FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (herein called the “Amendment”), is dated as of December 22, 2010, 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 hereto.

 

W I T N E S S E T H:

 

WHEREAS, Borrower, Parent, the Administrative Agent, L/C Issuer and the lenders party thereto (the “Lenders”) are party to that certain Credit Agreement dated as of March 7, 2007 (as heretofore amended, the “Original Agreement”), for the purpose and consideration therein expressed, whereby L/C Issuer became obligated to issue Letters of Credit to Borrower and the Lenders became obligated to make loans to Borrower as therein provided; and

WHEREAS, Borrower, Parent, the Administrative Agent, the L/C Issuer and the Lenders party hereto 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 the Lenders and the L/C Issuer to the 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.

 

 

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 Fifth Amendment to Credit Agreement.

 

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

 

ARTICLE II.

 

 

Section 2.1. Amendments.  Subject to the satisfaction of the conditions precedent set forth in Sections 3.1 and  3.2, the Original Agreement shall be amended effective as of the Effective Date (as defined below) in the manner provided in this Section 2.1.

 

(a) Defined Terms.  The definition of “Denbury Credit Party” is hereby deleted.  The following definitions are hereby added to Section 1.01 of the Original Agreement in appropriate alphabetical order:

 

““Vanguard” means Vanguard Natural Resources LLC, a Delaware limited liability company.”

““Vanguard Credit Party” means Vanguard or any of its Subsidiaries.”

““Vanguard Operating” means Vanguard Natural Gas, LLC, a Kentucky limited liability company.”

(b) Change of Control.  The definition of “Change of Control” in Section 1.01 of the Original Agreement is hereby amended in its entirety to read as follows:

 

““Change of Control” means the occurrence of any of the following whether voluntarily or involuntarily, including by operation of law:

 

(a)           the Borrower shall cease to be, directly or indirectly, a wholly owned Subsidiary of Parent;

 

(b)           General Partner shall cease to be the sole general partner of Parent; or General Partner shall cease to be Controlled by Vanguard; or any “person” or “group” (for purposes of this clause (b) and the following clause (c), as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)), other than Vanguard, or any wholly owned Subsidiary of Vanguard, is or becomes the “beneficial owner” (for purposes of this clause (b) and the following clause (c), as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such a person shall be deemed to have “beneficial ownership” of all shares that a ny such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 30% of the total voting power of the voting stock of General Partner; or

 

(c)           the (i) acquisition of ownership, directly or indirectly, beneficially or of record, by any “person” or “group” of Equity Interests representing more than 35% of the total voting power represented by the issued and outstanding voting stock of Vanguard, or (ii) occupation of a majority of those seats (other than vacant seats) on the board of managers of Vanguard by Persons who were neither (X) nominated by the board of managers of Vanguard nor (Y) appointed by managers so nominated.”

 

(c) Transactions with Affiliates.  The references in Section 7.09 to “Denbury Credit Party” are hereby amended to read “Vanguard Credit Party”.

 

ARTICLE III.

 

 

Section 3.1. Conditions to Effectiveness of this Amendment.  This Amendment shall become effective when and only when the Administrative Agent shall have received the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each in form and substance satisfactory to the Administrative Agent (unless otherwise specified):

 

(a) executed counterparts of this Amendment (or a consent to this Amendment) from the Required Lenders; and

 

(b) counterparts of this Amendment executed by a Responsible Officer of each applicable Credit Party sufficient in number for distribution to the Administrative Agent and the Lenders.

 

Section 3.2. Conditions Precedent to Amendments.  The amendments contained in Section 2.1 hereof are subject to the satisfaction of the following conditions precedent (the date such conditions are so satisfied herein called the “Effective Date”):

 

(a) the “Closing”, as defined in that certain Purchase Agreement by and among Denbury, Encore Partners GP Holdings LLC, Encore Partners LP Holdings LLC, and Encore Operating, L.P. as Selling Parties, Vanguard Natural Gas, LLC, as Buyer, and Vanguard, dated as of November 16, 2010 (the “Purchase Agreement”) has occurred in accordance in all material respects with the terms of the Purchase Agreement and applicable law.

 

(b) The Administrative Agent’s receipt of a certificate signed by a Responsible Officer of the Borrower, in form and substance satisfactory to the Administrative Agent, certifying that (i) the “Closing” (as defined in the Purchase Agreement) has occurred, (ii) each of the Borrower and each other Borrower-Related Party remakes its respective representations and warranties in accordance with Section 4.02(a) of the Original Agreement as of the Effective Date, (iii)  no Default shall exist or would result from the Closing (assuming for this purpose that the amendments set forth in Section 2.1 are in effect), and (iv) each of the Or iginal Agreement, as amended by this Amendment, and the other Loan Documents is ratified and confirmed in all respects.

 

(c) Any fees required to be paid by the Credit Parties on or before the Effective Date pursuant to written agreements entered into by the Credit Parties shall have been paid.

 

(d) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to the Effective Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

 

ARTICLE IV.

 

 

Section 4.1. Representations and Warranties.  In order to induce the L/C Issuer and each Lender to enter into this Amendment, the Borrower and Parent represent and warrant to the L/C Issuer and each Lender that the representations and warranties contained in Article V of the Original Agreement, after giving effect to this Amendment, or any other Loan Document are true and correct in all material respects on the date hereof, except to the extent such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date.

 

ARTICLE V.

 

 

Section 5.1. Ratification of Agreements.

 

(a)  The Original Agreement, after giving effect to this Amendment, is hereby ratified and confirmed in all respects.  The other Loan 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 shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent or the 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.

 

(b)  The undersigned Subsidiary or Subsidiaries of the Borrower (whether one or more, “Subsidiary Guarantor”, and if more than one jointly and severally), hereby (i) consents to the provisions of this Amendment and the transactions contemplated herein, (ii) ratifies and confirms the Guaranty made by it for the benefit of the Administrative Agent and Lenders executed pursuant to the Credit Agreement and the other Loan Documents made by it, (iii) agrees that all of its respective obligations and covenants thereunder shall remain unimpaired by the execution and delivery of this Amendment and the other documents and instruments executed in connection herewith, and (iv) agrees that such Guaranty and such other Loan Documents shall remain in full force and effect.

Section 5.2. Survival of Agreements.  All representations, warranties, covenants and agreements of any Credit 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 Credit Party hereunder or under the Credit Agreement to the Administrative Agent or any Lender shall be deemed to constitute representations and warranties by, and/or agreements and covenants of, such Credit Party under this Amendment and under the Credit Agreement.

 

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

 

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 may be validly executed by facsimile or other electronic transmission.

 

 

[The remainder of this page has been intentionally left blank.]

 

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

 

 

By:           /s/ Mark. C. Allen                                                      

Name: Mark C. Allen

Title:   Senior Vice President and

  Chief Financial Officer

 

By:           Encore Energy Partners GP LLC, its sole

 

general partner

 

By:                     /s/ Mark. C. Allen                                                    

       Name: Mark C. Allen

Title: Senior Vice President and

Chief Financial Officer

 

By:                       /s/ Mark. C. Allen                                                              

Name: Mark C. Allen

Title:   Senior Vice President and

  Chief Financial Officer

	BANK OF AMERICA, N.A., as Administrative Agent, L/C Issuer and a Lender   By:       /s/ Stephen J. Hoffman Name: Stephen J. Hoffman Title:  Managing Director

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Syndication Agent and as a Lender

By:       /s/  Thomas E. Stelmar, Jr. 

Name:  Thomas E. Stelmar, Jr.

Title:    Vice-President

BNP PARIBAS, as Co-Documentation Agent and as a Lender

 

 

 

By:         /s/ Edward Pak                                                                   

 

Name: Edward Pak

 

Title: Vice President

 

By:          /s/ Courtney Kubesch                                                                   

 

Name: Courtney Kubesch

 

Title: Vice President

 

CREDIT AGRICOLE CORPORATE AND

 

INVESTMENT BANK (f/k/a CALYON NEW YORK BRANCH), as Co-Documentation Agent and as a Lender

 

 

 

By:          /s/ Darrell Stanley                                                                   

 

Name: Darrell Stanley

 

Title: Managing Director

 

By:    /s/ Sharada Manne                                                           

 

Name: Sharada Manne

 

Title: Director

 

THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

By:                  /s/ John Frazell                                                           

 

Name:           John Frazell

 

Title:           Director

 

COMERICA BANK, as a Lender

 

 

 

By:                  /s/ Dustin S. Hansen                                                           

 

Name: Dustin S. Hansen

 

Title:           Senior Vice President

 

NATIXIS, as a Lender

 

 

 

By:        /s/ Donovan C. Broussard                                                           

 

Name: Donovan C. Broussard

 

Title: Managing Director

 

By: /s/ Liana Tchernysheva                                                                           

 

Name: Liana Tchernysheva

 

Title: Director

 

BANK OF SCOTLAND, as a Lender

 

 

 

By:        /s/ Julia R. Franklin                                                           

 

Name: Julia R. Franklin

 

Title: Assistant Vice President

 

U.S. BANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:          /s/ Daria Mahoney                                                           

 

Name: Daria Mahoney

 

Title:           Vice President

 

UNION BANK, N.A., as a Lender

 

 

 

By:         /s/ Alison Fuqua                                                           

 

Name: Alison Fuqua

 

Title: Vice President

 

THE FROST NATIONAL BANK, as a Lender

 

 

 

By:          /s/ John Warren                                                                   

 

Name: John Warren

 

Title: Sr. Vice President

 

ROYAL BANK OF CANADA, as a Lender

 

 

 

By:          /s/ Jay T. Sartain                                                                   

 

Name: Jay T. Sartain

 

Title: Authorized Signatory

 

CAPITAL ONE, N.A., as a Lender

 

 

 

By: /s/ Scott L. Joyce                                                                           

 

Name: Scott L. Joyce

 

Title: Senior Vice President

 

COMPASS BANK, as a Lender

 

 

 

By: /s/  Spencer Stasney                                                                           

 

Name: Spencer Stasney

 

Title: Vice President

 

BARCLAYS BANK PLC, as a Lender

 

 

 

By: /s/  Vanessa A. Kurbatskiy                                                                           

 

Name: Vanessa A. Kurbatskiy

 

Title: Vice President