magnum_8k-ex1001.htm








 


EXHIBIT 10.1




FIRST AMENDMENT TO


SECOND AMENDED AND RESTATED CREDIT AGREEMENT


 


THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of July 14, 2011, to be effective, however, as of June 30, 2011 (the “First Amendment Effective Date”), is entered into by and among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), the Guarantors party hereto (the “Guarantors”), the Lenders party hereto (the “Lenders”) and BANK OF MONTREAL, as Administrative Agent for the Lenders (the “Administrative Agent”).


 


RECITALS


 


WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into that certain Second Amended and Restated Credit Agreement dated April 13, 2011 (as amended or restated from time to time, the “Credit Agreement”); and


 


WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement; and


 


WHEREAS, said parties are willing to so amend the Credit Agreement subject to the terms and conditions set forth herein.


 


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, the Borrower, the Guarantors, the Lenders 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.           Amendments to Section 1.01.


 



	
  

	
(a)

	
The definition of “LIBO Rate” in Section 1.01 of the Credit Agreement is hereby amended to delete the phrase “; provided, in no event shall the LIBO Rate be less than 1%.”







 



	
  

	
(b)

	
Section 1.01 of the Credit Agreement is hereby amended to add the following new definition in proper alphabetical order:







 


“First Amendment Effective Date” means June 30, 2011.


 


3.           Amendment to Section 2.07.  Section 2.07 of the Credit Agreement is hereby amended to restate in its entirety subsection (a) thereof as follows:


 


“(a)           Borrowing Base.


 










  





  











  













(i)           For the period from and including the Effective Date to but excluding the First Amendment Effective Date, the amount of the Borrowing Base shall be $145,000,000; provided, if any of the Acquisitions are not consummated and closed contemporaneously with the Effective Date, the Borrowing Base shall be automatically reduced as follows:


 



	

FAILURE


TO CLOSE



	

REDUCTION OF


BORROWING BASE




	
NGAS Acquisition

	
$45,000,000


	
NuLoch Acquisition

	
$25,000,000












 


Upon the consummation and closing of any Acquisition after the Effective Date and satisfaction of the conditions set forth in Section 6.02, the Borrowing Base shall be automatically increased by the amount set forth above opposite the applicable Acquisition.  In addition, the Borrowing Base may be subject to further adjustments from time to time pursuant to Section 8.13(c) or Section 9.11.


 


(ii)           For the period from and including the First Amendment Effective Date to but excluding the first Redetermination Date, the amount of the Borrowing Base shall be $170,000,000.  Notwithstanding the foregoing, if the Borrower enters into Swap Agreements in the amounts set forth on Schedule 2.07(a)(ii) or in amounts for equivalent or greater value, as determined by the Administrative Agent in its reasonable discretion, the Borrowing Base shall be increased to $177,500,000.  In addition, the Borrowing Base may be subject to further adjustments from time to time pursuant to Section 8.13(c) or Section 9.11.”


 


4.           Amendment to Section 9.02.  Section 9.02 of the Credit Agreement is hereby amended to restate in their entirety clauses (m), (n) and (o) thereof as follows and add the following new clause (p) at the end of said Section:


 


“(m)           Debt of Alpha Hunter Drilling, LLC, Hunter Real Estate, LLC and Triad Hunter LLC guaranteed by the Borrower in an amount not to exceed $10,000,000 in the aggregate which Debt shall be on terms and conditions reasonably satisfactory to the Administrative Agent and have terms and conditions no more restrictive than the terms and conditions set forth in this Agreement;


 


(n)           the Hall Houston Debt in an amount not to exceed $640,695 at any one time outstanding;


 


(o)           Debt of the Borrower for the acquisition and/or financing of a corporate airplane in an amount not to exceed $4,100,000 and otherwise on terms and conditions reasonably satisfactory to the Administrative Agent; and


 










  





  











  













(p)           other Debt not to exceed $3,000,000 in the aggregate at any one time outstanding.”


 


5.           Amendment to Section 9.03.  Section 9.03 of the Credit Agreement is hereby amended to restate in their entirety clauses (f) and (g) thereof as follows and add the following new clause (h) at the end of said Section:


 


“(f)           Liens in favor of Lenders securing Debt permitted by Section 9.02(i);


 


(g)           Liens on the assets of Unrestricted Subsidiaries securing Debt permitted by Sections 9.02(j) and (m) and Liens on the assets of Triad Hunter LLC securing Debt permitted by Section 9.02(m); and


 


(h)           Liens securing Debt permitted by Section 9.02(o); provided such Liens extend only to the property purchased and/or financed with the proceeds of such Debt.”


 


6.           Amendment to Schedule 7.01.  Schedule 7.01 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 7.01 attached hereto.


 


7.           Amendment to Credit Agreement.  The Credit Agreement is hereby amended to add thereto Schedule 2.07(a)(ii) attached hereto.


 


8.           Ratification.  The Borrower and Guarantors hereby ratify all of their respective 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 as amended and modified by this Amendment.  Nothing in this Amendment extinguishes, novates or releases any right, claim, lien, security interest or entitlement of any of the Lenders or the Administrative Agent created by or contained in any of such documents nor is the Borrower nor any Guarantor released from any covenant, warranty or obligation created by or contained herein or therein.


 


9.           Representations and Warranties.  The Borrower and Guarantors hereby represent and warrant to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower and Guarantors, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower and Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (c) the representations and warranties contained in the Credit Agreement and the Loan Documents are true and correct on and as of the date hereof in all material respects as though made as of the date hereof, (d) no Default or Event of Default exists under the Credit Agreement or under any Loan Document and (e) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower and Guarantors.


 










  





  











  













10.           Conditions to Effectiveness.  This Amendment shall be effective on the First Amendment Effective Date upon satisfaction of the following conditions:


 



	
  

	
(a)

	
the execution and delivery hereof by the Borrower, the Guarantors and each of the Lenders to the Administrative Agent and receipt by the Administrative Agent of this Amendment; and







 



	
  

	
(b)

	
the payment to the Administrative Agent and the Lenders of all fees and expenses that are due in connection with this Amendment, including those amounts set forth in that certain letter dated June 27, 2011 between the Administrative Agent, BMO Capital Markets and the Borrower and any billed fees and disbursements of Andrews Kurth LLP.







 


11.           Counterparts.  This Amendment may be signed in any number of counterparts, which may be delivered in original, electronic or facsimile form each of which shall be construed as an original, but all of which together shall constitute one and the same instrument.


 


12.           Governing Law.  This Amendment, all Notes, the other Loan Documents and all other documents executed in connection herewith shall be deemed to be contracts and agreements under the laws of the State of New York and of the United States of America and for all purposes shall be construed in accordance with, and governed by, the laws of New York and of the United States.


 


13.           Final Agreement of the Parties.  Any previous agreement among the parties with respect to the subject matter hereof is superseded by the Credit Agreement, as amended by this Amendment.  Nothing in this Amendment, express or implied is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Amendment.


 


[Signature Pages Follow]


 




















  





  











  


















 


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


 


 



	 	
BORROWER:







MAGNUM HUNTER RESOURCES


CORPORATION, a Delaware corporation







By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Chief Financial Officer












GUARANTORS:







PRC WILLISTON, LLC,


a Delaware limited liability company







By:   Magnum Hunter Resources Corporation,


             its sole member








By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Chief Financial Officer












MAGNUM HUNTER RESOURCES LP,


a Delaware limited partnership







By:   Magnum Hunter Resources GP, LLC,


          its general partner








By:  Magnum Hunter Resources Corporation,


            its sole member











By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Chief Financial Officer











 


 



Signature Page to First Amendment to Credit Agreement






 





  





  











  








 


 







 



	 	
MAGNUM HUNTER RESOURCES GP, LLC,


a Delaware limited liability company







By:  Magnum Hunter Resources Corporation,


       its sole member


 


By:  /s/ Ronald D. Ormand


Ronald D. Ormand



Chief Financial Officer









TRIAD HUNTER, LLC,


a Delaware limited liability company












By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Vice President












EAGLE FORD HUNTER, INC.,


a Colorado corporation








By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Secretary




 









MAGNUM HUNTER PRODUCTION, INC.,


a Kentucky corporation







By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Chief Financial Officer







 








Signature Page to First Amendment to Credit Agreement















  





  











  














 



	 	
NGAS HUNTER, LLC,


a Delaware limited liability company







By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Vice President and Treasurer







MHR CALLCO CORPORATION,


a corporation existing under the laws


of the Province of Alberta













By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Vice President












MHR EXCHANGECO CORPORATION,


a corporation existing under the laws


 of the Province of Alberta








By:  /s/ Ronald D. Ormand


Ronald D. Ormand


Vice President and 







WILLISTON HUNTER CANADA, INC.,


a corporation existing under the laws


of the Province of Alberta







By:  /s/ Ronald D. Ormand


Ronald D. Ormand



Executive Vice President and Chief Financial Officer









 




 


 



Signature Page to First Amendment to Credit Agreement






















  





  











  














 



	 	
WILLISTON HUNTER, INC.,


a Delaware corporation












By:  /s/ Ronald D. Ormand


Ronald D. Ormand



Executive Vice President and Chief Financial Officer









 




 







 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



Signature Page to First Amendment to Credit Agreement




















  





  











  













 


 



	 	
ADMINISTRATIVE AGENT AND LENDER:







BANK OF MONTREAL












By:  /s/ Gumaro Tijerina


Gumaro Tijerina


Director







 


 


 



	 	
 


LENDER:







CAPITAL ONE, N.A.












By:   /s/ Nancy M. Mak


Name:   Nancy Mak


Title:  Vice President


 







 



	 	
LENDER:







AMEGY BANK NATIONAL ASSOCIATION












By:  /s/ Mark Serice


Mark Serice


Senior Vice President







 


 


 



	 	
LENDER:







KEYBANK NATIONAL ASSOCIATION







By:   /s/ David Morris


Name:   David Morris


Title:  Vice President


 







 






 



	 	
LENDER:







UBS LOAN FINANCE LLC












By:   /s/ Ira R. Otba


Name:   Ira R. Otba


Title:  Associate Director












By:   /s/ Mary E. Evans


Name:   Mary E. Evans


Title:  Associate Director


 







 








Signature Page to First Amendment to Credit Agreement

















  





  











  













 


 



	 	
LENDER:







CITIBANK, N.A.







By:   /s/ John Miller


Name:   John Miller


Title:  Vice President












LENDER:







DEUTSCHE BANK TRUST COMPANY AMERICAS







By:   /s/ Michael Betz


Name:   Michael Betz


Title:  Vice President







LENDER:







UNION BANK, N.A.







By:  /s/ Paul E. Cornell


Name:  Paul E. Cornell


Title:  Senior Vice President












LENDER:







CREDIT SUISSE AG, Cayman Islands Branch












By:   /s/ Nupur Kumar


Name:   Nupur Kumar


Title:  Vice President







By:  /s/ Rahul Parmar


Name:   Rahul Parmar


Title:  Associate












 



Signature Page to First Amendment to Credit Agreement

















  





  











  


















SCHEDULE 2.07(a)(ii)


 


SWAP AGREEMENT REQUIREMENTS


 







 



	
Year

	
2011

	
2012

	
2013

	
2014


	
Bbls

	
27,000

	
182,500

	
228,125

	
200,750


	
Minimum Hedge Price

	
$90.00

	
$90.00

	
$90.00

	
$90.00












 







 


 


 


 


 


 


 


 


 


 



Schedule 2.07(a)(ii)












  





  











  


















 


SCHEDULE 7.01


 


CORPORATE ORGANIZATIONAL CHART


 


(See attached)


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



Schedule 7.01