Exhibit 10.3

 

Execution Version

 

FOURTH AMENDMENT
TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of July 5, 2016, is among SANCHEZ PRODUCTION PARTNERS LP,
a Delaware limited partnership (the “Borrower”), the guarantors party hereto
(the “Guarantors”), each of the Lenders party hereto, and ROYAL BANK OF CANADA,
as administrative agent (in such capacity, the “Administrative Agent”), and as
collateral agent (in such capacity, the “Collateral Agent”), and relates to that
certain Third Amended and Restated Credit Agreement, dated as of March 31, 2015
(as amended, restated, modified or supplemented from time to time prior to the
date hereof, the “Existing Credit Agreement”; and as amended hereby, the “Credit
Agreement”), among the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, and ROYAL BANK OF CANADA, as letter of credit issuer.

WITNESSETH:

WHEREAS, the Borrower intends to enter into that certain Purchase and Sale
Agreement between Sanchez Energy Corporation, a Delaware corporation (“SN”),
SN Midstream, LLC, a Delaware limited liability company (“SN Midstream”), and
the Borrower on or about July 5, 2016 (the “Carnero PSA”), pursuant to which the
Borrower intends to acquire from SN Midstream fifty percent (50%) of the equity
of Carnero Gathering, LLC, a Delaware limited liability company (“Carnero
Gathering”), which owns certain midstream oil and gas assets located in Webb
County, Texas, as more particularly described in the Carnero PSA, for
approximately $37,000,000 (such acquisition, the “Carnero Acquisition”);

WHEREAS, the parties hereto desire to make certain amendments to the Existing
Credit Agreement to allow the Borrower to acquire Carnero Gathering and make
investments in certain other joint ventures on the terms and conditions provided
herein;

WHEREAS, the parties hereto also desire to correct certain scrivener’s errors in
the Existing Credit Agreement; and

WHEREAS, Section 12.02 of the Existing Credit Agreement provides that the
Borrower and the Lenders may amend the Existing Credit Agreement and the other
Loan Documents for certain purposes;

NOW, THEREFORE, in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:

Section 1.    Definitions.  Unless otherwise defined in this Amendment, each
capitalized term used in this Amendment has the meaning assigned to such term in
the Credit Agreement.

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Section 2.    Amendments to the Credit Agreement.  The Credit Agreement is
hereby amended as follows:

(a)    The fourth paragraph in the Recitals of the Credit Agreement is hereby
amended to replace the reference to “[_______], 2015” therein with “September
25, 2015” and to replace the reference to “$[320,000,000]” therein
with“$348,840,250”.

(b)    Section 1.01 of the Credit Agreement is hereby amended by amending and
restating the definition of “First Amendment Effective Date” therein with the
definition below of “Second Amendment Effective Date”, and inserting such term
in the appropriate alphabetical order:

“Second Amendment Effective Date” shall have the meaning set forth in that
certain Joinder, Assignment and Second Amendment to Third Amended and Restated
Credit Agreement dated as of October 14, 2015, among the Borrower, the
Guarantors, the Lenders party thereto, the Administrative Agent and the
Collateral Agent.

Each reference in the Credit Agreement to the defined term “First Amendment
Effective Date” shall hereby be amended and replaced with the defined term
“Second Amendment Effective Date”.

(c)    Section 1.01 of the Credit Agreement is hereby amended by inserting the
following defined terms therein in the appropriate alphabetical order:

“Carnero Gathering Agreement” means that certain Firm Gas Gathering Agreement by
and among SN, SN Catarina and TPL SouthTex Processing Company dated as of
October 2, 2015.

“Carnero Services Agreement” means that certain Services and Secondment
Agreement between Carnero Gathering LLC, as owner, and TPL SouthTex Processing
Company, as service provider, dated as of June 23, 2016.

“Carnero Transportation Services Agreement” means that certain Amended and
Restated Transportation Services Agreement between Carnero Gathering LLC, as
owner, and TPL SouthTex Processing Company LP, as shipper, dated as of June 23,
2016.

“Excess Cash” has the meaning assigned to such term in Section 3.03(c)(iv).

“Joint Venture” means, as to any Person, any other Person (a) in which such
Person owns fifty percent (50%) or less of an interest in the profits or capital
of such other Person or lacks sufficient Equity Interests or other voting
ownership interest to enable such Person ordinarily to elect a majority of the
directors of such other Person and (b) the business purpose of which is to
engage in Midstream Activities by acquiring or constructing, and thereafter
owning and operating, Midstream Properties that are related by project type or
class, geography or other similar characteristics, of the same type conducted by
the Borrower or a Subsidiary.  The definition of “Joint Venture” shall include
Carnero Gathering, LLC.

“Midstream Activities” means with respect to any Person, collectively,
(i) gathering, compressing, treating, processing and transporting natural gas,
crude, condensate and

 

2

 

 

--------------------------------------------------------------------------------

 

natural gas liquids, (ii) fractionating and transporting natural gas, crude,
condensate and natural gas liquids, (iii) marketing natural gas, crude,
condensate and natural gas liquids, and (iv) water distribution, supply,
treatment and disposal services, and all other similar activities.

“Permitted Joint Venture Debt” means, with respect to any Joint Venture, its
accounts payable and other accrued expenses, liabilities or obligations to pay
for the deferred purchase price of Property or services from time to time
incurred in the ordinary course of business with respect to which no more than
90 days have elapsed since the date of invoice therefor or that are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP.

“Trigger Event” means, with respect to any Joint Venture from which the Borrower
has included any dividends or distributions actually received in cash for
purposes of calculating Midstream Adjusted EBITDA of the Borrower and its
Consolidated Subsidiaries, the occurrence of any of the following:

(a) the Borrower and its Subsidiaries shall cease to own and control directly or
indirectly at least the amount of Equity Interests or other voting ownership of
such Joint Venture that the Borrower or any of its Subsidiaries initially owned;

(b) the incurrence, creation, assumption or existence of any Debt by such Joint
Venture other than Permitted Joint Venture Debt;

(c) the sale, distribution or other disposition by such Joint Venture of a
material portion of its assets or properties outside the ordinary course of
business such that the approval or consent of a specified percentage of the
members or other holders of voting Equity Interests of such Joint Venture or, if
applicable, the board or other applicable managing body of such Joint Venture,
is required under the terms of such Joint Venture’s organizational documents;

(d) the incurrence, creation, assumption or existence of any Lien on the assets
or properties of such Joint Venture other than Excepted Liens;

(e) the amendment, waiver or other modification of any gathering, compressing,
processing, transportation, services or other commercial agreement (including,
without limitation, the Carnero Transportation Services Agreement and the
Carnero Gathering Agreement) to which the primary revenues of such Joint Venture
are attributable if the effect of such amendment, waiver or other modification
is to reduce (or could reasonably be expected to reduce) in any material respect
any minimum committed volumes or minimum committed service level thereunder; or

(f) such Joint Venture shall voluntarily declare bankruptcy, or file a petition
or otherwise seek protection under any federal or state bankruptcy, insolvency
or reorganization law, or commence liquidation, winding up, dissolution,
recapitalization or reorganization.

 

3

 

 

--------------------------------------------------------------------------------

 

(d)    Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of “Applicable Margin” to replace the pricing table therein with the
following:

 

 

 

 

Borrowing Base Utilization Percentage

Eurodollar Loan

ABR Loan

Commitment Fee Rate

> 90%

3.25%

2.25%

0.500%

> 75% < 90%

3.00%

2.00%

0.500%

> 50% < 75%

2.75%

1.75%

0.500%

> 25% < 50%

2.50%

1.50%

0.500%

< 25%

2.25%

1.25%

0.500%

 

 

 

 

 

(e)    Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of “Catarina Gathering Agreement” to replace the reference to
“[____________]” therein with “October 14, 2015”.

(f)    Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of “Midstream Adjusted EBITDA” to add the following paragraph at the
end thereof:

“For purposes of computing Midstream Adjusted EBITDA for any period, so long as
no Trigger Event has occurred and is continuing, Adjusted EBITDA shall be
increased by the aggregate amount of dividends or distributions actually
received in cash during such period by the Borrower or any Consolidated
Subsidiaries from any Joint Venture for which the Borrower has delivered to the
Administrative Agent the financial statements thereof in accordance with Section
8.01(r), provided that the aggregate amount attributable to such dividends or
distributions actually received from such Joint Venture shall not exceed twenty
percent (20%) of the Midstream Adjusted EBITDA (as increased by such dividends
or distributions received from such Joint Venture) of the Borrower and its
Consolidated Subsidiaries for such period.”

(g)    Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of “Midstream Properties” to replace the instance of the “the
Borrower and its Subsidiaries” therein with “the Borrower, the Borrower’s
Subsidiaries, and any Joint Venture”.

(h)    Section 1.01 of the Credit Agreement is hereby amended by amending the
definition of “Subsidiary” to add the following sentence at the end thereof:

“Notwithstanding anything to the contrary contained herein, the definition of
Subsidiary shall not include Carnero Gathering, LLC or any other Joint Venture.”

(i)    Section 2.07(h) of the Credit Agreement is hereby amended to renumber
“clause (ii)” therein as “clause (i)” and to renumber “clause (iii)” therein to
“clause (ii)”.

(j)    Each reference in the Credit Agreement to “Section 2.07(h)(iii)” shall be
amended and replaced with “Section 2.07(h)(ii)”.

 

4

 

 

--------------------------------------------------------------------------------

 

(k)    Section 3.03(c) of the Credit Agreement is hereby amended by (i)
renumbering “clause (iv)” therein to “clause (v)” and (ii) inserting the
following as “clause (iv)” therein:

“(iv)  Excess Cash Balances. If at any time while there are any Borrowings
outstanding, the Borrower and its Consolidated Subsidiaries have any cash or
cash equivalents (other than cash in Cash Collateral Accounts) in excess of
$10,000,000 in the aggregate at any time (other than any cash set aside to pay
dividends or distributions to the Borrower’s Equity Interest holders and its
Consolidated Subsidiaries’ Equity Interest holders in the next ninety (90) days)
(the "Excess Cash"), then the Borrower shall prepay the Borrowings in an amount
equal to the Excess Cash within three (3) Business Days after such Excess Cash
exists; provided that to the extent that any Excess Cash results from the
receipt of the proceeds of any sale or disposition of Property, then the
Borrower shall not be required to prepay such Excess Cash until the fifth
Business Day following the receipt of such proceeds. Each prepayment of
Borrowings pursuant to this Section 3.03(c)(iv) shall be applied as directed by
the Borrower, provided that if the Borrower does not provide instructions for
the application of such prepayment, such prepayment shall be applied, first,
ratably to any ABR Borrowings then outstanding, and, second, to any Eurodollar
Borrowings then outstanding, and if more than one Eurodollar Borrowing is then
outstanding, to each such Eurodollar Borrowing in order of priority beginning
with the Eurodollar Borrowing with the least number of days remaining in the
Interest Period applicable thereto and ending with the Eurodollar Borrowing with
the most number of days remaining in the Interest Period applicable thereto.
Each prepayment of Borrowings pursuant to this Section 3.03(c)(iv) shall be
applied ratably to the Loans included in the prepaid Borrowings.”

(l)    Section 6.02 of the Credit Agreement is hereby amended by inserting a new
clause (f) therein immediately after clause (e) therein, to read as follows:

“(f)   At the time of, and immediately after giving effect to, such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, the Borrower and its Consolidated Subsidiaries shall not have any
cash or cash equivalents (other than cash in Cash Collateral Accounts) in excess
of $10,000,000 in the aggregate (other than any cash set aside to pay dividends
or distributions to the Borrower’s Equity Interest holders and its Consolidated
Subsidiaries’ Equity Interest holders in the next ninety (90) days).”

(m)    Section 7.17(a) of the Credit Agreement is hereby amended by replacing
the instance of “80%” therein with “90%”.

(n)    Section 7.18(c) of the Credit Agreement is hereby amended to replace the
reference therein to “80%” to “90%”.

(o)    Section 7.22 of the Credit Agreement is hereby amended by replacing the
reference to “[_________]” in the first line thereof with “the Second Amendment
Effective Date”, and replacing the word “hereof” in the second sentence therein
with the word “thereof”.

(p)    Section 7.23 of the Credit Agreement is hereby amended by (i) adding
immediately after the term “Palmetto Acquisition” therein the phrase “and
investments in Joint Ventures

 

5

 

 

--------------------------------------------------------------------------------

 

permitted under Section 9.05(i)”, and (ii) replacing the reference to the term
“RBL Component” in clause (b) therein with the term “Loan Limit”.  

(q)    Section 8.01(j) of the Credit Agreement is hereby amended to delete the
footnote reference at the end of thereof.

(r)    Section 8.01(p) of the Credit Agreement is hereby amended by amending and
restating the parenthetical therein to read as follows:

“(including, for the avoidance of doubt, any notice given by the Borrower or any
of its Subsidiaries under Section 3.3,  3.6,  5.2,  9.1,  10.1 or 11.4)”

(s)    Section 8.01 of the Credit Agreement is hereby amended by inserting a new
clause (r) therein immediately after the existing clause (q) therein, to read as
follows:

“(r)   Joint Venture Financial and Other Notice Information. If Borrower has
included any dividends or distributions actually received in cash from any Joint
Venture for purposes of calculating Adjusted EBITDA of the Borrower and its
Consolidated Subsidiaries for the most recently ended fiscal quarter, then
simultaneously with the delivery of the financial statements and certificates
required to be delivered pursuant to Section 8.01(a) or Section 8.01(b), the
Borrower shall deliver unaudited quarterly financial statements (with respect to
the first three (3) fiscal quarters) and audited year-end financial statements
provided to the Borrower by any Joint Venture.  For any Joint Venture that the
Borrower has included the amount of dividends or distributions actually received
in cash from such Joint Venture for purposes of calculating Adjusted EBITDA of
the Borrower and its Consolidated Subsidiaries, the Borrower shall promptly
furnish to the Administrative Agent, copies of any material notices, reports or
other information about the business affairs and financial condition of such
Joint Venture that the Joint Venture is required to deliver to its
equityholders, after the Joint Venture delivers such information to the holders
of its Equity Interests.”

(t)    Section 8.01 of the Credit Agreement is hereby amended by inserting a new
clause (s) therein, to read as follows:

“(s)  Excess Cash Reporting.  No later than one (1) Business Day following the
date that the Borrower determines that the Borrower and its Consolidated
Subsidiaries shall hold Excess Cash, written notice thereof together with, in
reasonable detail, the aggregate amount of cash and cash equivalents then held
by the Borrower and its Consolidated Subsidiaries, account information with
respect to each deposit bank account (or, if applicable, securities account) in
which such cash and cash equivalents are then held, the amount of the Excess
Cash, the anticipated payment date of any repayment required pursuant to
Section 3.02(c)(iv), and information concerning any cash or cash equivalents
held by the Borrower and its Consolidated Subsidiaries that is excluded from the
definition of “Excess Cash”.”

 

6

 

 

--------------------------------------------------------------------------------

 

(u)    Section 8.01 of the Credit Agreement is hereby amended by inserting a new
clause (t) therein, to read as follows:

“(t)  Promptly but in any event within one (1) Business Day following request
therefor, such information as the Administrative Agent shall have requested with
respect to the cash and cash equivalents then held by the Borrower and its
Consolidated Subsidiaries, including, without limitation, information of the
types described in the foregoing clause (s) of this Section 8.01.”

(v)    Section 8.12(a)(i) of the Credit Agreement is hereby amended by replacing
the instance of “80%” therein with “90%”.

(w)    Section 8.12(b)(x) of the Credit Agreement is hereby amended by replacing
the instance of “80%” therein with “90%”.

(x)    Section 8.12(c) of the Credit Agreement is hereby amended by replacing
each instance of “80%” therein with “90%”.

(y)    Section 8.13 of the Credit Agreement is hereby amended by (i) replacing
each instance of “80%” in clause (a) therein with “90%”, and (ii) inserting new
clauses (c) and (d) therein immediately after the existing clause (b) therein,
to read as follows:

“(c)  In the event that the Borrower or any Subsidiary acquires Equity Interest
or other ownership interest in any Joint Venture, then the Borrower shall, or
shall cause such Subsidiary to, promptly pledge all of its Equity Interest in
such Joint Venture (including, without limitation, delivering any original stock
or membership interest certificates (if such interests are certificated)
evidencing all of the issued and outstanding Equity Interests of such Joint
Venture to the Collateral Agent, together with appropriate undated stock powers,
or other equivalent instruments of transfer reasonably acceptable to
Administrative Agent, for each certificate duly executed in blank by the owner
thereof) and execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent or its designee, including without limitation, the
execution and delivery of a supplement to the Pledge and Security Agreement in
the form of Annex 1 to the Pledge and Security Agreement.

(d)   The Borrower shall, and shall cause each Guarantor to, do all things
reasonably requested by the Collateral Agent in accordance with the Pledge and
Security Agreement in order to enable the Collateral Agent to have and maintain
“control” (as defined in the UCC) pursuant to an account control agreement in
form and substance reasonably satisfactory to the Collateral Agent over the each
of the Borrower’s and such Guarantor’s deposit accounts (as listed in Item G of
Schedule II to the Pledge and Security Agreement).”

(z)    Section 8.16 of the Credit Agreement is hereby amended by replacing the
instance of “80%” therein with “90%”.

(aa)  Clause (iii) of Section 9.04 of the Credit Agreement is hereby amended by
replacing the reference to “RBL Component” therein and replacing it with “Loan
Limit”.

 

7

 

 

--------------------------------------------------------------------------------

 

(bb)  Section 9.05 of the Credit Agreement is hereby amended by deleting the
“or” at the end of clause (g) therein, replacing the period at the end of clause
(h) therein with “; or” and adding a new clause (i) therein to read as follows:

“(i)   Investments in any Joint Venture so long as  (i) prior to making such
Investment, the Borrower shall provide to the Administrative Agent a certificate
from a Responsible Officer giving notice of its proposed investment in such
Joint Venture and acknowledging its undertaking to pledge the Equity Interests
of such Joint Venture and deliver such other additional closing documents and
certificates in compliance with Section 8.13 of this Agreement, (ii)  there
shall remain at least 20% of unused borrowing capacity that can be accessed
under the Borrowing Base after giving effect thereto, and (iii) no Default or
Event of Default shall exist or result therefrom.”

(cc)  Article IX of the Credit Agreement is hereby amended to insert a new
Section 9.23 therein immediately after the existing Section 9.22 therein, to
read as follows:

“Section 9.23   Joint Ventures.  (a) With respect to any Joint Venture, if the
Borrower or a Subsidiary is the voting party on any matter with respect to the
management and operations of such Joint Venture, neither the Borrower nor any
Subsidiary shall, without the consent of the Majority Lenders, vote in favor of,
approve or consent to (i) the incurrence, creation, assumption or existence of
any Debt by such Joint Venture other than Permitted Joint Venture Debt, (ii) the
sale, distribution or other disposition of any material portion of the assets or
properties by such Joint Venture outside the ordinary course of business such
that the approval or consent of a specified percentage of the members or other
holders of voting Equity Interests of such Joint Venture or, if applicable, the
board or other applicable managing body of such Joint Venture, is required under
the terms of such Joint Venture’s organizational documents, (iii) the
incurrence, creation, assumption or existence of Liens by such Joint Venture
other than Excepted Liens, or (iv) the amendment, waiver or other modification
of any material gathering, compressing, processing, transportation, services or
other commercial agreement (including, without limitation, the Carnero
Transportation Services Agreement and the Carnero Gathering Agreement) to which
the primary revenues of such Joint Venture are attributable if the effect of
such amendment, waiver or modification is to reduce (or could reasonably be
expected to reduce) in any material respect any minimum committed volumes or
minimum committed service level thereunder.

(b) If a Joint Venture is managed by a board of directors or other managing
body, then (x) neither the Borrower nor any Subsidiary shall, without the
consent of the Majority Lenders, instruct its representative(s) on the board or
other managing body to vote for (i) the incurrence, creation, assumption or
existence of any Debt by such Joint Venture other than Permitted Joint Venture
Debt, (ii) the sale, distribution or other disposition of any material portion
of the assets or properties by such Joint Venture outside the ordinary course of
business such that the approval or consent of a specified percentage of the
members or other holders of voting Equity Interests of such Joint Venture or, if
applicable, the board or other applicable managing body of such Joint Venture,
is required under the terms of such Joint Venture’s organizational documents,
(iii) the incurrence, creation, assumption or existence of Liens by such Joint
Venture other than Excepted Liens, or (iv) the amendment, waiver or other
modification of any material gathering, compressing,

 

8

 

 

--------------------------------------------------------------------------------

 

processing, transportation, services or other commercial agreement (including,
without limitation, the Carnero Transportation Services Agreement and the
Carnero Gathering Agreement) to which the primary revenues of such Joint Venture
are attributable if the effect of such amendment, waiver or modification is to
reduce (or could reasonably be expected to reduce) in any material respect any
minimum committed volumes or minimum committed service level thereunder and
(y) the Borrower and each Subsidiary shall expressly instruct its
representative(s) on the board or other managing body to oppose any proposal to
vote in favor of, consent to or approve any of the foregoing actions or events.

Section 3.    Ratification.  Except as expressly amended, modified or waived
herein, each of the Borrower and the Guarantors hereby ratifies and confirms all
of the Obligations under the Credit Agreement and the other Loan Documents to
which it is a party, and all references to the Credit Agreement, the Mortgages
and the Notes in any of the Loan Documents shall be deemed to be references to
the Credit Agreement, the Mortgages and the Notes as amended, modified or waived
hereby.

Section 4.    Effectiveness.  This Amendment shall become effective on the date
(the “Amendment Effective Date”) on which each of the following conditions is
satisfied:

(a)    the Administrative Agent shall have received counterparts of this
Amendment executed by the Administrative Agent, the Collateral Agent, the
Borrower, the Guarantors and the Lenders;

(b)    the Administrative Agent shall have received: (A) reasonably satisfactory
evidence that, upon the consummation of the Carnero Acquisition, the Borrower
has (or contemporaneously with the Amendment Effective Date, shall have)
acquired, pursuant to the Carnero PSA, the equity interest of Carnero Gathering
described therein, free of any Liens other than Excepted Liens and Liens in
favor of the Collateral Agent; (B) a certificate of a Responsible Officer of the
General Partner (1) certifying that, upon the consummation of the Carnero
Acquisition, the Borrower has (or will have) consummated the acquisition
contemplated by the Carnero PSA substantially in accordance with its terms and
all conditions to the obligations of the parties set forth in the Carnero PSA
(other than the payment of the purchase price thereunder) shall have been
satisfied or waived, and no provision thereof shall have been waived, amended,
supplemented or otherwise modified to the extent such waiver, amendment,
supplement or other modification would reasonably be expected to adversely
affect the Lenders (except as otherwise agreed by the Lenders), (2) certifying
that the equity interest described in the Carnero PSA has been (or is to be)
acquired pursuant to the Carnero PSA, (3) certifying as to the final purchase
price paid (or to be paid) under the Carnero PSA after giving effect to all
adjustments as of the closing date for such acquisition, and specifying, by
category, the amount of such adjustment, and (4) certifying that attached
thereto is a true and complete executed copy of the Carnero PSA pursuant to
which the Borrower has acquired (or will acquire) such equity interests,
together with true and complete copies of the Services and Secondment Agreement
between Carnero Gathering and TPL SouthTex Processing Company LP (“TPL
SouthTex”) dated as of June 23, 2016, the Amended and Restated Transportation
Services Agreement between Carnero Gathering and TPL SouthTex dated as of
June 23, 2016, and the Firm Gas Gathering Agreement by and among Sanchez Energy
Corporation, SN Catarina, LLC and TPL SouthTex Processing Company dated as of
October 2, 2015; and (C) duly executed releases

 

9

 

 

--------------------------------------------------------------------------------

 

and/or terminations of any financing statements or other encumbrances
specifically referencing and burdening such equity interest, if any;

(c)    the Collateral Agent shall have received (i) from the Borrower duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of a supplement to the Pledge and Security Agreement (with respect to its
Equity Interests in Carnero Gathering), and (ii) one or more original membership
interest certificates evidencing all of the issued and outstanding Equity
Interests of Carnero Gathering acquired by the Borrower, together with the
appropriate undated stock powers, or other equivalent instruments of transfer
reasonably acceptable to the Collateral Agent, for each certificate duly
executed in blank by the owner of such Equity Interests;

(d)    the Borrower and each Guarantor shall have confirmed and acknowledged to
the Administrative Agent and the Lenders, and by its execution and delivery of
this Amendment the Borrower and each Guarantor do hereby confirm and acknowledge
to the Administrative Agent and the Lenders, that (i) the execution, delivery
and performance of this Amendment has been duly authorized by all requisite
limited partnership or limited liability company action, as applicable, on the
part of the Borrower or such Guarantor, as applicable, (ii) the Credit Agreement
and each other Loan Document to which it is a party constitute valid and legally
binding agreements enforceable against the Borrower or such Guarantor, as
applicable, in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or affecting
the enforcement of creditors’ rights generally and by general principles of
equity, (iii) the representations and warranties of the Borrower or such
Guarantor, if any, set forth in the Credit Agreement and in each other Loan
Document to which it is a party, shall be true and correct on and as of the
Amendment Effective Date, except to the extent any such representations and
warranties are expressly limited to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
specified earlier date, (iv) no Default or Event of Default exists under the
Credit Agreement or any of the other Loan Documents and (v) since December 31,
2014, there has been no event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect; and

(e)    the Borrower shall have paid all agreed fees to the extent due and
payable in connection with this Amendment and paid or reimbursed the
Administrative Agent for all its reasonable and documented out-of-pocket costs
and expenses incurred in connection with the preparation and execution and
delivery of this Amendment (including the reasonable fees, disbursements and
other charges of Mayer Brown LLP), in each case, to the extent provided in
Section 12.03 of the Credit Agreement.

Section 5.    Authorization of Collateral Agent.  The Lenders hereby authorize
the Collateral Agent to supplement or otherwise amend that certain Pledge and
Security Agreement to include the Borrower’s Equity Interest in Carnero
Gathering as Collateral and to make other conforming changes related thereto.

Section 6.    Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND

 

10

 

 

--------------------------------------------------------------------------------

 

CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Section 7.    Miscellaneous.

(a)    On and after the Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import,
referring to the Credit Agreement, and each reference in each other Loan
Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Existing Credit Agreement as amended or otherwise modified by this
Amendment.  This Amendment shall constitute a Loan Document for purposes of the
Credit Agreement.

(b)    The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any default of the
Borrower  or any Guarantor or any right, power or remedy of the Administrative
Agent or the Lenders under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.

(c)    Each of the Borrower and each Guarantor represents and warrants that as
of the date hereof (i) it has the limited partnership or limited liability
company power and authority to execute, deliver and perform the terms and
provisions of this Amendment, has taken all necessary limited partnership or
limited liability company action to authorize the execution, delivery and
performance of this Amendment, delivery and performance of this Amendment does
not and will not contravene the terms of the Borrower’s or such Guarantor’s, as
applicable, organizational documents; (ii) it has duly executed and delivered
this Amendment and this Amendment constitutes the legal, valid and binding
obligation of the Borrower or such Guarantor enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors’ rights
generally and general principles of equity (whether considered in a proceeding
in equity or law); (iii) no Default or Event of Default has occurred and is
continuing; and (iv) no action, suit, investigation or other proceeding is
pending or threatened before any arbitrator or Governmental Authority seeking to
restrain, enjoin or prohibit or declare illegal, or seeking damages from the
Borrower in connection with this Amendment or which could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.

Section 8.    Severability.  Any provisions of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provisions so held to be invalid.

Section 9.    Successors and Assigns.  This Amendment is binding upon and shall
inure to the benefit of the Administrative Agent, the Collateral Agent, the
Lenders, the Issuer, the Borrower and each Guarantor and their respective
successors and assigns.

Section 10.    Counterparts.  This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.  Delivery of an executed

 

11

 

 

--------------------------------------------------------------------------------

 

counterpart of a signature page to this Amendment by telecopier or
electronically by .pdf shall be effective as delivery of a manually executed
counterpart of this Amendment.

Section 11.    Headings.  The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment or any other Loan Document.

Section 12.    Integration.  This Amendment represents the final agreement of
the Borrower, each Guarantor, the Collateral Agent, the Administrative Agent,
the Issuer, and the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the Borrower,
any Guarantor, the Administrative Agent, the Collateral Agent, the Issuer, nor
any Lender relative to subject matter hereof not expressly set forth or referred
to herein.

 

 

12

 

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
executed by its officer(s) thereunto duly authorized as of the date first above
written.

 

SANCHEZ PRODUCTION PARTNERS LP, as Borrower

 

 

 

By:

SANCHEZ PRODUCTION PARTNERS GP LLC, its general partner

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

CEP MID-CONTINENT LLC,

 

as a Guarantor

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

NORTHEAST SHELF ENERGY, L.L.C.,

 

as a Guarantor

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

MID-CONTINENT OILFIELD SUPPLY, L.L.C.,

 

as a Guarantor

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

S - 1

--------------------------------------------------------------------------------

 

 

 

 

SEP HOLDINGS IV, LLC,

 

as a Guarantor

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

CATARINA MIDSTREAM, LLC,

 

as a Guarantor

 

 

 

 

 

By:

/s/  Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

S - 2

--------------------------------------------------------------------------------

 

 

 

 

ROYAL BANK OF CANADA,

 

as Administrative Agent and Collateral Agent

 

 

 

 

 

By:

/s/  Yvonne Brazier

 

Name:

Yvonne Brazier

 

Title:

Manager, Agency

 

 

 

 

 

ROYAL BANK OF CANADA,

 

as a Lender and the Issuer

 

 

 

 

 

By:

/s/  Mark Lumpkin, Jr.

 

Name:

Mark Lumpkin, Jr.

 

Title:

Authorized Signatory

 

 

 

S - 3

--------------------------------------------------------------------------------

 

 

 

 

CIT BANK, N.A. (f/k/a OneWest Bank, N.A.),

 

as a Lender

 

 

 

 

 

By:

/s/  Zachary Holly

 

Name:

Zachary Holly

 

Title:

Vice President

 

 

 

S - 4

--------------------------------------------------------------------------------

 

 

 

 

COMPASS BANK,

 

as a Lender

 

 

 

 

 

By:

/s/  Mark H. Wolf

 

Name:

Mark H. Wolf

 

Title:

Senior Vice President

 

 

 

S - 5

--------------------------------------------------------------------------------

 

 

 

 

SUNTRUST BANK,

 

as a Lender

 

 

 

 

 

By:

/s/  John Kovarik

 

Name:

John Kovarik

 

Title:

Vice President

 

 

 

 

 

S - 6

--------------------------------------------------------------------------------

 

 

 

 

CAPITAL ONE, NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

 

 

By:

/s/  Matthew Brice

 

Name:

Matthew Brice

 

Title:

Vice President

 

 

 

 

 

S - 7

--------------------------------------------------------------------------------

 

 

 

 

CITIBANK, N.A.,

 

as a Lender

 

 

 

 

 

By:

/s/  Cliff Vaz

 

Name:

Cliff Vaz

 

Title:

Vice President

 

 

 

 

 

S - 8

--------------------------------------------------------------------------------

 

 

 

 

COMERICA BANK,

 

as a Lender

 

 

 

 

 

By:

/s/  Jeff Treadway

 

Name:

Jeff Treadway

 

Title:

Senior Vice President

 

 

 

 

 

S - 9

--------------------------------------------------------------------------------

 

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as a Lender

 

 

 

By:

/s/  Nupur Kumar

 

Name:

Nupur Kumar

 

Title:

Authorized Signatory

 

 

 

 

 

By:

/s/  Max Wallins

 

Name:

Max Wallins

 

Title:

Authorized Signatory

 

 

 

 

 

S - 10

--------------------------------------------------------------------------------

 

 

 

 

ING CAPITAL LLC,

 

as a Lender

 

 

 

 

 

By:

/s/  Josh Strong

 

Name:

Josh Strong

 

Title:

Director

 

 

 

By:

/s/  Charles Hall

 

Name:

Charles Hall

 

Title:

Managing Director

 

 

S - 11

--------------------------------------------------------------------------------