EXHIBIT 4.17
2,500,000 SHARES
CHESAPEAKE ENERGY CORPORATION
6.75% CUMULATIVE CONVERTIBLE PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT
November 6, 2001
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Salomon Smith Barney Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
Chesapeake Energy Corporation, an Oklahoma corporation (the "COMPANY"),
proposes to issue and sell to Credit Suisse First Boston Corporation, Bear,
Stearns & Co. Inc., Lehman Brothers Inc. and Salomon Smith Barney Inc.
(collectively, the "INITIAL PURCHASERS"), upon the terms set forth in a purchase
agreement of even date herewith (the "PURCHASE AGREEMENT"), 2,500,000 shares of
its 6.75% 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 November 6, 2001 (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
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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) furnish, without charge, to each
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):
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(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
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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
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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.
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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
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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
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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"):
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(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 7.25% 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.
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(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.
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(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 Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Fax No.: (212) 474-3700
Attention: Stephen L. Burns, Esq.
(3) if to the Company, at its address as follows:
Chesapeake Energy Corporation
6100 North Western Avenue
Oklahoma City, OK 73118
Fax No.: (405) 848-8588
Attention: Marcus C. Rowland
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, TX 77002-6760
Fax No.: (713) 758-2346
Attention: James M. Prince, Esq.
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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.
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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/ MARTHA A. BURGER
-----------------------------------
Name: Martha A. Burger
Title: Treasurer
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The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ TIM PERRY
-----------------------------------
Name: Tim Perry
Title: Director