EXHIBIT 4.6.2
UNION BANK OF CALIFORNIA, N.A.
4200 LINCOLN PLAZA
500 NORTH AKARD
DALLAS, TEXAS 75201
October 5, 2001
Chesapeake Energy Corporation
Chesapeake Exploration Limited Partnership
6100 North Western Avenue
Oklahoma City, Oklahoma 73118
Re: Second Amended and Restated Credit Agreement dated as of June 11, 2001
(as amended, supplemented or restated, the "Credit Agreement"), 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 from time to
time parties thereto ("Lenders")
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement. Terms which are
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings given them in the Credit Agreement.
By letter dated September 10, 2001, Administrative Agent and Lenders
consented to the sale by Company of all of the outstanding capital stock of
Chesapeake Canada Corporation to a Person that is not an Affiliate of Company
for a sales price of approximately C $232,000,000 (the "Canadian Sale") pursuant
to the terms and conditions set forth therein. Upon consummation of the Canadian
Sale, Borrower and Company have requested that Administrative Agent and Lenders
consent (a) to the purchase, redemption, or other acquisition by Company of
shares of its common stock (the "Common Stock"), from the holders thereof (to
the extent entered into after the date hereof, the "Stock Repurchases"), and (b)
to the sale by Company of put options or other derivatives relating to its
Common Stock ("Option Contracts") whereby Company would become obligated to
purchase shares of Common Stock from the holder thereof (to the extent entered
into after the date hereof, the "Derivative Sales").
Subject to the terms and provisions hereof, Administrative Agent and
Lenders hereby (a) consent to the Stock Repurchases and the Derivative Sales,
(b) waive any violations of the Credit Agreement resulting therefrom, and (c)
agree that such Stock Repurchases and Derivative Sales 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 each Stock Repurchase and each Derivative
Sale, no Default or Event of Default has occurred which is continuing,
(ii) the Stock Repurchases and the Derivative Sales shall be
approved by the Board of Directors of Company,
(iii) without duplication, the aggregate amount paid by
Company for all Stock Repurchases or paid in connection with any Option
Contract (including, but not limited to, amounts paid upon an exercise
by the holder thereof and amounts paid to close out an Option Contract
prior to its expiration), plus the maximum amounts which Company might
be called upon to pay under or in connection with all Option Contracts
then outstanding, minus the aggregate amount of cash consideration
received by Company for entering into Derivative Sales shall not exceed
the amount of $50,000,000 at any time,
(iv) no Stock Repurchases may occur after June 30, 2002 and
all obligations of Company to purchase shares of Common Stock under
Option Contracts must expire on or prior to June 30, 2002,
(v) the Canadian Sale shall have been consummated prior to the
commencement of such Stock Repurchases and Derivative Sales,
(vi) each Stock Repurchase shall be made in compliance with
Regulation U promulgated by the Board of Governors of the Federal
Reserve System, and
(vii) nothing in this Letter Agreement shall allow any Person
to make any other new Restricted Payments not allowed pursuant to
Section 7.6 of the Credit Agreement.
In consideration of this Letter Agreement, provided that Majority
Lenders are signatory to this Letter Agreement on or before 2:00 p.m., Dallas,
Texas time on the date hereof, Borrower will pay to Administrative Agent, for
the account of the Lenders signatory to this Letter Agreement on or before such
time, an amendment fee determined by multiplying .05% times such Lender's
Revolving Commitment, which shall be due and payable on the date hereof.
The Credit Agreement is hereby ratified and confirmed in all respects.
Except as expressly set forth above, the execution, delivery and effectiveness
of this Letter Agreement shall not operate as a waiver of any right, power or
remedy of Administrative Agent or 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.
By its execution below, each Guarantor hereby (i) consents to the
provisions of this Letter Agreement 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 and the other
Loan Documents executed pursuant 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 Letter Agreement 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.
This Letter Agreement is a "Loan Document" as defined and described in
the Credit Agreement and all of the terms and provisions of the Credit Agreement
relating to Loan Documents shall apply hereto. This Letter Agreement may be
executed in multiple counterparts, all of which shall constitute one Letter
Agreement. This Letter Agreement may be validly executed by facsimile or other
electronic transmission.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
Please execute a copy of this Letter Agreement in the space provided
below to evidence your agreement to and acknowledgment of the foregoing.
Very truly yours,
UNION BANK OF CALIFORNIA, N.A.
Administrative Agent, Collateral Agent
and Lender
By: /s/ RANDALL OSTERBERG
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Name: Randall Osterberg
Title: Senior Vice President
By: /s/ SEAN MURPHY
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Name: Sean Murphy
Title: Assistant Vice President
ACKNOWLEDGED AND AGREED
to as of the date first written above:
BORROWER:
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP
By: Chesapeake Operating, Inc., its general partner
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
GUARANTORS:
CHESAPEAKE ENERGY CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
THE AMES COMPANY, INC.
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
ARKOMA PITTSBURG HOLDING CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE ACQUISITION CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE ENERGY LOUISIANA CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE OPERATING, INC.
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE OPERATING, INC., as General Partner of
Chesapeake Panhandle Limited Partnership
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE ROYALTY COMPANY
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE OPERATING, INC., as General Partner of
Chesapeake-Staghorn Acquisition L.P.
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE OPERATING, INC., as General Partner of
Chesapeake Louisiana, L.P.
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
CHESAPEAKE OPERATING, INC., as General Partner of
Chesapeake Exploration Limited Partnership
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
GOTHIC ENERGY CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
GOTHIC PRODUCTION CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
NOMAC DRILLING CORPORATION
By: /s/ MARTHA A. BURGER
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Name: Martha A. Burger
Title: Treasurer
LENDERS:
BANK OF OKLAHOMA, N.A.
By: /s/ JOHN N. HUFF
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Name: JOHN N. HUFF
Title: Vice President
BANK OF SCOTLAND
By: /s/ JOSEPH FRATUS
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Name: Joseph Fratus
Title: Vice President
BEAR STEARNS CORPORATE LENDING INC.
By: /s/ KEITH C. BARNISH
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Name: KEITH C. BARNISH
Title: Senior Vice President
BNP PARIBAS
By: /s/ BRIAN M. MALONE
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Name: Brian M. Malone
Title: Managing Director
COMERICA BANK - TEXAS
By: /s/ PETER L. SEFZIK
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Name: Peter L. Sefzik
Title: Corporate Banking Officer
COMPASS BANK
By: /s/ KATHLEEN J. BOWEN
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Name: Kathleen J. Bowen
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ MICHAEL R. QUIRAY
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Name: Michael R. Quiray
Title: VP, Sr. Manager
By: /s/ MICHAEL D. WILLIS
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Name: Michael D. Willis
Title: VP, Credit Analysis
NATEXIS BANQUES POPULAIRES
By: /s/ RENAUD J. D'HERBES By: /s/ DONOVAN C. BROUSSARD
------------------------------- -------------------------------------
Name: Renaud J. d'Herbes Name: Donovan C. Broussard
Title: Senior Vice President Title: Vice President
and Regional Manager
NATIONAL BANK OF CANADA, NEW YORK BRANCH
By: /s/ RANDALL K. WILHOIT
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Name: Randall K. Wilhoit
Title: Vice President
By: /s/ DOUG CLARK
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Name: Doug Clark
Title: Vice President
RZB FINANCE LLC
By: /s/ F. DEITER BEINTREXLER
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Name: F. Deiter Beintrexler
Title: President
By: /s/ JOHN A. VALISKA
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Name: John A. Valiska
Title: Vice President
SUMITOMO MITSUI BANKING CORPORATION
By:
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Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By: /s/ JIM BRIDWELL
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Name: Jim Bridwell
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ M. WARD POLZIN
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Name: M. WARD POLZIN
Title: Vice President
WASHINGTON MUTUAL BANK, FA
By: /s/ MARK M. ISENSEE
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Name: Mark M. Isensee
Title: Manager
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ BERNARD WEYMULLER
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Name: Bernard Weymuller
Title: Senior Vice President