LIMITED WAIVER AND CONSENT
This
Limited Waiver and Consent (this “ Waiver ”)
dated as of March 3, 2005, is by and among MAGNUM HUNTER
RESOURCES, INC. , a Nevada corporation (the “
Borrower ”), each of the Banks (as defined in the
Credit Agreement referred to below) party hereto, and DEUTSCHE
BANK TRUST COMPANY AMERICAS (formerly named Bankers Trust
Company), individually, as administrative agent (the “
Administrative Agent ”).
PRELIMINARY STATEMENT
WHEREAS,
the Borrower, each Bank then a party, the Administrative Agent, the
other agents party thereto, and the Issuer have heretofore entered
into that certain Fourth Amended and Restated Credit Agreement
dated as of March 15, 2002 (as amended or modified from time to
time prior to the date hereof, the “ Credit Agreement
”), pursuant to which the Banks have agreed to make revolving
credit loans to, and participate in letters of credit issued for,
the benefit of the Borrower under the terms and provisions stated
therein; and
WHEREAS,
the Borrower has entered into a certain Agreement and Plan of
Merger dated as of January 25, 2005, among Cimarex Energy Co.
(“ Cimarex ”), Cimarex Nevada Acquisition Co.,
and the Borrower (as amended, the “Cimarex Merger
Agreement ”); and
WHEREAS,
the Borrower has requested that the Administrative Agent and the
Banks (i) waive any breach of Section 7.2.11(c) of the Credit
Agreement that may have occurred as a result of the inadvertent
applicability of Section 5.2(a)(iii) of the Cimarex Merger
Agreement to the Borrower’s Restricted Subsidiaries, and (ii)
consent to distribution by the Borrower of all or a portion of the
trust units of the TEL Offshore Trust owned by the Borrower or any
Subsidiary of the Borrower at any time prior to the earlier of (x)
consummation of the merger transaction contemplated in the Cimarex
Merger Agreement and (y) the termination or expiration of the
Cimarex Merger Agreement, notwithstanding the provisions of Section
7.2.6(a) of the Credit Agreement to the extent necessary to permit
the Borrower to distribute such trust units, so long as no Event of
Default shall exist at the time of such distribution.
NOW
THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties agree as
follows:
Section 1. Limited Waiver
of Section 7.2.11(c) of the Credit Agreement . The
Administrative Agent and the Banks party hereto hereby waive any
breach of Section 7.2.11(c) of the Credit Agreement (which
restricts the Borrower or any of its Restricted Subsidiaries from
entering into any agreement that prohibits the ability of any
Restricted Subsidiary to make any payments, directly or indirectly,
to the Borrower by way of, among other things, dividends) that may
have occurred and may be continuing as a result of the
applicability of Section 5.2(a)(iii) of the Cimarex Merger
Agreement to the Borrower’s Restricted Subsidiaries (which
provides, in relevant part, that none of the Subsidiaries of the
Borrower shall declare, set aside or pay any dividends or other
distributions with respect to its capital stock without the prior
consent of Cimarex) from the date that the Cimarex Merger Agreement
became effective until the earlier of (x) consummation of the
merger transaction contemplated in the Cimarex Merger Agreement and
(y) the termination or expiration of the Cimarex Merger
Agreement, provided that the Borrower and its Restricted
Subsidiaries shall have (and the Borrower does hereby represent and
warrant to the Agents, Issuer and Banks that the Borrower and its
Restricted Subsidiaries do have) the right and ability under the
Cimarex Merger Agreement to make when due all payments of
Obligations under the Credit Agreement or any other Loan
Document.
Section 2. Consent to TEL
Offshore Distribution . The Administrative Agent and the
Banks party hereto hereby consent to and agree that,
notwithstanding anything to the contrary set forth in Section
7.2.6(a) of the Credit Agreement (which prohibits the Borrower or
any of its Restricted Subsidiaries from, among other things,
declaring, paying or making any dividend or distribution (in cash,
property or obligations) on any shares of any class of the
Borrower’s Capital Stock (now or hereafter outstanding) other
than dividends or distributions payable in the Borrower’s
common stock or warrants to purchase the Borrower’s common
stock or splitups or reclassifications of the Borrower’s
Capital Stock into additional or other shares of its common stock),
Section 7.2.6 of the Credit Agreement is hereby waived insofar as,
and only insofar as, the Borrower shall be expressly permitted to
declare and make a distribution of all or a portion of the trust
units of the TEL Offshore Trust to the holders of the
Borrower’s Capital Stock at any time from the da
