Document:

Exhibit

Exhibit 10.2
Execution Version

FIRST AMENDMENT TO SENIOR SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

This First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement (this “Agreement”) dated as of September 15, 2020, 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 and collateral agent for the Lenders (in such capacity, together with its successors and assigns, the “Agent”).
RECITALS
A.    The Borrower, the 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 Senior Secured Super-Priority Debtor-in-Possession Credit Agreement dated as of July 1, 2020 (as amended, restated, modified and supplemented from time to time, the “DIP Credit Agreement”).
B.    The Borrower has requested, and the Majority Lenders have agreed, to amend certain provisions of the DIP Credit Agreement on the terms and conditions set forth herein as provided in this Agreement.
C.    NOW, THEREFORE, to induce the Agent and the Lenders to enter into this Agreement 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. Each capitalized term which is defined in the DIP Credit Agreement but which is not defined in this Agreement, shall have the meaning assigned to such term in the DIP Credit Agreement. Unless otherwise indicated, all section references in this Agreement refer to sections of the DIP Credit Agreement.
Section 2.    Amendments to DIP Credit Agreement.
2.1    Amendments of Section 1.1. Section 1.1 of the DIP Credit Agreement is hereby amended by inserting the below new defined terms in correct alphabetical order:
““Forecasted Production” means, for any month of determination, the projected production for such month in respect of (i) crude oil and (ii) natural gas and natural gas liquids (for purposes of this clause (ii) only, taken together), in each case as set forth in the Forecasted Production Report most recently delivered pursuant to Section 9.12(d).”
““Forecasted Production Hedge Agreements” shall have the meaning provided in Section 10.10.”
““Forecasted Production Report” means a report certified by an Authorized Officer of the Borrower and in form and substance reasonably satisfactory to the Agent, setting forth, on a monthly basis for the eighteen (18) month period beginning on the date of 

delivery of such Forecasted Production Report, the reasonably anticipated projected production for each such month from Debtors’ Oil and Gas Properties in respect of (i) crude oil and (ii) natural gas and natural gas liquids (for purposes of this clause (ii) only, taken together), in each case as determined by the Borrower based on the Borrower’s internal engineering reports and as otherwise reasonably satisfactory to the Agent.” 
““Test Quarter” shall have the meaning provided in Section 10.10.”
2.2    Amendment of Section 9.12. Section 9.12 of the DIP Credit Agreement is hereby amended by inserting a new clause (d) as follows:
“(d) Prior to any Debtor entering into any Forecasted Production Hedge Agreement and thereafter contemporaneously with the delivery of each Hedge Schedule, the Borrower shall furnish to the Agent a Forecasted Production Report.”
2.3    Amendment of Section 10.10. Section 10.10 of the DIP Credit Agreement is hereby amended by inserting the following new paragraphs after the existing paragraph in Section 10.10 of the DIP Credit Agreement:
“Notwithstanding the foregoing, the Debtors will be permitted to enter into additional non-speculative Hedge Agreements with Hedge Banks to hedge or manage any of the risks related to Forecasted Production (such Hedge Agreements, “Forecasted Production Hedge Agreements”) so long as, at the time such Forecasted Production Hedge Agreement is entered into (1) such Forecasted Production Hedge Agreement relates only to the eighteen (18) calendar months covered by the most recently delivered Forecasted Production Report and (2) the notional volumes of Hydrocarbons subject to such Forecasted Production Hedge Agreement (when aggregated with all other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) shall not exceed the lesser of (x) 80% of the Forecasted Production for such month (calculated separately for (i) crude oil and (ii) natural gas and natural gas liquids (for purposes of this clause (ii) only, taken together)) as set forth in the most recently delivered Forecasted Production Report and (y) 80% of the reasonably anticipated projected monthly production from Oil and Gas Properties which are classified as Proved Reserves (calculated separately for (i) crude oil and (ii) natural gas and natural gas liquids (for purposes of this clause (ii) only, taken together)) based on the most recent Reserve Report delivered by the Borrower to the Agent in accordance with Section 9.12.
If, after the end of any calendar quarter (the “Test Quarter”), the Borrower determines that the aggregate volume of all commodity Hedge Agreements (other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) for which settlement payments were calculated during such Test Quarter exceeded the actual production of Hydrocarbons in such quarter, then the Borrower shall, within thirty (30) days of such determination, terminate, create off-setting positions or otherwise unwind existing Hedge Agreements (other than basis differential swaps) such that, at such time, future hedging volumes will not exceed, on a quarterly basis, the volume limitations imposed in Section 10.10 above for each subsequent quarterly period after the Test Quarter.”

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Section 3.    Effectiveness. 
3.1    This Agreement shall become effective on the date on which each of the  conditions set forth in this Section 3.1 are satisfied (the “Effective Date”):
(i)The Agent shall have received duly executed counterparts (in such number as may be requested by the Agent) of this Agreement from (a) the Borrower, (b) each Guarantor, (c) the Agent, and (d) Lenders constituting at least the Majority Lenders.
(ii)No Default or Event of Default shall have occurred and be continuing as of the date hereof, immediately before and after giving effect to the terms of this Agreement.
(iii)All representations and warranties made by any Debtor in the DIP Credit Agreement or in the other Credit Documents are, to the knowledge of an Authorized Officer 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).
(iv)The Bankruptcy Court shall have entered an order or orders approving this Agreement, which such orders shall be in form and substance satisfactory to the Agent and shall be in full force and effect.
Section 4.    Miscellaneous.
4.1    (a) On and after the effectiveness of this Agreement, each reference in the DIP Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the DIP Credit Agreement, and each reference in each other Credit Document to “the DIP Credit Agreement”, “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the DIP Credit Agreement, shall mean and be a reference to the DIP Credit Agreement as amended or otherwise modified by this Agreement; (b) the execution, delivery and effectiveness of this Agreement 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 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 Agreement 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 Agreement by telecopier or electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

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4.2    Neither the execution by the Agent or the Lenders of this Agreement, nor any other act or omission by the Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Agent or the Lenders of any defaults which may exist or which may occur in the future under the DIP Credit Agreement and/or the other Credit Documents (collectively “Violations”). Similarly, nothing contained in this Agreement shall directly or indirectly in any way whatsoever either: (a) impair, prejudice or otherwise adversely affect the 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 DIP Credit Agreement, the other Credit Documents, or any other contract or instrument except as expressly set forth in Section 2; 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 Agent or the Lenders under the DIP 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 Agent or the Lenders to any Violations.
4.3    Each Credit Party hereby acknowledges the terms of this Agreement and represents and warrants to the Lenders that as of the Effective Date, after giving effect to the terms of this Agreement: (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.
4.4    Each Credit Party hereby (in each case after giving effect to this Agreement) (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, and, in the case of any such Credit Party, each grant of security interests and liens in favor of the Agent, any Lender or any other Secured Party, as the case may be, under each Credit Document to which it is a party, (ii) in the case of any such Credit Party, agrees and acknowledges that the Liens in favor of Agent or any Secured Party under each Credit Document to which it is party constitute valid, binding, enforceable and perfected first priority liens and security interests (subject only to Permitted Liens) securing the Obligations and are not subject to avoidance, disallowance or subordination pursuant to any applicable law except as may be agreed in writing by the Agent, (iii) agrees and acknowledges that the Obligations constitute legal, valid and binding obligations of such Credit Party, and (iv) agrees that such ratification and reaffirmation is not a condition to the continued effectiveness of the Credit Documents. Each Credit Party acknowledges and agrees that any of the Credit Documents to which it is party or is otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Agreement.
4.5    This Agreement is a Credit Document as defined and described in the DIP Credit Agreement and all of the terms and provisions of the DIP Credit Agreement relating to Credit Documents shall apply hereto.
4.6    THE CREDIT DOCUMENTS, INCLUDING THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED 

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BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
4.7    THIS AGREEMENT 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 AND (TO THE EXTENT APPLICABLE) THE BANKRUPTCY CODE.

[Signature Pages Follow.]

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

	 
	 
	 
	 
	 

	 
	 
	CHESAPEAKE ENERGY CORPORATION
as a debtor and debtor-in-possession

	 
	 
	 
	 

	 
	 
	By:
	 
	/s/ Domenic J. Dell'Osso, Jr.

	 
	 
	Name:
	 
	Domenic J. Dell'Osso, Jr.

	 
	 
	Title:
	 
	Executive Vice-President and Chief Financial Officer

[Signature Page - First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement]

	
				
	 
	GUARANTORS:

	 
	CHESAPEAKE AEZ EXPLORATION, L.L.C.
CHESAPEAKE APPALACHIA, L.L.C.
CHESAPEAKE E&P HOLDING, L.L.C.
CHESAPEAKE ENERGY LOUISIANA, LLC
CHESAPEAKE ENERGY MARKETING, L.L.C.
CHESAPEAKE EXPLORATION, L.L.C.
CHESAPEAKE LAND DEVELOPMENT COMPANY, L.L.C.
CHESAPEAKE MIDSTREAM DEVELOPMENT, L.L.C.
CHESAPEAKE NG VENTURES CORPORATION
CHESAPEAKE OPERATING, L.L.C., on behalf of itself and as general partner of 
CHESAPEAKE LOUISIANA, L.P.
CHESAPEAKE PLAINS, LLC
CHESAPEAKE ROYALTY, L.L.C.
CHESAPEAKE VRT, L.L.C.
CHESAPEAKE-CLEMENTS ACQUISITION, L.L.C.
CHK ENERGY HOLDINGS, INC.
CHK NGV LEASING COMPANY, L.L.C.
CHK UTICA, L.L.C.
COMPASS MANUFACTURING, L.L.C.
EMLP, L.L.C., on behalf of itself and as the general partner of
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.
SPARKS DRIVE SWD, INC.
WINTER MOON ENERGY CORPORATION
BRAZOS VALLEY LONGHORN FINANCE CORP.
BRAZOS VALLEY LONGHORN, L.L.C.
BURLESON SAND LLC
BURLESON WATER RESOURCES, LLC
ESQUISTO RESOURCES II, LLC
PETROMAX E&P BURLESON, LLC
WHE ACQCO., LLC
WHR EAGLE FORD LLC
WILDHORSE RESOURCES II, LLC
WILDHORSE RESOURCES MANAGEMENT COMPANY, LLC,
each as a debtor and debtor-in-possession 

	 
	 
	 
	 

	 
	By:
	 
	/s/ Domenic J. Dell'Osso, Jr.

	 
	Name:
	 
	Domenic J. Dell'Osso, Jr.

	 
	Title:
	 
	Executive Vice President and Chief Financial Officer

[Signature Page - First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement]

	
				
	 
	 
	 
	 

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

	 
	 
	 

	 
	By:
	 
	/s/ David Helffrich

	 
	Name:
	 
	David Helffrich

	 
	Title:
	 
	Director

	
				
	 
	 
	 
	 

	 
	WELLS FARGO BANK NATIONAL ASSOCIATION, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Brett Steele

	 
	Name:
	 
	Brett Steele

	 
	Title:
	 
	Director

	
				
	 
	 
	 
	 

	 
	JPMORGAN CHASE BANK, N.A., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Arina Mavilian

	 
	Name:
	 
	Arina Mavilian

	 
	Title:
	 
	Authorized Signatory

	
				
	 
	 
	 
	 

	 
	BANK OF AMERICA, N.A., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Tyler D. Levings

	 
	Name:
	 
	Tyler D. Levings

	 
	Title:
	 
	Director

	
				
	 
	 
	 
	 

	 
	BMO HARRIS BANK N.A., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Melissa Guzmann

	 
	Name:
	 
	Melissa Guzmann

	 
	Title:
	 
	Director

[Signature Page - First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement]

	
				
	 
	 
	 
	 

	 
	CITIBANK, N.A., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Phil Ballard

	 
	Name:
	 
	Phil Ballard

	 
	Title:
	 
	Vice President

	
				
	 
	 
	 
	 

	 
	MIZUHO BANK, LTD., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ John Davies

	 
	Name:
	 
	John Davies

	 
	Title:
	 
	Authorized Signatory

	
				
	 
	 
	 
	 

	 
	ROYAL BANK OF CANADA, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Leslie P. Vowell

	 
	Name:
	 
	Leslie P. Vowell

	 
	Title:
	 
	Authorized Signatory

	
				
	 
	 
	 
	 

	 
	ABN AMRO CAPITAL USA LLC, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Hugo Diogo

	 
	Name:
	 
	Hugo Diogo

	 
	Title:
	 
	Managing Director

	 
	 
	 
	 

	 
	By:
	 
	/s/ Kelly Hall

	 
	Name:
	 
	Kelly Hall

	 
	Title:
	 
	Director

[Signature Page - First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement]

	
				
	 
	 
	 
	 

	 
	DNB CAPITAL LLC, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Mita Zalavadia

	 
	Name:
	 
	Mita Zalavadia

	 
	Title:
	 
	Assistant Vice President

	 
	 
	 
	 

	 
	By:
	 
	/s/ Ahelia Singh

	 
	Name:
	 
	Ahelia Singh

	 
	Title:
	 
	Assistant Vice President

	
				
	 
	 
	 
	 

	 
	EXPORT DEVELOPMENT CANADA, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Brian Craig

	 
	Name:
	 
	Brian Craig

	 
	Title:
	 
	Principal - Special Risks

	 
	 
	 
	 

	 
	By:
	 
	/s/ Michael J. Fortner

	 
	Name:
	 
	Michael J. Fortner

	 
	Title:
	 
	Principal EDC Special Risk

	
				
	 
	 
	 
	 

	 
	GOLDMAN SACHS LENDING PARTNERS, as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Mahesh Mohan

	 
	Name:
	 
	Mahesh Mohan

	 
	Title:
	 
	Authorized Signatory

	
				
	 
	 
	 
	 

	 
	MORGAN STANLEY BANK, N.A., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Kevin Newman

	 
	Name:
	 
	Kevin Newman

	 
	Title:
	 
	Authorized Signatory

	
				
	 
	 
	 
	 

	 
	MORGAN STANLEY SENIOR FUNDING, INC., as Lender

	 
	 
	 

	 
	By:
	 
	/s/ Kevin Newman

	 
	Name:
	 
	Kevin Newman

	 
	Title:
	 
	Vice President

[Signature Page - First Amendment to Senior Secured Super-Priority Debtor-in-Possession Credit Agreement]ex_204166.htm

Exhibit 10.35

 

 

 

Cortland Savings and Banking Company

 

Amended Annual Incentive Plan for Executive Officers

 

 

The Cortland Savings and Banking Company Amended Annual Incentive Plan for Executive Officers (the “Plan”) is designed to provide short-term cash incentives to eligible executive officers of The Cortland Savings and Banking Company (the “Bank”) and any subsidiary in order to:

 

 

	 	
			●

				
			Attract and retain executive officers

			

	 	
			●

				
			Motivate executive officers to achieve Bank objectives

			

	 	
			●

				
			Reward executives for achieving performance targets

			

	 	
			●

				
			Align executive incentives with shareholder interests

			

	 	
			●

				
			Provide incentive awards consistent with peers based on performance

			

	 	
			●

				
			Limit risks to shareholder value

			

	 	
			●

				
			Comply with regulatory guidelines related to executive compensation and incentive awards

			

	 	
			●

				
			Enhance shareholder value

			

 

 

Plan Administration

 

The Plan will be administered by the Directors Compensation Committee (the “Committee”), including the setting of performance goals, establishing the cash awards that may be awarded and determining the degree to which performance goals have been achieved, as provided herein. The Committee will establish the baseline for incentive awards, such as Minimal Acceptable Return to Shareholders (MARS) and related criteria, as well as the incentive percentage for each participant, the performance criteria and weighting of same and will review the impact of the plan on financial results to ensure objectives are being met. The Committee retains discretion to pay incentives if the baseline for incentive awards is not met.

 

 

Eligibility

 

In the sole discretion of the Committee, an incentive may be paid to members of Executive Management when the Bank has met certain performance criteria established by the Committee and when each individual member has met individual performance criteria established by the Committee, all as provided by the Plan. The criteria for the current Plan Year (as defined below) are attached within Exhibit A. Cash awards earned under the Plan will be based upon a percentage of the participants’ base earnings (i.e. average base salary as of January 1 through December 31 of the Plan Year) in a given Plan Year (as defined below), and will range from 0% (for below threshold performance) to 40% (for superior performance), all as determined by the Committee. Base earnings do not include referral fees and any other compensation. Awards earned and payable, as determined by the Committee, will be paid, in the discretion of the Committee, during the final quarter of a Plan Year or within two and a half months following the end of a Plan Year (i.e., March 15). The Committee will determine which Executive Management positions may participate, while other named executive officers will be recommended by the Bank’s Chief Executive Officer and approved by the Committee. To receive awards under the Plan, a participant must be an active employee of the Bank on the date of payment, with certain exceptions for death, disability and retirement. The Plan is effective September 15, 2020, and performance years under the Plan run from January 1 through December 31 of each applicable year (each a “Plan Year”).

 

 

 

 

Target Incentive Opportunity

 

Each participant is assigned a target incentive amount (“Target Incentive”), expressed as a percentage of annual earned base compensation for the Plan Year. Up to 50% of such Target Incentive will be based on the specific financial performance criteria briefly described above and as established by the Committee on an annual basis (the “Specific Financial Performance Criteria”), and up to 50% of such Target Incentive will be based on the Committee's subjective evaluation of the participant’s performance in managing earnings, capital, liquidity, interest rate sensitivity and increased risks presented by economic and other factors. The Specific Financial Performance Criteria and the specific goals to be achieved may change from one Plan Year to the next, and likewise may be different for one employee category or tier from the performance criteria and goals applicable to another category or tier, and may be different for one employee within a particular category or tier from the performance criteria and goals applicable to another employee within that same category or tier.

 

 

The Specific Financial Performance Criteria and goals may take into account factors such as total revenue, revenue growth, net income, earnings, earnings growth, earnings per share, cash flow, efficiency ratio, total deposits, deposit growth, fee income, non-interest income, total loans, loan growth, net interest margin, asset quality loan charge offs, nonperforming assets-to-assets ratio, classified asset coverage ratio, return on assets, return on equity, customer satisfaction, peer data, market data, management input, and other factors. These criteria may differ somewhat from participant to participant, but are important factors intended to focus the participant’s efforts and represent areas within the participant’s control.

 

 

The Committee has the discretion to adjust the methodology for calculating the Target Incentive to account for extraordinary or unforeseen occurrences which may affect the determination of whether the Target Incentive was achieved. The Committee will have the sole authority and discretion to evaluate all aspects of the Bank’s incentive compensation awards and to determine performance and the total amount of compensation available to members of Executive Management in the aggregate. The Committee has the authority but not the obligation to exclude any extraordinary accounting items, including but not limited to changes in generally accepted accounting procedures, extraordinary non-recurring items, sales of major assets or regulatory changes.

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