Exhibit 10.1
AGREEMENT AND AMENDMENT NO. 4
     This AGREEMENT AND AMENDMENT NO. 4 (“Agreement”) dated as of November 7,
2011 (“Effective Date”) is among Alta Mesa Holdings, LP, a Texas limited
partnership (“Borrower”), the affiliates of the Borrower party hereto (the
“Guarantors”), the Lenders (as defined below), and Wells Fargo Bank, N.A. as
administrative agent for such Lenders (in such capacity, the “Administrative
Agent”) and as issuing lender (in such capacity, the “Issuing Lender”).
RECITALS
     A. The Borrower is party to that certain Sixth Amended and Restated Credit
Agreement dated as of May 13, 2010 among the Borrower, the lenders party thereto
from time to time (the “Lenders”), the Administrative Agent, and the Issuing
Lender, as amended by that certain Amendment No. 1 dated as of September 2,
2010, that certain Agreement and Amendment No. 2 dated as of December 6, 2010,
and that certain Agreement and Amendment No. 3 dated as of May 23, 2011, each
among the Borrower, the Guarantors, the Lenders, the Administrative Agent and
the Issuing Lender (as so amended, the “Credit Agreement”).
     B. The parties hereto wish to, subject to the terms and conditions of this
Agreement, (i) redetermine and increase the Borrowing Base (as defined in the
Credit Agreement) and (ii) make certain other amendments to the Credit Agreement
as provided herein.
     NOW THEREFORE, in consideration of the benefits to be derived by the
parties hereto and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
     Section 1. Defined Terms; Other Provisions. As used in this Agreement, each
of the terms defined in the opening paragraph and the Recitals above shall have
the meanings assigned to such terms therein. Each term defined in the Credit
Agreement and used herein without definition shall have the meaning assigned to
such term in the Credit Agreement, unless expressly provided to the contrary.
Article, Section, Schedule, and Exhibit references are to Articles and Sections
of and Schedules and Exhibits to this Agreement, unless otherwise specified. The
words “hereof”, “herein”, and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” means “including,
without limitation,”. Paragraph headings have been inserted in this Agreement as
a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
     Section 2. Agreement — Borrowing Base. Subject to the terms of this
Agreement, as of the Effective Date, the Borrowing Base shall be increased by
$65,000,000 (the “Increase Amount”) resulting in a new Borrowing Base equal to
$325,000,000. Such Borrowing Base shall remain in effect at such level until the
Borrowing Base is redetermined in accordance with Section 2.02 of the Credit
Agreement, as amended hereby. The Borrower and the Lenders hereby acknowledge
and agree that the redetermination of the Borrowing Base set forth in this
Section 2 is the scheduled semi-annual redetermination of the Borrowing Base
scheduled for Fall, 2011 under Section 2.02 of the Credit Agreement. Each
Lender’s Pro Rata Share of the redetemined Borrowing Base, after giving effect
to the increase in the Borrowing Base set forth in this Section 2, is set forth
in Annex I attached hereto.

 

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     Section 3. Amendments to Credit Agreement.
          (a) Section 6.02 (Debts, Guaranties, and Other Obligations) of the
Credit Agreement is hereby amended by (i) replacing the amount “$8,000,000”
found in clause (f) therein with the amount “$12,000,000”, and (ii) replacing
the amount “$8,000,000” found in clause (n) therein with the amount
“$12,000,000".
          (b) Clause (c) of Section 6.14 (Limitation on Hedging) of the Credit
Agreement is hereby amended by deleting clause (c)(i) in its entirety and
replacing it with the following:
"(i) subject to the terms in the immediately following clause (ii) and clause
(iii), before and after giving effect to such Hydrocarbon Hedge Contract, no
more than 85% of the Anticipated Production of gas volumes and no more than 85%
of the Anticipated Production of oil volumes may be covered by Hydrocarbon Hedge
Contracts; provided that, as of any date of determination, (A) no more than 25%
of the oil volumes of Anticipated Production for the calendar year in which the
fourth anniversary of such determination date occurs and no more than 25% of the
gas volumes of Anticipated Production for the calendar year in which the fourth
anniversary of such determination date occurs may be attributable to PDNP
Reserves and PUD Reserves; (B) no more than 15% of the oil volumes of
Anticipated Production for the calendar year in which the fifth anniversary of
such determination date occurs and no more than 15% of the gas volumes of
Anticipated Production for the calendar year in which the fifth anniversary of
such determination date occurs may be attributable to PDNP Reserves and PUD
Reserves; and (C) no amount of oil volumes and no amount of gas volumes of
Anticipated Production for any calendar year occurring after the fifth
anniversary of such determination date may be attributable to PDNP Reserves and
PUD Reserves;”
          (c) Clause (c) of Section 6.14 (Limitation on Hedging) of the Credit
Agreement is hereby amended by deleting clause (c)(iii) in its entirety and
replacing it with the following:
"(iii) with respect to anticipated production of Hydrocarbons which are the
subject of an Acquisition under which the Borrower or any Restricted Subsidiary
is the purchaser, the Borrower and its Restricted Subsidiaries may enter into
Hydrocarbon Hedge Contracts covering such anticipated production prior to
effecting such Acquisition (regardless of the fact that such production is not
yet owned by the Borrower or such Restricted Subsidiary) so long as (A) a
binding purchase agreement has been executed by the Borrower or a Restricted
Subsidiary and the counterparties to such Acquisition, (B) at the time such
Hydrocarbon Hedge Contracts are entered into, the aggregate Unused Commitment
Amount is greater than or equal to 10% of the lesser of the Borrowing Base and
the aggregate Commitments then in effect, (C) the Borrower shall, and shall
cause its Restricted Subsidiaries to terminate, unwind or otherwise liquidate
all such Hydrocarbon Hedge Contracts upon the earliest of (1) the 90th day
following the full execution of the purchase agreement related to such
Acquisition if the Acquisition has not been fully consummated by such date,
(2) within 3 Business Days after the date upon on which such purchase agreement
is terminated by any party thereto, and (3) the date upon which the Borrower or
any Restricted Subsidiary believes, with reasonable certainty, that such
Acquisition will not be consummated, and (D) after giving pro forma effect to
such Acquisition (i.e. assuming that such Acquisition had gone into effect prior
to or as of the date such Hydrocarbon Hedge Contracts are entered into), the
Borrower and its Restricted Subsidiaries would be in compliance with the volume
limitations in clause (i) above;”

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     Section 4. Representations and Warranties. Each of the Guarantors and the
Borrower hereby represents and warrants that: (a) after giving effect to this
Agreement, the representations and warranties contained in the Credit Agreement,
as amended hereby, and the representations and warranties contained in the other
Loan Documents are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representation or warranty
that already is qualified or modified by materiality in the text thereof) on and
as of the Effective Date as if made on and as of such date except to the extent
that any such representation or warranty expressly relates solely to an earlier
date, in which case such representation or warranty is true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representation or warranty that already is qualified or
modified by materiality in the text thereof) as of such earlier date; (b) no
Default has occurred which is continuing; (c) the execution, delivery and
performance of this Agreement are within the corporate, limited liability
company, or partnership power and authority of such Person and have been duly
authorized by appropriate corporate and governing action and proceedings; (d)
this Agreement constitutes the legal, valid, and binding obligation of such
Person enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity; (e) there
are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security
Instruments are valid and subsisting and secure Borrower’s and the Guarantors’
obligations under the Loan Documents.
     Section 5. Conditions to Effectiveness. This Agreement shall become
effective on the Effective Date and enforceable against the parties hereto upon
the occurrence of the following conditions precedent:
          (a) The Administrative Agent shall have received multiple original
counterparts, as requested by the Administrative Agent, of this Agreement duly
and validly executed and delivered by duly authorized officers of the Borrower,
the Guarantors and all the Lenders.
          (b) The representations and warranties in this Agreement made by the
Guarantors and the Borrower shall be true and correct in all material respects.
          (c) The Borrower shall have paid, and hereby agrees to pay (i) all
reasonable fees and expenses of the Administrative Agent’s outside legal counsel
and other consultants pursuant to all invoices presented for payment on or prior
to the Effective Date, and (ii) for the account of each Lender, an amendment and
borrowing base increase fee equal to 0.45% of the Increase Amount that is
allocated to such Lender.
     Section 6. Acknowledgments and Agreements.
          (a) The Borrower and each Guarantor acknowledges that on the date
hereof all outstanding Obligations are payable in accordance with their terms
and the Borrower and each Guarantor hereby waives any defense, offset,
counterclaim or recoupment with respect thereto.
          (b) The Administrative Agent and the Lenders hereby expressly reserve
all of their rights, remedies, and claims under the Loan Documents. Nothing in
this Agreement shall constitute a waiver or relinquishment of (i) any Default or
Event of Default under any of the Loan Documents, (ii) any of the agreements,
terms or conditions contained in any of the Loan Documents, (iii) any rights or
remedies of the Administrative Agent or any Lender with respect to the Loan
Documents, or (iv) the rights of the Administrative Agent or any Lender to
collect the full amounts owing to them under the Loan Documents.

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          (c) Each of the parties hereto hereby adopt, ratify, and confirm the
Credit Agreement, as amended hereby, and acknowledges and agrees that the Credit
Agreement, as amended hereby, is and remains in full force and effect, and the
Borrower and the Guarantors acknowledge and agree that their respective
liabilities and obligations under the Credit Agreement, as amended hereby, and
the Guaranties, are not impaired in any respect by this Agreement.
          (d) From and after the Effective Date, all references to the Credit
Agreement and the Loan Documents shall mean such Credit Agreement and such Loan
Documents as amended by this Agreement.
          (e) This Agreement is a Loan Document for the purposes of the
provisions of the other Loan Documents. Without limiting the foregoing, any
breach of representations, warranties, and covenants under this Agreement shall
be a Default or Event of Default, as applicable, under the Credit Agreement.
     Section 7. Reaffirmation of the Guaranty. Each Guarantor hereby ratifies,
confirms, acknowledges and agrees that its obligations under its respective
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 all
of the Guaranteed Obligations (as defined in the Guaranties), as such Guaranteed
Obligations may have been amended by this Agreement, and its execution and
delivery of this Agreement does not indicate or establish an approval or consent
requirement by such Guarantor under its respective Guaranty in connection with
the execution and delivery of amendments, consents or waivers to the Credit
Agreement, the Notes or any of the other Loan Documents.
     Section 8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original and all of which, taken
together, constitute a single instrument. This Agreement may be executed by
facsimile signature or other similar electronic means and all such signatures
shall be effective as originals.
     Section 9. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted pursuant to the Credit Agreement.
     Section 10. Invalidity. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
     Section 11. Governing Law. This Agreement shall be deemed to be a contract
made under and shall be governed by and construed in accordance with the laws of
the State of Texas.
     Section 12. Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT AS
AMENDED BY THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE
THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[SIGNATURES BEGIN ON NEXT PAGE]

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     EXECUTED effective as of the date first above written.

                  BORROWER:   ALTA MESA HOLDINGS, LP         By:   Alta Mesa
Holdings GP, LLC             its general partner    
 
               
 
      By:
Name:   /s/ Michael McCabe
 
Michael McCabe    
 
      Title:   Chief Financial Officer    

              GUARANTORS:   ALTA MESA FINANCE SERVICES CORP.         ALTA MESA
GP, LLC         ARI DEVELOPMENT, LLC         ALTA MESA ACQUISITION SUB, LLC    
    BRAYTON MANAGEMENT GP II, LLC         CAIRN ENERGY USA, LLC        
LOUISIANA ONSHORE PROPERTIES LLC         THE MERIDIAN PRODUCTION, LLC        
THE MERIDIAN RESOURCE, LLC         THE MERIDIAN RESOURCE & EXPLORATION LLC      
  TMR DRILLING, LLC         VIRGINIA OIL AND GAS, LLC         ALTA MESA HOLDINGS
GP, LLC         ALTA MESA ENERGY LLC    
 
           
 
  Each by:   /s/ Michael McCabe
 
Michael A. McCabe    
 
      Chief Financial Officer    

                      ALTA MESA SERVICES, LP         ARANSAS RESOURCES, LP      
  BUCKEYE PRODUCTION COMPANY, LP         LOUISIANA EXPLORATION & ACQUISITIONS,
LP         NAVASOTA RESOURCES, LTD., LLP         NUECES RESOURCES, LP        
OKLAHOMA ENERGY ACQUISITIONS, LP         TEXAS ENERGY ACQUISITIONS, LP        
GALVESTON BAY RESOURCES, LP         PETRO ACQUISITIONS, LP         PETRO
OPERATING COMPANY, LP         ORION OPERATING COMPANY, LP    
 
                    Each by:   Alta Mesa GP, LLC    
 
               
 
      By:   /s/ Michael McCabe
 
Michael A. McCabe    
 
          Chief Financial Officer    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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                  BRAYTON RESOURCES, LP,         By: Brayton Management GP, LLC,
its general partner    
 
           
 
  By:   /s/ Michael McCabe
 
Michael A. McCabe    
 
      Chief Financial Officer    
 
                BRAYTON RESOURCES II, L.P.,         By: Brayton Management GP
II, LLC, its general partner    
 
           
 
  By:   /s/ Michael McCabe
 
Michael A. McCabe    
 
      Chief Financial Officer    

                      ALTA MESA RESOURCES, LP,         By:   Alta Mesa Resources
GP, LLC,             its sole general partner    
 
               
 
      By:   /s/ Michael McCabe
 
Michael A. McCabe,    
 
          Chief Financial Officer    

                      PETRO ACQUISITIONS HOLDINGS, LP,         By:   Petro
Acquisitions Holdings GP, LLC,             its sole general partner    
 
   
 
      By:   /s/ Michael McCabe
 
Michael A. McCabe,    
 
          Chief Financial Officer    

                  PETRO OPERATING COMPANY HOLDINGS, INC.,    
 
           
 
  By:   /s/ Michael McCabe
 
Michael A. McCabe    
 
      Chief Financial Officer    

                      GALVESTON BAY RESOURCES HOLDINGS, LP,         By:  
Galveston Bay Resources Holdings GP, LLC             its sole general partner  
 
 
               
 
      By:   /s/ Michael McCabe
 
Michael A. McCabe,    
 
          Chief Financial Officer    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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ADMINISTRATIVE AGENT/
           
ISSUING LENDER/
            LENDER:   WELLS FARGO BANK, N.A.    
 
           
 
  By:   /s/ Shiloh Davila
 
Shiloh Davila    
 
      Vice President    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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              LENDER:   UNION BANK, N.A.    
 
           
 
  By:
Name:   /s/ Paul E. Cornell
 
Paul E. Cornell    
 
  Title:   Senior Vice President    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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              LENDER:   CAPITAL ONE, NATIONAL ASSOCIATION    
 
           
 
  By:
Name:   /s/ Nancy M. Mak
 
Nancy M. Mak    
 
  Title:   Vice President    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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              LENDER:   BOKF, NA d/b/a Bank of Texas    
 
           
 
  By:
Name:   /s/ Martin W. Wilson
 
Martin W. Wilson    
 
  Title:   SVP    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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              LENDER:   AMEGY BANK NATIONAL ASSOCIATION    
 
           
 
  By:
Name:   /s/ Mark Serice
 
Mark Serice    
 
  Title:   Senior Vice President    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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              LENDER:   TEXAS CAPITAL BANK, N.A.    
 
           
 
  By:
Name:   /s/ Moni Collins
 
Moni Collins    
 
  Title:   Vice President    

Signature Page to Agreement and Amendment No. 4
(Alta Mesa Holdings, LP)

 

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ANNEX I
BORROWING BASE AS OF NOVEMBER 7, 2011*

                      PRO RATA SHARE OF THE   PERCENTAGE OF LENDERS   BORROWING
BASE*   TOTAL
Wells Fargo Bank, N.A.
  $ 79,824,561.40       24.561403509 %
Union Bank, N.A.
  $ 51,315,789.47       15.789473684 %
Toronto Dominion (New York) LLC
  $ 38,771,929.83       11.929824561 %
ING Capital LLC
  $ 31,929,824.56       9.824561404 %
Citibank, N.A.
  $ 31,929,824.56       9.824561404 %
Capital One, National Association
  $ 28,508,771.93       8.771929824 %
BOKF, NA d/b/a Bank of Texas
  $ 28,508,771.93       8.771929824 %
Amegy Bank National Association
  $ 17,105,263.16       5.263157895 %
Texas Capital Bank, N.A.
  $ 17,105,263.16       5.263157895 %
TOTAL
  $ 325,000,000.00       100 %

 

*   Borrowing Base is subject to redetermination pursuant to the terms of the
Credit Agreement, as amended.