Exhibit 10.1

 

THIRTEENTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND
AMENDMENT TO AMENDED AND RESTATED SECURITY AGREEMENTS

 

THIS THIRTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
AMENDMENT TO AMENDED AND RESTATED SECURITY AGREEMENTS (this “Amendment”),
effective as of the 18th day of December, 2012 (the “Effective Date”), is
entered into by and among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware
corporation (the “Borrower”), the guarantors party hereto (the “Guarantors”),
the lenders party hereto (the “Lenders”) and BANK OF MONTREAL, as administrative
agent for the Lenders (the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into
that certain Second Amended and Restated Credit Agreement dated April 13, 2011
(as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrower has requested that the Lenders and the Administrative
Agent amend certain provisions of the Credit Agreement; and

 

WHEREAS, said parties are willing to so amend the Credit Agreement subject to
the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth in this Amendment, the Borrower, the Guarantors, the Lenders and the
Administrative Agent agree as follows:

 

1.                                      Defined Terms.  Unless otherwise defined
herein, capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.

 

2.                                      Amendments to Section 1.02.

 

(a)                                 Section 1.02 of the Credit Agreement is
hereby amended to delete the definitions of “EBITDAX”, “Non-Conforming Borrowing
Base” and “Obligations” in their entirety and substitute the following therefor:

 

“EBITDAX” means, for any period, the sum of Consolidated Net Income for such
period calculated on a trailing four quarter basis plus the following expenses
or charges to the extent deducted from Consolidated Net Income in such period:
interest, income Taxes, depreciation, depletion, amortization, expenses
associated with the exploration of Oil and Gas Properties, all non-cash charges
and adjustments (including stock-based compensation, impairment of asset values,
non-cash adjustments to derivative carrying values, non-cash adjustments to
asset retirement obligations and other

 

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similar items as from time to time required under GAAP) and all non-recurring
expenses, minus all non-cash income added to Consolidated Net Income. 
Notwithstanding the foregoing, EBITDAX shall be Consolidated Net Income plus the
aforementioned expenses or charges (i) for the most recently ended quarter
multiplied by four (4) with respect to the quarter ending December 31, 2012,
(ii) for the most recently ended two (2) quarters multiplied by two (2) with
respect to the quarter ending March 31, 2013, and (iii) for the most recently
ended three (3) quarters multiplied by four-thirds (4/3) with respect to the
quarter ending June 30, 2013.

 

“Non-Conforming Borrowing Base” means an amount included in the Borrowing Base
at the times and in the amounts set forth in Section 2.07(a).  The
Non-Conforming Borrowing Base shall not be subject to Scheduled Redeterminations
or Interim Redeterminations.

 

“Obligations” means, without duplication, (i) all Debt evidenced hereunder,
(ii) the obligation of the Loan Parties for the payment of the fees payable
hereunder or under the other Loan Documents, (iii) all obligations and
liabilities of the Loan Parties to any Person relating to Swap Agreements
between any Loan Party and such Person initially entered into while such Person
was a Lender under the Prior Agreement or this Agreement or an Affiliate of a
Lender under the Prior Agreement or this Agreement, (iv) all obligations and
other liabilities of the Loan Parties to any Person relating to Cash Management
Agreements between any Loan Party and such Person while such Person is a Lender
under this Agreement or an Affiliate of a Lender under this Agreement and
(v) all other obligations and liabilities (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Loan Parties to the
Administrative Agent, the Issuer and the Lenders, including reimbursement
obligations with respect to LC Disbursements, in each case now existing or
hereafter incurred under, arising out of or in connection with any Loan
Document, and to the extent that any of the foregoing includes or refers to the
payment of amounts deemed or constituting interest, only so much thereof as
shall have accrued, been earned and which remains unpaid at each relevant time
of determination.

 

(b)                                 Section 1.02 of the Credit Agreement is
hereby amended to add the following new definitions in proper alphabetical
order:

 

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository,

 

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overdraft, credit or debit card, electronic funds transfer and other cash
management arrangements.

 

“Material Asset Sale” means any asset sale permitted under
Section 9.11(d) resulting in the receipt of net cash proceeds by the Borrower or
any Restricted Subsidiary in excess of $15,000,000, excluding, however, sales
made by the Borrower or its Restricted Subsidiaries in the ordinary course of
their partnership drilling programs.

 

“Issuance” means that certain issuance by the Borrower of Senior Notes as an
“add-on” to its existing 9.75% Senior Notes due 2020.

 

“Thirteenth Amendment Effective Date” means December 18, 2012.

 

3.                                      Amendments to Section 2.07(a). 
Section 2.07(a) of the Credit Agreement is hereby amended to restate paragraph
(iii) thereof in its entirety as follows and delete paragraph (iv) thereof in
its entirety:

 

“(iii)                         On the Thirteenth Amendment Effective Date,
(A) the Conforming Borrowing Base shall be equal to (x) $325,000,000 minus
(y) $0.125 for each $1.00 of the principal amount of the Issuance up to
$150,000,000 minus (z) $0.25 for each $1.00 of the principal amount of the
Issuance in excess of $150,000,000 and (B) the Non-Conforming Borrowing Base
shall be equal to (x) $50,000,000 minus (y) $0.125 for each $1.00 of the
principal amount of the Issuance up to $150,000,000 minus (z) the principal
amount of the Issuance in excess of $150,000,000 on a dollar-for-dollar basis. 
Upon the issuance of any Senior Notes after the Thirteenth Amendment Effective
Date, the Conforming Borrowing Base shall be automatically reduced by $0.25 for
each $1.00 of the aggregate principal amount of such Senior Notes.  The
Non-Conforming Borrowing Base shall be automatically reduced as follows (each, a
“Non-Conforming Borrowing Base Reduction Event”):

 

(1)                                 upon the issuance of Senior Notes after the
Thirteenth Amendment Effective Date, by the aggregate principal amount of such
Senior Notes on a dollar-for-dollar basis;

 

(2)                                 upon any Material Asset Sale after the
Thirteenth Amendment Effective Date, by the entire aggregate amount of net cash
proceeds received from such Material Asset Sale on a dollar-for-dollar basis;

 

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(3)                                 upon any increases in the Conforming
Borrowing Base after the Thirteenth Amendment Effective Date, by the amount of
such increase on a dollar-for-dollar basis;

 

(4)                                 on April 1, 2013, to an amount equal to 50%
of the amount of the Non-Conforming Borrowing Base on the Thirteenth Amendment
Effective Date; and

 

(5)                                 on July 1, 2013, to $0.

 

Notwithstanding anything contained herein to the contrary, the Non-Conforming
Borrowing Base shall never be greater than 12% of the Conforming Borrowing
Base.”

 

4.                                      Amendments to Section 9.01. 
Section 9.01 of the Credit Agreement is hereby amended to restate in their
entirety subsections (a) and (c) thereof as follows:

 

“(a)                           Current Ratio.  Commencing with the fiscal
quarter ending March 31, 2011, the Borrower will not permit, as of the last day
of any fiscal quarter, its ratio of (i) consolidated current assets of the
Borrower and the Restricted Subsidiaries (including the unused amount of the
total Commitments, but excluding non-cash assets under FAS 133) to
(ii) consolidated current liabilities of the Borrower and the Restricted
Subsidiaries (excluding non-cash obligations under FAS 133) (such ratio, the
“Current Ratio”) to be less than 1.0 to 1.0.  If the Issuance occurs after
January 1, 2013 but on or before January 31, 2013, the Current Ratio shall be
calculated as if the Issuance occurred on December 31, 2012.

 

(c)                                  Total Debt to EBITDAX.  The Borrower will
not permit, as of the last day of any fiscal quarter, its ratio of (i) total
Debt of the Borrower and the Restricted Subsidiaries as of such date to
(ii) EBITDAX of the Borrower and the Restricted Subsidiaries for the trailing
four quarter period then ended (such ratio, the “Leverage Ratio”) to exceed
(A) 4.75 to 1.0 for the fiscal quarter ending December 31, 2012, (B) 4.50 to 1.0
for the fiscal quarter ending March 31, 2013, (C) 4.25 to 1.0 for the fiscal
quarter ending June 30, 2013 and (D) 4.25 to 1.0 for the fiscal quarter ending
September 30, 2013 and for each fiscal quarter thereafter, unless, in the case
of this (D) only, a Material Asset Sale shall have occurred during any such
fiscal quarter in which case the Leverage Ratio shall not exceed 4.00 to 1.0 for
such fiscal quarter.”

 

5.                                      Amendments to Section 9.02. 
Section 9.02 of the Credit Agreement is hereby amended to restate clause
(p) thereof in its entirety as follows:

 

“(p)                           Debt evidenced by Senior Notes (including
unsecured guarantees in respect thereof) not to exceed an aggregate principal

 

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amount of $650,000,000 at any time outstanding; provided that (i) the maturity
date of the Senior Notes shall not be earlier than one year after the Maturity
Date and (ii) the Borrower shall not prepay any amounts owing under the Senior
Notes at any time;”.

 

6.                                      Co-Documentation Agents.  On the
Effective Date, Amegy Bank National Association shall no longer be a
Co-Documentation Agent under the Credit Agreement and SunTrust Bank shall become
a Co-Documentation Agent thereunder.  Any and all references in the Credit
Agreement and the other Loan Documents to Amegy Bank National Association as a
Co-Documentation Agent shall be deemed to refer to SunTrust Bank as a
Co-Documentation Agent.

 

7.                                      Amendment to Security Agreements.  The
definition of “Secured Parties” in each Security Agreement is hereby restated in
its entirety as follows:

 

“Secured Parties” means, collectively, (a) the Administrative Agent, (b) the
Lenders, (c) each party to a Permitted Swap Agreement if as of the time of
entering into such Permitted Swap Agreement such Person was a Lender under the
Prior Agreement or the Credit Agreement or an Affiliate of a Lender under the
Prior Agreement or the Credit Agreement and (d) each party to a Cash Management
Agreement if such Person is a Lender under the Credit Agreement or an Affiliate
of a Lender under the Credit Agreement.

 

8.                                      Ratification.  Each of the Borrower and
the Guarantors hereby ratifies all of its respective obligations under the
Credit Agreement and each of the Loan Documents to which it is a party, and
agrees and acknowledges that the Credit Agreement and each of the Loan Documents
to which it is a party are and shall continue to be in full force and effect as
amended and modified by this Amendment.  Except as provided herein, nothing in
this Amendment extinguishes, novates or releases any right, claim, lien,
security interest or entitlement of any of the Lenders or the Administrative
Agent created by or contained in any of such documents nor is the Borrower nor
any Guarantor released from any covenant, warranty or obligation created by or
contained herein or therein.

 

9.                                      Representations and Warranties.  The
Borrower and Guarantors hereby represent and warrant to the Administrative Agent
and the Lenders that (a) this Amendment has been duly executed and delivered on
behalf of the Borrower and Guarantors, (b) this Amendment constitutes a valid
and legally binding agreement enforceable against the Borrower and Guarantors in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law, (c) the
representations and warranties contained in the Credit Agreement and the Loan
Documents are true and correct on and as of the date hereof in all material
respects as though made as of the date hereof (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 as of such specified earlier date), (d) no Default or Event of

 

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Default exists under the Credit Agreement or under any Loan Document as of the
Effective Date and (e) the execution, delivery and performance of this Amendment
has been duly authorized by the Borrower and Guarantors.

 

10.                               Conditions to Effectiveness.  This Amendment
shall be effective on the Effective Date upon satisfaction of the following
conditions:

 

(a)                                 the Borrower, the Guarantors and each of the
Lenders shall have executed and delivered to the Administrative Agent
counterparts of this Amendment;

 

(b)                                 no later than January 31, 2013, the Borrower
shall have issued Senior Notes as an “add-on” to its 9.75% Senior Notes due 2020
in an aggregate principal amount of not less than $100,000,000; and

 

(c)                                  the Borrower shall have paid to the
Administrative Agent and the Lenders all fees and expenses that are due in
connection with this Amendment.

 

11.                               Counterparts.  This Amendment may be signed in
any number of counterparts, which may be delivered in original, electronic or
facsimile form each of which shall be construed as an original, but all of which
together shall constitute one and the same instrument.

 

12.                               Governing Law.  This Amendment, all Notes, the
other Loan Documents and all other documents executed in connection herewith
shall be deemed to be contracts and agreements under the laws of the State of
New York and of the United States of America and for all purposes shall be
construed in accordance with, and governed by, the laws of New York and of the
United States.

 

13.                               Final Agreement of the Parties.  Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by the Credit Agreement, as amended by this Amendment.  Nothing in
this Amendment, express or implied is intended to confer upon any party other
than the parties hereto any rights, remedies, obligations or liabilities under
or by reason of this Amendment.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the Effective Date.

 

 

BORROWER:

 

 

 

MAGNUM HUNTER RESOURCES

 

CORPORATION, a Delaware corporation

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Chief Financial Officer

 

 

 

 

 

GUARANTORS:

 

 

 

PRC WILLISTON, LLC,

 

a Delaware limited liability company

 

 

 

By:

Magnum Hunter Resources Corporation,

 

 

its sole member

 

 

 

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

 

Ronald D. Ormand

 

 

 

Chief Financial Officer

 

 

 

 

 

MAGNUM HUNTER RESOURCES LP,

 

a Delaware limited partnership

 

 

 

By:

Magnum Hunter Resources GP, LLC,

 

 

its general partner

 

 

 

 

 

By:

Magnum Hunter Resources Corporation,

 

 

 

its sole member

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

 

 

Ronald D. Ormand

 

 

 

 

Chief Financial Officer

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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MAGNUM HUNTER RESOURCES GP, LLC,

 

a Delaware limited liability company

 

 

 

By:

Magnum Hunter Resources Corporation,

 

 

its sole member

 

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

 

Ronald D. Ormand

 

 

 

Chief Financial Officer

 

 

 

 

 

TRIAD HUNTER, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Vice President

 

 

 

 

 

EAGLE FORD HUNTER, INC.,

 

a Colorado corporation

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Secretary

 

 

 

 

 

MAGNUM HUNTER PRODUCTION INC.,

 

a Kentucky corporation

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Chief Financial Officer

 

 

 

 

 

NGAS HUNTER, LLC

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Vice President and Treasurer

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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MHR CALLCO CORPORATION,

 

a corporation existing under the laws of the Province of Alberta

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Vice President

 

 

 

 

 

MHR EXCHANGECO CORPORATION,

 

a corporation existing under the laws of the Province of Alberta

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Vice President

 

 

 

 

 

WILLISTON HUNTER CANADA, INC.,

 

a corporation existing under the laws of the Province of Alberta

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

 

WILLISTON HUNTER INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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WILLISTON HUNTER ND, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Vice President and Treasurer

 

 

 

 

 

BAKKEN HUNTER, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Executive Vice President

 

 

 

 

 

MAGNUM HUNTER MARKETING, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Executive Vice President and Treasurer

 

 

 

 

 

VIKING INTERNATIONAL RESOURCES CO., INC.,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Ronald D. Ormand

 

 

Ronald D. Ormand

 

 

Executive Vice President and Treasurer

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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ADMINISTRATIVE AGENT AND LENDER:

 

 

 

BANK OF MONTREAL

 

 

 

 

 

By:

/s/ Joseph A. Bliss

 

 

Joseph A. Bliss

 

 

Managing Director

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

CAPITAL ONE, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Nancy M. Mak

 

Name:

Nancy M. Mak

 

Title:

Senior Vice President

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

CITIBANK, N.A.

 

 

 

 

 

By:

/s/ John F. Miller

 

Name:

John F. Miller

 

Title:

Attorney-In-Fact

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

 

 

 

 

By:

/s/ Marcus M. Tarkington

 

Name:

Marcus M. Tarkington

 

Title:

Director

 

 

 

 

 

By:

/s/ Michael Getz

 

Name:

Michael Getz

 

Title:

Vice President

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER

 

 

 

ROYAL BANK OF CANADA

 

 

 

 

 

By:

/s/ Kristan Spivey

 

Name:

Kristan Spivey

 

Title:

Authorized Signatory

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

UBS LOAN FINANCE LLC

 

 

 

 

 

By:

/s/ Lana Gifas

 

Name:

Lana Gifas

 

Title:

Director

 

 

 

 

 

By:

/s/ Joselin Fernandes

 

Name:

Joselin Fernandes

 

Title:

Associate Director

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER

 

 

 

ABN AMRO CAPITAL USA LLC

 

 

 

 

 

By:

/s/ Darrell Holley

 

Name:

Darrell Holley

 

Title:

Managing Director

 

 

 

 

 

By:

/s/ Casey Lowary

 

Name:

Casey Lowary

 

Title:

Director

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

By:

/s/ Jeffrey H. Rathkamp

 

Name:

Jeffrey H. Rathkamp

 

Title:

Managing Director

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

KEYBANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Chulley Bogle

 

Name:

Chulley Bogle

 

Title:

Vice President

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

SUNTRUST BANK

 

 

 

 

 

By:

/s/ Yann Pirio

 

Name:

Yann Pirio

 

Title:

Director

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

AMEGY BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Mark A. Serice

 

Name:

Mark A. Serice

 

Title:

Senior Vice President

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

CREDIT SUISSE AG, Cayman Islands Branch

 

 

 

 

 

By:

/s/ Doreen Barr

 

Name:

Doreen Barr

 

Title:

Director

 

 

 

 

 

By:

/s/ Michael Spaight

 

Name:

Michael Spaight

 

Title:

Associate

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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LENDER:

 

 

 

GOLDMAN SACHS BANK USA

 

 

 

 

 

By:

/s/ Michelle Latzoni

 

Name:

Michelle Latzoni

 

Title:

Authorized Signatory

 

Signature Page to Thirteenth Amendment to Credit Agreement

 

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