1
EXHIBIT 4.6
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 27, 2000
BY AND AMONG
CHESAPEAKE ENERGY CORPORATION
AND
APPALOOSA INVESTMENT LIMITED PARTNERSHIP I
PALOMINO FUND LTD.
TERSK L.L.C.
XXXXXXXXXXX STRATEGIC INCOME FUND
XXXXXXXXXXX CHAMPION INCOME FUND
XXXXXXXXXXX HIGH YIELD FUND
XXXXXXXXXXX STRATEGIC BOND FUND/VA
ATLAS STRATEGIC INCOME FUND
PERSONS EXECUTING THE ADDENDUM
2
This Common Stock Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of June 27, 2000 among Chesapeake Energy Corporation, an
Oklahoma corporation (the "COMPANY"), Appaloosa Investment Limited Partnership I
("AILP"), Palomino Fund Ltd. ("PALOMINO"), Tersk L.L.C. ("TERSK" and, together
with AILP and Palomino, "APPALOOSA"), Xxxxxxxxxxx Strategic Income Fund
("STRATEGIC"), Xxxxxxxxxxx Champion Income Fund ("CHAMPION"), Xxxxxxxxxxx High
Yield Fund ("HIGH YIELD"), Xxxxxxxxxxx Strategic Bond Fund/VA ("VARIABLE"),
Atlas Strategic Income Fund ("ATLAS" and, together with Strategic, Champion,
High Yield and Variable, "XXXXXXXXXXX"), and such other Persons executing an
addendum (the "ADDENDUM") to this Agreement in the form set forth in Exhibit "A"
(each a "NOTEHOLDER" and, collectively, the "NOTEHOLDERS").
The parties comprising Appaloosa and Xxxxxxxxxxx have each agreed to
sell Gothic Energy Corporation 14 1/8% Series B Senior Secured Discount Notes
Due 2006 and the beneficial interests in the related indenture and pledge
agreement owned by such parties (collectively, the "NOTES") pursuant to separate
Senior Secured Discount Notes Purchase Agreements, each dated June 23, 2000,
among Chesapeake Energy Marketing, Inc., an Oklahoma corporation and wholly
owned subsidiary of the Company ("CEMI"), and each of the parties comprising
Appaloosa and Xxxxxxxxxxx (each, a "PURCHASE AGREEMENT" and, collectively, the
"PURCHASE AGREEMENTS"). In order to induce Appaloosa and Xxxxxxxxxxx to sell the
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement, to make the representations provided in this Agreement and to
issue additional shares of stock as provided herein in satisfaction of paragraph
10.1 of the respective Purchase Agreements. The execution and delivery of this
Agreement is a condition to the obligations of Appaloosa and Xxxxxxxxxxx set
forth in Section 9 of the respective Purchase Agreements. CEMI and the Company
will offer to provide the registration rights contained in this Agreement to
other holders of Notes that (i) agree to sell such Notes in whole or in part for
shares of Common Stock pursuant to a Purchase Agreement with CEMI and (ii)
execute the Addendum. For purposes of this Agreement, any such purchase
agreement shall be a "Purchase Agreement," and such notes and the holders'
beneficial interests in related note documentation shall be "Notes." Capitalized
terms used herein but not defined have the respective meanings set forth in the
Purchase Agreements.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BUSINESS DAY: Any day on which the New York Stock Exchange is open for
trading and which is not a legal United States holiday.
CLOSING DATE: June 27, 2000.
3
COMMON STOCK: Common Stock, $.01 par value per share, of the Company.
COMMISSION: The Securities and Exchange Commission.
EFFECTIVE DATE: The date the Shelf Registration Statement is declared
effective by the Commission.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
HOLDERS: As defined in Section 2 hereof.
PERSON: Any individual, corporation, partnership, joint venture, trust,
estate, unincorporated organization or government or any agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in the Shelf Registration Statement
at the time such Shelf Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, all material
incorporated by reference into such Prospectus and any information
previously omitted in reliance upon Rule 430A of the Act.
PURCHASE PRICE: The cash and Shares to be exchanged as payment for the
Notes pursuant to the Purchase Agreements.
RECOMMENCEMENT DATE: As defined in Section 5(b) hereof.
RULE 144: Rule 144 promulgated under the Act.
SHARES: The shares of Common Stock constituting a portion of the
Purchase Price which are transferred to the Noteholders pursuant to the
Purchase Agreements including any adjustment under paragraph 10.1 of
the Purchase Agreement.
SHELF REGISTRATION STATEMENT: As defined in Section 3 hereof.
SUSPENSION NOTICE: As defined in Section 5(b) hereof.
TRANSFER RESTRICTED SECURITIES: The Shares, upon delivery thereof to
the Noteholders pursuant to the respective Purchase Agreements and at
all times subsequent thereto, until (a) the date on which the Shares
have been disposed of in accordance with the Shelf Registration
Statement, (b) the date on which the Shares are distributed to the
public pursuant to Rule 144 or are saleable pursuant to Rule 144(k) (or
similar provisions then in effect) under the Act or (c) the date on
which the Shares cease to be outstanding. A Share will cease being a
Transfer Restricted Security at such time that the foregoing clauses
(a), (b) or (c) apply to such Share.
4
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
As soon as practicable after the Closing Date but in no event later
than 45 days after the Closing Date, the Company shall file with the Commission
a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT"), relating to all Transfer Restricted Securities, and
shall use its best efforts to cause such Shelf Registration Statement to become
effective on or prior to 105 days after the Closing Date. The Shelf Registration
Statement will cover a minimum of 20 million shares of Common Stock in order to
provide for the initial consideration and any additional shares of Common Stock
which might be issued under paragraph 10.1 of each of the Purchase Agreements.
The Company shall use its best efforts to keep the Shelf Registration
Statement required by this Section 3 continuously effective, supplemented and
amended as required by and subject to the provisions of Section 5(a) hereof to
the extent necessary to ensure that it is available for sales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of this
Section 3, and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for the shorter of (i) two years following the
Closing Date or (ii) the date on which all Transfer Restricted Securities
covered by the Shelf Registration Statement have been sold pursuant thereto.
SECTION 4. PROVISION BY HOLDERS OF CERTAIN INFORMATION
No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in the Shelf Registration Statement pursuant to
this Agreement unless such Holder furnishes to the Company in writing the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with the Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. Each Noteholder agrees to
furnish the Company such information on or before the Closing Date. Each selling
Holder agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
SECTION 5. SHELF REGISTRATION PROCEDURES
(a) Procedures. In connection with the Shelf Registration
Statement, the Company shall:
(i) use its best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information
furnished to the Company pursuant to Section 4 hereof), and
pursuant thereto the Company will prepare and file with the
Commission a Shelf Registration Statement relating to the
-3-
5
registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise
in accordance with the provisions hereof. The Company shall
not be permitted to include in the Shelf Registration
Statement any securities other than the Transfer Restricted
Securities;
(ii) use its best efforts to keep such Shelf
Registration Statement continuously effective and provide all
requisite financial statements for the period specified in
Section 3 of this Agreement. Upon the occurrence of any event
that would cause any such Shelf Registration Statement or the
Prospectus contained therein (i) to contain an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading
or (ii) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this
Agreement, the Company shall file promptly (A) an appropriate
amendment to such Shelf Registration Statement curing such
defect, and, if Commission review is required, use its best
efforts to cause such amendment to be declared effective as
soon as practicable, (B) a supplement pursuant to Rule 424
under the Act curing such defect or (C) an Exchange Act report
incorporated by reference curing such defect;
(iii) prepare and file with the Commission such
amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep such Shelf
Registration Statement effective for the applicable period set
forth in Section 3 hereof, cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with
the provisions of the Act with respect to the disposition of
all Transfer Restricted Securities covered by such Shelf
Registration Statement during the applicable period in
accordance with the intended method or methods of distribution
by the sellers thereof set forth in such Shelf Registration
Statement or supplement to the Prospectus;
(iv) advise the Holders and underwriters, if any,
promptly and, if requested by such Persons, confirm such
advice in writing, (A) when the Shelf Registration Statement
or any Prospectus supplement or post- effective amendment has
been filed, and, with respect to the Shelf Registration
Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the
Commission for amendments to the Shelf Registration Statement
or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance
by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement under the
Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes
any statement of a material fact made in the Shelf
Registration Statement, the Prospectus, any amendment or
supplement thereto made, not misleading;
-4-
6
(v) subject to Section 5(a)(ii), if any fact or event
contemplated by Section 5(iv)(D) above shall exist or have
occurred, prepare a post-effective amendment or supplement to
the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(vi) deliver to each Holder and underwriter, if any,
without charge, a reasonable number of copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Holder or underwriter
reasonably may request; the Company hereby consents to the use
(in accordance with law) of the Prospectus and any amendment
or supplement thereto by each Holder and each underwriter, if
any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
(vii) prior to any offering of Transfer Restricted
Securities, cooperate with the Holders in connection with the
registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as reasonably requested and do any and all other
acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement;
provided, however, that the Company shall not be required to
register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it
to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Shelf
Registration Statement, in any jurisdiction where it is not
now so subject;
(viii) in connection with any sale of Transfer
Restricted Securities that will result in such securities no
longer being Transfer Restricted Securities, cooperate with
the Holders to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends;
(ix) list all shares of Common Stock covered by the
Shelf Registration Statement on the principal U.S. securities
exchange on which the Common Stock is then listed;
(x) use its best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Shelf
Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be
required to enable the seller or sellers thereof to consummate
the disposition of such Transfer Restricted Securities;
-5-
7
(xi) use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to the
Shelf Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of
Rule 158 (which need not be audited) covering a twelve-month
period beginning after the Effective Date (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xvii) provide to the Holders with a reasonable
opportunity to review and comment on any registration
statement to be filed pursuant to this Agreement prior to the
filing thereof with the Commission, and shall make all changes
thereto as any Holder may request in writing to the extent
such changes are required, in the judgment of the Company, by
the Act;
(xviii) use reasonable commercial efforts to obtain
the withdrawal of any order suspending the effectiveness of
such registration statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of any
of the Transfer Restricted Securities for sale in any
jurisdiction, at the earliest possible moment;
(xix) use its best efforts to furnish to each Holder
and to each managing underwriter, if any, a signed
counterpart, addressed to such Holder or such underwriter, if
any, of (i) an opinion or opinions of counsel to the Company
and (ii) a comfort letter or comfort letters from the
Company's independent public accountants pursuant to SAS 72,
each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the
case may be, as such Holder or the managing underwriter
reasonably requests;
(xx) enter into customary agreements (including
underwriting agreements in customary form, which shall include
"lock-up" obligations as may be requested by the managing
underwriters, not to exceed 90 days in duration, but excluding
shares that may be issued pursuant to benefit plans or in
connection with mergers or acquisitions) and take such other
actions (including using its reasonable efforts to make such
domestic road show presentations and otherwise engaging in
such reasonable marketing support in connection with any
underwritten offering, including without limitation the
obligation to make its executive officers available for such
purpose of so requested by the selling Holder (a "Road Show"))
as are reasonably requested by any selling Holder in order to
expedite or facilitate the sale of any Transfer Restricted
Securities covered by a registration statement pursuant to an
underwritten offering in accordance herewith; and
-6-
8
(xxi) select an investment banking firm or firms of
national standing to manage the underwritten offering, subject
to the reasonable consent of the Holders of a majority of the
Transfer Restricted Securities for such registration.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of (i) the notice referred to in
Section 5(a)(iv)(C), (ii) any notice from the Company of the existence of any
fact of the kind described in Section 5(a)(iv)(D) hereof or (iii) any notice
from the Company that (a) sales under the Shelf Registration Statement would
require the disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential, or (b) such disclosure would
impede the Company's ability to consummate a material transaction (in each case,
a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
until (A) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 5(a)(v) hereof, or (B) such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"),
provided, that any suspension pursuant to clause (iii) above shall not exceed 60
days in any twelve-month period. Each Holder receiving a Suspension Notice
hereby agrees that it will either (x) destroy any Prospectuses, other than
permanent file copies, then in such Holder's possession which have been replaced
by the Company with more recently dated Prospectuses or (y) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice.
(c) Restrictions on the Company. During the period
specified in Section 3 of this Agreement, the Company will not
effect any public sale or distribution of any securities the
same as or similar to the Transfer Restricted Securities, or
any securities convertible into or exchangeable or exercisable
for any Company securities the same as or similar to the
Transfer Restricted Securities (except pursuant to
registration on Form S-4 or any successor form, or otherwise
in connection with the acquisition of a business or assets of
a business, a merger, or an exchange offer for the securities
of the issuer of another entity, or registrations on Form S-8
or any successor form relating solely to securities offered
pursuant to any benefit plan), during the 14-day period prior
to and through the period (i) beginning on the commencement of
the public distribution of Transfer Restricted Securities
pursuant to the Shelf Registration Statement in an
underwritten offering by or on behalf of any Holder to the
extent timely notified in writing by the selling Holders or
the underwriters managing such distribution and (ii) ending on
the first to occur of (A) the 90th day after such commencement
and (B) the end of such distribution (the "Company Standstill
Period"), including that portion of such period following an
underwritten distribution commenced during the Company
Standstill Period that does not coincide with the Company
Standstill Period.
-7-
9
SECTION 6. PIGGYBACK REGISTRATIONS
(a) In addition to the agreements relating to the Shelf Registration
Statement the Company agrees as follows:
(i) If at any time the Company proposes to file an
additional registration statement under the Act with respect
to an offering of Common Stock (x) for the Company's own
account (except pursuant to registrations on Form S-4 or any
successor form, or Form S-8 or any successor form relating
solely to securities issued pursuant to any benefit plan) or
(y) for the account of any holders of Common Stock other than
the Noteholders, then (A) the Company shall give written
notice of such proposed filing to the Noteholders as soon as
practicable (but in no event less than 30 days before the
anticipated filing date), (B) such notice shall offer each
Noteholder, subject to the terms and conditions hereof, the
opportunity to request that such actions be taken under Rule
429 under the Act ("Rule 429") as shall cause the prospectus
contained in such additional registration statement (a
"Noteholder Piggyback Registration Statement") to be available
to permit the offer and sale, at such Noteholder's election,
of some or all of the Transfer Restricted Securities owned by
such Noteholder on the same terms and conditions as the
Company's or such other holder's Common Stock (a Noteholder
Piggyback Sale"), and (C) the Company shall otherwise take
such reasonable actions as will enable such Noteholder to
effect a Noteholder Piggyback Sale on such terms and
conditions.
(ii) Subject to Section 6(b), the Company shall take
such actions as shall be required under Rule 429 to cause the
combined prospectus contained in such Noteholder Piggyback
Registration Statement to permit the offer and sale of all
Transfer Restricted Securities requested by such Noteholder
within 20 days after the receipt of any notice given by the
Company pursuant to Section 6(a)(i), clause (A), to be covered
by such combined prospectus; provided, however, that if, at
any time after giving written notice of its intention to
register any securities and prior to the effective date of
such Noteholder Piggyback Registration Statement, the Company
shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its
election, give written notice of such determination to each
Noteholder and, thereupon, (i) in the case of a determination
not to register, will be relieved of any obligation to cause
any Transfer Restricted Securities to be covered by such
combined prospectus, without prejudice, however, to the rights
of any Noteholder to have its Transfer Restricted Securities
continue to be included in the Shelf Registration Statement
and (ii) in the case of a determination to delay registering,
shall be permitted to delay causing any Transfer Restricted
Securities to be covered by the combined prospectus for the
same period as the delay in registering such other securities.
(iii) If the offering pursuant to such Noteholder
Piggyback Registration Statement is to be underwritten, then
each Noteholder making a request for a Noteholder Piggyback
Sale pursuant to this Section 6(a) must participate in such
underwritten offering and shall not be permitted to make any
other offering in connection with such registration. If the
offering pursuant to such Noteholder
-8-
10
Piggyback Registration Statement is to be on any other terms,
then each Noteholder making a request for a Noteholder
Piggyback Sale pursuant to this Section 6(a) must participate
in such offering on such basis and shall not be permitted to
make an underwritten offering in connection with such
registration. Each Noteholder shall be permitted to withdraw
all or part of such Noteholder's Transfer Restricted
Securities from coverage by a Noteholder Piggyback
Registration Statement at any time prior to (but only prior
to) the effective date thereof without prejudice to the rights
of such Noteholder to have its Transfer Restricted Securities
continue to be included in the Shelf Registration Statement.
(b) Notwithstanding anything contained herein, if the managing
underwriter or underwriters of a sale or offering described in Section 6(a)
pursuant to which a Noteholder has requested a Noteholder Piggyback Sale shall
advise the Company in writing that (x) the size of the offering that the
Noteholders, the Company and any other holders intend to make or (y) the kind of
securities that one or more Noteholders, the Company and such other holders
intend to include in such offering are such that the success of the offering
would be materially and adversely affected, then (A) if the size of the offering
is the basis of such underwriter's advice, the amount of Transfer Restricted
Securities to be offered for the account of any Noteholder shall be reduced to
the extent necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing underwriter or
underwriters; provided, however, that, if securities are being offered for the
account of Persons other than the Company or such Noteholder, the proportion by
which the amount of such Transfer Restricted Securities intended to be offered
for the account of any Noteholder is reduced shall not exceed the proportion by
which the amount of such securities intended to be offered for the account of
such Persons is reduced; and (B) if the combination of securities to be offered
is the basis of such underwriter's advice (1) the Transfer Restricted Securities
to be included in such offering shall be reduced as described in clause (A)
above (subject to the provision in clause (A)) or (2) if the actions described
in sub-clause (1) of this clause (B) would, in the judgment of the managing
underwriter, be insufficient to eliminate the adverse effect that inclusion of
the Transfer Restricted Securities requested to be included would have on such
offering, such Transfer Restricted Securities will be excluded from such
offering, but only if all shares of Common Stock are also excluded. Any
reduction in Transfer Restricted Securities to be included in an underwritten
offering as contemplated by this Section 6(b) shall be without prejudice to the
Noteholders' rights to have their Transfer Restricted Securities continue to be
included in the Shelf Registration Agreement.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance with
this Agreement will be borne by the Company, regardless of whether a Shelf
Registration Statement required by this Agreement 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, messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company and
not more than one counsel for the Holders of Transfer Restricted Securities as
described in Section 7(b) below; (v) all application and filing fees in
connection with listing the Common Stock on a national securities exchange
pursuant to the requirements hereof; (vi) all fees and disbursements of
independent certified public accountants of the
-9-
11
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance); ; and (vii) fees and expenses in
connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc. including fees and expenses of any
"qualified independent underwriter" in connection with an underwritten offering.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company. The Noteholders will bear the expense of any underwriting commissions
in connection with an underwritten offering.
(b) The Company will reimburse the Holders selling Transfer Restricted
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 selected by the Holders of a majority of the Transfer
Restricted Securities.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder, its
directors, its officers and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act and Section 20 of the Exchange
Act), from and against any and all losses, claims, damages, liabilities,
judgments, (including without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Holder or any prospective purchaser of Shares pursuant to the
Shelf Registration Statement or caused by 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, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the Holders
expressly for use in the Shelf Registration Statement or Noteholder Piggyback
Registration Statement.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and its directors and
officers, and each Person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company set forth in section (a) above, but
only with reference to information relating to such Holder furnished in writing
to the Company by such Holder expressly for use in the Shelf Registration
Statement.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the Person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees
-10-
12
and expenses of such counsel, as incurred (except that in the case of any action
in respect of which indemnity may be sought pursuant to both Sections 7(a) and
7(b), a Holder shall not be required to assume the defense of such action
pursuant to this Section 7(c), but may employ separate counsel and participate
in the defense thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of the Holder). Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Holders of a
majority of the Transfer Restricted Securities, in the case of the parties
indemnified pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than (20) twenty Business Days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been 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 the indemnified party.
(d) To the extent that the indemnification provided for in this Section
7 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand, and of the
Holders, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative fault of the Company,
on the one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the
-11-
13
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 by the Holders, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and judgments referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any matter, including any action that could have given rise to such
losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 8, no Holder will be required to contribute any
amount in excess of the amount by which the net proceeds of the offering (before
deducting expenses) received by such Holder exceeds the amount of damages that
such Holder has 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective Transfer
Restricted Securities held by each of the Holders hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resale of such Transfer Restricted
Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of
the Exchange Act, to make all filings required thereby in a timely manner in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144 (if available).
SECTION 10. REPRESENTATIONS
(a) The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Oklahoma, (ii) has the corporate power to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby and (iii) is not in default under or in
violation of any provision of the Company's certificate of
incorporation or bylaws.
-12-
14
(b) The authorized capital stock of the Company consists of
250,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock of which 122,721,082 shares of Common Stock
and 2,492,037 shares of preferred stock were issued and
outstanding as of June 16, 2000.
(c) The Company has delivered or made available to
the Noteholder each registration statement, report, definitive
proxy statement or definitive information statement and all
exhibits thereto filed since December 31, 1998, each in the
form (including exhibits and any amendments thereto) filed
with the Commission. Except as otherwise disclosed, such
reports were filed with the Commission in a timely manner,
constitute all forms, reports and documents required to be
filed by the Company under the Act, the Exchange Act and the
rules and regulations promulgated thereunder. As of their
respective dates, such reports (a) complied as to form in all
material respects with the applicable requirements of the Act
and the Exchange Act and (b) did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements made therein not misleading. Each of the balance
sheets of the Company included in or incorporated by reference
in such reports (including the related notes and schedules)
fairly presents the financial position of the Company as of
the date thereof and each of the statements of income,
retained earnings and cash flow of the Company included or
incorporated by reference into such reports (including any
related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may
be, of the Company for the periods set forth therein (subject,
in the case of unaudited statements, to normal year-end audit
adjustments which would not be material in amount or effect),
in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved,
except as may be noted therein and except, in the case of any
unaudited statements, as permitted by Form 10-Q promulgated
under the Exchange Act.
(d) Neither the execution and delivery of this
Agreement nor compliance with the terms and provisions of this
Agreement will violate any law, statute, rule or regulation of
any governmental authority, or will on the Closing Date
conflict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order, injunction,
decree or ruling of any court or governmental agency,
authority to which the Company is subject or of any agreement
or instrument to which the Company is a party.
(e) The execution, delivery and performance of this
Agreement have been duly and validly authorized and approved
by all requisite corporate action on the part of the Company.
This Agreement has been, and the other agreements contemplated
hereby when executed and delivered will be, duly executed and
delivered by the Company and, assuming the due authorization,
execution and delivery hereof and thereof by the other parties
hereto or thereto, this Agreement constitutes and, when
executed, each of the other agreements contemplated hereby
will constitute, a valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and similar laws
affecting creditors' rights generally from time to time and to
general principles of equity.
(f) There is no litigation, proceeding or
investigation pending or, to the
-13-
15
knowledge of the Company threatened against or affecting the
Company that questions the validity or enforceability of this
Agreement or any other document, instrument or agreement to be
executed and delivered by either the Company or CEMI in
connection with the transactions contemplated hereby.
(g) No vote of the holders of any class or series of
the Company's capital stock or other voting securities is
necessary to approve this Agreement or the transactions
contemplated hereby.
(h) As of the Closing Date CEMI is solvent.
SECTION 11. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Noteholders 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
Noteholders or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 3 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) No Piggybacks on Shelf Registration Statement. The Company shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of their
securities in the Shelf Registration Statement other than the Transfer
Restricted Securities.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 3
hereof and this Section 10(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of Shares representing a majority of the outstanding Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates).
(e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Noteholders, 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 hereunder.
-14-
16
(f) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, to the address set forth on the
records of either the Registrar with respect to the Shares or
The Depository Trust Company, as the case may be;
(ii) if to the Company: to Chesapeake Energy
Corporation, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000, Attention: Corporate Secretary, with a copy to
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., 5400 Renaissance Tower, 0000
Xxx Xxxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxxxx;
and
(iii) if to the Noteholders: to Appaloosa Management,
L.P., 00 Xxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000, Attention:
Xx. Xxxxxx Xxxxxxxxx; to Xxxxxxxxxxx Funds, Inc., 2 World
Trade Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Xx. Xxxxxx Xxxxx; to any other Noteholder at the
address set forth in the Addendum executed by the Noteholder;
or in any case to such other address as the Person to be
notified may have requested in writing.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
(g) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreements. If any transferee of any Holder shall acquire Transfer
Restricted Securities in any manner, whether by operation of law or otherwise,
such Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and the applicable Purchase
Agreement, and such Person shall be entitled to receive the benefits hereof.
(h) 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.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
-15-
17
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(k) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreements, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
(m) Common Stock Issuance. Under the terms of paragraph 10.1 of each of
the Purchase Agreements, CEMI is obligated to cause the issuance of additional
shares of Common Stock or to pay additional cash to the Noteholders under
certain circumstances. The Company agrees to reserve sufficient shares to
satisfy any such obligations, to list such shares of Common Stock with the New
York Stock Exchange as provided herein and to include such shares in the Shelf
Registration Statement. If CEMI does not satisfy the obligations under paragraph
10.1 of any Purchase Agreement by issuing the required shares of Common Stock or
paying the required amount of cash, the Company will issue the number of shares
of Common Stock directly to the appropriate Noteholder required to satisfy such
obligations under the appropriate Purchase Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CHESAPEAKE ENERGY CORPORATION
By: /s/ Xxxxxx X. XxXxxxxxx
--------------------------------
Xxxxxx X. XxXxxxxxx,
Chief Executive Officer
-16-
18
XXXXXXXXXXX STRATEGIC INCOME FUND
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary
----------------------------
XXXXXXXXXXX HIGH YIELD FUND
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary
----------------------------
XXXXXXXXXXX CHAMPION INCOME FUND
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary
----------------------------
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS
F/A/X
XXXXXXXXXXX STRATEGIC BOND FUND/VA
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary
----------------------------
-17-
19
ATLAS ASSETS,INC. F/A/O
ATLAS STRATEGIC INCOME FUND
By: /s/ Xxxxxx Xxxx
----------------------------------
Name: Xxxxxx Xxxx
-----------------------------
Title: Vice President
----------------------------
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
PALOMINO FUND LTD
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
TERSK L.L.C.
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
-18-
20
EXHIBIT "A"
CHESAPEAKE ENERGY CORPORATION
ADDENDUM
TO COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
We, the undersigned, execute this Addendum, effective as of the date
below, as a condition precedent to our acquisition of Common Stock of Chesapeake
Energy Corporation, an Oklahoma corporation (the "Company"), and hereby agree to
become a party to, and be bound by, that certain Common Stock Registration
Rights Agreement (the "Agreement") dated as of June____, 2000, by and among the
Company, Appaloosa (as defined in the Agreement), Xxxxxxxxxxx (as defined in the
Agreement) and other persons executing this Addendum from time to time, in all
manner and respects as set forth in the Agreement.
Executed as of this _______ day of ______________, _________.
By:
----------------------------
By:
----------------------------
Name:
-----------------------
Title:
----------------------
Address:
-------------------------------
Number of shares of Chesapeake Common Stock owned on this date which were
acquired in exchange for Gothic Energy Corporation 14 1/8% Series B Senior
Secured Discount Notes Due 2006:
-19-
