Magnum Hunter Resources 10Q 2012 Q2 Quarterly report | SEC Filing

Exhibit 10.3

EIGHTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS EIGHTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), effective as of the 10th day of May, 2012 (the “Eighth Amendment Effective Date”), is entered into by and among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), the guarantors party hereto (the “Guarantors”), the lenders party hereto (the “Lenders”) and BANK OF MONTREAL, as administrative agent for the Lenders (the “Administrative Agent”).

RECITALS

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into that certain Second Amended and Restated Credit Agreement dated April 13, 2011 (as amended by the First Amendment to Second Amended and Restated Credit Agreement effective as of June 30, 2011, the Second Amendment to Second Amended and Restated Credit Agreement effective as of August 15, 2011, the Third Amendment to Second Amended and Restated Credit Agreement effective as of September 28, 2011, the Fourth Amendment to Second Amended and Restated Credit Agreement effective as of December 6, 2011, the Fifth Amendment to Second Amended and Restated Credit Agreement and Second Amendment to Amended and Restated Security and Pledge Agreements effective as of February 14, 2012, the Sixth Amendment to Second Amended and Restated Credit Agreement effective as of May 2, 2012, the Seventh Amendment to Second Amended and Restated Credit Agreement effective as of May 2, 2012, and as further amended or restated from time to time, the “Credit Agreement”); and

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

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

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, the Borrower, the Guarantors, the Lenders and the Administrative Agent agree as follows:

1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.

2. Amendment to Section 9.02. Section 9.02 of the Credit Agreement is hereby amended to restate clause (p) thereof in its entirety as follows:

“(p) either (i) Second Lien Debt (including guarantees in respect thereof) not to exceed an aggregate principal amount of $450,000,000 at any time outstanding and otherwise on terms and conditions reasonably satisfactory to the Administrative Agent, including, without limitation, an Intercreditor Agreement; provided that (A) immediately following the incurrence of the Second Lien

Debt, the Borrower shall use a portion of the proceeds thereof to repay in full the Capital One Debt, (B) the maturity date of the Second Lien Debt shall not be earlier than six months after the Maturity Date and (C) the Borrower shall not prepay any amounts in respect of the Second Lien Debt unless (1) no Default or Event of Default has occurred and is continuing and (2) either (y) such prepayment is made with the cash proceeds of the Senior Notes immediately following the issuance thereof or (z) after giving effect to such prepayment, the Borrower shall have a minimum Liquidity of not less than $75,000,000; or (ii) Debt evidenced by Senior Notes (including unsecured guarantees in respect thereof) not to exceed an aggregate principal amount of $500,000,000 at any time outstanding; provided that (A) immediately following the issuance of the Senior Notes, the Borrower shall use a portion of the proceeds thereof to repay in full the Capital One Debt or any Second Lien Debt then outstanding, (B) the maturity date of the Senior Notes shall not be earlier than one year after the Maturity Date and (C) the Borrower shall not prepay any amounts owing under the Senior Notes at any time;”.

3. Amendment to Schedule 1.01C. Schedule 1.01C of the Credit Agreement is hereby amended to add the following new paragraph 8 at the end of said Schedule:

“8. The Borrower shall have received proceeds from the issuance of common stock in an amount equal to or greater than $100,000,000.”

4. Ratification. Each of the Borrower and the Guarantors hereby ratifies all of its respective obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party are and shall continue to be in full force and effect as amended and modified by this Amendment. Except as provided herein, nothing in this Amendment extinguishes, novates or releases any right, claim, lien, security interest or entitlement of any of the Lenders or the Administrative Agent created by or contained in any of such documents nor is the Borrower nor any Guarantor released from any covenant, warranty or obligation created by or contained herein or therein.

5. Representations and Warranties. The Borrower and Guarantors hereby represent and warrant to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower and Guarantors, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower and Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (c) the representations and warranties contained in the Credit Agreement and the Loan Documents are true and correct on and as of the date hereof in all material respects as though made as of the date hereof (except to the extent any such representations and warranties are

expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date), (d) no Default or Event of Default exists under the Credit Agreement or under any Loan Document as of the Eighth Amendment Effective Date and (e) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower and Guarantors.

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

(a) the Borrower, the Guarantors and the Required Lenders shall have executed and delivered to the Administrative Agent counterparts of this Amendment; and

(b) the Borrower shall have paid to the Administrative Agent and the Lenders all fees and expenses that are due in connection with this Amendment.

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

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

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

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the Eighth Amendment Effective Date.

BORROWER:

MAGNUM HUNTER RESOURCES
CORPORATION, a Delaware corporation


By:	/s/ Ronald D. Ormand
	Ronald D. Ormand
	Chief Financial Officer


GUARANTORS:

PRC WILLISTON, LLC,
a Delaware limited liability company

By:	Magnum Hunter Resources Corporation,
	its sole member


	By:	/s/ Ronald D. Ormand
		Ronald D. Ormand
		Chief Financial Officer


MAGNUM HUNTER RESOURCES LP,
a Delaware limited partnership

By:	Magnum Hunter Resources GP, LLC,
	its general partner

	By:	Magnum Hunter Resources Corporation,
		its sole member


		By:	/s/ Ronald D. Ormand
			Ronald D. Ormand
			Chief Financial Officer