Document:

Exhibit 10.1

 

EXECUTION VERSION

 

FIRST AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “First Amendment”) is entered into effective as of the 27th day of March, 2013, among SOUTHCROSS ENERGY PARTNERS, L.P., a Delaware limited partnership (the “Borrower”), WELLS FARGO BANK, N.A., a national banking association, as the Administrative Agent (the “Administrative Agent”), and each of the Lenders (as defined below) that has executed this First Amendment (the “Consenting Lenders”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Administrative Agent and the financial institutions party thereto as lenders (the “Lenders”) are parties to that certain Second Amended and Restated Credit Agreement dated as of November 7, 2012 (as amended, the “Credit Agreement”) (unless otherwise defined herein, all terms used herein which are defined in the Credit Agreement shall have the meanings given such terms in the Credit Agreement, as amended hereby); and

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have made Loans to the Borrower and provided certain other credit accommodations to the Borrower; and

 

WHEREAS, the Borrower has requested that certain terms and provisions of the Credit Agreement be amended as provided in this First Amendment; and

 

WHEREAS, subject to the terms and conditions set forth herein, the Consenting Lenders have agreed to the Borrower’s requests.

 

NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Borrower, the Administrative Agent and the Consenting Lenders hereby agree as follows:

 

SECTION 1          Amendments.  In reliance on the representations, warranties, covenants and agreements contained in this First Amendment, and subject to the satisfaction of each condition precedent set forth in Section 2 hereof, the Credit Agreement shall be amended effective as of the First Amendment Effective Date in the manner provided in this Section 1.

 

1.1          Restated Definitions.  The definition of “Availability” contained in Section 1.02 of the Credit Agreement shall be amended and restated in its entirety as follows:

 

“Availability” means, at any time, an amount equal to (a) the aggregate Commitments minus (b) the sum of (i) the aggregate Revolving Credit Exposures of all Lenders and (ii) the Availability Block.

 

1.2          Deleted Definitions.  Section 1.02 of the Credit Agreement shall be amended to delete the defined term “LC Commitment” therefrom.

 

 

1.3          Additional Definitions.  Section 1.02 of the Credit Agreement shall be amended to add thereto in alphabetical order the following defined terms:

 

“Availability Block” means, at any time, an amount equal to (x) $100,000,000 minus (y) the dollar amount of immediately available funds on deposit in the GP Cash Collateral Account at such time minus (z) the sum of (i) the LC Exposure at such time (as determined after giving effect to the issuance, amendment, renewal or extension of any Letter of Credit for which such request is being made and in connection with which the Availability Block is being calculated for the purposes of Section 2.07(a) or Section 2.07(b)) plus (ii) the aggregate amount of all LC Disbursements that have been reimbursed by or on behalf of the Borrower with the proceeds of an ABR Borrowing made after the First Amendment Effective Date at such time; provided, that, the amount subtracted in the calculation of Availability Block pursuant to  clause (z) of this definition shall not exceed $31,500,000.

 

“Equity Holder Agreement” means the “Equity Holder Agreement” under and as defined in the First Amendment, as amended, restated, supplemented or otherwise modified from time to time.

 

“First Amendment” means that certain First Amendment to Second Amended and Restated Credit Agreement dated March 27, 2013, entered into by and among the Borrower, the Administrative Agent, and the Lenders party thereto.

 

“First Amendment Effective Date” has the meaning assigned to such term in the First Amendment.

 

“GP Cash Collateral Account” means the deposit account established in the name of the General Partner with Wells Fargo Bank, N.A. pursuant to Section 3.2 of the First Amendment and any successor or replacement account.

 

“GP Cash Collateral Control Agreement” means the “GP Cash Collateral Control Agreement” under and as defined in the First Amendment, as amended, replaced, restated, supplemented or otherwise modified from time to time.

 

“GP Cash Collateral Pledge Agreement” means the “GP Cash Collateral Pledge Agreement” under and as defined in the First Amendment, as amended, restated, supplemented or otherwise modified from time to time.

 

“GP Collateral” means the “GP Collateral” under and as defined in the GP Cash Collateral Pledge Agreement.

 

“LC Sublimit” means, at any time, an amount equal to the sum of (x) $31,500,000 and (y) the amount of dollars on deposit in the GP Cash Collateral Account in excess of $10,000,000 at such time.

 

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1.4          Amendment to Section 2.01 of the Credit Agreement.  Clause (ii) of Subsection 2.01(a) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(ii) the total Revolving Credit Exposures exceeding an amount equal to (x) the total Commitments minus (y) the Availability Block.

 

1.5          Amendment to Section 2.03 of the Credit Agreement.  The last sentence of the penultimate paragraph of Section 2.03 of the Credit Agreement shall be amended and restated in its entirety as follows:

 

Each Borrowing Request shall constitute a representation that (a) the amount of the requested Borrowing shall not cause the total Revolving Credit Exposures to exceed an amount equal to (x) the total Commitments minus (y) the Availability Block, and (b) each condition precedent set forth in Section 6.02 has been satisfied with respect to such Borrowing.

 

1.6          Amendment to Section 2.06 of the Credit Agreement.  Clause (B) of Subsection 2.06(b)(i) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(B) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 3.04(b)(i), the total Revolving Credit Exposures would exceed an amount equal to (x) the total Commitments minus (y) the Availability Block.

 

1.7          Amendments to Section 2.07 of the Credit Agreement.  Section 2.07 of the Credit Agreement shall be amended as follows:

 

(a)           The proviso in Subsection 2.07(a) of the Credit Agreement shall be amended by (i) deleting the phrase, “or the total Revolving Credit Exposures would exceed the total Commitments”, therefrom and inserting in lieu thereof, “or the total Revolving Credit Exposures would exceed an amount equal to (x) the total Commitments minus (y) the Availability Block”, and (ii) deleting the reference to “LC Commitment” therefrom and inserting a reference to “LC Sublimit” in lieu thereof.

 

(b)           Clause (A) of the penultimate sentence of Subsection 2.07(b) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(A) the LC Exposure shall not exceed the LC Sublimit,

 

(c)           Clause (C) of the penultimate sentence of Subsection 2.07(b) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(C) the total Revolving Credit Exposures shall not exceed an amount equal to (x) the total Commitments minus (y) the Availability Block, and

 

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1.8          Amendment to Mandatory Prepayments.  Subsection 3.04(b)(i) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(i)            If, after giving effect to any termination or reduction of the Commitments pursuant to Section 2.06(b), the total Revolving Credit Exposures exceeds an amount equal to (x) the total Commitments minus (y) the Availability Block, then the Borrower shall (A) prepay the Borrowings on the date of such termination or reduction in an aggregate principal amount equal to such excess, and (B) if any excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.07(j).

 

1.9          Amendment to Section 6.02 of the Credit Agreement.  Section 6.02 of the Credit Agreement shall be amended as follows:

 

(a)           Subsection 6.02(a) of the Credit Agreement shall be amended by inserting the following parenthetical immediately after the word “Default”:

 

(other than, solely with respect to Borrowings or issuances, amendments, renewals or extensions of Letters of Credit, as applicable, requested on or prior to May 15, 2013, any Default resulting from the Borrower’s failure to satisfy the covenants set forth in Section 9.01 for the Rolling Period ending March 31, 2013)

 

(b)           Subsection 6.02(b) of the Credit Agreement shall be amended by inserting the following proviso immediately before the period at the end of such Subsection:

 

; provided, that, for the purposes of this Section 6.02(b), the representation and warranty set forth in Section 7.07(c) shall exclude, solely with respect to Borrowings or issuances, amendments, renewals or extensions of Letters of Credit, as applicable, requested on or prior to May 15, 2013, any Default resulting from the Borrower’s failure to satisfy the covenants set forth in Section 9.01 for the Rolling Period ending March 31, 2013

 

1.10        Amendments to Section 8.01 of the Credit Agreement.  Section 8.01 of the Credit Agreement shall be amended as follows:

 

(a)           Subsection 8.01(a) of the Credit Agreement shall be amended and restated in its entirety as follows:

 

(a)           Annual Financial Statements.  As soon as available, but in any event (i) with respect to the annual financial statements to be delivered for the fiscal year of the Borrower ending December 31, 2012, not later than April 30, 2013, and (ii) with respect to the annual financial statements to be delivered for each fiscal year of the Borrower ending on or after December 31, 2013, in accordance with then applicable law and not later than the date on which annual financial statements are required to be delivered to the SEC, its audited consolidated balance sheet and related statements of income or operations (and, as to balance sheets and statements of income or operations,

 

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accompanied by consolidating schedules), stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit, except for, solely with respect to such financial statements delivered for the period ended December 31, 2012, any “going concern” or like qualification or exception with respect to the Borrower’s ability to satisfy the covenants set forth in Section 9.01 or with respect to the Borrower’s ability to access Borrowings under this Agreement as a result thereof) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.

 

(b)           Subsection 8.01(c) of the Credit Agreement shall be amended by inserting the phrase “and no later than April 1st of each calendar year” immediately after the reference to “Section 8.01(a)” contained therein.

 

1.11        Amendment to Restricted Payments Covenant.  Subsection 9.04(c) of the Credit Agreement shall be amended by inserting the following parenthetical immediately after the phrase “Event of Default”:

 

(other than, solely with respect to the quarterly cash dividends of Available Cash declared and paid by the Borrower to the holders of its Equity Interests for the fiscal quarter ending March 31, 2013, any Default or Event of Default resulting from the Borrower’s failure to satisfy the covenants set forth in Section 9.01 for the Rolling Period ending March 31, 2013)

 

1.12        Amendment to Section 12.19 of the Credit Agreement.  The last sentence of Section 12.19 of the Credit Agreement shall be amended and restated in its entirety as follows:

 

NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER SHALL HAVE ANY RECOURSE AGAINST THE GENERAL PARTNER (INCLUDING ANY RECOURSE FOR ANY DEFICIENCY REMAINING UNDER THIS AGREEMENT OR ANY LOAN DOCUMENT AFTER THE DISPOSITION OF COLLATERAL PLEDGED BY THE BORROWER OR ANY SUBSIDIARY AND THE DISPOSITION OF THE GP COLLATERAL PLEDGED BY THE GENERAL PARTNER); PROVIDED, THAT, NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, (A) IN NO EVENT SHALL THIS SECTION 12.19 RELIEVE THE GENERAL PARTNER FROM ANY LIABILITY IT MAY HAVE AS A RESULT OF ITS FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, OR THAT OF ANY OF ITS OFFICERS, IN CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE OF ANY LOAN DOCUMENTS OR ANY CERTIFICATES OR DOCUMENTS DELIVERED IN CONNECTION THEREWITH BY THE GENERAL PARTNER ON BEHALF OF THE BORROWER IN ITS CAPACITY AS THE BORROWER’S GENERAL PARTNER; AND (B) THE GENERAL PARTNER SHALL

 

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BE OBLIGATED TO PERFORM ALL OF ITS COVENANTS AND AGREEMENTS CONTAINED IN THE GP CASH COLLATERAL PLEDGE AGREEMENT, THE GP CASH COLLATERAL CONTROL AGREEMENT, AND THE EQUITY HOLDER AGREEMENT AND SHALL NOT BE RELIEVED OF ANY LIABILITY ARISING THEREUNDER OR IN CONNECTION THEREWITH.

 

1.13        Replacement of Borrowing Request Exhibit.  Exhibit B to the Credit Agreement is hereby amended and restated in its entirety in the form of Exhibit B to this First Amendment, and Exhibit B to this First Amendment shall be deemed to be attached as Exhibit B to the Credit Agreement.

 

SECTION 2          Conditions Precedent.  This First Amendment will be effective as of the date that each of the following conditions precedent has been satisfied (such date, the “First Amendment Effective Date”):

 

2.1          Closing Deliveries.  Administrative Agent shall have received each of the following documents, instruments, and agreements, each of which shall be in form and substance and executed in such counterparts (if applicable) as shall be acceptable to Administrative Agent and each of which shall, unless otherwise indicated, be dated as of the First Amendment Effective Date:

 

(a)           counterparts hereof duly executed by the Borrower and Consenting Lenders that are sufficient to constitute the Required Lenders and consent and agreement counterparts hereof duly executed by the other Loan Parties;

 

(b)           counterparts of a pledge agreement duly executed by the General Partner and the Administrative Agent (the “GP Cash Collateral Pledge Agreement”), which shall provide for a pledge by the General Partner of all of its right, title and interest in the GP Cash Collateral Account (as defined below) and the funds deposited therein to the Administrative Agent for the benefit of the Secured Parties as security for the Secured Obligations;

 

(c)           counterparts of a deposit account control agreement duly executed by the General Partner, the Administrative Agent and Wells Fargo Bank, N.A. (the “GP Cash Collateral Control Agreement”), which shall, among other things, restrict the General Partner’s access to and establish the Administrative Agent’s “control” (as such term is defined in Section 9.104 of the Texas UCC (as defined in the Guaranty and Collateral Agreement)) of the GP Cash Collateral Account;

 

(d)           counterparts of an agreement duly executed by the General Partner and Southcross Energy LLC, a Delaware limited liability company (together with the General Partner as the owners of at least 58% of the issued and outstanding Equity Interests in the Borrower, the “Equity Holders” and each individually, an “Equity Holder”), and the Administrative Agent (the “Equity Holder Agreement”), which shall require each Equity Holder to promptly deposit or cause to be deposited, as applicable, into the GP Cash Collateral Account any and all proceeds received by such Equity Holder (or

 

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received by any transfer agent holding Equity Interests on behalf of such Equity Holder) in respect of the quarterly cash dividends of Available Cash to be declared and paid by the Borrower for the fiscal quarter ending March 31, 2013;

 

(e)           an opinion of Gardere Wynne Sewell LLP, as special counsel to the Loan Parties and the General Partner, favorably opining as to such matters as the Administrative Agent may reasonably request; and

 

(f)            such other documents, instruments and certificates as the Administrative Agent or its counsel may reasonably request relating to the foregoing, the organization, existence and good standing of the General Partner and each of the Loan Parties, the authorization of this First Amendment and the transactions contemplated hereby, and any other legal matters relating to the General Partner, the Loan Parties and this First Amendment.

 

2.2          Establishment of GP Cash Collateral Account.  The General Partner shall have (a) established a deposit account in its name with Wells Fargo Bank, N.A. (the “GP Cash Collateral Account”) and (b) deposited at least $10,000,000 in immediately available funds into the GP Cash Collateral Account.

 

2.3          Fees and Expenses.  The Borrower shall have paid to the Administrative Agent all fees due and owing to the Administrative Agent or the Consenting Lenders in connection with this First Amendment including, without limitation, (a) an amendment consent fee in an amount equal to 0.125% of the aggregate amount of the Commitments of the Consenting Lenders (including Wells Fargo), and (b) all reasonable fees and expenses incurred by the Administrative Agent (including, without limitation, fees and expenses of counsel to the Administrative Agent) in the preparation, execution, review and negotiation of this First Amendment and any other related documents for which the Borrower shall have been invoiced by the Administrative Agent on or before the First Amendment Effective Date.

 

2.4          Absence of Defaults.  No Default or Event of Default shall have occurred which is continuing.

 

2.5          Representations and Warranties.  Each representation and warranty contained in Section 3 hereof shall be true and correct in all material respects.

 

2.6          Other Documents.  The Administrative Agent shall have been provided with such documents, instruments, and agreements, and the Borrower and the other Loan Parties shall have taken such actions, in each case as the Administrative Agent may reasonably require in connection with this First Amendment and the transactions contemplated hereby.

 

SECTION 3          Representations and Warranties.  In order to induce the Administrative Agent and the Lenders to enter into this First Amendment, Borrower hereby represents and warrants to the Administrative Agent and each Lender that:

 

3.1          Accuracy of Representations and Warranties.  Each representation and warranty of each Loan Party contained in the Loan Documents is true and correct in all material

 

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respects as of the date hereof (except that (i) to the extent that any such representation and warranty is expressly limited to an earlier date, in which case, on the date hereof, such representation and warranty shall continue to be true and correct in all material respects as of such specified earlier date and (ii) to the extent that any such representations and warranties are qualified by materiality, such representations and warranties shall continue to be true and correct in all respects).

 

3.2          Due Authorization, No Conflicts.  The execution, delivery and performance by the Borrower of this First Amendment are within the Borrower’s limited partnership powers, have been duly authorized by necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (other than filings with the SEC required under applicable law) and do not violate or constitute a default under any provision of applicable law or any material agreement binding upon the Borrower or any of its Subsidiaries, or result in the creation or imposition of any Lien upon any of the assets of the Borrower or any of its Subsidiaries.

 

3.3          Validity and Binding Effect.  This First Amendment constitutes the valid and binding obligations of the Borrower enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor’s rights generally, and subject to general principles of equity, regardless of whether considered in a proceeding in equity or law.

 

3.4          Absence of Defaults.  No Default or Event of Default has occurred which is continuing.

 

3.5          No Defense.  The Borrower has no defenses to (a) payment, counterclaims or rights of set-off with respect to the Secured Obligations on the date hereof or (b) the validity, enforceability or binding effect against the Borrower of the Credit Agreement or any of the other Loan Documents or any Liens intended to be created thereby.

 

3.6          Review and Construction of Documents.  The Borrower (a) has had the opportunity to consult with legal counsel of its own choice and has been afforded an opportunity to review this First Amendment with its legal counsel, (b) has reviewed this First Amendment and fully understands the effects thereof and all terms and provisions contained herein, and (c) has executed this First Amendment of its own free will and volition.  Furthermore, the Borrower acknowledges that (i) this First Amendment shall be construed as if jointly drafted by the Borrower and the Lenders, and (ii) the recitals contained in this First Amendment shall be construed to be part of the operative terms and provisions of this First Amendment.

 

SECTION 4          Miscellaneous.

 

4.1          Limitations; Reservation of Rights.  Except for the amendments set forth in Section 2 hereof, nothing contained herein shall be deemed a consent to or waiver of any action or inaction of the Borrower or any other Loan Party that constitutes a violation of any provision of the Credit Agreement or any other Loan Document, or which results in a Default or Event of Default (including any and all existing or prospective Defaults or Events of Default) under the

 

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Credit Agreement or any other Loan Document.  Neither the Lenders nor the Administrative Agent shall be obligated to grant any future waivers, consents or amendments with respect to the Credit Agreement or any other Loan Document.  No failure or delay on the part of Administrative Agent or any Lender to exercise any right or remedy under the Credit Agreement, any other Loan Document or applicable law shall operate as a consent to or waiver thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise of any right or remedy, all of which are cumulative and are expressly reserved.

 

4.2          Reaffirmation of Loan Documents; Extension of Liens.  Any and all of the terms and provisions of the Credit Agreement and the Loan Documents shall, except as amended and modified hereby, remain in full force and effect.  The Borrower hereby extends the Liens securing the Secured Obligations until the Secured Obligations have been paid in full, and agrees that the amendments and modifications herein contained shall in no manner affect or impair the Secured Obligations or the Liens securing payment and performance thereof.

 

4.3          Parties in Interest.  All of the terms and provisions of this First Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

 

4.4          Counterparts.  This First Amendment may be executed in counterparts, and all parties need not execute the same counterpart; however, no party shall be bound by this First Amendment until this First Amendment has been executed by the Borrower and the Required Lenders, and the consent and agreement counterparts have been executed by the other Loan Parties, at which time this First Amendment shall be binding on, enforceable against and inure to the benefit of the Borrower and all Lenders.  Facsimiles or other electronic copies (e.g., .pdf) shall be effective as originals.

 

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

 

4.6          Release.  The Borrower and each other Loan Party on their own behalf and on behalf of their predecessors, successors, heirs, legal representatives and assigns (collectively, the “Releasing Parties”), hereby acknowledge and stipulate that as of the First Amendment Effective Date, none of the Releasing Parties has any claims or causes of action of any kind whatsoever against Administrative Agent, any other Secured Party or any of their officers, directors, employees, agents, attorneys, or representatives, or against any of their respective predecessors, successors, or assigns (each of the foregoing, collectively, the “Released Parties”).  Each of the Releasing Parties hereby forever releases, remises, discharges and holds harmless the Released Parties, from any and all claims, causes of action, demands, and liabilities of any kind whatsoever, whether direct or indirect, fixed or contingent, liquidated or nonliquidated, disputed or undisputed, known or unknown, which any of the Releasing Parties has or may acquire in the

 

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future relating in any way to any event, circumstance, action, or failure to act from the beginning of time through the date of this First Amendment.

 

4.7          Covenant Not to Sue.  The Borrower and each other Loan Party, on their own behalf and on behalf of the Releasing Parties, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by Borrower or such other Loan Party pursuant to Section 4.6 above.  If the Borrower or any other Loan Party or any of their successors, assigns or other legal representatives violates the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Released Party as a result of such violation.

 

4.8          Headings.  The headings, captions and arrangements used in this First Amendment are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of this First Amendment, nor affect the meaning thereof.

 

4.9          No Implied Waivers.  No failure or delay on the part of the Administrative Agent or the Lenders in exercising, and no course of dealing with respect to, any right, power or privilege under this First Amendment, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this First Amendment, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

4.10        Arms-Length/Good Faith.  This First Amendment has been negotiated at arms-length and in good faith by the parties hereto.

 

4.11        Interpretation.  Wherever the context hereof shall so require, the singular shall include the plural, the masculine gender shall include the feminine gender and the neuter and vice versa.  The headings, captions and arrangements used in this First Amendment are for convenience only and shall not affect the interpretation of this First Amendment.

 

4.12        Severability.  In case any one or more of the provisions contained in this First Amendment shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this First Amendment shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

 

4.13        Loan Documents.  The Loan Parties acknowledge and agree that each of the Equity Holder Agreement and this First Amendment is a Loan Document and each of the GP Cash Collateral Pledge Agreement and the GP Cash Collateral Control Agreement is a Security Instrument.

 

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4.14        Further Assurances.  The Borrower agrees to execute, acknowledge, deliver, file and record such further certificates, instruments and documents, and to do all other acts and things, as may be requested by the Lenders as necessary or advisable to carry out the intents and purposes of this First Amendment.

 

4.15        Governing Law.  THIS FIRST AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF TEXAS.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed by their respective authorized officers on the date and year first above written.

 

 

	
THE   BORROWER:
    	
 
    	
SOUTHCROSS   ENERGY PARTNERS, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Southcross   Energy Partners GP, LLC,
    
	
 
    	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   David W. Biegler
    
	
 
    	
 
    	
 
    	
David   W. Biegler
    
	
 
    	
 
    	
 
    	
Chairman   and Chief Executive Officer
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

The undersigned (i) consent and agree to this First Amendment, and (ii) agree that the Loan Documents to which it is a party (including, without limitation, the Second Amended and Restated Guaranty and Collateral Agreement dated as of November 7, 2012, as applicable) shall remain in full force and effect and shall continue to be the legal, valid and binding obligation of the undersigned, enforceable against it in accordance with its terms.

 

	
 
    	
CONSENTED, ACKNOWLEDGED AND AGREED TO BY:
    
	
 
    	
 
    
	
 
    	
SOUTHCROSS   ENERGY OPERATING, LLC
    
	
 
    	
SOUTHCROSS   ENERGY LP LLC
    
	
 
    	
SOUTHCROSS   ENERGY GP LLC
    
	
 
    	
SOUTHCROSS   DELTA PIPELINE LLC
    
	
 
    	
SOUTHCROSS   PROCESSING LLC
    
	
 
    	
SOUTHCROSS   ALABAMA PIPELINE LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David W. Biegler
    
	
 
    	
 
    	
David   W. Biegler
    
	
 
    	
 
    	
Chairman   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
SOUTHCROSS   CCNG GATHERING LTD.
    
	
 
    	
SOUTHCROSS   CCNG TRANSMISSION LTD.
    
	
 
    	
SOUTHCROSS   GULF COAST TRANSMISSION
    
	
 
    	
 
    	
LTD.
    
	
 
    	
SOUTHCROSS   MISSISSIPPI PIPELINE, L.P.
    
	
 
    	
SOUTHCROSS   MISSISSIPPI GATHERING, L.P.
    
	
 
    	
SOUTHCROSS   ALABAMA GATHERING
    
	
 
    	
 
    	
SYSTEM,   L.P.
    
	
 
    	
SOUTHCROSS   MIDSTREAM SERVICES, L.P.
    
	
 
    	
SOUTHCROSS   MARKETING COMPANY LTD.
    
	
 
    	
SOUTHCROSS   NGL PIPELINE LTD.
    
	
 
    	
SOUTHCROSS   GATHERING LTD.
    
	
 
    	
SOUTHCROSS   MISSISSIPPI INDUSTRIAL
    
	
 
    	
 
    	
GAS   SALES, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Southcross   Energy GP LLC,
    
	
 
    	
 
    	
as general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David W. Biegler
    
	
 
    	
 
    	
David   W. Biegler
    
	
 
    	
 
    	
Chairman   and Chief Executive Officer
    
				

 

CONSENT AND AGREEMENT SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
THE   ADMINISTRATIVE AGENT
    	
 
    	
 
    
	
AND A   LENDER:
    	
 
    	
WELLS   FARGO BANK, N.A., as the
   Administrative Agent and a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Brandon Kast
    
	
 
    	
 
    	
 
    	
Brandon   Kast
    
	
 
    	
 
    	
 
    	
Assistant   Vice President
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

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

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
 
    	
SUNTRUST   BANK, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Shannon Juhan
    
	
 
    	
 
    	
Name:
    	
Shannon   Juhan
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
BARCLAYS   BANK PLC, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Vanessa A. Kurbatskiy
    
	
 
    	
Name:
    	
Vanessa   A. Kurbatskiy
    
	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
JPMORGAN   CHASE BANK, N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Preeti Bhatnagar
    
	
 
    	
Name:
    	
Preeti   Bhatnagar
    
	
 
    	
Title:
    	
Authorized   Officer
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
COMPASS   BANK,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Blake Kirshman
    
	
 
    	
Name:
    	
Blake   Kirshman
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
AMEGY   BANK NATIONAL ASSOCIATION, 
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jill McSorley
    
	
 
    	
Name:
    	
Jill   McSorley
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
ROYAL   BANK OF CANADA, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason S. York
    
	
 
    	
Name:
    	
Jason   S. York
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
COMERICA   BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brandon M. White
    
	
 
    	
Name:
    	
Brandon   M. White
    
	
 
    	
Title:
    	
Corporate   Banking Officer
    

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
MIDFIRST   BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   W. Thomas Portman
    
	
 
    	
Name:
    	
W.   Thomas Portman
    
	
 
    	
Title:
    	
Vice   President
    

 

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

	
LENDER:
    	
RAYMOND   JAMES BANK, N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

SIGNATURE PAGE

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

EXHIBIT B
 FORM OF BORROWING REQUEST

 

[                    ], 20[    ]

 

Southcross Energy Partners, L.P., a Delaware limited partnership (the “Borrower”), pursuant to Section 2.03 of that certain Second Amended and Restated Credit Agreement dated as of November 7, 2012 (together with all amendments, restatements, supplements, or other modifications, if any, from time to time made thereto, the “Credit Agreement”), among the Borrower, the Existing Borrower, the various financial institutions that are or may become a party thereto (collectively, the “Lenders”), Wells Fargo Bank, N.A., as administrative agent for the Lenders (in such capacity together with any successors thereto, the “Administrative Agent”), and the other agents which are or may become parties thereto (unless otherwise defined herein, each capitalized term used herein has the meaning assigned to it in the Credit Agreement), hereby requests a Borrowing as follows:

 

(i)                                     the aggregate amount of the requested Borrowing is $[                ];

 

(ii)                                  the date of such Borrowing is [                  ], 20[    ];

 

(iii)                               such Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];

 

(iv)                              [the initial Interest Period applicable thereto is [one, three or six months]]1;

 

(v)                             the current total Revolving Credit Exposures (without regard to the requested Borrowing) is $[                    ];

 

(vi)                              the pro forma total Revolving Credit Exposures (giving effect to the requested Borrowing) is $[                        ];

 

(vii)                           the Availability Block is $[                          ], which is calculated as follows:

 

(x)                                 $100,000,000; minus

 

(y)                                 $[                        ], the dollar amount of immediately available funds on deposit in the GP Cash Collateral Account; minus

 

(z)                                  $[                        ]2, which is the sum of the following:

 

(1)         LC Exposure3, which is $[                      ]; plus

 

1  To be included if the requested Borrowing is a Eurodollar Borrowing.

2  The amount subtracted in the calculation of the Availability Block pursuant to clause (z) shall not exceed $31,500,000.

3  As determined after giving the effect to the issuance, amendment, renewal or extension of any Letter of Credit for which this request is being made and in connection with which the Availability Block is being calculated for the purposes of Section 2.07(a) or Section 2.07(b) of the Credit Agreement.

 

Exhibit B-1

 

(2)         the aggregate amount of all LC Disbursements that have been reimbursed by or on behalf of the Borrower with the proceeds of an ABR Borrowing made after the First Amendment Effective Date, which is $[                        ]; and

 

(viii)                      the location and number of the Borrower’s account to which funds are to be disbursed, which complies with the requirements of Section 2.05 of the Credit Agreement, are as follows:

 

[                                                        ]

[                                                        ]

[                                                        ]

[                                                        ]

[                                                        ].

 

The undersigned certifies that he/she is the [                ] of the Borrower’s General Partner, and that as such he/she is authorized to execute this certificate on behalf of the Borrower.  The undersigned further certifies, represents and warrants on behalf of the Borrower that the conditions to lending specified in Section 6.02 of the Credit Agreement are satisfied as of the date hereof and that the Borrower is entitled to receive the requested Borrowing under the terms and conditions of the Credit Agreement.

 

Exhibit B-2

 

	
 
    	
SOUTHCROSS   ENERGY PARTNERS, L.P.
    
	
 
    	
 
    
	
 
    	
By:   Southcross Energy Partners GP, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit B-3Exhibit 10.24

 

SECOND AMENDMENT TO LEASE

 

THIS SECOND AMENDMENT TO LEASE (hereinafter referred to as the “Amendment”) is made this 21st day of September, 2012, by and between CWTX CORPORATE PLACE 87, L.P., a Delaware limited partnership (“Landlord”), and INTRUSION, INC., a Delaware corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord and Tenant are party to that certain Lease, with the Lease Reference Date of January 12, 2004 (the “Original Lease”) as amended by that certain First Amendment to Lease, dated as of September 1, 2009 (the “First Amendment”, and together with the Original Lease, the “Lease”, as may be further amended or modified from time to time), pursuant to which Landlord leases to Tenant certain premises consisting of approximately 27,777 rentable square feet with a common address of 1101 East Arapaho Road, Suite 200, Richardson, Texas, as more particularly described in the Lease (the “Premises”). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Lease.

 

WHEREAS, the Term is scheduled to expire on December 31, 2012 and Landlord and Tenant desire to extend the existing Term for an additional fifty-two (52) full calendar months from such expiration date and to amend the terms and conditions of the Lease as hereinafter provided.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of ten dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, and the mutual covenants set forth herein, the parties hereto agree as follows:

 

1.                                      Extension of Term. The Term is hereby extended for a period of fifty-two (52) full calendar months, commencing as of January 1, 2013 (the “Extended Term Commencement Date”) and expiring on April 30, 2017 (the “Extended Term”). From and after the date hereof, the “Term” shall be deemed to include the Extended Term.

 

2.                                      Monthly Installment of Rent.

 

(a)                                 Monthly Installment of Rent Schedule. Effective as of the Extended Term Commencement Date, the Annual Rent and Monthly Installment of Rent for the Premises payable by Tenant to Landlord during the Extended Term is as follows:

 

	
ANNUAL RENT and MONTHLY INSTALLMENT OF RENT:
    	
 
    
	
Period
    	
 
    	
Rentable Square

Footage
    	
 
    	
 
    	
Annual Rent Per

Square Foot
    	
 
    	
 
    	
Annual Rent
    	
 
    	
 
    	
Monthly

Installment of Rent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
From
    	
 
    	
 
    	
Through
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1/01/2013
    	
 
    	
 
    	
4/30/2014
    	
 
    	
27,777
    	
 
    	
 
    	
$13.25
    	
 
    	
 
    	
$368,045.25
    	
 
    	
 
    	
$30,670.44
    	
 
    
	
5/01/2014
    	
 
    	
 
    	
4/30/2015
    	
 
    	
27,777
    	
 
    	
 
    	
$13.50
    	
 
    	
 
    	
$374,989.50
    	
 
    	
 
    	
$31,249.13
    	
 
    
	
5/01/2015
    	
 
    	
 
    	
4/30/2017
    	
 
    	
27,777
    	
 
    	
 
    	
$14.00
    	
 
    	
 
    	
$388,878.00
    	
 
    	
 
    	
$32,406.50
    	
 
    

 

Except as otherwise set forth in this Amendment, all other terms and conditions with respect to the payment of Monthly Installment of Rent, Taxes, Expenses, or any other sums due and payable by Tenant under the Lease shall remain as set forth thereunder.

 

(b)                                 Monthly Installment of Rent Abatement Period. Notwithstanding the foregoing subsection (a) and the Monthly Installment of Rent due and payable as set forth in the Original Lease and First Amendment, Tenant’s obligation to pay the Monthly Installment of Rent shall be conditionally abated as follows (the “Monthly Installment of Rent Abatement Period”):

 

 

	
From:
    	
 
    	
 
    	
To:
    	
 
    	
Monthly Installment
    	
 
    	
 
    	
Monthly Installment of
    	
 
    	
 
    	
Monthly Installment
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
of Rent
    	
 
    	
 
    	
Rent Abated
    	
 
    	
 
    	
of Rent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Due and Payable
    	
 
    
	
1/01/2013
    	
 
    	
 
    	
4/30/2013
    	
 
    	
$30,670.44
    	
 
    	
 
    	
$30,670.44
    	
 
    	
 
    	
$0.00
    	
 
    

 

During any Monthly Installment of Rent Abatement Period, Tenant’s obligation to pay Expenses, Taxes, and any and all other charges pursuant to the terms of the Lease shall continue in full force and effect without abatement of any kind. The abatement of Monthly Installment of Rent described above is expressly conditioned on Tenant’s performance of its obligations under the Lease throughout the Term. If there is an Event of Default under the Lease and such Event of Default leads to the enforcement of any remedies against Tenant (including the termination of the Lease prior to the expiration of the Term), then Tenant shall immediately pay to Landlord on demand, in addition to all other amounts and damages to which Landlord is entitled, the amount of Monthly Installment of Rent which would otherwise have been due and payable during any portion of the Monthly Installment of Rent Abatement Period.

 

(c)                                  Base Year. As of the Extended Term Commencement Date, the Base Year (Expenses) and Base Year (Taxes) shall both deemed to be calendar year 2013.

 

3.                                      AS-IS Condition; Tenant’s Work.

 

(a)                                 AS-IS Condition. Tenant hereby acknowledges and agrees that it has accepted the Premises as of the date hereof, and will accept the Premises as of the Extended Lease Term Commencement Date, in AS-IS, WHERE-IS condition without any representation or warranty of any kind made by Landlord in favor of Tenant.

 

(b)                                 Tenant’s Work. Notwithstanding the foregoing subsection (a), Tenant may, on or after the Extension Term Commencement Date (except as set forth on Exhibit A) complete the work set forth on Exhibit A attached hereto in accordance with the terms and conditions set forth on such exhibit.

 

4.                                      Landlord’s Address. Landlord’s Address set forth in the Reference Pages of the Lease is hereby deleted in its entirety and replaced with the following:

 

	
LANDLORD’S ADDRESS:
    	
c/o IndCor Properties 

2 N. Riverside Plaza, Suite 2350 

Chicago, IL 60606 

Attention: Lease Administration 

With a copy to: 

 

c/o IndCor Properties 

7887 E. Belleview Avenue, Suite 325 

Denver, CO 80111 

Attention: Charles E. Sullivan
    

 

5.                                      Limitation of Landlord’s Liability. Section 40 of the Original Lease shall be amended and restated in its entirety as follows:

 

“40.                         Limitation of Landlord’s Liability. All obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises and not thereafter. The term “Landlord” in this Lease shall mean only the owner, for the time being of the Premises, and in the event of the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord thereafter accruing, but such obligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership. Any liability of Landlord under this Lease shall be limited solely to its interest in the Building, and in no event shall any personal liability be asserted against Landlord in connection with this Lease nor shall any recourse be had to any other property or assets of Landlord. Any obligation or liability whatsoever of Landlord which may arise at any time under this Lease or any obligation or liability which may be incurred by it pursuant to any other instrument, transaction, or undertaking contemplated hereby shall not be personally binding upon, nor shall resort for the enforcement thereof be had to the property of, its trustees, directors,

 

2

 

 

shareholders, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort, or otherwise.”

 

6.             Renewal Option. For the avoidance of doubt, Exhibit E of the Original Lease and Section 6 of the First Amendment are hereby deemed null and void and of no further force and effect. Tenant shall have a one-time renewal option on the terms and conditions as set forth on Exhibit B attached hereto.

 

7.             Roof. Notwithstanding anything to the contrary in the Lease, Landlord may elect, in its sole discretion and from time to time, to install (or permit the installation of) telecommunication equipment, solar equipment and panels, and any other equipment for any other uses on the roof of the Premises.

 

8.             Tenant’s Broker. Tenant represents and warrants that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other person brought about this transaction other than NAI Robert Lynn. Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction.

 

9.             OFAC. Tenant hereby represents and warrants that, to the best of its knowledge, neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an Event of Default will be deemed to have occurred, without the necessity of notice to the defaulting party.

 

10.          Authority. Tenant represents and warrants to Landlord that Tenant has been and is qualified to do business in the state in which the Premises is located, that the entity has the full right and authority to enter into this Amendment, and that all persons signing on behalf of the entity were authorized to do so by appropriate actions.

 

11.          Severability. If any clause or provision of this Amendment is illegal, invalid or unenforceable under present or future laws, then and in that event, it is the intention of the parties hereto that the remainder of this Amendment shall not be affected thereby. It is also the intention of the parties to this Amendment that in lieu of each clause or provision of this Amendment that is illegal, invalid or unenforceable, there be added, as a part of this Amendment, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

 

12.          Counterparts and Delivery. The Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Amendment. Execution copies of the Amendment may be delivered by facsimile or email, and the parties hereto agree to accept and be bound by facsimile signatures or scanned signatures transmitted via email hereto, which signatures shall be considered as original signatures with the transmitted Amendment having the binding effect as an original signature on an original document. Notwithstanding the foregoing, Tenant shall, upon Landlord’s request, deliver original copies of the Amendment to Landlord at the address set forth in such request. Neither party may raise the use of a facsimile machine or scanned document or the fact that any signature was transmitted through the use of a facsimile machine or email as a defense to the enforcement of the Amendment.

 

13.          Conflict; Ratification. Insofar as the specific terms and provisions of this Amendment purport to amend or modify or are in conflict with the specific terms, provisions and exhibits of the Lease, the terms and provisions of this Amendment shall govern and control. Landlord and Tenant hereby agree that (a) this Amendment is incorporated into and made a part of the Lease, (b) any and all references to the Lease hereinafter shall include this Amendment, and (c) the Lease, and all terms, conditions and provisions of the Lease, are in full force and effect as of the date hereof, except as expressly modified and amended hereinabove.

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly authorized, executed and delivered as of the day and year first set forth above.

 

 

	
TENANT:
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
INTRUSION, INC., a Delaware corporation
    	
 
    	
CWTX CORPORATE PLACE 87, L.P., a Delaware 
   limited partnership
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Michael L. Paxton
    	
 
    	
By:
    	
CWTX GP, L.L.C., a Delaware limited liability 
    
	
Name:
    	
Michael L. Paxton
    	
 
    	
 
    	
company, its general partner
    
	
Title:
    	
VP & CFO
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    	
/s/ Charles E. Sullivan
    
	
 
    	
 
    	
Name:
    	
 
    	
Charles E. Sullivan
    
	
 
    	
 
    	
Title:
    	
 
    	
Vice President
    
												

 

 

 

EXHIBIT A

 

TENANT’S WORK

 

(a)              Tenant’s Work. Landlord shall contribute, on the terms and conditions of this Exhibit A, up to a maximum amount of $111,108.00 (the “Allowance”) towards Tenant’s alterations and improvements to the Premises as agreed to between Landlord and Tenant and provided that any such alterations or improvements will become permanently affixed to the Property, directly benefit the Building, and are agreed to by Landlord, such consent not to be unreasonably withheld (collectively, the “Tenant’s Work”). Landlord’s agreement to provide the Allowance is expressly conditioned upon Tenant’s submission of detailed plans and specifications for the Tenant’s Work to Landlord with Tenant to finalize such plans and specifications in response to any of Landlord’s comments thereto within five (5) business days of Landlord’s response to such submission.

 

(b)              Landlord’s Approval; Tenant’s Obligations. The Tenant’s Work shall be subject to the terms of Section 6 of the Lease. In addition to obtaining Landlord’s consent as and when required pursuant to Section 6 of the Lease, Tenant shall obtain Landlord’s prior written consent for any of the Tenant’s Work for which Tenant will seek reimbursement from the Allowance. In all cases, Tenant shall deliver plans and specifications for the Tenant’s Work, and any other documentation reasonably requested by Landlord, to Landlord for approval prior to commencing any of the Tenant’s Work. All of the Tenant’s Work shall be constructed and undertaken in a good and workmanlike manner and in compliance with all applicable laws, and Tenant shall perform, at its expense, any alteration or modification required by any applicable laws as a result of the Tenant’s Work. Landlord may monitor the construction of the Tenant’s Work, subject to the obligation to provide prior notice to Tenant of any entry onto the Premises (except in the case of emergency, in which case no prior notice is required). In the event the scope of work requested by Tenant is such that Landlord elects to engage a third-party architect, engineer, or other similar consultant or professional to review such proposed work, Tenant shall reimburse Landlord for its actual, reasonable out-of-pocket costs in reviewing plans and specifications and in monitoring the construction for compliance with such approved plans and specifications. Landlord’s right to approve the Tenant’s Work and to monitor construction shall be solely for its own benefit, and Landlord shall have no duty to see that the Tenant’s Work complies with any applicable laws. In addition, Landlord may collect a construction management fee in an amount which shall be calculated based upon the scope of the Tenant’s Work as described herein and any additional work requested by Tenant and agreed to by Landlord, taking into account costs generally payable for similar services within the market area in which the Building is located, and such fee shall be paid, in part or in whole, from the Allowance with any amount not covered by the Allowance to be paid by Tenant directly to Landlord (or, at Landlord’s election, to Landlord’s property manager). Landlord shall provide Tenant with a good faith estimated cost of the expected construction management fee; provided, however, Tenant hereby agrees and acknowledges that the estimated cost of such fee is an estimate only and Landlord makes no guaranty or warranty that such estimate will be accurate.

 

(c)              Allowance. The Allowance may be used only for the hard costs and Eligible Soft Costs (as hereinafter defined) of construction of the Tenant’s Work pursuant to the approved plans and specifications. “Eligible Soft Costs” shall be deemed to be costs and expenses incurred by Tenant which are directly and primarily related to the Tenant’s Work and which relate solely to the work of any architect, space planner, engineer, or similar construction professional or which are direct payments made to applicable authorities for permitting and license fees; provided, however, that in no event shall the Eligible Soft Costs exceed fifteen percent (15%) of the total Allowance or be used for services provided in connection with the negotiation of the Lease. For the avoidance of doubt, Eligible Soft Costs shall expressly exclude any financing, attorney, or other costs and expenses not expressly permitted hereunder. In no event will the Allowance be used to pay for moving or storage expenses or furniture, racking, equipment, cabling, telephone systems or any other item of personal property which is not intended to be permanently affixed to the Premises. Payment of the Allowance shall be made by Landlord to Tenant within thirty (30) days following the last to occur of: (i) completion of the Tenant’s Work, (ii) Landlord’s receipt of Tenant’s invoice substantiating the costs related thereto, (iii) Landlord’s receipt of final lien waivers from all contractors and subcontractors who performed the Tenant’s Work, and (iv) Landlord’s receipt of a copy of the final closed-out permit approved by the applicable governing authority for any work which requires the same. Landlord shall be under no obligation to pay for any of the Tenant’s Work in excess of the Allowance. Further, the Allowance shall only be available for Tenant’s use for work performed and submitted for reimbursement in accordance with the terms of this exhibit from the Extension Term Commencement Date through December 31, 2016, at which time

 

 

Tenant hereby waives any and all rights to any unused portion of the Allowance; provided, however, that Landlord agrees to permit Tenant, upon Tenant’s written request, to commence any portion of the Tenant’s Work related solely to the HVAC system servicing the existing server area located within the Premises prior to the Extension Term Commencement Date.

 

 

 

EXHIBIT B

 

RENEWAL OPTION

 

Notwithstanding anything to the contrary in the Lease, Tenant shall have one (1) option to renew the Lease Term (the “Renewal Option”) on the following terms and conditions:

 

(a)                                           Provided that as of the date of the receipt of the Renewal Notice (as hereinafter defined) by Landlord and the Renewal Commencement Date (as hereinafter defined), (i) Tenant is the tenant named on the Lease as of the Extended Term Commencement Date, (ii) Tenant actually occupies all of the Premises, and (iii) no default exists, or would exist but for the passage of time or the giving of notice, or both, then Tenant shall have the right to extend the Term for an additional term of sixty (60) months (the “Renewal Term”) commencing on the day following the expiration of the Extended Term (the “Renewal Commencement Date”). Tenant shall give Landlord written notice (the “Renewal Notice”) of its election to renew the Term in accordance with the terms hereof at least six (6) months, but not more than nine (9) months, prior to the scheduled expiration date of the Extended Term.

 

(b)                                          The Annual Rent payable by Tenant to Landlord during the Renewal Term shall be the greater of (i) the Annual Rent applicable to the last year of the Extended Term, and (ii) the then-prevailing market rate for comparable space in comparable buildings in the vicinity of the Property taking into account the size of the Lease, the length of the renewal term, market escalations, and the credit of Tenant. The Annual Rent shall not be reduced by reason of any costs or expenses saved by Landlord by reason of Landlord’s not having to find a new tenant for such premises (including, without limitation, brokerage commissions, costs of improvements, rent concessions or lost rental income during any vacancy period).

 

(c)                                           Within thirty (30) days of receipt of the Renewal Notice, Landlord shall notify Tenant of its determination of the Annual Rent (which shall be made in Landlord’s sole discretion) for the Renewal Term, and Tenant shall advise Landlord in writing of any objection within ten (10) days of receipt of Landlord’s notice. Failure to respond within the ten (10) day period shall constitute Tenant’s rejection of such Annual Rent with Tenant’s exercise of the Renewal Option deemed withdrawn and the Lease shall expire or terminate in accordance with its terms. If Tenant objects in writing, Landlord and Tenant shall commence negotiations to attempt to agree upon the Annual Rent for a period of up to fifteen (15) days after Landlord’s receipt of Tenant’s objection notice. If the parties cannot agree, each acting in good faith but without any obligation to agree, on the Annual Rent on or before the end of such fifteen (15) day period, then Tenant’s exercise of the Renewal Option shall be deemed withdrawn and the Lease shall expire or terminate in accordance with its terms.

 

(d)                                          The determination of the Annual Rent does not reduce the Tenant’s obligation to pay or reimburse Landlord for Expenses, Taxes, and any other reimbursable or chargeable items as set forth in the Lease, and Tenant shall reimburse and pay Landlord as set forth in the Lease with respect to such items with respect to the Premises during the Renewal Term.

 

(e)                                           Except for the Annual Rent for the Renewal Term as determined above, Tenant’s occupancy of the Premises during the Renewal Term shall be on the same terms and conditions as are in effect immediately prior to the expiration of the Extended Term; provided, however, Tenant shall have no further right to any allowances, credits or abatements or any options to expand, contract, renew, terminate or extend the Lease.

 

(f)                                             If Tenant does not give the Renewal Notice within the period set forth above, the Renewal Option shall automatically terminate. Time is of the essence as to the giving of the Renewal Notice.

 

(g)                                          Landlord shall have no obligation to refurbish or otherwise improve the Premises for the Renewal Term. The Premises shall be tendered on the Renewal Commencement Date in “as-is” condition.

 

(h)                                          If the Lease is extended for the Renewal Term, then, promptly after the determination of Annual Rent in accordance with the terms of this exhibit, Landlord shall prepare and Tenant shall execute an amendment to the Lease confirming the extension of the Term and the other provisions applicable thereto.

 

 

(i)                                              If Tenant exercises its right to renew the term of the Lease for the Renewal Term pursuant to this exhibit and the parties execute the amendment, the term “Term” as used in the Lease shall be construed to include, when practicable, the Renewal Term except as provided in subparagraph (e) above.

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