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EXHIBIT 4.11
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of March
10, 1998 (the "Effective Date"), is by and among Chesapeake Energy Corporation,
an Oklahoma corporation (the "COMPANY"), and those shareholders of Hugoton
Energy Corporation, a Kansas corporation ("HUGOTON") whose signatures appear on
the signature pages hereof (the "SHAREHOLDERS").
RECITALS:
WHEREAS, the Company, Chesapeake Acquisition Corp. and Hugoton are parties
to that certain Agreement and Plan of Merger, dated November 12, 1997, as
amended by Amendment No.1 dated February 9, 1998 (the "Merger Agreement");
WHEREAS, pursuant to the Merger Agreement, the Shareholders (as well as
certain other persons) will execute and deliver to the Company an Affiliate
Letter substantially in the Form of Annex C to the Merger Agreement pursuant to
which they will acknowledge that the shares of Common Stock, par value $0.01 per
share, of the Company (the "COMMON STOCK") they receive in the merger (the
"MERGER") to be effected pursuant to the Merger Agreement will be subject to
certain transfer restrictions; and
WHEREAS, under the provisions of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the General Rules and Regulations promulgated by the
Securities and Exchange Commission ("SEC") thereunder, such transfer
restrictions will include limitations on the manner in which the Shareholders
may sell the shares of Common Stock they receive in connection with the Merger,
absent registration under the Securities Act of the sale of such shares of
Common Stock or the availability of an exemption from the registration
requirements of the Securities Act; and
WHEREAS, the Company has agreed, on the terms and subject to the conditions
set forth herein, to grant the Shareholders certain rights to register their
shares of Common Stock for sale under the Securities Act;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereby agree as follows:
1. DEFINITIONS. The following terms, as used herein, have the following
meanings (all terms defined herein in the singular to have the correlative
meanings when used in the plural and vice versa):
"COMMERCIALLY REASONABLE EFFORTS" when used with respect to any
obligation to be performed or term or provision to be observed hereunder,
means such efforts as a prudent Person seeking the benefits of such
performance or action would make, use, apply or exercise to preserve,
protect or advance its rights or interests, provided, that such efforts do
not require such Person to incur a material financial cost or a substantial
risk of material liability unless such cost or liability (i) would
customarily be incurred in the course of performance or observance of the
relevant obligation, term or provision, (ii) is caused by or results from
the wrongful act or negligence of the Person whose performance or
observance is required hereunder or (iii) is not excessive or unreasonable
in view of the rights or interests to be preserved, protected or advanced.
Such efforts may include, without limitation, the expenditure of such funds
and retention by such Person of such accountants, attorneys or other
experts or advisors as may be necessary or appropriate to effect the
relevant action; the undertaking of any special audit or internal
investigation that may be necessary or appropriate to effect the relevant
action; and the commencement, termination or settlement of any action, suit
or proceeding involving such Person to the extent necessary or appropriate
to effect the relevant action.
"CLOSING DATE" has the meaning ascribed to such term in the Merger
Agreement.
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"DEMAND REGISTRATION" means any registration of Shares under the
Securities Act effected in accordance with Section 2.1.
"DEMAND REGISTRATION STATEMENT" has the meaning ascribed to such term
in Section 2.1(c).
"EFFECTIVE TIME" has the meaning ascribed to such term in the Merger
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations
promulgated thereunder.
"HOLDERS" means the Shareholders or any permitted assignee or
transferee of any Shares.
"INDEMNIFIED PARTY" has the meaning ascribed to it in Section 2.6(a).
"LOSS" has the meaning ascribed to it in Section 2.6(a).
"NOTICE OF DEMAND" means a request by a Shareholder pursuant to
Section 2.1(a) that the Company effect the registration under the
Securities Act of all or part of the Shares held by it and at its option,
any direct or indirect permitted transferee of Shares and any other Holder
that requests to have its securities included in such registration pursuant
to Section 2.1(a). A Notice of Demand shall specify an amount of Shares
proposed to be registered, which amount shall not be less than 1,000,000
Shares.
"PARTICIPATING HOLDERS" means, with respect to any registration of
Shares by the Company pursuant to this Agreement, any Shareholders that are
entitled to participate in, or seeking to participate in, such
registration.
"PERSON" means a natural person, a corporation, a limited liability
company, a partnership, a trust, a joint venture, or any other entity or
organization.
"PIGGYBACK REGISTRATION" means any registration of Shares under the
Securities Act effected in accordance with Section 2.2.
"PIGGYBACK REGISTRATION NOTICE" has the meaning ascribed to it in
Section 2.2(a).
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without
limitation, (a) all registration, filing, securities exchange listing and
National Association of Securities Dealers fees, (b) all registration,
filing, qualification and other fees and expenses of complying with
securities or blue sky laws of all jurisdictions in which the securities
are to be registered and any legal fees and expenses incurred in connection
with the blue sky qualifications of the Shares and the determination of
their eligibility for investment under the laws of all such jurisdictions,
(c) all word processing, duplicating, printing, messenger and delivery
expenses, (d) the fees and disbursements of counsel for the Company and of
its independent public accountants, including, without limitation, the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (e) the reasonable fees and
disbursements incurred by the Participating Holders (including, without
limitation, the reasonable fees and disbursements for one counsel or firm
of counsel selected by the Participating Holders), (f) any fees and
disbursements of underwriters customarily paid by issuers of securities
(excluding underwriting discounts commissions and transfer taxes, if any,
relating to the Shares being registered) and (g) fees and expenses of other
Persons retained or employed by the Company. Registration Expenses, to the
extent payable by the Company, shall not include underwriting discounts,
commissions or transfer taxes payable in respect of the sale of Shares by
the Participating Holders.
"SHARES" means the shares of Common Stock received by each Shareholder
pursuant to the Merger Agreement and any shares of Common Stock received in
respect thereof pursuant to dividends, distributions or stock splits.
"SUCCESSOR" means, with respect to any Person, a successor to such
Person by merger, consolidation, liquidation or other similar transaction.
"SUSPENSION NOTICE" has the meaning ascribed to it in Section 2.3(g).
"SUSPENSION PERIOD" has the meaning ascribed to it in Section 2.3(g).
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2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 DEMAND REGISTRATION.
(a) REGISTRATION ON REQUEST. Upon receipt of a Notice of Demand, the
Company shall, subject to the provisions of Section 2.1(b), use Commercially
Reasonable Efforts to (i) effect at the earliest practicable date, but in no
event prior to the Effective Time, the registration under the Securities Act of
the Shares that the Company has been so requested to register pursuant to the
Notice of Demand and (ii) cause such registration to be declared effective
promptly thereafter. The Holders acknowledge that a registration statement to be
filed by the Company pursuant to a Notice of Demand may not be filed with the
Securities and Exchange Commission ("SEC"), and the Shareholders shall not
submit to the Company a Notice of Demand, prior to the Effective Time.
(b) LIMITATIONS ON DEMAND REGISTRATION. The Company shall not be obligated
to take any action to effect any registration pursuant to this Section 2.1 after
the Company has, in accordance with the provisions of Section 2.3(c), effected
three (3) registrations of Shares with respect to registrations requested
pursuant to Section 2.1.
(c) COMPANY UNDERTAKING REGARDING DEMAND REGISTRATION. The Company will use
its Commercially Reasonable Efforts to promptly prepare and file but in no event
prior to the Effective Time with the SEC a registration statement (the "DEMAND
REGISTRATION STATEMENT") for the Shares in respect of which a Notice of Demand
is given, as provided in this Section 2.1. Such Demand Registration Statement
shall relate to the offer and sale of the Shares in respect of which the Notice
of Demand is given in accordance with the methods of distribution to be set
forth in such registration statement as directed by the Participating Holders.
The Company further agrees to use its Commercially Reasonable Efforts to take
all steps necessary or appropriate so that such Demand Registration Statement
can be declared effective promptly and, subject to the terms of Section 2.3, to
keep it continuously effective in order to permit the prospectus forming a part
thereof to be used by the Holders until the earlier of (i) 60 days after its
effectiveness and (ii) the date that the Holders sell all of the Shares subject
to such registration statement, but in no event prior to the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder (the "SHELF PERIOD"); provided, however, that (x) the Company may (no
more than twice during the pendency of such Demand Registration Statement and
for a period not to exceed forty-five (45) days on any one occasion suspend use
of the Demand Registration Statement at any time if the continued effectiveness
thereof would require the Company to disclose a material financing, acquisition
or other corporate transaction, which disclosure the Board of Directors of the
Company shall have determined in good faith is not in the best interests of the
Company and its shareholders.
(d) NOTICE TO CERTAIN NON-REQUESTING HOLDERS. Upon receipt of any Notice of
Demand from any Holder, the Company will give prompt (but in any event within
fifteen (15) days after such receipt) notice to all Holders of such Notice of
Demand and of such Holders' rights to have Shares included in such registration
(subject to priorities in registration rights set forth in this Agreement). Upon
the request of any such Holder made within fifteen (15) days after the receipt
by such Holder of any such notice given pursuant to this Section 2.1(d) (which
request shall specify the Shares intended to be disposed of by such Holder and
the intended method or methods of disposition thereof), the Company will
(subject to any priorities in registration rights among the various Holders) use
Commercially Reasonable Efforts to effect the registration of all Shares which
the Company has been so requested to register pursuant to the Notice of Demand.
(e) PRIORITY IN DEMAND REGISTRATIONS. If (i) a registration pursuant to
this Section 2.2 involves an underwritten offering of the securities being
registered to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing under underwriting terms appropriate
for such a transaction and (ii) the managing underwriter of such underwritten
offering shall inform the Company and the Participating Holders by letter of its
belief that the amount of securities requested to be included in such
registration exceeds the amount which can be sold in (or during the time of)
such offering within a price range acceptable to the Participating Holders, then
the Company will include in such registration such amount of securities which
the Company is so advised can be sold in (or during the time of) such offering
as follows: first, such Shares requested to be included in such registration by
the Participating Holders pro rata on the
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basis of the amount of such securities so proposed to be sold and so requested
to be included by such parties; second, such other securities of the Company;
and third such securities of other securities holders of the Company having
piggyback registration rights which would permit inclusion in such offering and
which are requested to be included in such registration by such other holders
pro rata on the basis of the amount of such securities so proposed to be sold
and so requested to be included by such holders.
2.2 PIGGYBACK REGISTRATION.
(a) RIGHT TO INCLUDE SHARES. If the Company at any time after the Effective
Time proposes to register any of its equity securities under the Securities Act
(other than by a registration on Form S-4 or Form S-8 or any successor or
similar form then in effect and other than pursuant to Section 2.1) on a form
and in a manner that would permit registration of the Shares, whether or not for
sale for its own account, it will give prompt (but in no event less than fifteen
(15) days prior to the proposed date of filing the registration statement
relating to such registration) notice to the Holders of the Shares of the
Company's intention to do so and of the rights of such Holders under this
Section 2.2; provided, however, that no such notice need be given to the
Holders, and the Holders shall have no rights under this Section 2.2, if the
Holders have therefore disposed of the Shares. Upon the request of any Holders
made within fifteen (15) days after such Holder's receipt of any such notice
(which request shall specify the Shares intended to be disposed of by the
Holders and the intended method or methods of disposition thereof) (the
"PIGGYBACK REGISTRATION NOTICE"), the Company will use Commercially Reasonable
Efforts to effect the registration under the Securities Act of all Shares which
the Company has been so requested to register by the Participating Holders, to
the extent required to permit the disposition (in accordance with the intended
method or methods thereof as aforesaid) of the Shares so to be registered,
provided that if, at any time after giving notice of its intention to register
any equity securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such equity
securities, the Company may, at its election, give notice of such determination
to each such Holder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Shares in
connection with such registration (but not from its obligation to pay all
Registration Expenses in connection therewith as provided in Section 2.3(b)),
and (ii) in the case of a determination to delay registering such other equity
securities, shall be permitted to delay registering any Shares for the same
period as the delay in registering such other equity securities.
(b) PRIORITY IN PRIMARY PIGGYBACK REGISTRATIONS. If (i) a registration
pursuant to this Section 2.2 involves an underwritten offering of the Shares
being registered for sale for the account of the Company to be distributed (on a
firm commitment basis) by or through one or more underwriters of recognized
standing under underwriting terms appropriate for such a transaction and (ii)
the managing underwriter of such underwritten offering shall inform the Company
and the Participating Holders of its belief that the amount of Shares requested
to be included in such registration exceeds the amount which can be sold in (or
during the time of) such offering within a price range acceptable to the
Company, then the Company will include in such registration such amount of
Shares which the Company is so advised can be sold in (or during the time of)
such offering as follows: first, if such registration relates to Shares of the
Company in respect of which a person is exercising demand registration rights,
all Shares of the Company held by such other Person; second, all Shares proposed
by the Company to be sold for its own account; and third, such Shares requested
to be included in such registration by the Participating Holders and any other
shareholder(s) of the Company then exercising piggyback registration rights pro
rata on the basis of the amount of such Shares so proposed to be sold and so
requested to be included by such holders.
2.3 REGISTRATION TERMS AND PROCEDURES.
(a) REGISTRATION STATEMENT FORM. Registrations under Section 2.1 shall be
on such appropriate registration forms of the SEC (i) as shall be acceptable to
the Company and (ii) as shall permit the disposition of such Shares in
accordance with the intended method or methods of disposition. The Company
agrees to include in any such registration statement all information that any
Participating Holders shall reasonably request (to the extent such information
relates to such Participating Holders).
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(b) REGISTRATION EXPENSES. Subject to Section 2.3(e), the Company will pay
all Registration Expenses incurred in connection with a registration to be
effected (whether or not effected or deemed effected pursuant to subsection (c)
below) pursuant to Section 2.1 or 2.2.
(c) EFFECTIVENESS OF DEMAND REGISTRATION. A registration will not be deemed
to have been effected under Section 2.1 unless the registration statement with
respect thereto has been declared effective by the SEC and, subject to Section
2.3(f)(vii) hereof, remains effective for the earlier of forty-five (45) days or
the distribution of the securities covered by such registration statement;
provided, however, that if (i) after such registration statement has been
declared effective, the marketing of Shares offered pursuant to such
registration statement is materially disrupted or adversely affected as a result
of any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court (for reasons other than a misrepresentation
or omission by any Shareholder) or (ii) the conditions to closing specified in
the purchase agreement or underwriting agreement entered into in connection with
such registration have not been satisfied (for reasons other than a wrongful or
bad faith act, omission or misrepresentation by any Participating Holder) such
registration statement will be deemed not to have become effective. If a
registration pursuant to Section 2.1 is deemed not to have been effected
hereunder, then the Company shall continue to be obligated to effect a
registration pursuant to such Section.
(d) SELECTION OF UNDERWRITER. The offering of Shares pursuant to Section
2.1 shall be in such form (which may include an underwritten offering) as the
Participating Holders may elect, and if the Company so elects an offering
pursuant to Section 2.2 shall be in the form of an underwritten offering. In
connection with an underwritten offering of Shares pursuant to this Agreement,
the Company shall have the exclusive right to select one or more nationally
recognized firms of investment bankers to act as the book-running managing
underwriter or co-managing underwriters in connection with such offering.
(e) WITHDRAWAL. Any Participating Holder shall be permitted to withdraw all
or part of the Shares from such registration at any time prior to the effective
date of the registration statement covering such securities; provided that, in
the event of a withdrawal from a registration effected pursuant to Section 2.1,
such registration shall be deemed to have been effected for purposes of Section
2.3(c), unless such Participating Holder shall have paid or reimbursed the
Company for the reasonable out-of-pocket costs and expenses paid by the Company
in respect of such registration.
(f) REGISTRATION PROCEDURES. In connection with the Company's obligations
to register Shares pursuant to this Agreement, the Company will use Commercially
Reasonable Efforts to effect such registration so as to permit the sale of any
Shares included in such registration in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company will as
expeditiously as possible:
(i) prepare and (as soon thereafter as practicable) file with the SEC
the requisite registration statement containing all information required
thereby to effect such registration and thereafter use Commercially
Reasonable Efforts to cause such registration statement to become and
remain effective in accordance with the terms of this Agreement, provided,
that as far in advance as practicable before filing such registration
statement or any amendment, supplement or exhibit thereto (but, with
respect to the filing of such registration statement, in no event later
than three business days prior to such filing), the Company will furnish to
the Participating Holders or its counsel copies of reasonably complete
drafts of all such documents proposed to be filed (excluding exhibits,
which shall be made available upon request by any Participating Holder),
and any such Holder shall have the opportunity to object to any information
contained therein and the Company will make the corrections reasonably
requested by such Holder with respect to information relating to such
Holder or the plan of distribution of the Shares prior to filing any such
registration statement, amendment, supplement or exhibit;
(ii) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
(A) as reasonably requested by any Participating Holder to which such
registration statement relates (but only to the extent such request relates
to information with respect to such Holder) and (B) as may be necessary to
keep such registration statement effective for the period referred to in
Section 2.1(c) in the case of a Demand Registration Statement or six (6)
months in the case of a registration effected pursuant to Section 2.2 (or
such shorter
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period as shall be necessary to complete the distribution of the securities
covered thereby, but not before the expiration of the Shelf Period), and
comply with the provisions of the Securities Act with respect to the sale
or other disposition of all securities covered by such registration
statement during such period in accordance with the intended method or
methods of disposition by the seller or sellers thereof set forth in such
registration statements;
(iii) furnish to each Holder covered by, and each underwriter or agent
participating in the disposition of securities under, such registration
statement such number of conformed copies of such registration statement
and of each such amendment and supplement thereto (in each case excluding
all exhibits and documents incorporated by reference, which exhibits and
documents shall be furnished to any such Person upon request), such number
of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act relating to
the Shares, in conformity with the requirements of the Securities Act, and
such other documents as such Holder, underwriter or agent may reasonably
request to facilitate the disposition of such Shares;
(iv) use Commercially Reasonable Efforts to register or qualify all
Shares and other securities covered by such registration statement under
all applicable blue sky and other securities laws, and to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition of the securities owned by such Holder, except that the Company
shall not for any such purpose be required to (a) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this clause (iv) be obligated to be so
qualified, (b) subject itself to taxation in any such jurisdiction or (c)
consent to general service of process in any jurisdiction;
(v) use Commercially Reasonable Efforts to cause all Shares covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities applicable to the Company as may be
reasonably necessary to enable the seller or sellers thereof (or
underwriter or agent, if any) to consummate the disposition of such Shares
in accordance with the plan of distribution set forth in such registration
statement;
(vi) furnish to each Participating Holder a signed counterpart,
addressed to such Holder (and underwriter or agent, if any) of:
(A) an opinion of counsel to the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), and
(B) unless otherwise precluded under applicable accounting rules, a
"comfort" letter, dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have
certified the Company's financial statements included in such
registration statement,
in each case, reasonably satisfactory in form and substance to such
Shareholder (and underwriter or agent and their respective counsel) and
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriter or agent
in underwritten public offerings of securities;
(vii) promptly notify each Holder and any underwriter or agent
participating in the disposition of Shares covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the
happening of any event known to the Company as a result of which, the
prospectus included in such registration statement, as then in
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effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made, and promptly prepare and furnish to such Holder (or
underwriter or agent, if any) a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made;
(viii) otherwise use Commercially Reasonable Efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable (but not more than
fifteen (15) months) after the effective date of the registration
statement, an earnings statement satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 promulgated thereunder, and furnish to
each Holder covered by such registration statement or any participating
underwriter or agent at least three (3) business days prior to the filing a
copy of any amendment or supplement to such registration statement or
prospectus;
(ix) provide and cause to be maintained a transfer agent and registrar
for all Shares covered by such registration statement from and after a date
not later than the effective date of such registration statement;
(x) use Commercially Reasonable Efforts to list, on or prior to the
effective date of such registration statement, all Shares covered by such
registration statement on any securities exchange on which any of the
outstanding shares of Common Stock are then listed for trading;
(xi) cooperate with each seller of Shares and each underwriter or
agent participating in the disposition of such Shares and their respective
counsel in connection with any filings required to be made with the
National Association of Securities Dealers;
(xii) use Commercially Reasonable Efforts to prevent the issuance by
the SEC or any other governmental agency or court of a stop order,
injunction or other order suspending the effectiveness of such registration
statement and, if such an order is issued, use Commercially Reasonable
Efforts to cause such order to be lifted as promptly as practicable;
(xiii) take such other actions as the Participating Holders shall
reasonably request in order to expedite or facilitate the disposition of
such Shares;
(xiv) promptly notify each Participating Holder and the underwriter or
agent, if any:
(A) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
(B) of any written comments from the SEC with respect to any filing
referred to in clause (A) and of any written request by the SEC for
amendments or supplements to such registration statement or prospectus;
(C) of the notification to the Company by the SEC of its initiation
of any proceeding with respect to, or of the issuance by the SEC of, any
stop order suspending the effectiveness of such registration statement;
and
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of any Shares for sale under the
applicable securities or blue sky laws of any jurisdiction;
(xv) cooperate with each Participating Holder and each underwriter or
agent participating in the distribution of such Shares to facilitate the
timely preparation and delivery of certificates (which shall not bear any
restrictive legends, other than as required by applicable law) representing
securities sold under a
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registration statement hereunder, and enable such securities to be in such
denominations and registered in such names as such seller, underwriter or
agent may request and keep available and make available to the Company's
transfer agent, prior to the effectiveness of such registration statement,
an adequate supply of such certificates;
(xvi) not later than the effective date of such registration
statement, provide a CUSIP number for all Shares covered by a registration
statement hereunder;
(xvii) incorporate in the registration statement or any amendment,
supplement or post-effective amendment thereto such information as each
Participating Holder, the underwriter or agent (if any) or their respective
counsel may reasonably request to be included therein with respect to any
Shares being sold by such Participating Holder to such underwriter or
agent, the purchase price being paid therefor by such underwriter or agent
and any other terms of the offering of such Shares; and
(xviii) during any period when a prospectus is required to be
delivered under the Securities Act, make periodic filings with the SEC
pursuant to and containing the information required by the Exchange Act
(whether or not the Company is required to make such filings pursuant to
such Act).
(g) AGREEMENTS OF CERTAIN SHAREHOLDERS. (i) In connection with the
registration of any of the Shares, each Participating Holder shall furnish to
the Company such information regarding such Participating Holder, the Shares
held by such Participating Holder and the intended plan of distribution of such
securities as the Company may from time to time reasonably request in writing in
connection with such registration.
(ii) In connection with the registration of any of the Shares, each
Participating Holder agrees that upon receipt of any notice (a "SUSPENSION
NOTICE") from the Company of the happening of any event of the kind described in
clause (vii) of Section 2.3(f), such Participating Holder will forthwith
discontinue such Participating Holder's disposition of Shares pursuant to the
registration statement relating to such Shares until such Participating Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
clause (vii) of Section 2.3(f) (the period from the date on which such
Participating Holder receives a suspension Notice to the date on which such
Participating Holder receives copies of the supplemented or amended prospectus
being herein called the "SUSPENSION PERIOD"). The Company shall take such
actions as are necessary to end the Suspension Period as promptly as
practicable. In the event the Company shall give any such notice, the periods
referred to in Section 2.1(c), Section 2.3(c) and clause (ii) of Section 2.3(f)
shall be extended by a number of days equal to the number of days of the
Suspension Period.
2.4 UNDERWRITTEN OFFERINGS. If the Company at any time proposes to
register any of its equity securities under the Securities Act as contemplated
by Section 2.2 and such securities are to be distributed by or through one or
more underwriters, the Company will, if requested by any Participating Holder
and subject to Section 2.2(b), arrange for such underwriters to include all of
the Shares to be offered and sold by the such Participating Holder or Holders
among the securities to be distributed by such underwriters. Such Participating
Holder shall be a party to the underwriting agreement between the Company and
such underwriters, provided that such agreement is reasonably satisfactory in
substance and form to the Company and the Participating Holders.
2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Holders of Shares to be
registered under such registration statement, and their respective counsel and
accountants reasonable access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such Holders or their counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, each Participating Holder,
its directors, officers, shareholders, employees, investment advisers and
agents, either direct or indirect, and each other Person, if any, who controls
such Persons within
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the meaning of the Securities Act (each such Person, an "INDEMNIFIED PARTY"),
from and against any losses, claims, damages, liabilities or expenses, joint or
several (each a "LOSS" and collectively, "LOSSES"), to which such Indemnified
Party may become subject under the Securities Act or otherwise, to the extent
that such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which any of the Shares were registered under the Securities Act in
accordance with this Agreement (including all documents incorporated therein by
reference), and preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any 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 the Company will
reimburse such Indemnified Party for any legal or any other expenses reasonably
incurred by it in connection with investigating or defending against any such
Loss, action or proceeding; provided that in any such case the Company shall not
be liable to any particular Indemnified Party to the extent that such Loss (or
action or proceeding in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Indemnified
Party specifically for inclusion therein; and provided, further, that the
Company shall not be liable in any such case to the extent it is finally
determined by a court of competent jurisdiction that any such Loss (or action or
proceeding in respect thereof) arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
(i) in any such preliminary prospectus, if (A) it was the
responsibility of such Indemnified Party to provide the Person asserting
such Loss with a current copy of the prospectus and such Indemnified Party
failed to deliver or cause to be delivered a copy of the prospectus to such
Person after the Company had furnished such Indemnified Party with a
sufficient number of copies of the same prior to the sale of Shares to the
Person asserting such Loss and (B) the prospectus corrected such untrue
statement or omission; or
(ii) in such prospectus, if such untrue statement or omission is
corrected in an amendment or supplement to such prospectus and such
amendment or supplement has been delivered to the Indemnified Party prior
to the sale of Shares to the Person asserting such Loss and the Indemnified
Party thereafter fails to deliver the prospectus as so amended or
supplemented prior to or concurrently with such sale after the Company had
furnished such Indemnified Party (in accordance with the notice provisions
contained in Section 8 for Persons who are parties to this Agreement) with
a sufficient number of copies of the same for delivery to purchasers of
securities.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall survive
the transfer of such securities by such Indemnified Party. The Company shall
also indemnify each other Person who participates (including as an underwriter)
in the offering or sale of Shares hereunder, their officers and directors and
each other Person, if any, who controls any such participating Person within the
meaning of the Securities Act to the same extent as provided above with respect
to Indemnified Parties.
(b) INDEMNIFICATION BY THE PARTICIPATING HOLDERS. (i) The Company may
require, as a condition to including any Shares in any registration statement
filed pursuant to Section 2.1 or 2.2 and as a condition to indemnifying such
sellers pursuant to this Section 2.6, that the Company shall have received an
undertaking reasonably satisfactory to it from each prospective seller of such
Shares to indemnify and hold harmless and reimburse (in the same manner and to
the same extent as set forth in paragraph (a) of this Section 2.6) the Company,
each director, officer, employee and agent of the Company, and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, from and against any Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered under the
Securities Act (including all documents incorporated therein by reference), any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any
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amendment or supplement thereto, or any omission or alleged omission from such
registration statement, preliminary prospectus, final prospectus or summary
prospectus, or any amendment or supplement thereto required to be stated therein
or necessary to make the statements therein not misleading, if (but only if)
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such prospective seller specifically for inclusion
therein; provided, however, that such prospective seller shall not be obligated
to provide such indemnity to the extent that such Losses result, directly or
indirectly, from the failure of the Company to promptly amend or take action to
correct or supplement any such registration statement, prospectus, amendment or
supplement based on corrected or supplemental information provided in writing by
such prospective seller to the Company expressly for such purpose; and provided,
further, that the obligation to provide indemnification pursuant to this Section
2.6(b) shall be several, and not joint and several, among such indemnifying
parties. Notwithstanding anything in this Section 2.6(b) to the contrary, in no
event shall the liability of any prospective seller under such indemnity be
greater in amount than the amount of the proceeds received by such seller upon
the sale of its Shares in the offering to which the Losses relate. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer, employee,
agent or participating or controlling Person and shall survive the transfer of
such securities by such prospective seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in paragraph (a) or (b) of this Section 2.6, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give prompt written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 2.6, except to the extent that the indemnifying party is actually and
materially prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be entitled
to participate in and to assume the defense thereof (such assumption to
constitute its acknowledgment of its agreement to indemnify the indemnified
party with respect to such matters), jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal fees or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in such indemnified party's
reasonable judgment, a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, such indemnified party
shall be entitled to separate counsel for such claim at the expense of the
indemnifying party; and provided, further, that, unless there exists a conflict
of interest among indemnified parties, all indemnified parties in respect of
such claim shall be entitled to only one counsel or firm of counsel for all such
indemnified parties. In the event an indemnifying party shall not be entitled,
or elects not, to assume the defense of a claim, such indemnifying party shall
not be obligated to pay the fees and expenses of more than one counsel or firm
of counsel for all parties indemnified by such indemnifying party in respect of
such claim, unless in the reasonable judgment of any such indemnified party a
conflict of interest exists between such indemnified party and any other of such
indemnified parties in respect of such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of one additional counsel
or firm of counsel for such indemnified parties. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that (i) does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all Losses in respect of such claim or litigation or (ii) would
impose injunctive relief on such indemnified party. No indemnifying party shall
be subject to any Losses for any settlement made without its consent, which
consent shall not be unreasonably withheld.
(d) OTHER INDEMNIFICATION. The provisions of this Section 2.6 shall be in
addition to any other rights to indemnification or contribution which an
indemnified party may have pursuant to law, equity, contract or otherwise.
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(e) INDEMNIFICATION PAYMENTS. The indemnification required by this Section
2.6 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, promptly as and when bills are received or
Losses are incurred.
(f) CONTRIBUTION. If for any reason the foregoing indemnity and
reimbursement is unavailable or is insufficient to hold harmless an indemnified
party under paragraph (a) or (b) of this Section 2.6, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any Loss (or actions or proceedings, whether commenced or
threatened, in respect thereof), including, without limitation, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Loss, action or proceeding, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other. The relative fault 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 party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. Notwithstanding anything in this Section 2.6(f) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 2.6(f) to contribute any amount in excess of the amount by which the net
proceeds received by such indemnifying party from the sale of Shares in the
offering to which the Losses of the indemnified parties relate exceeds the
amount of any damages which such indemnifying party has otherwise been required
to pay by reason of such untrue statement or 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.
3. TERM. This Agreement shall be effective on the date hereof and, subject
to Section 13 hereof, shall continue in full force and effect until the first
anniversary of the Effective Date.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended, supplemented or
modified at any time; provided that the Company has provided its written consent
to such amendment, supplement or modification. Any term or condition of this
Agreement may be waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term or
condition. No waiver by any party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same term or condition of this Agreement on any future occasion.
5. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect
to the subject matter hereof.
6. NO THIRD-PARTY BENEFICIARY. The terms and provisions of this Agreement
are intended solely for the benefit of each party and their respective
Successors and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than (i) any Holder entitled to
notice of the registration of securities under this Agreement and (ii) any
Participating Holder entitled to indemnity under Section 2.6.
7. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom and (iv) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.
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8. NOTICES. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only (i) if delivered
personally (ii) by facsimile transmission, (iii) by Federal Express or other
nationally recognized courier service or (iv) mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to the Company, to:
Chesapeake Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. XxXxxxxxx
Fax No.: (000) 000-0000
With respect to the Holders, any notice, request or other communication
hereunder shall be sent to the addresses and facsimile numbers appearing beneath
such Shareholder's signature on the signature page hereof or to the addresses
and facsimile numbers provided to the Company and the other parties hereto by
notice as herein provided and referencing this Agreement. All such notices,
requests and other communications will (i) if delivered personally to the
address as provided in this Section 8, be deemed given upon delivery, (ii) if
delivered by facsimile transmission to the facsimile number as provided in this
Section 8, be deemed given upon receipt, and (iii) if delivered by courier
service or mail in the manner described above to the address as provided in this
Section 8, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section 8). Any Person
from time to time may change its address, facsimile number or other information
for the purpose of notices to that Person by giving notice in accordance with
this Section 8 specifying such change to each of the other parties executing
this Agreement.
9. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
Successors and permitted assigns.
10. DESCRIPTIVE HEADINGS. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for convenience of reference only
and do not define or limit the provisions hereof or otherwise affect the meaning
hereof.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA WITHOUT REFERENCE TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
12. REGISTRATION RIGHTS TO OTHERS. As of the date hereof, the Company has
not granted to any other holder of its securities rights with respect to the
registration of securities of the Company under the Securities Act other than
(i) its agreement to provide registration rights to Xxxxxxx X. Xxxxxxxx in
respect of the shares he will receive pursuant to the merger of DLB Oil and Gas,
Inc. with a subsidiary of the Company and (ii) its agreement to provide
registration rights to AnSon Partners Limited Partnership in respect of the
shares it will receive pursuant to the merger of AnSon Partners Limited
Partnership with a subsidiary of the Company.
13. TERMINATION OF CERTAIN RIGHTS AND OBLIGATIONS. The provisions of
Section 2.6., the rights of any party hereto with respect to the breach of any
provision hereof and any obligation accrued as of the date of termination shall
survive the termination of this Agreement.
14. NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter into,
modify, amend or waive any agreement with respect to its securities if such
agreement, modification or waiver would conflict with the rights granted
pursuant to this Agreement to the Shareholders of Shares.
15. SPECIFIC PERFORMANCE. The parties agree that, to the extent permitted
by law, (i) the obligations imposed on them in this Agreement are special,
unique and of an extraordinary character, and that in the event of a breach by
any such party damages would not be an adequate remedy and (ii) each of the
other parties shall be entitled to specific performance and injunctive and other
equitable relief in addition to any other remedy to which it may be entitled at
law or in equity.
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16. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same instrument.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
CHESAPEAKE ENERGY CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
----------------------------------
Xxxxxx X. XxXxxxxxx
Chairman of the Board and Chief
Executive Officer
SHAREHOLDERS:
/s/ XXXXX X. XXXXXX
------------------------------------
Xxxxx X. Xxxxxx
Wilvest, L.P.
By: /s/ XXXXX X. XXXXXX
----------------------------------
Xxxxx X. Xxxxxx
General Partner
Xxxxxx Foundation
By: /s/ XXXXX X. XXXXXX
----------------------------------
Xxxxx X. Xxxxxx
Trustee
Comdisco, Inc
By: /s/ XXXX X. ADREINI
----------------------------------
Xxxx X. Adreini
AMERICAN GAS & OIL INVESTORS,
LIMITED PARTNERSHIP
By: First Reserve Corporation
By: /s/ XXXX XXXXXX
----------------------------------
Xxxx Xxxxxx
Managing Director
FIRST RESERVE FUND V, LIMITED
PARTNERSHIP
By: First Reserve Corporation
By: /s/ XXXX XXXXXX
----------------------------------
Xxxx Xxxxxx
Managing Director
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SCHEDULE I
SHAREHOLDERS PARTIES TO REGISTRATION RIGHTS AGREEMENT
NUMBER OF SHARES OF
CHESAPEAKE ENERGY CORPORATION
SHAREHOLDER COMMON STOCK OWNED
----------- -----------------------------
Xxxxx X. Xxxxxx............................................. 5,009,776
Wilvest, L.P. .............................................. 130,000
Xxxxxx Foundation........................................... 263,154
Comdisco, Inc. ............................................. 5,017,766
American Gas & Oil Investors, Limited Partnership........... 327,265
First Reserve Fund V, Limited Partnership................... 1,159,207
15
