Fourth Amendment to Credit Agreement Among Legacy Reserves LP as Borrower, BNP Paribas, as Administrative Agent, and The Lenders Signatory Hereto Effective as of April 24, 2008
Exhibit 10.1
Fourth
Amendment
to
Among
as
Borrower,
BNP
Paribas,
as
Administrative Agent,
and
The
Lenders Signatory Hereto
Effective
as of April 24, ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ to Credit Agreement
This
Fourth Amendment to Credit Agreement (this “Fourth Amendment”)
executed effective as of April 24, 2008 (the “Fourth Amendment Effective
Date”) is among Legacy Reserves LP, a limited partnership formed under
the laws of the State of Delaware (the “Borrower”); each of
the undersigned guarantors (the “Guarantors”, and
together with the Borrower, the “Obligors”); each of
the Lenders that is a signatory hereto; and BNP Paribas, as administrative agent
for the Lenders (in such capacity, together with its successors, the “Administrative
Agent”).
Recitals
A. The
Borrower, the Administrative Agent and the Lenders are parties to that certain
Credit Agreement dated as of March 15, 2006 (as amended to date, the “Credit Agreement”),
pursuant to which the Lenders have made certain credit available to and on
behalf of the Borrower.
B. The
Borrower has requested and the Administrative Agent and the Lenders have agreed
to amend certain provisions of the Credit Agreement.
C. NOW,
THEREFORE, 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. Defined
Terms. Each capitalized term which is defined in the Credit
Agreement, but which is not defined in this Fourth Amendment, shall have the
meaning ascribed to such term in the Credit Agreement. Unless
otherwise indicated, all section references in this Fourth Amendment refer to
the Credit Agreement.
Section
2. Amendments to Credit
Agreement.
2.1 Definitions. Section
1.02 is hereby amended by amending and restating the following definitions as
follows:
“ ‘Agreement’ means this
Credit Agreement, as amended by that certain First Amendment to Credit
Agreement, dated as of July 7, 2006, the Second Amendment to Credit Agreement,
dated as of May 3, 2007, the Third Amendment to Credit Agreement, dated as of
October 24, 2007, and the Fourth Amendment to Credit Agreement, dated as of
April 24, 2008, and as the same may from time to time be further amended,
modified, supplemented or restated.”
“ ‘Applicable Margin’
means, for any day, with respect to any ABR Loan or Eurodollar Loan, as the case
may be, the rate per annum set forth in the Borrowing Base Utilization Grid
below based upon the Borrowing Base Utilization Percentage then in
effect:
Fourth
Amendment 2
|
Borrowing
Base Utilization Percentage
|
Eurodollar
Loans
|
ABR
Loans
|
|
|
Level
1
|
less
than 33%
|
1.250%
|
0.000%
|
|
Level
2
|
greater
than or equal to 33%, but less than 66%
|
1.500%
|
0.000%
|
|
Level
3
|
greater
than or equal to 66%, but less than 85%
|
1.750%
|
0.125%
|
|
Level
4
|
greater
than or equal to 85%
|
1.875%
|
0.250%
|
Each
change in the Applicable Margin 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 8.12(a), then
the “Applicable Margin” means the rate per annum set forth on the grid when the
Borrowing Base Utilization Percentage is at its highest level.”
2.2 Annex
I. Annex I is hereby amended and restated in its entirety with
the Annex I attached hereto.
Section
3. Assignment; Borrowing
Base.
3.1 Assignment. For
an agreed consideration, each of BNP Paribas, Bank of America, N.A., Comerica
Bank, KeyBank, National Association and Wachovia Bank, National Association
(collectively, the “Assignor Lenders”)
hereby irrevocably sells and assigns to Fortis Capital Corp., The Bank of Nova
Scotia and Compass Bank (the “Assignee Lenders”),
and each of the Assignee Lenders, by its signature hereto, hereby irrevocably
purchases and assumes from the Assignor Lenders, subject to and in accordance
with the Credit Agreement, as of the Fourth Amendment Effective Date (i) such
Assignor Lenders’ rights and obligations in their capacities as Lenders under
the Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
on the attached Annex
I, of such outstanding rights and obligations of the Assignor Lenders
under the Credit Agreement and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor Lenders against any Person, whether known or unknown, arising under or
in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above.
Fourth
Amendment 3
3.2 Borrowing
Base.
(a) For
the period from and including the Fourth Amendment Effective Date to but
excluding the next Redetermination Date, the amount of the Borrowing Base shall
be equal to $272,000,000. Notwithstanding the foregoing, the
Borrowing Base may be subject to further adjustments from time to time pursuant
to Section 8.13(c) or Section 9.12(d).
(b) The
Borrowing Base shall automatically increase to $320,000,000 upon the completion
of the following conditions:
(i) The
Administrative Agent shall have received a certificate of a Responsible Officer
certifying that the Borrower is concurrently consummating that certain
acquisition for approximately $82,000,000 (in cash and Equity Interests) of Oil
and Gas Properties in the Permian Basin (the “Acquisition
Properties”) which is currently scheduled to close April 30, 2008 (the
“Acquisition”).
(ii) The
Administrative Agent shall have received, or be receiving concurrently with the
closing of the Acquisition, original assignments conveying the Acquisition
Properties to the Borrower, for the Administrative Agent to file for record in
the respective counties.
(iii) The
Administrative Agent shall have received from each party thereto duly executed
counterparts (in such number as may be requested by the Administrative Agent) of
security instruments with respect to the Acquisition Properties, including
mortgages and deeds of trust in form satisfactory to the Administrative
Agent. In connection with the execution and delivery of such security
instruments, the Administrative Agent shall be reasonably satisfied that the
security instruments create first priority, perfected Liens (subject only to
Excepted Liens identified in clauses (a) to (d) and (f) of the definition
thereof, but subject to the provisos at the end of such definition) on at least
80% of the total value of the Acquisition Properties.
(iv) The
Administrative Agent shall have received title information as the Administrative
Agent may reasonably require satisfactory to the Administrative Agent setting
forth the status of title to at least 80% of the total value of the Acquisition
Properties.
(v) The
Administrative Agent shall have received payment of all fees and other amounts
due and payable, including, for the account of each Lender then party to the
Credit Agreement, ratably in accordance with its Applicable Percentage, a
Borrowing Base increase fee equal to 25 bps on the amount of any increase of
each Lender’s Commitment over such Lender’s highest Commitment previously in
effect, payable on the consummation of the Acquisition.
Section
4. Conditions
Precedent. The effectiveness of this Fourth Amendment is
subject to the receipt by the Administrative Agent of the following documents
and satisfaction of the other conditions provided in this Section 4, each
of which shall be reasonably satisfactory to the Administrative Agent in form
and substance:
Fourth
Amendment 4
4.1 Fourth
Amendment. The Administrative Agent shall have received
multiple counterparts as requested of this Fourth Amendment from each Lender and
the Borrower.
4.2 Notes. The
Administrative Agent shall have received a Note payable to the order of each
Lender in the amount of such Lender’s Commitment after giving effect to the
assignment and increase in commitments pursuant to this Fourth Amendment, duly
executed and delivered by Borrower, to be dated as of the Fourth Amendment
Effective Date.
4.3 Security
Instruments. The Administrative Agent shall have received from
each party thereto duly executed counterparts (in such number as may be
requested by the Administrative Agent) of Security Instruments in form and
substance satisfactory to the Administrative Agent, such that the Borrower
remains in compliance with Section 8.14 of the Credit Agreement.
4.4 Borrowing Base Increase
Fee. The Administrative Agent shall have received payment of
all fees and other amounts due and payable, including, for the account of each
Lender party to this Amendment, ratably in accordance with its Applicable
Percentage, a Borrowing Base increase fee equal to 25 bps on the amount of any
increase of each Lender’s Commitment over such Lender’s highest Commitment
previously in effect, payable on the First Amendment Effective
Date.
4.5 No
Default. No Default or Event of Default shall have occurred
and be continuing as of the Fourth Amendment Effective Date.
Section
5. Representations and
Warranties; Etc. Each Obligor hereby affirms: (a)
that as of the date of execution and delivery of this Fourth Amendment, all of
the representations and warranties contained in each Loan Document to which such
Obligor is a party are true and correct in all material respects as though made
on and as of the Fourth Amendment Effective Date (unless made as of a specific
earlier date, in which case, was true as of such date); and (b) that after
giving effect to this Fourth Amendment and to the transactions contemplated
hereby, no Defaults exist under the Loan Documents or will exist under the Loan
Documents.
Section
6. Miscellaneous.
6.1 Confirmation. The
provisions of the Credit Agreement (as amended by this Fourth Amendment) shall
remain in full force and effect in accordance with its terms following the
effectiveness of this Fourth Amendment.
6.2 Ratification and Affirmation
of Obligors. Each of the Obligors hereby expressly (i)
acknowledges the terms of this Fourth Amendment, (ii) ratifies and affirms its
obligations under the Guaranty Agreement and the other Security Instruments to
which it is a party, (iii) acknowledges, renews and extends its continued
liability under the Guaranty Agreement and the other Security Instruments to
which it is a party and (iv) agrees that its guarantee under the Guaranty
Agreement and the other Security Instruments to which it is a party remains in
full force and effect with respect to the Indebtedness as amended
hereby.
Fourth
Amendment 5
6.3 Counterparts. This
Fourth Amendment may be executed by one or more of the parties hereto in any
number of separate counterparts, and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.
6.4 No Oral
Agreement. This written Fourth Amendment, the Credit Agreement
and the other Loan Documents executed in connection herewith and therewith
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or unwritten oral agreements of the
parties. There are no subsequent oral agreements between the
parties.
6.5 Governing
Law. This Fourth Amendment (including, but not limited to, the
validity and enforceability hereof) shall be governed by, and construed in
accordance with, the laws of the State of Texas.
Fourth
Amendment 6
IN
WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly
executed effective as of the date first written above.
| BORROWER: | LEGACY RESERVES LP | ||
|
By:
|
Legacy Reserves GP,
LLC,
its general partner
|
||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| President, Chief Financial Officer and Secretary | |||
| GUARANTORS: | LEGACY RESERVES OPERATING LP | ||
|
By:
|
Legacy Reserves Operating GP,
LLC,
its general
partner
|
||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| President, Chief Financial Officer and Secretary | |||
| LEGACY RESERVES OPERATING GP, LLC | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| President, Chief Financial Officer and Secretary | |||
| LEGACY RESERVES SERVICES, INC. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| President, Chief Financial Officer and Secretary | |||
Fourth
Amendment 7
| ADMINISTRATIVE AGENT: |
BNP
PARIBAS
as Administrative
Agent and Lender
|
||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇▇ | |||
| Director | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Managing Director | |||
Fourth
Amendment 8
| LENDERS: | BANK OF AMERICA N.A. | ||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||
| Managing Director | |||
| COMERICA BANK | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Vice President | |||
| KEY BANK N.A. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Managing Director | |||
Fourth
Amendment 9
| WACHOVIA BANK NATIONAL ASSOCIATION | |||
|
|
By:
|
/s/ ▇▇ ▇▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Director | |||
| FORTIS CAPITAL CORP. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Director | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Director | |||
| COMPASS BANK | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Senior Vice President | |||
Fourth
Amendment 10
| THE BANK OF NOVIA SCOTIA | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Director | |||
Fourth
Amendment 11