LIMITED WAIVER REGARDING CREDIT
AGREEMENT
THIS LIMITED WAIVER REGARDING
CREDIT AGREEMENT (this
“ Limited Waiver ”), dated as of
March 26, 2009 (the “ Effective Date
”), is entered into by and among PIONEER SOUTHWEST ENERGY
PARTNERS L.P. , a Delaware limited partnership(the “
Borrower ”), each lender party hereto, BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and
L/C Issuer, WELLS FARGO BANK, N. A. , as Syndication Agent,
and BMO CAPITAL MARKETS FINANCING, INC. , as Documentation
Agent.
W I T N E S S E T
H:
WHEREAS , the Borrower, the lenders party thereto
(collectively, the “ Lenders ” and individually,
a “ Lender ”), the Swing Line Lender, the L/C
Issuer, the Administrative Agent, the Syndication Agent and the
Documentation Agent have entered into that certain Credit
Agreement, dated as of October 29, 2007, as amended by that
certain Amendment to Credit Agreement, dated as of December 14,
2007, as further amended by that certain Second Amendment to Credit
Agreement, dated as of February 15, 2008, as further amended by
that certain Third Amendment to Credit Agreement, dated as of
April 15, 2008, by and among the Borrower, the Lenders,
the Swing Line Lender, the L/C Issuer, the Administrative Agent,
the Syndication Agent and the Documentation Agent (as may be
further amended or otherwise modified, the “ Credit
Agreement ”); and
WHEREAS, Borrower and its Restricted Subsidiaries have
entered into certain Swap Contracts with Qualified Counterparties
with respect to approximately 45% or more of the forecasted
production attributable to Oil and Gas Properties constituting
proved developed producing reserves described in the most recent
Reserve Report for all periods through December 31, 2011 (the
“ Existing Swap Contracts ”); and
WHEREAS , the Borrower has requested that the Lenders,
Swing Line Lender, the L/C Issuer, the Administrative Agent, the
Syndication Agent and the Documentation Agent waive certain
provisions of the Credit Agreement and the Lenders party hereto,
the Swing Line Lender, the L/C Issuer, the Administrative Agent,
the Syndication Agent and the Documentation Agent are willing to
waive certain provisions of the Credit Agreement related to the
Existing Swap Contracts as set forth herein.
NOW THEREFORE
, in consideration of the foregoing
and the mutual agreements set forth herein, the parties hereto
agree as follows:
SECTION 1.
Definitions
. Unless otherwise defined in this
Limited Waiver, each capitalized term used in this Limited Waiver
has the meaning assigned to such term in the Credit
Agreement.
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SECTION 2.
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Limited Waiver of Section 6.11(b)
of the Credit Agreement.
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(a) The
Lenders party hereto, the Swing Line Lender, the L/C Issuer, the
Administrative Agent, the Syndication Agent and the Documentation
Agent hereby waive the requirements of clause (b) of Section 6.11
of the Credit Agreement that the Borrower and its Restricted
Subsidiaries shall have entered into, on or before
Limited Waiver Regarding Credit
Agreement
April 1, 2009, and at all
times thereafter maintain, Swap Contracts with Qualified
Counterparties with respect to not less than 50% of the forecasted
production attributable to Oil and Gas Properties constituting
proved developed producing (PDP) reserves described in the most
recent Reserve Report for the period from January 1, 2011 through
December 31, 2011, so long as Borrower and its Restricted
Subsidiaries maintain the Existing Swap Contracts with respect to
such period.
(b) The
express waiver set forth in this Section 2 is limited to the extent described herein and
shall not be construed as a waiver of any other agreement,
covenant, or restriction set forth in the Credit Agreement,
including Section 6.11(c), or any other Loan Document or of any
other provision of, or time periods set forth in, clause (b) of
Section 6.11 of the Credit Agreement, other than as specified
herein. The L/C Issuer and the Lenders reserve the right to
exercise any rights and remedies available to them in connection
with any present or future defaults with respect to the Credit
Agreement or any other provision of any other Loan
Document.
SECTION 3.
Representations and Warranties, Etc . To induce the Lenders
to enter into this Limited Waiver, the Borrower represents and
warrants to the Administrative Agent and the Lenders that as of the
date hereof, after giving effect to this Limited Waiver:
(a) each
of the representations and warranties by the Borrower contained in
the Credit Agreement and in the other 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 those that by their terms
relate solely as to an earlier date, in which event they shall be
true and correct on and as of such earlier date;
(b) the
execution, delivery and performance of this Limited Waiver has been
duly authorized by all requisite organizational action on the part
of the Borrower;
(c) the
Credit Agreement and each other Loan Document constitute valid and
legally binding agreements enforceable against each Loan Party that
is a party thereto in accordance with their respective terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting
creditors’ rights generally and by general principles of
equity, regardless of whether considered in a proceeding in equity
or at law; and
(d) no
Default or Event of Default exists under the Credit Agreement or
any of the other Loan Documents.
SECTION 4.
Ratification . The Borrower hereby ratifies, approves and
confirms, as of the Effective Date, (a) the covenants and
agreements contained in each Loan Document to which it is a
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