Exhibit 10.1

 

EXECUTION

 

THIRD AMENDMENT TO SECOND AMENDED

AND RESTATED CREDIT AGREEMENT

This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Third Amendment”), dated as of July 20, 2015, is entered into by and among
SANCHEZ ENERGY CORPORATION, a Delaware corporation (“Borrower”), each of SEP
HOLDINGS III, LLC, a Delaware limited liability company (“SEP”), SN MARQUIS LLC,
a Delaware limited liability company (“SN Marquis”), SN COTULLA ASSETS, LLC, a
Texas limited liability company (“SN Cotulla”), SN OPERATING, LLC, a Texas
limited liability company (“SN Operating”), SN TMS, LLC, a Delaware limited
liability company (“SN TMS”), and SN CATARINA, LLC, a Delaware limited liability
company (“SN Catarina; together with SEP, SN Marquis, SN Cotulla, SN Operating
and SN TMS collectively, the “Guarantors” and each, a “Guarantor”), the Required
Lenders party hereto, and ROYAL BANK OF CANADA, as Administrative Agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Administrative Agent”).

RECITALS

A.The Borrower, the Guarantors, the Lenders, the Issuing Bank and the
Administrative Agent previously entered into that certain Second Amended and
Restated Credit Agreement dated as of June 30, 2014 (as amended by that certain
First Amendment to Second Amended and Restated Credit Agreement dated as of
September 9, 2014, and as amended by that certain Second Amendment to Second
Amended and Restated Credit Agreement dated as of March 31, 2015 and as it may
be further amended, restated, supplemented or modified from time to time, the
“Credit Agreement”) and certain other Loan Documents (as defined in the Credit
Agreement) in connection therewith.

B.The Borrower has requested that the Administrative Agent and the Lenders amend
the Credit Agreement as set forth herein. The Administrative Agent and the
Required Lenders are willing to amend the Credit Agreement on the terms and
conditions contained in this Third Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth in this Third Amendment and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the parties hereto, the
Borrower, the Guarantors, the Required Lenders, the Issuing Bank and the
Administrative Agent agree as follows:

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

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

 

 

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(i) The following defined terms are hereby added to Section 1.02 of the Credit
Agreement in the proper alphabetical order:

“Acquisition” means one or more acquisitions by the Loan Parties of Oil and Gas
Properties.

“Availability” means, at any time, (a) the then effective total Commitments
minus (b) the aggregate principal amount of Loans and participation interests in
Letters of Credit (without regard to any sale by a Lender of a participation in
any Loan under Section 12.04(c)).

“Bee County Gas Processing Property” means a ten percent (10%) undivided
interest in that certain gas processing facility in Bee County, Texas.

“DW Midstream Assets” means those Eligible Midstream Assets in Dimmit and Webb
Counties, Texas used to deliver Hydrocarbons produced by one or more Loan
Parties and either contributed to the DW Midstream Unrestricted Subsidiary or
sold to the DW Midstream Counterparty as part of the DW Midstream Transaction.

“DW Midstream Counterparty” means the purchaser or parent entity of the
purchaser, as the context requires, of the DW Midstream Assets or the Equity
Interests in the DW Midstream Unrestricted Subsidiary, as applicable, as part of
the DW Midstream Transaction.

“DW Midstream Counterparty Equity Interests” means any Equity Interests in the
DW Midstream Counterparty received as part of the DW Midstream Transaction and
any Equity Interests constituting “proceeds” (within the meaning of such term
under Section 9-102(64) of the UCC) thereof resulting from any share or unit
split, reorganization, dividend, distribution or other similar event at the DW
Midstream Counterparty, including any Equity Interest constituting proceeds of
any such proceeds.  

“DW Midstream Counterparty Notes” means any payment-in-kind promissory note
issued by the DW Midstream Counterparty to a Loan Party as part of the DW
Midstream Transaction and any payment-in-kind promissory note issued as payment
in-kind interest on any DW Midstream Counterparty Note in accordance with the
terms thereof; provided, that at the time of issuance of the initial DW
Midstream Counterparty Note, the issuer shall be a Reporting Company.

“DW Midstream Transaction” collectively means (i) the contribution of the DW
Midstream Assets by a Loan Party to the DW Midstream Unrestricted Subsidiary;
(ii) the disposition by the Loan Party parent of the DW Midstream Unrestricted
Subsidiary of 50% to 100% of the Equity Interests in such Unrestricted
Subsidiary to the DW Midstream Counterparty or the disposition of

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such DW Midstream Assets to the DW Midstream Counterparty,  in exchange for
cash, DW Midstream Counterparty Equity Interests or DW Midstream Counterparty
Notes; provided that no less than 75% of the aggregate consideration received by
the Loan Parties in exchange for such Equity Interests in such Unrestricted
Subsidiary or such DW Midstream Assets, as applicable, is in the form of cash or
“cash equivalents” as defined in the indentures governing the Senior Unsecured
Notes; (iii) the retention by any Loan Party of any joint and several liability
in connection with Eligible Midstream Assets transferred to an Unrestricted
Subsidiary, including the DW Midstream Assets, to the extent required under the
terms of the HIL Lease and (iv) one or more Loan Parties entering into
gathering, transportation, gas processing, and other midstream services
agreements with the DW Midstream Counterparty and/or its Affiliates, the terms
of which gathering, transportation, gas processing, and other midstream services
agreements are acceptable to Administrative Agent, as confirmed by the
Administrative Agent in writing when such agreements are or were entered into.

“DW Midstream Unrestricted Subsidiary” means the Unrestricted Subsidiary to whom
the DW Midstream Assets are contributed as part of the DW Midstream Transaction.

“Eagle Ford Midstream JV” means the JV Entity formed or to be formed in
connection with the Eagle Ford Midstream JV Transaction initially owned,
directly or indirectly, 50% by the Eagle Ford Midstream JV Sanchez Party and 50%
by the Eagle Ford Midstream JV Counterparty.

“Eagle Ford Midstream JV Counterparty” means the Person(s) other than the Eagle
Ford Midstream JV Sanchez Party and, if applicable, SN Catarina, which is a
party to the Eagle Ford Midstream JV LLC Agreement and a member of the Eagle
Ford Midstream JV.

“Eagle Ford Midstream JV LLC Agreement” means the limited liability company
agreement initially between Eagle Ford Midstream JV Sanchez Party and the Eagle
Ford Midstream JV Counterparty governing the Eagle Ford Midstream JV, the terms
of which limited liability company agreement is acceptable to Administrative
Agent, as confirmed by the Administrative Agent in writing when such agreement
is or was entered into.

“Eagle Ford Midstream JV Sanchez Party” means the Unrestricted Subsidiary a
party to the Eagle Ford Midstream JV LLC Agreement and a member of the Eagle
Ford Midstream JV.

“Eagle Ford Midstream JV Transaction” collectively means (a) the acquisition by
SN Catarina of the Bee County Gas Processing Property, (b) direct or indirect
Investments by any Loan Party in the Eagle Ford Midstream JV Sanchez Party, any
Unrestricted Subsidiary parent entity thereof, and/or the Eagle Ford Midstream
JV in an aggregate amount, without duplication, not to exceed

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$80,000,000, comprised of (i) cash contributions to the Eagle Ford Midstream JV
Sanchez Party (including cash contributions made indirectly through the Eagle
Ford Midstream JV Sanchez Party’s Unrestricted Subsidiary parent(s), if any),
(ii)  Eagle Ford Midstream JV Transaction Additional Fees, (iii) net amounts
paid pursuant to the Eagle Ford Midstream JV Transaction Netting Agreement to
the extent not reimbursed pursuant to the Eagle Ford Midstream JV Transaction
Reimbursement Agreement, (iv) amounts paid pursuant to the Eagle Ford Midstream
JV Transaction Guaranty to the extent not reimbursed pursuant to the Eagle Ford
Midstream JV Transaction Reimbursement Agreement, (v) Letters of Credit issued
to support obligations of the Eagle Ford Midstream JV Sanchez Party (less any
amounts drawn thereunder and reimbursed pursuant to the Eagle Ford Midstream JV
Transaction Reimbursement Agreement) and (vi) amounts realized upon the
enforcement, if any, of the Eagle Ford Midstream JV Transaction Pledge
Agreement, (c) any Loan Party entering into and performing its obligations under
the Eagle Ford Midstream JV Transaction Guaranty, the Eagle Ford Midstream JV
Transaction Netting Agreement, the Eagle Ford Midstream JV Transaction Pledge
Agreement, the Eagle Ford Midstream JV Transaction Agreements and the Eagle Ford
Midstream JV Transaction Reimbursement Agreement, in the case of any such
performance which constitutes a direct or indirect Investment by a Loan Party in
the Eagle Ford Midstream JV Sanchez Party, any Unrestricted Subsidiary parent
entity thereof, and/or the Eagle Ford Midstream JV, to the extent described in
clause (b) of this definition, (d) if SN Catarina so elects, the exchange of
some or all of the Bee County Gas Processing Property for the Initial Eagle Ford
Midstream JV Units and (e) the grant by SN Catarina of a security interest in
the Eagle Ford Midstream JV Units, so acquired, and certain related property and
any proceeds thereof pursuant to the Eagle Ford Midstream JV Transaction Pledge
Agreement.  For the sake of clarity, the purchase price of the Bee County Gas
Processing Property, the value of so much of the Bee County Gas Processing
Property as is exchanged for the Initial Eagle Ford Midstream JV Units, and fees
and other amounts paid by the Loan Parties under the Eagle Ford Midstream JV
Transaction Agreements on arms’ length terms, as determined by the Borrower in
good faith, shall not constitute Investments and shall not count against the
$80,000,000 amount in this definition.

“Eagle Ford Midstream JV Transaction Additional Fees” has the meaning provided
in the Eagle Ford Midstream JV Transaction Agreements.

“Eagle Ford Midstream JV Transaction Agreements” means the purchase and sale
agreement for the Bee County Gas Processing Property, an ownership and operating
agreement with respect to the related facility, natural gas processing
agreements, gathering agreements and related agreements, if any, entered into
with the Eagle Ford Midstream JV Counterparty in connection with the Eagle Ford
Midstream JV Transaction, which purchase and sale agreement, ownership and
operating agreement, natural gas processing agreements, gathering

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agreements and related agreements are acceptable to Administrative Agent, as
confirmed by the Administrative Agent in writing when such agreements are or
were entered into.

“Eagle Ford Midstream JV Transaction Guaranty” means the guaranty made by
Borrower in favor of the Eagle Ford Midstream JV in respect of the obligations
of the Eagle Ford Midstream JV Sanchez Party under the Eagle Ford Midstream JV
LLC Agreement, which guaranty is acceptable to Administrative Agent, as
confirmed by the Administrative Agent in writing when such guaranty is or was
entered into, and in any event includes a maximum aggregate liability of
Borrower of $80,000,000.

“Eagle Ford Midstream JV Transaction Netting Agreement” means an agreement
between one or more Loan Parties and the Eagle Ford Midstream JV Sanchez Party
(collectively for purposes of this definition, the “Sanchez Parties”) on the one
hand and the Eagle Ford Midstream JV Counterparty on the other hand, which
agreement is acceptable to Administrative Agent, as confirmed by the
Administrative Agent in writing when such agreement is or was entered into and
provides for the netting of amounts owed by the Sanchez Parties to the Eagle
Ford Midstream JV Counterparty under the Eagle Ford Midstream JV Transaction
Agreements against amounts owed by the Eagle Ford Midstream JV Counterparty to
the Sanchez Parties under the Eagle Ford Midstream JV Transaction Agreements.

“Eagle Ford Midstream JV Transaction Pledge Agreement” means the pledge
agreement made by SN Catarina and the Eagle Ford Midstream JV Sanchez Party in
favor of the Eagle Ford Midstream JV Counterparty, which pledge agreement is
acceptable to Administrative Agent, as confirmed by the Administrative Agent in
writing when such pledge agreement is or was entered into.

“Eagle Ford Midstream JV Transaction Reimbursement Agreement” means the
agreement, if any, among the Loan Parties a party to the Eagle Ford Midstream JV
Transaction Agreements and the Eagle Ford Midstream JV Sanchez Party providing
for reimbursement by the relevant party of amounts due such Loan Party or the
Eagle Ford Midstream JV Sanchez Party, as applicable, from the Eagle Ford
Midstream JV Counterparty and set off against amounts owed to the Eagle Ford
Midstream JV Counterparty by a Loan Party or the Eagle Ford Midstream JV Sanchez
Party, which agreement is acceptable to Administrative Agent, as confirmed by
the Administrative Agent in writing when such agreement is or was entered into.

“Eagle Ford Midstream JV Units” means the Initial Eagle Ford Midstream JV Units
and any Equity Interests constituting “proceeds” (within the meaning of such
term under Section 9-102(64) of the UCC) thereof resulting from any unit split,
reorganization, distribution or other similar entity event at the Eagle

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Ford Midstream JV, including any Equity Interest constituting proceeds of any
such proceeds.

“HIL Lease” means that certain Oil and Gas Lease dated May 12, 2010, by and
between Harrison Interests, Ltd. as “lessor” and P Ranch Working Interest, LLC,
as “lessee”, as amended, regarding properties in Dimmit, La Salle and Webb
Counties, Texas, with respect to which the interests of the lessee were acquired
by SN Catarina in the Catarina Property Acquisition.

“Initial Eagle Ford Midstream JV Units” means Equity Interests in the Eagle Ford
Midstream JV in an amount equal to the lesser of (i) 2% of the issued and
outstanding Equity Interests in the Eagle Ford Midstream JV at the time of
acquisition by a Loan Party thereof and (ii) such amount of the issued and
outstanding Equity Interests in the Eagle Ford Midstream JV at the time of
acquisition by a Loan Party thereof as has a value of $5,000,000, as determined
by the Borrower in good faith at such time.

“Point Comfort Port JV” means the JV Entity formed or to be formed in connection
with the Point Comfort Port JV Transaction initially owned, directly or
indirectly, 50% by the Point Comfort Port JV Sanchez Party and 50% by the Point
Comfort Port JV Counterparty. 

“Point Comfort Port JV Counterparty” means the Person(s) other than the Point
Comfort Port JV Sanchez Party that own an Equity Interest in the Point Comfort
Port JV.

“Point Comfort Port JV Sanchez Party” means the Unrestricted Subsidiary that
owns an Equity Interest in the Point Comfort Port JV.

 “Point Comfort Port JV Transaction” collectively means (a) direct or indirect
Investments by any Loan Party in the Point Comfort Port JV, any Unrestricted
Subsidiary parent entity thereof, and/or the Point Comfort Port JV in an
aggregate amount, without duplication, not to exceed $10,000,000 comprised of
(i) cash contributions to the Point Comfort Port JV Sanchez Party (including
cash contributions made indirectly through the Point Comfort Port JV Sanchez
Party’s Unrestricted Subsidiary parent(s), if any)  and (ii) amounts paid
pursuant to the Point Comfort Port JV Transaction Guaranty to the extent not
reimbursed by the Point Comfort Port JV Sanchez Party and (b) any Loan Party
entering into and performing its obligations under the Point Comfort Port JV
Transaction Guaranty and the Point Comfort Port JV Transaction Agreements, in
the case of any such performance which constitutes a direct or indirect
Investment by a Loan Party in the Point Comfort Port JV Sanchez Party, to the
extent described in clause (a) of this definition.

“Point Comfort Port JV Transaction Agreements” means one or more throughput and
other related agreements between a Loan Party or Loan Parties on

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the one hand and the Point Comfort Port JV and/or Point Comfort Port JV
Counterparty on the other hand, which agreements are acceptable to the
Administrative Agent, as confirmed by the Administrative Agent in writing when
such agreements are or were entered into.

“Point Comfort Port JV Transaction Guaranty” means a guaranty by Borrower of
certain obligations of the Point Comfort Port JV Sanchez Party, which guaranty
is acceptable to the Administrative Agent, as confirmed by the Administrative
Agent in writing when such guaranty is or was entered into, and in any event
includes a maximum aggregate liability of Borrower of $10,000,000.  

“Reporting Company” means a corporation, limited liability company, partnership
or other form of company subject to Section 13 or 15(d) of the Exchange Act
which Person is acceptable to Administrative Agent, as confirmed by the
Administrative Agent in writing when the documents setting forth the terms of
the DW Midstream Transaction are or were entered into.

“Specified Acquisition” means any Acquisition for which: (i) a binding and
enforceable purchase and sale agreement has been signed by a Loan Party; (ii) at
the time of the signing of the applicable purchase and sale agreement, the ratio
of Availability to the then effective total Commitments is at least 0.10 to 1.0,
and (iii) the aggregate volumes hedged with respect to the reasonably
anticipated projected production from proved Oil and Gas Properties to be
acquired in all pending Specified Acquisitions that have not yet been
consummated shall not exceed 15.0% of the Loan Parties’ reasonably anticipated
projected production from Oil and Gas Properties constituting Proved Reserves
(without giving effect to all such pending Specified Acquisitions).

“Third Amendment” means that certain Third Amendment to Second Amended and
Restated Credit Agreement dated the Third Amendment Effective Date among the
Borrower, the Guarantors, the Required Lenders, the Issuing Bank and the
Administrative Agent.

 “Third Amendment Effective Date” means July 20, 2015.

(ii)The defined term “Agreement” in Section 1.02 of the Credit Agreement is
hereby deleted and the following is substituted therefor:

“Agreement” means this Second Amended and Restated Credit Agreement, as amended
by the First Amendment, Second Amendment, Third Amendment and as the same may
from time to time be amended, modified, supplemented or restated.

(iii)The defined term “Debt” in in Section 1.02 of the Credit Agreement is
hereby amended by deleting the word “and” between clauses (l) and (m) of the
first sentence thereof and inserting the following at the end of clause (m) in
such sentence:

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“and (n) obligations arising under the retention by any Loan Party of any joint
and several liability in connection with the DW Midstream Assets, to the extent
required under the terms of the HIL Lease.”

(iv)The defined term “Senior Unsecured Notes” in Section 1.02 of the Credit
Agreement is hereby amended to replace the amount “$850,000,000” in clause
(a)(ii) thereof with the amount “$1,150,000,000”. 

(v)The defined term “SPP PSA” in Section 1.02 of the Credit Agreement is hereby
deleted and the following is substituted therefor:

“SPP PSA” means that certain Purchase and Sale Agreement dated March 31, 2015,
together with all schedules and exhibits thereto, between SEP, as “seller”, and
SEP Holdings IV, as “buyer”, providing for (i) the transfer by SEP to SEP
Holdings IV of the SPP Properties, (ii) the novation by the Borrower to SPP of
the SPP Swaps, (iii) the issuance by SPP to SEP of the Initial SPP Units and the
entry into a registration rights agreement in connection therewith, and (iv) the
payment by SEP Holdings IV to SEP of $83,000,000.00 in cash (subject to
adjustment in accordance with the SPP PSA).

(vi)The defined term “Swap Agreement” in Section 1.02 of the Credit Agreement is
hereby amended by replacing the word “and” between clauses (b) and (c) of the
last sentence thereof with a comma and inserting the following at the end of
clause (c) in such sentence:

“and (d) options and other similar rights to acquire or dispose of Eligible
Midstream Assets (or Equity Interests in Unrestricted Subsidiaries that directly
or indirectly own Eligible Midstream Assets) shall not constitute Swap
Agreements for purposes of Section 9.17.”

(vii)The following terms defined in Section 1.02 of the Credit Agreement are
hereby deleted in their entirety:

“Initial SPP Note”.

“Sanchez/Century JV Entity.”

“Sanchez/Century JV Entity Cash Dividends”.

“Sanchez/Century Midstream Assets”.

“Sanchez/Century Midstream JV Transaction”.

“SPP Note”.

(viii)Section 8.11 of the Credit Agreement is hereby amended to insert the
following Section 8.11(d) immediately after Section 8.11(c) of the Credit
Agreement:

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“(d)Contemporaneously with entering into the DW Midstream Transaction or the
Eagle Ford Midstream JV Transaction, the Borrower shall deliver to the
Administrative Agent a certificate of a Responsible Officer stating that the
Board of Directors has determined that such transaction (i) taken as a whole, is
upon fair and reasonable terms no less favorable to the Borrower than the
Borrower would obtain in a comparable arm’s length transaction not involving,
directly or indirectly, an Affiliate and (ii) has been approved by a majority of
the Board of Directors.  Together with each such certificate the Borrower shall
deliver to the Administrative Agent copies of the documents entered into or to
be entered into by the Loan Parties in connection with such
transaction.  Notwithstanding anything in any Loan Document to the contrary,
upon the receipt by the relevant Loan Party of any DW Midstream Equity Interests
or DW Midstream Counterparty Notes, no action to grant or perfect a Lien upon
the property so received is required to be undertaken unless the Administrative
Agent requests in writing that any such action be undertaken.  For the sake of
clarity no such action has been requested as of the Third Amendment Effective
Date.  Notwithstanding anything in any Loan Document to the contrary, until such
time as both (i) the Lien of the Eagle Ford Midstream JV Transaction Pledge
Agreement has been released and (ii) the Administrative Agent requests in
writing that any such action be undertaken, no action to grant or perfect a Lien
upon any Eagle Ford Midstream JV Units acquired in accordance with the terms of
this Agreement is required to be taken.”

(ix)Section 9.01(c) of the Credit Agreement is hereby deleted and the word
“Reserved” is substituted therefor.

(x)Section 9.02(d) of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“(d)Debt associated with or comprised of (i) worker’s compensation claims,
performance, bid, surety or similar bonds or surety obligations required by
Governmental Requirements or third parties, including, guarantees and
obligations of the Borrower and its Restricted Subsidiaries with respect to
letters of credit supporting such obligations (in each case other than an
obligation for money borrowed), in connection with the operation of the Oil and
Gas Properties in the ordinary course of business, (ii) the retention by any
Loan Party of any joint and several liability in connection with the DW
Midstream Assets, to the extent required under the terms of the HIL Lease, (iii)
obligations to deliver quantities of natural gas or to pay Eagle Ford Midstream
JV Transaction Additional Fees under the Eagle Ford Midstream JV Transaction
Agreements, (iv) obligations under the Eagle Ford Midstream JV Transaction
Guaranty, the Eagle Ford Midstream JV Transaction Netting Agreement, the Eagle
Ford Midstream JV Transaction Pledge Agreement (including the security interests
thereunder) and the Eagle Ford Midstream JV Transaction Reimbursement Agreement,
and (v) the Point Comfort Port JV Guaranty;”

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(xi)Section 9.03(b) of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“(b)Liens arising under the Eagle Ford Midstream JV Transaction Pledge Agreement
and Excepted Liens;”

(xii)Section 9.05(l) of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“(l)Letters of Credit issued hereunder to support Debt or other obligations of
any Unrestricted Subsidiary or any JV Entity in an aggregate face amount at any
time outstanding not exceeding the remainder of (i) the Unrestricted Subsidiary
Maximum Cash Investment Amount minus (ii) the aggregate amount of Investments of
cash in Unrestricted Subsidiaries pursuant to Section 9.05(m);  provided, that
for the avoidance of doubt the Unrestricted Subsidiary Maximum Cash Investment
Amount shall not apply to (x) Investments described in the Eagle Ford Midstream
JV Transaction, which Investments are governed by Section 9.05(n) and, to the
extent applicable, Section 9.05(m) and (y) Investments described in the SN
Services Transaction, which Investments are governed by Section 9.05(o) and, to
the extent applicable, Section 9.05(m);”.

(xiii)Section 9.05(m) of the Credit Agreement is hereby deleted and the
following is substituted therefor:

“(m)Investments in Unrestricted Subsidiaries (including for the avoidance of
doubt Investments in the DW Midstream Unrestricted Subsidiary, the Eagle Ford
Midstream JV Sanchez Party, the Point Comfort Port JV Sanchez Party, SN
Midstream and SN Services in excess of amounts otherwise provided in this
Agreement) (excluding Letters of Credit to support Debt or other obligations of
Unrestricted Subsidiaries and JV Entities, which shall be permitted only to the
extent permitted under Section 9.05(l) and, in the case of the Eagle Ford
Midstream JV Sanchez Party, Section 9.05(n)) comprised of (i) cash in an
aggregate amount at any time outstanding not exceeding the remainder of (A) the
Unrestricted Subsidiary Maximum Cash Investment Amount minus (B) the aggregate
face amount outstanding of Letters of Credit issued pursuant to Section 9.05(l)
and (ii) Eligible Midstream Assets;”

(xiv)Section 9.05(n) of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“(n)Investments contemplated by the DW Midstream Transaction, Investments
contemplated by the Eagle Ford Midstream JV Transaction (including Letters of
Credit to support obligations of the Eagle Ford Midstream JV Sanchez Party) and
Investments contemplated by the Point Comfort Port JV Transaction; provided, for
the sake of clarity, that to the extent such Investments are permitted pursuant
to Section 9.05(m), Investments in connection with the

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DW Midstream Transaction, the Eagle Ford Midstream JV Transaction and the Point
Comfort Port JV Transaction in excess of the amounts provided for in the
definitions thereof shall be permitted;”

(xv)Section 9.05(q) of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“(q) Investments comprised of DW Midstream Counterparty Equity Interests, DW
Midstream Counterparty Notes and/or Eagle Ford Midstream JV Units; and”.

(xvi)Section 9.11 of the Credit Agreement is hereby amended by deleting clause
(ii) in the introductory paragraph thereof and substituting the following
therefor:

“(ii)the contribution of Eligible Midstream Assets contemplated by the DW
Midstream Transaction and/or the exchange of some or all of the Bee County Gas
Processing Property for the Initial Eagle Ford Midstream JV Units as
contemplated by clause (d) of the definition of Eagle Ford Midstream JV
Transaction,”.

(xvii)Section 9.11(e)(2) of the Credit Agreement is hereby deleted and the
following is substituted therefor:

“(2)100% of the consideration received in respect of such sale or other
disposition shall be cash; provided, however, in connection with the SPP
Property Disposition, non-cash consideration comprised of the Initial SPP Units
may be received,”

(xviii)   Section 9.11(f) of the Credit Agreement is hereby deleted and the
following is substituted therefor:

“(f)the sale, conveyance, transfer, lease or other disposition of (i) Eligible
Midstream Assets and (ii) cash to an Unrestricted Subsidiary pursuant to
Sections 9.05(m) and 9.05(n).”.

(xix)Section 9.11 of the Credit Agreement is hereby amended by deleting the last
paragraph thereof and substituting the following therefor:

“For the sake of clarity, (i) Liquidations (including the sale, assignment,
conveyance, novation or other transfer) of any Swap Agreement are governed by
Section 9.17 and not this Section 9.11 and (ii) assets that constitute both
Eligible Midstream Assets and Oil and Gas Properties shall be treated as
Eligible Midstream Assets for purposes of this Section 9.11 except to the extent
that such assets are comprised of rights to not yet extracted hydrocarbons.”

(xx)The first sentence of Section 9.13 of the Credit Agreement is hereby deleted
and the following is substituted therefor:

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“Except for the SPP PSA Transaction and, subject to Section 8.11(d), the DW
Midstream Transaction, the Eagle Ford Midstream JV Transaction and the Point
Comfort Port JV Transaction, each of which is expressly permitted under this
Agreement, the Borrower will not, and will not permit any Restricted Subsidiary
to, enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of Property or the rendering of any service, with any
Affiliate unless such transactions are otherwise permitted under this Agreement
and are upon fair and reasonable terms no less favorable to it than it would
obtain in a comparable arm’s length transaction with a Person not an Affiliate.”

(xxi)Section 9.17 of the Credit Agreement is hereby deleted and the following is
substituted therefor”

“(a)Neither Borrower nor any of its Subsidiaries (including Unrestricted
Subsidiaries) will be a party to or in any manner be liable on any Swap
Agreement entered into for speculative purposes.

(b)From and after the Third Amendment Effective Date, the Borrower will not, and
will not permit any Restricted Subsidiary to, enter into any Swap Agreements
with respect to commodities with any Person other than (i) Swap Agreements in
effect as of the Third Amendment Effective Date described on Schedule 9.17 to
the Third Amendment, (ii) Swap Agreements constituting floor or put options with
an Approved Counterparty, (iii) Swap Agreements (other than floor or put
options) with an Approved Counterparty that are limited to notional volumes
which (when aggregated with other commodity Swap Agreements then in effect other
than basis differential swaps on volumes already hedged pursuant to other Swap
Agreements) do not exceed, as of the date such Swap Agreement is executed, (A)
for the period from 1 to 24 months after the date of execution of such Swap
Agreement, the volume of reasonably anticipated projected production (assuming
no curtailment or interruption of transportation for such projected production)
from the greater of (x) ninety percent (90%) of proved developed producing
reserves and (y) eighty-five percent (85%) of Borrower’s total Proved Reserves
(for each month during the period during which such Swap Agreement is in effect,
calculated separately for each of crude oil, natural gas and natural gas liquids
(which may be hedged with Swap Agreements for crude oil, natural gas, and/or
components of natural gas)) as such volumes are reflected in the most recent
Reserve Report delivered on or before the date such Swap Agreement is executed,
(B) for the period from 25 to 60 months after the date of execution of such Swap
Agreement, the greater of (x) eighty-five percent (85%) of the volume of proved
developed producing reserves and (y) eighty percent (80%) of the volume of
Borrower's total Proved Reserves (for each month during the period during which
such Swap Agreement is in effect, calculated separately for crude oil, natural
gas and natural gas liquids (which may be hedged with Swap Agreements for crude
oil, natural gas, and/or components of natural gas)) as such volumes are
reflected in the most recent Reserve Report delivered on or before the date such
Swap Agreement is

-12-

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

executed, and (C) for the period after the end of the 60th month after the date
of execution of such Swap Agreement, zero percent (0%) (no commodity Swap
Agreements other than floor or put options).

(c)From and after the Third Amendment Effective Date, proved developed producing
reserves and total Proved Reserves pertaining to Oil and Gas Properties to be
acquired pursuant to a Specified Acquisition will be deemed to be reflected in
the most recent Reserve Report delivered at the relevant time and the Loan
Parties may enter into Swap Agreements that would be permitted by Section
9.17(b) based thereon; provided that Swap Agreements entered into pursuant to
this Section 9.17(c) must be Liquidated upon the date which is the earlier to
occur of: (i) the date that is 120 days after the execution of the purchase and
sale agreement relating to the Specified Acquisition to the extent that such
Specified Acquisition has not been consummated by such date and (ii) the date
that is 60 days after the date on which any Loan Party knows with reasonable
certainty that the Specified Acquisition will not be consummated.

(d)From and after the Third Amendment Effective Date, the Borrower will not, and
will not permit any Restricted Subsidiary to, enter into any Swap Agreements
with respect to interest rates with any Person other than Swap Agreements in
respect of interest rates with an Approved Counterparty, as follows: (i) Swap
Agreements effectively converting interest rates from fixed to floating, the
notional amounts of which (when aggregated with all other Swap Agreements of the
Borrower and its Restricted Subsidiaries then in effect effectively converting
interest rates from fixed to floating) do not exceed 75% of the then outstanding
principal amount of the Borrower's and Restricted Subsidiaries' Debt for
borrowed money which bears interest at a fixed rate and (ii) Swap Agreements
effectively converting interest rates from floating to fixed, the notional
amounts of which (when aggregated with all other Swap Agreements of the Borrower
and its Restricted Subsidiaries then in effect effectively converting interest
rates from floating to fixed) do not exceed 75% of the then outstanding
principal amount of the Borrower's and Restricted Subsidiaries' Debt for
borrowed money which bears interest at a floating rate. 

(e)Except as required by the proviso to Section 9.17(c), the Borrower will not,
and will not permit any other Loan Party to, Liquidate any Swap Agreement in
respect of commodities unless (x) if such Swap Liquidation would result in an
automatic redetermination of the Borrowing Base pursuant to Section
2.07(b)(iii), the Borrower delivers reasonable prior written notice thereof to
the Administrative Agent, and (y) if a Borrowing Base Deficiency would result
from such Swap Liquidation as a result of an automatic redetermination of the
Borrowing Base pursuant to Section 2.07(b)(iii), the Borrower prepays
Borrowings, prior to or contemporaneously with the consummation of such Swap
Liquidation to the extent that such prepayment would have been required under
Section 3.04(c)(i) after giving effect to such automatic redetermination of the
Borrowing Base.”

-13-

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

(xxii)Section 9.18 of the Credit Agreement is hereby deleted and the following
is substituted therefor:

“The Borrower will not, and will not permit any Restricted Subsidiary to, enter
into any arrangement, directly or indirectly, whereby it shall sell or transfer
any property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred; provided, that for the sake of clarity,
this Section 9.18 shall not restrict any sale, conveyance, transfer or other
disposition of Eligible Midstream Assets and subsequent payment of fees for the
use of such Eligible Midstream Assets, in each case to the extent permitted
under the provisions of this Agreement other than this Section 9.18.”

(xxiii)   Annex I of the Credit Agreement is hereby deleted and Annex I attached
to this Third Amendment is substituted therefor.

(xxiv)The Financial Covenant Calculation Worksheet attached to Exhibit D Form of
Compliance Certificate is hereby deleted and the Financial Covenant Calculation
Worksheet attached as Exhibit D to this Third Amendment is substituted therefor.

(xxv)A new Schedule 9.17 to the Credit Agreement, “Existing Swap Agreements as
of the Third Amendment Effective Date” in the form attached as Schedule 9.17 to
this Second Amendment is hereby added to the Credit Agreement in substitution
for the prior Schedule 9.17.

3.Borrower’s Ratification. The Borrower hereby ratifies all of its Obligations
under the Credit Agreement and each of the Loan Documents to which it is a
party, and agrees and acknowledges that the Credit Agreement and each of the
Loan Documents to which it is a party are and shall continue to be in full force
and effect. Nothing in this Third Amendment extinguishes, novates or releases
any right, claim, Lien, security interest or entitlement of any of the Lenders,
the Issuing Bank or the Administrative Agent created by or contained in any of
such documents nor is Borrower released from any covenant, warranty or
obligation created by or contained herein or therein.

4.Guarantors’ Ratification. Each Guarantor by its execution in the space
provided below under “ACKNOWLEDGED for purposes of Section 4” hereby ratifies,
confirms, acknowledges and agrees that its obligations under the Guaranty are in
full force and effect and that such Guarantor continues to unconditionally and
irrevocably guarantee the full and punctual payment, when due, whether at stated
maturity or earlier by acceleration or otherwise, of the Obligations, and its
execution and delivery of this Third Amendment does not indicate or establish an
approval or consent requirement by any Guarantor under the Guaranty in
connection with the execution and delivery of amendments to the Credit
Agreement, the Notes or any of the other Loan Documents (other than the Guaranty
or any other Loan Document to which a Guarantor is a party).

-14-

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

5.Conditions to Effectiveness of Third Amendment. This Third Amendment shall be
effective upon the satisfaction, in the Administrative Agent’s sole discretion,
of the following conditions precedent:

(i)The Administrative Agent shall have executed, and shall have received from
the Borrower and the Required Lenders duly executed signature pages to, this
Third Amendment, and shall have received a duly executed acknowledgement of
Section 4 of this Third Amendment from each Guarantor; and

(ii)the Administrative Agent shall have received such other documents as the
Administrative Agent or its counsel may reasonably request.

6.No Implied Amendment, Waiver or Consent. This Third Amendment shall not
constitute an amendment or waiver of any provision not expressly referred to
herein and shall not be construed as a consent to any action on the part of the
Borrower that would require a waiver or consent of the Lenders or Required
Lenders, as applicable, or an amendment or modification to any term of the Loan
Documents except as expressly stated herein.

7.Miscellaneous. This Third Amendment is a Loan Document. Except as affected by
this Third Amendment, the Loan Documents are unchanged and continue in full
force and effect. However, in the event of any inconsistency between the terms
of the Credit Agreement, as amended by this Third Amendment, and any other Loan
Document, the terms of the Credit Agreement will control and the other document
will be deemed to be amended to conform to the terms of the Credit Agreement.
All references to the Credit Agreement will refer to the Credit Agreement as
amended by this Third Amendment and any other amendments properly executed among
the parties. Borrower agrees that all Loan Documents to which it is a party
(whether as an original signatory or by assumption of the Obligations) remain in
full force and effect and continue to evidence its legal, valid and binding
obligations enforceable in accordance with their terms (as the same are affected
by this Third Amendment or are amended in connection with this Third Amendment).
AS A MATERIAL INDUCEMENT TO THE ADMINISTRATIVE AGENT AND LENDERS PARTY HERETO TO
ENTER INTO THIS THIRD AMENDMENT, BORROWER RELEASES THE ADMINISTRATIVE AGENT, THE
ISSUING BANK, THE LENDERS AND THEIR RESPECTIVE PREDECESSORS, SUCCESSORS,
ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, TRUSTEES, AGENTS AND ATTORNEYS FROM ANY
LIABILITY FOR ACTIONS OR FAILURES TO ACT IN CONNECTION WITH THE LOAN DOCUMENTS
PRIOR TO THE THIRD AMENDMENT EFFECTIVE DATE. NO COURSE OF DEALING BETWEEN
BORROWER OR ANY OTHER PERSON, ON THE ONE HAND, AND THE ADMINISTRATIVE AGENT,
ISSUING BANK AND THE LENDERS, ON THE OTHER, WILL BE DEEMED TO HAVE ALTERED OR
AMENDED THE CREDIT AGREEMENT OR AFFECTED BORROWER’S, THE ADMINISTRATIVE AGENT’S,
THE ISSUING BANK’S OR THE LENDERS’ RIGHT TO ENFORCE THE CREDIT AGREEMENT AS
WRITTEN. This Third Amendment will be binding upon and inure to the benefit of
each of the undersigned and their respective successors and permitted assigns.

-15-

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

8.Form. Each agreement, document, instrument or other writing to be furnished to
the Administrative Agent and/or the Lenders under any provision of this
instrument must be in form and substance satisfactory to the Administrative
Agent and its counsel.

9.Headings. The headings and captions used in this Third Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of
this Third Amendment, the Credit Agreement, or the other Loan Documents.

10.Interpretation.  Wherever possible each provision of this Third Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Third Amendment shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Third Amendment.

11.Multiple Counterparts. This Third Amendment may be separately executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
agreement. This Third Amendment may be transmitted and/or signed by facsimile,
telecopy or electronic mail. The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as
manually‑signed originals and shall be binding on all Loan Parties, all Lenders,
the Administrative Agent and the Issuing Bank. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually‑signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

12.Governing Law.  This THIRD AMENDMENT shall be governed by, and construed in
accordance with the laws of the State of NEW YORK without regard to any
choice-of-law provisions that would require the application of the law of
another jurisdiction.

[Signature Pages Follow]

 

 

-16-

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

 

 

 

 

BORROWER:

 

 

 

 

 

SANCHEZ ENERGY CORPORATION,

 

a Delaware corporation

 

 

 

By:

/s/ G. Gleeson Van Riet

 

G. Gleeson Van Riet

 

Senior Vice President – Chief Financial

 

Officer

 

Signature Page 1

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

ACKNOWLEDGED for the purposes stated in
Section 4:

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

SEP HOLDINGS III, LLC,

 

a Delaware limited liability company

 

 

 

SN MARQUIS LLC,

 

a Delaware limited liability company

 

 

 

SN COTULLA ASSETS, LLC,

 

a Texas limited liability company

 

 

 

SN OPERATING, LLC,

 

a Texas limited liability company 

 

 

 

SN TMS, LLC,

 

a Delaware limited liability company 

 

 

 

SN CATARINA, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ G. Gleeson Van Riet

 

G. Gleeson Van Riet

 

Senior Vice President – Chief Financial

 

Officer

 

Signature Page 2

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

ADMINISTRATIVE AGENT:

 

 

 

 

 

ROYAL BANK OF CANADA, as
Administrative Agent

 

 

 

 

 

By:

/s/ Yvonne Brazier

 

Name:

Yvonne Brazier

 

Title:

Manager, Agency

 

Signature Page 3

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

LENDERS:

 

 

 

 

 

ISSUING BANK AND LENDER:

 

 

 

ROYAL BANK OF CANADA

 

 

 

By:

/s/ Mark Lumpkin, Jr.

 

Name:

Mark Lumpkin, Jr.

 

Title:

Authorized Signatory

 

Signature Page 4

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

CAPITAL ONE, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Michael Higgins

 

Name:

Michael Higgins

 

Title:

Director

 

Signature Page 5

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

 

 

 

 

 

By:

/s/ Nupur Kumar

 

Name:

Nupur Kumar

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Karim Rahimtoola

 

Name:

Karim Rahimtoola

 

Title:

Authorized Signatory

 

Signature Page 6

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

COMPASS BANK

 

 

 

 

 

By:

/s/ Les Werme

 

Name:

Les Werme

 

Title:

Director

 

Signature Page 7

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

SUNTRUST BANK

 

 

 

 

 

By:

/s/ Chulley Bogle

 

Name:

Chulley Bogle

 

Title:

Vice President

 

Signature Page 8

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

ING CAPITAL LLC

 

 

 

 

 

By:

/s/ Josh Strong

 

Name:

Josh Strong

 

Title:

Director

 

 

 

 

By:

/s/ Juli Bieser

 

Name:

Juli Bieser

 

Title:

Managing Director

 

Signature Page 9

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

BRANCH BANKING AND TRUST COMPANY

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Signature Page 10

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

IBERIABANK

 

 

 

 

 

By:

/s/ W. Bryan Chapman

 

Name:

W. Bryan Chapman

 

Title:

Executive Vice President

 

Signature Page 11

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

MUFG UNION BANK, N.A., f/k/a Union Bank, N.A.

 

 

 

 

 

By:

/s/ Haylee Dallas

 

Name:

Haylee Dallas

 

Title:

Vice President

 

Signature Page 12

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

SOCIÉTÉ GENÉRALÉ

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Signature Page 13

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

BMO HARRIS BANK, N.A.

 

 

 

 

 

By:

/s/ James V. Ducote

 

Name:

James V. Ducote

 

Title:

Managing Director

 

Signature Page 14

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

 

 

 

 

 

By:

/s/ Nimisha Srivastav

 

Name:

Nimisha Srivastav

 

Title:

Director

 

 

 

 

By:

/s/ Mark Roche

 

Name:

Mark Roche

 

Title:

Managing Director

 

Signature Page 15

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

SUMITOMO MITSUI BANKING CORPORATION

 

 

 

 

 

By:

/s/ James D. Weinstein

 

Name:

James D. Weinstein

 

Title:

Managing Director

 

Signature Page 16

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Ben Leonard

 

Name:

Ben Leonard

 

Title:

Vice President

 

Signature Page 17

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

COMERICA BANK

 

 

 

 

 

By:

/s/ Bradley Kuhn

 

Name:

Bradley Kuhn

 

Title:

Assistant Vice President

 

Signature Page 18

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

 

FIFTH THIRD BANK

 

 

 

 

 

By:

/s/ Justin Bellamy

 

Name:

Justin Bellamy

 

Title:

Director

 

 

 

Signature Page 19

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

 

 

 

 

 

 

 

 

 

 

Name of Lender

    

Applicable
Percentage

    

Elected
Commitment

    

Maximum
Credit Amount

 

Royal Bank of Canada

 

10.196078 

%  

$

30,588,235.30 

 

$

152,941,176.45 

 

Capital One, National Association

 

10.196078 

%  

$

30,588,235.30 

 

$

152,941,176.45 

 

Compass Bank

 

8.921569 

%  

$

26,764,705.88 

 

$

133,823,529.42 

 

SunTrust Bank

 

8.921569 

%  

$

26,764,705.88 

 

$

133,823,529.42 

 

Credit Suisse AG, Cayman Islands Branch

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

Branch Banking and Trust Company

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

ING Capital LLC

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

MUFG Union Bank, N.A.

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

Sociètè Genèralè

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

IBERIABANK

 

6.372549 

%  

$

19,117,647.06 

 

$

95,588,235.29 

 

BMO Harris Bank, N.A.

 

4.705882 

%  

$

14,117,647.06 

 

$

70,588,235.30 

 

Credit Agricole Corporate and Investment Bank

 

4.705882 

%  

$

14,117,647.06 

 

$

70,588,235.30 

 

Sumitomo Mitsui  Banking Corporation

 

3.529412 

%  

$

10,588,235.29 

 

$

52,941,176.48 

 

U.S. Bank National Association,

 

3.529412 

%  

$

10,588,235.29 

 

$

52,941,176.48 

 

Comerica Bank

 

3.529412 

%  

$

10,588,235.29 

 

$

52,941,176.48 

 

Fifth Third Bank

 

3.529412 

%  

$

10,588,235.29 

 

$

52,941,176.48 

 

TOTAL

 

100 

%  

$

300,000,000.00 

 

$

1,500,000,000.00 

 

 

 

 

Annex I

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

SCHEDULE 9.17

 

Existing Swap Agreements as of Third Amendment Effective Date

 

Oil Swaps:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

 

    

 

    

 

    

 

    

 

    

 

 

    

 

    

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value as of

 

Premiums to Be

 

 

 

Contract Period

 

Instrument

 

Counterparty

 

Barrels

 

Purchased

 

Sold

 

Pricing Index

 

 

 

 

June 30, 2015

 

Paid

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

Soc Gen

 

92,000 

 

$

85.50 

 

n/a

 

NYMEX WTI

 

 

 

 

$

2,305,295 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

Soc Gen

 

368,000 

 

$

72.78 

 

n/a

 

NYMEX WTI

 

 

                   

 

$

4,552,167 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

ING

 

368,000 

 

$

71.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

3,898,798 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

ING

 

276,000 

 

$

73.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

3,474,689 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

ING

 

368,000 

 

$

72.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

4,265,859 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

ING

 

368,000 

 

$

71.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

3,898,798 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

BP

 

368,000 

 

$

72.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

4,265,859 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

BMO

 

184,000 

 

$

88.35 

 

n/a

 

NYMEX WTI

 

 

 

 

$

5,133,652 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

BMO

 

184,000 

 

$

67.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

1,215,278 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Soc Gen

 

366,000 

 

$

63.25 

 

n/a

 

NYMEX WTI

 

 

 

 

$

420,123 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Shell

 

366,000 

 

$

80.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

6,480,234 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Shell

 

183,000 

 

$

80.15 

 

n/a

 

NYMEX WTI

 

 

 

 

$

3,267,251 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

ING

 

732,000 

 

$

62.00 

 

n/a

 

NYMEX WTI

 

 

 

 

$

(64,245)

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

BMO

 

183,000 

 

$

80.15 

 

n/a

 

NYMEX WTI

 

 

 

 

$

3,267,251 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

BMO

 

366,000 

 

$

80.15 

 

n/a

 

NYMEX WTI

 

 

 

 

$

6,534,506 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

BMO

 

366,000 

 

$

63.25 

 

n/a

 

NYMEX WTI

 

 

 

 

$

420,123 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

53,335,638 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas Swaps:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Period

 

Instrument

 

Counterparty

 

Mmbtu

 

Purchased

 

Sold

 

Pricing Index

 

 

 

 

 

 

 

 

 

 

 

 

July 1, 2015 - October 31, 2015

 

Swap

 

Shell

 

1,230,000

 

$

3.54 

 

n/a

 

NYMEX NG

 

 

 

 

$

873,773 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

Soc Gen

 

1,840,000

 

$

3.91 

 

n/a

 

NYMEX NG

 

 

 

 

$

1,850,812 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Swap

 

BMO

 

1,840,000

 

$

4.01 

 

n/a

 

NYMEX NG

 

 

 

 

$

2,034,489 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Shell

 

3,660,000

 

$

3.92 

 

n/a

 

NYMEX NG

 

 

 

 

$

2,700,711 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Shell

 

3,660,000

 

$

3.80 

 

n/a

 

NYMEX NG

 

 

 

 

$

2,278,670 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

Shell

 

3,660,000

 

$

3.83 

 

n/a

 

NYMEX NG

 

 

 

 

$

2,365,612 

 

$

-

 

 

 

January 1, 2016 - December 31, 2016

 

Swap

 

RBC

 

3,660,000

 

$

3.92 

 

n/a

 

NYMEX NG

 

 

 

 

$

2,700,711 

 

$

-

 

 

 

January 1, 2017 - December 31, 2017

 

Swap

 

BMO

 

3,650,000

 

$

3.65 

 

n/a

 

NYMEX NG

 

 

 

 

$

1,018,744 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

15,823,522 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas 3-Way Collars:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Period

 

Mmbtu

 

Counterparty

 

Short Put

 

Long Put

 

Short call

 

Pricing Index

 

 

 

 

 

 

 

 

 

 

 

 

July 1, 2015 - December 31, 2015

 

920,000 

 

Shell

 

$

3.50

 

$

4.00 

 

$

4.90 

 

NYMEX NG

 

 

 

 

$

421,569 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

920,000 

 

BMO

 

$

3.50

 

$

4.00 

 

$

4.90 

 

NYMEX NG

 

 

 

 

$

421,569 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

843,138 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas Enhanced Swaps:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Period

 

Instrument

 

Counterparty

 

Mmbtu

 

Purchased

 

Put

 

Pricing Index

 

 

 

 

 

 

 

 

 

 

 

 

July 1, 2015 - December 31, 2015

 

Enhanced Swap

 

Soc Gen

 

368,000 

 

$

4.50 

 

$

3.75 

 

NYMEX NG

 

 

 

 

$

267,637 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Enhanced Swap

 

RBC

 

1,104,000 

 

$

4.44 

 

$

3.75 

 

NYMEX NG

 

 

 

 

$

736,788 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Enhanced Swap

 

BMO

 

1,840,000 

 

$

4.21 

 

$

3.75 

 

NYMEX NG

 

 

 

 

$

780,319 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Enhanced Swap

 

BMO

 

1,840,000 

 

$

4.27 

 

$

3.75 

 

NYMEX NG

 

 

 

 

$

890,527 

 

$

-

 

 

 

July 1, 2015 - December 31, 2015

 

Enhanced Swap

 

BMO

 

552,000 

 

$

4.40 

 

$

3.75 

 

NYMEX NG

 

 

 

 

$

343,597 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,018,868 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil Puts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Period

 

Instrument

 

Counterparty

 

Barrels

 

Put Price

 

Sold

 

Pricing Index

 

Prem/Bbl

 

 

 

 

 

 

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

BMO

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.08 

 

$

2,264,017 

 

$

(2,225,280)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

BMO

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.15 

 

$

2,264,017 

 

$

(2,250,900)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

BMO

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.25 

 

$

2,264,017 

 

$

(2,287,500)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

Capital One

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.00 

 

$

2,264,017 

 

$

(2,196,000)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

ING

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.05 

 

$

2,264,017 

 

$

(2,214,300)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

ING

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.00 

 

$

2,264,017 

 

$

(2,196,000)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

Soc Gen

 

732,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.25 

 

$

4,528,034 

 

$

(4,575,000)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

Soc Gen

 

366,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.00 

 

$

2,264,017 

 

$

(2,196,000)

 

 

 

January 1, 2016 - December 31, 2016

 

Put

 

Fifth Third

 

732,000 

 

$

60.00 

 

n/a

 

NYMEX WTI

 

$

6.02 

 

$

4,528,034 

 

$

(4,406,640)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

24,904,187 

 

$

(24,547,620)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand Total

 

$

97,925,353 

 

$

(24,547,620)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Soc Gen

 

$

16,188,085 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shell

 

$

18,387,820 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ING

 

$

20,001,933 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BP

 

$

4,265,859 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Suisse

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RBC

 

$

3,437,499 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BMO

 

$

28,852,106 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifth Third

 

$

4,528,034 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital One

 

$

2,264,017 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand Total

 

$

97,925,353 

 

 

 

 

 

 

 

Schedule 9.17

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

FINANCIAL COVENANT CALCULATION WORKSHEET

 

Summary of Financial Ratios

 

 

 

 

 

Section 9.01 Financial Covenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Compliance?

   

  

  

 

Current Ratio

min. 1.0 to 1.0

 

 

 

 

 

 

Senior Secured Leverage Ratio

max. 2.25 to 1.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Ratio

 

 

 

 

 

 

 

Consolidated Current Assets (including unused Commitments to the extent that the
Borrower is permitted to borrow such amount under the terms of the Agreement,
but excluding non-cash assets under FAS 133)

=

 $

 

 

 

 

Consolidated Current Liabilities (excluding outstanding Obligations to the
extent included in consolidated current liabilities, non-cash obligations under
FAS 133 and any accrual related to non-cash compensation arising from any grant
of stock, stock options or other equity based awards)

 $

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Leverage Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

=

 $

 

 

 

 

Consolidated EBITDA [or Annualized
Consolidated EBITDA through 9/30/15]

 $

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 8.13(a)

[Provide details of compliance/non-compliance]

Exhibit D Page 1

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

 

 

 

Current Ratio

 

Section 9.01 Financial Covenants

 

 

 

 

 

Consolidated Current Assets

$

 

(+) Unused Commitments to the extent that the Borrower is permitted to borrow
such amount under the terms of the Agreement

$

 

(-) Non-cash assets under FAS 133

$

 

Total Consolidated Current Assets

$

 

 

 

 

Consolidated Current Liabilities

$

 

(-) Outstanding Obligations to the extent included in consolidated current
liabilities

 $

 

(-)Non-cash obligations under FAS 133

$

 

(-) Accrual related to non-cash compensation arising from any grant of stock,
stock options or other equity based awards

$

 

Total Consolidated Current Liabilities

$

 

 

 

 

Current Ratio is ___ to 1.00.

 

 

Exhibit D Page 2

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

Senior Secured Leverage Ratio commencing with fiscal quarter ending 3/31/15
Section 9.01 Financial Covenants

 

Senior Secured Debt (without duplication) at end of

Q__ 201_

Total Credit Exposure (outstanding principal amount of Loans plus aggregate LC
Exposure)

$

(+) All secured obligations of Borrower and its Restricted Subsidiaries for
borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or
other similar instruments

$

(+) All secured Capital Lease Obligations of Borrower and its Restricted
Subsidiaries (excluding any office lease of the Borrower or any Restricted
Subsidiary constituting a Capital Lease Obligation)

$

(+) All secured obligations of Borrower and its Restricted Subsidiaries under
Synthetic Leases

$

(+) All secured Debt of others secured by a Lien on any Property of Borrower or
any Restricted Subsidiary, whether or not such Debt is assumed by such Person

$

Total Senior Secured Debt

 

Consolidated EBITDA for [●] Quarters ended[●] /1[●]

 

Consolidated Net Income (the following to be added, without duplication and to
the extent deducted (and not added back) in calculating such Consolidated Net
Income)

$

(+) Consolidated Net Interest Expense

$

(+) Consolidated Income Tax Expense

$

(+) Consolidated depletion, depreciation and amortization expense of the
Borrower and its Restricted Subsidiaries

$

(+) Other non-cash charges to the extent not included in the foregoing

$

(+) Fees and expenses expensed and paid in cash in connection with (1) the
public offering of Borrower’s Equity Interests, (2) the 2012 Credit Agreement,
(3) the 2013 Credit Agreement, (4) the Senior Unsecured Notes and (5) the
Agreement, including any amendments to date

$

(+) Unrestricted Person Cash Dividends

$

(-) All-non-cash income to the extent included in determining Consolidated Net
Income

$

 

 

First Testing Period Pro Forma Consolidated EBITDA

$

 

 

For the Rolling Period ending on 3/ 31/15
First Testing Period Pro Forma Consolidated EBITDA

$

(+) Consolidated EBITDA for 2 quarters ending 3/31/15

$

Sum:

$

Multiply sum by 4/3

$

 

 

Exhibit D Page 3

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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

 

For the Rolling Period ending 6/30/15

First Testing Period Pro Forma Consolidated EBITDA

$

(+) Consolidated EBITDA for 3 quarters ending 6/30/15

$

Sum:

$

For Rolling Periods ending on and after 9/30/15

Consolidated EBITDA for prior 4 quarters

$

 

Senior Secured Leverage Ratio is __ to 1.00.

 

 

Exhibit D Page 4

Third Amendment to Sanchez

Second Amended and Restated Credit Agreement

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