Second Amendment to Credit Agreement dated as of October 3, 2014 among Memorial Resource Development Corp., as Borrower, Bank of America, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, JPMorgan Chase Bank, N.A., BMO Harris Bank, N.A., Comerica Bank, Credit Agricole Corporate and Investment Bank, Natixis, MUFG Union Bank, N.A., and Wells Fargo Bank, National Association, as Co-Documentation Agents and the Lenders party hereto Merrill Lynch, Pierce, Fenner & Smith Incorporated, Sole Lead Arranger and Sole Bookrunner Second Amendment to Credit Agreement
Exhibit 10.7
Second Amendment to Credit Agreement
dated as of October 3, 2014
among
Memorial Resource Development Corp.,
as Borrower,
Bank of America, N.A.,
as Administrative Agent,
Citibank, N.A.,
as Syndication Agent,
JPMorgan Chase Bank, N.A., BMO Harris Bank, N.A., Comerica Bank,
Credit Agricole Corporate and Investment Bank, Natixis, MUFG Union Bank,
N.A., and Wells Fargo Bank, National Association,
as Co-Documentation Agents
and
the Lenders party hereto
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Sole Lead Arranger and Sole Bookrunner
Second Amendment to Credit Agreement
This Second Amendment to Credit Agreement (this “Second Amendment”), dated as of October 3, 2014 (the “Second Amendment Effective Date”), is among Memorial Resource Development Corp., a corporation formed under the laws of the State of Delaware (the “Borrower”); each of the undersigned guarantors (together with the Borrower, collectively, the “Loan Parties”); each of the Lenders that is a signatory hereto; and Bank of America, N.A., as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”).
Recitals
A.The Borrower, the Administrative Agent and the Lenders are parties to that certain Credit Agreement dated as of June 18, 2014 (as amended prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit available to and on behalf of the Borrower.
B.The parties hereto desire to enter into this Second Amendment to amend the Credit Agreement in certain respects including, without limitation, to modify the Swap Agreements negative covenant as set forth herein, to be effective as of the Second Amendment Effective Date.
C.Subject to and upon the terms and conditions set forth herein, the Lenders have agreed to enter this Second Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed such term in the Credit Agreement, as amended hereby. Unless otherwise indicated, all section references in this Second Amendment refer to the Credit Agreement.
Section 2.Amendments. In reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, the Credit Agreement shall be amended effective as of the Second Amendment Effective Date in the manner provided in this Section 2.
2.1Additional Definition. Section 1.02 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definition which shall read in full as follows:
“Second Amendment” means that certain Second Amendment to Credit Agreement dated as of October 3, 2014, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
2.2Amended Definitions. The definitions of “Approved Counterparty” and “Loan Documents” contained in Section 1.02 of the Credit Agreement are hereby amended and restated in their entirety to read in full as follows:
“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender or (b) any other Person that has a long term senior unsecured debt rating of BBB+/Baa1 by S&P or Moody’s (or their equivalent) or higher (including, for the sake of clarity, any other Person the obligations of which under Swap Agreements with Loan Parties are guaranteed by a credit support provider that has a long term senior unsecured debt rating of BBB+/Baa1 by S&P or Moody’s (or their equivalent) or higher at the time such Swap Agreement is entered into).
“Loan Documents” means this Agreement, the First Amendment, the Second Amendment, the Notes, the Letter of Credit Agreements, the Letters of Credit, the Agency Fee Letter, and the Security Instruments.
2.3Amendment to Section 9.18 of the Credit Agreement. Section 9.18(a)(i) of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:
(i)Swap Agreements in respect of commodities (A) with an Approved Counterparty and (B) the notional volumes for which (when aggregated with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, (1) for the first 24 months after the date of execution of such Swap Agreement (the “First Measurement Period”), 100% and (2) for the first 36 months immediately following the First Measurement Period, 75%, in each case, of the reasonably anticipated projected production (assuming no curtailment or interruption of transportation for such anticipated
production) from proved Oil and Gas Properties included in the most recent Reserve Report for each month during the period during which such Swap Agreement is in effect for each of crude oil, natural gas and natural gas liquids, (which, in the case of natural gas liquids, may be hedged with Swap Agreements for crude oil), each calculated separately,
Section 3.Conditions Precedent. The effectiveness of the amendments to the Credit Agreement contained in Section 2 hereof is subject to the following:
3.1The Administrative Agent shall have received counterparts of this Second Amendment from the Loan Parties and the Majority Lenders.
3.2The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Second Amendment Effective Date.
3.3No Default, Event of Default, or Borrowing Base Deficiency shall exist immediately prior to or after giving effect to the amendments to the Credit Agreement contained in Section 2 hereof.
3.4The Administrative Agent shall have received such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.
The Administrative Agent shall notify the Borrower and the Lenders of the effectiveness of this Second Amendment, and such notice shall be conclusive and binding.
Section 4.Representations and Warranties; Etc. Each Loan Party hereby affirms: (a) that as of the date hereof, all of the representations and warranties contained in each Loan Document to which such Loan Party is a party are true and correct in all material respects as though made on and as of the date hereof (unless made as of a specific earlier date, in which case, was true as of such date and except to the extent that any such representation and warranty is qualified by materiality, in which case such representation and warranty shall continue to be true and correct in all respects), (b) no Defaults exist under the Loan Documents or will, after giving effect to this Second Amendment, exist under the Loan Documents and (c) no Material Adverse Effect has occurred.
Section 5.Miscellaneous.
5.1Confirmation and Effect. The provisions of the Credit Agreement (as amended by this Second Amendment) shall remain in full force and effect in accordance with its terms following the effectiveness of this Second Amendment. Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.
5.2Ratification and Affirmation of Loan Parties. Each of the Loan Parties hereby expressly (a) acknowledges the terms of this Second Amendment, (b) ratifies and affirms its obligations under the Guaranty Agreement and the other Loan Documents to which it is a party, as amended hereby, (c) acknowledges, renews and extends its continued liability under the Guaranty Agreement and the other Loan Documents to which it is a party, as amended hereby, (d) ratifies and affirms all Liens granted by it pursuant to the Loan Documents to secure the Indebtedness (except to the extent that such Liens have been released in accordance with the Loan Documents) and (e) agrees that its guarantee under the Guaranty Agreement and the other Loan Documents to which it is a party remains in full force and effect with respect to the Indebtedness.
5.3Counterparts. This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by facsimile or electronic (e.g., pdf) transmission shall be effective as delivery of a manually executed original counterpart hereof.
5.4No Oral Agreement. This written Second Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties. There are no unwritten oral agreements between the parties.
5.5Governing Law. This Second Amendment (including, but not limited to, the validity and enforceability hereof) shall be governed by, and construed in accordance with, the laws of the State of New York.
5.6Payment of Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for all of its out-of-pocket costs and expenses incurred in connection with this Second Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
5.7Severability. Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
5.8Successors and Assigns. This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed effective as of the date first written above.
| BORROWER: | MEMORIAL RESOURCE DEVELOPMENT CORP., | ||
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| a Delaware corporation | ||
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| By: | /s/ John A. Weinzierl | |
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| Name: | John A. Weinzierl | |
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| Title: | Chief Executive Officer | |
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| GUARANTORS: | MEMORIAL RESOURCE FINANCE CORP., | ||
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| a Delaware corporation | ||
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| By: | /s/ John A. Weinzierl | |
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| Name: | John A. Weinzierl | |
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| Title: | Chief Executive Officer | |
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| MRD Operating LLC | ||
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| BETA OPERATING COMPANY, LLC | ||
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| WILDHORSE RESOURCES, LLC | ||
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| By: | Memorial Resource Development Corp., |
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| its sole member |
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| By: | /s/ John A. Weinzierl |
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| Name: | John A. Weinzierl |
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| Title: | Chief Executive Officer |
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| Classic Hydrocarbons GP Co., L.L.C. | ||
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| CLASSIC HYDROCARBONS HOLDINGS, L.P. | ||
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| By: | Classic Hydrocarbons GP Co., L.L.C., |
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| its general partner |
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| By: | /s/ John A. Weinzierl |
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| Name: | John A. Weinzierl |
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| Title: | President and Chief Executive Officer |
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| CLASSIC OPERATING CO. LLC | ||
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| By: | Classic Hydrocarbons, Inc., |
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| its sole member |
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| CLASSIC HYDROCARBONS OPERATING, LLC | ||
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| CLASSIC HYDROCARBONS, INC. | ||
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| CRATON ENERGY GP III, LLC | ||
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| CRATON ENERGY HOLDINGS III, LP | ||
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| By: | Craton Energy GP III, LLC, |
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| its general partner |
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| By: | /s/ John A. Weinzierl | |
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| Name: | John A. Weinzierl | |
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| Title: | Chief Executive Officer | |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| ADMINISTRATIVE AGENT |
| BANK OF AMERICA, N.A., as Administrative Agent |
| AND LENDER: |
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| By: | /s/ Denise Jones |
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| Name: | Denise Jones |
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| Title: | Assistant Vice President |
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| BANK OF AMERICA, N.A., as a Lender |
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| By: | /s/ Raza Jafferi |
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| Name: | Raza Jafferi |
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| Title: | Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Citibank, N.A., as a Lender | |
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| By: | /s/ Peter Kardos |
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| Name: | Peter Kardos |
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| Title: | Vice-President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | JPMorgan Chase Bank, N.A., as a Lender | |
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| By: | /s/ Robert L. Mendoza |
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| Name: | Robert L. Mendoza |
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| Title: | Senior Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | BMO Harris Bank, N.A., as a Lender | |
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| By: | /s/ Gumaro Tijerina |
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| Name: | Gumaro Tijerina |
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| Title: | Managing Director |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Comerica Bank, as a Lender | |
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| By: | /s/ Jeffery Treadway |
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| Name: | Jeffery Treadway |
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| Title: | Senior Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Credit Agricole Corporate and Investment Bank, as a Lender | |
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| By: | /s/ Sharada Manne |
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| Name: | Sharada Manne |
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| Title: | Managing Director |
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| By: | /s/ Ting Lee |
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| Name: | Ting Lee |
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| Title: | Director |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Natixis, as a Lender | |
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| By: | /s/ Stuart Murray |
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| Name: | Stuart Murray |
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| Title: | Managing Director |
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| By: | /s/ Jarrett Price |
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| Name: | Jarrett Price |
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| Title: | Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | MUFG Union Bank, N.A. f/k/a Union Bank, N.A., as a Lender | |
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| By: | /s/ Stacy A. Goldstein |
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| Name: | Stacy A. Goldstein |
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| Title: | Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Wells Fargo Bank, National Association, as a Lender | |
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| By: | /s/ Shiloh Davila |
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| Name: | Shiloh Davila |
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| Title: | Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Barclays Bank PLC, as a Lender | |
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| By: | /s/ Marguerite Sutton |
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| Name: | Marguerite Sutton |
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| Title: | Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | ING Capital LLC, as a Lender | |
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| By: | /s/ Juli Bieser |
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| Name: | Juli Bieser |
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| Title: | Director |
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| By: | /s/ Michael Price |
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| Name: | Michael Price |
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| Title: | Managing Director |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Royal Bank of Canada, as a Lender | |
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| By: | /s/ Mark Lumpkin, Jr. |
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| Name: | Mark Lumpkin, Jr. |
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| Title: | Authorized Signatory |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Commonwealth Bank of Australia, as a Lender | |
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| By: | /s/ Sanjay Remond |
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| Name: | Sanjay Remond |
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| Title: | Director |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Capital One, National Association, as a Lender | |
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| By: | /s/ Michael Higgins |
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| Name: | Michael Higgins |
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| Title: | Director |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
| LENDER: | Associated Bank, N.A., as a Lender | |
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| By: | /s/ Farhan Iqbal |
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| Name: | Farhan Iqbal |
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| Title: | Senior Vice President |
[Signature Page to Second Amendment to Credit Agreement
Memorial Resource Development Corp.]
