Exhibit 10.1

 

Execution Version

 

 

 

SECOND AMENDMENT

 

TO

 

CREDIT AGREEMENT

 

Dated as of June 25, 2013

 

among

 

NEW SOURCE ENERGY PARTNERS L.P.,

as Borrower,

 

 

BANK OF MONTERAL

as Administrative Agent,

 

ASSOCIATED BANK, N.A.,

as Syndication Agent,

 

 

and

 

THE LENDERS PARTY HERETO

 

 
 

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SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND Amendment to Credit Agreement (this “Second Amendment”) dated as of
June 25, 2013, is among New source energy PARTNERS L.P., a Delaware limited
partnership, (the “Borrower”); each of the lenders party to the Credit Agreement
referred to below (collectively, the “Lenders”); and bank of montreal, as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.           WHEREAS, the Borrower, the Administrative Agent and the Lenders are
parties to that certain Credit Agreement dated as of February 13, 2013 (as
amended by the First Amendment to Credit Agreement dated February 28, 2013, the
“Credit Agreement”), pursuant to which the Lenders have made certain credit
available to and on behalf of the Borrower.

 

B.             The Borrower has requested and the Administrative Agent and the
Lenders have agreed to amend certain provisions of the Credit Agreement.

 

C.            NOW, THEREFORE, to induce the Administrative Agent and the Lenders
to enter into this Second Amendment and 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. Unless otherwise indicated, all section and exhibit references in
this Second Amendment refer to sections or exhibits of the Credit Agreement.

 

Section 2.     Amendment to the Credit Agreement.

 

2.1           Amendment to Section 1.02. The definition of “Agreement” is hereby
amended and restated in its entirety to read as follows:

 

“Agreement” means this Credit Agreement, as amended by the First Amendment to
Credit Agreement dated as of February 28, 2013 and the Second Amendment to
Credit Agreement dated as of June 25, 2013, and as the same may from time to
time be amended, modified, supplemented or restated.

 

Section 3.     New Lenders, Assignments and Reallocation of Commitments and
Loans; Borrowing Base Increase.

 

3.1           New Lenders, Assignments and Reallocation of Commitments and
Loans. Each Lender party to the Credit Agreement immediately prior to the Second
Amendment Effective Date (used herein as defined below) has, in consultation
with the Borrower, agreed to reallocate its respective Maximum Credit Amount and
Commitment and to, among other things, allow Commonwealth Bank of Australia and
Societe Generale to become parties to the Credit Agreement as Lenders,
(collectively, the “New Lenders” and each a “New Lender”) by acquiring an
interest in the Aggregate Maximum Credit Amounts and Commitments. The
Administrative Agent and the Borrower hereby consent to such reallocation and
each New Lender’s acquisition of an interest in the Maximum Credit Amounts and
Commitments. On the Second Amendment Effective Date and after giving effect to
such reallocations, the Maximum Credit Amounts and Commitment of each Lender
(including the New Lenders) shall be as set forth on Annex I to this Second
Amendment, which Annex I supersedes and replaces Annex I to the Credit
Agreement, and each New Lender shall become a party to the Credit Agreement, as
amended by this Second Amendment, as a “Lender” and have all of the rights and
obligations of a Lender under the Credit Agreement, as amended by this Second
Amendment, and the other Loan Documents. With respect to such reallocation, each
New Lender shall be deemed to have acquired the Maximum Credit Amount and
Commitment assigned to it from the existing Lenders pursuant to the terms of the
Assignment and Assumption attached as Exhibit F to the Credit Agreement as if
the New Lenders and such existing Lenders executed an Assignment and Assumption
with respect to such allocation pursuant to which the term “Effective Date”
shall be the “Second Amendment Effective Date” as defined herein and item 6
therein shall be deemed to be deleted. Notwithstanding Section 12.04(b)(ii)(C),
the Lenders deemed to be parties to the Assignment Agreement shall not be
required to pay a processing and recordation fee of $3,500 to the Administrative
Agent. On the Second Amendment Effective Date, the Administrative Agent shall
take the actions specified in Section 12.04(b)(v), including recording the
assignment described herein in the Register, and such assignment shall be
effective for purposes of the Credit Agreement. If, on the Second Amendment
Effective Date, any Eurodollar Loans have been funded, then the Borrower shall
be obligated to pay any breakage fees or costs that are payable pursuant to
Section 5.02, in connection with the reallocation of such outstanding Eurodollar
Loans to effectuate the provisions of this paragraph.

 

 
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3.2           Borrowing Base Increase. For the period from and including the
Second Amendment Effective Date to but excluding the next Redetermination Date,
the amount of the Borrowing Base shall be equal to $75,000,000. Notwithstanding
the foregoing, the Borrowing Base may be subject to further adjustments from
time to time pursuant to Section 2.07(e), Section 8.13(c) or Section 9.12(d).
For this avoidance of doubt, this Borrowing Base increase shall constitute the
April 1, 2013 Scheduled Redetermination.

 

Section 4.     Conditions Precedent. This Second Amendment shall become
effective on the date when each of the following conditions is satisfied (or
waived in accordance with Section 12.02 of the Credit Agreement) (the “Second
Amendment Effective Date”):

 

4.1           The Administrative Agent shall have received from the Lenders and
the Borrower, (in such number as may be requested by the Administrative Agent)
counterparts of this Second Amendment signed on behalf of such Person.

 

4.2           No Default shall have occurred and be continuing as of the Second
Amendment Effective Date.

 

4.3           The Administrative Agent shall have received new duly executed
Notes payable to Commonwealth Bank of Australia and Societe Generale, to the
extent requested by each such Lender, in a principal amount equal to the
applicable new Maximum Credit Amount of such Lender, dated as of the Second
Amendment Effective Date.

 

 
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4.4           The Administrative Agent shall have received a nonrefundable
upfront fee in an amount equal to $112,500, payable to the Administrative Agent
in immediately available funds for the account of each New Lender in accordance
with the amount of such New Lender’s Commitment provided for in this Second
Amendment.

 

4.5           Each New Lender shall have received a nonrefundable fee in the
amount of $28,125 from each of BMO Harris Financing, Inc. and Associated Bank,
N.A.

 

4.6           The Administrative Agent shall have received such other documents
as the Administrative Agent or its special counsel may reasonably require.

 

The Administrative Agent is hereby authorized and directed to declare this
Second Amendment to be effective (and the Second Amendment Effective Date shall
occur) when it has received documents confirming or certifying, to the
satisfaction of the Administrative Agent, compliance with the conditions set
forth in this Section 4 or the waiver of such conditions as permitted hereby.
Such declaration shall be final, conclusive and binding upon all parties to the
Credit Agreement for all purposes.

 

Section 5.     Miscellaneous.

 

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

 

5.2          Ratification and Affirmation; Representations and Warranties. The
Borrower hereby (a) acknowledges the terms of this Second Amendment; (b)
ratifies and affirms its obligations under, and acknowledges its continued
liability under, each Loan Document to which it is a party and agrees that each
Loan Document to which it is a party remains in full force and effect as
expressly amended hereby; and (c) represents and warrants to the Lenders that as
of the date hereof, after giving effect to the terms of this Second 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 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 in all material respects as of such specified earlier
date, (ii) no Default or Event of Default has occurred and is continuing and
(iii) no event, development or circumstance has occurred which individually or
in the aggregate has resulted in, or could reasonably be expected to have, a
Material Adverse Effect.

 

5.3           Counterparts. This Second 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 this Second Amendment by telecopy, facsimile or email
transmission shall be effective as delivery of a manually executed counterpart
hereof.

 

5.4           No Oral Agreement. This Second Amendment, the Credit Agreement,
and the other Loan Documents executed in connection herewith and therewith
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or unwritten oral agreements of the parties.
There are no subsequent oral agreements between the parties.

 

 
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5.5           GOVERNING LAW. This Second Amendment (including, but not limited
to, the validity and enforceability hereof) shall be governed by, and construed
in accordance with, the laws of the State of Texas.

 

5.6          Payment of Expenses. In accordance with Section 12.03 of the Credit
Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for
all of its reasonable out-of-pocket costs and reasonable expenses incurred in
connection with this Second Amendment, any other documents prepared in
connection herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

 

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

 

5.8           Successors and Assigns. This Second Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

[SIGNATURES BEGIN NEXT PAGE]

 

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

 

 

 

BORROWER:

New Source Energy Partners L.P.

 

 

 

By: New Source Energy GP, LLC,

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Kristian B. Kos

 

 

Kristian B. Kos

 

 

President and Chief Executive Officer

 

Signature Page to Second Amendment to Credit Agreement

 

 

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ADMINISTRATIVE AGENT:

BANK OF MONTREAL,

 

as Administrative Agent and Issuing Bank 

 

 

 

 

 

 

 

By:

/s/ Gumaro Tijerina

 

Name:

Gumaro Tijerina

 

Title:

Director

  

Signature Page to Second Amendment to Credit Agreement

 

 

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LENDERS:

BMO HARRIS FINANCING, INC.,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Gumaro Tijerina

 

Name:

Gumaro Tijerina

 

Title:

Director

   

 

ASSOCIATED BANK, N.A.,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Timothy Brendel

 

Name:

Timothy Brendel

 

Title:

Senior Vice President

  

 

COMMONWEALTH BANK OF AUSTRALIA,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ David Giacalone

 

Name:

David Giacalone

 

Title:

Risk Executive

  

 

SOCIETE GENERALE,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Graeme Bullen

 

Name:

Graeme Bullen

 

Title:

Managing Director

  

Signature Page to Second Amendment to Credit Agreement

 

 
 

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 Annex I

ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

 

Aggregate Maximum Credit Amounts

 

 

 

Name of Lender

Applicable Percentage

Maximum Credit Amount

BMO Harris Financing, Inc.

30.00%

$45,000,000.00

Associated Bank, N.A.

30.00%

$45,000,000.00

Commonwealth Bank of Australia

20.00%

$30,000,000.00

Societe Generale

20.00%

$30,000,000.00

TOTAL

100.00%

$150,000,000.00

 

 

 

 Annex I