Consulting Agreement - Chesapeake Energy Corp. and Michael Paulk
AMENDED AND RESTATED CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into this 11th day of
January, 2001, effective as herein set forth, by and between CHESAPEAKE ENERGY
CORPORATION, an Oklahoma corporation ("Chesapeake"), and MICHAEL PAULK
("Consultant").
WITNESSETH:
WHEREAS, Chesapeake has entered into an Agreement and Plan of
Merger (the "Merger Document") with Gothic Energy Corporation ("Gothic") to
acquire Gothic (the "Acquisition"); and
WHEREAS, Chesapeake desires to retain Consultant to provide
certain services to Chesapeake after the closing of the acquisition regarding
projects and/or properties and assets to be acquired as a result of the
Acquisition; and
WHEREAS, Chesapeake and Consultant desire to amend and restate
in its entirety that certain Consulting Agreement dated September 8, 2000
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the amount of ten
dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Chesapeake and Consultant do hereby
agree as follows.
1. Chesapeake hereby retains Consultant as an independent contractor and
Consultant hereby accepts the assignment to act as Consultant to Chesapeake
pursuant to the terms of this Consulting Agreement.
2. This Consulting Agreement shall be for a term commencing on the first (1st)
day of the first (1st) calendar month following the "Effective Time" (as defined
in the Merger Document) (the "Effective Date") and ending on the second
anniversary of the Effective Date.
3. Consultant shall be entitled to receive for services provided pursuant to
this Agreement and expenses incurred in performing his duties under this
Agreement the fixed monthly amount of $2,200.00. Such monthly reimbursements
shall be payable only during the first six (6) months of this Agreement
commencing on the Effective Date and continuing on the first (1st) day of the
next succeeding five (5) calendar months.
4. In consideration of the sum to be paid to Consultant by Chesapeake pursuant
to paragraph 3 hereof, Consultant agrees during the period provided in paragraph
3, upon Chesapeake's reasonable request, to provide analysis and recommendations
concerning development, sale or other disposition of assets obtained in the
Acquisition. Thereafter during the term of this Agreement, prior to providing
such consulting services Chesapeake and Consultant, on a case by case basis,
will agree upon the compensation to be paid to Consultant by Chesapeake in
providing any such analysis and recommendations.
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5. During the term of this Agreement neither Consultant or any "Affiliate" (as
defined in the Merger Document) of Consultant will acquire any leasehold or
mineral interest in any unit in the "MidContinent Area" (as defined in the
Merger Document) if Chesapeake or any Affiliate of Chesapeake owns any interest
in such unit. If Consultant or any Affiliate of Consultant acquires an interest
in such a unit then such interest is to be offered to Chesapeake for acquisition
at the cost incurred by Consultant or his Affiliate in making such acquisition.
If an interest in such a unit is acquired by Consultant or his Affiliate as part
of a multi-property acquisition only those interests acquired in units in which
a Chesapeake interest already exist are to be offered to Chesapeake at the
portion of the total acquisition cost attributable to such unit(s). Notices to
be delivered pursuant to this paragraph shall be delivered by Consultant to
Chesapeake no later than ten (10) days after such acquisition and Chesapeake
shall respond within fifteen (15) days after receipt of such notice of its
intent to acquire or refuse such unit. In consideration of the agreements by
Consultant set forth in this paragraph, Consultant will be entitled to receive
and Chesapeake agrees to pay the sum of $1,964,000.00. $900,000.00 shall be paid
on the Effective Date and the remainder of such sum shall be paid in equal
quarterly installments of $133,000.00 commencing on the last business day of the
third full calendar month following the Effective Date and continuing on the
last business day of each succeeding three month period until the aggregate
amount is paid in full. Except for amounts withheld from such payments by
Chesapeake as required by applicable law, Consultant agrees to pay any and all
taxes which are levied or assessed directly or indirectly against the consulting
payments paid to Consultant hereunder. The Consultant will indemnify and hold
Chesapeake harmless from and against all claims, demands, expenses, liabilities
and causes of action asserted against Chesapeake on account of or arising in
connection with Consultant's failure, in whole or in part, to pay any taxes on
the consulting fees paid to Consultant under this Agreement.
6. It is intended by the parties that the relationship created by this Agreement
be that of Chesapeake-Independent Contractor. In no manner is Consultant to be
considered an employee of Chesapeake. Consultant shall have no right or
authority to enter into any agreement or obligation on behalf of Chesapeake and
Consultant agrees to indemnify and hold Chesapeake harmless from any claims
which may be made against Chesapeake relating to purported actions of Consultant
as an agent of Chesapeake.
7. Chesapeake may assign its rights under this Agreement provided any such
assignee assumes and agrees to perform the obligations of Chesapeake hereunder
provided that in such event Chesapeake shall not be relieved of the payment
obligations set forth herein. Consultant may not transfer his rights and
obligations hereunder without the consent of Chesapeake except to any affiliate
or any related party of Consultant.
8. This Agreement constitutes the entire Agreement between the parties related
to the subject matter hereof and no modifications shall be effective unless in
writing executed by Chesapeake and Consultant.
9. This Agreement shall be governed by the laws of the State of Oklahoma.
10. In the event of a default by either party to adhere to under the terms of
this Agreement then the non-defaulting party shall be entitled to pursue any
remedy available at law or in equity arising from such default.
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SIGNATURE PAGE
(CONSULTING AGREEMENT)
IN WITNESS WHEREOF Chesapeake has executed this Consulting
Agreement the day and year first above written.
CHESAPEAKE ENERGY CORPORATION,
an Oklahoma corporation
By: /s/ Marcus C. Rowland
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Marcus C. Rowland, Executive Vice President
"CHESAPEAKE"
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SIGNATURE PAGE
(CONSULTING AGREEMENT)
IN WITNESS WHEREOF Consultant has executed this Consulting
Agreement the day and year first above written.
/s/ Michael Paulk
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MICHAEL PAULK
"CONSULTANT"