EX-4.6.1 4 h02395exv4w6w1.txt CONSENT & WAIVER LETTER EXHIBIT 4.6.1 UNION BANK OF CALIFORNIA, N.A. 4200 LINCOLN PLAZA 500 NORTH AKARD DALLAS, TEXAS 75201 December 11, 2002 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 that are defined in the Credit Agreement and not otherwise defined herein are used herein with the meanings given them in the Credit Agreement. Borrower and Company have informed Administrative Agent and Lenders that they intend to enter into the following transactions (collectively, the "Proposed Transactions"): o Company intends to acquire ONEOK Resources Company for $300,000,000 cash (subject to customary adjustments) by causing a Subsidiary Guarantor to purchase all of the outstanding capital stock of ONEOK Resources Company, a wholly owned subsidiary of ONEOK, Inc., substantially in accordance with the Stock Purchase Agreement by and between ONEOK, Inc., as seller, and Chesapeake Beta Corp., as buyer, dated as of November 25, 2002 (the "ONEOK Acquisition"). o Borrower intends to (a) sell (in one or more transactions) substantially all of its oil and gas properties located in the Permian Basin for cash consideration and/or (b) exchange (in one or more transactions) such properties for oil and gas properties located in or adjacent to the mid-continent (Kansas, Oklahoma and Texas Panhandle) basins for aggregate consideration of at least $100,000,000 (including cash received from any sales plus the associated value of any properties exchanged (as determined by the applicable exchange contract or Company's Board of Directors, if such value is not specified therein)) (the "Permian Basin Disposition"). o Company intends to issue new Senior Notes in the aggregate face amount of up to $200,000,000, 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 Company's 9% Senior Notes due 2012 and 8.375% Senior Notes due 2008 (the "New Notes"). o Prior to or contemporaneously with the issuance of the New Notes, Company intends to issue additional Common Stock (the "New Common Stock"). Borrower and Company have requested that Administrative Agent and Lenders consent to certain of the Proposed Transactions. Accordingly, subject to the terms and provisions hereof, Administrative Agent and Lenders hereby: (a) (i) consent to the ONEOK Acquisition and (ii) waive any violations of Section 7.7 of the Credit Agreement resulting therefrom; provided that (1) at the time of the ONEOK Acquisition, no Default or Event of Default has occurred that is continuing, (2) the ONEOK Acquisition shall be approved by the Board of Directors of Company, (3) ONEOK Resources Company 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), (4) the ONEOK Acquisition shall be consummated on or before April 30, 2003, (5) immediately following the consummation of the ONEOK Acquisition, Company and Borrower shall deliver to Administrative Agent a certificate signed by a Responsible Officer certifying that after giving effect to the ONEOK Acquisition and the inclusion of ONEOK Resources Company as a Subsidiary Guarantor (i) no Default or Event of Default exists that is continuing and (ii) all representations and warranties contained in Section 4 of the Credit Agreement are true and correct, and (6) except as otherwise provided herein, nothing in this Letter Agreement shall allow any Group Member to make any other new Investments not allowed pursuant to Section 7.7 of the Credit Agreement; and (b) (i) consent to the issuance of the New Notes, (ii) waive any violations of Section 7.2 of the Credit Agreement resulting therefrom, and (iii) 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 (1) at the time of the issuance of the New Notes, no Default or Event of Default has occurred that is continuing, (2) the issuance of the New Notes shall be approved by the Board of Directors of Company, (3) the issuance of the New Notes shall be consummated on or before April 30, 2003, (4) 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 Common Stock shall not exceed 62.50%, (5) the net proceeds of the New Notes shall be used to consummate the ONEOK Acquisition with any remaining funds (or all of such funds should the ONEOK Acquisition fail to close) used to repay outstanding Indebtedness of any Group Member or to pay the purchase price of oil and gas properties acquired by a Group Member or to pay development costs with respect to oil and gas properties owned by a Group Member, and (6) except as otherwise provided herein, nothing in this Letter Agreement shall allow any Group Member to incur any other new Indebtedness not allowed pursuant to Section 7.2 of the Credit Agreement; and (c) (i) consent to the Permian Basin Disposition, (ii) waive any violations of Section 7.5 of the Credit Agreement resulting therefrom, and (iii) agree that provisions of Section 7.5(e) of the Credit Agreement shall not apply to any Net Cash Proceeds of the Permian Basin Disposition; provided that (1) at the time of the Permian Basin Disposition, no Default or Event of Default has occurred that is continuing, (2) the Permian Basin Disposition shall be approved by the Board of Directors of Company, (3) after giving effect to the Permian Basis Disposition, Company and Borrower shall be in compliance with the provisions of Section 6.9(a) of the Credit Agreement, (4) any Net Cash Proceeds of the Permian Basin Disposition shall be used to repay outstanding Indebtedness of any Group Member or to pay the purchase price of oil and gas properties acquired by a Group Member or to pay development costs with respect to oil and gas properties owned by a Group Member, and (5) except as otherwise provided herein, nothing in this Letter Agreement shall allow any Group Member to make any other dispositions not allowed pursuant to Section 7.5 of the Credit Agreement. The limitations set forth in clause (a) above shall not be deemed to restrict Investments otherwise allowed under clause (n) of Section 7.7 of the Credit Agreement. Administrative Agent is hereby authorized to take any action requested by Company or Borrower having the effect of releasing any Collateral that is included within the Permian Basin Disposition in order to permit the consummation of such transaction. In consideration of this Letter Agreement, provided that Majority Lenders are signatory to this Letter Agreement 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 Lender signatory to this Letter Agreement on or before such date and time, an amendment fee determined by multiplying .50% 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 (as modified by certain Assumption Agreements) 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 ---------------------------------- Name: Randall Osterberg Title: Senior Vice President By: /s/ Sean Murphy ---------------------------------- 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 ------------------------------------------------ Martha A. Burger Treasurer and Sr. Vice President Human Resources GUARANTORS: 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, INC. CARMEN ACQUISITION CORP. CHESAPEAKE ACQUISITION CORPORATION CHESAPEAKE BETA CORP. CHESAPEAKE DELTA CORP. CHESAPEAKE ENERGY LOUISIANA CORPORATION CHESAPEAKE ENO ACQUISITION CORP. CHESAPEAKE FOCUS CORP. CHESAPEAKE KNAN ACQUISITION CORPORATION CHESAPEAKE MOUNTAIN FRONT CORP. CHESAPEAKE ROYALTY COMPANY GOTHIC ENERGY CORPORATION GOTHIC PRODUCTION CORPORATION NOMAC DRILLING CORPORATION 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 LENDERS: 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 Signatory 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. Nautt ----------------------------------- Name: Ian W. Nautt Title: Associate NATEXIS BANQUES POPULAIRES By: /s/ Donovan C. Broussard ----------------------------------- Name: Donovan C. Broussard Title: Vice President By: /s/ Daniel Payer ----------------------------------- Name: Daniel Payer Title: Vice President PNC BANK, NATIONAL ASSOCIATION By: /s/ Doug Clark ----------------------------------- Name: Doug Clark Title: Vice President RZB FINANCE LLC By: /s/ Pearl Geffers ----------------------------------- Name: Pearl Geffers Title: First Vice President By: /s/ John A. Valisku ----------------------------------- Name: John A. Valisku Title: Group Vice President SUMITOMO MITSUI BANKING CORPORATION By: /s/ William M. Ginn ----------------------------------- Name: William M. Ginn Title: General Manager TORONTO DOMINION (TEXAS), INC. By: /s/ Debbie A. Greene ----------------------------------- Name: Debbie A. Greene Title: Vice President WASHINGTON MUTUAL BANK, FA By: /s/ Mark Isensee ----------------------------------- Name: Mark Isensee Title: Vice President