses shall
not include fees of counsel for the Holders other than of one counsel as set
forth above or Selling Expenses as defined below.
"6.75 DEBENTURES" has the meaning the recitals hereto specify.
"REQUEST NOTICE" has the meaning Section 3(a) specifies.
"REQUESTING HOLDER" means, in connection with any Piggyback
Registration, any Holder who has duly delivered a Request Notice with respect to
that Piggyback Registration in accordance with the provisions of Section 3(a).
"REQUISITE WEDGE HOLDERS" means, as of any time of
determination, any combination of Holders who hold not less than 50% of the
Registrable Securities originally issued to Wedge who are also holders of not
less than 2% of the total number of shares of Common Stock then outstanding.
"REQUISITE SECURITIES" means, as of any time of determination
hereunder, (i) Registrable Securities having an aggregate value of at least
$10,000,000, in the event a Demand Registration would require the Company to
file a registration statement on Form S-1 or its substantial equivalent with the
Commission under the Securities Act, or (ii) Registrable Securities having an
aggregate value of at least $7,500,000, in the event a Demand Registration would
require the Company to file a registration statement on Form S-3 or its
substantial equivalent with the Commission under the Securities Act. For
purposes of this definition, the aggregate value of Registrable Securities shall
be determined by using the average closing price (the last reported sales price
for a share of Common Stock, as reported on the consolidated transaction
reporting system for the principal national securities exchange on which shares
of Common Stock are listed (or, if shares of Common Stock are not so listed but
are quoted on the Nasdaq Stock Market, as reported by the Nasdaq Stock Market))
of Common Stock for the 30 trading days next preceding the date on which
"Requisite Securities" is determined.
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Exhibit 99.2
"RULE 144" means, at any time, Rule 144 promulgated under the
Securities Act, or any similar successor rule thereto, as the same shall be in
effect at that time.
"RULE 145" means, at any time, Rule 145 promulgated under the
Securities Act, or any similar successor rule thereto, as the same shall be in
effect at that time.
"SECURITIES ACT" means, at any time, the Securities Act of
1933, as amended, and any successor federal statute, and the rules and
regulations of the Commission thereunder, as in effect at that time.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes arising from or relating to the
sale of Registrable Securities.
"UNDERWRITERS' MAXIMUM NUMBER" has the meaning Section 2(b)
specifies.
"WEDGE" has the meaning the preamble hereto specifies.
"WHITE" has the meaning the preamble hereto specifies.
Section 2. DEMAND REGISTRATIONS.
(a) REQUEST FOR REGISTRATION. Subject to the provisions of
Sections 2(b) through (f) and Sections 5, 6, 7 and 8, if, at any time after
the date hereof, the Company shall receive from either (i) the Requisite
Wedge Holders or (ii) Chesapeake a written request that the Company effect
the registration under the Securities Act of the resale of Registrable
Securities held by such Requisite Wedge Holders or Chesapeake, as the case may
be (a "Demand Registration"), then the Company shall:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) use its best efforts to effect, as soon as
practicable and in accordance with the provisions of Section
6, the registration under the Securities Act of the
Registrable Securities that the Company has been so
requested to register, together with all or such portion of
the Registrable Securities of any other Holders who request
to participate in such Demand Registration as are specified
in a written request received by the Company within 20 days
after the Company mails the written notice referred to in
clause (i) of this Section 2(a); PROVIDED, HOWEVER, that the
Company shall not be obligated to take any action to effect
any such registration under the Securities Act: (A) after
the Company has effected four such registrations initiated
by the Requisite Wedge Holders pursuant to this Section 2(a)
which have become effective; or (B) if less than the
Requisite Securities are requested to be included in the
registration; PROVIDED, FURTHER, that Chesapeake shall only
be entitled to initiate one Demand Registration (unless,
following Chesapeake's initiation of a Demand Registration,
the total amount of Registrable Securities actually offered
and sold pursuant to such Demand Registration is reduced to
less than 75% of the amount of Registrable Securities sought
to be included by Chesapeake in such Demand Registration (as
specified in the written request delivered by Chesapeake
pursuant to the foregoing provisions of this Section 2(a))
as a result of a reduction in the total amount of
Registrable Securities included in such Demand Registration
pursuant to the provisions of Section 2(b), in which case
Chesapeake shall be entitled to initiate a second Demand
Registration in accordance with this Section 2(a)).
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Exhibit 99.2
Notwithstanding the foregoing provisions of this Section 2(a): (A) the Company
will be entitled to defer the initial filing of the registration statement
relating to any Demand Registration for a period of up to 90 days after it
receives the demand therefor pursuant to the foregoing provisions if it
furnishes to the Demanding Holders a certificate signed by the President of the
Company stating that, in the good faith judgment of the board of directors of
the Company, it would be detrimental to the Company or its shareholders for such
registration statement to be filed, and it is therefore beneficial to defer the
filing of such registration statement; and (B) if, at the time of any request
for a Demand Registration from the Demanding Holders pursuant to the foregoing
provisions, the Company has fixed plans to file within 90 days after that demand
a registration statement for the public offering and sale of any of its
securities in a public offering under the Securities Act (other than an Exempt
Offering of the type specified in clause (i), (ii), (iv) or (v) of the
definition of Exempt Offering), the Company will be entitled to defer the
initial filing of that Demand Registration until 60 days after the effective
date of that registration statement if, after it receives that request for a
Demand Registration from the Demanding Holders, it (i) furnishes to the
Demanding Holders a written notice of that intent, (ii) files that registration
statement within that 90-day period and (iii) affords the Holders the right to
participate in that public offering pursuant to, and subject to, the provisions
of Section 3.
(b) UNDERWRITTEN DEMAND REGISTRATIONS. The offering of
the Registrable Securities pursuant to any Demand Registration shall be in the
form of an underwritten offering. In the event the managing underwriter or
underwriters with respect to a Demand Registration advise the Company and the
Demanding Holders in writing that the total amount of Registrable Securities
requested to be included in such offering, together with any other shares of
Common Stock that the Company intends to have included in such offering, would
exceed the maximum amount of securities which can be marketed at a price
reasonably related to the current fair market value of such securities without
adversely affecting such offering (the "Underwriters' Maximum Number"), the
initial filing of the registration statement for such Demand Registration will
be prepared on the basis that the offering will include, up to the Underwriters'
Maximum Number: first, all of the Registrable Securities requested to be
included in such registration by the Holders thereof, allocated pro rata among
such Holders on the basis of the number of Registrable Securities requested to
be included therein by each such Holder; and second, any shares of Common Stock
to be included in such registration by the Company or any other holders of
shares of Common Stock, allocated as determined by the Company, subject to any
applicable agreements between the Company and any such holders
(c) SELECTION OF UNDERWRITERS. The managing underwriter
or underwriters to be used in connection with such registration shall be
selected by the Holders holding a majority of the Registrable Securities being
registered, subject to the approval by the Company, which approval shall not be
unreasonably withheld.
(d) UNDERWRITING AGREEMENTS. The Company shall (together
with all Holders offering Registrable Securities pursuant to a Demand
Registration) enter into an underwriting agreement in customary form with the
underwriters selected for such Demand Registration pursuant to the provisions of
Section 2(c), and each such Holder shall complete and execute all
questionnaires, powers of attorney, indemnities and other documents, and obtain
such spousal or other consents, as are reasonably required under the terms of
those arrangements and this Agreement.
(e) WITHDRAWAL FROM UNDERWRITING. If any Holder disapproves
of the proposed terms of the underwriting arrangements relating to an
underwritten offering pursuant to a Demand Registration, such Holder may elect
to withdraw therefrom by written notice to the Company and the lead managing
underwriter for that offering delivered not less than 10 days before the
registration statement relating to that Demand Registration becomes effective
under the Securities Act. Any Registrable Securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities (together with any
other Registrable Securities held by such Holder) shall be subject to the
restrictions set forth in Section 4 until the expiration of the Lockup Period
relating to the offering being made pursuant to such registration. If by the
withdrawal of such Registrable Securities a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include any additional Registrable Securities they own
in the same proportion and manner used in determining the number of shares
originally included pursuant to Section 2(b).
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Exhibit 99.2
(f) INCLUSION AS A DEMAND REGISTRATION. For purposes of
this Section 2, a registration will not count as a Demand Registration until it
has become effective; PROVIDED, HOWEVER, if the Demanding Holders withdraw all
their Registrable Securities (whether before or after the effectiveness of such
registration) and not as a result of any wrongdoing by the Company, or if as a
result of any action by the managing underwriters or underwriters, such demand
will count as a Demand Registration for purposes of this Section 2 unless the
Demanding Holders reimburse the Company, promptly upon request, for all of the
Registration Expenses related to the attempted registration.
Section 3. PIGGYBACK REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Whenever the
Company proposes to register the public offering and sale of any shares of
Common Stock for its own account under the Securities Act, other than an Exempt
Offering, the Company shall give written notice thereof to each Holder as soon
as practicable (but in any event at least 15 days prior to its initial filing
with the Commission of the registration statement for that offering), offering
such Holder the opportunity to register on such registration statement such
number of Registrable Securities as such Holder may request in writing (a
"Request Notice"), subject to the provisions of Section 3(b), not later than 10
days after the date of the giving of such notice (any such registration being a
"Piggyback Registration"). Upon receipt by the Company of any such request, the
Company shall use reasonable efforts to include such Registrable Securities in
such registration statement and to cause such registration statement to become
effective with respect to such Registrable Securities in accordance with the
registration procedures set forth in Section 6. If the Company's registration is
to be effected pursuant to an underwritten offering, Registrable Securities
registered pursuant to this Section 3 shall be distributed in accordance with
such offering; PROVIDED, HOWEVER, that: (i) the Company may reserve to itself
the right to be the exclusive grantor of any underwriter's overallotment option;
and (ii) the shares of Registrable Securities any Requesting Holder will be
entitled to offer and sell will be subject to reduction as Section 3(b)
provides. In connection with each Piggyback Registration, the Company, in its
sole discretion, will determine whether to proceed with or terminate the
offering and to select any underwriter or underwriters to administer the
offering. Each Holder requesting inclusion in a registration pursuant to this
Section 3 may, at any time before the effective date of the registration
statement relating to such registration, revoke such request by delivering
written notice of such revocation to the Company (which notice shall be
effective only upon receipt by the Company); PROVIDED, HOWEVER, that if the
Company, in consultation with its financial and legal advisors, determines that
such revocation would materially delay the registration or require a
recirculation of the prospectus subject to completion contained in the
registration statement, then such Holder shall have no right to so revoke its
request.
(b) PRIORITY IN PIGGYBACK REGISTRATION. The Company will
have the right to determine the aggregate size of each offering pursuant to a
Piggyback Registration and to limit the number of Registrable Securities to be
included in that offering without reducing the number of shares of Common Stock
to be offered by the Company in that offering, as follows: (i) if the lead
managing underwriter selected by the Company for that offering (or, if that
offering will not be underwritten, a financial advisor to the Company)
determines that marketing factors render necessary or advisable a limitation on
the number of Registrable Securities to be included in that offering, the
Company will be required to include in that offering only such number of
Registrable Securities, if any, as that lead managing underwriter (or financial
advisor, as the case may be) believes (as evidenced by its written advice to the
Company) will not jeopardize the success of the primary offering by the Company;
and (ii) if the Company limits the number of Registrable Securities that
Requesting Holders may have included in any offering pursuant to clause (i), but
does not exclude all Registrable Securities from that offering, the maximum
number of Registrable Securities to be included in that offering on behalf of
each of those Requesting Holders will be the product of (A) the number of
Registrable Securities that Requesting Holder has specified in its Request
Notice relating to that offering multiplied by (B) the fraction the numerator of
which is the number of Registrable Securities that the Company has determined
(in accordance with the foregoing provisions of this Section 3(b)) may be
included in that offering and the denominator of which is the aggregate number
of Registrable Securities all those Requesting Holders have specified in their
Request Notices relating to that offering.
(c) UNDERWRITING AGREEMENTS. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form with the
underwriters selected for such underwriting by the Company, and each such Holder
shall complete and execute all questionnaires, powers of attorney, indemnities
and other documents, and obtain such spousal or other consents, as are
reasonably required under the terms of those arrangements and this Agreement.
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Exhibit 99.2
(d) WITHDRAWAL FROM UNDERWRITING. If any Holder disapproves
of the proposed terms of the underwriting arrangements relating to the offering
being effected pursuant to a Piggyback Registration, such Holder may elect to
withdraw therefrom by written notice to the Company and the lead managing
underwriter for that offering delivered not less than 10 days before the
registration statement relating to that Piggyback Registration becomes effective
under the Securities Act. Any Registrable Securities so withdrawn shall also be
withdrawn from such registration, and such Registrable Securities (together with
any other Registrable Securities held by such Holder) shall be subject to the
restrictions set forth in Section 4 until the expiration of the Lockup Period
relating to the offering being made pursuant to such registration.
Section 4. MARKET STANDOFF. If the Company at any time shall
effect the registration of an underwritten public offering of any shares of
Common Stock under the Securities Act (including any registration pursuant to
Section 2 or 3), the Holders shall not sell, transfer, make any short sale of,
grant any option for the purchase of, or otherwise dispose of, any Registrable
Securities (other than those shares of Common Stock included in such
registration pursuant to Section 2 or 3) without the prior written consent of
the Company for a period designated by the Company in writing to the Holders
(each such period being a "Lockup Period"), which period shall begin not more
than 10 days prior to the effectiveness of the registration statement pursuant
to which such public offering shall be made and shall extend until the last to
occur of (i) the 60th day after the effective date of such registration
statement and (ii) the earlier of (A) the 120th day after the commencement of
the lockup period, if any, established pursuant to the underwriting arrangements
entered into by the Company (and the Holders, if any, offering Registrable
Securities in that offering) in connection with that offering and (B) the
expiration of the lockup period described in the immediately preceding clause
(A). The Company shall obtain the agreement of any person permitted to sell
shares of stock in a registration to be bound by and to comply with this Section
4 as if such person was a Holder hereunder. Whenever the provisions of this
Section 4 become applicable, the Company will seek to obtain the agreement of
its officers and directors to be bound by the transfer restrictions set forth in
this Section 4 for the duration of the applicable Lockup Period.
Section 5. EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with (i) one Demand Registration initiated by the
Requisite Wedge Holders, (ii) one Demand Registration initiated by Chesapeake
and (iii) all Piggyback Registrations shall be borne by the Company. All Selling
Expenses relating to Registrable Securities so registered, as well as all
Registration Expenses relating to Demand Registrations and Piggyback
Registrations not required to be borne by the Company, shall be borne by the
Holders pro rata on the basis of the number of Registrable Securities so
registered on their behalf.
Section 6. REGISTRATION PROCEDURES. If and whenever the Company
is required by the provisions of Section 2 or 3 to effect the registration of
Registrable Securities, the Company shall:
(a) prepare and file with the Commission a registration
statement with respect to the offering of these Registrable Securities and use
its best efforts to cause such registration statement to become and remain
effective as provided herein;
(b prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and current and to comply with the provisions of the Securities Act
with respect to the sale of or other disposition of all Registrable Securities
covered by such registration statement, including such amendments and
supplements as may be necessary to reflect the plan of distribution for such
Registrable Securities, but for no longer than 120 days subsequent to the
effective date of such registration statement; PROVIDED, HOWEVER, such period
shall be extended for the period of time equal to the period, if any, that a
Holder refrains from selling any Registrable Securities covered by such offering
at the request of the lead managing underwriter for such offering;
(c) furnish to each prospective seller of Registrable
Securities pursuant to such registration such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may reasonably request
in order to facilitate the sale or other disposition of the Registrable
Securities of such seller;
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Exhibit 99.2
(d) notify each Holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or incomplete in the light of the
circumstances then existing, and, at the request of any such Holder, prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(e) cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange or approved for
quotation on any inter-dealer quotation system on which the Common Stock is then
listed or quoted;
(f) use its best efforts to register or qualify the
Registrable Securities covered by such registration under such other securities
or "blue sky" laws of such jurisdictions as any Holder may reasonably request
and do any and all other acts and things which may be reasonably necessary or
advisable to enable any Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; PROVIDED,
HOWEVER, that the Company will not be required to qualify generally to do
business, subject itself to general taxation or consent to general service of
process in any jurisdiction where it would not otherwise be required to do so
but for this paragraph (f);
(g) subject to the execution of confidentiality
agreements in form and substance satisfactory to the Company, make available
upon reasonable notice and during normal business hours, for inspection by each
Holder holding such Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other agent retained by any Holder or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such Inspector in connection with such registration statement;
(h) use its best efforts to obtain from its independent
public accountants "comfort" letters in customary form and at customary times
and covering matters of the type customarily covered by comfort letters;
(i) use its best efforts to obtain from its counsel an
opinion or opinions in customary form; (j) otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least 12 months, but not more than
18 months, beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and
(k) use its best efforts to take all other steps necessary
to effect the registration of the offering and sale of the Registrable
Securities contemplated hereby.
Section 7. INDEMNIFICATION. If any of the Registrable Securities
are included in a registration statement under this Agreement, the following
provisions shall apply.
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Exhibit 99.2
(a) The Company will, to the extent applicable law
permits, indemnify each Holder, each of such Holder's officers and directors and
partners (and each partner's officers, directors and partners) and such Holder's
separate legal counsel and independent accountants, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, and each
underwriter, if any, and each person who controls any underwriter within the
meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained, on the effective date thereof, in any registration
statement, any prospectus contained therein, or any amendment or supplement
thereto, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in the light of the circumstances under
which they were made) not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers, directors
and partners (and each partner's officers, directors and partners) and such
Holders' separate legal counsel and independent accountants and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected and to the extent applicable law
permits, indemnify the Company, each of its directors and officers and its legal
counsel and independent accountants, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained, on the effective date thereof,
in any such registration statement, any prospectus contained therein, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement or
prospectus in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Holder specifically for
use therein; PROVIDED, HOWEVER, that the obligations of any such Holder
hereunder shall be limited to an amount equal to the proceeds to each such
Holder of Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this
Section 7 (each, an "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, PROVIDED that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld or delayed), and the Indemnified Party may participate
in such defense at such party's expense, and PROVIDED, FURTHER, that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7 to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation.
8
Exhibit 99.2
(d) If the indemnification provided for in this Section 7
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying the Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
with respect to such loss, liability, claim, damage or expense in the proportion
that is appropriate to reflect the relative fault of the Indemnifying Party and
the Indemnified Party in connection with the statements or omissions that
resulted in such loss, liability, claim, damage or expense, as well as any other
relevant equitable considerations. The relative fault of the Indemnifying Party
and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party, and the parties,
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 8. INFORMATION BY HOLDER. The Holder or Holders of
Registrable Securities included in any registration shall furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
Section 9. RULE 144 REPORTING. The Company will: (i) use
commercially reasonable efforts to file with the Commission in a timely manner
all reports and other documents Section 13 or 15(d) of the Exchange Act, as
applicable, requires it to file with the Commission; and (ii) so long as a
Holder owns Registrable Securities, deliver to the Holder, on the Holder's
request, a written statement as to whether the Company is in compliance with the
requirements referred to in clause (i) of this sentence (if it is then subject
to those requirements).
Section 10. ASSIGNMENT OF REGISTRATION RIGHTS. A Holder may not
transfer the registration rights this Agreement affords the Holder to any other
Person (other than (i) an Affiliate of that Holder or (ii) a member of the
"immediate family" (as that term is used in Item 404 of Regulation S-K
promulgated by the Commission, as in effect on the date hereof) of (A) that
Holder or (B) any Affiliate of that Holder) without the prior written consent of
the Company (which consent will not be unreasonably withheld), and in that case
only if the transferee executes an addendum to this Agreement in which that
transferee agrees to comply with and otherwise be bound by all the terms and
conditions hereof.
Section 11. SUBSEQUENT GRANTS OF REGISTRATION RIGHTS.
(a) Without the affirmative vote of the Holders of at
least 66?% of the Registrable Securities, the Company shall not grant to any
purchaser of the Company's securities any demand registration rights or
piggyback registration rights that, with respect to underwriters cutbacks, would
be inconsistent or in conflict with the provisions hereof.
(b) For as long as any Holder is entitled to exercise any
registration rights described herein in respect of any Registrable Securities
held by that Holder, such Holder shall be entitled to receive the benefit of any
and all registration rights hereafter granted by the Company to any other Person
which are more favorable than the registration rights provided to such Holder
pursuant to this Agreement.
Section 12. TERM. This Agreement and all rights granted to the
Investors hereunder shall expire on the eighth anniversary of the date hereof.
Section 13. MISCELLANEOUS.
9
Exhibit 99.2
(a) NOTICES. All notices and other communications provided
for or permitted hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by facsimile or courier
service, when actually received by the party to whom the notice or communication
is sent, or (ii) if deposited with the United States postal service (whether
actually received or not), at the close of business on the third San Antonio,
Texas business day next following the day when placed in the mail, postage
prepaid, certified or registered with return receipt requested, addressed to the
appropriate party or parties at the address of that party set forth or referred
to below (or at such other address as that party may designate by written notice
to each other party in accordance herewith):
(i) If to the Company: Pioneer Drilling Company
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇. ▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice for
purposes of this Agreement) to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
3000 One Shell Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. Paris
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Wedge: WEDGE Energy Services, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice for
purposes of this Agreement) to:
WEDGE Energy Services, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to Chesapeake: Chesapeake Energy Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile: 405) 879-9580
with a copy (which shall not constitute notice for
purposes of this Agreement) to:
Commercial Law Group
2725 Oklahoma Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iv) If to any other Holder, at the most current address
of that Holder as reflected in the books and records of
the Company.
10
Exhibit 99.2
(b) ENTIRE AGREEMENT; AMENDMENTS. This Agreement represents the
entire agreement of the parties hereto, and supersedes any other agreements
among the parties with respect to the subject matter hereof. Without limiting
the generality of the foregoing, the Existing RRA is hereby canceled in its
entirety and rendered a nullity by agreement of the Company and Wedge. The terms
and provisions of this Agreement may not be modified or amended, or any of the
provisions hereof waived, except pursuant to the written consent of the Company
and holders of a majority of the Registrable Securities then outstanding.
(c) ASSIGNMENT. Subject to the provisions of Section 10, this
Agreement will inure to the benefit of and be binding on the heirs, executors,
administrators, successors and assigns of each of the parties hereto.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument, but
all of which taken together shall constitute one and the same agreement.
(e) HEADINGS; INTERPRETATION. The headings of the various
sections of this Agreement have been inserted for convenience of reference only
and shall not limit or affect the meaning or interpretation of this Agreement.
Whenever the context requires, references in this Agreement to the singular
number shall include the plural and vice versa, and words denoting gender shall
include the masculine, feminine and neuter. This Agreement uses the words
"herein," "hereof," "hereto" and "hereunder" and words of similar import to
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and the word "Section" is used to refer to Sections of this
Agreement, unless otherwise specified. As used in this Agreement, the word
"including" (and, with correlative meaning, the word "include") means including
without limiting the generality of any description preceding that word, and the
verbs "shall" and "will" are used interchangeably and have the same meaning.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
any principles of conflicts of law thereof that would result in the application
of the laws of any other jurisdiction.
(g) SEVERABILITY. In case any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and other applications thereof shall
not in any way be affected or impaired thereby.
11
Exhibit 99.2
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
PIONEER DRILLING COMPANY
By: /S/ Wm.▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: Wm.▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Title: President and CFO
----------------------------------------------
WEDGE ENERGY SERVICES, L.L.C.
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------------------
Title: Vice President
----------------------------------------------
CHESAPEAKE ENERGY CORPORATION
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/S/ ▇▇▇▇ ▇▇▇▇▇
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12