EXHIBIT 4.19
EXECUTION COPY
4,600,000 Shares
CHESAPEAKE ENERGY CORPORATION
6.00% Cumulative Convertible Preferred Stock
REGISTRATION RIGHTS AGREEMENT
March 5, 2003
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX BARNEY INC.
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXX & COMPANY L.L.C.
RBC XXXX XXXXXXXX INC.
XXXXXXX & COMPANY INTERNATIONAL
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
Chesapeake Energy Corporation, an Oklahoma corporation (the "Company"),
proposes to issue and sell to Credit Suisse First Boston LLC, Xxxxxx Xxxxxxx &
Co. Incorporated, Xxxxxxx Xxxxx Barney Inc., Bear, Xxxxxxx & Co. Inc., Xxxxxx
Brothers Inc., CIBC World Markets Corp., Xxxxxxx Xxxx & Company L.L.C., RBC Xxxx
Xxxxxxxx Inc. and Xxxxxxx & Company International (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), 4,600,000 shares of its 6.00% Cumulative
Convertible Preferred Stock, par value $0.01 per share (liquidation preference
$50 per share) (the "Convertible Preferred Stock"). The Convertible Preferred
Stock will be convertible into shares of Common Stock, par value $0.01 per
share, of the Company (the "Common Stock") at the conversion price set forth in
the Offering Circular dated February 27, 2003 (the "Offering Circular"), subject
to adjustment in accordance with the Certificate of Designation of the
Convertible Preferred Stock (the "Certificate of Designation"). The Convertible
Preferred Stock and the Common Stock issuable upon conversion of the Convertible
Preferred Stock are collectively referred to as "Securities" and each referred
to singularly as a "Security." As an inducement to the Initial Purchasers to
enter into the Purchase Agreement, the Company agrees with the Initial
Purchasers, for the benefit of the Initial Purchasers and the holders of the
Securities (collectively the "Holders"), as follows:
1. Shelf Registration. So long as any Transfer Restricted Security (as
defined in Section 5 hereof) exists, the Company shall take the following
actions:
(a) The Company shall, within 60 days after the date on which the
Initial Purchasers purchase the Convertible Preferred Stock pursuant to the
Purchase Agreement (the "Closing
Date"), file with the Securities and Exchange Commission (the "Commission")
and thereafter use its reasonable best efforts to cause to be declared
effective no later than 180 days after the Closing Date a registration
statement (the "Shelf Registration Statement") on an appropriate form under
the Securities Act relating to the offer and sale of the Transfer
Restricted Securities by the Holders thereof from time to time in
accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act (hereinafter,
the "Shelf Registration"); provided, however, that no Holder (other than an
Initial Purchaser) shall be entitled to have the Securities held by it
covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to
such Holder.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective, in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, until such time as all the Securities covered by the
Shelf Registration Statement (i) have been sold pursuant thereto or (ii)
are eligible to be sold under Rule 144(k) under the Securities Act (or any
successor rule thereof), assuming for this purpose that the Holders thereof
are not affiliates of the Company (in any such case, such period being
called the "Shelf Registration Period." The Company shall be deemed not to
have used its reasonable best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any
action that would result in Holders of Securities covered thereby not being
able to offer and sell such Securities during that period, unless such
action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, the Company
shall have no such obligations or liabilities with respect to any written
information pertaining to any Holder and furnished to the Company by or on
behalf of such Holder specifically for inclusion therein.
2. Registration Procedures. In connection with the Shelf Registration
contemplated by Section 1 hereof, the following provisions shall apply so long
as any Transfer Restricted Security exists:
(a) The Company shall (i), if requested by an Initial Purchaser,
furnish, without charge, to such Initial Purchaser, prior to the filing
thereof with the Commission, a copy of the Shelf Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus
included therein and, in the event that an Initial Purchaser (with respect
to any portion of an unsold allotment from the original offering) is
participating in the Shelf Registration Statement, the Company shall use
its best efforts to reflect in each such document, when so filed with the
Commission, such comments as such Initial Purchaser reasonably may propose,
(ii) include in each such document the names of the Holders who have
delivered written notice to the Company at least three business days prior
to the filing thereof that they propose to sell Transfer Restricted
Securities pursuant to the Shelf Registration Statement as selling
securityholders and (iii) file pursuant to Rule 424(b) under the Securities
Act an amendment to the Shelf Registration Statement or amend the
prospectus to cover new Holders of Securities upon at least seven business
days' prior written notice by such new Holders to such effect.
(b) The Company shall give written notice to the Initial Purchasers,
the Holders of the Securities and the Holders of Transfer Restricted
Securities included within the coverage of the Shelf Registration Statement
(which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by
an instruction to suspend the use of the prospectus until the requisite
changes have been made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Shelf Registration Statement or the prospectus in
order that the Shelf Registration Statement or the prospectus do not
contain an untrue statement of a material fact nor omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Transfer Restricted
Securities included within the coverage of the Shelf Registration, without
charge, if the Holder so requests in writing, at least one copy of the
Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules and all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included
in the Shelf Registration Statement and any amendment or supplement thereto
as such person may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment
or supplement thereto by each of the selling Holders in connection with the
offering and sale of the Transfer Restricted Securities covered by the
prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.
(f) Prior to any public offering of the Securities pursuant to the
Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of the Transfer Restricted Securities included
therein and their respective counsel in connection with the registration or
qualification of the Securities for offer and sale under the securities or
"blue sky" laws of such states of the United States as any Holder
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions
of the Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required to (i) qualify generally to
do business in any jurisdiction where it is not then so qualified or (ii)
take any action which would subject it to general service of process or to
taxation in any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the Transfer
Restricted Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders may request a
reasonable period of time prior to sales of the Securities pursuant to the
Shelf Registration Statement, except in such cases where such Transfer
Restricted Securities are required to be issued only in book-entry form
pursuant to the terms of the Certificate of Designation.
(h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 2(b) above during the Shelf Registration Period, the
Company shall promptly prepare and file a post-effective amendment to the
Shelf Registration Statement or a supplement to the related prospectus and
any other required document so that, as thereafter delivered to Holders of
the Securities or purchasers of Securities, the prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
If the Company notifies the Initial Purchasers or the Holders of Transfer
Restricted Securities included within the coverage of the Shelf
Registration Statement, in accordance with paragraphs (ii) through (v) of
Section 2(b) above, to suspend the use of the prospectus until the
requisite changes to the prospectus have been made, then the Initial
Purchasers and the Holders shall suspend use of such prospectus.
(i) Not later than the effective date of the Shelf Registration
Statement, the Company will provide CUSIP numbers for the Convertible
Preferred Stock registered for resale under the Shelf Registration
Statement, and provide one or more certificates for such Convertible
Preferred Stock, in a form eligible for deposit with The Depository Trust
Company.
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act)
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of a 12-month period
(or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first fiscal quarter commencing after the effective
date of the Shelf Registration Statement, which statement shall cover such
12-month period.
(k) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as
the Company may from time to time reasonably require for inclusion in the
Shelf Registration Statement, and the Company may exclude from such
registration the Securities of any Holder that fails to furnish such
information within the applicable time period specified in Section 2(a)
above.
(l) The Company shall enter into such customary agreements (including,
if requested, an underwriting agreement in customary form) and take all
such other action, if any, as any Holder of the Securities shall reasonably
request in order to facilitate the disposition of the Securities pursuant
to any Shelf Registration.
(m) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Securities, any
underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained
by the Holders of the Securities or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and (ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by the Holders of the Securities or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as shall be reasonably necessary to enable such
persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act; provided, however, that the foregoing
inspection and information gathering shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one
counsel designated by and on behalf of such other parties as described in
Section 3 hereof.
(n) In the case of any Shelf Registration, the Company, if requested
by any Holder of Securities covered thereby, shall cause (i) its counsel to
deliver an opinion and updates thereof relating to the Securities in
customary form addressed to such Holders and the managing underwriters, if
any, thereof and dated, in the case of the initial opinion, the effective
date of such Shelf Registration Statement (it being agreed that the matters
to be covered by such opinion shall include, without limitation, the due
incorporation and good standing of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations; the due authorization, execution and delivery of the
relevant agreement of the type referred to in Section 2(l) hereof; the due
authorization, execution, authentication and issuance, and the validity and
enforceability, of the applicable Securities; the absence of material legal
or governmental proceedings involving the Company and its subsidiaries; the
absence of governmental approvals required to be obtained in connection
with the Shelf Registration Statement, the offering and sale of the
applicable Securities, or any agreement of the type referred to in Section
2(l) hereof; the compliance as to form of such Shelf Registration Statement
and any documents incorporated by reference therein with the requirements
of the Securities Act; and, as of the date of the opinion and as of the
effective date of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the prospectus included therein, as then
amended or supplemented, and from any documents incorporated by reference
therein of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of any such documents,
in the light of the circumstances existing at the time that such documents
were filed with the Commission under the Securities and Exchange Act of
1934, as amended (the "Exchange Act")); (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof
requested by any underwriters of the applicable Securities and (iii) its
independent public accountants to provide to the selling Holders of the
applicable Securities and any underwriter therefor a comfort letter in
customary form and covering matters of the type customarily covered in
comfort letters in connection with primary underwritten offerings, subject
to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
(o) The Company shall use its best efforts to cause the Common Stock
included in such Shelf Registration Statement to be, upon resale
thereunder, listed on each securities exchange, if any, on which any shares
of Common Stock are then listed.
(p) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Securities
covered by the Shelf Registration Statement contemplated hereby.
3. Registration Expenses.
(a) All expenses incident to the Company's performance of and
compliance with this Agreement will be borne by the Company, regardless of
whether the Shelf Registration Statement is ever filed or 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
and printing of prospectuses), messenger and delivery services and
telephone;
(iv) all fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with listing on
a national securities exchange or automated quotation system pursuant
to the requirements hereof; and
(vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special
audit and comfort letters required by or incident to such
performance).
The Company will 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 Shelf Registration Statement, the Company
will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities who are selling or reselling Securities pursuant to
the "Plan of Distribution" contained in the Shelf Registration Statement
for the reasonable fees and disbursements of not more than one counsel, who
shall be chosen by the Holders of a majority in number of shares of the
Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder of
the Transfer Restricted Securities included within the coverage of the
Shelf Registration Statement and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Exchange Act (each
Holder and such controlling persons are referred to collectively as the
"Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of,
or are 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, and shall reimburse, as incurred, the
Indemnified Parties for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action in respect thereof; provided, however, that (i)
the Company shall not be liable in any such case to the extent that such
loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in the Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of
such Holder specifically for inclusion therein and (ii) with respect to any
untrue statement or omission or alleged untrue statement or omission made
in any prospectus relating to a Shelf Registration Statement, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit
of any Holder from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent
that a prospectus relating to such Securities was required to be delivered
by such Holder under the Securities Act in connection with such purchase
and any such loss, claim, damage or liability of such Holder results from
the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a
copy of the final prospectus if the Company had previously furnished copies
thereof to such Holder; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. The Company shall also indemnify
underwriters, their officers and directors and each person who controls
such underwriters within the meaning of the Securities Act or the Exchange
Act to the same extent as provided above with respect to the
indemnification of the Holders of the Securities if requested by such
Holders.
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act from and against any losses, claims, damages or liabilities or
any actions in respect thereof, to which the Company or any such
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in a Shelf
Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement
or omission or alleged untrue statement or omission was made in reliance
upon and in conformity with written information pertaining to such Holder
and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any
legal or other expenses reasonably incurred by the Company or any such
controlling person in connection with investigating or defending any loss,
claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 4, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a)
or (b) above. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such
action, and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to in subsection (a) or (b) above in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as
any other relevant equitable considerations. The relative fault of the
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 Company on the one hand or such Holder or such other
indemnified party, as the case may be, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding any other
provision of this Section 4(d), the Holders shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Holders from the sale of the Securities pursuant to the
Shelf Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the
same rights to contribution as such indemnified party and each person, if
any, who controls the Company within the meaning of the Securities Act or
the Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall survive the sale
of the Securities pursuant to the Shelf Registration Statement and shall
remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of
any indemnified party.
5. Additional Dividends Under Certain Circumstances.
(a) Additional dividends ("Additional Dividends") with respect to the
Convertible Preferred Stock shall accrue as follows if any of the following
events occur (each such event in clauses (i) through (iii) below being
herein called a "Registration Default"):
(i) the Shelf Registration Statement required by this Agreement
is not filed with the Commission on or prior to 60 days after the
Closing Date;
(ii) the Shelf Registration Statement required by this Agreement
is not declared effective by the Commission on or prior to 180 days
after the Closing Date;
(iii) if after the Shelf Registration Statement required by this
Agreement has been declared effective by the Commission but (A) such
Registration Statement thereafter ceases to be effective or (B) the
Shelf Registration Statement or the related prospectus ceases to be
usable in connection with resales of Transfer Restricted Securities
during the periods specified herein because either (1) any event
occurs as a result of which the related prospectus forming part of
such Shelf Registration Statement would include any 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, or (2) it shall be necessary to
amend such Shelf Registration Statement or supplement the related
prospectus, to comply with the Securities Act or the Exchange Act or
the respective rules thereunder.
Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission .
Additional Dividends shall accrue on the shares of Convertible Preferred Stock
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all such Registration Defaults have been
cured, at a rate of 6.50% per annum (50 basis points above the rate shown on the
cover page of the Offering Circular) in addition to the dividends otherwise
accruing on the Convertible Preferred Stock.
(b) A Registration Default referred to in Section 5(a)(iii)
hereof shall be deemed not to have occurred and be continuing in
relation to the Shelf Registration Statement or the related prospectus
if (i) such Registration Default has occurred solely as a result of (x)
the filing of a post-effective amendment to the Shelf Registration
Statement to incorporate annual audited financial information with
respect to the Company where such post-effective amendment is not yet
effective and needs to be declared effective to permit Holders to use
the related prospectus or (y) other material events, with respect to
the Company that would need to be described in the Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y),
the Company is proceeding promptly and in good faith to amend or
supplement such Shelf Registration Statement and related prospectus to
describe such events; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 30
days, Additional Dividends shall be payable in accordance with the
above paragraph from the day such Registration Default occurs until
such Registration Default is cured.
(c) Any amounts of Additional Dividends due pursuant to
Section 5(a) will be payable in cash on the regular dividend payment
dates with respect to the Convertible Preferred Stock on the same terms
and conditions and subject to the same limitations as pertain at such
time for the payment of regular dividends. The amount of Additional
Dividends will be determined by multiplying the applicable Additional
Dividends rate by the aggregate liquidation preference of the
outstanding shares of Convertible Preferred Stock and further
multiplied by a fraction, the numerator of which is the number of days
such Additional Dividend rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until
(i) the date on which such Security has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (ii) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act
or is saleable pursuant to Rule 144(k) under the Securities Act.
6. Rules 144 and 144A. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time during the Shelf Registration Period the
Company is not required to file such reports, it will, upon the request of any
Holder of Transfer Restricted Securities, make publicly available other
information so long as necessary to permit sales of their securities pursuant to
Rules 144 and 144A. The Company covenants that it will take such further action
as any Holder of Transfer Restricted Securities may reasonably request, all to
the extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchasers upon request. Upon the request of any Holder
of Transfer Restricted Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
7. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
Holders of a majority in number of shares of such Transfer Restricted Securities
to be included in such offering.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
8. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 1 hereof may
result in material irreparable injury to the Initial 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 Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company's
obligations under Section 1 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 departures
from the provisions hereof may
not be given, except by the Company and the written consent of the Holders
of a majority in number of shares of Transfer Restricted Securities
(provided that Holders of Common stock issued upon conversion of
Convertible Preferred Stock shall be deemed to be Holders of the aggregate
number of shares of Convertible Preferred stock from which such Common
Stock was converted) affected by such amendment, modification, supplement,
waiver or consents. Without the consent of the Holder of each share of
Convertible Preferred Stock then outstanding, however, no modification may
change the provisions relating to the payment of Additional Dividends.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class
mail, facsimile transmission, or air courier which guarantees overnight
delivery:
(1) if to the Holders, at the most current address shown for the
Holders in the records of the Transfer Agent, with a copy in like
manner as follows:
(2) if to the Initial Purchasers:
Credit Suisse First Boston LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Transactions Advisory Group
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(3) if to the Company, at its address as follows:
Chesapeake Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged by recipient's facsimile machine
operator, if sent by
facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial 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 their rights or the rights of
Holders hereunder.
(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 the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Transfer Restricted Securities. The
Company hereby agrees to extend the benefits of this Agreement to any
Holder of Transfer Restricted Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original
party hereto.
(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
PRINCIPLES OF CONFLICTS OF LAWS.
(j) Severability. If 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) Securities Held by the Company. Whenever the consent or approval
of Holders of a specified number of Transfer Restricted Securities is
required hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Transfer Restricted Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required
percentage.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
Chesapeake Energy Corporation
by /s/ Xxxxxx X. XxXxxxxxx
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX BARNEY INC.
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXX & COMPANY L.L.C.
RBC XXXX XXXXXXXX INC.
XXXXXXX & COMPANY INTERNATIONAL
By: CREDIT SUISSE FIRST BOSTON LLC
by /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
