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FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT,
LIMITED WAIVER AND CONSENT
AND
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT
, LIMITED
WAIVER AND CONSENT AND FIRST AMENDMENT TO SECURITY AGREEMENT
(hereinafter called this “
Amendment ”)
is dated as of June 17, 2008, by and among BREITBURN
OPERATING L.P., a Delaware limited partnership (the “
Company ”),
BREITBURN ENERGY PARTNERS L.P., as Parent Guarantor (“
Parent ”),
the Company’s Subsidiaries, as guarantors (the “
Guarantors ”),
the Lenders (defined below), and WELLS
FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders (in such capacity, together with its successors in such
capacity “
Administrative Agent ”).
W I T N E S S
E T H :
WHEREAS,
the Company, the Guarantors, Administrative Agent, Issuing
Lender and the Lenders have entered into that certain Amended
and Restated Credit Agreement dated as of November 1, 2007 (as
amended, modified or restated from time to time, the
“
Credit Agreement ”),
whereby upon the terms and conditions therein stated the Lenders
have agreed to make certain loans to the Company upon the terms and
conditions set forth therein; and
WHEREAS,
the Company has requested that the Lenders agree to increase
the Borrowing Base to $900,000,000 pursuant to
Section 2.05 of
the Credit Agreement; and
WHEREAS,
the Company and the Parent have notified the Administrative
Agent and the Lenders that Parent intends to consummate the
Provident Acquisition and the BEC Contribution each as herein
defined; and
WHEREAS,
the Company and the Parent have notified the Administrative
Agent and the Lenders that the Parent will enter into an
agreement with BreitBurn Energy Corporation to transfer up to
50% of BreitBurn Management Company to a group that includes
BreitBurn Energy Corporation and which acquires BreitBurn
Energy Company L.P.; and
WHEREAS,
as a condition to the amendments, consents and waivers set
forth herein, the Administrative Agent and the Lenders require
BreitBurn GP LLC to become a party to the Security Agreement;
and
WHEREAS,
subject to the terms hereof, the undersigned Lenders are
willing to agree to the consents, waivers and amendments to
the Credit Agreement and the Security Agreement as set forth
herein.
NOW
,
THEREFORE, for and in consideration of the mutual covenants
and agreements herein contained, the parties to this Amendment
hereby agree as follows:
SECTION 1.
Defined
Terms .
(a)
As
used in this Amendment the following terms have the meanings
set forth below.
“
Amendment Closing Date Transactions
”
means the Provident Acquisition and the BEC
Contribution.
“
Amendment Effective Date ”
has the meaning given to such term in Section 6.
“
BEC Contribution” means
the contribution by BreitBurn Energy Corporation to the Parent of
all of BreitBurn Energy Corporation’s interests in BreitBurn
Management Company on the Amendment Effective Date pursuant to the
BEC Contribution Agreement.
“
BEC Contribution Agreement”
means
the Contribution Agreement dated as of June 11, 2008, by and among
BreitBurn Energy Corporation and the Parent, as Buyer, governing
the BEC Contribution.
“
BMC Transfer” means
the transfer by the Parent of up to 50% of BreitBurn Management
Company to BreitBurn Energy Company L.P. to a group that includes
BreitBurn Energy Corporation and which acquires BreitBurn Energy
Company, L.P. in a transaction that is approved by the independent
directors of BreitBurn GP LLC and that is on fair and reasonable
terms no less favorable to the Parent and its Affiliates than would
be obtainable in a comparable arm’s-length transaction with a
Parent not an Affiliate of the Parent.
“
BreitBurn Management Company
” means
BreitBurn Management Company, LLC, a Delaware limited liability
company.
“
Organization Document Amendments”
means
the amendments to the Organization Documents of the Loan Parties
being made on the Amendment Effective Date.
“Provident”
means, collectively, Pro
LP Corp. and Pro GP Corp.
“
Provident Acquisition ”
means the consummation of the following transactions pursuant to
the Provident Acquisition Agreement: (i) the acquisition by the
Parent from
Pro LP Corp., an affiliate of Provident Energy Trust,
of
all
of Pro LP Corp.’s limited partnership interests in Parent,
followed by cancellation on the Amendment Closing Date of such
interests, (ii) acquisition by the Parent from Pro GP Corp. of all
of Pro GP Corp.’s limited partnership interests in the
Parent, followed by cancellation on the Amendment Closing Date of
such interests, (iii) acquisition by the Parent from Pro GP Corp.
and Pro LP Corp., an affiliate of Provident Energy Trust of all the
limited liability company interests in BreitBurn
Management Company owned by Pro GP Corp. and Pro LP Corp.
,
(iv) the contribution by BreitBurn
Management Company to
the Parent of the ownership interest in BreitBurn GP LLC, so that
following such contribution BreitBurn GP LLC will be a wholly owned
subsidiary of the Parent.
“
Provident Acquisition
Agreements ”
(i) the Purchase Agreement dated as of June 11, 2008, by and among
Pro LP Corp., a Delaware corporation and Pro GP Corp., a Delaware
corporation, as Selling Parties), and the Parent, as Buyer,
governing the purchase and sale of general partnership interests in
the Parent, and (ii) the Purchase Agreement dated as of June 11,
2008, by and among Pro LP Corp., a Delaware corporation and Pro GP
Corp., a Delaware corporation, as Selling Parties), and the Parent,
as Buyer, governing the purchase and sale of limited liability
company interests in BreitBurn Management company, LLC
.
“
Transactions” means
the Amendment Closing Date Transactions and the BMC
Transfer.
(b)
Except
as may otherwise be provided herein, all other capitalized
terms that are defined in the Credit Agreement shall have the
same meaning herein as therein, all of such terms and their
definitions being incorporated herein by
reference.
SECTION 2.
Limited Waiver and Consents .
Effective as of the Amendment Effective Date, pursuant to the
request of the Company and the Parent, the undersigned Lenders
hereby:
(a)
Waive
the use of proceeds requirement contained in
Section 7.16 of
the Credit Agreement to the extent required in order to permit an
advance to be made to the Company on the Amendment Effective
Date,
provided that the
proceeds of such advance will be used by the Company (A) to pay a
cash dividend to the Parent in an amount up to $345,000,000, and
such cash will be used by the Parent and its affiliates to
consummate the Provident Acquisition, (ii) to pay transaction costs
associated with the Amendment Closing Date Transactions and with
the Borrowing Base increase and the amendments, consents and
waivers described herein, and (B) to pay accrued interest and fees
to the Lenders. Waive the requirement that the Borrower make the
representation and warranty contained in
Section 6.08 of
the Credit Agreement (use of loan proceeds to purchase Margin
Stock) in connection with the advance made on the Amendment
Effective Date.
(b)
Waive
the provisions of
Section 8.04 of
the Credit Agreement to permit the Parent to invest in BreitBurn
Management Company. Waive the provisions of
Section 8.02 of
the Credit Agreement to permit the BMC Transfer
.
(c)
Waive
the restrictions on Investments contained in
Section 8.04 of
the Credit Agreement and the restrictions on dividends and equity
repurchases contain in
Section 8.09 of
the Credit Agreement to permit the payment of a dividend by the
Company to the Parent and to permit the acquisition of equity
interests from Provident pursuant to the Provident
Acquisition.
(d)
Waive
the requirement that transactions among Affiliates must be
“in the ordinary course of business” contained
in
Section 8.06 of
the Credit Agreement to the extent required in order to permit the
Transactions, provided however, that the Lenders do not waive the
requirement contained in
Section 8.06 of
the Credit Agreement that such transaction shall be upon fair and
reasonable terms no less favorable to the Parent than would be
obtainable in a comparable arm’s-length transaction with a
Person not an Affiliate of the Parent.
(e)
Consent
to the Organization Document Amendments pursuant to
Section 8.11 (c) of
the Credit Agreement.
(f)
Waive
any Default or Event of Default by reason of a Change of
Control arising from the Provident Acquisition under
Section 9.01(h) of
the Credit Agreement arising from the Amendment Closing Date
Transactions.
(g)
Waive
the provisions contained in
Article IV and
Sections 7.14 and
7.15 of
the Credit Agreement to the extent required in order to permit the
following: (a) BreitBurn Management Company will not be required to
give a guaranty and security agreement on the Amendment Effective
Date,
provided however ,
that (i) for so long as BreitBurn Management Company is not a
Guarantor, the Parent may not, either directly or through any of
its Subsidiaries, make Investments in BreitBurn Management Company,
and (ii) BreitBurn Management Company shall execute a guaranty
agreement and security agreement if it is still a Subsidiary as
defined in the Credit Agreement 90 days after the Amendment
Effective Date; (b) the Parent will not be required to pledge its
interests in BreitBurn GP LLC; and (c) BreitBurn GP LLC shall not
be required to pledge its general partnership interest in the
Parent.
SECTION 3.
Amendments to Credit Agreement .
Effective as of the Amendment Effective Date, the Credit Agreement
is hereby amended as follows:
(a)
Amendment to Definition of Change of Control
. The definition of Change of Control is amended to read as set
forth below.
“
Change of Control
” means
(a)
General Partner shall cease to own, directly or indirectly,
all of the general partner interest (including without
limitation, all outstanding securities convertible to general
partner interests) of the Company; or BreitBurn GP LLC shall
cease to own, directly or indirectly, all of the general
partner interest (including without limitation, all
outstanding securities convertible to general partner
interests) of Parent; or
(b)
Parent shall cease to own, directly or indirectly, all of the
limited partnership interests (including without limitation,
all outstanding Equity convertible to limited partner
interests) of the Company, or shall cease to own, directly or
indirectly, all of the general partnership interest (including
without limitation, all outstanding Equity convertible to
general partner interests) of the Company, or shall cease to
own, directly or indirectly, at least
51%
of the member interest (including without limitation, all
outstanding Equity convertible to limited partner interests) of
BreitBurn GP LLC; or
(c)
a sale of all or substantially all of the assets of the Loan
Parties taken as a whole to any Person or group of Persons;
or
(d)
the liquidation or dissolution of Parent or the Company;
or
(e)
any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group
shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to
acquire, whether such right is exercisable immediately or only
after the passage of time (such right, an “option
right”)), directly or indirectly, of 50% or more of the
equity securities of the Parent or of the general partner of
the Parent entitled to vote for members of the board of
directors or equivalent governing body of the Parent or the
general partner of the Parent on a fully-diluted basis (and
taking into account all such securities that such
“person” or “group” has the right to
acquire pursuant to any option right); or
(f)
the first day on which a majority of the Board of Directors of
BreitBurn GP LLC are not Continuing Directors. “
Continuing Directors ”
means any member of the board of directors (or managers, in the
case of a limited liability company) of BreitBurn GP LLC, who (A)
is a member of such board of directors or managers as of the date
of this Agreement or (B) was nominated for election or elected to
such board of directors or managers with the affirmative vote of
two-thirds of the Continuing Directors who were members of such
board of directors or managers at the time of such nomination or
election (not including as board nominees any directors which the
board is obligated to nominate pursuant to shareholders’
agreements, voting trust arrangements or similar
arrangements).
(b)
Amendment to the Definition of Pricing Grid .
The definition of Pricing Grid is amended as follows:
“
Pricing Grid ”
means the annualized variable rates (stated in terms of basis
points (“
bps ”))
set forth below for the Applicable Margin, Commitment Fee and
Letter of Credit Fee, based upon the ratio of Effective Amount to
the Borrowing Base Amount (the “
Borrowing Base Utilization Percentage
”),
as follows:
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Applicable Margin
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Effective Amount/
Borrowing Base
Amount
(Borrowing Base
Utilization
Percentage)
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LIBOR
(bps)
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Base Rate
(bps)
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Commitment
Fee
(bps)
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Letter of Credit
Fee
(bps)
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³
85%
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200.00
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100.00
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50.00
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200.00
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<
85% ³
66%
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175.00
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75.00
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37.50
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175.00
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<
66% ³
33%
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150.00
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50.00
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37.50
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150.00
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<
33%
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125.00
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25.00
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30.00
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125.00
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For
any period where the ratio of the Parent’s Total
Indebtedness to EBITDAX exceeds 3.50:1.00, the LIBOR margin,
Base Rate margin and Letter of Credit Fee shall be 25.0 basis
points greater at each level than the margin indicated above,
and the Commitment Fee shall be 5.0 basis points greater than
indicated above.
Each
change in the Applicable Margin, Commitment Fee and Letter of
Credit Fee shall apply during the period commencing on the
date of such change in the Borrowing Base Utilization
Percentage (as defined above) and ending on the date
immediately preceding the effective date of the next such
change in the Borrowing Base Utilization Percentage, provided,
however, that if at any time the Company fails to deliver a
Reserve Report pursuant to
Section 7.02 ,
then until such time as a Reserve Report is delivered the
“Applicable Margin” means, and the Commitment Fee and
Letter of Credit shall be set at, the rate per annum set forth on
the grid when the Borrowing Base Utilization Percentage is at its
highest level.
Any
increase or decrease in the Applicable Margin, Commitment Fee
or Letter of Credit Fee resulting from a change in the
Parent’s Total Indebtedness to EBITDAX shall become
effective as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant
to
Section 7.02(d) ;
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then the 25.0
basis points and 5.0 basis points increases shall apply as of the
first Business Day after the date on which such Compliance
Certificate was required to have been delivered and shall remain in
effect until the date on which such Compliance Certificate is
delivered.”
(c)
Amendment to Section 7.14 (Pledge of Equity in New
Subsidiary) .
Section 7.14 of
the Credit Agreement is amended by adding the parenthetical
“(other than BreitBurn GP LLC, for so long as it is the
general partner of the Parent)” after the phrase “any
new Subsidiary”.
(d)
Amendment to Section 8.10 (Derivative Contracts)
.
Section 8.10(a)(iii) of
the Credit Agreement is amended by replacing the phrase “any
of the Lenders or their Affiliates” with “a Lender
Derivative Provider” and
Section 8.10(b)(iii) of
the Credit Agreement is amended by replacing the phrase “a
Lender or its Affiliate” with “a Lender Derivative
Provider”.
(e)
Amendment to Section 8.04 of the Credit Agreement (Loans and
Investments) .
Section 8.04 of
the Credit Agreement is amended by:
(i)
deleting the word “and” at the end of clause
(i),
(iii)
inserting the following immediately following clause
(i):
“(j)
Investments by the Parent in BreitBurn Management, Company LLC
from and after such time as Breitburn Management Company, LLC
becomes a Guarantor; and”
(iii)
relettering clause (j) as clause (k).
(f)
Amendment to
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