Exhibit 10.1

 

Execution Version

 

LIMITED WAIVER AND THIRD AMENDMENT

TO SECOND LIEN TERM LOAN AGREEMENT

 

This LIMITED WAIVER AND THIRD AMENDMENT TO SECOND LIEN TERM LOAN AGREEMENT (this
“Waiver and Amendment”), dated as of June 29, 2012, is by and among EUREKA
HUNTER PIPELINE, LLC, a Delaware limited liability company (the “Borrower”),
PENNANTPARK INVESTMENT CORPORATION, a Maryland corporation (“PennantPark”) and
the other financial institutions party hereto (together with PennantPark, the
“Lenders”).

 

WHEREAS, the Borrower and the Lenders are parties to that certain Second Lien
Term Loan Agreement, dated as of August 16, 2011 (as amended by that certain
First Amendment to Second Lien Term Loan Agreement dated as of September 20,
2011 and that certain Second Amendment to Second Lien Term Loan Agreement dated
as of May 2, 2012 and as may be further amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Lenders and U.S. Bank National Association, as
collateral agent (the “Collateral Agent”);

 

WHEREAS, Borrower has advised the Lenders that the Borrower anticipates the
occurrence of certain Events of Default and has requested that the Lenders agree
to waive such Events of Default as described herein;

 

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement
as described herein; and

 

WHEREAS, on the terms and subject to the conditions contained herein, the
Lenders are willing to waive certain anticipated Events of Default and make
certain amendments to the Credit Agreement, in each case, in accordance with
Section 10.2 of the Credit Agreement;

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1.             Defined Terms.

 

(a)         Capitalized terms used but not defined in this Waiver and Amendment
shall have the meanings ascribed to such terms in the Credit Agreement.  The
principles of interpretation set forth in Section 1.4 of the Credit Agreement
shall apply to the provisions of this Waiver and Amendment.

 

(b)         Each reference to “hereof’, “hereunder”, “herein” and “hereby” and
each other similar reference contained in the Credit Agreement, each reference
to “this Agreement” or “the Credit Agreement” and each other similar reference
contained in the Agreement or any other Loan Document shall on and after the
Third Amendment Effective Date (as defined below) refer to the Credit Agreement
as amended by this Waiver and Amendment.  Any notices, requests, certificates
and other instruments executed and delivered on or after the Third

 

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Amendment Effective Date may refer to the Credit Agreement without making
specific reference to this Waiver and Amendment but nevertheless all such
references shall mean the Credit Agreement as amended by this Waiver and
Amendment unless the context otherwise requires.

 

2.             Limited Waiver.  Effective as of the Third Amendment Effective
Date, the Lenders party hereto hereby agree to waive any Events of Default
occurring as a result of the Borrower’s failure to comply with (i) the minimum
Interest Coverage Ratio required by Section 6.1(b) of the Credit Agreement for
the Fiscal Quarter ended June 30, 2012, and (ii) the maximum Total Leverage
Ratio required by Section 6.1(c) of the Credit Agreement for the Fiscal Quarter
ended June 30, 2012.

 

3.             Amendments to Credit Agreement. In reliance on the
representations and warranties set forth in Section 4 below and subject to the
satisfaction of the conditions set forth in Section 5 below, the parties hereby
agree to the following amendments:

 

(a)         Section 1.1 of the Credit Agreement is hereby amended by inserting
the following defined terms in proper alphabetical sequence:

 

“Third Amendment” means that certain Limited Waiver and Third Amendment to
Second Lien Term Loan Agreement dated as of June 29, 2012, by and among the
Borrower and the Lenders party thereto.

 

“Third Amendment Effective Date” means the “Third Amendment Effective Date” as
defined in the Third Amendment.

 

(b)         Section 2.11 of the Credit Agreement is hereby amended by replacing
each reference to “Change of Control” appearing therein with “Change in
Control”.

 

(c)         Section 2.12(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“(a)       Cash Interest and Additional Interest.

 

(i)  Prior to the Third Amendment Effective Date, interest shall be payable on
the principal amount of the Loans at a fixed rate equal to (x) 9.75% per annum,
payable in cash (all interest payable pursuant to this clause (x) and pursuant
to Section 2.12(a)(ii) below being referred to herein as “Cash Interest”), and
(y) 2.75% per annum (increasing to 3.75% per annum on and at all times after the
first date following the Closing Date on which a Loan Party incurs any
Indebtedness, other than Loans, in excess of $1,000,000), payable in cash (all
interest payable pursuant to this clause (y) being referred to herein as
“Additional Interest”), in each case, subject to Section 2.12(d) below.

 

(ii)  On and after the Third Amendment Effective Date, interest shall be payable
on the principal amount of the Loans at a fixed rate equal to 12.50% per annum
(increasing to 13.50% per annum on and at all times after the first date

 

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following the Third Amendment Effective Date on which a Loan Party incurs any
Indebtedness, other than Loans, in excess of $1,000,000), payable in cash.”

 

(d)         Section 2.12(d) of the Credit Agreement is hereby amended by
inserting the words “occurring prior to the Third Amendment Effective Date”
immediately following the words “on each Interest Payment Date” appearing
therein.

 

(e)         Section 5.2(i) of the Credit Agreement is hereby amended by
replacing the words “Additional Interest” appearing therein with “interest”.

 

(f)          Section 6.1(b) of the Credit Agreement is hereby amended by
(i) replacing the required minimum Interest Coverage Ratio of “1.00:1.00” for
the Fiscal Quarter ending September 30, 2012 with a required minimum Interest
Coverage Ratio of “0.85:1.00”, (ii) replacing the required minimum Interest
Coverage Ratio of “1.00:1.00” for the Fiscal Quarter ending December 31, 2012
with a required minimum Interest Coverage Ratio of “0.85:1.00” and
(iii) inserting the following sentence immediately prior to the last sentence
appearing in such Section:

 

“Notwithstanding the foregoing, (x) if the First Lien Funding Date shall have
occurred on or prior to September 30, 2012, the required minimum Interest
Coverage Ratio for the Fiscal Quarter ending September 30, 2012 shall be
1.00:1.00 and (y) if the First Lien Funding Date shall have occurred on or prior
to December 31, 2012, the required minimum Interest Coverage Ratio for the
Fiscal Quarter ending December 31, 2012 shall be 1.00:1.00, in each case, unless
the First Lien Credit Agreement shall have been amended on or prior to such date
in a manner satisfactory to the Required Lenders.”

 

(g)         Section 6.1(c) of the Credit Agreement is hereby amended by
(i) replacing the required maximum Total Leverage Ratio of “6.50:1.00” for the
Fiscal Quarter ending September 30, 2012 with a required maximum Total Leverage
Ratio of “9.50:1.00”, (ii) replacing the required maximum Total Leverage Ratio
of “6.50:1.00” for the Fiscal Quarter ending December 31, 2012 with a required
maximum Total Leverage Ratio of “8.50:1.00” and (iii) inserting the following
sentence immediately prior to the last sentence appearing in such Section:

 

“Notwithstanding the foregoing, (x) if the First Lien Funding Date shall have
occurred on or prior to September 30, 2012, the required maximum Total Leverage
Ratio for the Fiscal Quarter ending September 30, 2012 shall be 6.50:1.00 and
(y) if the First Lien Funding Date shall have occurred on or prior to
December 31, 2012, the required maximum Total Leverage Ratio for the Fiscal
Quarter ending December 31, 2012 shall be 6.50:1.00, in each case, unless the
First Lien Credit Agreement shall have been amended on or prior to such date in
a manner satisfactory to the Required Lenders.”

 

4.             Representations and Warranties.  The Borrower represents and
warrants as of the Third Amendment Effective Date to each Lender that:

 

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(a)         The Borrower (i) has the power and authority, and the legal right,
to make, deliver and perform this Waiver and Amendment and (ii) has taken all
necessary corporate or other action to authorize the execution, delivery and
performance of this Waiver and Amendment;

 

(b)         No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
to be obtained by the Borrower in connection with the execution, delivery,
performance, validity or enforceability of this Waiver and Amendment;

 

(c)         This Waiver and Amendment (i) has been duly executed and delivered
on behalf of the Borrower and (ii) constitutes a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law);

 

(d)         The execution, delivery and performance of this Waiver and
Amendment, the borrowings under the Credit Agreement in connection herewith, and
the use of the proceeds thereof will not result in a violation of any
Requirement of Law or any Contractual Obligation of the Borrower, and will not
result in, or require, the creation or imposition of any Lien on any of its
Properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Collateral
Documents);

 

(e)         After giving effect to the limited waiver set forth in Section 2,
the representations and warranties made by any Loan Party in or pursuant to the
Loan Documents are true and accurate in all material respects as of the date
hereof (other than those representations and warranties that are expressly
qualified by a Material Adverse Effect or other materiality qualifier, in which
case such representations and warranties shall be true and correct in all
respects, and those representations and warranties that are made as of a
specific date, in which case such representations and warranties shall be true
and correct in all material respects as of such date) with the same force and
effect as if such had been made on and as of the date hereof; and

 

(f)          after giving effect to the limited waiver set forth in Section 2,
no Default or Event of Default has occurred and is continuing.

 

5.             Conditions Precedent.  The effectiveness of this Waiver and
Amendment is subject to the satisfaction of the following conditions (the date
of satisfaction of such conditions, the “Third Amendment Effective Date”):

 

(a)         the Lenders having executed and delivered this Waiver and Amendment;

 

(b)         the Lenders having received this Waiver and Amendment duly executed
and delivered by a Responsible Officer of the Borrower;

 

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(c)         (x) each Lender consenting in writing to this Waiver and Amendment
having received in cash a fee equal to 1.00% of the aggregate principal amount
of the Loans and/or Commitments held by it as of the Third Amendment Effective
Date and (y) PennantPark and the Collateral Agent having received any fees,
expenses and other amounts payable pursuant to Section 10.3 of the Credit
Agreement (including fees of counsel) that are outstanding as of the Third
Amendment Effective Date; and

 

(d)         the Third Amendment Effective Date having occurred on or prior to
June 30, 2012.

 

6.             Loan Documents.  This Waiver and Amendment shall constitute a
Loan Document, as such term is defined in the Credit Agreement.  This Waiver and
Amendment is not intended to nor shall it be construed to create a novation or
accord and satisfaction with respect to any of the Obligations.

 

7.             Severability.  Any provision of this Waiver and Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

8.             Integration.  This Waiver and Amendment and the other Loan
Documents represent the entire agreement of the Loan Parties and the Lenders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Lender relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

 

9.             GOVERNING LAW.  THIS WAIVER AND AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS WAIVER AND AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

10.          Survival.  The representations and warranties contained in
Section 4 of this Waiver and Amendment shall survive the execution and delivery
of this Waiver and Amendment and the Third Amendment Effective Date.

 

11.          Release.  In consideration of, among other things, the Lenders’
execution and delivery of this Waiver and Amendment, to the extent permitted by
applicable law, the Borrower hereby forever agrees and covenants not to sue or
prosecute against any Lender or its affiliates, subsidiaries, shareholders and
“controlling persons” (within the meaning of federal securities laws), and their
respective successors and assigns, and each and all of the officers, directors,
partners, employees, agents, attorneys and other representatives of each of the
foregoing in their respective capacities as such (collectively, the “Releasees”
and each a “Releasee”) and hereby forever waives, releases and discharges, to
the fullest extent permitted by law, each Releasee from any and all claims,
actions, suits, demands, controversies, trespasses, judgments, costs or expenses
whatsoever that the Borrower now has or hereafter may have of whatsoever nature
and kind, which are actually known to a Responsible Officer of the Borrower,
whether arising at law

 

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or in equity, against the Releasees, based in whole or in part on facts arising
on or prior to the Third Amendment Effective Date, that relate to, arise out of
or otherwise are in connection with: (i) any or all of the Loan Documents or
transactions contemplated thereby or any actions or omissions in connection
therewith or (ii) any aspect of the dealings or relationships between or among
the Borrower and the other Loan Parties, on the one hand, and any or all of the
Lenders, on the other hand, relating to any or all of the Loan Documents or
transactions contemplated thereby.

 

12.          Ratification; No Other Amendments; No Waiver. Except as expressly
modified hereby, the Credit Agreement and each other Loan Document are each
hereby ratified and confirmed by the parties hereto and remain in full force and
effect in accordance with the respective terms thereof.  Other than as otherwise
expressly provided herein, this Waiver and Amendment shall not be deemed to
operate as an amendment or waiver of, or to prejudice, any right, power,
privilege or remedy of any Lender, the Collateral Agent or any other Indemnitee
under the Agreement or any of the other Loan Documents, nor shall the entering
into of this Waiver and Amendment preclude any such Person from refusing to
enter into any further amendments with respect to the Agreement or any of the
other Loan Documents.  Other than as expressly provided herein, this Waiver and
Amendment shall not constitute a waiver of compliance with any covenant or other
provision in the Agreement or any other Loan Document or of the occurrence or
continuance of any present or future Default or Event of Default.

 

13.          Headings.  The section headings contained in this Waiver and
Amendment are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Waiver and Amendment.

 

14.          Amendments.  This Waiver and Amendment may not be amended or
modified except in the manner specified for an amendment of or modification to
the Credit Agreement in Section 10.2 of the Credit Agreement.

 

[Signature Pages to Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Amendment to
be duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.

 

 

 

EUREKA HUNTER PIPELINE, LLC

 

 

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Name:

Ronald D. Ormand

 

 

Title:

Executive Vice President

 

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PENNANTPARK INVESTMENT

 

CORPORATION

 

as a Lender

 

 

 

 

 

By:

/s/ Arthur Penn

 

 

Name: Arthur Penn

 

 

Title: Chief Executive Officer

 

 

 

 

 

PENNANTPARK SBIC LP

 

as a Lender

 

 

 

 

 

By:

/s/ Arthur Penn

 

 

Name: Arthur Penn

 

 

Title: Manager of PennantPark SBIC, GP, LLC

 

 

General Partner of PennantPark SBIC LP

 

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