1
EXHIBIT 4.15
WARRANT REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 21, 1998
BY AND AMONG
GOTHIC ENERGY CORPORATION
AND
THE PURCHASERS NAMED HEREIN
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of April 21, 1998, by and among Gothic Energy Corporation, an Oklahoma
corporation (the "COMPANY"), and the purchasers named on the signature pages
hereto (each a "PURCHASER" and collectively, the "PURCHASERS"), each of whom has
agreed to purchase the Company's Units (the "Units") pursuant to the Purchase
Agreement (as defined below), each Unit consisting of warrants (the "WARRANTS")
to purchase shares (the "WARRANT SHARES") of the common stock, par value $.01
per share (the "COMMON STOCK") and the 14-1/8% Senior Secured Discount Notes due
2006, of the Company.
This Agreement is made pursuant to the Purchase Agreement, dated April 21,
1998, (the "PURCHASE AGREEMENT"), by and among the Company and the Purchasers.
In order to induce the Purchasers to purchase the Units, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the
Purchasers set forth in Article IV of the Purchase Agreement. Capitalized terms
used herein and not otherwise defined shall have the meaning assigned to them in
the Warrant Agreement, dated April 21, 1998 (the "WARRANT AGREEMENT"), among the
Company and American Stock Transfer and Trust Company, as warrant agent,
relating to the Warrants.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Warrant Shelf Registration Statement is declared effective, as amended
or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 4(b) hereof.
2
REGISTRABLE WARRANT or REGISTRABLE WARRANT SHARE: subject to the last
sentence of Section 3(c), each Warrant or Warrant Share, until the earlier to
occur of (i) the date on which Warrant or Warrant Share has been effectively
registered under the 1933 Act and disposed of pursuant to the Warrant Shelf
Registration Statement (as defined below) and (ii) such Warrant or Warrant
Shares shall have become eligible for resale pursuant to Rule 144(k) under the
1933 Act.
REGISTRATION DEFAULT: As defined in Section 3(c) hereof.
SUSPENSION NOTICE: As defined in Section 4(b) hereof.
WARRANT AGENT: the warrant agent with respect to the Warrants under the
Warrant Agreement.
WARRANT LIQUIDATED DAMAGES: As defined in Section 3(c) hereof.
WARRANT SHELF REGISTRATION STATEMENT: As defined in Section 3(a) hereof.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Registrable Warrants or Registrable
Warrant Shares (each, a "HOLDER") whenever such Person owns Registrable Warrants
or Registrable Warrant Shares.
SECTION 3. WARRANT SHELF REGISTRATION
(a) Warrant Shelf Registration Statement. Promptly (and in any event not
more than 45 days) following the Closing Date, the Company shall file with the
Commission and thereafter use its best efforts to have declared effective not
later than 120 days after the Closing Date, a registration statement on an
appropriate form under the Act relating to (i) the offer and sale of the
Registrable Warrant Shares by the Company to the holders of the Registrable
Warrants upon exercise thereof and (ii) the offer and sale of the Registrable
Warrants and Registrable Warrant Shares by the holders thereof, in each case
from time to time in accordance with the methods of distribution set forth in
such registration statement and Rule 415 under the 1933 Act (the "Warrant Shelf
Registration Statement"). For purposes of this Agreement, the term "REGISTRABLE
WARRANT SHARES" shall be deemed to include any Warrant Shares issued and sold by
the Company to any holder of Registrable Warrants upon the exercise thereof.
-2-
3
(b) Effectiveness. The Company agrees to use its best efforts to keep the
Warrant Shelf Registration Statement continuously effective in order to permit
the Prospectus included therein to be usable by the holders of the Registrable
Warrants and the Registrable Warrant Shares for nine years from the Closing Date
or such shorter period that will terminate when all Registrable Warrants and
Registrable Warrant Shares covered by the Warrant Shelf Registration Statement
have been sold pursuant to such registration statement; provided, that the
Company shall be deemed not to have used its best efforts to keep the Warrant
Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in holders of the Registrable
Warrants and Registrable Warrant Shares covered thereby not being able to offer
and sell such Registrable Warrants and Registrable Warrant Shares during that
period, unless such action is required by applicable law, and provided, further,
that the foregoing shall not apply to actions if the Company determines, in its
reasonable judgment, upon advice of counsel, as authorized by a resolution of
its Board of Directors, that the continued effectiveness and usability of such
registration statement would (i) require the disclosure of material information,
which the Company has a bona fide business reason for preserving as
confidential, or (ii) interfere with any financing, acquisition, corporate
reorganization or other material transaction involving the Company or any of its
Affiliates (as defined in the rules and regulations adopted under the 1934 Act);
provided, however, that the failure to keep the registration statement effective
and usable for offers and sales of Registrable Warrants and Registrable Warrant
Shares for such reasons shall last no longer than 60 days in any 12-month period
(whereafter Warrant Liquidated Damages (as defined in Section 3(c)) shall accrue
and be payable).
(c) Warrant Liquidated Damages. If the Company fails to file within 45
days, or cause to become effective within 120 days, the Warrant Shelf
Registration Statement, or (subject to Section 3(b)) the Warrant Shelf
Registration Statement is declared effective but thereafter ceases to be
effective in connection with resales of the Registrable Warrants or Registrable
Warrant Shares (each, a "REGISTRATION DEFAULT"), then the Company agrees to pay
to each holder of Registrable Warrants or Registrable Warrant Shares, liquidated
damages in an amount equal to (i) one-tenth of one cent ($.001) per day per
Registrable Warrant or such Registrable Warrant Share held by such holder during
the two week period immediately following a Registration Default, (ii) three-
tenths of one cent ($.003) per day per Registrable Warrant or such Registrable
Warrant Share held by such holder during the four week period immediately
following the two week period referred to in clause (i) and (iii) thereafter,
five-tenths of one cent ($.005) per day per Registrable Warrant or such
Registrable Warrant Share held by such holder (the "WARRANT LIQUIDATED
DAMAGES"), accruing in each case from the date of such Registration Default and
ceasing to accrue on the date such Registration Default has been cured by, as
applicable, the filing, declaration of effectiveness or withdrawal of suspension
of effectiveness of the Warrant Shelf Registration Statement, as the case may
be. The Company shall deliver the
-3-
4
Warrant Liquidated Damages to the Warrant Agent on the first day of each month
next following a month as to which Warrant Liquidated Damages have accrued for
the benefit of the holders of Registrable Warrants and to a paying agent (which
may be the Company) for the benefit of the holders of Registrable Warrant Shares
and cause the Warrant Agent and such paying agent to promptly deliver such funds
to the holders of Registrable Warrants and Registrable Warrant Shares entitled
thereto. For purposes of this Agreement, the term "Registration Default" shall
not include the failure of the Company to register the offer and sale of the
Registrable Warrant Shares of the Company to the holders of the Registrable
Warrants as set forth under Section 3(a)(i) hereof if such registration is
against the current policies of the staff of the Commission.
(d) Provision by Holders of Certain Information in Connection with the
Warrant Shelf Registration Statement. No Holder of Registrable Warrants or
Registrable Warrant Shares may include any of its Registrable Warrants or
Registrable Warrant Shares in any Warrant Shelf Registration Statement pursuant
to this Agreement unless and until such Holder furnishes to the Company in
writing, within 10 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Warrant Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Registrable Warrants or
Registrable Warrant Shares shall be entitled to Warrant Liquidated Damages
pursuant to Section 3(c) hereof unless and until such Holder shall have provided
all such information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 4. REGISTRATION PROCEDURES
(a) General Provisions. (i) In connection with the Warrant Shelf
Registration Statement, the Company shall use its best efforts to effect such
registration to permit the sale of the Registrable Warrants or Registrable
Warrant Shares in accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Company pursuant to
Section 3(d) hereof), and pursuant thereto the Company will prepare and file
with the Commission a registration statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Registrable Warrants or Registrable Warrant Shares in accordance with the
intended method or methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof;
(ii) use its best efforts to keep the Warrant Shelf Registration
Statement continuously effective and provide all requisite financial statements
for the period specified in Section 3 of this Agreement. Upon the occurrence of
any event that would cause any such
-4-
5
Warrant Shelf Registration Statement or the Prospectus contained therein (A) to
contain an untrue statement of material fact or omit to state any material fact
necessary to make the statements therein not misleading or (B) not to be
effective and usable for resale of Registrable Warrants or Registrable Warrant
Shares during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to the Warrant Shelf Registration Statement
curing such defect, and, if Commission review is required, use its best efforts
to cause such amendment to be declared effective as soon as practicable;
(iii) prepare and file with the Commission such amendments and post-
effective amendments to the Warrant Shelf Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period set forth in Section 3 hereof; cause the Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the provisions of
the Act with respect to the disposition of all securities covered by the Warrant
Shelf Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in
the Warrant Shelf Registration Statement or supplement to the Prospectus;
(iv) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to the
Warrant Shelf Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of the issuance by the Commission of any
stop order suspending the effectiveness of the Warrant Shelf Registration
Statement under the Act or of the suspension by any state securities commission
of the qualification of the Registrable Warrants or Registrable Warrant Shares
for offering or sale in any jurisdiction, or the initiation of any proceeding
for any of the preceding purposes, (C) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in the
Warrant Shelf Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the Warrant shelf
Registration Statement in order to make the statements therein not misleading,
or that requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Warrant Shelf Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Registrable Warrants or Registrable Warrant Shares under
state securities or Blue Sky laws, the Company shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time;
-5-
6
(v) subject to Section 4(a)(ii), if any fact or event contemplated
by Section 4(a)(iv)(C) above shall exist or have occurred, prepare a supplement
or post-effective amendment to the Registration Statement or related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Registrable
Warrants or Registrable Warrant Shares, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(vi) upon request of a Holder, furnish to such selling Holder named
in any Registration Statement or Prospectus in connection with such exchange or
sale, if any, before filing with the Commission, copies of the Warrant Shelf
Registration Statement or any Prospectus included therein or any amendments or
supplements to the Warrant Shelf Registration Statement or Prospectus (including
all documents incorporated by reference after the initial filing of the Warrant
Shelf Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period of at
least five Business Days, and the Company will not file the Warrant Shelf
Registration Statement or Prospectus or any amendment or supplement to the
Warrant Shelf Registration Statement or Prospectus (including all such documents
incorporated by reference) to which such Holders shall reasonably object within
five Business Days after the receipt thereof. A Holder shall be deemed to have
reasonably objected to such filing if the Warrant Shelf Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading or fails to comply
with the applicable requirements of the Act;
(vii) promptly prior to the filing of any document that is to be
incorporated by reference into the Warrant Shelf Registration Statement or
Prospectus, if requested by any selling Holder, provide copies of such document
to each Holder in connection with such exchange or sale, if any, make the
Company's representatives available for discussion of such document and other
customary due diligence matters, and include such information in such document
prior to the filing thereof as such Holders may reasonably request;
(viii) make available, at reasonable times, for inspection by each
selling Holder and any attorney or accountant retained by such selling Holders,
all financial and other records, pertinent corporate documents of the Company
and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, attorney or accountant in
connection with the Warrant Shelf Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness; provided, however, that such Persons shall first agree in writing
with the Company that any information
-6-
7
that is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to inquires
of regulatory authorities, (ii) disclosure of such information is required by
law (including any disclosure requirements pursuant to federal securities laws
in connection with the filing of the Warrant Shelf Registration Statement or the
use of any Prospectus), (iii) such information becomes generally available to
the public other than as a result of a disclosure or failure to safeguard such
information by such Person or (iv) such information becomes available to such
Person from a source other than the Company and its subsidiaries and such source
is not known, after due inquiry, by such Person to be bound by a confidentiality
agreement; provided further, that the foregoing investigation shall be
coordinated on behalf of such Persons by one representative designated by and on
behalf of such Persons and any such confidential information shall be available
from such representative to such Persons so long as any Person agrees to be
bound by such confidentiality agreement;
(ix) if requested by any selling Holders in connection with such
exchange or sale, promptly include in the Warrant Shelf Registration Statement
or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to have
included therein, including, without limitation, information relating to the
"Plan of Distribution" of the Registrable Warrants or Registrable Warrant
Shares; and make all required filings of such Prospectus supplement or post-
effective amendment as soon as practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(x) furnish to each selling Holder in connection with such exchange
or sale, without charge, at least one copy of the Warrant Shelf Registration
Statement, as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
(xi) deliver to each Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company hereby
consents to the use (in accordance with law) of the Prospectus and any amendment
or supplement thereto by each selling Holder in connection with the offering and
the sale of the Registrable Warrants or Registrable Warrant Shares covered by
the Prospectus or any amendment or supplement thereto;
(xii) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and warranties
and take all such other actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable
-7-
8
Warrants or Registrable Warrant Shares pursuant to the Warrant Shelf
Registration Statement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to the Warrant Shelf Registration
Statement. In such connection, the Company shall:
(A) upon request of any Holder, furnish (or in the case of paragraph
(2), use its best efforts to cause to be furnished) to each Holder, upon the
effectiveness of the Warrant Shelf Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf of the
Company confirming, as of the date thereof, the matters set forth in Section
4.1(g) of the Purchase Agreement and such other similar matters as such Holders
may reasonably request; and
(2) an opinion, dated the date of effectiveness of the Warrant
Shelf Registration Statement of counsel for the Company covering matters similar
to those set forth in Exhibit 6 of the Purchase Agreement and such other matters
as such Holder may reasonably request, and in any event including a statement to
the effect that such counsel has participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants for the Company and have considered the matters required to be
stated therein and the statements contained therein, although such counsel has
not independently verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of the foregoing
and without independent check or verification), no facts came to such counsel's
attention that caused such counsel to believe that the Warrant Shelf
Registration Statement, at the time the Warrant Shelf Registration Statement or
any post-effective amendment thereto became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus contained in the Warrant Shelf Registration Statement as of
its date contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Without limiting
the foregoing, such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and schedules and
other financial data included in the Warrant Shelf Registration Statement
contemplated by this Agreement or the related Prospectus;
(B) deliver such other documents and certificates as may be reasonably
requested by the selling Holders to evidence compliance with the matters covered
in clause (A) above and with any customary conditions contained in any agreement
entered into by Company pursuant to this clause (xii);
-8-
9
(xiii) prior to any public offering of the Registrable Warrants or
Registrable Warrant Shares, cooperate with the selling Holders and their counsel
in connection with the registration and qualification of the Registrable
Warrants or Registrable Warrant Shares under the securities or Blue Sky laws of
such jurisdictions as the selling Holders may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Warrants or Registrable Warrant Shares covered
by the Warrant Shelf Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation where it
is not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Warrant Shelf Registration Statement, in any
jurisdiction where it is not now so subject;
(xiv) in connection with any sale of the Registrable Warrants or
Registrable Warrant Shares that will result in such securities no longer being
Registrable Warrants or Registrable Warrant Shares, as the case may be,
cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing the Registrable Warrants or Registrable Warrant Shares
to be sold and not bearing any restrictive legends; and to register the
Registrable Warrants or Registrable Warrant Shares in such denominations and
such names as the selling Holders may request at least two Business Days prior
to such sale of the Registrable Warrants or Registrable Warrant Shares;
(xv) use its best efforts to cause the disposition of the Registrable
Warrants or Registrable Warrant Shares covered by the Warrant Shelf Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Warrants or Registrable Warrant
Shares, subject to the proviso contained in clause (xiii) above;
(xvi) provide a CUSIP number for all Registrable Warrants or
Registrable Warrant Shares not later than the effective date of the Warrant
Shelf Registration Statement covering the Registrable Warrants or Registrable
Warrant Shares and provide the Warrant Agent under the Warrant Agreement with
printed certificates for the Registrable Warrants or Registrable Warrant Shares
which are in a form eligible for deposit with the Depository Trust Company;
(xvii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders with regard to the Warrant Shelf Registration Statement, as
soon as practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) covering a twelve-
-9-
10
month period beginning after the effective date of the Registration Statement
(as such term is defined in paragraph (c) of Rule 158 under the Act); and
(xviii) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or Section
15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Registrable Warrant or Registrable Warrant Share that, upon receipt of the
notice referred to in Section 4(a)(iv)(C) or any notice from the Company of the
existence of any fact of the kind described in Section 4(a)(iv)(D) hereof (in
each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue
disposition of Registrable Warrants or Registrable Warrant Shares pursuant to
the Warrant Shelf Registration Statement until (i) such Holder has received
copies of the supplemented or amended Prospectus contemplated by Section 4(a)(v)
hereof, or (ii) such Holder is advised in writing by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension
Notice hereby agrees that it will either (i) destroy any Prospectuses, other
than permanent file copies, then in such Holder's possession which have been
replaced by the Company with more recently dated Prospectuses or (ii) deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the Prospectus covering such
Registrable Warrants or Registrable Warrant Shares that was current at the time
of receipt of the Suspension Notice. The time period regarding the
effectiveness of the Warrant Shelf Registration Statement set forth in Section 3
hereof shall be extended by a number of days equal to the number of days in the
period from and including the date of delivery of the Suspension Notice to the
date of delivery of the Recommencement Date.
SECTION 5. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether the
Warrant Shelf Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Warrant Shares and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company and
the Holders of Registrable Warrants or Registrable Warrant Shares; (v) all
application and filing fees in connection with listing the Warrant Shares on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public
-10-
11
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with the Warrant Shelf Registration Statement required by
this Agreement, the Company will reimburse the Purchasers and the Holders of
Registrable Warrants or Registrable Warrant Shares who are selling or reselling
Warrant Shares pursuant to the "Plan of Distribution" contained in the Warrant
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be chosen by the Holders
of a majority of the Registrable Warrants or Warrant Shares (voting together as
a single class) for whose benefit such Registration Statement is being prepared.
SECTION 6. INDEMNIFICATION
(a) The Company agrees and covenants to hold harmless and indemnify each
Holder and each person, if any, who controls each Holder within the meaning of
Section 20 of the Exchange Act from and against any losses, claims, damages,
liabilities and expenses (including expenses of investigation) to which such
Holder or such controlling person may become subject (i) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Warrant Shelf Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) or arising out of or based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (ii) arising out of, based upon or in any way related or attributed to
claims, actions or proceedings relating to this Agreement or the subject matter
of this Agreement or (iii) arising in any manner out of or in connection with
any Person being a Holder and relating to any action taken or omitted to be
taken by the Company; provided, however, that the Company shall not be liable
under this paragraph (a) for any amount paid in settlement of claims without its
written consent, which consent shall not be unreasonably withheld, or to the
extent that it is finally judicially determined that such losses, claims,
damages or liabilities arose primarily out of the gross negligence, willful
misconduct or bad faith of such Holder. The Company further agree to reimburse
each Holder for any reasonable legal and other expenses as they are incurred by
it in connection with investigating, preparing to defend or defending any
lawsuits, claims or other proceedings or investigations arising in any manner
out of or in connection with such Person being a Holder; provided that if the
Company reimburse any Holder hereunder for any expenses incurred in connection
with a lawsuit, claim or other
-11-
12
proceeding for which indemnification is sought, such Holder hereby agrees to
refund such reimbursement of expenses to the extent it is finally judicially
determined that the losses, claims, damages or liabilities arising out of or in
connection with such lawsuit, claim or other proceedings arose primarily out of
the gross negligence, willful misconduct or bad faith of such Holder or from a
violation by such Holder of legal requirements applicable to such Holder. The
Company further agrees that the indemnification, contribution and reimbursement
commitments set forth in this Section 6 shall apply whether or not any Holder is
a formal party to any such lawsuits, claims or other proceedings.
Notwithstanding the foregoing, the Company shall not be liable to a party
seeking indemnification under the foregoing provisions of this paragraph (a) to
the extent that any such losses, claims, damages, liabilities or expenses arise
out of or are based upon an untrue statement or omission made in any of the
documents referred to in this paragraph (a) in reliance upon and in conformity
with the information relating to the party seeking indemnification furnished in
writing by such party for inclusion therein. The indemnity, contribution and
expense reimbursement obligations of the Company under this Section 6 shall be
in addition to any liability the Company may otherwise have.
(b) If any Person shall be entitled to indemnity hereunder (the
"INDEMNIFIED PARTIES"), such Indemnified Party shall give prompt notice
confirmed in writing to the party or parties from which such indemnity is sought
(the "INDEMNIFYING PARTIES") of the commencement of any proceeding (a
"PROCEEDING") with respect to which such Indemnified Party seeks indemnification
or contribution pursuant hereto; provided, however, that the failure so to
notify the Indemnifying Parties shall not relieve the Indemnifying Parties from,
any obligation or liability except to the extent that the Indemnifying Parties
have been prejudiced materially by such failure. The Indemnifying Parties shall
have the right, exercisable by giving written notice to an Indemnified Party
promptly after the receipt of written notice from such Indemnified Party of such
Proceeding, to assume, at the Indemnifying Parties' expense, the defense of any
such Proceeding, with counsel reasonably satisfactory to such Indemnified Party;
provided, however, that an Indemnified Party or Parties (if more than one such
Indemnified Party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or parties unless (i) the Indemnifying Parties agree to
pay such fees and expenses; or (ii) the Indemnifying Parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Party or parties; or (iii) the named parties to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party or parties and the Indemnifying Party or an Affiliate of the
Indemnifying Party and such Indemnified Parties, and the Indemnifying Parties
shall have been advised in writing by counsel that there may be one or more
material defenses available to such Indemnified Party or parties that are
different from or additional to those available to the Indemnifying Parties, in
which case, if such Indemnified Party or parties notifies the
-12-
13
Indemnifying Parties in writing that it elects to employ separate counsel at the
expense of the Indemnifying Parties, the Indemnifying Parties shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Parties, it being understood, however, that, unless there
exists a conflict among Indemnified Parties, the Indemnifying Parties shall not
in connection with any one such Proceeding or separate but substantially similar
or related Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than,
one separate firm of attorneys (together with appropriate local counsel, if any)
at any time for such Indemnified Party or parties, or for fees and expenses that
are not reasonable. No Indemnified Party or parties will settle any Proceedings
without the written consent of the Indemnifying Party or parties (but such
consent will not be unreasonably withheld).
(c) If for any reason the indemnification provided for in this Section 6 is
unavailable to an Indemnified Party, or insufficient to hold it harmless, in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Party on the one hand and the Indemnified Party on
the other, but also the relative fault of the Indemnifying and Indemnified
Parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying and Indemnified Parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Indemnifying or
Indemnified Parties and each such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any reasonable
legal or other fees or expenses incurred by such party in connection with
investigating or defending any such claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to the immediately preceding paragraph were
determined by any method of allocation which does not take into account the
equitable considerations referred to in such paragraph. No person guilty of
fraudulent misrepresentation shall be entitled to contribution from any Person.
-13-
14
SECTION 7. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Registrable
Warrants or Registrable Warrant Shares remain outstanding and during any period
in which the Company (i) is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request of any Holder, to such Holder or beneficial
owner of Registrable Warrants or Registrable Warrant Shares in connection with
any sale thereof and any prospective purchaser of such Registrable Warrants or
Registrable Warrant Shares designated by such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Registrable Warrants or Registrable Warrant Shares pursuant to Rule
144A, and (ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make
all filings required thereby in a timely manner in order to permit resales of
such Registrable Warrants or Registrable Warrant Shares pursuant to Rule 144.
SECTION 8. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 3 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 3(c)
hereof and this Section 8(c)(i), the Company has obtained the written consent of
Holders of all outstanding Registrable Warrants or Registrable Warrant Shares
and (ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the Registrable Warrants or
Registrable Warrant Shares (voting together as a single class).
-14-
15
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Purchasers, on the other hand, and shall have the right to enforce
such agreements directly to the extent they may deem such enforcement necessary
or advisable to protect its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the Warrant Register,
with a copy to the Warrant Agent; and
(ii) if to the Company:
Gothic Energy Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in the Warrant Agreement.
-15-
16
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Warrants or Registrable Warrant
Shares in violation of the terms hereof or of the Purchase Agreement or the
Warrant Agreement. If any transferee of any Holder shall acquire Registrable
Warrants or Registrable Warrant Shares in any manner, whether by operation of
law or otherwise, such Registrable Warrants or Registrable Warrant Shares shall
be held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Warrants or Registrable Warrant Shares such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Registrable
Warrants or Registrable Warrant Shares. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-16-
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Gothic Energy Corporation
By:
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Purchasers:
By:
------------------------------------
Name:
Title
By:
------------------------------------
Name:
Title:
-17-