Exhibit 10.2
Execution Version
FIFTH AMENDMENTTO
TERM LOAN CREDIT AGREEMENT
This FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT (this “Fifth Amendment”) dated as of September 14, 2018, among LEGACY RESERVES LP, a limited partnership duly formed under the laws of the State of Delaware (the “Borrower”), each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”), CORTLAND CAPITAL MARKET SERVICES LLC, as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”), the Lenders under the Term Loan Credit Agreement (the “Lenders”).
Recitals
A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Term Loan Credit Agreement dated as of October 24, 2016, as amended by the First Amendment and Waiver to the Term Loan Credit Agreement, dated July 31, 2017, as further amended by the Second Amendment to the Term Loan Credit Agreement, dated October 30, 2017, as further amended by the Third Amendment to the Term Loan Credit Agreement, dated December 31, 2017, and as further amended by the Fourth Amendment to the Term Loan Credit Agreement, dated as of March 23, 2018 (as so amended prior to the date hereof, the “Existing Credit Agreement,” and the Existing Credit Agreement as amended by this Fifth Amendment, the “Term Loan Credit Agreement”).
B. The Guarantors are parties to that certain Term Loan Guaranty Agreement dated as of October 25, 2016 made by each of the Guarantors (as defined therein) in favor of the Administrative Agent (the “Term Loan Guaranty Agreement”).
C. The Borrower, the Guarantors, the Administrative Agent and the Lenders have agreed to amend certain provisions of the Term Loan Credit Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for 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 Term Loan Credit Agreement, but which is not defined in this Fifth Amendment, shall have the meaning ascribed to such term in the Term Loan Credit Agreement. Unless otherwise indicated, all article, section and exhibit references in this Fifth Amendment refer to articles, sections and exhibits of the Term Loan Credit Agreement.
Section 2. Amendments to Term Loan Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The following definitions are hereby amended and restated in their entirety to read as follows:
“Agreement” means this Term Loan Credit Agreement, as amended by the First Amendment and Waiver to the Term Loan Credit Agreement, dated July 31, 2017, as further amended by the Second Amendment to the Term Loan Credit Agreement, dated October 30, 2017, as further amended by the Third Amendment to the Term Loan Credit Agreement, dated December 31, 2017, the Fourth Amendment, dated as of March 23, 2018, and the Fifth Amendment, dated as of September 14, 2018, as the same may from time to time be amended, modified, supplemented or restated.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest (other than, prior to conversion into common Equity Interests, the Convertible Senior Notes).
“Redemption” means with respect to any Debt (including, without limitation, the Convertible Senior Notes), the repurchase, redemption, prepayment, repayment or defeasance or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of any such Debt, but excluding, for the avoidance of doubt, the cashless conversion of the Convertible Senior Notes into common Equity Interests in accordance with the terms of the Senior Indenture governing the Convertible Senior Notes. For the avoidance of doubt, the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Redemption of the Convertible Senior Notes. “Redeem” has the correlative meaning thereto.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, Redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or such Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or such Subsidiary. For the avoidance of doubt, (i) any payment on Equity Interests (including any payment on Debt that exists due to conversion or exchange of any Equity Interests into Debt) in connection with an asset sale, change of control or any redemption requirements pursuant to the terms of such Equity Interest shall constitute a Restricted Payment, (ii) any Permitted Convertible Note Cash Payment shall not constitute a Restricted Payment, (iii) the cashless conversion pursuant to its terms of any Convertible Senior Note into common Equity Interests shall not constitute a Restricted Payment and (iv) the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Restricted Payment.
Page 2
“Senior Indentures” means, collectively or individually, as the context requires, any indenture or other agreement pursuant to which (i) any Senior Notes are issued and (ii) any Permitted Refinancing Debt with respect to any Senior Notes, including the Convertible Senior Notes, are issued, in each case, as the same may be amended, restated or supplemented, subject to the terms of Section 9.04(c).
The following definitions are hereby added where alphabetically appropriate to read as follows:
“Convertible Senior Notes” means the Borrower’s 8.00% Convertible Senior Notes due 2023 and any Permitted Refinancing Debt in respect thereof.
“Permitted Convertible Note Cash Payments” means (a) any payment in cash of a conversion incentive in an amount not to exceed one year’s interest that would otherwise be payable pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the early cashless conversion of such Convertible Senior Notes into common Equity Interests and (b) any cash payment in lieu of the issuance of fractional shares pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the cashless conversion of the Convertible Senior Notes into common Equity Interests.
“Tenth Amendment” means that certain Tenth Amendment to Third Amended and Restated Credit Agreement, dated as of September 14, 2018, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
The definition of “Permitted Refinancing Debt” is hereby amended by adding the following sentence at the end thereof:
“For the avoidance of doubt, the Convertible Senior Notes constitute Debt that is Permitted Refinancing Debt in respect of a portion of the Borrower’s 8.00% Senior Notes due 2020 and a portion of the Borrower’s 6.625% Senior Notes due 2021.”.
2.2 Amendment to Section 9.04(b). Section 9.04(b) is hereby amended by adding a new clause (iii) at the end thereof:
(iii) Notwithstanding anything to the contrary contained herein, the Borrower will not, and will not permit any Subsidiary to, elect to settle in cash, or settle in cash, all or any portion of the Borrower’s conversion obligations under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Senior Notes or
Page 3
otherwise);provided that the Borrower may make Permitted Convertible Note Cash Payments. The Borrower will not permit any Convertible Senior Note to contain any term that requires the cash settlement of all or any portion of the Borrower’s conversion obligations thereunder (other than terms permitting the Permitted Convertible Note Cash Payments).
2.3 Amendment to Section 9.04(c). Section 9.04(c) is hereby amended by adding the following sentence at the end thereof: “Notwithstanding anything to the contrary set forth herein, this Section 9.04(c) shall not prohibit the issuance of Convertible Senior Notes as Permitted Refinancing Debt with respect to the Borrower’s 8.00% Senior Notes due 2020 or 6.625% Senior Notes due 2021 solely because the stated interest rate of the Convertible Senior Notes is greater than 6.625% per annum (so long as such interest rate does not exceed 10.00% per annum).”.
Section 3. Conditions Precedent. This Fifth Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in writing in accordance with Section 12.02 of the Term Loan Credit Agreement) (the “Fifth Amendment Effective Date”):
3.1 The Administrative Agent shall have received from each Lender party to the Term Loan Credit Agreement, the Borrower and the Guarantors, counterparts (in such number as may be requested by the Administrative Agent) of this Fifth Amendment signed on behalf of such Person.
3.2 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.4) of a Responsible Officer of the Borrower certifying (a) that attached thereto is a true, correct and complete copy of the Tenth Amendment to the RBL Credit Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, and shall in any event amend the RBL Credit Agreement in the same manner as the Term Loan Credit Agreement is to be amended by this Fifth Amendment (the “First Lien Amendment”) and (b) as to the aggregate amount of all consent, amendment and other fees payable to the holders of the RBL Facility in connection with the First Lien Amendment and/or the Reorganization Transactions. The “Tenth Amendment Effective Date” under and as defined in the RBL Credit Agreement shall have occurred (or shall occur substantially concurrently with the Fifth Amendment Effective Date).
3.3 The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable pursuant to the Credit Agreement on or prior to the Fifth Amendment Effective Date, including fees and expenses invoiced by Arnold & Porter Kaye Scholer LLP and Latham & Watkins LLP prior to the Fifth Amendment Effective Date.
3.4 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.2) of a Responsible Officer of the Borrower certifying (a) that the Borrower has consummated (or substantially concurrently with the Fifth Amendment Effective Date, will consummate) the exchange of a portion of its 8.00% Senior Notes due 2020 and a portion of its 6.625% Senior Notes due 2021 for the Convertible Senior Notes, (b) that attached thereto is a true and complete copy of the Senior Indentures (or amendment to existing Senior Indentures) with respect to such Convertible Senior Notes and (c) as to the aggregate principal amount of such Convertible Senior Notes issued.
Page 4
3.5 No Default shall have occurred and be continuing as of the Fifth Amendment Effective Date.
3.6 The Fourth Amendment Effective Date shall have occurred.
3.7 The Administrative Agent shall have received such other documents as the Administrative Agent or its counsel may reasonably require.
Section 4. Miscellaneous.
4.1 Confirmation. The provisions of the Term Loan Credit Agreement, as amended by this Fifth Amendment, shall remain in full force and effect following the effectiveness of this Fifth Amendment.
4.2 Ratification and Affirmation; Representations and Warranties. Each Obligor hereby (a) acknowledges the terms of this Fifth Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Term Loan Document to which it is a party and agrees that each Term Loan Document to which it is a party remains in full force and effect as expressly amended hereby; (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Fifth Amendment: (i) all of the representations and warranties contained in each Term Loan Document to which it is a party are true and correct, 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, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect; and (d) agrees that from and after the Fifth Amendment Effective Date each reference to the Term Loan Credit Agreement in the other Term Loan Documents shall be deemed to be a reference to the Term Loan Credit Agreement, as amended by this Fifth Amendment.
4.3 Counterparts. This Fifth 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 Fifth Amendment by telecopy, facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart hereof.
4.4 No Oral Agreement. This Fifth Amendment, the Term Loan Credit Agreement and the other Term 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 subsequent oral agreements between the parties.
4.5 GOVERNING LAW. The provisions of Section 12.09 of the Term Loan Credit Agreement are incorporated hereinmutatis mutandis.
4.6 Payment of Expenses. In accordance with Section 12.03 of the Term Loan Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent and the Lenders for all of their reasonableout-of-pocket costs and reasonable expenses incurred in connection with this Fifth 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 and the Lenders.
Page 5
4.7 Severability. Any provision of this Fifth 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.
4.8 Successors and Assigns. This Fifth Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
4.9 Term Loan Document. This Fifth Amendment is a “Term Loan Document” as defined and described in the Term Loan Credit Agreement, and all of the terms and provisions of the Term Loan Credit Agreement relating to Term Loan Documents shall apply hereto.
4.10 RELEASE. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BORROWER AND EACH OTHER OBLIGOR HEREBY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, RELEASES AND FOREVER DISCHARGES EACH LENDER, EACH AGENT AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, TRUSTEES, ATTORNEYS, AGENTS, ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS AND EXPERTS) AND AFFILIATES (COLLECTIVELY THE “RELEASED PARTIES” AND INDIVIDUALLY A “RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS, DEBTS, LIABILITIES, COSTS, DAMAGES, EXPENSES OR OTHER OBLIGATIONS OF ANY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY),FOR OR BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO BE DONE, OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON OR PRIOR TO THE DATE OF THE FIFTH AMENDMENT AND ARE IN ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO ANY OF THIS FIFTH AMENDMENT, THE TERM LOAN CREDIT AGREEMENT, ANY OTHER TERM LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (COLLECTIVELY, THE “RELEASED MATTERS”). THE BORROWER AND EACH OTHER OBLIGOR, BY EXECUTION HEREOF, HEREBY ACKNOWLEDGES AND AGREES THAT THE AGREEMENTS IN THIS SECTION 4.10 ARE INTENDED TO COVER AND BE IN FULL SATISFACTION FOR ALL OR ANY ALLEGED INJURIES OR DAMAGES ARISING IN CONNECTION WITH THE RELEASED MATTERS.
Page 6
4.11 Administrative Agent Direction. Each undersigned Lender (collectively constituting all Lenders party to the Term Loan Credit Agreement) hereby directs the Administrative Agent to execute and deliver this Fifth Amendment.
[SIGNATURES BEGIN NEXT PAGE]
Page 7
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be duly executed as of the date first written above.
| BORROWER: | LEGACY RESERVES LP | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| GUARANTORS: | LEGACY RESERVES OPERATING LP | |||||
| By: | Legacy Reserves Operating GPLLC, its general partner | |||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| LEGACY RESERVES OPERATING GP LLC | ||||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
| LEGACY RESERVES SERVICES, INC. | ||
| DEW GATHERING LLC | ||
| PINNACLE GAS TREATING LLC | ||
| LEGACY RESERVES ENERGY SERVICES LLC | ||
| LEGACY RESERVES GP, LLC | ||
| LEGACY RESERVES INC. | ||
| By: | /s/ James Daniel Westcott | |
| James Daniel Westcott | ||
| President and Chief Financial Officer | ||
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
| CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent | ||
| By: | /s/ Matthew Trybula | |
| Name: | Matthew Trybula | |
| Title: | Associate Counsel |
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
GSO ENERGY SELECT OPPORTUNITIES FUND LP By: GSO Energy Select Opportunities Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
GSO ENERGYPARTNERS-A LP By: GSO EnergyPartners-A Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
GSO ENERGYPARTNERS-B LP By: GSO EnergyPartners-B Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
GSO ENERGYPARTNERS-C LP By: GSO EnergyPartners-C Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
GSO ENERGYPARTNERS-C II LP By: GSO EnergyPartners-C Associates II LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
GSO ENERGYPARTNERS-D LP By: GSO EnergyPartners-D Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNERS LP By: GSO Palmetto Opportunistic Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
GSO CSF III HOLDCO LP By: GSO Capital Solutions Associates III LP, its general partner By: GSO Capital Solutions Associates III (Delaware) LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
GSO AIGUILLE DES GRAND MONTETS FUND II LP By: GSO Aiguille des Grand Montets Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENTTO TERM LOAN CREDIT AGREEMENT
