Exhibit 10.4
April 3, 2009
T. J. Thom
Energy Partners, Ltd.
201 St. Charles Avenue, Suite 3400
New Orleans, Louisiana 70170
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Re:
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Credit
Agreement dated as of April 23, 2007, among Energy Partners,
Ltd., a Delaware corporation (the “Borrower”), Bank of
America, N.A., as Administrative Agent, Collateral Agent, and L/C
Issuer (the “Administrative Agent”) and the Lenders
party thereto (the “Lenders”) (as amended, the
“Credit Agreement”). Capitalized terms used in this
letter shall have the meanings given to them in the Credit
Agreement.
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Dear Ms. Thom:
Background.
The Borrower’s Borrowing Base
was determined on March 11, 2009, pursuant to
Section 2.15 of the Credit Agreement (the “
Determination ”). As a result of the Determination,
the Borrowing Base Deficiency is currently in the amount of
$38,000,000. In accordance with Section 2.05 of the
Credit Agreement, on March 23, 2009, Borrower provided the
Administrative Agent a plan to reduce the Borrowing Base Deficiency
(the “ Plan ”). On March 24, 2009, the
Administrative Agent, at the direction of the Lenders, notified the
Borrower that the Plan was not approved. In accordance with
Section 2.05 , the Borrower has until April 3,
2009, to pay the Borrowing Base Deficiency in full (the “
Borrowing Base Deficiency Payment ”).
Requested Consent
. The Borrower requests that the due
date for the Borrowing Base Deficiency Payment be extended until
April 14, 2009 (the “ Payment Extension ”).
Section 10.01 of the Credit Agreement permits the
Borrowing Base Deficiency Payment to be extended upon the written
consent of the Required Lenders.
Representations and
Warranties . The Borrower
represents and warrants to the Administrative Agent and the Lenders
that (a) this consent agreement (this “ Agreement
”) is a Loan Document under the Credit Agreement and
constitutes its legal, valid, and binding obligation, enforceable
in accordance with the terms hereof (subject as to enforcement of
remedies to any Debtor Relief Laws), (b) the execution,
delivery and performance by the Borrower and each other Loan Party
of this Agreement, and the consummation of the transactions
contemplated thereby, do not and will not (i) require any
consent, approval or license not already obtained,
(ii) violate any applicable Law, or (iii) conflict with,
result in a breach of, or constitute a default under the
organizational and governance documents of the Borrower or any
other Loan Party, or under any material license, indenture,
agreement or other instrument, to which the Borrower or any other
Loan Party is a party or beneficiary of, or by its collateral may
be bound, (c) except as otherwise disclosed to the
Administrative Agent and the
Lenders, there has been no change, occurrence or
development that has had a Material Adverse Effect, and
(d) the Credit Agreement, as affected by this Agreement, and
the other Loan Documents remain in full force and effect and are
hereby reaffirmed.
Acknowledgement of Existing
Defaults . Borrower
acknowledges and agrees that certain Defaults have occurred as
disclosed to the Administrative Agent (“ Existing
Defaults ”). Borrower further acknowledges and agrees
that the Administrative Agent’s and each Required
Lender’s execution of this Agreement is not a waiver of or
forbearance in any manner with respect to the Existing Defaults and
as such, the Administrative Agent and each Lender has all rights
and remedies afforded to them under the Loan Documents, at Law or
in equity, and nothing contained herein shall prohibit or affect
the Administrative Agent or any Lender in exercising such rights
and remedies.
Consent . Notwithstanding anything to the contrary in
the Credit Agreement and subject to the effectiveness of this
Agreement, the Required Lenders hereby consent to and expressly
permit the Payment Extension subject to the conditions that
(a) except for the Existing Defaults, all conditions,
obligations and covenants of the Borrower and each other Loan Party
under the Credit Agreement, the other Loan Documents and herein are
and shall continue to be complied with, and (b) each
representation and warranty contained herein shall be true and
correct on the date hereof.
Conditions Precedent
. This Agreement shall not be
effective until the Administrative Agent shall have received
counterparts of this Agreement executed by the Borrower, each other
Loan Party, the Administrative Agent and the Required
Lenders.
Release . As a material part of the consideration for
the Administrative Agent and the Required Lenders entering into
this Agreement, Borrower and each Loan Party signing this Agreement
(collectively “ Releasor ”) agree as follows
(the “ Release Provision ”):
(a) Releasor hereby releases and
forever discharges the Administrative Agent and each Lender and the
Administrative Agent’s and each Lender’s predecessors,
successors, assigns, officers, managers, directors, shareholders,
employees, agents, attorneys, representatives, parent corporations,
subsidiaries, and affiliates (hereinafter all of the above
collectively referred to as “ Lender Group ”)
jointly and severally from any and all claims, counterclaims,
demands, damages, debts, agreements, covenants, suits, contracts,
obligations, liabilities, accounts, offsets, rights, actions, and
causes of action of any nature whatsoever occurring prior to the
date hereof and relating to any of the Loan Documents or the
transactions contemplated thereby, including, without limitation,
all claims, demands, and causes of action for contribution and
indemnity, whether arising at Law or in equity, presently
possessed, whether known or unknown, whether liability be direct or
indirect, liquidated or unliquidated, presently accrued, whether
absolute or contingent, foreseen or unforeseen, and whether or not
heretofore asserted (“ Claims ”), which Releasor
may have or claim to have against any of Lender Group; except, as
to any member of Lender Group, to the extent that any such Claims
results from any of gross negligence or willful misconduct of that
member.
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(b) Releasor agrees not to sue any
of Lender Group or in any way assist any other person or entity in
suing Lender Group with respect to any claim released herein. The
Release Provision may be pleaded as a full and complete defense to,
and may be used as the basis for an injunction against, any action,
suit, or other proceeding which may be instituted, prosecuted, or
attempted in breach of the release contained herein.
(c) Releasor acknowledges, warrants,
and represents to Lender Group that:
(i) Releasor has read and
understands the effect of the Release Provision. Releasor has had
the assistance of independent counsel of its own choice, or has had
the opportunity to retain such independent counsel, in reviewing,
discussing, and considering all the terms of the Release Provision;
and if counsel was retained, counsel for Releasor has read and
considered the Release Provision and advised Releasor to execute
the same. Before execution of this Agreement, Releasor has had
adequate opportunity to make whatever investigation or inquiry it
may deem necessary or desirable in connection with the subject
matter of the Release Provision.
(ii) Releasor is not acting in
reliance on any representation, understanding, or agreement not
expressly set forth herein. Releasor acknowledges that Lender Group
has not made any representation with respect to the Release
Provision except as expressly set forth herein.
(iii) Releasor has executed this
Agreement and the Release Provision thereof as its free and
voluntary act, without any duress, coercion, or undue influence
exerted by or on behalf of any person.
(iv) Releasor is the
