Document:

exv10w1

 

EXHIBIT
10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called the “Amendment”) made as of August 22,
2007 by and among Encore Energy Partners Operating LLC, a Delaware limited liability company
(“Borrower”), Encore Energy Partners LP, a Delaware limited partnership (“Parent”), Bank of
America, N.A., as the Administrative Agent (the “Administrative Agent”) and L/C Issuer, and the
Lenders party to the Original Agreement defined below (“Lenders”).

W I T N
E  S S E T  H:

     WHEREAS, Borrower, Operating, Administrative Agent, L/C Issuer and Lenders entered into that
certain Credit Agreement dated as of March 7, 2007 (as amended, supplemented or modified from time
to time, the “Original Agreement”), for the purpose and consideration therein expressed, whereby
L/C Issuer became obligated to issue Letters of Credit to Borrower and Lenders became obligated to
make loans to Borrower as therein provided; and

     WHEREAS, Borrower, Parent, Administrative Agent, L/C Issuer and Lenders desire to amend the
Original Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and in the Original Agreement, in consideration of the loans and other credit
which may hereafter be made by Lenders and L/C Issuer to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:

ARTICLE I.

DEFINITIONS AND REFERENCES

     Section 1.1. Terms Defined in the Original Agreement. Unless the context otherwise
requires or unless otherwise expressly defined herein, the terms defined in the Original Agreement
shall have the same meanings whenever used in this Amendment.

     Section 1.2. Other Defined Terms. Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to them in this
Section 1.2.

     “Amendment” means this First Amendment to Credit Agreement.

     “Amendment Documents” means this Amendment and all other documents or
instruments delivered in connection herewith or therewith.

 

 

     “Credit Agreement” means the Original Agreement as amended hereby.

ARTICLE II.

AMENDMENTS TO ORIGINAL AGREEMENT

     Section 2.1. Interest Coverage Ratio.

     (a) The Original Agreement is hereby amended to add the following definitions of
“Consolidated Total Interest Coverage Ratio”, “Consolidated Senior Interest
Coverage Ratio” and “Consolidated Senior Interest Expense”, in appropriate
alphabetical order:

     “‘Consolidated Total Interest Coverage Ratio’ means the ratio of (i)
Consolidated EBITDA to (ii) the sum of (A) Consolidated Net Interest Expense plus (B) Letter
of Credit Fees (accruing during the Fiscal Quarter ending on such date), where such
Consolidated EBITDA and Consolidated Net Interest Expense are calculated for (i) the one
Fiscal Quarter ended June 30, 2007 times 4, (ii) for the two Fiscal Quarters ended September
30, 2007 times 2, (iii) the three Fiscal Quarters ended December 31, 2007 times 4/3rds, and
(iv) the actual period of four consecutive (4) Fiscal Quarters ended on such date in the
case of each Fiscal Quarter ended on or after March 31, 2008.”

     “‘Consolidated Senior Interest Coverage Ratio’ means ratio of (i) Consolidated
EBITDA to (ii) Consolidated Senior Interest Expense, where such Consolidated EBITDA and
Consolidated Senior Interest Expense are calculated for (i) the one Fiscal Quarter ended
June 30, 2007 times 4, (ii) for the two Fiscal Quarters ended September 30, 2007 times 2,
(iii) the three Fiscal Quarters ended December 31, 2007 times 4/3rds, and (iv) the actual
period of four consecutive (4) Fiscal Quarters ended on such date in the case of each Fiscal
Quarter ended on or after March 31, 2008.”

     “‘Consolidated Senior Interest Expense” means, for any period, with respect to
Parent, the Borrower and its Consolidated Restricted Subsidiaries for such period, (a) the
interest expense attributable to all Consolidated Funded Debt, minus (b) interest income.”

     (b) Section 7.13(b) of Original Agreement is hereby amended in its entirety to
read as follows:

     “(b) At the last day of each Fiscal Quarter, commencing June 30, 2007, neither
the Borrower nor Parent will permit (i) the Consolidated Total Interest Coverage
Ratio to be less than 1.5 to 1 nor (ii) the Consolidated Senior Interest Coverage
Ratio to be less than 2.5 to 1.”

ARTICLE III.

CONDITIONS OF EFFECTIVENESS

     Section 3.1. Effective Date. This Amendment shall become effective (the “Effective
Date”) when and only when:

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     (a) Administrative Agent shall have received a counterpart of this Amendment executed
and delivered by Borrower, Parent, each Guarantor and Required Lenders.

     (b) Administrative Agent shall have received, for the account of each Lender who
executes this Amendment on or before August 22, 2007, an amendment fee equal to 0.10% of
such Lender’s Applicable Percentage of the current Borrowing Base.

     (c) Borrower shall have paid, in connection with this Amendment and the Loan Documents, all
other fees and reimbursements to be paid to Administrative Agent pursuant to this Amendment or any
Loan Documents, or otherwise due Administrative Agent and including fees and disbursements of
Administrative Agent’s attorneys.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

     Section 4.1. Representations and Warranties. In order to induce L/C Issuer and each
Lender to enter into this Amendment, Borrower and Parent represent and warrant to L/C Issuer and
each Lender that:

     (a) The representations and warranties contained in Article V of the Original Agreement are
shall be true and correct in all material respects on and as of the Effective Date except to the
extent that such representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that the representations
and warranties contained in subsections (a) and (b) of Section 5.04 of the Credit Agreement shall
be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Credit Agreement.

     (b) Each Credit Party is duly authorized to execute and deliver this Amendment and the other
Amendment Documents (to the extent such Credit Party is a party to this Amendment and the other
Amendment Documents) and is and will continue to be duly authorized to borrow monies and to perform
its obligations under the Credit Agreement. Each Credit Party has duly taken all company action
necessary to authorize the execution and delivery of this Amendment and the other Amendment
Documents (to the extent that such Credit Party is a party to this Amendment and the other
Amendment Documents) and to authorize the performance of its obligations hereunder and thereunder.

     (c) The execution and delivery by each Credit Party of this Amendment and the other Amendment
Documents (to the extent that such Credit Party is a party to this Amendment and the other
Amendment Documents), the performance each Credit Party of its obligations hereunder and thereunder
and the consummation of the transactions contemplated hereby and thereby do not and will not
conflict with any provision of Law or of the Organization Documents of such Credit Party, or of any
material agreement, judgment, license, order or permit applicable to or binding upon such Credit
Party, or, except as provided hereby, result in the creation of any Lien upon any assets or
properties of such Credit Party. Except for those which have been obtained, no consent, approval,
authorization or order of any court or Governmental Authority or

3

 

third party is required in connection with the execution and delivery by any Credit Party of
this Amendment and the other Amendment Documents (to the extent that such Credit Party is a party
to this Amendment and the other Amendment Documents) or to consummate the transactions contemplated
hereby and thereby.

     (d) When duly executed and delivered, each of this Amendment, the Amendment Documents and the
Credit Agreement will be a legal and binding obligation of each Credit Party (to the extent that
such Credit Party is a party to this Amendment and the other Amendment Documents), enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors’ rights and by equitable principles of general
application.

     (e) The most recent financial statements delivered pursuant to Section 6.01(a) and (b) of the
Credit Agreement fairly present the consolidated financial position at such dates and the statement
of operations and the changes in consolidated financial position for the periods ending on such
dates for Parent. Copies of such financial statements have heretofore been delivered to
Administrative Agent, L/C Issuer and each Lender. Since such dates no material adverse change has
occurred in the consolidated financial condition or business of Parent.

ARTICLE V.

MISCELLANEOUS

     Section 5.1. Ratification of Agreements. The Original Agreement as hereby amended is
hereby ratified and confirmed in all respects. The other Loan Documents, as they may be amended or
affected by the various Amendment Documents, are hereby ratified and confirmed in all respects.
Any reference to the Credit Agreement in any Loan Document shall be deemed to be a reference to the
Original Agreement as hereby amended. The execution, delivery and effectiveness of this Amendment
and the other Amendment Documents shall not, except as expressly provided herein or therein,
operate as a waiver of any right, power or remedy of Administrative Agent, L/C Issuer or Lenders
under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement or any other Loan Document.

     Section 5.2. Survival of Agreements. All representations, warranties, covenants and
agreements of any Loan Party herein shall survive the execution and delivery of this Amendment and
the performance hereof, and shall further survive until all of the Obligations are paid in full.
All statements and agreements contained in any certificate or instrument delivered by any Loan
Party hereunder or under the Credit Agreement to Administrative Agent, L/C Issuer or any Lender
shall be deemed to constitute representations and warranties by, and/or agreements and covenants
of, Borrower, Parent, and such Loan Party under this Amendment and under the Credit Agreement.

     Section 5.3. Loan Documents. This Amendment is and the other Amendment Documents are
each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply
hereto and thereto.

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     Section 5.4. Governing Law. This Amendment shall be governed by and construed in
accordance with the Laws applicable to the Credit Agreement.

     Section 5.5. Counterparts; Fax. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same Amendment. This Amendment and the other
Amendment Documents may be validly executed by facsimile or other electronic transmission.

     THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

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     IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	 	 	 	 	 
	 	ENCORE ENERGY PARTNERS OPERATING LLC

 	 
	 	By:  	/s/ Robert C. Reeves
 	 
	 	 	Robert C. Reeves, Vice President, Chief 	 
	 	 	Financial Officer, Treasurer and Secretary 	 
	 

	 	 	 	 	 
	 	ENCORE ENERGY PARTNERS LP

 	 
	 	By:  	Encore Energy Partners GP LLC, its sole
 	 
	 	 	general partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                 /s/ Robert C. Reeves
 	 
	 	 	Robert C. Reeves, Senior Vice 	 
	 	 	President, Chief Financial Officer
and Treasurer 	 
	 

	 	 	 	 	 
	 	ENCORE CLEAR FORK PIPELINE LLC

 	 
	 	By:  	/s/ Robert C. Reeves
 	 
	 	 	Robert C. Reeves, Vice President, Treasurer 	 
	 	 	and Secretary 	 
	 

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as 

Administrative Agent, L/C Issuer and a Lender

 	 
	 	By:  	/s/ Jeffrey H. Rathkamp
 	 
	 	 	Name:  	Jeffrey H. Rathkamp 	 
	 	 	Title:  	Managing Director 	 
	 

 

 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as

Co-Syndication Agent and as a Lender

 	 
	 	By:  	/s/ Christopher L. Hewitt
 	 
	 	 	Name:  	Christopher L. Hewitt 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as Co-Syndication 

Agent and as a Lender

 	 
	 	By:  	/s/  Scott Myatt
 	 
	 	 	Name:  	Scott Myatt 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                        /s/ Steve Staples
 	 
	 	 	Name:  	Steve Staples 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BNP PARIBAS, as Co-Documentation Agent and

as a
Lender

 	 
	 	By:  	/s/ Betsy Jocher
 	 
	 	 	Name:  	Betsy Jocher 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                        /s/ Robert Long
 	 
	 	 	Name:  	Robert Long 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, as Co-Documentation 

Agent and
as a Lender

 	 
	 	By:  	/s/ Michael D. Willis
 	 
	 	 	Name:  	Michael D. Willis 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                       /s/ Page Dillehunt
 	 
	 	 	Name:  	Page Dillehunt 	 
	 	 	Title:  	Managing Director 	 
	 

 

 

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as a Lender

 	 
	 	By:  	/s/ David G. Mills
 	 
	 	 	Name:  	David G. Mills 	 
	 	 	Title:  	Director 	 
	 

 

 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/ Peter L. Sefzik
 	 
	 	 	Name:  	Peter L. Sefzik 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	NATIXIS, as a Lender

 	 
	 	By:  	/s/ Louis P. Laville, III
 	 
	 	 	Name:  	Louis P. Laville, III 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                     /s/ Daniel Payer
 	 
	 	 	Name:  	Daniel Payer 	 
	 	 	Title:  	Director 	 
	 

 

 

	 	 	 	 	 
	 	BANK OF SCOTLAND, as a Lender

 	 
	 	By:  	/s/ Joseph Fratus
 	 
	 	 	Name:  	Joseph Fratus 	 
	 	 	Title:  	First Vice President 	 
	 

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Daria Mahoney
 	 
	 	 	Name:  	Daria Mahoney 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A., as a Lender

 	 
	 	By:  	/s/ Alison Fuqua
 	 
	 	 	Name:  	Alison Fuqua 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	 	 
	 	By:  	                   /s/ Sean Murphy
 	 
	 	 	Name:  	Sean Murphy 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

 

	 	 	 	 	 
	 	THE FROST NATIONAL BANK, as a Lender

 	 
	 	By:  	/s/ John S. Warren
 	 
	 	 	Name:  	John S. Warren 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as a Lender

 	 
	 	By:  	/s/ Don J. McKinnerney
 	 
	 	 	Name:  	Don J. McKinnerney 	 
	 	 	Title:  	Authorized Signatoryexv10w1

 

Exhibit 10.1

August 20, 2007

Mr. Robin Easton

1509 85th Avenue NE

Clyde Hill, WA 98004

Dear Robin,

On behalf of Blue Nile, Inc. (the “Company”), I am pleased to offer you the position of Chief
Financial Officer, reporting to Diane Irvine. The terms of your relationship with the Company will
be as indicated herein.

	 	1.	 	Position. You will become the Chief Financial Officer for the Company. As
such, you will have responsibilities as determined by the President.
	 
	 	2.	 	Base Salary. You will be paid a monthly salary of $16,667 less payroll
deductions and all required withholdings, which represents an annualized rate of $200,000.
Your wage will be payable in accordance with the Company’s standard payroll policies. The
Company may modify your compensation from time to time as it deems necessary.
	 
	 	3.	 	Performance Bonus. You will be paid an annual performance bonus with a target
payout of $100,000. Your performance bonus can range from 0% to 200% of target based on
the performance of the Company and your individual performance against key objectives.
This bonus amount will be prorated for 2007 based on the number of months you are employed
by the Company (employment for a partial month will be calculated as if employed for the
full month).
	 
	 	4.	 	Stock Options. We will recommend to the Board of Directors or Subcommittee
thereof, that you be granted the greater of: (1) a non-statutory stock option to purchase
30,000 shares of common stock of the Company; or (2) a non-statutory stock option valued at
$925,000 on the date of grant (your starting date), such value to be calculated based upon
the Company’s per share Black-Scholes methodology for expensing its stock options
(utilizing the assumptions the Board or Subcommittee determines at or before the date of
grant). The exercise price of your stock option will be the closing sales price (or the
closing bid, if no sales were reported) as quoted on the NASDAQ National Market on the last
market trading day prior to the date of grant. One fourth (1/4) of the shares subject to
such option will vest on the first year anniversary of your hire date and one forty-eighth
(1/48) of the shares subject to such option will vest each month thereafter as long as your
employment continues with the Company. The Company’s 2004 Equity Incentive Plan, the Grant
Notice and the Stock Option Agreement shall govern the terms of this option grant in all
respects.
	 
	 	5.	 	Benefits. You will be eligible to receive healthcare and dental benefits, life
and disability insurance, transportation allowance, and a 401(k) plan effective on the
first of the month following your date of hire. The Company may modify your benefits from
time to time as it deems necessary.
	 
	 	6.	 	Standard Employee Agreement. As a condition to your employment, you are
required to sign and comply with the Company’s standard Employee Nondisclosure, Proprietary
Information, Inventions, Nonsolicitation and Noncompetition Agreement relating to the
protection of the Company’s proprietary and confidential information and assignment of
inventions. In addition, you will be required to abide by the Company’s strict policy that
prohibits any new employee from using or bringing with him or her from any previous
employer any confidential information, trade secrets, or proprietary materials or processes
of such former employer.
	 
	 	7.	 	Employee Handbook. As a Company employee, you will be expected to abide by the
Company’s rules and 

 

 

	 	 	 	standards. You further understand that you will be required to
acknowledge and sign that you have received a copy of the Company’s Employee Handbook and
that you understand the Company’s policies set forth in the Company’s Employee Handbook.
	 
	 	8.	 	Federal Immigration Law. For purposes of federal immigration law, you will be
required to provide to the Company documentary evidence of your identity and eligibility
for employment in the United States. Such documentation must be provided to us within
three (3) business days of your date of hire, or our employment relationship with you may
be terminated.
	 
	 	9.	 	At-Will Employment. Your employment is at-will, as defined under applicable
law. This means you may voluntarily quit at any time, for any reason or for no reason,
simply by notifying the Company. Likewise, the Company may terminate your employment at
any time, for any reason or for no reason, with or without cause or advance notice. This
at-will employment relationship cannot be changed except in a writing signed by a Company
officer.
	 
	 	10.	 	Entire Agreement. This Agreement, together with your Employee Nondisclosure,
Proprietary Information, Inventions, Nonsolicitation and Noncompetition Agreement,
constitutes the complete and exclusive statement of your employment agreement with the
Company. The employment terms in this letter supersede any other agreements or promises
made to you by anyone, whether written or oral.
	 
	 	11.	 	Start Date. To be determined.

Again, let me indicate how pleased we all are to extend this offer, and how much we look forward to
working together. Please indicate your acceptance by signing and returning the enclosed copy of
this letter.

	 	 	 	 	 
	Very truly yours,

Blue Nile Inc.

 	 	 
	/s/ Mark Vadon
 	 	 	 	 
	Mark Vadon, CEO 	 	 
	 

The foregoing terms and conditions are hereby accepted:

	 	 	 	 	 
	 	 	 
	Signed: 	/s/ Robin Easton
 	 	 
	 	Robin Easton 	 

Dated:       8/20/2007

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