Exhibit 4.9.1
FIFTH AMENDMENT
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND
CONSENT
THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
CONSENT (herein called this "Amendment") is dated as of March 3, 2003 (but
effective on the Effective Date, defined below in Section 3.1) by and among
Chesapeake Exploration Limited Partnership, an Oklahoma limited partnership
("Borrower"), Chesapeake Energy Corporation, an Oklahoma corporation
("Company"), Bear Stearns Corporate Lending Inc., as syndication agent
("Syndication Agent"), Union Bank of California, N.A., as administrative agent
and collateral agent ("Administrative Agent"), and the several banks and other
financial institutions or entities parties hereto ("Lenders").
W I T N E S S E T H:
WHEREAS, Borrower, Company, Syndication Agent, Administrative Agent and
Lenders entered into that certain Second Amended and Restated Credit Agreement
dated as of June 11, 2001 (as amended, supplemented, or restated to the date
hereof, the "Original Agreement"), for the purpose and consideration therein
expressed, whereby Lenders became obligated to make loans to Borrower as therein
provided;
WHEREAS, Company intends to acquire certain oil and gas assets for cash for
a purchase price of $500,000,000 (subject to customary adjustments),
substantially in accordance with the Purchase and Sale Agreement by and between
El Paso Production Company and Noric, L.P., as sellers, and Chesapeake EP
Corporation, as buyer, dated as of February 21, 2003 (the "El Paso
Acquisition");
WHEREAS, Company intends to issue new senior notes in the aggregate face
amount of up to $350,000,000, providing (a) for an interest rate at the then
prevailing market rate of interest, (b) for a maturity date of not sooner than
seven years from the date of issuance, and (c) for covenants, mandatory
prepayments, defaults, and events of default no more restrictive than those
governing Company's 7-3/4% Senior Notes due 2015 (the "New Notes");
WHEREAS, prior to or contemporaneously with the issuance of the New Notes,
Company intends to issue new Cumulative Convertible Perpetual Preferred Stock of
the Company in the aggregate face amount of not more than $250,000,000 with a
dividend rate of not more than 7.5% per annum (the "New Preferred Stock") and/or
additional common stock of the Company (the "New Common Stock");
WHEREAS, Borrower and Company have requested that Administrative Agent and
Lenders consent to the foregoing proposed transactions; and
WHEREAS, Borrower, Company, Syndication Agent, Administrative Agent and
Lenders desire to amend the Original Agreement as set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
Definitions and References
Section 1.1. Terms Defined in the Original Agreement. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.
Section 1.2. Other Defined Terms. Unless the context otherwise requires,
the following terms when used in this Amendment shall have the meanings assigned
to them in this Section 1.2.
"Amendment" means this Fifth Amendment to Second Amended and
Restated Credit Agreement and Consent.
"Credit Agreement" means the Original Agreement as amended hereby.
"Effective Date" has the meaning given to such term in Section 3.1.
ARTICLE II.
Amendments and Consents
Section 2.1. Defined Terms. The definition of "Indentures" in Section 1.1
of the Original Agreement is hereby amended in its entirety to read as follows:
" 'Indentures': the collective reference to (i) the 7-7/8% Note
Indenture, (ii) the 8-1/2% Note Indenture, (iii) the 8-1/8% Note Indenture,
(iv) the 8-3/8% Note Indenture, and (v) the other Indentures entered into
from time to time as permitted pursuant to the terms of this Agreement or
any consent by Majority Lenders hereunder governing Indebtedness of the
Company and the guarantors thereof."
Section 2.2. Restricted Payments. Upon the issuance of not less than
15,000,000 shares of New Common Stock, Paragraph (c) of Section 7.6 of the
Original Agreement is hereby amended to replace the reference to "$25,000,000"
with "$35,000,000."
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Section 2.3. New Notes. Administrative Agent and Lenders hereby (a)
consent to the issuance of the New Notes, (b) waive any violations of Section
7.2 of the Credit Agreement resulting therefrom, and (c) agree that such New
Notes shall be permitted in addition to the Indebtedness otherwise permitted
pursuant to Section 7.2 of the Credit Agreement; provided that (i) at the time
of the issuance of the New Notes, no Default or Event of Default has occurred
that is continuing, the issuance of the New Notes shall be approved by the Board
of Directors of Company, and the face amount of the New Notes divided by the sum
of (x) the face amount of the New Notes plus (y) the aggregate sales price of
the New Preferred Stock and/or New Common Stock shall not exceed 65%; (ii) the
issuance of the New Notes shall be consummated on or before April 30, 2003;
(iii) the net proceeds of the New Notes shall be used to consummate the El Paso
Acquisition with any remaining funds (or all of such funds should the El Paso
Acquisition fail to close) used to repay outstanding Indebtedness of any Group
Member under the Loan Documents or to pay the purchase price of oil and gas
properties acquired by a Group Member under the Loan Documents or to pay
development costs with respect to oil and gas properties owned by a Group
Member; and (iv) except as otherwise provided herein, nothing in this Amendment
shall allow any Group Member to incur any other new Indebtedness not allowed
pursuant to Section 7.2 of the Credit Agreement.
Section 2.4. Acquisition. Administrative Agent and Lenders hereby (a)
consent to the El Paso Acquisition and (b) waive any violations of Section 7.7
of the Credit Agreement resulting therefrom; provided that (i) at the time of
the El Paso Acquisition, no Default or Event of Default has occurred that is
continuing, the El Paso Acquisition shall be approved by the Board of Directors
of Company, and the Company has received proceeds of the New Notes, New
Preferred Stock and/or New Common Stock of at least $350,0000,000, (ii) each
newly formed subsidiary of the Company (the "New Subsidiaries") shall become a
Subsidiary Guarantor under the Credit Agreement pursuant to Section 6.9(b)
thereof or shall be merged into a Subsidiary Guarantor (with such Subsidiary
Guarantor being the continuing or surviving entity), (iii) the initial closing
of the El Paso Acquisition shall be consummated on or before April 30, 2003,
(iv) immediately following the consummation of the El Paso Acquisition, Company
and Borrower shall deliver to Administrative Agent a certificate signed by a
Responsible Officer certifying that after giving effect to the El Paso
Acquisition and the inclusion of the New Subsidiaries as a Subsidiary Guarantor
(x) no Default or Event of Default exists that is continuing and (y) all
representations and warranties contained in Section 4 of the Credit Agreement
are true and correct, and (v) except as otherwise provided herein, nothing in
this Amendment shall allow any Group Member to make any other new Investments
not allowed pursuant to Section 7.7 of the Credit Agreement. The limitations set
forth in this Section shall not be deemed to restrict Investments otherwise
allowed under clause (n) of Section 7.7 of the Credit Agreement.
Section 2.5. Preferred Stock Dividends. Administrative Agent and Lenders
hereby (a) consent to the payment of cash dividends in respect of the New
Preferred Stock in the aggregate face amount not to exceed $250,000,000 (the
"New Preferred Dividends"), (b) waive any violations of the Credit Agreement
resulting therefrom, and (c) agree that such New Preferred Dividends shall be
permitted in addition to the Restricted Payments otherwise permitted pursuant to
Section 7.6 of the Credit Agreement; provided that (i) at the time of the
declaration of such New Preferred Dividends, no Default or Event of Default has
occurred which is continuing, (ii) the payment of the New Preferred Dividends
shall be declared by the Board of Directors of
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Company, and (iii) nothing in this Amendment shall allow any Person to make any
other new Restricted Payments not allowed pursuant to Section 7.6 of the Credit
Agreement.
ARTICLE III.
Conditions of Effectiveness; Closing
Section 3.1. Effective Date. This Amendment shall become effective on the
date when all of the following conditions precedent have been satisfied (the
"Effective Date"), provided that the Effective Date may occur no later than
April 30, 2003 unless agreed to in writing by Administrative Agent and Borrower.
(a) Administrative Agent shall have received, at Administrative Agent's
office, duly executed and delivered and in form and substance satisfactory to
Administrative Agent, all of the following:
(i) this Amendment duly executed by Borrower, Company and
Administrative Agent;
(ii) the Consent Agreement attached hereto duly executed by all
Subsidiary Guarantors;
(iii) an "Omnibus Certificate" of the Secretary and of the Chairman
of the Board or President of the general partner of Borrower, which shall
contain the names and signatures of the officers of the general partner of
Borrower authorized to execute Loan Documents and which shall certify to
the truth, correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions attached thereto duly adopted by the
Board of Directors of the general partner of Borrower and in full force and
effect at the time this Amendment is entered into, authorizing the
execution of this Amendment and the other Loan Documents delivered or to be
delivered in connection herewith and the consummation of the transactions
contemplated herein and therein, (2) a copy of the charter documents of
Borrower and of the general partner of Borrower and all amendments thereto,
certified by the appropriate official of the Borrower's state and general
partner's state of organization, and (3) a copy of any bylaws of the
general partner of Borrower previously delivered to Agent and Lenders in
connection with the Original Agreement (which may, with respect to any such
charter documents or bylaws, reference documents previously delivered in
connection with the Original Agreement);
(iv) a "Compliance Certificate" of the Chairman of the Board or
President and of the chief financial officer of the Company, which shall
contain (1) a certification by such officers as to the satisfaction of the
conditions set out in subsections (a), (b), and (c) of Section 5.2 of the
Original Agreement and (2) the calculations required to determine the
Senior Debt Limit (along with the supporting documentation described in
Section 5.2(c) of the Original Agreement);
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(v) documents similar to those specified in subsection (iii) of this
Section with respect to each Subsidiary Guarantor (which may, with respect
to charter documents or bylaws, reference documents previously delivered in
connection with the Original Agreement); and
(vi) such other supporting documents as Administrative Agent may
reasonably request.
(b) Borrower shall have paid, in connection with such Loan Documents,
all recording, handling, amendment and other fees required to be paid to
Administrative Agent pursuant to any Loan Documents.
(c) Borrower shall have paid, in connection with such Loan Documents, all
other fees and reimbursements to be paid to Administrative Agent pursuant to any
Loan Documents, or otherwise due Administrative Agent and including fees and
disbursements of Administrative Agent's attorneys.
ARTICLE IV.
Representations and Warranties
Section 4.1. Representations and Warranties of Borrower. In order to
induce each Lender to enter into this Amendment, Borrower represents and
warrants to each Lender that:
(a) The representations and warranties contained in Section 4 of the
Original Agreement are true and correct at and as of the time of the
effectiveness hereof, except to the extent that the facts on which such
representations and warranties are based have been changed by the extension of
credit under the Credit Agreement.
(b) The Company and Borrower are duly authorized to execute and deliver
this Amendment and are and will continue to be duly authorized to borrow monies
and to perform their respective obligations under the Credit Agreement. The
Company and Borrower have duly taken all corporate or partnership action
necessary to authorize the execution and delivery of this Amendment and to
authorize the performance of the obligations of the Company and Borrower
hereunder.
(c) The execution and delivery by the Company and Borrower of this
Amendment, the performance by the Company and Borrower of its obligations
hereunder and the consummation of the transactions contemplated hereby do not
and will not conflict with any provision of law, statute, rule or regulation or
of the certificate of incorporation, bylaws, or agreement of limited partnership
of the Company or Borrower (as applicable), or of any material agreement,
judgment, license, order or permit applicable to or binding upon the Company or
Borrower, or result in the creation of any lien, charge or encumbrance upon any
assets or properties of the Company or Borrower. Except for those which have
been obtained, no consent, approval, authorization or order of any court or
governmental authority or third party is required
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in connection with the execution and delivery by the Company and Borrower of
this Amendment or to consummate the transactions contemplated hereby.
(d) When duly executed and delivered, each of this Amendment and the
Credit Agreement will be a legal and binding obligation of the Company and
Borrower, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors' rights and by equitable principles of general
application.
(e) The audited annual consolidated financial statements of the Company
dated as of December 31, 2001 and the unaudited quarterly consolidated financial
statements of the Company dated as of September 30, 2002 fairly present the
consolidated financial position at such dates and the consolidated statement of
operations and the changes in consolidated financial position for the periods
ending on such dates for the Company. Copies of such financial statements have
heretofore been delivered to each Lender. Since such dates no material adverse
change has occurred in the financial condition or businesses or in the
consolidated financial condition or businesses of the Company.
ARTICLE V.
Miscellaneous
Section 5.1. Ratification of Agreements. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. Any reference to the
Credit Agreement in any Loan Document shall be deemed to be a reference to the
Original Agreement as hereby amended. The execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of Lenders under the Credit Agreement, the
Notes, or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement, the Notes or any other Loan Document.
Section 5.2. Survival of Agreements. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Loans, and shall further survive until
all of the Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by the Company, Borrower or any
Subsidiary Guarantor hereunder or under the Credit Agreement to any Lender shall
be deemed to constitute representations and warranties by, and/or agreements and
covenants of, such Loan Party under this Amendment and under the Credit
Agreement.
Section 5.3. Loan Documents. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto.
Section 5.4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
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Section 5.5. Counterparts; Fax. This Amendment may be separately executed
in counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Amendment. This Amendment may be validly executed by facsimile or other
electronic transmission.
Section 5.6. Amendment Fee. In consideration of this Amendment, provided
that Lenders constituting Majority Lenders are signatory to this Amendment on or
before 5:00 p.m., Dallas, Texas time on the date hereof, Borrower will pay to
Administrative Agent, for the account of each such signatory Lender, an
amendment fee determined by multiplying .15% times such Lender's Revolving
Commitment, which shall be due and payable on the date hereof.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
CHESAPEAKE EXPLORATION LIMITED
PARTNERSHIP
By: Chesapeake Operating, Inc., its
general partner
By: /s/ Martha A. Burger
---------------------------------
Martha A. Burger
Treasurer and Sr. Vice President
Human Resources
CHESAPEAKE ENERGY CORPORATION
By: /s/ Martha A. Burger
---------------------------------
Martha A. Burger
Treasurer and Sr. Vice President
Human Resources
UNION BANK OF CALIFORNIA, N.A.
Administrative Agent, Collateral Agent,
Issuing Lender and Lender
By: /s/ Sean Murphy
----------------------------------
Name: Sean Murphy
Title: Vice President
By: /s/ Carl Stutzman
----------------------------------
Name: Carl Stutzman
Title: Senior Vice President and
Manager
BANK OF OKLAHOMA, N.A.
By: /s/ John N. Huff
--------------------------------
Name: John N. Huff
Title: Vice President
BANK OF SCOTLAND
By: /s/ Joseph Fratus
--------------------------------
Name: Joseph Fratus
Title: First Vice President
BEAR STEARNS CORPORATE LENDING INC.
By: /s/ Victor Bulzacchelli
--------------------------------
Name: Victor Bulzacchelli
Title: Authorized Agent
BNP PARIBAS
By: /s/ David Dodd
--------------------------------
Name: David Dodd
Title: Director
By: /s/ Polly Schott
--------------------------------
Name: Polly Schott
Title: Vice President
COMERICA BANK - TEXAS
By: /s/ Peter L. Sefzik
--------------------------------
Name: Peter L. Sefzik
Title: Assistant Vice President
COMPASS BANK
By: /s/ Kathleen J. Bowen
---------------------------------------
Name: Kathleen J. Bowen
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Olivier Audemard
---------------------------------------
Name: Olivier Audemard
Title: Senior Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ James P. Moran
---------------------------------------
Name: James P. Moran
Title: Director
By: /s/ Ian W. Nalitt
---------------------------------------
Name: Ian W. Nalitt
Title: Associate
NATEXIS BANQUES POPULAIRES
By: /s/ Donovan C. Broussard
---------------------------------------
Name: Donovan C. Broussard
Title: Vice President
By: /s/ Louis P. Laville, III
---------------------------------------
Name: Louis P. Laville, III
Title: Vice President and Group Manager
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Doug Clark
---------------------------------------
Name: Doug Clark
Title: Vice President
RZB FINANCE LLC
By: /s/ Christoph Hoedl
------------------------------------------
Name: Christoph Hoedl
Title: Vice President
By: /s/ Elizabeth Hirst
------------------------------------------
Name: Elizabeth Hirst
Title: AVP
SUMITOMO MITSUI BANKING
CORPORATION
By: /s/ William Ginn
------------------------------------------
Name: William Ginn
Title: General Manager
TORONTO DOMINION (TEXAS), INC.
By: /s/ Rachel Suiter
------------------------------------------
Name: Rachel Suiter
Title: Vice President
WASHINGTON MUTUAL BANK, FA
By: /s/ Mark Isensee
------------------------------------------
Name: Mark Isensee
Title: Vice President
Fifth Amendment to Second Amended and Restated Credit Agreement and Consent
CONSENT AND AGREEMENT
By its execution below, each Guarantor hereby (i) consents to the
provisions of this Amendment and the transactions contemplated herein, (ii)
ratifies and confirms the Guarantee Agreement dated as of June 11, 2001 made by
it for the benefit of Administrative Agent and Lenders (as modified by certain
Assumption Agreements) and the other Loan Documents executed pursuant to the
Credit Agreement (or any prior amendment or supplement to the Credit Agreement),
(iii) agrees that all of its respective obligations and covenants thereunder
shall remain unimpaired by the execution and delivery of this Amendment and the
other documents and instruments executed in connection herewith, and (iv) agrees
that the Guarantee Agreement and such other Loan Documents shall remain in full
force and effect.
CHESAPEAKE ENERGY CORPORATION
CHESAPEAKE OPERATING, INC.
By: /s/ Martha A. Burger
-------------------------------
Martha A. Burger
Treasurer and Sr. Vice President Human Resources
of each above corporation
THE AMES COMPANY, L.L.C.
(successor to The Ames Company, Inc.)
CARMEN ACQUISITION, L.L.C.
(successor to Carmen Acquisition Corp.)
CHESAPEAKE ACQUISITION, L.L.C.
(successor to Chesapeake Acquisition Corporation)
CHESAPEAKE EP CORPORATION
(formerly known as Chesapeake Beta Corporation)
CHESAPEAKE DELTA CORP.
CHESAPEAKE ENERGY LOUISIANA CORPORATION
CHESAPEAKE ENO ACQUISITION, L.L.C.
(successor to Chesapeake Eno Acquisition Corp.)
CHESAPEAKE FOCUS, L.L.C.
(successor to Chesapeake Focus Corp.)
CHESAPEAKE KNAN ACQUISITION, L.L.C.
(successor to Chesapeake Knan Acquisition Corporation)
CHESAPEAKE MOUNTAIN FRONT, L.L.C.
(successor to Chesapeake Mountain Front Corp.)
CHESAPEAKE ORC, L.L.C.
CHESAPEAKE ROYALTY, L.L.C.
(successor to Chesapeake Royalty Company)
GOTHIC ENERGY, L.L.C.
(successor to Gothic Energy Corporation)
GOTHIC PRODUCTION, L.L.C.
(successor to Gothic Production Corporation)
NOMAC DRILLING CORPORATION
SAP ACQUISITION, L.L.C.
(successor to Sap Acquisition Corp.)
By: /s/ Martha A. Burger
----------------------------------------
Martha A. Burger
Treasurer of each above corporation
CHESAPEAKE PANHANDLE LIMITED PARTNERSHIP
CHESAPEAKE-STAGHORN ACQUISITION L.P.
CHESAPEAKE LOUISIANA, L.P.
CHESAPEAKE SIGMA, L.P.
By: CHESAPEAKE OPERATING, INC., as General Partner
of each above limited partnership
By: /s/ Martha A. Burger
----------------------------------------
Martha A. Burger
Treasurer and Sr. Vice President Human Resources