MAGNUM HUNTER RESOURCES CORP - FORM 8-K - EX-10.1 - NINTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

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EXHIBIT 10.1

NINTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

This NINTH Amendment to SECOND AMENDED AND RESTATED Credit Agreement (this “Amendment”), effective as of the 8^th day of August, 2012 (the “Ninth 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, the Eighth Amendment to Second Amended and Restated Credit Agreement effective as of August 10, 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) Debt evidenced by Senior Notes (including unsecured guarantees in respect thereof) not to exceed an aggregate principal amount of $550,000,000 at any time outstanding; provided that (i) the maturity date of the Senior Notes shall not be earlier than one year after the Maturity Date and (ii) the Borrower shall not prepay any amounts owing under the Senior Notes at any time;”.

3. Amendment to Section 9.03. Section 9.03 of the Credit Agreement is hereby amended to restate clause (k) thereof in its entirety as follows:

“(k) reserved.”

4. Amendment to Section 9.04. Section 9.04 of the Credit Agreement is hereby amended to restate clause (c) thereof in its entirety as follows:

“(c) without limiting the dividends permitted by Section 9.04(b), the Borrower may declare and pay cash dividends on its Series C and Series D preferred stock permitted hereunder so long as (i) no Event of Default exists at the time of, or is caused by, such payment, (ii) after giving effect to such payment, availability under the Borrowing Base is equal to or greater than the greater of (x) two and one-half percent (2.5%) of the Borrowing Base then in effect and (y) $5,000,000, and (iii) such dividends do not exceed $25,000,000 in any calendar year;”.

5. Consent to Sale of Real Property. The Administrative Agent and the Lenders hereby consent to the sale by Magnum Hunter Production Inc. of that certain office building located in Lexington, Kentucky as described in Schedule 9.03 of the Credit Agreement (the “Released Property”). The Administrative Agent and the Lenders hereby (i) waive Section 9.11 of the Credit Agreement to the extent necessary to effectuate the sale of the Released Property and (ii) agree that the value of the Released Property shall not be included in calculating the usage of the basket in Section 9.11(e) of the Credit Agreement.

6. Borrowing Base Redetermination; Acknowledgement and Agreement of the Parties.

	(a)	Effective as of the Ninth Amendment Effective Date, the Conforming Borrowing Base shall be equal to $260,000,000 and the Non-Conforming Borrowing Base shall be equal to $0.

(b)

The parties hereto acknowledge and agree that the Borrowing Base redetermination effected pursuant to clause (a) of this Section 6 shall be deemed to be the November 1, 2012 Scheduled Redetermination.

7. 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.

8. 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 Ninth Amendment Effective Date and (e) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower and Guarantors.

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

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

	(b)	the Borrower shall have delivered to the Administrative Agent (i) the Reserve Report supporting the redetermination of the Borrowing Base effected hereby, (ii) the related certificate required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) of the Credit Agreement, (iii) any Engineering Reports as shall have been reasonably requested by the Required Lenders in connection with the Reserve Report described in clause (i) above and (iv) title information required to be delivered by the Borrower pursuant to Section 8.13(a) of the Credit Agreement; and

(c)

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

10. 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.

11. 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.

12. 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 Ninth 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