Exhibit 10.1

 

Execution Version

 

 

FIFTH AMENDMENT

TO
CREDIT AGREEMENT

 

DATED AS OF
MAY 4, 2015

 

AMONG

 

LRE OPERATING, LLC,

AS BORROWER,

 

LRR ENERGY, L.P.,

AS PARENT,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS ADMINISTRATIVE AGENT,

 

AND

 

THE LENDERS PARTY HERETO

 

 

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FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Fifth Amendment”) dated as of
May 4, 2015, is among LRE OPERATING, LLC, a Delaware limited liability company
(the “Borrower”); LRR ENERGY, L.P., a Delaware limited partnership (the
“Parent”); WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in
such capacity, together with its successors in such capacity, the
“Administrative Agent”) for the lenders from time to time party to the Credit
Agreement referred to below (collectively, the “Lenders”); and the Lenders.

 

R E C I T A L S

 

A.            The Borrower, the Parent, the Administrative Agent and the Lenders
are parties to that certain Credit Agreement dated as of July 22, 2011, as
amended by that certain First Amendment to Credit Agreement dated as of
September 30, 2011, that certain Second Amendment to Credit Agreement dated as
of June 8, 2012, that certain Third Amendment to Credit Agreement dated as of
June 27, 2012 and that certain Fourth Amendment to Credit Agreement dated as of
October 1, 2014 (as further amended, restated, modified or supplemented from
time to time, the “Credit Agreement”), pursuant to which the Lenders have agreed
to make certain loans to, and extensions of credit on behalf of, the Borrower.

 

B.            The Borrower, the Parent, the Administrative Agent and the Lenders
have agreed to, among other things, amend the Credit Agreement in order to
provide for a non-conforming Borrowing Base.

 

C.            The Administrative Agent and the Lenders have agreed to effectuate
the Scheduled Redetermination scheduled to occur on or around May 1, 2015,
pursuant to Section 2.07 of the Credit Agreement.

 

AGREEMENT

 

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 used
herein, but not otherwise defined herein has the meaning given such term in the
Credit Agreement (including after giving effect to the amendments set forth in
Section 2 hereof).  Unless otherwise indicated, all references to Sections in
this Fifth Amendment refer to Sections of the Credit Agreement.

 

Section 2.                      Amendments to Credit Agreement. Subject to the
satisfaction (or waiver in accordance with Section 12.02 of the Credit
Agreement) of the conditions precedent set forth in Section 4:

 

2.1          Amendments to Section 1.02.  Section 1.02 of the Credit Agreement
is hereby amended as follows:

 

(a)           Each of the following definitions appearing in Section 1.02 is
amended

 

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and restated in its entirety as follows:

 

“Applicable Margin” means, for any day, with respect to any Loan or with respect
to the Commitment Fee Rate, as the case may be, the rate per annum set forth in
the Conforming Borrowing Base Utilization Grid below based upon the Conforming
Borrowing Base Utilization Percentage then in effect:

 

Conforming Borrowing Base Utilization Grid

 

Conforming
Borrowing Base
Utilization
Percentage

 

< 25%

 

³ 25%
< 50%

 

³ 50%
< 75%

 

³ 75%
< 90%

 

³ 90%
< 100%

 

³ 100%

 

Eurodollar Loans

 

2.00

%

2.25

%

2.50

%

2.75

%

3.00

%

3.10

%

ABR Loans

 

1.00

%

1.25

%

1.50

%

1.75

%

2.00

%

2.10

%

Commitment Fee Rate

 

0.375

%

0.375

%

0.50

%

0.50

%

0.50

%

0.80

%

 

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 that if at any time the
Borrower fails to deliver a Reserve Report pursuant to Section 8.12 and such
failure continues for more than 30 days from the date when such Reserve Report
is due, then the “Applicable Margin” for Loans means the rate per annum set
forth on the grid when the Conforming Borrowing Base Utilization Percentage is
at its highest level.

 

“Borrowing Base” means at any time an amount equal to the amount determined in
accordance with Section 2.07 from time to time, as the same may be adjusted from
time to time pursuant to Section 2.07(e), Section 2.07(f), Section 2.07(g),
Section 8.13(c) or Section 9.12(f).  From and after the Conforming Date, the
Borrowing Base shall be, and shall be in an amount equal to, the Conforming
Borrowing Base.

 

“Interim Redetermination Date” means the date on which a Borrowing Base and/or
Conforming Borrowing Base that has been redetermined pursuant to an Interim
Redetermination becomes effective as provided in Section 2.07(d).

 

“Proposed Borrowing Base Notice” has the meaning assigned to such term in
Section 2.07(c)(ii).

 

“Scheduled Redetermination Date” means the date on which a Borrowing Base and/or
Conforming Borrowing Base that has been redetermined pursuant to a Scheduled
Redetermination becomes effective as provided in Section 2.07(d).

 

(b)           The following defined terms are added to Section 1.02 in
appropriate

 

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alphabetical order:

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption, including the Foreign Corrupt
Practices Act of 1977, as amended.

 

“Conforming Borrowing Base” means, at any time, an amount determined in
accordance with Section 2.07 based on the Administrative Agent’s or the
applicable Lender’s application of its Conforming Credit Criteria, as such
Conforming Borrowing Base may be adjusted from time to time pursuant to
Section 2.07(e), Section 8.13(c) and Section 9.12(f).

 

“Conforming Borrowing Base Utilization Percentage” means, as of any day, the
fraction expressed as a percentage, the numerator of which is the sum of the
Revolving Credit Exposures of the Lenders on such day, and the denominator of
which is the Conforming Borrowing Base in effect on such day.

 

“Conforming Credit Criteria” means the information contained in the Engineering
Reports and such other information (including the status of title information
with respect to the Oil and Gas Properties as described in the Engineering
Reports and the existence of any other Debt) as the Administrative Agent or the
applicable Lender deems appropriate in its sole discretion and consistent with
its normal and customary oil and gas lending criteria as it exists at the
particular time.

 

“Conforming Date” means the earlier of (i) November 1, 2015 and (ii) the date on
which the VNR Merger Agreement terminates according to its terms.

 

“Fifth Amendment Effective Date” means May 4, 2015.

 

“Mandatory Redetermination” means the redetermination of the Borrowing Base
pursuant to Section 2.07(g).

 

“Mandatory Redetermination Date” means the date on which a Borrowing Base that
has been redetermined pursuant to the Mandatory Redetermination under
Section 2.07(g) becomes effective as provided under Section 2.07(d). For the
avoidance of doubt, the Conforming Date shall be the Mandatory Redetermination
Date.

 

“Proposed Conforming Borrowing Base” means any Conforming Borrowing Base
proposed by the Administrative Agent pursuant to Section 2.07(c)(i).

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the

 

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United States Department of the Treasury or (b) the United Nations Security
Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, the or by the United Nations Security Council, the European Union or any
EU member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person controlled by any such Person.

 

“VNR Merger Agreement” means that certain Purchase Agreement and Plan of Merger,
dated as of April 20, 2015, by and among Vanguard Natural Resources, LLC, a
Delaware limited liability company, Lighthouse Merger Sub, LLC, a Delaware
limited liability company, Lime Rock Management LP, a Delaware limited
partnership, LRR-A, LRR-B, LRR-C, Lime Rock Resources II-A, L.P., a Delaware
limited partnership, Lime Rock Resources, II-C, L.P., a Delaware limited
partnership, the Parent and the General Partner, in the form attached as
Exhibit 2.1 to the Form 8-K filed with the SEC on April 22, 2015.

 

(c)           The definition of “Borrowing Base Utilization Percentage”
appearing in Section 1.02 is hereby deleted in its entirety.

 

(d)           The definition of “LIBO Rate” appearing in Section 1.02 is hereby
amended by adding the following sentence at the end thereof:

 

Notwithstanding the foregoing, in no event shall the LIBO Rate be less than
zero.

 

2.2          Amendments to Section 2.07.  Section 2.07 is hereby amended and
restated in its entirety as follows:

 

Section 2.07          Borrowing Base.

 

(a)           Initial Borrowing Base.  For the period from and including the
Fifth Amendment Effective Date to but excluding the first Redetermination Date
thereafter, the amount of the Borrowing Base shall be $245,000,000 and the
amount of the Conforming Borrowing Base shall be $195,000,000. Notwithstanding
the foregoing, the Borrowing Base and the Conforming Borrowing Base may each be
subject to further adjustments in between Scheduled Redeterminations from time
to time pursuant to Section 2.07(e), Section 2.07(f), Section 2.07(g),
Section 8.13(c) or Section 9.12(f).

 

(b)           Scheduled and Interim Redeterminations.  The Borrowing Base and
the Conforming Borrowing Base shall each be redetermined semi-annually, in

 

4

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each case in accordance with this Section 2.07 (a “Scheduled Redetermination”),
and, subject to Section 2.07(d), such redetermined Borrowing Base and Conforming
Borrowing Base shall become effective and applicable to the Borrower, the
Agents, the Issuing Bank and the Lenders on May 1st and November 1st of each
year (or, in each case, such date promptly thereafter as reasonably
practicable).  In addition, the Borrower may, by notifying the Administrative
Agent thereof, and the Administrative Agent may, at the direction of the
Required Lenders, by notifying the Borrower thereof, one time during any 6 month
period, each elect to cause the Borrowing Base and the Conforming Borrowing Base
to be redetermined between Scheduled Redeterminations (each, an “Interim
Redetermination”) in accordance with this Section 2.07.

 

(c)           Scheduled and Interim Redetermination Procedure.

 

(i)            Each Scheduled Redetermination and each Interim Redetermination
shall be effectuated as follows: Upon receipt by the Administrative Agent of
(A) the Reserve Report and the certificate required to be delivered by the
Borrower to the Administrative Agent, in the case of a Scheduled
Redetermination, pursuant to Section 8.12(a) and (c), and, in the case of an
Interim Redetermination, pursuant to Section 8.12(b) and (c), and (B) such other
reports, data and supplemental information, including, the information provided
pursuant to Section 8.12(c), as may, from time to time, be reasonably requested
by the Required Lenders (the Reserve Report, such certificate and such other
reports, data and supplemental information being the “Engineering Reports”), the
Administrative Agent shall evaluate the information contained in the Engineering
Reports and shall, in its sole discretion, propose (1) prior to the Conforming
Date, both (x) a new Borrowing Base based upon such information and such other
information as the Administrative Agent deems appropriate in its sole
discretion, and (y) a new Conforming Borrowing Base based solely upon the
Administrative Agent’s application of its Conforming Credit Criteria and
(2) from and after the Conforming Date, a new Borrowing Base and a new
Conforming Borrowing Base which shall be the same amount and which shall each be
based solely upon such Engineering Reports and the Administrative Agent’s
application of its Conforming Credit Criteria.  In no event shall the Proposed
Borrowing Base or the Proposed Conforming Borrowing Base exceed the Aggregate
Maximum Credit Amounts.

 

(ii)           The Administrative Agent shall notify the Borrower and the
Lenders of the Proposed Borrowing Base and the Proposed Conforming Borrowing
Base (the “Proposed Borrowing Base Notice”):

 

(A)          in the case of a Scheduled Redetermination (1) if the
Administrative Agent shall have received the Engineering Reports required to be
delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then on or before the April 15th and October 15th of such year
following the date of delivery or (2) if the Administrative Agent shall not have

 

5

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received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then
promptly after the Administrative Agent has received complete Engineering
Reports from the Borrower and has had a reasonable opportunity to determine the
Proposed Borrowing Base in accordance with Section 2.07(c)(i); and

 

(B)          in the case of an Interim Redetermination, promptly, and in any
event, within fifteen (15) days after the Administrative Agent has received the
required Engineering Reports.

 

(iii)          Any Proposed Borrowing Base or Proposed Conforming Borrowing Base
that would increase the Borrowing Base or the Conforming Borrowing Base, as
applicable, then in effect must be approved by all of the Lenders as provided in
this Section 2.07(c)(iii); and any Proposed Borrowing Base or Proposed
Conforming Borrowing Base that would decrease or maintain the Borrowing Base or
the Conforming Borrowing Base, as applicable, then in effect must be approved or
be deemed to have been approved by the Required Lenders as provided in this
Section 2.07(c)(iii).  Upon receipt of the Proposed Borrowing Base Notice, each
Lender shall have fifteen (15) days (A) to agree with the Proposed Conforming
Borrowing Base or disagree with the Proposed Conforming Borrowing Base by
proposing an alternate Conforming Borrowing Base based solely upon its
application of its Conforming Credit Criteria and (B) if applicable, to agree
with the Proposed Borrowing Base or disagree with the Proposed Borrowing Base by
proposing an alternate Borrowing Base.  If, in the case of any Proposed
Borrowing Base or Proposed Conforming Borrowing Base that would decrease or
maintain the Borrowing Base or the Conforming Borrowing Base, as applicable,
then in effect, at the end of such fifteen (15) days, any Lender has not
communicated its approval or disapproval in writing to the Administrative Agent,
such silence shall be deemed to be an approval of the Proposed Borrowing Base
and the Proposed Conforming Borrowing Base, as applicable.  If, in the case of
any Proposed Borrowing Base or Proposed Conforming Borrowing Base that would
increase the Borrowing Base or the Conforming Borrowing Base then in effect, at
the end of such fifteen (15) days, any Lender has not communicated its approval
or disapproval in writing to the Administrative Agent, such silence shall be
deemed to be a disapproval of the Proposed Borrowing Base and the Proposed
Conforming Borrowing Base, as applicable.  If, at the end of such 15-day period,
all of the Lenders, in the case of a Proposed Borrowing Base or Proposed
Conforming Borrowing Base that would increase the Borrowing Base or the
Conforming Borrowing Base, as applicable, then in effect, or the Required
Lenders, in the case of a Proposed Borrowing Base or Proposed Conforming
Borrowing Base that would decrease or maintain the Borrowing Base or the
Conforming Borrowing Base, as applicable, then in effect, have approved or, in
the case of a decrease or reaffirmation, deemed to have approved, as aforesaid,
then the Proposed Borrowing Base and/or the Proposed Conforming Borrowing Base,
as applicable, shall become the new Borrowing Base and/or the new Conforming
Borrowing Base, as applicable, effective on the

 

6

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date specified in Section 2.07(d).  If, however, at the end of such 15-day
period, all of the Lenders or the Required Lenders, as applicable, have not
approved or, in the case of a decrease or reaffirmation, deemed to have
approved, as aforesaid, then the Administrative Agent shall poll the Lenders to
ascertain the highest Borrowing Base and/or the highest Conforming Borrowing
Base, as applicable, then acceptable to (x) in the case of a decrease or
reaffirmation, a number of Lenders sufficient to constitute the Required Lenders
and (y) in the case of an increase, all of the Lenders, and such amount shall
become the new Borrowing Base and/or the new Conforming Borrowing Base, as
applicable, effective on the date specified in Section 2.07(d).

 

(d)           Effectiveness of a Redetermined Borrowing Base and Conforming
Borrowing Base.  After a redetermined Borrowing Base and/or Conforming Borrowing
Base is approved or is deemed to have been approved by all of the Lenders or the
Required Lenders, as applicable, pursuant to Section 2.07(c)(iii), the
Administrative Agent shall notify the Borrower and the Lenders of the amounts of
the redetermined Borrowing Base and Conforming Borrowing Base (the “New
Borrowing Base Notice”), and such amounts shall become the new Borrowing Base
and the new Conforming Borrowing Base, as applicable, effective and applicable
to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders:

 

(i)            in the case of a Scheduled Redetermination, (A) if the
Administrative Agent shall have received the Engineering Reports required to be
delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then on May 1st or November 1st (or, in each case, such date
promptly thereafter as reasonably practicable), as applicable, following such
notice, or (B) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower pursuant to
Section 8.12(a) and (c) in a timely and complete manner, then on the Business
Day next succeeding delivery of such notice; and

 

(ii)           in the case of an Interim Redetermination, on the Business Day
next succeeding delivery of such notice.

 

In the case of the Mandatory Redetermination, the new Borrowing Base and the new
Conforming Borrowing Base shall become effective on the Conforming Date
regardless of the date of delivery of such notice.

 

Such amounts shall then become the Borrowing Base and the Conforming Borrowing
Base, as applicable, until the next Scheduled Redetermination Date, the next
Interim Redetermination Date, the Mandatory Redetermination Date or the next
adjustment to the Borrowing Base and the Conforming Borrowing Base under
Section 2.07(e), Section 2.07(f), Section 2.07(g), Section 8.13(c) or
Section 9.12(f), whichever occurs first.  Notwithstanding the foregoing, no
Scheduled Redetermination or Interim Redetermination shall become effective
until the New

 

7

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Borrowing Base Notice related thereto is received by the Borrower.

 

(e)           Automatic Reduction of Conforming Borrowing Base Upon Senior Notes
Issuance. In addition to other automatic reductions of the Borrowing Base and/or
Conforming Borrowing Base set forth herein, upon any issuance of Senior
Unsecured Notes (except to the extent issued in exchange for then outstanding
Senior Unsecured Notes or the proceeds are applied to refinancing, redemption or
retirement of outstanding Senior Unsecured Notes or to pay fees, expenses or
premiums related to such exchange or such refinancing, redemption or
retirement), the Borrowing Base and the Conforming Borrowing Base shall be
automatically decreased an amount equal to 25% of the notional amount of Senior
Unsecured Notes issued at such time.  Such decrease in the Borrowing Base and
the Conforming Borrowing Base shall occur without any vote of the Lenders or
action by the Administrative Agent.

 

(f)            Monthly Reduction of Borrowing Base. Prior to the Conforming
Date, in addition to other automatic reductions of the Borrowing Base set forth
herein, the Borrowing Base (but not the Conforming Borrowing Base) shall be
automatically decreased on the first day of each month, commencing June 1, 2015,
in an amount equal to $1,000,000.  Such decrease in the Borrowing Base shall
occur without any vote of the Lenders or action by the Administrative Agent.

 

(g)           Mandatory Redetermination.  In addition to the other
redeterminations of the Borrowing Base provided for herein, and notwithstanding
anything to the contrary contained herein, the Borrowing Base shall reduce
immediately and automatically on the Conforming Date to the Conforming Borrowing
Base as in effect on and as of such date, and from and after such date the
Borrowing Base shall be, and shall be in an amount equal to, the Conforming
Borrowing Base.  Such decrease in the Borrowing Base shall occur without any
vote of the Lenders or action by the Administrative Agent.

 

(h)           Maximum Amount of Borrowing Base.  Notwithstanding anything to the
contrary set forth herein, unless the administrative agent and the lenders under
the Second Lien Loans have consented in writing thereto, in no event may the
Borrowing Base hereunder be increased to an amount in excess of the “First Lien
Cap” under and as defined in the Intercreditor Agreement.

 

2.3          Amendment to Section 3.04(c)(ii).  Section 3.04(c)(ii) is hereby
amended by inserting “(other than pursuant to clauses (e), (f) and (g) therein)”
immediately after the first reference to “Section 2.07” appearing therein.

 

2.4          Amendment to Section 3.04(c)(iii).  Section 3.04(c)(iii) is hereby
amended by replacing the reference therein to “Section 9.12” with
“Section 2.07(e), Section 2.07(f) or Section 9.12(f)”.

 

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2.5          Amendment to Section 3.04(c).  Clauses (iv) and (v) of
Section 3.04(c) are hereby renumbered as clauses (v) and (vi), respectively, and
a new clause (iv) of Section 3.04(c) is hereby added as follows:

 

(iv)          Upon any adjustment to the Borrowing Base pursuant to
Section 2.07(g), if the total Revolving Credit Exposures exceeds the Borrowing
Base as adjusted, then the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such excess and (B) if any excess remains
after prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section 2.08(j).  The Borrower shall
be obligated to make such prepayment and/or deposit of cash collateral on the
earlier of (I) 60 days after the Conforming Date and (II) November 1, 2015;
provided that all payments required to be made pursuant to this
Section 3.04(c)(iv) must be made on or prior to the Termination Date.

 

2.6          Amendment to Section 7.22.  Section 7.22 is hereby amended and
restated in its entirety as follows:

 

Section 7.22          Anti-Corruption Laws and Sanctions.  The Parent has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Parent, the Borrower, their Subsidiaries and their respective
directors, officers, employees and agents with Anti-Corruption Laws and
applicable Sanctions, and the Parent, the Borrower, their Subsidiaries and their
respective officers and employees, and to the knowledge of the Parent or the
Borrower, their respective directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects.  None of
(a) the Parent, the Borrower, their Subsidiaries or to the knowledge of the
Parent, the Borrower or such Subsidiary, any of their respective directors,
officers or employees or (b) to the knowledge of the Parent or the Borrower, any
agent of the Parent, the Borrower or any Subsidiary that will act in any
capacity in connection with or benefit from the credit facility established
hereby, is a Sanctioned Person.   No Borrowing or Letter of Credit, use of
proceeds or other transaction contemplated by the Credit Agreement will violate
Anti-Corruption Laws or applicable Sanctions

 

2.7          Sections 7.23 and 7.24 — Deleted.  Sections 7.23 and 7.24 are
hereby deleted in their entirety.

 

2.8          Amendment to Section 8.02.  Section 8.02 is hereby amended by
adding the following as new clause (e):

 

(e)           the termination of the Merger Agreement.

 

2.9          Amendment to Section 8.09.  Section 8.09 is hereby amended by
adding the following sentence at the end thereof:

 

The Parent will maintain in effect and enforce policies and procedures designed
to ensure compliance by the Parent, the Borrower, their Subsidiaries and their

 

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respective directors, officers, employees and agents with Anti-Corruption Laws
and applicable Sanctions.

 

2.10        Amendment to Section 8.14.  Section 8.14 is hereby amended by
replacing each reference to “80%” appearing therein with “90%”.

 

2.11        Amendment to Section 9.04(a).  Clause (iv) of Section 9.04(a) is
hereby amended and restated in its entirety as follows:

 

(iv)          (A) prior to October 1, 2015, the Parent may make Restricted
Payments of Available Cash to holders of its Equity Interests in compliance with
the terms of its Organizational Documents in an aggregate amount for all such
Restricted Payments made after the Fifth Amendment Effective Date not to exceed
$10,600,000, in each case only so long as no Event of Default or Borrowing Base
Deficiency has occurred and is continuing or would result therefrom and (B) on
or after October 1, 2015, the Parent may make Restricted Payments of Available
Cash to holders of its Equity Interests in compliance with the terms of its
Organizational Documents, in each case only so long as (1) no Event of Default
or Borrowing Base Deficiency has occurred and is continuing or would result
therefrom and (2) after giving effect to such Restricted Payment, the difference
of (x) the total Commitments (i.e., the lesser of the Aggregate Maximum Credit
Amounts and the then effective Borrowing Base) minus (y) the total Revolving
Credit Exposure is equal to or greater than 15% of the Conforming Borrowing Base
then in effect.

 

2.12        Amendment to Section 9.08.  Section 9.08 is hereby amended by adding
the following sentence at the end thereof:

 

The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall ensure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for
the purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country or
(iii) in any manner that would result in the violation of any Sanctions
applicable to any party hereto.

 

Section 3.                      Borrowing Base Redetermination.  Subject to the
satisfaction of the conditions precedent set forth in Section 4 (or waived in
accordance with Section 12.02) and pursuant to Section 2.07 of the Credit
Agreement, the Administrative Agent and the Lenders agree that the Borrowing
Base shall be decreased from $260,000,000 to $245,000,000, and that the
Conforming Borrowing Base shall be $195,000,000, in each case effective as of
the Fifth Amendment Effective Date, and continuing until the next Scheduled
Redetermination, Interim Redetermination or other redetermination or adjustment
of the Borrowing Base and/or Conforming Borrowing Base thereafter.  The
Borrower, the Parent, the Administrative Agent

 

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and Lenders agree that the redetermination of the Borrowing Base provided for in
this Section 3 shall be considered and deemed to be the May 1, 2015 Scheduled
Redetermination.

 

Section 4.                      Conditions Precedent.  This Fifth Amendment
shall not become effective until the date on which each of the following
conditions is satisfied:

 

4.1          Fifth Amendment.  The Administrative Agent shall have received from
the Lenders, the Parent and the Borrower executed counterparts (in such number
as may be requested by the Administrative Agent) of this Fifth Amendment.

 

4.2          Upfront Fees.  The Borrower shall have paid to the Administrative
Agent, for the account of each Lender in accordance with such Lender’s
Applicable Percentage, upfront fees in an aggregate amount equal to 5 basis
points (0.05%) of $245,000,000.

 

4.3          Fees and Expenses.  The Administrative Agent and the Lenders shall
have received all other fees and amounts due and payable on or prior to the date
hereof, including, to the extent invoiced, reimbursement or payment of all
reasonable out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder (including, to the extent invoiced on or prior to the Fifth
Amendment Effective Date, the reasonable fees and expenses of Vinson & Elkins,
LLP, counsel to the Administrative Agent).

 

4.4          Mortgages, Mortgage Amendments and Title.

 

(a)           The Administrative Agent shall have received mortgages and/or
deeds of trust (or supplements to existing mortgages and/or deeds of trust, as
applicable) in form and substance acceptable to the Administrative Agent and
duly executed by the Borrower, together with such other assignments,
conveyances, amendments, agreements and other writings, including, without
limitation, UCC-1 financing statements (each duly authorized and executed), as
the Administrative Agent shall deem necessary or appropriate to grant, evidence
and perfect first-priority Liens in favor of the Administrative Agent on at
least 90% of the total value of the Oil and Gas Properties set forth on the most
recently delivered Reserve Report.

 

(b)           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 Oil and Gas Properties set forth on the most recently
delivered Reserve Report.

 

4.5          Amendment to Second Lien Credit Agreement.  The Administrative
Agent shall have received a copy of an amendment to the Second Lien Credit
Agreement, dated as of May 4, 2015, among the Borrower, the Parent, Wells Fargo
Energy Capital, Inc., as administrative agent, and the lenders party thereto,
and any other amendments, documents or agreements prepared in connection
therewith, each in form and substance reasonably satisfactory to the
Administrative Agent.

 

4.6          Consent to Intercreditor Agreement. The Administrative Agent shall
have received a copy of a consent to the Intercreditor Agreement, in form and
substance reasonably satisfactory to the Administrative Agent, evidencing the
consent of Wells Fargo Energy Capital, Inc. to the amendments set forth herein.

 

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4.7          Further Assurances.  The Administrative Agent shall have received
such other agreements, instruments, approvals, and other documents, each
satisfactory to the Administrative Agent in form and substance, as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

 

4.8          No Default or Event of Default.  No Default or Event of Default
shall have occurred and be continuing, before and after giving effect to the
terms of this Fifth Amendment.

 

Section 5.                      Miscellaneous.

 

5.1          Confirmation.  The provisions of the Credit Agreement, as amended
by this Fifth Amendment, shall remain in full force and effect following the
effectiveness of this Fifth Amendment.

 

5.2          Ratification and Affirmation; Representations and Warranties.  Each
of the Borrower and Parent hereby (a) acknowledges the terms of this Fifth
Amendment, (b) ratifies and affirms its obligations under, and acknowledges,
renews and extends its continued liability under, each of the Loan Documents to
which it is a party and agrees that each of the Loan Documents to which it is a
party remains in full force and effect, except as expressly amended hereby,
notwithstanding the amendments contained herein and (c) represents and warrants
to the Lenders that as of the date hereof, both before and after giving effect
to the terms of this Fifth Amendment (i) all of the representations and
warranties contained in each Loan Document to which it is a party are true and
correct in all material respects (except that any such representations and
warranties that are qualified by materiality shall be true and correct in all
respects), unless such representations and warranties are stated to relate to a
specific earlier date, in which case, such representations and warranties shall
continue to be true and correct in all material respects (except that any such
representations and warranties that are qualified by materiality shall be true
and correct in all respects) as of such earlier date and (ii) no Default or
Event of Default has occurred and is continuing.

 

5.3          Loan Documents.  This Fifth Amendment and each agreement,
instrument, certificate or document executed by the Borrower, the Parent or any
of their officers in connection herewith are “Loan Documents” as defined and
described in the Credit Agreement and all of the terms and provisions of the
Credit Agreement relating to Loan Documents shall apply hereto and thereto.

 

5.4          Counterparts.  This Fifth 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.  Delivery of an executed signature page of this Fifth Amendment by
facsimile or electronic mail shall be effective as delivery of a manually
executed counterpart hereof; provided that, upon the request of any party
hereto, such facsimile transmission or electronic mail transmission shall be
promptly followed by the original thereof.

 

5.5          NO ORAL AGREEMENT.  THIS FIFTH AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT
THE FINAL AGREEMENT AMONG THE

 

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PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS AMONG
THE PARTIES.

 

5.6          GOVERNING LAW.  THIS FIFTH 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 NEW YORK.

 

5.7          Release. In consideration of the agreements contained herein, the
Borrower and the Parent hereby forever waive, discharge and release each of the
Lenders, the Administrative Agent, any other Agent, the Issuing Bank and the
Swingline Lender, and each of their respective officers, directors, agents and
employees and its affiliates, successors, assigns, shareholders and controlling
persons (collectively, the “Released Persons”) from any and all claims
(including, without limitation, cross-claims, counterclaims, rights of set-off
and recoupment), demands, liabilities, damages, actions and causes of actions,
whether in law or in equity, of whatsoever nature and kind, whether known or
unknown, that the Borrower or the Parent had or has against the Released
Persons, with respect to the Credit Agreement and the other Loan Documents and
the transactions contemplated thereby or hereby, but only to the extent arising
on or before the Fifth Amendment Effective Date; provided, however, it is
expressly acknowledged and agreed that such waiver, discharge and release does
not apply to, nor shall impair in any respect, any Bank Products, Swap
Agreements or other arrangements or agreements other than the Credit Agreement
and the other Loan Documents, between or among the Borrower, the Parent or any
Subsidiary, on the one hand, and any one or more Released Persons, on the other
hand, even if such Bank Products, Swap Agreements or other arrangements or
agreements may be referred to in or secured by the Credit Agreement or another
Loan Document.

 

[SIGNATURES BEGIN NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be
duly executed as of the date first written above.

 

BORROWER:

LRE OPERATING, LLC

 

 

 

 

 

By:

/s/ Jaime R. Casas

 

Name:

Jaime R. Casas

 

Title:

Vice President and Chief Financial Officer

 

 

 

 

 

 

PARENT:

LRR ENERGY, L.P.

 

 

 

 

By:

LRE GP, LLC, its general partner

 

 

 

 

 

 

 

By:

/s/ Jaime R. Casas

 

Name:

Jaime R. Casas

 

Title:

Vice President and Chief Financial Officer

 

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ADMINISTRATIVE AGENT:

WELLS FARGO BANK, N. A.

 

as Administrative Agent, Issuing Bank, Swing Line Lender, and Lender

 

 

 

 

 

 

 

By:

/s/ Matthew A. Turner

 

Name:

Matthew A. Turner

 

Title:

Vice President

 

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LENDERS:

BANK OF AMERICA, N.A.

 

 

 

 

 

 

 

By:

/s/ Michael Clayborne

 

Name:

Michael Clayborne

 

Title:

Vice President

 

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CITIBANK, N.A.

 

 

 

 

 

 

 

By:

/s/ Scott Gildea

 

Name:

Scott Gildea

 

Title:

Senior Vice President

 

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ROYAL BANK OF CANADA

 

 

 

 

 

 

 

By:

/s/ Evans Swann, Jr.

 

Name:

Evans Swann, Jr.

 

Title:

Authorized Signatory

 

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COMERICA BANK

 

 

 

 

 

 

 

By:

/s/ Jeff Treadway

 

Name:

Jeff Treadway

 

Title:

Senior Vice President

 

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BARCLAYS BANK PLC

 

 

 

 

 

By:

/s/ Vanessa Kurbatskiy

 

Name:

Vanessa Kurbatskiy

 

Title:

Vice President

 

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AMEGY BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ H. Brock Hudson MS

 

Name:

H. Brock Hudson  MS

 

Title:

Senior Vice President

 

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