Exhibit 10.1

Execution Version

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
April 11, 2012, is made by and among QRE OPERATING, LLC, a Delaware limited
liability company (“Borrower”); QR ENERGY, LP, a Delaware limited partnership
(“QRE MLP”); QRE GP, LLC, a Delaware limited liability company (“General
Partner”); WELLS FARGO BANK, NATIONAL ASSOCIATION (in its individual capacity,
“Wells Fargo”) as administrative agent (in such capacity, together with its
successors in such capacity, the “Administrative Agent”) for the financial
institutions (collectively the “Lenders”) party to the hereinafter-defined
Credit Agreement; and the undersigned Lenders.

W I T N E S S E T H:

WHEREAS, Borrower, QRE MLP, General Partner, the Administrative Agent and the
Lenders entered into a Credit Agreement dated as of December 17, 2010, as
amended by that certain First Amendment to Credit Agreement, dated as of
October 3, 2011, and by that certain Second Amendment to Credit Agreement, dated
as of March 16, 2012 (as so amended, and as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Borrower,
the Administrative Agent and the undersigned Lenders do hereby agree as follows:

1. Amendments to Credit Agreement.

(a) Section 1.02 of the Credit Agreement is hereby amended as follows:

(i) The definition of “Aggregate Maximum Credit Amounts” is amended and restated
in its entirety as follows:

“Aggregate Maximum Credit Amounts” at any time shall equal the sum of the
Maximum Credit Amounts, as the same may be reduced or terminated pursuant to
Section 2.06. From and after the Third Amendment Effective Date, the Aggregate
Maximum Credit Amounts of the Lenders are $1,500,000,000.”

(ii) The definition of “Agreement” is amended and restated in its entirety as
follows:

“Agreement” means this Credit Agreement, as the same may from time to time be
amended, modified, supplemented or restated, including, without limitation, by
the First Amendment, the Second Amendment and the Third Amendment.

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(iii) The definition of “Applicable Margin” is amended by replacing the
Borrowing Base Utilization Grid therein with the following:

 

Borrowing Base Utilization Grid

 

Borrowing Base Utilization Percentage

     <25 %     

 

> 25

<50

% 

% 

   

 

>50

<75

% 

% 

   

 

>75

<90

% 

% 

    >90 % 

Eurodollar Loans

     1.50 %      1.75 %      2.00 %      2.25 %      2.50 % 

ABR Loans

     0.50 %      0.75 %      1.00 %      1.25 %      1.50 % 

Commitment Fee Rate

     0.375 %      0.375 %      0.50 %      0.50 %      0.50 % 

(iv) The definition of “Maturity Date” is amended and restated in its entirety
as follows:

“Maturity Date” means the date that is five (5) years after the Third Amendment
Effective Date.

(v) The definition of “Security Instruments” is hereby amended and restated in
its entirety as follows:

“Security Instruments” means the Guaranty Agreement, Security Agreement,
Mortgages, any Intercreditor Agreement entered into pursuant to Section 9.02(i),
other agreements, instruments or certificates described or referred to on
Schedule 1.02A, and any and all other agreements, instruments, consents or
certificates now or hereafter executed and delivered by any Obligor or any other
Person (other than Swap Agreements with the Lenders or any Affiliate of a
Lender, participation or similar agreements between any Lender and any other
lender or creditor with respect to any Obligations pursuant to this Agreement or
Treasury Management Agreements) in connection with, or as security for the
payment or performance of the Obligations, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.

(vi) The definition of “Transaction Documents” is amended and restated in its
entirety as follows:

“Transaction Documents” means (a) the agreements, instruments or certificates
described or referred to on Schedule 1.02(B) and all other agreements,
instruments or documents entered into on or before the Effective Date in
connection with the foregoing, (b) the 2011 Transaction Documents and (c) the
2012 Transaction Documents.

 

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(vii) By adding the following defined terms in appropriate alphabetical order:

“2012 Transactions” means the consummation of the acquisition from Prize
Petroleum, LLC and Prize Pipeline, LLC, and delivery of the 2012 Transaction
Documents, each in form and substance satisfactory to the Administrative Agent.

“2012 Transaction Documents” means the agreements and instruments described or
referred to on Schedule I to the Third Amendment and all other agreements,
instruments or documents entered into on or before the Third Amendment Effective
Date in connection with the foregoing.

“2012 Transaction Properties” means all Property proposed to be acquired by QRE
MLP, the Borrower or its Subsidiaries on or before the Third Amendment Effective
Date pursuant to the 2012 Transaction Documents.

“Intercreditor Agreement” means an Intercreditor Agreement in form and substance
satisfactory to the Administrative Agent and the Majority Lenders, pursuant to
which the Liens securing the Second Lien Loans shall be subordinated to the
Liens securing the Obligations.

“Net Cash Proceeds” means, with respect to any Debt issued pursuant to
Section 9.02(h) or any issuance of Equity Interests by QRE MLP, the cash
proceeds thereof, net of customary fees, commissions, costs and other expenses
incurred in connection therewith and, in the case of Debt issued pursuant to
Section 9.02(h), net of any amount required to be used to repay the Obligations
after the Borrowing Base reduction, if any, required pursuant to Section 9.02(h)
and any resulting mandatory prepayment required as a result thereof pursuant to
Section 3.04(c)(iii).

“Second Lien Loans” means a senior secured term loan facility entered into
pursuant to Section 9.02(i) or any refinancing thereof effected pursuant to
Section 9.02(j).

“Second Lien Obligations” means obligations of QRE MLP, the Borrower or any of
their Subsidiaries owed in respect of any Second Lien Loans including
(a) obligations of arising under or in respect of the due and punctual payment
of (i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Second Lien Loans, when and as due,

 

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whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), owing to the secured parties
pursuant to Second Lien Loans (in their capacity as such) and (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
under or pursuant to the documents governing the Second Lien Loans owing to the
secured parties pursuant to the Second Lien Loans (in their capacity as such).

“Third Amendment” means that certain Third Amendment to Credit Agreement dated
as of April 11, 2012, by and among Borrower, QRE MLP, General Partner, the
Administrative Agent and the Lenders.

“Third Amendment Effective Date” shall mean the date on which the conditions
specified in Section 4 of the Third Amendment are satisfied (or waived by each
Lender in accordance with Section 12.02).

(b) Section 2.07(a) of the Credit Agreement is hereby amended by amending and
restating the first sentence thereof as follows:

“For the period from and including the Third Amendment Effective Date to but
excluding the first Redetermination Date to occur after such date, the amount of
the Borrowing Base shall be $730,000,000.”

(c) Section 9.02(c) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“(c) intercompany Debt between QRE MLP and any of its Subsidiaries or between
Subsidiaries to the extent permitted by Section 9.05(g); provided that such Debt
is not assigned, transferred, negotiated or pledged (other than pursuant to a
Security Instrument) to any Person and is not held by any Person other than QRE
MLP or one of its Wholly-Owned Subsidiaries, and, provided further, that any
such Debt owed by either the Borrower or a Guarantor shall be subordinated to
the Obligations on the terms set forth in the Guaranty Agreement.”

(d) Section 9.02(h) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“(h) Unsecured Debt of QRE MLP or its Subsidiaries; provided that (i) no Event
of Default has occurred and is continuing or would occur after giving effect to
the incurrence of such Debt, (ii) after giving effect to the incurrence of such
Debt on a

 

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pro forma basis, QRE MLP shall be in compliance with the covenants set forth in
Section 9.01, (iii) the maturity date for such Debt shall not be earlier than
seven (7) years after the incurrence thereof, (iv) for each $1.00 of such Debt
incurred, the Borrowing Base shall be reduced, effective immediately upon the
incurrence of such Debt, by $0.25 and any mandatory prepayments required by
Section 3.04(c)(iii) shall be made concurrently therewith (except that with
respect to any Debt incurred pursuant to this Section 9.02(h), no such Borrowing
Base reduction shall be required to the extent the proceeds of such Debt are
immediately used to refinance Debt previously incurred pursuant to this
Section 9.02(h) or Section 9.02(i), in each case in accordance with the
provisions of Section 9.02(j)), and (v) the interest rates and other terms of
such Debt shall be reasonably acceptable to the Administrative Agent; and”

(e) A new Section 9.02(i) is added to the Credit Agreement as follows:

“(i) Debt in the form of a second-lien term loan not to exceed the principal
amount of $100,000,000 in the aggregate at any one time outstanding; provided
that in connection with the incurrence of any such Debt, the Borrower and the
Guarantors and the Second Lien Loan lenders (or the Second Lien Loan
administrative agent on behalf of, and having been authorized by, the Second
Lien Loan lenders) execute and deliver to the Administrative Agent an
Intercreditor Agreement.”

(f) A new Section 9.02(j) is added to the Credit Agreement as follows:

“(j) Refinancings or renewals of Debt incurred pursuant to Section 9.02(h) or
Section 9.02(i); provided that (i) any such refinancing Debt is in an aggregate
principal amount not greater than the aggregate principal amount of the Debt
being renewed or refinanced, plus the amount of any premiums required to be paid
thereon and reasonable fees and expenses associated therewith and an amount
equal to any unutilized commitment under the Debt being renewed or refinanced,
(ii) such refinancing Debt has a later or equal final maturity and longer or
equal weighted average life than the Debt being renewed or refinanced, (iii) the
covenants, events of default, subordination and other provisions thereof
(including any guarantees thereof) shall be, in the aggregate, no less favorable
to the Lenders than those contained in the Debt being renewed or refinanced, and
(iv) such refinancing Debt shall not be secured by any property of QRE MLP or
its Subsidiaries, except to the extent permitted pursuant to Section 9.03.”

(g) Section 9.03(a) is amended and restated in its entirety as follows:

“(a) (i) Liens securing the payment of any Obligations and (ii) Liens granted on
the Collateral to secure the Second Lien Obligations; provided that, in the case
of this clause (ii), such Liens are subordinated to the Liens securing the
Obligations in accordance with the terms of the Intercreditor Agreement.”

 

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(h) A new Section 9.24 is added to the Credit Agreement as follows:

“Restrictions on Payment of Certain Debt. QRE MLP will not, and will not permit
any of its Subsidiaries to, make any payments (whether voluntary or mandatory,
or a prepayment, redemption, retirement, defeasance, acquisition, or deposit),
or set aside funds for any such payment, with respect to any Debt incurred as
permitted by Section 9.02(h) or Section 9.02(i) (or any refinancing thereof
permitted pursuant to Section 9.02(j)); provided, however, that QRE MLP and its
Subsidiaries may, so long as, both before and after giving effect to each such
payment, no Default or Event of Default has occurred and is continuing:

(a) with respect to Debt incurred as permitted by Section 9.02(h) or any
refinancing thereof permitted pursuant to Section 9.02(j), (i) make regularly
scheduled payments of principal and interest with respect to such Debt (unless
it is expressly subordinate and junior in right of payment to the Obligations
and, in such case, only to the extent the applicable terms of subordination
otherwise permit the applicable subordinated creditor to accept and retain such
payment) and (ii) prepay such Debt (A) at a time when no Loans or Letters of
Credit (unless cash collateralized on terms reasonably acceptable to the
Administrative Agent) are outstanding (including after giving effect to such
prepayment of such Debt) or (B) with Net Cash Proceeds; and

(b) with respect to Debt incurred as permitted by Section 9.02(i) or any
refinancing thereof permitted pursuant to Section 9.02(j), repay such Debt
(i)(A) at a time when no Loans or Letters of Credit (unless cash collateralized
on terms reasonably acceptable to the Administrative Agent) are outstanding
(including after giving effect to such repayment of such Debt), (B) with Net
Cash Proceeds or (C) by refinancing such Debt pursuant to Section 9.02(j), and
(ii) other than any such repayment permitted pursuant to Section 9.24(b)(i),
only if (x) immediately after giving effect to any such repayment, the Borrowing
Base Utilization Percentage shall not exceed 90%, and (y) a Financial Officer of
QRE MLP shall have provided a certificate to the Administrative Agent
demonstrating compliance (on a pro forma basis after giving effect to such
repayment) with Section 9.01(a), and (z) the aggregate amount of all such
repayments made as permitted by and pursuant to this Section 9.24(b)(ii) shall
at no time exceed $50,000,000; provided, however, that repayments pursuant to
this Section 9.24(b)(ii) shall be permitted only until the earlier to occur of
(1) the one year anniversary of the Third Amendment Effective Date or (2) such
time as repayments under this Section 9.24(b) reach $50,000,000.”

(i) A new Section 11.12 is added to the Credit Agreement as follows:

“Intercreditor Agreement. Notwithstanding anything herein to the contrary, each
Lender also acknowledges that, upon the execution and delivery by the
Administrative Agent (with the written approval of the Majority Lenders) of an
Intercreditor Agreement pursuant to Section 9.02(i), each such Lender will be
bound by the terms and provisions of such Intercreditor Agreement. In the event
of any conflict between the terms of such Intercreditor Agreement and the
Security Instruments, the terms of such Intercreditor Agreement shall govern and
control.”

 

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2. New Lenders and Reallocation of Commitments. The Lenders have agreed among
themselves to reallocate the Commitments, Aggregate Maximum Credit Amount and
aggregate Revolving Credit Exposures and to, among other things, allow certain
financial institutions identified by Wells Fargo Securities, LLC, in
consultation with the Borrower, to become parties to the Credit Agreement as
Lenders (each, a “New Lender”) by acquiring an interest in the Commitments,
Aggregate Maximum Credit Amounts and aggregate Revolving Credit Exposures. Each
of the Administrative Agent and the Borrower hereby consent to (i) the
reallocation of the Commitments, Aggregate Maximum Credit Amounts and aggregate
Revolving Credit Exposures (including the reallocation of 100% of the Commitment
of Bank of Scotland plc (the “Exiting Lender”) and (ii) each New Lender’s
acquisition of an interest in the Commitments, Aggregate Maximum Credit Amounts
and aggregate Revolving Credit Exposures. The assignments by the existing
Lenders (including the Exiting Lender) necessary to effect the reallocation of
the Commitments, Aggregate Maximum Credit Amounts and aggregate Revolving Credit
Exposures and the assumptions by the New Lenders necessary for such New Lenders
to acquire such interests are hereby consummated pursuant to the terms and
provisions of this Section 2 and of Section 12.04(b) of the Credit Agreement,
and each Lender, including the Exiting Lender and the New Lenders, is deemed to
have consummated such assignments and assumptions pursuant to the terms,
provisions and representations of the Assignment and Assumption attached as
Exhibit G to the Credit Agreement as if each Lender, including the Exiting
Lender and the New Lenders, had executed and delivered an Assignment and
Assumption (with the Effective Date, as defined therein, being the Third
Amendment Effective Date); provided that the Administrative Agent hereby waives
the $3,500 processing and recordation fee set forth in Section 12.04(b)(ii)(C)
of the Credit Agreement with respect to the assignments and assumptions
contemplated by this Section 2; provided further that any New Lender that is a
Foreign Lender shall have delivered to the Borrower (with a copy to the
Administrative Agent) the documentation required pursuant to Section 5.03(e) of
the Credit Agreement. On the Third Amendment Effective Date and after giving
effect to such assignments and assumptions, the Applicable Percentage, the
Applicable Percentage of the Borrowing Base and Maximum Credit Amount of each
Lender shall be as set forth on Annex I to this Amendment. Each Lender hereby
consents and agrees to the Applicable Percentages, Borrowing Base Allocations
and Maximum Credit Amounts set forth on Annex I to this Amendment. To the extent
requested by any Lender, and in accordance with Section 5.02 of the Credit
Agreement, the Borrower shall pay to such Lender, within the time period
prescribed by Section 5.02 of the Credit Agreement, any amounts required to be
paid by Borrower under Section 5.02 of the Credit Agreement in the event the
payment of any principal of any Eurodollar Loan or the conversion of any
Eurodollar Loan other than on the last day of an Interest Period applicable
thereto is required in connection with the reallocation contemplated by this
Section 2. Notwithstanding any provision in Section 12.04(b) to the contrary,
all parties hereto agree that the assignments and assumptions provided for in
this Section 2 have been approved and consented to by all such parties and are
effective as provided herein and in the event of any conflict between this
Section 2 and Section 12.04(b) of the Credit Agreement, the terms and provisions
of this Section 2 shall control.

 

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3. Amendment to Mortgages. The Borrower and each Lender hereby agree that, in
connection with the execution and delivery of this Amendment and the 2012
Transaction Documents, each of the existing Mortgages will be amended to, and
any new Mortgage will, reflect the exclusion from Deed of Trust Property (as
defined therein) of “Buildings” and “Manufactured (Mobile) Homes”, each as
defined in the applicable Flood Insurance Regulation. For purposes of this
Section 3, “Flood Insurance Regulation” shall mean (i) the National Flood
Insurance Act of 1968, (ii) the Flood Disaster Protection Act of 1973, (iii) the
National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), and
(iv) the Flood Insurance Reform Act of 2004.

4. Conditions Precedent. This Amendment shall not become effective until the
date on or before April 30, 2012 on which each of the following conditions is
satisfied (or waived by each Lender in accordance with Section 12.02 of the
Credit Agreement):

(a) The Administrative Agent shall have received from each party hereto
counterparts (in such number as may be requested by the Administrative Agent) of
this Amendment signed on behalf of such party.

(b) The Administrative Agent, Wells Fargo Securities, LLC and the Lenders shall
have received all commitment and agency fees and all other fees and amounts due
and payable on or prior to the Third Amendment Effective Date, 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 Third Amendment Effective Date, the
reasonable fees and expenses of Sidley Austin LLP, counsel to the Administrative
Agent).

(c) The Administrative Agent shall have received a certificate of the Secretary
or an Assistant Secretary or a Responsible Officer setting forth (i) resolutions
of its board of directors or managers or other relevant governing body with
respect to the authorization of the Borrower to execute and deliver this
Amendment and to enter into the transactions contemplated by this Amendment,
(ii) the officers of the General Partner (y) who are authorized to sign this
Amendment and (z) specimen signatures of such authorized officers, and (iii) all
waivers, amendments, supplements or other modifications to any Organizational
Documents of the General Partner and each Obligor, certified as being true and
complete. The Administrative Agent and the Lenders may conclusively rely on such
certificate until the Administrative Agent receives notice in writing from the
Borrower to the contrary.

(d) The Administrative Agent shall have received a compliance certificate which
shall be substantially in the form of Exhibit D to the Credit Agreement, duly
and properly executed by a Responsible Officer and dated as of the Third
Amendment Effective Date.

(e) The Administrative Agent shall have received a duly executed Note payable to
each Lender increasing its Maximum Credit Amount or which is a new Lender and
which requests a Note in a principal amount equal to its Maximum Credit Amount
dated as of the date hereof.

 

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(f) The Administrative Agent shall have received (i) a certificate of a
Responsible Officer certifying: (A) that the 2012 Transactions are being
concurrently consummated in accordance with applicable law and the terms of the
2012 Transaction Documents (with all of the material conditions precedent
thereto having been satisfied by the parties thereto); (B) that no provision of
the 2012 Transaction Documents have been waived, amended, supplemented or
otherwise modified in any respect materially adverse to the Borrower, QRE MLP or
the Lenders; and (C) that the sum of (1) the amount by which the Borrowing Base
exceeds the Revolving Credit Exposures and (2) Borrower’s unrestricted cash and
cash equivalents, upon the Third Amendment Effective Date after giving effect to
the consummation of the 2012 Transactions, equals or exceeds $50,000,000; (ii) a
true and complete executed copy of each of the 2012 Transaction Documents
(including all amendments thereto); (iii) original counterparts or copies,
certified as true and complete, of the assignments, deeds and leases for all of
the 2012 Transaction Properties; and (iv) such other related documents and
information as the Administrative Agent shall have reasonably requested. The
2012 Transaction Documents shall be in form and substance satisfactory to the
Administrative Agent.

(g) The Administrative Agent shall have received evidence that any Liens on the
2012 Transaction Properties shall be released upon or prior to the consummation
of the 2012 Tranactions, and all Lien releases, UCC-3’s, or other documents or
instruments necessary or desirable to effect such Lien releases shall have been
executed and delivered to the Administrative Agent in form and substance
satisfactory to the Administrative Agent.

(h) The Administrative Agent shall be reasonably satisfied with the
environmental condition of the 2012 Transaction Properties

(i) The Administrative Agent shall have received an opinion of (i) Vinson &
Elkins L.L.P., special counsel to the Borrower, and (ii) local counsel for each
state (other than Michigan) in which any 2012 Transaction Property is located,
in each case in form and substance satisfactory to the Administrative Agent.

(j) The Administrative Agent shall have received a certificate of a Responsible
Officer certifying that the Borrower has received all consents and approvals
required by Section 7.03.

(k) The Administrative Agent shall have received a Reserve Report with respect
to the Borrowing Base Properties, including the 2012 Transaction Properties,
prepared by Internal Petroleum Engineers accompanied by a certificate signed by
a Responsible Officer covering the matters described in Section 8.12(c).

(l) The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of all Security Instruments that are determined by the Administrative
Agent to be necessary or desirable in order to permit the Administrative Agent
to be reasonably satisfied that the Security Instruments will create upon
recording first priority, perfected Liens (subject only to Excepted Liens
identified in clauses (a) to (d) and (f) of the definition thereof, but subject
to the provisos at the end of such definition) on at least 80% of the total
value of the proved Oil and Gas Properties evaluated in the Reserve Report
delivered pursuant to clause (k) above.

 

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(m) The Administrative Agent shall have received projections of QRE MLP and its
Subsidiaries, after giving effect to the 2012 Transactions, through the fiscal
year ending December 31, 2015, which projections shall be reasonably
satisfactory to the Administrative Agent.

(n) The Administrative Agent shall have received the preliminary unaudited pro
forma balance sheet of QRE MLP as of December 31, 2011.

(o) The Administrative Agent shall have received appropriate Uniform Commercial
Code search certificates reflecting no prior Liens encumbering the Properties of
the Obligors for each of the following jurisdictions: Delaware and any other
jurisdiction requested by the Administrative Agent; other than those being
assigned or released on or prior to the Effective Date or Liens permitted by
Section 9.03.

(p) The Administrative Agent shall have received copies of the hedging
arrangements described on Schedule II attached hereto (the “2012 Hedging
Arrangements”). The Administrative Agent shall have received satisfactory
evidence that such 2012 Hedging Arrangements are fully effective on the Third
Amendment Effective Date.

(q) The Administrative Agent shall have completed and be satisfied with due
diligence (including regarding business, financial, reserve, legal and
environmental matters) relative to the 2012 Transactions, the 2012 Transaction
Properties, QRE MLP, the Borrower, and the Subsidiaries.

(r) The Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

The Administrative Agent shall notify the Borrower and the Lenders of the Third
Amendment Effective Date, and such notice shall be conclusive and binding.

5. Representations True; No Default. Borrower represents and warrants that the
representations and warranties contained in the Loan Documents 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) on and as of the date hereof as though made on and as of such date,
except to the extent any such representation or warranty is expressly limited to
an earlier date, in which case, on and as of the date hereof, such
representation or warranty shall continue to be true and correct in all material
respects as of such specified earlier date. Borrower hereby certifies that no
Default or Event of Default has occurred and is continuing.

6. Ratification. Except as expressly amended hereby, the Loan Documents shall
remain in full force and effect. The Credit Agreement, as hereby amended, and
all rights and powers created thereby or thereunder and under the other Loan
Documents are in all respects ratified and confirmed and remain in full force
and effect.

7. Definitions and References. Any term used in this Amendment that is defined
in the Credit Agreement shall have the meaning therein ascribed to it. The terms
“Agreement” and “Credit Agreement” as used in the Loan Documents or any other
instrument, document or writing furnished to the Administrative Agent or the
Lenders by the Borrower and referring to the Credit Agreement shall mean the
Credit Agreement as hereby amended.

 

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8. Miscellaneous. This Amendment (a) shall be binding upon and inure to the
benefit of Borrower, the Administrative Agent and the Lenders and their
respective successors and assigns (provided, however, no party may assign its
rights hereunder except in accordance with the Credit Agreement); (b) may be
modified or amended only in accordance with the Credit Agreement; (c) may be
executed in several counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when so executed and delivered, shall
constitute an original agreement, and all such separate counterparts shall
constitute but one and the same agreement, and (d) together with the other Loan
Documents, embodies the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
consents and understandings relating to such subject matter. Delivery of an
executed counterpart of a signature page to this Amendment by telecopy or as an
attachment to an email shall be effective as delivery of a manually executed
counterpart of this Amendment.

[Signature Pages Follow]

 

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The parties hereto have caused this Amendment to be duly executed as of the day
and year first above written.

 

BORROWER:     QRE OPERATING, LLC     By:   /s/ Cedric W. Burgher       Cedric W.
Burgher,       Chief Financial Officer

 

Signature Page to Third Amendment to Credit Agreement

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QRE MLP:     QR ENERGY, LP     By:   QRE GP, LLC       its General Partner      
By:   /s/ Cedric W. Burgher         Cedric W. Burgher,         Chief Financial
Officer

 

Signature Page to Third Amendment to Credit Agreement

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GENERAL PARTNER:     QRE GP, LLC     By:   /s/ Cedric W. Burgher       Cedric W.
Burgher,       Chief Financial Officer

 

Signature Page to Third Amendment to Credit Agreement

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ADMINISTRATIVE AGENT

AND LENDER:

   

WELLS FARGO BANK, NATIONAL

ASSOCIATION

as Administrative Agent and a Lender

    By:   /s/ Scott Hodges     Name:   Scott Hodges     Title:   Managing
Director

 

Signature Page to Third Amendment to Credit Agreement

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LENDER:    

JPMORGAN CHASE BANK, N.A.

as a Lender

    By:   /s/ Jo Linda Papadakis       Jo Linda Papadakis       Authorized
Officer

 

Signature Page to Third Amendment to Credit Agreement

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LENDER:     ROYAL BANK OF CANADA     By:   /s/ Don J. McKinnerney     Name:  
Don J. McKinnerney     Title:   Authorized Signatory

 

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LENDER:     THE ROYAL BANK OF SCOTLAND plc     By:   /s/ Sanjay Remond     Name:
  Sanjay Remond     Title:   Director

 

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LENDER:     TORONTO DOMINION (NEW YORK) LLC     By:   /s/ Kelly Hundal     Name:
  Kelly Hundal     Title:   Authorized Signatory

 

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LENDER:     BANK OF AMERICA, N.A.     By:   /s/ Sandra M. Serie     Name:  
Sandra M. Serie     Title:   Vice President

 

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LENDER:     BANK OF MONTREAL     By:   /s/ Kevin Utsey     Name:   Kevin Utsey  
  Title:   Director

 

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LENDER:     BNP PARIBAS     By:   /s/ Greg Smothers     Name:   Greg Smothers  
  Title:   Director

 

    By:   /s/ Edward Pak     Name:   Edward Pak     Title:   Director

 

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LENDER:     CAPITAL ONE, N.A.     By:   /s/ Matthew L. Molero     Name:  
Matthew L. Molero     Title:   Vice President

 

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LENDER:     CITIBANK, N.A.     By:   /s/ Thomas Benavidea     Name:   Thomas
Benavidea     Title:   Senior Vice President

 

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LENDER:     COMERICA BANK     By:   /s/ Justin Crawford     Name:   Justin
Crawford     Title:   Vice President

 

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LENDER:     ING CAPITAL LLC     By:   /s/ Juli Bieser     Name:   Juli Bieser  
  Title:   Director

 

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LENDER:     UNION BANK, N.A.     By:   /s/ Scott Gildea     Name:   Scott Gildea
    Title:   Vice President

 

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LENDER:     SCOTIABANC INC.     By:   /s/ J.F. Todd     Name:   J.F. Todd    
Title:   Managing Director

 

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LENDER:     REGIONS BANK     By:   /s/ Daniel G. Steele     Name:   Daniel G.
Steele     Title:   Senior Vice President

 

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LENDER:     COMPASS BANK     By:   /s/ Dorothy Marchand     Name:   Dorothy
Marchand     Title:   Senior Vice President

 

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LENDER:     CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK     By:   /s/ Tom
Byargeon     Name:   Tom Byargeon     Title:   Managing Director           By:  
/s/ Sharada Manne     Name:   Sharada Manne     Title:   Managing Director

 

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LENDER:     U.S. BANK NATIONAL ASSOCIATION     By:   /s/ Mark E. Thompson    
Name:   Mark E. Thompson     Title:   Senior Vice President

 

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LENDER:     CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH     By:   /s/ Mikhail
Faybusovich     Name:   Mikhail Faybusovich     Title:   Director           By:
  /s/ Michael Spaight     Name:   Michael Spaight     Title:   Associate

 

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LENDER:   CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK
AGENCY   By:   /s/ Trudy Nelson   Name:   Trudy Nelson   Title:   Authorized
Signatory   By:   /s/ Dominic Sorresso   Name:   Dominic Sorresso   Title:  
Authorized Signatory

 

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LENDER:  

BARCLAYS BANK PLC.

  By:   /s/ Michael J. Mozer   Name:   Michael J. Mozer   Title:   Vice
President

 

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EXITING LENDER:

  BANK OF SCOTLAND plc   By:   /s/ Julia R. Franklin   Name:   Julia R. Franklin
  Title:   Vice President

 

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SCHEDULE I

2012 TRANSACTION DOCUMENTS

1.   Purchase and Sale Agreement by and between Prize Petroleum, LLC and Prize
Pipeline, LLC (collectively, “Seller”) and QRE Operating, LLC, as “Buyer”, dated
March 19, 2012.

2.   All exhibits, forms or other documents attached to the foregoing agreement;
and

3.   All other instruments or documents entered into on or before the Third
Amendment Effective Date in connection with the foregoing.

 

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SCHEDULE II

HEDGING ARRANGEMENTS

 

PERIOD

   SWAPS
(BOD)      PRICE  

May – Dec. 2012

     850       $ 109.17   

2013

     900       $ 106.40   

2014

     850       $ 100.44   

2015

     800       $ 96.20   

2016

     800       $ 93.82   

2017

     780       $ 92.15   

 

Schedule I

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Third Amendment to Credit Agreement

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ANNEX I

EACH LENDER’S

MAXIMUM CREDIT AMOUNT

AND

APPLICABLE PERCENTAGE OF BORROWING BASE

 

Name of Lender

   Applicable
Percentage     Applicable
Percentage of
Borrowing Base      Maximum
Credit  Amount  

Wells Fargo Bank, National Association

     6.986301370 %    $ 51,000,000.0       $ 104,794,521   

JPMorgan Chase Bank, N.A.

     6.986301370 %    $ 51,000,000.0       $ 104,794,521   

Royal Bank of Canada

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

The Royal Bank of Scotland plc

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Toronto Dominion (New York) LLC

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Bank of Montreal

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Barclays Bank PLC.*

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Citibank, N.A.

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Bank of America, N.A.

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

Credit Agricole S.A.

     5.479452055 %    $ 40,000,000.0       $ 82,191,781   

BBVA Compass

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

CIBC Inc.*

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

Comerica Bank

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

Regions Bank

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

Scotiabanc Inc.

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

Union Bank, N.A.

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

U.S. Bank N.A.

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

Credit Suisse AG, Cayman Islands Branch*

     4.041095890 %    $ 29,500,000.0       $ 60,616,438   

ING Capital LLC

     3.287671233 %    $ 24,000,000.0       $ 49,315,068   

BNP Paribas

     3.287671233 %    $ 24,000,000.0       $ 49,315,068   

Capital One, N.A.

     3.287671233 %    $ 24,000,000.0       $ 49,315,068      

 

 

   

 

 

    

 

 

 

TOTAL:

     100.000000000 %    $ 730,000,000       $ 1,500,000,000      

 

 

   

 

 

    

 

 

 

 

* Indicates new Lender as of Third Amendment Effective Date

 

Annex I

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Third Amendment to Credit Agreement