Document:

Exhibit

10-Q Document

Exhibit 4.1

Execution Version

FIRST AMENDMENT

TO

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 30, 2015

AMONG

CHESAPEAKE ENERGY CORPORATION,
AS THE BORROWER,

MUFG Union Bank, N.A.,
AS ADMINISTRATIVE AGENT, CO-SYNDICATION AGENT, A SWINGLINE LENDER
AND A LETTER OF CREDIT ISSUER,

WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS CO-SYNDICATION AGENT, A SWINGLINE LENDER
AND A LETTER OF CREDIT ISSUER,

AND

THE LENDERS
PARTY HERETO

MUFG UNION BANK, N.A. AND 
WELLS FARGO SECURITIES, LLC
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

10-Q Document

FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this “Amendment”) dated as of September 30, 2015, is among Chesapeake Energy Corporation, an Oklahoma corporation (the “Borrower”), each of the undersigned guarantors (the “Guarantors”), each Lender (as defined below) party hereto, and MUFG Union Bank, N.A., as administrative agent for the Lenders (in such capacity, together with its successors and assigns, the “Administrative Agent”).
RECITALS
A.The Borrower, the Administrative Agent and the banks and other financial institutions from time to time party thereto (together with their respective successors and assigns in such capacity, each a “Lender”) have entered into that certain Credit Agreement dated as of December 15, 2014 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”).
B.The Borrower has requested, and the Majority Lenders or all Lenders, as applicable, have agreed, to amend certain provisions of the Credit Agreement on the terms and conditions set forth herein.
C.NOW, THEREFORE, to induce the Administrative Agent and the Lenders to enter into this Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.  Definitions.  Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning assigned to such term in the Credit Agreement. Unless otherwise indicated, all section references in this Amendment refer to sections of the Credit Agreement.
Section 2.  Amendments to Credit Agreement.
2.1    Amendment to Section 1.1.  The following defined terms set forth in Section 1.1 of the Credit Agreement are hereby amended in their entirety to read as follows:
“Applicable Margin” shall mean, for any day other than a day during a Borrowing Base Trigger Period, with respect to any ABR Loan or LIBOR Loan, as the case may be, the rate per annum set forth in the grid below based upon the Pricing Level in effect on such day:

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	Level
	Applicable Rating
S&P/Moody’s
	LIBOR
Loans
	ABR
Loans
	Commitment
Fee Rate

	Pricing
Level 1
	BB/Ba2 or lower
	200.0
	100.0
	35.0

	Pricing
Level 2
	BB+/Ba1
	162.5
	62.5
	25.0

	Pricing
Level 3
	BBB-/Baa3
	150.0
	50.0
	20.0

	Pricing
Level 4
	BBB/Baa2
	125.0
	25.0
	17.5

	Pricing
Level 5
	BBB+/Baa1 or
higher
	112.5
	12.5
	15.0

The applicable pricing level in the leftmost column in the table above (with respect to the table immediately above, the “Pricing Level”) will be based on the Applicable Ratings from S&P and Moody’s.  For purposes hereof, (a) if either S&P or Moody’s shall not have in effect an Applicable Rating (other than by reason of the circumstances referred to in the second succeeding paragraph), then the applicable Pricing Level will be based on the single available Applicable Rating, (b) if the Applicable Ratings established by S&P and Moody’s shall fall within different Pricing Levels, the applicable Pricing Level shall be based on the higher of the two Applicable Ratings unless one of the two ratings is two or more Pricing Levels lower than the other, in which case the applicable Pricing Level shall be determined by reference to the Pricing Level one rating lower than the higher of the two Applicable Ratings, and (c) if the Applicable Ratings established by S&P and Moody’s shall be changed other than as a result of a change in the rating system of S&P or Moody’s, such change shall be effective as of the date on which it is first announced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the Administrative Agent.  Each change in the applicable rate shall apply during the period commencing on the effective date of such change and ending on the day immediately preceding the effective date of the next such change.
For any day when no Applicable Rating is in effect, the Applicable Margin with respect to LIBOR Loans and ABR Loans and the Commitment Fee Rate shall be the rates set forth opposite Pricing Level 1.
If the rating system of S&P or Moody’s shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Margin with respect to LIBOR Loans and ABR Loans and the Commitment Fee Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.

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Notwithstanding the foregoing, for any day during a Borrowing Base Trigger Period, “Applicable Margin” shall mean, with respect to any ABR Loan or LIBOR Loan, as the case may be, the rate per annum set forth in the grid below based upon the Pricing Level  in effect on such day:
	
					
	Level
	Borrowing Base
Utilization
Percentage
	LIBOR
Loans
	ABR Loans
Margin
	Commitment
Fee Rate

	Pricing
Level 1
	>75%
	275.0
	175.0
	50.0

	Pricing
Level 2
	<75%
	250.0
	150.0
	50.0

	Pricing
Level 3
	<50%
	225.0
	125.0
	37.5

	Pricing
Level 4
	<25%
	200.0
	100.0
	37.5

The applicable pricing level in the leftmost column in the table immediately above (with respect to the table immediately above, the “Pricing Level”) will be based on the Borrowing Base Utilization Percentage set forth in the second leftmost column.  Each change in the Applicable Margin or the Commitment Fee Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change, provided, however, that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 9.13(a), then until such time as a Reserve Report is delivered the “Applicable Margin” and “Commitment Fee Rate” means the rate per annum set forth opposite Pricing Level 1.
“Borrowing Base” shall mean, at any time, an amount equal to the amount determined in accordance with Section 2.14, as the same may be adjusted from time to time pursuant to the provisions thereof; provided that the Borrowing Base on the First Amendment Effective Date shall be $4,000,000,000.
“Borrowing Base Required Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or holding at least 85% of the unused Adjusted Total Commitment at such date and the Total Exposure (excluding the Exposure of Defaulting Lenders) at such date or (b) if the Total Commitment has been terminated, Non-Defaulting Lenders having or holding at least 85% of the Total Exposure (excluding the Exposure of Defaulting Lenders) at such date.
“Borrowing Base Trigger Period” shall mean:
(a) the period (the “Special Borrowing Base Trigger Period”) commencing on the First Amendment Effective Date and continuing until the later of (i) the first anniversary of the First Amendment Effective Date and (ii) either (A) the 

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first Business Day on which (1) the rating of the Index Debt is BB+ or higher from S&P (with an Index Debt rating of at least Ba2 from Moody’s) or Ba1 or higher from Moody’s (with an Index Debt rating of at least BB from S&P) and (2) the Leverage Ratio of the Borrower  (as of the date of the most recent financial statements delivered to the Administrative Agent pursuant to Section 9.1) does not exceed 3.00:1.00 or (B) the first Business Day on which the rating of the Index Debt is BBB- or higher from S&P (with an Index Debt rating of at least Ba1 from Moody’s) or Baa3 or higher from Moody’s (with an Index Debt rating of at least BB+ from S&P) (such date the “First Unsecured Period Date”); and 
(b) at any time after the First Unsecured Period Date, 
(i) the first Business Day following a Borrowing Base Trigger Event until the first Business Day on which the rating of the Index Debt is BB or higher from S&P (if then rated by S&P) and Ba2 or higher from Moody’s (if then rated by Moody’s); or
(ii) the period commencing with the date on which the Borrower elects under Section 13.18 to have the Facility governed by a Borrowing Base and ending on any date on which the Borrower has elected to cease to have the Facility governed by a Borrowing Base, provided that on such date, no Borrowing Base Trigger Event is in effect. 
“Collateral Coverage Ratio” shall mean as of any date of determination, the ratio of the PV-9 of the Borrowing Base Properties that constitute Mortgaged Properties to the lesser of (a) the Borrowing Base and (b) the Commitments then in effect.
“Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of the Group Members, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded, without duplication, (a) the income (or loss) of any Person (other than a Group Member) in which any Group Member has an ownership interest and any income represented by any dividends, distributions or proceeds of redemptions of Capital Stock in respect of any Person (other than a Group Member) in which a Group Member has an ownership interest, except, in each case, to the extent of the amount of cash dividends and other distributions actually paid to any Group Member during such period, and (b) the undistributed earnings of any Group Member to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Credit Document) or Requirement of Law applicable to such Group Member; provided that any non-cash income attributable to cancellation or early extinguishment of any Indebtedness of any Group Member shall be excluded in calculating Consolidated Net Income and Consolidated EBITDA.

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“First Scheduled Redetermination Date” shall mean (a) during the Special Borrowing Base Trigger Period, April 15, 2016  and (b) during any other Borrowing Base Trigger Period, (i) with respect to the Borrowing Base, the first June 15th occurring more than six (6) months after the Borrowing Base Trigger Event initiating such Borrowing Base Trigger Period and (ii) with respect to PV-9, the first June 15th or October 30th occurring more than six (6) months after such Borrowing Base Trigger Event.
“Permitted Refinancing Indebtedness” shall mean, with respect to any Indebtedness (the “Refinanced Indebtedness”), any Indebtedness issued or incurred in exchange for, or the net proceeds of which are used to modify, extend, refinance, renew, replace or refund (collectively to “Refinance” or a “Refinancing” or “Refinanced”), such Refinanced Indebtedness (or previous refinancing thereof constituting Permitted Refinancing Indebtedness); provided that (A) the principal amount (or accreted value, if applicable) of any such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Indebtedness outstanding immediately prior to such Refinancing except by an amount equal to the unpaid accrued interest and premium thereon plus other amounts paid and fees and expenses incurred in connection with such Refinancing plus an amount equal to any existing commitment unutilized and letters of credit undrawn thereunder, (B) if the Indebtedness being Refinanced is Indebtedness permitted by Section 10.1(g) or 10.1(h), the direct and contingent obligors with respect to such Permitted Refinancing Indebtedness are not changed (except that a Credit Party may be added as an additional obligor), (C) other than with respect to a Refinancing in respect of Indebtedness permitted pursuant to Section 10.1(f), such Permitted Refinancing Indebtedness shall have a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Refinanced Indebtedness (provided that, if the Refinancing is of any of the Existing Contingent Convertible Notes, then such Permitted Refinancing Indebtedness shall have a stated maturity and, if applicable, any mandatory call date not earlier than the date that is 91 days after the Maturity Date in effect at the time such Permitted Refinancing Indebtedness is incurred), and (D) if the Indebtedness being Refinanced is Indebtedness permitted by Section 10.1(g) or 10.1(h)), terms and conditions of any such Permitted Refinancing Indebtedness, taken as a whole (excluding terms as to interest rates, fees, floors, funding discounts and redemption or prepayment premiums), are either (A) reasonably satisfactory to the Administrative Agent or (B) either (1) not be materially more restrictive, taken as a whole, to the Borrower and its Restricted Subsidiaries, than the Loan Documents (or the Lenders receive the benefit of the more restrictive terms which, for avoidance of doubt, may be provided to them without their consent) or (2) apply after the Maturity Date; provided that a certificate of an Authorized Officer of the Borrower delivered to the Administrative Agent at least five Business Days prior to the incurrence or issuance of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the 

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Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement.
2.2    Further Amendment to Section 1.1.  Section 1.1 of the Credit Agreement is hereby amended to add thereto the following definitions:
“Borrowing Base Utilization Percentage” shall mean, as of any day, the fraction expressed as a percentage, the numerator of which is the sum of the Total Exposures of the Lenders on such day, and the denominator of which is the lesser of (a) the Total Commitment in effect on such day or (b) the Borrowing Base in effect on such day.
 “Consolidated Interest Charges” shall mean, for any Test Period, the sum of (a) all cash interest and loan fees (other than non-recurring loan fees, including without limitation administrative fees, arrangement fees, amendment fees and upfront fees) in respect of Indebtedness (including that attributable to Capital Lease Obligations) of any Group Member deducted in determining Consolidated Net Income for such period, together with all interest and loan fees (other than non-recurring loan fees, including, without limitation, administrative fees, arrangement fees, amendment fees and upfront fees) capitalized or deferred during such period and not deducted in determining Consolidated Net Income for such period but excluding amortization of interest and loan fees (other than non-recurring loan fees, including  without limitation administrative fees, arrangement fees, amendment fees and upfront fees) capitalized or deferred during an earlier period plus (b) all fees, expenses and charges in respect of letters of credit issued for the account of any Group Member deducted in determining Consolidated Net Income for such period, together with all such fees, expenses and charges in respect of letters of credit capitalized or deferred during such period and not deducted in determining Consolidated Net Income for such period, all as determined on a consolidated basis in accordance with GAAP. Revenues and expenses derived from Hedge Agreements related to interest rates or dividend rates will be treated as adjustments to interest expense for purposes of this definition.
“Existing Contingent Convertible Notes” shall mean the Borrower’s 2.75% Contingent Convertible Senior Notes due 2035, 2.50% Contingent Convertible Senior Notes due 2037 and 2.25% Contingent Convertible Senior Notes due 2038.
“First Amendment” shall mean that certain First Amendment to Credit Agreement dated as of September 30, 2015 among the Borrower, the Administrative Agent and Lenders constituting at least the Majority Lenders.
“First Amendment Effective Date” shall mean the “Effective Date,” as such term is defined in the First Amendment.

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“First Lien Secured Leverage Ratio” shall mean, as of the last day of each fiscal quarter of the Borrower, the ratio of (a) Total Exposure as of such day to (b) Consolidated EBITDA for the Test Period ending on such day.
“Interest Coverage Ratio” shall mean, as of the last day of any fiscal quarter of the Borrower, the ratio of (a) Consolidated EBITDA for the Test Period ending  on such day to (b) Consolidated Interest Charges for the Test Period ending on such day.
“Junior Debt” shall mean (a) any borrowed money Indebtedness subordinated in right of payment to the Loans and (b) during a Borrowing Base Period, (1) any borrowed money Indebtedness subordinated in right of payment to the Loans, (2) any borrowed money Indebtedness secured by a subordinate Lien on all or any part of the Collateral, and (3) any unsecured borrowed money Indebtedness. 
2.3    Amendment to Section 2.14(c)(iii).  The first sentence of Section 2.14(c)(iii) of the Credit Agreement is hereby amended to read in its entirety as follows:
(A) Any Proposed Borrowing Base that would increase the Borrowing Base then in effect must be approved or deemed to have been approved by the Borrowing Base Required Lenders, (B) any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect must be approved or be deemed to have been approved by the Required Lenders, (C) any Proposed PV-9 that would increase the PV-9 then in effect must be approved or be deemed to have been approved by the Borrowing Base Required Lenders and (D) any Proposed PV-9 that would decrease or maintain the PV-9 then in effect must be approved or be deemed to have been approved by the Required Lenders, in each case, as determined in each such Lender’s sole discretion and in good faith, consistent with each such Lender’s usual and customary oil and gas lending criteria as they exist at the particular time as provided in this Section 2.14(c)(iii).
2.4    Further Amendment to Section 2.14(c)(iii).  The fourth and fifth sentences of Section 2.14(c)(iii) of the Credit Agreement are hereby amended in their entirety to read as follows:
If, at the end of such 15-day period, the Borrowing Base Required Lenders (in the case of a Proposed Borrowing Base or PV-9 that would increase the Borrowing Base or PV-9 then in effect) or the Required Lenders (in the case of a Proposed Borrowing Base or PV-9 that would decrease or maintain the Borrowing Base or PV-9 then in effect) have approved or been deemed to have approved, as aforesaid, then the Proposed Borrowing Base or PV-9, as the case may be, shall become the new Borrowing Base or PV-9, as applicable, effective on the date specified in Section 2.14(d).  If, however, at the end of such 15-day period, the Borrowing Base Required Lenders or the Required Lenders, as applicable, have not approved or deemed to have approved, as aforesaid, a new Borrowing Base and/or PV-9, then the Administrative Agent shall promptly thereafter poll the 

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Lenders to ascertain the highest Borrowing Base or PV-9, as applicable, then acceptable to the Borrowing Base Required Lenders (in the case of any increase to the Borrowing Base or to the PV-9) or a number of Lenders sufficient to constitute the Required Lenders (in any other case) and such amount shall become the new Borrowing Base or PV-9, as applicable, effective on the date specified in Section 2.14(d).
2.5    Amendment to Section 2.14(d).  The introductory clause of Section 2.14(d) of the Credit Agreement is hereby amended to read in its entirety as follows:
After a redetermined Borrowing Base or PV-9 is approved or is deemed to have been approved by the Borrowing Base Required Lenders or the Required Lenders, as applicable, pursuant to Section 2.14(c)(iii), the Administrative Agent shall promptly thereafter notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base or PV-9, as the case may be (the “New Determination Notice”), and such amount, subject to Section 2.14(e), shall become the new Borrowing Base or PV-9, as applicable, effective and applicable to the Borrower, the Administrative Agent, the Letter of Credit Issuers and the Lenders:
2.6    Further Amendment to Section 2.14(d)  Section 2.14(d)(i)(A) of the Credit Agreement is hereby amended to read in its entirety as follows:
(A) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Sections 9.13(a) and (b) in a timely and complete manner, then (x) in the case of the Borrowing Base, on June 15th (or, in the case of the First Scheduled Redetermination Date with respect to the Special Borrowing Base Trigger Period, April 15, 2016), and (y) in the case of PV-9, on June 15th (or, in the case of the First Scheduled Redetermination Date with respect to the Special Borrowing Base Trigger Period, April 15, 2016) and October 30th following such notice, or
2.7    Amendment to Section 9.10(a).  The following sentence is hereby added to the end of Section 9.10(a) of the Credit Agreement:
Notwithstanding the foregoing and with respect only to the Special Borrowing Base Trigger Period, the Borrower will execute and deliver, or will cause to be executed and delivered, (i) within 60 days after the First Amendment Effective Date, Mortgages granting a security interest in Collateral equal to at least 60% of the value of Collateral necessary to satisfy the Collateral Requirement, and (ii) within 90 days after the First Amendment Effective Date, the remaining Mortgages necessary to satisfy the Collateral Requirement. 
2.8    Amendment to Section 9.10(c).  The first sentence of Section 9.10(c) of the Credit Agreement is hereby restated in its entirety to read as follows:
During a Borrowing Base Trigger Period, subject to any applicable limitations set forth in the Credit Documents, the Borrower will deliver to the Administrative 

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Agent for filing, registration or recording all documents and instruments, including Uniform Commercial Code or other applicable personal property and financing statements (a) required to satisfy the Collateral Requirements and (b) otherwise reasonably requested by the Administrative Agent to be filed, registered or recorded to create or continue, as applicable, the Liens intended to be created by any Security Document and perfect such Liens to the extent required by, and with the priority required by, such Security Document to the Administrative Agent and none of the Collateral shall be subject to any other pledges, security interests or mortgages, except for Liens permitted under Section 10.2.  
2.9    Amendment to Section 9.13(a).  The following sentence is hereby added to the end of Section 9.13(a) of the Credit Agreement:
Notwithstanding the foregoing and with respect only to the first Reserve Report to be delivered after the First Amendment Effective Date, the Borrower shall furnish to the Administrative Agent, on or before March 15, 2016, the May 1st Reserve Report evaluating Proved Reserves as of January 1, 2016.
2.10    Amendment to Section 10.1(s).  Section 10.1(s) of the Credit Agreement is hereby amended to read in its entirety as follows:
(s)    Indebtedness (x) secured by Liens on the Collateral subordinate to the Lien securing the Obligations  under the Security Documents, provided that (i) at the time of, and after giving pro forma effect to, the incurrence of such Indebtedness, no Default, Event of Default, or Borrowing Base Deficiency shall exist and be continuing and the Collateral Requirements shall be satisfied, (ii) to the extent the terms and documentation for such indebtedness are not substantially consistent with the corresponding Loan Documents (excluding terms as to interest rates, fees, floors, funding discounts and redemption or prepayment premiums), either (A) such terms and documentation shall be reasonably satisfactory to the Administrative Agent or (B) such terms and documentation shall either (1) not be materially more restrictive, taken as a whole, to the Borrower and its Restricted Subsidiaries, than the Loan Documents (or the Lenders receive the benefit of the more restrictive terms which, for avoidance of doubt, may be provided to them without their consent), in each case, as certified by a Responsible Officer of the Borrower in good faith or (2) apply after the applicable Maturity Date, (iii) the holders of such Indebtedness will have entered into an intercreditor agreement related to the Liens of those holders and those in favor of the Administrative Agent, reasonably acceptable to the Administrative Agent subordinating their Lien to that securing the Obligations, (iv) such Indebtedness will not have scheduled amortization and will not mature by its terms prior to 91 days after the Maturity Date in effect at the time such Indebtedness is incurred, and (v) the principal amount of such Indebtedness together with interest and fees accrued thereon, shall not exceed $2,000,000,000; provided further, that if any portion of such Indebtedness is issued after the First Scheduled Redetermination Date during the Special Borrowing Base Trigger Period, the Total Commitment shall be reduced by an amount equal to 25% of the principal amount of such Indebtedness 

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issued after such Scheduled Redetermination and secured by such subordinated Liens, and (y) secured by Liens in an amount not to exceed 10% of the Borrowing Base in effect at the time of issuance, provided that such Indebtedness is secured by Liens on Property of the Group Members that does not constitute Collateral;
2.11    Amendment to Section 10.2(t).  Section 10.2(t) of the Credit Agreement is hereby amended to read in its entirety as follows:
(t)    Liens securing any Indebtedness permitted by Sections 10.1(j) or, during a Borrowing Base Trigger Period, Section 10.1(s);
2.12    Amendment to Section 10.7.   Section 10.7(a) of the Credit Agreement is hereby amended in its entirety to read as follows:
(a)    The Borrower will not, and will not permit any Restricted Subsidiary to, optionally prepay, repurchase or redeem or otherwise defease any Permitted Additional Debt comprised of senior subordinated or subordinated Indebtedness (it being understood that payments of regularly scheduled cash interest in respect of, and payment of principal on the scheduled maturity date of such Permitted Additional Debt shall be permitted); provided, however, that the Borrower or any Restricted Subsidiary may optionally prepay, repurchase, redeem or defease any such Permitted Additional Debt (i) with the proceeds of any Permitted Refinancing Indebtedness, (ii) by converting or exchanging such Permitted Additional Debt to Stock (other than Disqualified Stock) of the Borrower, and (iii) so long as no Event of Default has occurred and is continuing or would result therefrom and the Borrower is in compliance on a Pro Forma Basis with the Financial Performance Covenants; and
2.13    Further Amendment to Section 10.7.  There is hereby added to Section 10.7 of the Credit Agreement a new Section 10.7(c), which shall read in its entirety as follows:
(c)    During any Borrowing Base Trigger Period, the foregoing Sections 10.7(a) and (b) of this Agreement shall be replaced by the following:
“(a)    The Borrower will not, and will not permit any Restricted Subsidiary to, optionally prepay, repurchase or redeem or otherwise defease any Junior Debt (it being understood that payments of regularly scheduled cash interest in respect of, and payment of principal on the scheduled maturity date of such other Indebtedness shall be permitted); provided, however, that the Borrower or any Restricted Subsidiary may optionally prepay, repurchase, redeem or defease any Junior Debt (i) with the proceeds of any Permitted Refinancing Indebtedness, (ii) by converting or exchanging such Junior Debt to Stock (other than Disqualified Stock) of the Borrower, or (iii) so long as (A) no Event of Default has occurred and is continuing or would result therefrom and (B) either (1) the Available Commitment is not less than 33% of the then-effective Loan Limit (after giving effect to such prepayment, repurchase, redemption or defeasance) or (2) both (x) the Available Commitment is not less than 10% of the 

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then-effective Loan Limit (after giving effect to such prepayment, repurchase, redemption or defeasance) and (y) the Leverage Ratio of the Borrower  (as of the date of the most recent financial statements delivered to the Administrative Agent pursuant to Section 9.1) does not exceed 4.00:1.00; and
(b)    The Borrower will not amend or modify the documentation governing any Junior Debt or the terms applicable to any of the foregoing to the extent that (i) any such amendment or modification, taken as a whole, would be adverse to the Lenders in any material respect (it being agreed that any amendment or modification of the terms with respect to any of the Existing Contingent Convertible Notes to change (1) the stated maturity thereof or any mandatory call date applicable thereto (so long as such stated maturity or mandatory call date is not sooner than the then-current Maturity Date), (2) the interest rate and/or dates of cash interest payments applicable thereto, and/or the relevant rate of exchange to Stock of the Borrower would not be adverse to the Lenders in any material respect) or (ii) the documentation governing any such Junior Debt, as so amended or modified, would not (A) be permitted to be included in the documentation governing any senior subordinated or subordinated Permitted Additional Debt or (B) permit such Indebtedness to be incurred pursuant to Section 10.1(s).”
2.14    Amendment to Section 10.11(a).  Section 10.11(a) of the Credit Agreement is hereby amended to read in its entirety as follows:
(a)    Leverage Ratio.  Other than during an Investment Grade Period or a Borrowing Base Trigger Period, the Borrower will not permit its Leverage Ratio to exceed 4.00:1.00.
2.15    Further Amendment to Section 10.11.  There is hereby added to Section 10.11 of the Credit Agreement a new Section 10.11(c), which shall read in its entirety as follows:
(c)    Borrowing Base Trigger Period Covenants.  During a Borrowing Base Trigger Period (beginning with the fiscal quarter ending September 30, 2015), the Borrower will not permit, 
(i)    its First Lien Secured Leverage Ratio to exceed (A) 3.50:1.00 for any Test Period ending on or before December 31, 2017 or (B) 3.00:1.00 for any Test Period ending thereafter; or
(ii)    its Interest Coverage Ratio to be less than (A) 1.10:1.00 for any Test Period ending on or before  March 31, 2017; (B) 1.15:1.00 for the Test Period ending June 30, 2017; (C) 1.20:1.00 for the Test Period ending September 30, 2017, or (C) 1.25:1.00 for any Test Period ending December 31, 2017 or later.
2.16    Amendment to Section 13.18(b). Section 13.18(b) of the Credit Agreement is hereby amended to read in its entirety as follows:

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(b)    At any time during a Borrowing Base Trigger Period (other than the Special Borrowing Base Trigger Period), as long as no Borrowing Base Trigger Event has occurred and is continuing, the Borrower may provide notice to the Administrative Agent of its election to exit such Borrowing Base Trigger Period and enter into an Unsecured Period together with a certificate of an Authorized Officer of the Borrower confirming that (A) no Event of Default exists and (B) no Borrowing Base Trigger Event has occurred and is continuing.

Section 3.  Conditional Amendments to Credit Agreement.  The amendments to the Credit Agreement set forth in this Section 3 shall be effective if, and only if, by no later than 5:00 pm, Central Time, on October 9, 2015, the Administrative Agent shall have received duly executed counterparts (in such number as may be requested by the Administrative Agent) of this Agreement from all Lenders.
3.1    Amendment to Section 1.1.  The following defined terms set forth in Section 1.1 of the Credit Agreement are hereby amended in their entirety to read as follows: 
“Collateral” shall have the meaning provided for such term in each of the Security Documents; provided that with respect to any Mortgages, “Collateral”, as defined herein, shall include “Mortgaged Property” as defined therein and the rights and interest of each Loan Party in Hedge Agreements giving rise to Lender Hedging Obligations.
“Obligations” shall mean (a) all advances to, and debts, liabilities, obligations, covenants and duties of, any Credit Party arising under any Credit Document or otherwise with respect to any Loan, any Swingline Loan, or any Letter of Credit (including any Unpaid Drawings), in each case, entered into with the Borrower or any other Credit Party, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof in any proceeding under any bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and (b) the Lender Hedging Obligations.  Without limiting the generality of the foregoing, the Obligations of the Credit Parties under the Credit Documents include the obligation (including Guarantee Obligations) to pay principal, interest, charges, expenses, fees, attorney costs, indemnities and other amounts payable by any Credit Party under any Credit Document.  Notwithstanding the foregoing, (a) the obligations of the Borrower or any Restricted Subsidiary under any Hedge Agreement giving rise to Lender Hedging Obligations shall be secured and guaranteed pursuant to the Security Documents and the Guarantee only to the extent that, and for so long as, the other Obligations are so secured and guaranteed, (b) any release of Collateral or Guarantors effected in the manner permitted by this Agreement and the other Credit Documents shall not require the consent of the holders of Lender Hedge Obligations unless otherwise specifically set forth herein and (c) solely with respect to any Guarantor that is not an “eligible contract participant” under the 

12

10-Q Document

Commodity Exchange Act, Excluded Hedge Obligations of such Credit Party shall in any event be excluded from “Obligations” owing by such Credit Party.
“Secured Parties” shall mean, collectively, (a) the Administrative Agent, (b) the Letter of Credit Issuers, (c) each Lender, each sub-agent pursuant to Article XII appointed by the Administrative Agent with respect to matters relating to the Credit Documents and (d) each Hedge Bank with respect to their respective Lender Hedging Obligations. 
3.2    Further Amendment to Section 1.1.  Section 1.1 of the Credit Agreement is hereby amended to add thereto the following definitions:
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute, and any regulations promulgated thereunder. 
“Excluded Hedge Obligation” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Guarantor with respect to, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof or other agreement or undertaking agreeing to guarantee, repay, indemnify or otherwise be liable therefor) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee obligation or other liability of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation or (b) in the case of a Swap Obligation subject to a clearing requirement pursuant to section 2(h) of the Commodity Exchange Act (or any successor provision thereto), because such Guarantor is a “financial entity,” as defined in section 2(h)(7)(C)(i) of the Commodity Exchange Act (or any successor provision thereto), at the time the guarantee obligation or other liability of such Guarantor becomes or would become effective with respect to such related Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee obligation or other liability or security interest is or becomes illegal.
“Hedge Bank” shall mean any Person (other than the Borrower or any of its Subsidiaries) that (a) at the time it enters into a Hedge Agreement is a Lender, the Administrative Agent or an Affiliate of a Lender or the Administrative Agent or (b) at any time after it enters into a Hedge Agreement, it becomes a Lender, the Administrative Agent or an Affiliate of a Lender or the Administrative Agent.
“Lender Hedging Obligations” shall mean obligations under any Hedge Agreement which (a)  are permitted by this Agreement between a Group Member 

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10-Q Document

and a Hedge Bank, and (b) specifies that the obligations of such Group Member are secured by the Security Documents.  In no event shall any obligation under any Hedge Agreement subject to the Secured Hedge Facility be considered a Lender Hedging Obligation.
“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
3.3    Amendment to Article XI.  The final paragraph of Article XI of the Credit Agreement is hereby amended to read in its entirety as follows:
Any amount received by the Administrative Agent from any Credit Party (or from proceeds of any Collateral) following any acceleration of the Obligations under this Agreement or any Event of Default with respect to the Borrower under Section 11.5 shall be applied:
(i)    first, to payment or reimbursement of that portion of the Obligations constituting fees, expenses and indemnities payable to the Administrative Agent in its capacity as such;
(ii)    second, to the Secured Parties, an amount equal to all Obligations due and owing to them on the date of distribution and, if such moneys shall be insufficient to pay such amounts in full, then ratably (without priority of any one over any other) to such Secured Parties in proportion to the unpaid amount thereof; and
(iii)    third, pro rata to any other Obligations then due and owing; and
(iv)    fourth, any surplus then remaining, after all of the Obligations then due shall have been paid in full in cash, shall be paid to the Borrower or its successors or assigns or to whomever may be lawfully entitled to receive the same or as a court of competent jurisdiction may award.
3.4    Amendment to Section 13.17(b).  Section 13.17(b) of the Credit Agreement is hereby amended to read in its entirety as follows:
(b)    Notwithstanding anything to the contrary contained herein or any other Credit Document, when all Obligations (other than Lender Hedging Obligations and indemnification and other contingent obligations for which no claim has been asserted at the relevant time of determination) have been paid in full, all Commitments have terminated or expired and no Letter of Credit shall be outstanding that is not Cash Collateralized or otherwise back-stopped pursuant to arrangements satisfactory to the applicable Letter of Credit Issuer and the Administrative Agent (such time, “Facility Termination”), all security interests and Liens in all Collateral and all obligations under all the Credit Documents shall be automatically released and discharged (whether or not on the date of such 

14

10-Q Document

release there may be any (i) Lender Hedge Obligations or (ii) any contingent or indemnification obligations not then due), and the Administrative Agent shall (without notice to, or vote or consent of, any Secured Party) take such actions as shall be required, advisable or reasonably requested by the Borrower to evidence or otherwise more fully effect the foregoing, provided, however, that such Obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.
3.5    Amendment to Article XIII.  A new Section 13.23 is hereby added to  the Credit Agreement to read as follows:
13.23.  Collateral Matters; Hedge Agreements.  The benefit of the Security Documents and of the provisions of this Agreement relating to any Collateral securing the Obligations shall also extend to and be available on a pro rata basis to any Hedge Bank under any Hedge Agreement giving rise to Lender Hedging Obligations, in each case, after giving effect to all netting arrangements relating to such Hedge Agreements; provided that, with respect to any Hedge Agreement that remains secured after the Hedge Bank thereto is no longer a Lender or an Affiliate of a Lender, the provisions of Article XII shall also continue to apply to such Hedge Bank in consideration of its benefits hereunder and each such Hedge Bank shall, if requested by the Administrative Agent, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to evidence the continued applicability of the provisions of Article XII.  No Person shall have any voting rights under any Credit Document solely as a result of the existence of Lender Hedging Obligations.

Section 4.  Effectiveness.  This Amendment shall become effective on the first date on which each of the conditions set forth in this Section 4 is satisfied (the “Effective Date”):
4.1    The Administrative Agent shall have received duly executed counterparts (in such number as may be requested by the Administrative Agent) of this Amendment from (a) the Borrower, (b) each Guarantor, (c) the Administrative Agent, and (d) Lenders constituting at least the Majority Lenders.
4.2    The Administrative Agent shall have received all documents the Administrative Agent may have reasonably requested prior to the Effective Date relating to the existence of the Borrower, the corporate authority for and the validity of this Amendment and the Credit Agreement as amended thereby, and any other matters relevant thereto.
4.3    The Administrative Agent and the Majority Lenders shall have received customary closing certificates (including good standing certificates).

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10-Q Document

4.4    The Borrower shall have paid (including an authorization by the Borrower to debit an account with the Administrative Agent), no later than the Effective Date, (a) to the Administrative Agent for each Lender executing and delivering this Amendment on or before 5:00 pm, Central Time, on September 30, 2015, a fee equal to 0.15% of such Lender’s Commitment; (b) to the Administrative Agent for each Lender executing and delivering this  Amendment thereafter, but before both (1) 5:00 pm, Central Time, on October 2, 2015 and (2) the Effective Date, a fee equal to 0.10% of such Lender’s Commitment, and (c) all fees of the Administrative Agent and other amounts due and payable on or before the Effective Date to the extent invoiced, including all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.  If any Lender executes and delivers this Amendment after the Effective Date but on or before 5:00 pm, Central Time, on October 2, 2015, the Borrower shall promptly pay to the Administrative Agent, for the account of such Lender, the fee that would have been payable to such Lender if it had executed and delivered this Amendment before the Effective Date. 
4.5    No Default or Event of Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of this Amendment. 
4.6    All representations and warranties made by any Credit Party in the Credit Agreement or in the other Credit Documents are, to the knowledge of the Borrower, true and correct in all material respects (unless such representations and warranties are already qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) with the same effect as though such representations and warranties had been made on and as of the date hereof (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (unless such representations and warranties are already qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) as of such earlier date).
Section 5.  Miscellaneous.  
5.1    (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in each other Credit Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended or otherwise modified by this Amendment; (b) the execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any default of the Borrower or any right, power or remedy of the Administrative Agent or the Lenders under any of the Credit Documents, nor constitute a waiver of any provision of any of the Credit Documents; (c) this Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart; and (d) delivery of an executed counterpart of a signature page to this Amendment by telecopier or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.

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5.2    Neither the execution by the Administrative Agent or the Lenders of this Amendment, nor any other act or omission by the Administrative Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the Lenders of any defaults which may exist or which may occur in the future under the Credit Agreement and/or the other Credit Documents, or any future defaults of the same provision waived hereunder (collectively “Violations”).  Similarly, nothing contained in this Amendment shall directly or indirectly in any way whatsoever either: (a) impair, prejudice or otherwise adversely affect the Administrative Agent’s or the Lenders’ right at any time to exercise any right, privilege or remedy in connection with the Credit Documents with respect to any Violations; (b) amend or alter any provision of the Credit Agreement, the other Credit Documents, or any other contract or instrument; or (c) constitute any course of dealing or other basis for altering any obligation of the Borrower or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the other Credit Documents, or any other contract or instrument.  Nothing in this letter shall be construed to be a consent by the Administrative Agent or the Lenders to any Violations.
5.3    The Borrower and each Guarantor hereby (a) acknowledges the terms of this Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Credit Document to which it is a party and agrees that each Credit Document to which it is a party remains in full force and effect, except as expressly amended or modified hereby; and (c) represents and warrants to the Lenders that as of the Effective Date, after giving effect to the terms of this Amendment:  (i) all of the representations and warranties contained in each Credit Document to which it is a party are true and correct in all material respects (unless already qualified by materiality in which case such applicable representation and warranty shall be true and correct), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (unless already qualified by materiality in which case such applicable representation and warranty shall be true and correct) as of such specified earlier date, and (ii) no Default or Event of Default has occurred and is continuing.
5.4    This Amendment is a Credit Document as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Credit Documents shall apply hereto.
5.5    THE CREDIT DOCUMENTS, INCLUDING THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT AMONG 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 BETWEEN THE PARTIES.
5.6    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Signature Pages Follow]

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10-Q Document

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their officers thereunto duly authorized as of the date first above written.
	
						
	BORROWER:
	 
	 
	CHESAPEAKE ENERGY CORPORATION
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ Caleb G. Morgret
	 

	 
	 
	 
	Name:
	Caleb G. Morgret
	 

	 
	 
	 
	Title:
	Vice President and Treasurer
	 

	 
	 
	 
	 
	 
	 

	
						
	GUARANTORS:
	 
	 
	CHESAPEAKE LOUISIANA, L.P.
	 

	 
	 
	 
	By: CHESAPEAKE OPERATING, L.L.C., its general partner
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ Caleb G. Morgret
	 

	 
	 
	 
	Name:
	Caleb G. Morgret
	 

	 
	 
	 
	Title:
	Vice President and Treasurer
	 

	 
	 
	 
	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
				
	 
	 
	 
	 

	 
	 
	CHESAPEAKE EXPLORATION, L.L.C.
CHESAPEAKE APPALACHIA, L.L.C. 
CHESAPEAKE E&P HOLDING CORPORATION
CHESAPEAKE ENERGY LOUISIANA CORPORATION
CHESAPEAKE NG VENTURES CORPORATION
CHK ENERGY HOLDINGS, INC. 
SPARKS DRIVE SWD, INC.
WINTER MOON ENERGY CORPORATION
CHESAPEAKE AEZ EXPLORATION, L.L.C.
CHESAPEAKE-CLEMENTS ACQUISITION, L.L.C.
CHESAPEAKE ENERGY MARKETING, L.L.C.
CHESAPEAKE LAND DEVELOPMENT COMPANY, L.L.C.
CHESAPEAKE OPERATING, L.L.C.
CHESAPEAKE PLAZA, L.L.C.
CHESAPEAKE ROYALTY, L.L.C.
CHESAPEAKE VRT, L.L.C.
CHK-MAC, L.L.C.
CHK UTICA PREFERRED HOLDINGS, L.L.C.
COMPASS MANUFACTURING, L.L.C.
EMLP, L.L.C., on behalf of itself and as general partner in
     EMPRESS LOUISIANA PROPERTIES, L.P.
EMPRESS, L.L.C.
GSF, L.L.C.
MC LOUISIANA MINERALS, L.L.C.
MC MINERAL COMPANY, L.L.C.
MIDCON COMPRESSION, L.L.C.
NOMAC SERVICES, L.L.C.
NORTHERN MICHIGAN EXPLORATION COMPANY,
     L.L.C.
ARKANSAS MIDSTREAM GAS SERVICES CORP.
AMGS, L.L.C.
CHESAPEAKE MIDSTREAM DEVELOPMENT, L.L.C.
CHESAPEAKE MIDSTREAM HOLDINGS, L.L.C.
CHESAPEAKE MIDSTREAM MANAGEMENT, L.L.C.
CHESAPEAKE WEST TEXAS GATHERING, L.L.C.
CHK UTICA, L.L.C.

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Caleb G. Morgret

	 
	 
	Name:
	Caleb G. Morgret

	 
	 
	Title:
	Vice President and Treasurer

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	MUFG UNION BANK, N.A.,
as Administrative Agent and Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Haylee Edwards

	 
	Name:
	Haylee Edwards

	 
	Title:
	Vice President

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	THE BANK OF TOKYO-MITSUBISHI
UFJ, LTD., as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Carl Stutzman

	 
	Name:
	Carl Stutzman

	 
	Title:
	Managing Director

	 
	 
	Group Head

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	WELLS FARGO BANK NATIONAL
ASSOCIATION, as Co-Syndication Agent,
Letter of Credit Issuer, Swingline Lender and
Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Michael A. Tribolet

	 
	Name:
	Michael A. Tribolet

	 
	Title:
	Managing Director

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	CRÉDIT AGRICOLE CORPORATE AND
INVESTMENT BANK, as Documentation
Agent, Letter of Credit Issuer and Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Sharada Manne

	 
	Name:
	Sharada Manne

	 
	Title:
	Managing Director

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Michael Willis

	 
	Name:
	Michael Willis

	 
	Title:
	Managing Director

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	BANK OF AMERICA, N.A., as Co-
Documentation Agent, Letter of Credit Issuer
and Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Bryan Heller

	 
	Name:
	Bryan Heller

	 
	Title:
	Director

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	JPMORGAN CHASE BANK, N.A., as Co-
Documentation Agent, Letter of Credit Issuer
and Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Muhammad Hasan

	 
	Name:
	Muhammad Hasan

	 
	Title:
	Vice President

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	CITIBANK, N.A., as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Saqeeb Ludhi

	 
	Name:
	Saqeeb Ludhi

	 
	Title:
	Vice President

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	DEUTSCHE BANK AG NEW YORK
BRANCH, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Kirk L. Tashjian

	 
	Name:
	Kirk L. Tashjian

	 
	Title:
	Director

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Keith C. Braun

	 
	Name:
	Keith C. Braun

	 
	Title:
	Managing Director

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	DNB CAPITAL LLC, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Asulv Tveit

	 
	Name:
	Asulv Tveit

	 
	Title:
	First Vice President

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Joe Hykle

	 
	Name:
	Joe Hykle

	 
	Title:
	Senior Vice President

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	GOLDMAN SACHS BANK USA, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Michelle Latzoni

	 
	Name:
	Michelle Latzoni

	 
	Title:
	Authorized Signatory

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	MORGAN STANLEY BANK, N.A., as
Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Dmitriy Barskiy

	 
	Name:
	Dmitriy Barskiy

	 
	Title:
	Authorized Signatory

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	BARCLAYS BANK PLC, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Luke Syme

	 
	Name:
	Luke Syme

	 
	Title:
	Assistant Vice President

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	EXPORT DEVELOPMENT CANADA, as
Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Trevor Mulligan

	 
	Name:
	Trevor Mulligan

	 
	Title:
	Asset Manager

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Victor Samuel

	 
	Name:
	Victor Samuel

	 
	Title:
	Asset Manager

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	NATIXIS, NEW YORK BRANCH, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Stuart Murray

	 
	Name:
	Stuart Murray

	 
	Title:
	Managing Director

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Mary Lou Allen

	 
	Name:
	Mary Lou Allen

	 
	Title:
	Director

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	MIZUHO BANK, LTD., as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Leon Mo

	 
	Name:
	Leon Mo

	 
	Title:
	Authorized Signatory

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	BNP Paribas, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Ann Rhoads

	 
	Name:
	Ann Rhoads

	 
	Title:
	Managing Director

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Sriram Chandrasekaran

	 
	Name:
	Sriram Chandrasekaran

	 
	Title:
	Director

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	COMPASS BANK, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Kathleen J. Bowen

	 
	Name:
	Kathleen J. Bowen

	 
	Title:
	Managing Director

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	THE BANK OF NOVA SCOTIA, as Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Alan Dawson

	 
	Name:
	Alan Dawson

	 
	Title:
	Director

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First Amendment

10-Q Document

	
			
	 
	U.S. BANK NATIONAL ASSOCIATION, as
Lender

	 
	 
	 

	 
	 
	 

	 
	By:
	/s/ Bruce E. Hernandez

	 
	Name:
	Bruce E. Hernandez

	 
	Title:
	Senior Vice President

	 
	 
	 

Signature Page
CHESAPEAKE ENERGY CORPORATION - First AmendmentExhibit 10.1

 

October 29, 2015

 

Dear Nancy:

 

Welcome to the Bon-Ton team! The details of your offer as we discussed
are included below. In your position as EVP, Chief Financial Officer you will report directly to Kathy Bufano, President &
Chief Executive Officer.

 

In recognition of your responsibilities, your base salary will be
$500,000 annually, paid according to the established bi-weekly payroll calendar.

 

Your start date to be November 9, 2015.

 

Performance Incentive Program

You will be eligible to participate in the Cash Bonus Program, beginning
in Fiscal 2016.

 

Your target bonus is 75% of base salary, a threshold of 37.5%, and
a maximum of 150% for achievement of pre-determined objectives. The objectives for your position as currently defined are 70% Company
adjusted EBITDA to plan and 30% on Company sales dollars to plan. Payouts at threshold or above are made upon the achievement of
the minimum company Net Income threshold, as well as the achievement of your individual metrics.

 

In consideration of your inability to participate in the program
for 2015, you will be provided the following: A one-time payment of $100,000, net of all applicable taxes, will be paid at the
first pay period after your start date and another $100,000, net of all applicable taxes, paid at the time of our normal bonus
program payout on or about April 15, 2016. If you terminate your employment on your own accord, are terminated for cause, or do
not initiate your relocation within two years of your start date, you will be responsible for reimbursing Bon-Ton on a pro-rated
basis for the lump sum payments indicated.

 

Each year the metrics and payouts are evaluated and approved by
the Human Resource Compensation Committee (HRCC) of the Board of Directors.

 

Long-Term Incentive

Upon hire, you will be awarded
175,000 shares of restricted stock with a three-year cliff vest. These are time based, not performance based. As this award is
higher than our original offer, the additional shares are in lieu of any awards that would have been made in 2016 for the 2015
performance period.

 

Should your employment be involuntarily
terminated not for cause, the Restricted Stock shall vest as follows: if occurs prior to the first anniversary of the Date of Grant,
the Restricted Stock shall vest one-third on the first anniversary of the Date of Grant, one-third on the second anniversary of
the Date of Grant and the remainder on the third anniversary of the Date of Grant; if occurs after the first anniversary of the
Date of Grant and before the second anniversary of the Date of Grant, the Restricted Stock shall vest two-thirds on the second
anniversary of the Date of Grant and the remainder on the third anniversary of the Date of Grant; and if occurs after the second
anniversary of the Date of Grant and before the third anniversary of the Date of Grant, the Restricted Stock shall vest on the
third anniversary of the Date of Grant. 

 

     

     

    

In order to align the interest of our executives with the interests
of our shareholders, Executive Vice Presidents of the Company are required to hold one times the base salary value in Company stock.
The value is based on the Bon-Ton’s average daily closing common stock price as determined by the HRCC. An executive has
five year in which to meet these guidelines.

 

Your compensation is reviewed annually. At that time, you will be
considered for long-term incentives in the form of Restricted Stock Units (time-based) and Performance shares. Traditionally, the
Restricted Stock units (time-based) have a three-year cliff vest. Each year the metrics and payouts are evaluated and approved
by the Human Resource Compensation Committee (HRCC) of the Board of Directors. For 2015, performance shares are based 100% on the
Company cumulative adjusted EBITDA to plan for the three-year period of fiscal 2015-2017, net of all incentive payments. The lowest
payout level for 2015 is set at 25% of target for achievement of 95.9% of plan. The maximum payout is 150% of target. Any payment
above target requires a positive shareholder return (TSR.) As previously noted, you will not be eligible for any long-term incentives
for the 2015 performance period and awarded in 2016.

 

Commuting & Relocation Expenses

Expenses defined as commuting by our Tax department will be reimbursed
up to $40,000 for approximately a nine month period. This period of time will be defined as your commuting period. Commuting expenses
are expected to be airfare to and from home to place of business, apartment or hotel in Milwaukee and/or York, and transportation
while in Milwaukee and/or York. This will not include meals. Commuting expense are defined by the IRS as taxable income. You will
be responsible for all taxes as it applies to your commuting expenses. At the end of your commuting period, we anticipate that
you will relocate to Milwaukee, with the understanding that it may take a period of time to sell your current residence.

 

We will pay for the costs associated with the sale of your current
home, purchase of new home, and relocation of household items per our relocation policy within the next 12 months unless agreed
upon otherwise. You will be provided a $12,000 lump sum, to cover temporary housing, home finding, and incidental expenses. This
amount will be grossed up to cover any applicable taxes. Any further payout, including duplicate housing expenses will be reviewed
by Human Resources and approved based on pro-active marketing of your home.

 

If you terminate your employment on your own accord, are terminated
for cause, or do not initiate your relocation within two years of your start date, you will be responsible for reimbursing Bon-Ton
on a pro-rated basis for any relocation expenses plus gross-up paid or reimbursed on your behalf, including the relocation lump
sum indicated. To initiate your relocation, you will be required to sign a Repayment Agreement which will detail the repayment
schedule.

 

     

     

    

Performance Appraisals

Performance Appraisals are conducted annually and based on results
for the previous fiscal year. You will not be eligible for a performance review and merit increase for your 2015 performance in
May 2016.

 

Benefits

You will be eligible to participate in our medical/prescription,
dental, vision, supplemental life, long-term disability, and group legal plans on the 1st day after your 90th
day of employment.

 

In order to assist in your transition to the Company sponsored medical,
vision, and dental programs, we will provide you reimbursement in the form of a lump sum for the difference between your current
insurance payments and the Bon-Ton medical premium, until otherwise qualified under the Bon-Ton plan.

 

Vacation

You will be eligible for 2 weeks of vacation in 2015. Effective
in 2016 and forward you will be eligible for 5 weeks of vacation. Because these exceptions are made on a case by case basis, we
ask you to treat this exception as confidential.

 

Executive Severance Plan

If your employment is terminated without cause, you will be provided
one year of severance net of any pay from another employer, and a COBRA stipend, until otherwise qualified for health insurance
by another employer, in exchange for the execution of the Non-Compete/Non-Solicitation agreement and a release of waiver and claims,
as currently defined by our Executive Severance Plan. Please find enclosed a copy of these agreements for your review.

 

Acceptance

Please review this offer and the information provided; sign, date,
and return one copy of the letter to me. We look forward to your future success on the Bon Ton team!

 

	 	Sincerely,
	 	THE BONwTON STORES, INC.
	 	 
	 	/s/ Denise M. Domian
	 	Denise M. Domian

SVP, Human Resources

 

 

 

 

ACKNOWLEDGEMENT:

Please return a signed and dated copy of this letter to me.

 

 

	/s/ Nancy A. Walsh	 
	Nancy A. Walsh	Date: October 29, 2015

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