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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Battalion Oil Corporation | AMEX:BATL | AMEX | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.10 | -8.40% | 1.09 | 1.19 | 1.07 | 1.18 | 108,745 | 20:06:22 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction |
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| (IRS Employer |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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| Name of each exchange on which registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Item 1.01 | Entry Into Material Definitive Agreement. |
On December 26, 2024 (the “Closing Date”), Halcón Holdings, LLC (the “Borrower”), a wholly owned subsidiary of Battalion Oil Corporation (the “Company”) entered into a Second Amended and Restated Senior Secured Credit Agreement (the “Amended and Restated Credit Agreement”), by and among the Company, the Borrower, the subsidiary guarantors party thereto, Fortress Credit Corp., as administrative agent, and certain other financial institutions party thereto, as lenders. The Amended and Restated Credit Agreement amends and restates in its entirety the Company’s Amended and Restated Senior Secured Revolving Credit Agreement entered into on November 24, 2021, as amended, by and among the Company, the Borrower, Macquarie Bank Limited, as administrative agent, and the lenders party thereto (the “Existing Credit Agreement”). All obligations under the Existing Credit Agreement were refunded, refinanced and repaid in full by the loans under the Amended and Restated Credit Agreement. Pursuant to the Amended and Restated Credit Agreement, the lenders party thereto have agreed to provide the Borrower with (i) an initial term loan facility in the aggregate principal amount of $162.0 million, funded on the Closing Date and (ii) an incremental term loan facility in the aggregate principal amount of up to $63.0 million to be made available to the Borrower from January 3, 2025 until the date that is the earliest to occur of (x) the date on which such incremental term facility is fully drawn, (y) the date on which such incremental term facility is terminated and (z) January 11, 2025, subject to the satisfaction of certain conditions.
The maturity date of the Amended and Restated Credit Agreement is December 26, 2028. Until such maturity date, borrowings under the Amended and Restated Credit Agreement shall bear interest at a rate per annum equal to a forward-looking term rate that is based on SOFR for a tenor of three (3) months (with a credit spread adjustment of 0.15% per annum) (or another applicable reference rate, as determined pursuant to the terms of the Amended and Restated Credit Agreement) plus an applicable margin of 7.75%.
The Borrower may elect, at its option, to prepay any borrowing outstanding under the Amended and Restated Credit Agreement. Such voluntary prepayments, certain mandatory prepayments and change of control prepayments are subject to the following prepayment premium, as applicable:
Period | Premium | ||
Months 0 - 12 | Make-whole amount equal to 12 months of interest plus 4.00% | ||
Months 13 - 30 | 2.00% | ||
Thereafter | 0.00% |
In the event the Borrower shall receive a disapproval notice (a “Disapproval Notice”) from the required lenders under the Amended and Restated Credit Agreement rejecting or otherwise disqualifying a proposed buyer in connection with a permitted change in control thereunder to be consummated within 12 months following the Closing Date, such voluntary prepayments, certain mandatory prepayments and change of control prepayments are subject to the following prepayment premium, as applicable:
Period | Premium | ||
Months 0 - 9 | Make-whole amount equal to 9 months of interest plus 2.00% | ||
Months 10 - 30 | 2.00% | ||
Thereafter | 0.00% |
The Borrower may be required to make mandatory prepayments of the loans under the Amended and Restated Credit Agreement in connection with the incurrence of non-permitted debt, certain asset sales, and with excess cash on hand in excess of certain maximum levels. The Borrower is required to make scheduled amortization payments in an aggregate principal amount equal to 2.50% of the aggregate principal amount of the loans outstanding on the Closing Date commencing with the fiscal quarter ending June 30, 2025.
Amounts outstanding under the Amended and Restated Credit Agreement are guaranteed by certain of the Borrower’s direct and indirect subsidiaries and secured by a security interest in substantially all of the assets of the Borrower and such direct and indirect subsidiaries, and of the equity interests of the Borrower held by the Company.
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The Amended and Restated Credit Agreement contains certain customary representations and warranties, including organization; powers; authority; enforceability; approvals; no conflicts; financial condition; no material adverse effect; litigation; environmental matters; compliance with laws and agreements; no defaults; Investment Company Act; taxes; ERISA; disclosure; no material misstatements; insurance; restrictions on liens; subsidiaries; location of business and offices; properties and titles; maintenance of properties; gas imbalances; prepayments; marketing of production; swap agreements; use of proceeds; solvency; money laundering; anti-corruption laws; sanctions; EEA financial institutions; senior debt status; suspense accounts; and midstream agreements.
The Amended and Restated Credit Agreement also contains certain affirmative and negative covenants, including delivery of financial statements; notice of material events; conduct of business; payment and performance of obligations; operation and maintenance of properties; insurance; books and records; compliance with laws; environmental matters; reserve reports; capital plan; title information; ERISA; account control agreements; lender meetings; marketing activities; keepwell; swap agreements; permitted joint ventures; separateness; indebtedness; liens; dividends and distributions; investments; amendments to organizational documents; sale or discount of receivables; mergers; sale of properties; unwind of swap agreements; transactions with affiliates; negative pledges; dividend restrictions; gas imbalances; take-or-pay or other prepayments; swap agreements; maximum G&A expenses; capital expenditures; minimum volume commitments; workover expenses; well services contracts; and a holding company status covenant in respect to the Company.
The Amended and Restated Credit Agreement also contains certain financial covenants, including the maintenance of (i) an Asset Coverage Ratio (as defined in the Amended and Restated Credit Agreement) not to fall below 1.70x as of March 31, 2025 through and including June 30, 2025, 1.85x as of September 30, 2025 through and including December 31, 2025, and 2.00x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter, (ii) a Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) not to exceed 2.75x as of March 31, 2025 through and including June 30, 2025 and 2.50x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter, (iii) a Current Ratio (as defined in the Amended and Restated Credit Agreement) not to fall below 1.00x, determined on the last day of each calendar month commencing with the calendar month ending March 31, 2025 and (iv) Liquidity (as defined in the Amended and Restated Credit Agreement) not to fall below the greater of (x) $10,000,000 and (y) the amount equal to the scheduled principal and interest payments for the immediately succeeding three (3) month period, determined as of the last day of any fiscal quarter.
The Amended and Restated Credit Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy.
The foregoing description of the Amended and Restated Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 9.01Financial Statements and Exhibits
(d)Exhibits.
The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
| Description |
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10.1 |
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104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BATTALION OIL CORPORATION | |
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December 27, 2024 | By: | /s/ Matthew B. Steele |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
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Exhibit 10.1
Execution Version
SECOND AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT
dated as of
December 26, 2024
by and among
BATTALION OIL CORPORATION,
as Holdings,
HALCÓN HOLDINGS, LLC,
as the Borrower,
the other Loan Parties party hereto,
FORTRESS CREDIT CORP.,
as Administrative Agent,
and the Lenders party hereto
TABLE OF CONTENTS
EXHIBITS AND SCHEDULES
Exhibits
Exhibit AForm of Term Loan Note
Exhibit BForm of Borrowing Request
Exhibit CForm of Compliance Certificate
Exhibit DSecurity Documents
Exhibit EForm of Assignment and Assumption
Exhibit F-1 | Form of U.S. Tax Compliance Certificate |
Exhibit F-2 | Form of U.S. Tax Compliance Certificate |
Exhibit F-3 | Form of U.S. Tax Compliance Certificate |
Exhibit F-4 | Form of U.S. Tax Compliance Certificate |
Exhibit GForm of Solvency Certificate
Exhibit HForm of Reserve Report Certificate
Exhibit IForm of Guarantee and Collateral Agreement
Exhibit JCapital Plan
Exhibit KForm of Swap Intercreditor Agreement
Exhibit LDirection Letter
Exhibit MOperator Removal Agreement
Exhibit NForm of Incremental Term Loan Joinder Agreement
Schedules
Schedule 1.02(a)Initial Capital Plan
Schedule 1.02(b)Initial Term Loan Commitment
Schedule 1.02(c)Incremental Term Loan Commitment
Schedule 7.05 Litigation
Schedule 7.14Subsidiaries
Schedule 7.18Gas Imbalances
Schedule 7.19Marketing Contracts
Schedule 7.20Swap Agreements
Schedule 7.28Suspense Accounts
Schedule 7.29Midstream Agreements
Schedule 9.02Existing Indebtedness
Schedule 9.05(a)Existing Investments
Schedule 9.05(o)Permitted JV Entity Contributions
Schedule 9.21(a)Minimum Volume Commitments
This SECOND AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (this “Agreement”), dated as of December 26, 2024, is by and among HALCÓN HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), the other Subsidiaries of the Borrower party hereto as Guarantors, each of the Lenders from time to time party hereto, FORTRESS CREDIT CORP. (in its individual capacity, “Fortress”), and as administrative agent for the Lenders (in such capacity pursuant to Article XI, together with its successors in such capacity, the “Administrative Agent”) and, solely with respect to Article IX-A hereof, BATTALION OIL CORPORATION, a Delaware corporation (“Holdings”).
RECITALS
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
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“ABR” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 0.00%, such rate shall be deemed to be 0.00% for purposes of this Agreement.
“ABR Loan” means a Loan that bears interest based on the ABR.
“Accepting Lenders” has the meaning assigned to such term in Section 3.04(c)(v).
“Accounting Change” has the meaning assigned to such term in Section 1.04.
“Acquisition Conditions” means, with respect to any acquisition of assets (including any assets constituting a business unit, line of business or division) or Equity Interests, (a) if such acquisition involves the acquisition of Equity Interests of a Person that upon such acquisition would become a Subsidiary, such acquisition shall result in the issuer of such Equity Interests becoming a Subsidiary and, to the extent required by Section 8.14, a Guarantor; (b) such acquisition shall result in the Administrative Agent, for the benefit of the Secured Parties, being granted a security interest in any Equity Interests or any assets so acquired to the extent required by Section 8.14; (c) subject to Section 1.06, immediately after giving effect to such acquisition, no Default or Event of Default shall have occurred and be continuing; (d) immediately after giving effect to such acquisition, the Borrower and the other Loan Parties shall be in pro forma compliance with Section 9.01 as of the last day of the most recently ended fiscal quarter for which financial statements are required to have been delivered pursuant to Section 8.01(b) (or, if the most recently ended fiscal quarter is the fiscal quarter ending on December 31 of any year, for which annual financial statements are required to have been delivered pursuant to Section 8.01(a)); and (e) immediately after giving effect to such acquisition, the Borrower and the other Loan Parties shall be in compliance with Section 9.06.
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent” has the meaning assigned to such term in the preamble hereto.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
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“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Agreement” means this Second Amended and Restated Senior Secured Credit Agreement, including the Annexes, Schedules and Exhibits hereto, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Annual Budget” has the meaning assigned to such term in Section 8.01(e).
“Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act of 1977 and all other laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of the other Loan Parties from time to time concerning or relating to bribery or corruption.
“Applicable Margin” means (a) with respect to SOFR Loans (or Loans bearing interest at a rate determined by reference to any other Benchmark), 7.75% per annum and (b) with respect to ABR Loans, 6.75% per annum.
“Applicable Percentage” means, with respect to any Lender, a percentage equal to a fraction (a) the numerator of which is an amount equal to such Lender’s Credit Exposure (b) the denominator of which is the sum of the Credit Exposure of all Lenders; provided that, in the case of Section 4.04 when a Defaulting Lender shall exist, “Applicable Percentage” shall be adjusted to disregard any Defaulting Lender’s Credit Exposure.
“Applicable Prepayment Premium” means, from and after the Closing Date:
Date of Prepayment / Repayment | Applicable Prepayment Premium |
On or prior to the twelve (12) month anniversary of the Closing Date | Make-Whole Amount |
After the twelve (12) month anniversary of the Closing Date but on or prior to the thirty (30) | 2.00% |
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month anniversary of the Closing Date | |
After the thirty (30) month anniversary of the Closing Date | 0.00% |
Date of Prepayment / Repayment | Applicable Prepayment Premium |
On or prior to the nine (9) month anniversary of the Closing Date | Make-Whole Amount |
After the nine (9) month anniversary of the Closing Date but on or prior to the thirty (30) month anniversary of the Closing Date | 2.00% |
After the thirty (30) month anniversary of the Closing Date | 0.00% |
“Approved Counterparty” means (a) each Secured Lender Swap Provider, (b) BP, Cargill, EDF, MBL, Nextera and J. Aron & Company LLC and (c) any other Person proposed by the Borrower so long as the long-term senior unsecured debt rating of such swap counterparty (or of the credit support provider for such swap counterparty’s obligations under its Swap Agreements) at the time of proposal is at least A3 or A- by S&P or Moody’s (or their equivalent).
“Approved Electronic Platform” has the meaning assigned such term in Section 11.13.
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the
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ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Approved Petroleum Engineers” means NSAI and any other independent petroleum engineers reasonably acceptable to the Administrative Agent.
“Asset Coverage Ratio” means, as of any date, the ratio of (a) Total PDP PV-10 as of such date (plus, for purposes of compliance with Section 9.01(c) only, as of such date, the amount of actual cash payments made by the Borrower during the most recently ended fiscal quarter constituting Capital Expenditures in connection with non-producing wells and drilled but uncompleted wells (excluding plugged wells or wells that are not reasonably expected to be completed) that are contemplated by the Capital Plan) to (b) Consolidated Total Net Indebtedness as of such date.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit E or any other form approved by the Administrative Agent.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an Interest Period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 3.03(d).
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any
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order for relief in such proceeding entered in respect thereof, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.03(a).
“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities; at such time.
“Benchmark Replacement Conforming Changes” means, with respect to either the use or administration of Adjusted Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition “Business Day,” the definition of “U.S. Government Securities Business
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Day,” the definition of “Interest Period “ or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
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For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.03 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.03.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.”
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.
“Board of Directors” means, with respect to any Person, such Person’s board of managers, board of directors, general partner, or such other body that governs the affairs of such Person.
“Borrower” has the meaning assigned to such term in the preamble hereto.
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“Borrowing Request” means a request by the Borrower, substantially in the form of Exhibit B or any other form approved by the Administrative Agent, for a Loan in accordance with Section 2.03.
“BP” means BP Energy Company, a Delaware corporation.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City, New York or Houston, Texas are authorized or required by law to remain closed.
“Capital Expenditures” means, with respect to any Person, all expenditures by such Person for the acquisition or leasing of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements and capitalized workover expenses) that are required to be capitalized under GAAP on a balance sheet of such Person. For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment owned by such Person or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price minus the credit granted by the seller of such equipment for such equipment being traded in at such time, or the amount of such proceeds, as the case may be. For the avoidance of doubt, it is hereby understood and agreed that (x) expenditures pursuant to clause (c) of the definition of “Investment” and (y) G&A Expenses shall not constitute Capital Expenditures.
“Capital Plan” means the Initial Capital Plan and any subsequent listing of Qualifying Projects delivered pursuant to Section 8.12(c) hereof. Each Capital Plan shall be substantially similar to Exhibit J and shall contain, with respect to each such Qualifying Project: (a) the expected timing of the commencement of drilling on the first well that is part of such Qualifying Project, (b) the Capital Plan Boundary associated with each such Qualifying Project and (c) certification by a Responsible Officer that (i) any such calculations and assumptions used in determining that the listed Projects are Qualifying Projects were made in good faith and believed by Borrower to be reasonable at the time made, and (ii) any Qualifying Project included in such Capital Plan which was also listed in a previous Capital Plan, but for which drilling operations have not yet commenced, continues to be a Qualifying Project as of the date of such subsequent submission.
“Capital Plan Boundary” means the geographic boundary depicted on Schedule 1.02(a) and each subsequently approved Capital Plan pursuant to Section 8.12 of this Agreement.
“Captive Insurance Subsidiary” means any Subsidiary of the Borrower that is subject to regulation as an insurance company (or any Subsidiary thereof).
“Caracara Assets” means (a) that certain Class II hydrogen sulfide injection well with API Number 42-495-31471 located in Winkler County, Texas and (b) each injection permit related thereto issued by the applicable Governmental Authority.
“Cargill” means Cargill, Incorporated, a Delaware corporation.
“Cash Balance” means, as of any date of determination, the aggregate amount of (a) cash and (b) Cash Equivalents, in each case, held or owned by (either directly or indirectly), credited to an account of or that would otherwise be required to be reflected as an asset on the balance sheet
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of, the Borrower or any other Loan Party as of such date; provided that the Cash Balance shall exclude, without duplication, (i) any cash or Cash Equivalents for which the Borrower or any Subsidiary have, in the ordinary course of business, issued checks or initiated wires or ACH transfers in order to utilize such cash or Cash Equivalents, (ii) any cash or Cash Equivalents set aside to pay royalty obligations, working interest obligations including operating and capital expenses, production payments, suspense payments and severance taxes of the Borrower or any other Loan Party then due and owing to third parties and for which the Borrower or such other Loan Party has issued checks or has initiated wires or ACH transfers (or will issue checks or initiate wires or ACH transfers within three (3) Business Days in order to make such payments); (iii) any cash or Cash Equivalents set aside to pay payroll, payroll taxes, other taxes, employee wage and benefit payments and trust and fiduciary obligations of the Borrower or any other Loan Party then due and owing and for which the Borrower or such other Loan Party has issued checks or has initiated wires or ACH transfers (or will issue checks or initiate wires or ACH transfers within three (3) Business Days in order to make such payments); (iv) while and to the extent refundable, any cash or Cash Equivalents of the Borrower or any other Loan Party constituting purchase price deposits held in escrow pursuant to a binding and enforceable purchase and sale agreement permitted hereunder with a third party containing customary provisions regarding the payment and refunding of such deposits; (v) restricted cash or Cash Equivalents of the Borrower or any other Loan Party associated with the plugging and abandonment liabilities and other similar obligations imposed by a Governmental Requirement and arising in connection with acquisitions and divestitures of Oil and Gas Properties permitted hereunder; (vi) any refundable deposits held by unaffiliated third parties made in connection with transactions in the ordinary course of business; and (vii) cash constituting Reinvestment Proceeds to the extent being held in a Reinvestment Proceeds Account.
“Cash Equivalent” means cash held in US dollars and all Investments of the type identified in Section 9.05(d) through Section 9.05(g).
“Cash Flow” means, for any period, for Borrower and its Consolidated Subsidiaries on a consolidated basis, (a) EBITDAX for such period minus (b) all non-cash items added back to EBITDAX for such period.
“Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrower or any of the other Loan Parties.
“Change in Control” means
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Notwithstanding the foregoing, (x) the Holdings Merger and the other transactions occurring pursuant to the Holdings Merger Agreement shall not constitute a Change in Control so
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long as the Holdings Merger Conditions shall have been satisfied at the consummation of the Holdings Merger, and (y) the occurrence of a Permitted Change in Control shall not be deemed a Change in Control.
“Change in Control Prepayment” means any prepayment or repayment of the Loans in full in connection with the occurrence of a Change in Control, whether at the Borrower’s option pursuant to Section 3.04(a) or following an acceleration of the Loans pursuant to Section 10.01, in each case so long as such prepayment or repayment is made no later than two (2) Business Days after the date of such Change in Control.
“Change in Law” means (a) the adoption of or taking effect of any law, rule or regulation or treaty after the date of this Agreement, (b) any change in any law, rule or regulation or treaty or in the administration, in the interpretation, implementation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 5.01(c)), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States of America or foreign regulatory authorities, in each case pursuant to Basel III (but not Basel II), shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, issued, adopted, promulgated or implemented.
“Closing Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with Section 12.02).
“Closing Date Wells in Progress” means the Hunter D 2606H and Hunter E 2001H.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.
“Collateral” means all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document; provided that at no time shall Excluded Assets be included in the Collateral (only for so long as such assets constitute “Excluded Assets”).
“Collateral Agent” has the meaning given such term in the Swap Intercreditor Agreement.
“Collateral Coverage Minimum” has the meaning assigned to such term in Section 8.14(a).
“Commodities Account” has the meaning assigned to such term in the UCC.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute, and any regulations promulgated thereunder.
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“Compliance Certificate” means the Compliance Certificate, signed by a Financial Officer, substantially in the form of Exhibit C or any other form approved by the Administrative Agent.
“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower or any Guarantor pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to this Agreement, including through an Approved Electronic Platform.
“Consolidated Net Income” means, with respect to the Borrower and its Consolidated Subsidiaries for any period, the aggregate of the net income (or loss) of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom:
For the avoidance of doubt, if the Borrower or any Consolidated Subsidiary shall acquire or dispose of any Property during such period, then Consolidated Net Income shall be calculated after giving pro forma effect to such acquisition, merger, disposition or redesignation, as if such acquisition, disposition or redesignation had occurred on the first day of such period.
“Consolidated Subsidiaries” means, as to any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP.
“Consolidated Total Indebtedness” means as of any date of determination, the aggregate principal amount of all Indebtedness of the Borrower and its Consolidated Subsidiaries, without duplication, outstanding on such date, in an amount that would be reflected on a consolidated
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balance sheet (excluding the footnotes and other notes thereto) prepared as of such date on a consolidated basis in accordance with GAAP but only to the extent such Indebtedness comprises (a) Indebtedness for borrowed money, (b) obligations in respect of Finance Leases, (c) obligations evidenced by bonds, notes, debentures, promissory notes or similar instruments, (d) obligations in respect of unreimbursed drawn letters of credit, (e) Indebtedness of the type described in clauses (c), (f) and (l) of the definition thereof and (f) any Indebtedness to the extent included in the foregoing clauses (a) through (e) of others guaranteed by the Borrower or any of its Subsidiaries or in which the Borrower or such Subsidiary otherwise assures a creditor against loss of the Indebtedness (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Indebtedness and the maximum stated amount of such guarantee or assurance against loss; provided that Consolidated Total Indebtedness shall not include (i) Indebtedness in respect of obligations under Swap Agreements, other than to the extent such obligations are due and payable and not paid on such date, or, undrawn letters of credit (or if drawn, to the extent cash collateralized in the manner set forth in Section 2.06(i)), bank guarantees and performance or similar bonds or (ii) for the avoidance of doubt, any Non-Recourse Indebtedness of any Permitted JV Entity.
“Consolidated Total Net Indebtedness” means as of any date of determination, Consolidated Total Indebtedness minus Unrestricted Cash that would be listed on the consolidated balance sheet of the Borrower and the Consolidated Subsidiaries at such date.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. For the purposes of this definition, and without limiting the generality of the foregoing, any Person that owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of the directors or other governing body of a Person (other than as a limited partner of such other Person) will be deemed to “control” such other Person. “Controlled” has the meaning correlative thereto.
“Control Agreement” means a control agreement or similar agreement, as applicable, in form and substance reasonably satisfactory to the Administrative Agent, executed by the applicable Loan Party, the Administrative Agent and the relevant financial institution party thereto, which (a) provides a first priority perfected Lien in favor of the Administrative Agent for the benefit of the Secured Parties (provided such Control Agreement may permit certain Excepted Liens according to its terms) and (b) establishes the Administrative Agent’s control, in each case, with respect to any Deposit Account, Securities Account or Commodities Account of such Loan Party.
“Controlled Account” means a Deposit Account, Securities Account or Commodities Account that is subject to a Control Agreement.
“Covered Entity” means any of the following:
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“Covered Party” has the meaning assigned to such term in Section 12.22.
“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Credit Exposure” means, as to any Lender at any time, the outstanding principal amount of such Lender’s Loans at such time.
“Cure Period” has the meaning assigned to such term in Section 9.01(e)(i).
“Cure Prepayment” has the meaning assigned to such term in Section 9.01(e)(iii).
“Current Assets” means, as of any date of determination, without duplication, the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries at such date, but excluding, without duplication (a) all non-cash assets under FASB ASC Topic 815, (b) the aggregate amount of any deposits (whether in cash or otherwise) posted by the Borrower or any of its Consolidated Subsidiaries to secure Swap Obligations owing by such Persons or to cover market exposures, (c) any deferred tax assets and (d) any cash or Cash Equivalents deemed to be “restricted” in accordance with GAAP.
“Current Liabilities” means, as of any date of determination, without duplication, the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries on such date, but excluding, without duplication (a) all non-cash obligations under FASB ASC Topic 815, (b) the current portion of the then outstanding aggregate principal amount of the Loans under this Agreement, (c) any deferred tax liabilities, (d) any current maturities of long-term Indebtedness for borrowed money, (e) royalties in suspense which are more than ninety (90) days past due in an amount not to exceed $7,500,000 in the aggregate, and (f) accounts payable which are more than ninety (90) days past due and are being contested in good faith by appropriate action (and adequate reserves for the same are being maintained in accordance with GAAP) in an amount not to exceed $2,000,000 in the aggregate.
“Current Ratio” means, as of any date of determination, the ratio of (a) Current Assets as of the last day of the most recently ended calendar month (which may be such date of determination) to (b) Current Liabilities on such day.
“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website; provided that if by 5:00 p.m. (New York City time) on the second
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(2nd) U.S. Government Securities Business Day immediately following any SOFR Determination Day, SOFR in respect of such SOFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date with respect to Adjusted Daily Simple SOFR has not occurred, then SOFR for such SOFR Determination Day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator’s Website; provided, further that SOFR as determined pursuant to this proviso shall be utilized for purposes of calculation of Adjusted Daily Simple SOFR for no more than three (3) consecutive SOFR Rate Days. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
“Declining Lender” has the meaning assigned to such term in Section 3.04(c)(v).
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Loan Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Loan Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, or (c) has become the subject of (A) a Bankruptcy Event or (B) a Bail-In Action.
“Direction Letters” means letters substantially in the form of Exhibit L.
“Disapproval Effective Date” means the date on which the Borrower receives a Disapproval Notice with respect to a proposed Permitted Change in Control.
“Disapproval Notice” means a written notice to the Borrower and Holdings from the Administrative Agent expressly rejecting or otherwise disqualifying, in the sole and absolute discretion of the Required Lenders, a Person that otherwise satisfies the requirements of a “Permitted Buyer”.
“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer, condemnation or other disposition thereof (in one transaction or in a series of transactions and whether effected pursuant to a division or otherwise). The terms “Dispose” and “Disposed of” shall have correlative meanings.
“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, (a) matures (excluding any maturity as a result of the optional redemption by the
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issuer thereof) or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, (b) is convertible or exchangeable (unless at the sole option of the issuer thereof) for Indebtedness or (c) is redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in each case, in whole or in part, on or prior to the date that is one year after the Maturity Date; provided, that, notwithstanding the foregoing, the preferred Equity Interests in Holdings owned by the Permitted Holders shall not constitute Disqualified Capital Stock.
“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States of America or any state thereof or the District of Columbia.
“EBITDAX” means, for any period, an amount determined for the Borrower and its Consolidated Subsidiaries equal to the sum of Consolidated Net Income for such period plus the following expenses or charges to the extent deducted from Consolidated Net Income in such period: (a) interest expense, (b) income Taxes paid with respect to such period, (c) depreciation, (d) depletion, (e) amortization, (f) all other non-cash charges, (g) exploration expenses or costs (to the extent the Borrower adopts the successful efforts method of accounting), (h) any fees, expenses and other Transaction Costs which are incurred in connection with the Transactions and the other transactions contemplated hereby or thereby, (i) the amount of any non-recurring cash expenses and charges (other than any such non-recurring expenses and charges arising in the ordinary course of business), determined in accordance with GAAP, in an amount not to exceed ten percent (10%) of EBITDAX for such period (determined prior to giving effect to such addback) and (j) for any four fiscal quarter measurement period and only to the extent constituting a non-recurring cash expense, that certain cash expense identified as “Contract asset” in Note 11 on the Form 10-Q of Holdings for the fiscal quarter ending September 30, 2024 in an aggregate amount equal to $18,511,000 minus the following items of income to the extent included in Consolidated Net Income in such period: (i) all non-cash income (including cancellation of indebtedness income and non-cash income resulting from the requirements of Accounting Standards Codifications 410 and 815) and (ii) the amount of any non-recurring cash items of income, determined in accordance with GAAP; provided, however, that EBITDAX for the fiscal quarter ending December 31, 2024 shall be the product of EBITDAX during such fiscal quarter multiplied by four (4); EBITDAX for the fiscal quarter ending March 31, 2025 shall be EBITDAX during such fiscal quarter plus the product of EBITDAX during the fiscal quarter ending December 31, 2024 multiplied by three (3); and EBITDAX for the fiscal quarter ending June 30, 2025 shall EBITDAX during such fiscal quarter plus EBITDAX during the fiscal quarter ending March 31, 2025 plus the product of EBITDAX during the fiscal quarter ending December 31, 2024 multiplied by two (2). For purposes of calculating EBITDAX for any period of four consecutive fiscal quarters (each, a “Reference Period”), (x) if during such Reference Period (or, in the case of pro forma calculations, during the period from the last day of such Reference Period to and including the date as of which such calculation is made) the Borrower or any Consolidated Subsidiary shall have made a Material Disposition or Material Acquisition, EBITDAX (including Consolidated Net Income) for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Disposition or Material Acquisition by the Borrower or its Consolidated Subsidiaries occurred on the first day of such Reference Period and (y) if any calculations in the foregoing clause (x) are
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made on a pro forma basis, such pro forma adjustments are factually supportable and are determined in good faith by a Responsible Officer and subject to supporting documentation reasonably acceptable to the Administrative Agent. As used in this definition, “Material Acquisition” means any acquisition by the Borrower or its Consolidated Subsidiaries of property or series of related acquisitions of property that involves consideration in excess of $5,000,000, and “Material Disposition” means any Disposition of property or series of related sales, transfers or other dispositions of property that yields gross proceeds to the Borrower or any Consolidated Subsidiary in excess of $5,000,000.
“ECP” means any Person who qualifies as an “eligible contract participant” under Section 2(e) of the Commodity Exchange Act.
“EDF” means EDF Trading North America, LLC.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“Emergency Capital Expenditures” means any Capital Expenditures that are incurred in response to and to resolve or mitigate an emergency or threat to human health, safety or protection of the environment, as determined by the Borrower in good faith in consultation with the Administrative Agent, or to the extent required under any applicable law, rule or regulation of any Governmental Authority (including Environmental Laws).
“Environmental Laws” means any and all Governmental Requirements pertaining in any way to health, safety the environment or the preservation or reclamation of natural resources, in effect in any and all jurisdictions in which the Borrower or any other Loan Party is conducting or at any time has conducted business, or where any Property of the Borrower or any other Loan Party is located, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and
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Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements. For the purpose of this definition, (i) the term “oil” shall have the meaning specified in OPA, (ii) the terms “hazardous substance” and “release” (or “threatened release”) have the meanings specified in CERCLA, (iii) the terms “solid waste” and “disposal” (or “disposed”) have the meanings specified in RCRA and (iv) the term “oil and gas waste” shall have the meaning specified in Section 91.1011 of the Texas Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any Property of the Borrower or any other Loan Party is located establish a meaning for “oil,” “hazardous substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall apply.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, each as amended or modified from time to time.
“ERISA Affiliate” means each trade or business (whether or not incorporated) which together with the Borrower or any other Loan Party would be deemed to be a “single employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
“ERISA Event” means (a) a “reportable event” described in section 4043 of ERISA with respect to a Plan or a controlled group member, as applicable, for which the reporting requirements have not been waived, (b) the withdrawal of the Borrower, any other Loan Party or any ERISA Affiliate from a Plan subject to section 4063 or 4064 of ERISA during a plan year in which it was a “substantial employer” as defined in section 4001(a)(2) of ERISA, or a cessation of operations that is treated as such a withdrawal as provided in section 4062(e) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability pursuant to section 4202 of ERISA, (f) the failure of Borrower, any other Loan Party or any ERISA Affiliate to meet the minimum funding standards under section 430 of the Code or section 303 of ERISA (determined without regard to any waiver of funding provisions therein) with respect to a Plan, (g) the Borrower, any other Loan Party or any ERISA Affiliate incurs a withdrawal liability under Subtitle E of Title IV of ERISA with respect to a Multiemployer Plan or (h) any other event or condition which constitutes grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“Erroneous Payment” has the meaning assigned to it in Section 11.15(a).
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“Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 11.15(d)(i).
“Erroneous Payment Impacted Class” has the meaning assigned to it in Section 11.15(d)(i).
“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 11.15(d)(i).
“Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 11.15(e).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Event of Default” has the meaning assigned to such term in Section 10.01.
“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained to the extent required in accordance with GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not more than sixty (60) days delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens which arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are usual and customary in the oil and gas business and are for claims which are not more than sixty (60) days delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP, provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held by the Borrower or any other Loan Party or materially impair the value of such Property subject thereto; (e) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is
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intended by Borrower or any of the other Loan Parties to provide collateral to the depository institution; (f) easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the Borrower or any other Loan Party for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Borrower or any other Loan Party or materially impair the value of such Property subject thereto; (g) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations and regulatory obligations (excluding Liens arising under ERISA) and other obligations of a like nature incurred in the ordinary course of business and not in connection with the borrowing of money; (h) judgment and attachment Liens not giving rise to an Event of Default, provided that any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and no action to enforce such Lien has been commenced; (i) Liens arising from UCC financing statement filings regarding operating leases entered into in the ordinary course of business covering only the Property under any such operating lease; (j) Liens on cash earnest money deposited pursuant to the terms of an agreement to acquire assets used in, or Persons engaged in, the oil and gas business, as permitted by this Agreement; and (k) Liens listed on the exhibits to the Security Documents with respect to the Oil and Gas Properties of Borrower and the other Loan Parties, so long as such Liens (1) do not reduce the Net Revenues Interest (or “NRI” or terms of similar effect) attributable to any well, unit or lease included in the Oil and Gas Properties of Borrower and the other Loan Parties, materially below that shown on such exhibits to the Security Documents or (2) increase the Working Interest (or “WI” or terms of similar effect) attributable to any well, unit or lease included in the Oil and Gas Properties of Borrower and the other Loan Parties, materially above that shown on such exhibits to the Security Documents; and (m) Liens pursuant to merger agreements, stock purchase agreements, asset sale agreements and similar agreements permitted by this Agreement (1) limiting the transfer of properties and assets pending the consummation of the subject transaction, or (2) in respect of earnest money deposits, good faith deposits, purchase price adjustment and indemnity escrows and similar deposit or escrow arrangements made or established thereunder; provided, further that (i) the term “Excepted Liens” shall not include any Lien securing Indebtedness for borrowed money, (ii) Liens described in clauses (a) through (e) shall remain “Excepted Liens” only for so long as no action to enforce such Lien has been commenced, and (iii) no intention to subordinate the first priority Lien granted in favor of the Administrative Agent and the Lenders is to be hereby implied or expressed by the permitted existence of such Excepted Liens.
“Excess Cash Flow” means, for any fiscal quarter (without duplication), an amount equal to:
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“Excluded Accounts” means (a) Deposit Accounts the balance of which consists exclusively of (i) withheld income Taxes and federal, state or local employment Taxes required to be paid to the Internal Revenue Service or state or local Governmental Authorities with respect to employees of the Borrower or any Loan Party, (ii) amounts required to be paid over to an employee benefit plan on behalf of or for the benefit of employees of the Borrower or any other Loan Party, (iii) amounts set aside for payroll and the payment of accrued employee benefits, medical, dental and employee benefits claims to employees of the Borrower or any other Loan Party, (iv) amounts constituting purchase price deposits held in escrow pursuant to a purchase and sale agreement with a third party containing customary provisions regarding the payment and refunding of such deposits, (v) amounts held in escrow or in trust pending litigation or other settlement claims, (vi) zero balance accounts, and (vii) amounts held in trust or as fiduciaries for third parties in respect of such third party’s ratable share of the revenues of Oil and Gas Properties, (b) other Deposit Accounts, Securities Accounts or Commodities Accounts so long as (i) the average daily maximum balance in each such account over a thirty (30) day period does not at any time exceed $1,000,000 and (ii) the aggregate balance for all such accounts excluded pursuant to this clause (b) on any day does not exceed $3,000,000 and (c) any Deposit Account that is a dedicated cash collateral account securing obligations owing Section 9.02(l).
“Excluded Assets” has the meaning assigned to such term in the Guarantee and Collateral Agreement.
“Excluded Swap Agreement Unwind” means, so long as no Event of Default has occurred and is continuing, any Unwind of Swap Agreements effected by the Borrower in order to comply with the requirements of Section 9.18(d), but only with respect to Swap Agreements covering notional amounts not to exceed the amount required to cause the Borrower to be in compliance with the requirements of Section 9.18(d).
“Excluded Swap Obligation” means (as such definition may be modified from time to time as agreed by the Borrower and the Administrative Agent), with respect to any Guarantor, any Swap Obligation, if, and to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, as applicable, such Swap Obligation (or
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any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order thereunder (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of (or grant of such security interest by, as applicable) such Guarantor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Agreements for which such guarantee or security interest is or becomes illegal.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Guarantor hereunder or under any other Loan Document, (a) Taxes imposed on or measured by net income (however denominated), branch profits Taxes or franchise Taxes, in each case, (i) imposed by any jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any withholding Tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts with respect to such federal withholding Tax pursuant to Section 5.03, (c) Taxes attributable to such Lender’s failure to comply with Section 5.03(e) and (d) any withholding Tax that is imposed under FATCA.
“Existing Borrower” means the “Borrower”, as such term is defined in the Existing Credit Agreement.
“Existing Commitments” has the meaning assigned to such term in Section 12.23(c).
“Existing Loans” has the meaning assigned to such term in Section 12.23(c).
“Existing Obligations” means all “Secured Obligations”, as such term is defined in the Existing Credit Agreement.
“Exiting Administrative Agent” means the “Administrative Agent”, as such term is defined in the Existing Credit Agreement.
“Exiting Lender” means any “Lender”, as such term is defined in the Existing Credit Agreement, that is not a Lender under this Agreement.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities that facilitates the implementation of the foregoing.
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“Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0.00%.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.
“Fee Letter” means that certain Fee Letter, dated as of the Closing Date, by and among the Borrower, the Administrative Agent, and the initial Lenders party hereto as of the Closing Date.
“Finance Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, recorded as finance leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder; provided that any lease that would not have been recorded as a finance lease if it had been entered into prior to the adoption of ASU No. 2016-02 “Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)” shall not be a Finance Lease whether or not so designated in accordance with GAAP as in effect at the time of the execution of such lease.
“Financial Officer” means, for any Person, the chief executive officer, the chief financial officer, principal accounting officer, treasurer or controller of such Person. Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of the Borrower.
“Financial Statements” means the financial statement or statements of Holdings and its Consolidated Subsidiaries referred to in Section 7.04(a).
“Five-Year Strip Price” means, as of the date that is five (5) days prior to delivery of a Reserve Report or other information and materials required to be delivered pursuant to the terms of this Agreement, (a) for the sixty (60) month period commencing with the month in which such date occurs, as quoted on the NYMEX and published in a nationally recognized publication for such pricing as selected by the Administrative Agent (as such prices may be corrected or revised from time to time by the NYMEX in accordance with its rules and regulations), the corresponding monthly quoted futures contract price for months 0–60 and (b) for periods after such sixty (60) month period, the average corresponding monthly quoted futures contract price for months 49–60; provided, however, that (i) in the event that the NYMEX no longer provides futures contract price quotes for sixty (60) month periods, the longest period of quotes of less than sixty (60) months shall be used and (ii) if the NYMEX no longer provides such futures contract quotes or has ceased to operate, the Required Lenders shall, in consultation with the Borrower, designate another nationally recognized commodities exchange to replace the NYMEX for purposes of the references to the NYMEX in this definition.
“Flood Insurance Regulations” means (a) the National Flood Insurance Act of 1968, (b) the Flood Disaster Protection Act of 1973, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC § 4001, et seq.), (d) the Flood Insurance Reform Act of 2004 and (e) the
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Biggert-Waters Flood Insurance Reform Act of 2012, in each case as now or hereafter in effect or any successor statute thereto and including any regulations promulgated thereunder.
“Floor” means a rate of interest equal to 3.00%.
“Force Majeure Event” means any catastrophic accident, act of war or terrorism, civil or military disturbance, natural catastrophe or act of God, and significant interruptions, losses or malfunctions of utilities services (in each case, which are not caused by and are outside the control of the Borrower and the other Loan Parties and their respective officers, employees and agents).
“Foreign Lender” means any Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Fury” means Fury Resources, Inc., a Delaware corporation.
“G&A Expenses” means expenses and costs incurred by the Borrower and each other Loan Party that are classified as “general and administrative costs” including Restricted Payments made pursuant to Section 9.04(c), Section 9.04(d) or Section 9.04(e) (other than Section 9.04(e)(ii)) in accordance with GAAP including, without limitation, consulting fees, salary, rent, supplies, travel, insurance, accounting, audit, legal, engineering and broker related fees required to manage the affairs of the Loan Parties; provided, that G&A Expenses shall not include (x) any Transaction Costs, (y) any expenses and costs that are capitalized by charging such amounts back to a well, or any expenses and costs that are capitalized by charging such amounts back to any working interest owner in accordance with the accounting guidelines of the Council of Petroleum Accountants Societies then in effect, or (z) any one-time expenses or costs relating to unusual or extraordinary events (including, for the avoidance of doubt, (i) settlement costs, and (ii) expenses incurred in connection with the consummation of any investment, acquisition, merger, disposition, amendment or modification of Indebtedness or similar transactions, equity issuance or capital contribution, but excluding any retention or bonus payments paid in cash).
“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time subject to the terms and conditions set forth in Section 1.04.
“Gas Balancing Obligations” means those obligations set forth on Schedule 7.18 (as may be updated pursuant to the terms of Section 7.18).
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.
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“Guarantors” means, collectively:
“Guarantee and Collateral Agreement” means a Second Amended and Restated Guarantee and Collateral Agreement substantially in the form of Exhibit I and executed by the Borrower and Guarantors.
“Highest Lawful Rate” means, with respect to each Lender, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Loans or on other Secured Obligations under laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws allow as of the date hereof.
“Holdings” has the meaning assigned to such term in the preamble hereto.
“Holdings Merger” shall mean the transaction contemplated by the Holdings Merger Documents, wherein San Jacinto, among other things, will be merged with and into Holdings, with Holdings being the surviving entity.
“Holdings Merger Agreement” means an Agreement and Plan of Merger by and among Holdings, Fury and San Jacinto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Holdings Merger Conditions” means, with respect to the consummation of the Holdings Merger, the following:
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“Holdings Merger Documents” means all documents executed in connection with the Holdings Merger, in form and substance reasonably acceptable to the Administrative Agent,
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including but not limited to the Holdings Merger Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.
“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.
“Incremental Lender” means (a) on the Incremental Term Loan Closing Date, one or more of (i) a Meritz Party that executes and delivers an Incremental Term Loan Lender Joinder Agreement to the Administrative Agent and/or (ii) an Initial Term Loan Lender that consents to having an Incremental Term Loan Commitment and (b) on any other date of determination, any Lender that has an Incremental Term Loan Commitment or that holds Incremental Term Loans.
“Incremental Term Loan” has the meaning assigned to such term in Section 2.01(b).
“Incremental Term Loan Availability Period” means the period from and including January 3, 2025 to and including the Incremental Term Loan Commitment Expiration Date.
“Incremental Term Loan Closing Date” means the date on which the conditions specified in Section 6.02 are satisfied (or waived in accordance with Section 12.02).
“Incremental Term Loan Commitment” means, with respect to each Incremental Lender, the commitment of such Incremental Lender to make the Incremental Term Loan as set forth on Schedule 1.02(c) or in the applicable Incremental Term Loan Lender Joinder Agreement or the most recent Assignment and Assumption or other documentation contemplated hereby executed by such Incremental Lender. As of the Closing Date, the aggregate amount of the Incremental Term Loan Commitment is $63,000,000.
“Incremental Term Loan Commitment Expiration Date” means the earliest to occur of (a) the date on which the Incremental Term Loan has been fully drawn, (b) the date on which the Incremental Term Loan Commitments are otherwise terminated and (c) January 11, 2025.
“Incremental Term Loan Lender Joinder Agreement” means a joinder agreement from an Incremental Lender in connection with funding the Incremental Term Loan, substantially in the form of Exhibit N.
“Indebtedness” means, for any Person, the sum of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services including earnouts (but only
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at such time such obligation is due and required to be paid and such obligation remains unpaid) (excluding accounts payable incurred in the ordinary course of business that (i) are not overdue by more than ninety (90) days past the date of invoice or (ii) are being contested in good faith by appropriate action and adequate reserves for the same have been maintained in accordance with GAAP); (d) all obligations under Finance Leases; (e) all obligations under Synthetic Leases; (f) all Indebtedness (as defined in the other clauses of this definition) of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Indebtedness is assumed by such Person; (g) all Indebtedness (as defined in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the Indebtedness (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Indebtedness and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Indebtedness or Property of others; (i) obligations to deliver commodities, goods or services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments for periods in excess of 120 days prior to the day of delivery, other than gas balancing arrangements in the ordinary course of business; (j) obligations to pay for goods or services whether or not such goods or services are actually received or utilized by such Person; (k) any Indebtedness of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock; (m) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment, (n) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, and (o) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including, without limitation any Swap Agreement, whether entered into for hedging or speculative purposes. The Indebtedness of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP; provided, however, the contingent obligations of Borrower or any Subsidiary of Borrower pursuant to any purchase and sale agreement, stock purchase agreement, merger agreement or similar agreement shall not constitute “Indebtedness” within this definition so long as none of the same contains an obligation to pay money over time.
“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Loan Parties under any Loan Document.
“Indemnitee” has the meaning assigned to such term in Section 12.03(b).
“Information” has the meaning assigned to such term in Section 12.11.
“Initial Capital Plan” means the Capital Plan with respect to the initial Projects set forth on Schedule 1.02(a).
“Initial Reserve Report” means the report with respect to certain Oil and Gas Properties of the Borrower and the other Loan Parties prepared by NSAI with an as of date of June 30, 2024.
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For the avoidance of doubt, the Initial Reserve Report will be deemed to include the Closing Date Wells in Progress.
“Initial Term Loan” has the meaning assigned to such term in Section 2.01(a).
“Initial Term Loan Commitment” means, with respect to each Initial Term Loan Lender, the commitment of such Lender to make the Term Loan as set forth on Schedule 1.02(b) or in the most recent Assignment and Assumption or other documentation contemplated hereby executed by such Lender. The aggregate amount of the Initial Term Loan Commitments of the Initial Term Loan Lenders as of the Closing Date is $162,000,000.
“Initial Term Loan Lender” means, as of any date of determination, each Lender having an Initial Term Loan Commitment or that holds Initial Term Loans.
“Interest Payment Date” means (a) the last day of each fiscal quarter and (b) the Maturity Date.
“Interest Period” means (a) initially, the period commencing on the Closing Date and ending on the next succeeding Interest Payment Date and (b) each subsequent period commencing on the day after the last Interest Payment Date and ending on the next succeeding Interest Payment Date.
“Investment” means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale); (b) the making of any deposit with, or advance, loan or capital contribution to, assumption of Indebtedness of, purchase or other acquisition of any other Indebtedness of, or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding ninety (90) days representing the purchase price of inventory, goods, supplies or services sold by such Person in the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions) of Property of another Person that constitutes a business unit, or (d) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.
“IRR Parameters” means (a) the price forecast used to calculate the projected internal rate of return shall be the then-current Five-Year Strip Price, (b) the projected internal rate of return for any Qualifying Project shall be measured from the date when Capital Expenditures associated with such Qualifying Project were initially made, (c) the cumulative projected internal rate of return shall (i) reflect actual economic and production results of existing Projects (including, for the avoidance of doubt, pricing actually realized) and (ii) with respect to forecasted economic and production results, be based on the latest forecast provided by the Borrower in good faith and based on reasonable assumptions and approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed); provided that, if the Administrative Agent do not approve any
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such forecast, the Borrower shall provide an updated forecast from NSAI and (d) all costs and expenses associated with the drilling and completion of the wells included in the current (and, if required, approved) Capital Plan shall be included in the calculation of the projected internal rate of return, regardless of whether the Borrower shall have received invoices therefor at the time of measurement.
“Issuing Bank” means any Lender consenting to be the Issuing Bank and that is reasonably acceptable to the Borrower and the Administrative Agent. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.
“LC Commitment” means, at any time, an amount equal to $5,000,000. For the avoidance of doubt, the LC Commitment is in addition to the aggregate Commitments but shall be reduced dollar-for-dollar by any letters of credit issued and outstanding pursuant to Section 9.02(l).
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.
“LC Fee” has the meaning assigned to such term in Section 3.05(b).
“Lenders” means the Persons listed on Schedule 1.02(b) and any Person that shall have become a party hereto pursuant to (a) an Assignment and Assumption or (b) an Incremental Term Loan Lender Joinder Agreement, other than, in each case, any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Issuing Bank.
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“Letter of Credit Agreements” means all letter of credit applications and other agreements (including any amendments, modifications or supplements thereto) submitted by the Borrower, or entered into by the Borrower, with the Issuing Bank relating to any Letter of Credit.
“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a deed of trust, mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) production payments and the like payable out of Oil and Gas Properties. The term “Lien” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations. For the purposes of this Agreement, the Borrower and the other Loan Parties shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement
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pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.
“Liquidity” means, as of any date of determination, all Unrestricted Cash held by the Borrower or any of the other Loan Parties as of such date of determination.
“Loan Documents” means (i) this Agreement, (ii) the Notes, if any, (iii) the Letter of Credit Agreements, (iv) the Letters of Credit, (v) the Security Documents, (vi) the Fee Letter, (vii) the Operator Removal Agreements, and (viii) any other agreements entered into in connection herewith by the Borrower, Holdings or any Loan Party with or in favor of the Administrative Agent or the Lenders, which such agreements are expressly identified therein as a “Loan Document”. For the avoidance of doubt, the Loan Documents do not include any Secured Swap Agreements, and no Secured Third Party Swap Provider shall be deemed to be a party or have any rights under any Loan Documents other than the Swap Intercreditor Agreement to which it is a party.
“Loan Party” means the Borrower and each Guarantor.
“Loans” means, collectively, the Initial Term Loan and the Incremental Term Loan made by the Lenders to the Borrower pursuant to Section 2.02.
“Make-Whole Amount” means, with respect to any Loans being prepaid or accelerated (whether pursuant to Article X, at the Borrower’s option pursuant to Section 3.04(a), pursuant to a Change in Control Prepayment or as required pursuant to Section 3.04(c)(i) or Section 3.04(c)(iii)), an amount equal to the sum of (a) interest payments (calculated using a per annum rate of interest equal to the interest rate at the date of prepayment or acceleration (prior to giving effect to any increase in interest rate pursuant to Section 3.02(b))) that would have been paid on the full principal amount of the Loans so prepaid or accelerated if such principal amount had been outstanding from the date of prepayment or acceleration to the date that is (i) at all times prior to the Disapproval Effective Date, twelve (12) months after the Closing Date or (ii) on and after the Disapproval Effective Date, nine (9) months after the Closing Date, plus (b)(i) at all times prior to the Disapproval Effective Date, 4.00% of the principal amount of such Loans being prepaid or accelerated or (ii) on and after the Disapproval Effective Date, 2.00% of the principal amount of such Loans being prepaid or accelerated.
“Material Adverse Effect” means a material adverse effect on (a) the business, financial condition, operations, performance, prospects or properties of the Borrower, Holdings and the other Loan Parties, taken as a whole, (b) the ability of the Loan Parties to perform their respective material obligations under the Loan Documents, or (c) the ability of the Administrative Agent, the Issuing Bank and the Lenders to enforce the Loan Documents.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and the other Loan Parties in an aggregate outstanding principal amount exceeding $10,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any other Loan Party in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such other Loan Party would be required to pay if such Swap Agreement were terminated at such time.
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“Material Midstream Agreement” means any Midstream Agreement that provides for or contemplates payments to be made by the Borrower or any other Loan Party in excess of $5,000,000 during any period of twelve (12) consecutive months.
“Material Oil and Gas Properties” means Oil and Gas Properties owned by the Borrower or any of the other Loan Parties (x) with an aggregate fair market value in excess of $5,000,000 or (y) subject to the Capital Plan.
“Maturity Date” means December 26, 2028.
“Maximum Term Loan Amount” means $225,000,000.
“MBL” means Macquarie Bank Limited.
“Meritz Party” means AI Partners Asset Management Co., Ltd or any of its Related Parties or managed funds.
“Midstream Agreement” means any agreement related to Midstream Properties (e.g. gas gathering or transportation agreements) to which the Borrower or any other Loan Party is party.
“Midstream Properties” means all Property used in: (a) gathering, compressing, treating, processing and transporting Hydrocarbons downstream of the tank battery; (b) fractionating and transporting Hydrocarbons; (c) marketing Hydrocarbons; (d) water distribution, supply, treatment and disposal services thereof, including gathering systems, processing plants, storage facilities, surface leases, rights of way and servitudes related to each of the foregoing; and (e) without duplication with any Oil and Gas Properties, other infrastructure assets of a Person useful in connection with Oil and Gas Properties similar to any of the foregoing as of such date.
“Minimum Volume Commitment” means any “ship or pay” or other similar arrangement where any Person (a) commits to utilize a minimum capacity in a pipeline or otherwise guarantees a minimum thru-put volume in respect of a pipeline, processing or other midstream facility and (b) agrees to pay for such capacity or thru-put regardless of whether such capacity or thru-put is actually utilized.
“Money Laundering Laws” has the meaning assigned to such term in Section 7.23.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized rating agency.
“Mortgage” means each of the mortgages or deeds of trust executed by any one or more Loan Parties to the Collateral Agent, for the benefit of the Secured Parties, as security for the Secured Obligations, together with any supplements, modifications or amendments thereto and assumptions or assignments of the obligations thereunder by any Loan Party. “Mortgages” means all of such Mortgages collectively.
“Mortgaged Property” means any Property owned by any Loan Party which is subject to the Liens existing and to exist under the terms of the Security Documents.
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“Multiemployer Plan” means a multiemployer plan as defined in sections 3(37) or 4001 (a)(3) of ERISA, to which the Borrower, any other Loan Party or an ERISA Affiliate makes or is obligated to make contributions, or during the immediately preceding six years, has made or been obligated to make contributions.
“Net Cash Proceeds” means in connection with any issuance or sale of Equity Interests, debt securities or instruments, the incurrence or issuance of Indebtedness, any Disposition of Property, any Unwind of Swap Agreements (other than an Excluded Swap Agreement Unwind) or any Casualty Event, the aggregate cash proceeds received from such issuance, sale, incurrence, Disposition, Unwind or Casualty Event, as applicable, net of reasonable and documented out-of-pocket expenses (including attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith) and Taxes reasonably anticipated by the Borrower to be incurred or made in connection therewith.
“Net Working Capital” means, as of any determination date, (a) the Current Assets as of such date (excluding (i) non-cash assets under FAS 133 or ASC 815 and (ii) receivables or other amounts owing from any Affiliate of the Borrower) minus (b) the Current Liabilities as of such date ((i) including deferred Transaction Costs and (ii) excluding current liabilities in respect of Indebtedness and non-cash liabilities under FAS 133 or ASC 815). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.
“Nextera” means Nextera Energy Marketing, LLC.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Recourse Indebtedness” means any Indebtedness of any Permitted JV Entity, in each case in respect of which the holder or holders thereof (a) shall have recourse only to, and shall have the right to require the obligations of such Permitted JV Entity to be performed, satisfied, and paid only out of, the Property of such Permitted JV Entity and/or one or more of its subsidiaries and/or any other Person (other than Borrower and/or any other Loan Party (other than in respect of Equity Interests of such Permitted JV Entity)), (b) shall have no direct or indirect recourse (including by way of guaranty, support or indemnity) to the Borrower or any other Loan Party or to any of the Property of Borrower or any other Loan Party (other than in respect of Equity Interests of such Permitted JV Entity), whether for principal, interest, fees, expenses or otherwise and (c) the amount of any such Non-Recourse Indebtedness of the Wink JV Holdco shall not at any time exceed $5,000,000 in the aggregate outstanding.
“Notes” means the promissory notes of the Borrower as requested by a Lender and described in Section 2.02(c) and being substantially in the form of Exhibit A, together with all amendments, modifications, replacements, extensions and rearrangements thereof.
“NSAI” means Netherland, Sewell & Associates, Inc.
“NYMEX” means the New York Mercantile Exchange.
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“Offer” has the meaning assigned to such term in Section 3.04(c)(v).
“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, the lands covered thereby and all oil in tanks and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. For the avoidance of doubt, reference to “Oil and Gas Properties” shall be deemed to refer to the Oil and Gas Properties of the Loan Parties.
“Operating Agreement” means (a) any joint operating agreements covering or relating to any one or more of the Oil and Gas Properties and (b) any subsequently executed joint operating agreement covering or relating to any one or more of the Oil and Gas Properties that is executed after the date hereof by a Loan Party in the ordinary course of business.
“Operator” means (a) Halcón Operating Co., Inc., a Texas corporation, (b) Halcón Energy Properties, Inc., a Delaware corporation, (c) Halcón Field Services, LLC, a Delaware limited liability company, (d) Halcón Permian, LLC, a Delaware limited liability company, and (e) any other Person designated to conduct the maintenance, development or operation, or to manage the maintenance, development or operation, of any Oil and Gas Property under any Operating Agreement, or any assignee or successor thereto in such capacity.
“Operator Removal Agreement” means a removal of operator agreement, entered into by and among Borrower, Administrative Agent, and each Affiliate of Borrower, any other Loan Party or Holdings that is an Operator under any Operating Agreement, which shall be in the form of Exhibit M hereto (with changes thereto as may be reasonably acceptable to the Borrower, the Administrative Agent and such Affiliate).
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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Lenders” has the meaning assigned to such term in Section 12.03(a).
“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise solely from any payment made under or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement and any other Loan Document except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.04(b)).
“Participant” has the meaning set forth in Section 12.04(c)(i).
“Participant Register” has the meaning set forth in Section 12.04(c)(i).
“Patriot Act” has the meaning assigned to such term in Section 7.23.
“Payment in Full” means (a) the Commitments and the LC Commitments have expired or been terminated, (b) the principal of and interest on each Loan and all fees payable hereunder and all other amounts payable under the Loan Documents shall have been indefeasibly paid in full in cash (other than contingent indemnification obligations), (c) all Letters of Credit shall have expired or terminated (or are cash collateralized or otherwise secured to the satisfaction of the Issuing Bank and the Administrative Agent) and all LC Disbursements shall have been reimbursed and (d) the expiration or termination of all Secured Swap Agreements and all amounts owing by any Loan Party thereunder shall have been indefeasibly paid in full in cash (other than Secured Swap Agreements as to which arrangements satisfactory to the applicable Secured Swap Provider have been made).
“Payment Recipient” has the meaning assigned to it in Section 11.15(a).
“Periodic Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Permitted Acquisition” shall mean the acquisition, by merger or otherwise, by the Borrower or any other Loan Party of any assets (including any assets constituting a business unit, line of business or division) or Equity Interests, so long as (a) the Acquisition Conditions are satisfied and (b) the consideration for such acquisition, together with all other Permitted Acquisitions consummated since the Closing Date, shall not exceed the Permitted Acquisition Cap Amount; provided that, in the case of an acquisition consisting exclusively of PDP Reserves, the Borrower shall certify compliance with clause (d) of the definition of Acquisition Conditions pursuant to a Reserve Report prepared by an Approved Petroleum Engineer.
“Permitted Acquisition Cap Amount” means $50,000,000.
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“Permitted Buyer” means, in connection with a Permitted Change in Control, any Person or group of such Persons (excluding any Permitted Holders or any Affiliate thereof) that (a) as a substantial part of its business, regularly and historically has explored, produced, operated and developed Oil and Gas Properties in the Permian Basin located in the State of Texas, (b) maintains a credit rating equal to or greater than that of Fury or otherwise demonstrates reasonably sufficient financial wherewithal to consummate a Permitted Change in Control and (c) has delivered to the Administrative Agent the certification specified in clause (f) of the definition of “Permitted Change in Control”. A Person satisfying the foregoing qualifications shall be deemed to be satisfactory to the Administrative Agent and the Lenders unless a Disapproval Notice is received by the Borrower and Holdings prior to the Permitted Change in Control Effective Date.
“Permitted Capital Expenditures has the meaning assigned to such term in Section 9.20.
“Permitted Change in Control” means the occurrence of a transaction (or series of transactions), by merger or otherwise, which results in a Change in Control, and with respect to which the following conditions are met:
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“Permitted Change in Control Effective Date” means the date of consummation of a Permitted Change in Control; provided, that there shall only be one Permitted Change in Control Effective Date.
“Permitted Holders” means Luminus Management, LLC, Oaktree Capital Management L.P., Lion Point Capital L.P., and Gen IV Investment Opportunities, LLC, and each of their respective Affiliates and funds managed or advised by any of them or any of their respective Affiliates (but excluding any operating portfolio companies of the foregoing persons).
“Permitted JV Entity” means each of (a) the Wink JV Holdco, and (b) Wink JV Entity.
“Permitted Reinvestment Transaction” shall mean the acquisition, by merger or otherwise, by the Borrower or any of other Loan Party of any assets (including any assets constituting a business unit, line of business or division) or Equity Interests, so long as (i) the Acquisition Conditions are satisfied and (ii) such acquisition is funded solely with Reinvestment Proceeds.
“Permitted Tax Distribution” has the meaning assigned to such term in Section 9.04(e)(ii).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Petroleum Industry Standards” means the Definitions for Oil and Gas Reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.
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“Plan” means any employee pension benefit plan, as defined in section 3(2) of ERISA other than a Multiemployer Plan, which (a) is currently or hereafter sponsored, maintained or contributed to by the Borrower, any other Loan Party or an ERISA Affiliate or (b) was at any time during the immediately preceding six years, sponsored, maintained or contributed to by the Borrower, any other Loan Party or an ERISA Affiliate.
“Pledge Agreement” means the Amended and Restated Non-Recourse Pledge Agreement dated as of the Closing Date and executed by Holdings in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Pledged Collateral” has the meaning assigned to such term in the Pledge Agreement.
“Post-Merger Permitted Holders” means, collectively, (a) any of the Permitted Holders and (b) subject to (i) each Lender’s receipt of all documentation and other information in connection with applicable “know your customer” and Money Laundering Laws, including the Patriot Act and (ii) to the extent applicable, in connection with Beneficial Ownership Regulation, a Beneficial Ownership Certification in a form reasonably satisfactory to the Administrative Agent and each requesting Lender, such other Persons as the Administrative Agent and the Lenders may approve in their sole discretion.
“Project” means a single well (if not part of a well pad) or group of wells sharing the same well pad, in each case with respect to which drilling and/or completion will occur after the Closing Date.
“Projected Hedged Revenue” means, as determined for each immediately succeeding fiscal year, (a) the Borrower’s projected future revenues to be realized from the production of Hydrocarbons from the Oil and Gas Properties of the Loan Parties to the extent such production volume is hedged pursuant to commodity Swap Agreements entered into in compliance with this Agreement, less (b) projected attributable lease operating expenses and G&A Expenses, in each case, as set forth in the Annual Budget prepared and delivered pursuant to Section 8.01(e) and consistent with the Capital Plan. The Borrower’s calculation of Projected Hedged Revenue shall be subject to the Administrative Agent’s prior review and approval (such approval not to be unreasonably withheld or delayed).
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.
“Proved Developed Producing Reserves” or “PDP Reserves” means oil and gas reserves that, in accordance with the Petroleum Industry Standards, are classified as both “Proved Reserves” and “Developed Producing Reserves”.
“Proved Reserves” means oil and gas reserves that, in accordance with Petroleum Industry Standards, are classified as both “Proved Reserves” and one of the following: (a) “Developed Producing Reserves”, (b) “Developed Non-Producing Reserves” or (c) “Undeveloped Reserves.”
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“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public-Sider” means a Lender whose representatives may trade in securities of the Borrower or any of their respective Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement, and has notified the Administrative Agent in writing that such Lender wishes to receive only information consisting exclusively of information with respect to the Borrower and its Affiliates that is either publicly available or not material with respect to the Borrower and its Affiliates, any of their respective securities for purposes of United States federal and state securities laws.
“PV-10” means, on any date of determination, with respect to any Proved Reserves expected to be produced from any Oil and Gas Properties to which Proved Reserves are attributed, the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to the Borrower’s and the other Loan Parties’ collective interests in such Proved Reserves during the remaining expected economic lives of such reserves, calculated in accordance with the Five-Year Strip Price.
“QFC Credit Support” has the meaning assigned to such term in Section 12.22.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each of the Borrower, Holdings and the other Loan Parties that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other person as constitutes an ECP under the Commodity Exchange Act or any regulations as promulgated thereunder.
“Qualifying Project” means (a) each Project set forth in the Initial Capital Plan, and (b) any subsequent Project not included in the Initial Capital Plan; provided, that in each case of the foregoing clauses (a) and (b), such Project has a projected internal rate of return of not less than 30% (based on the IRR Parameters and as reviewed and approved by the Administrative Agent and the Lenders, such approval not to be unreasonably withheld or delayed).
“Redemption” means with respect to any Indebtedness, the repurchase, redemption, prepayment, repayment, defeasance, purchase or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of such Indebtedness. “Redeem” has the correlative meaning thereto.
“Reference Period” has the meaning assigned to such term in the definition of “EBITDAX”.
“Register” has the meaning assigned to such term in Section 12.04(b)(iv).
“Regulation D” means Regulation D of the Board, as the same may be amended, supplemented or replaced from time to time.
“Reinvestment Proceeds” has the meaning assigned to such term in Section 3.04(c).
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“Reinvestment Proceeds Account” means a deposit account of the Borrower subject to a Control Agreement in favor of the Administrative Agent which exclusively holds Reinvestment Proceeds.
“Rejection Notice” has the meaning assigned to such term in Section 3.04(c)(v).
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, partners, representatives and advisors (including attorneys, accountants and experts) of such Person and such Person’s Affiliates.
“Relevant Governmental Body” means the Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York, or any successor thereto.
“Remedial Work” has the meaning assigned to such term in Section 8.10(a).
“Required Lenders” means, at any date, Non-Defaulting Lenders and the Issuing Bank having or holding more than seventy-five percent (75%) of the sum of the total Credit Exposure, unused LC Commitment and total LC Exposure in the aggregate at such date; provided, that only for purposes of determining “Required Lenders” in Section 11.12, the calculation of Credit Exposure for any Non-Defaulting Lender shall include the termination value of any Secured Lender Swap Agreements of such Non-Defaulting Lender but only to the extent closed out at the time of such determination.
“Required Prepayment Date” has the meaning assigned to such term in Section 3.04(c)(v).
“Required Swap Agreements” has the meaning assigned to such term in Section 8.20(c).
“Reserve Report” means the Initial Reserve Report and any other subsequent report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each March 31st, June 30th, September 30th or December 31st, the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the other Loan Parties, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions reasonably acceptable to the Administrative Agent.
“Reserve Report Certificate” has the meaning assigned to such term in Section 8.12(b).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the President, the Chief Operating Officer, any Financial Officer, Chief Legal Officer or Executive Vice President of such Person. Unless otherwise specified, all references to a Responsible Officer herein means a Responsible Officer of the Borrower.
“Restricted Parties” means, collectively, (a) the Loan Parties and (b) the Wink JV Holdco.
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“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in any Person, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of (a) any such Equity Interests or (b) any option, warrant or other right to acquire any such Equity Interests.
“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services LLC business and any successor thereto that is a nationally recognized rating agency.
“San Jacinto” means San Jacinto Merger Sub, Inc., a Delaware corporation.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any comprehensive Sanctions (as of the Closing Date, without limitation, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea, Russia and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, or His Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any government, including any agency or instrumentality thereof, of a Sanctioned Country or Venezuela, or (d) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a), (b) or (c).
“Sanctions” means all economic or financial sanctions or trade embargoes, or other requirements imposed under similar laws or regulations, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or His Majesty’s Treasury of the United Kingdom.
“SEC” means the Securities and Exchange Commission or any successor Governmental Authority.
“Second Offer” has the meaning assigned to such term in Section 3.04(c)(v).
“Secured Lender Swap Agreement” means a Swap Agreement between (a) any Loan Party and (b) a Secured Lender Swap Provider.
“Secured Lender Swap Provider” means any Person (other than a Secured Third Party Swap Provider) that, at the time it enters into a Swap Agreement with a Loan Party (including by novation), is (a) a Lender or an Affiliate of a Lender who is the counterparty to any such Swap Agreement with a Loan Party, (b) the Administrative Agent or an Affiliate of the Administrative Agent who is the counterparty to any such Swap Agreement or (c) any Person who was a Lender or an Affiliate of a Lender at or prior to the time when such Person entered into any such Swap Agreement who is a counterparty to any such Swap Agreement with a Loan Party; provided that any such Person that ceases to be a Lender, an Affiliate of a Lender, the Administrative Agent or
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an Affiliate of the Administrative Agent shall not be a Secured Lender Swap Provider with respect to any Swap Agreement or any transactions thereunder that it thereafter enters into (or that is assigned or transferred to it) while it is not a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent.
“Secured Obligations” means (a) any and all amounts owing or to be owing by the Borrower or any other Loan Party to (i) the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender under any Loan Document, and (ii) any Secured Lender Swap Provider with respect to any Secured Lender Swap Agreement, and (b) all renewals, extensions and/or rearrangements of any of the foregoing, in each case, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising (including interest and fees accruing after the maturity of the Loans and LC Disbursements or the termination of the Secured Lender Swap Agreements and interest accruing after the filing of any petition for bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), including, for the avoidance of doubt, all Applicable Prepayment Premiums, fees (including the Exit Fee (as defined in the Fee Letter)) and other amounts required to be paid or reimbursed by the Loan Parties under any Loan Document; provided that solely with respect to any Loan Party that is not an “eligible contract participant” under the Commodity Exchange Act, Excluded Swap Obligations of such Loan Party shall in any event be excluded from “Secured Obligations” owing by such Loan Party.
“Secured Parties” means, collectively, the Collateral Agent, the Administrative Agent, the Issuing Bank, the Lenders, each Secured Swap Provider, and any other Person owed Secured Obligations. “Secured Party” means any of the foregoing individually.
“Secured Swap Agreement” means (a) any Secured Lender Swap Agreement and (b) any Secured Third Party Swap Agreement.
“Secured Swap Provider” means (a) any Secured Lender Swap Provider and (b) any Secured Third Party Swap Provider.
“Secured Third Party Swap Agreement” means, at any time, any Swap Agreement between (a) any Loan Party and (b) a Secured Third Party Swap Provider; provided that such term shall (i) not include any transactions entered into after the time such swap counterparty ceases to be a Secured Third Party Swap Provider as defined herein and (ii) include any transactions entered into before the time that such swap counterparty ceases to be a Secured Third Party Swap Provider as defined herein.
“Secured Third Party Swap Obligations” means any and all amounts owing or to be owing by the Borrower or any other Loan Party to any Secured Third Party Swap Provider with respect to any Secured Third Party Swap Agreement; provided that solely with respect to any Loan Party that is not an “eligible contract participant” under the Commodity Exchange Act, Excluded Swap Obligations of such Loan Party shall in any event be excluded from “Secured Third Party Swap Obligations” owing by such Loan Party.
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“Secured Third Party Swap Provider” means each Approved Counterparty so long as such Approved Counterparty (a) shall have entered into and remains subject to the Swap Intercreditor Agreement and (b) is not a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent.
“Securities Account” has the meaning assigned to such term in the UCC.
“Security Documents” means (a) the Guarantee and Collateral Agreement, (b) the Mortgages, (c) any Perfection Certificate, (d) any Control Agreement, (e) the Pledge Agreement, (f) the Swap Intercreditor Agreement, (g) the other agreements, instruments or certificates described or referred to in Exhibit D and (h) any and all other agreements, instruments or certificates now or hereafter executed and delivered by the Borrower or any other Person (other than Secured Lender Swap Agreements or participation or similar agreements between any Lender and any other lender or creditor with respect to any Secured Obligations pursuant to this Agreement), in each case in connection with, or as security for the payment or performance of the Secured Obligations, the Loans, the Notes, if any, this Agreement, or reimbursement obligations under the Letters of Credit, as such agreements may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Determination Date” has the meaning given to such term in the definition of “Daily Simple SOFR”.
“SOFR Loan” means a Loan that bears interest at a rate based on Adjusted Term SOFR.
“SOFR Rate Day” has the meaning given to such term in the definition of “Daily Simple SOFR”.
“Solvency Certificate” means a solvency certificate signed by a Financial Officer in substantially the form of Exhibit G hereto.
“Solvent” means, with respect to any Person as of the date of any determination, that on such date (a) the fair value of the Property of such Person (both at fair valuation and at present fair saleable value) is greater than the total liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s Property would constitute unreasonably small capital after giving due consideration to current and anticipated future capital requirements and current and anticipated future business
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conduct and the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, such liabilities shall be computed at the amount which, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under FASB Accounting Standards Codification Topic 450-20).
“Specified Equity Contribution” means any capital contributions made in cash to, or any cash proceeds of an issuance of Equity Interests (other than Disqualified Capital Stock) by, the Borrower during the applicable Cure Period that are made for the purpose of exercising the cure rights set forth in Section 9.01(e).
“Specified Subordinated Indebtedness” means any unsecured Indebtedness that is subordinated in right of payment to the Secured Obligations on terms satisfactory to the Administrative Agent; provided that such Indebtedness (a) does not require any cash payments of principal, interest or other amounts prior to the date that is 180 days after the Maturity Date (except as otherwise agreed to by the Administrative Agent in its sole discretion), (b) does not have any covenants or events of default that are more restrictive or onerous than those contained in the Loan Documents and (c) has a stated maturity date that is no earlier than 180 days after the Maturity Date.
“Subsidiary” means: (a) any Person of which at least a majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, manager or other governing body of such Person (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Borrower or one or more of its Subsidiaries or by the Borrower and one or more of its Subsidiaries and (b) any partnership of which the Borrower or any of its Subsidiaries is a general partner. Unless otherwise indicated herein, each reference to the term “Subsidiary” means a Subsidiary of the Borrower; provided that, notwithstanding anything in this definition to the contrary, it is hereby understood and agreed that no Permitted JV Entity shall be deemed a “Subsidiary” for any purposes hereunder.
“Supported QFC” has the meaning assigned to such term in Section 12.22.
“Swap” means any “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Swap Agreement” means any agreement with respect to any Swap, forward, future or derivative transaction, collar or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more interest rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any other Loan Party shall be a Swap Agreement.
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“Swap Intercreditor Agreement” means an intercreditor agreement to be entered into by and among the Collateral Agent, the Administrative Agent, the Borrower, the other Loan Parties from time to time a party thereto and the Secured Third Party Swap Providers from time to time party thereto, which shall be substantially in the form of Exhibit K (with such changes thereto as may be reasonably acceptable to the Borrower, the Collateral Agent, the Administrative Agent and such Secured Third Party Swap Providers).
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Synthetic Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” means the Initial Term Loan or the Incremental Term Loan, as context requires.
“Term Loan Commitment” means the Initial Term Loan Commitment or the Incremental Term Loan Commitment, as context requires.
“Term SOFR” means the Term SOFR Reference Rate on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of the relevant Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for a tenor of three (3) months has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day.
“Term SOFR Adjustment” means a percentage equal to 0.15% per annum.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
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“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR for a tenor of three (3) months.
“Title Coverage Minimum” has the meaning assigned to such term in Section 8.13(a).
“Total Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Net Indebtedness as of such date to (b) EBITDAX for the period of four consecutive fiscal quarters ending on such date (or, if such date is not the last day of a fiscal quarter, the last day of the most recently ended fiscal quarter), subject to the proviso in the definition thereof with respect to the fiscal quarters ending December 31, 2024, March 31, 2025 and June 30, 2025.
“Total PDP PV-10” means, as of any date of determination, the sum of (a) the estimated market value (whether positive or negative) of the Loan Parties’ hedge position, discounted using an annual discount rate of 10%, plus (b) the present value of estimated future revenues to be realized from the production of Hydrocarbons from the Oil and Gas Properties of the Loan Parties to which Proved Developed Producing Reserves are attributed as set forth in the most recent Reserve Report delivered pursuant hereto, with appropriate deductions for take or pay and other prepayments, severance and ad valorem taxes, operating, gathering, transportation and marketing expenses, capital expenditures (including capitalized workover expenses) and plugging and abandonment costs. Each calculation of such estimated future revenues shall be made (a) using the Five-Year Strip Price, adjusted in a manner reasonably acceptable to the Administrative Agent for (i) any basis differential between the actual delivery location and the reference price delivery location and price differential between the actual product delivered and the reference product, in each case using methodology consistent with past practices and in good faith based on observable differentials (which utilized differentials shall be, volume weighted on the basis of current and expected future arrangements for the sale of production, the lesser of (A) the average actual differentials for the last twelve months and (B) those future differentials which may be hedged by contract); and (ii) quality and gravity, (b) using costs as of the date of estimation without future escalation and without giving effect to non-property related expenses such as general and administrative expenses, debt service, future income tax expense and depreciation, depletion and amortization, (c) discounted using an annual discount rate of 10% and (d) to the extent not otherwise specified in the preceding clauses of this sentence, using reasonable economic assumptions consistent with such clauses. Total PDP PV-10 shall be calculated on a pro forma basis, giving effect to (x) the Closing Date Wells in Progress, (y) acquisitions and Dispositions of Oil and Gas Properties consummated by the Borrower and the other Loan Parties since the date of the most recently delivered Reserve Report (provided that, in the case of any acquisition of Oil and Gas Properties, the Administrative Agent shall have received a Reserve Report, in form and substance reasonably satisfactory to it, evaluating the Proved Developed Producing Reserves attributable thereto) and (z) the unwind, monetization or termination of any Swap Agreement to which a Loan Party is a party, in each case occurring since the date of the most recently delivered Reserve Report.
“Transaction Costs” means the financing fees, legal costs and other expenses payable by the Borrower and the other Loan Parties in connection with the consummation of the Transactions on the Closing Date.
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“Transactions” means, with respect to (a) the Borrower, the execution, delivery and performance by the Borrower of its obligations under this Agreement, each other Loan Document to which it is a party, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged Properties and other Properties pursuant to the Security Documents, and (b) each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document to which it is a party, the guaranteeing of the Secured Obligations and the other obligations under the Guarantee and Collateral Agreement by such Guarantor and such Guarantor’s grant of the security interests and provision of collateral thereunder, and the grant of Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to the Security Documents, and (c) the assignment, termination or release of all Liens, Indebtedness and guarantees under the Existing Credit Agreement.
“UCC” means the Uniform Commercial Code of the State of New York or of any other state the laws of which are required to be applied in connection with the perfection of security interests in any collateral.
“UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Unrestricted Cash” means cash and Cash Equivalents of the Borrower or any of the other Loan Parties that would not appear as “restricted” on a consolidated balance sheet of the Borrower or any of the other Loan Parties; provided that (a) cash and Cash Equivalents that would appear as “restricted” on a consolidated balance sheet of Borrower or any of the other Loan Parties solely because such cash or Cash Equivalents are subject to a Control Agreement in favor of the Administrative Agent shall constitute Unrestricted Cash hereunder, (b) cash and Cash Equivalents shall be included in the determination of Unrestricted Cash only to the extent that such cash and Cash Equivalents are maintained in accounts subject to a Control Agreement or are Excluded Accounts of the type specified in clause (b) of the definition thereof, in each case, in compliance with the terms of this Agreement, and (c) cash and Cash Equivalents that are maintained in accounts to the extent required under this Agreement to cash collateralize LC Exposure shall not be included in Unrestricted Cash.
“Unwind” means, with respect to any transaction under a Swap Agreement, the early termination, unwind, or cancelation of any transaction under such Swap Agreement. “Unwound” shall have a meaning correlative to the foregoing.
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“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” has the meaning given in Section 7701(a)(30) of the Code.
“U.S. Special Resolution Regimes” has the meaning given to such term in Section 12.22.
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries or by the Borrower and one or more of the Wholly-Owned Subsidiaries.
“Wink JV Entity” means Wink Amine Treater, LLC, a Texas limited liability company.
“Wink JV Holdco” means Wink Amine Treater Holdings, LLC, a Texas limited liability company (f/k/a Brazos Amine Treater Holdings, LLC, a Texas limited liability company).
“Workover Expenses” means any expenses relating to workovers, “re-works” or other remedial treatments in respect of producing oil & gas wells.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. The use of the phrase “subject to” as used in connection with Excepted Liens or otherwise and the permitted existence of any Excepted Liens or any other Liens shall not be interpreted to expressly or impliedly subordinate any Liens granted in favor of the Administrative Agent and the other Secured Parties as there is no intention to subordinate the Liens granted in favor of the Administrative Agent and the other Secured Parties. No provision of this Agreement or any other Loan Document shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.
The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, (a) the continuation of, administration of, submission of,
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calculation of or any other matter related to ABR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, ABR, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of ABR, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain ABR, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR or any other Benchmark, or any component definition thereof or rates referred to in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
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Promptly following receipt of such Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made. Not later than 1:00 P.M., New York City time, on the Closing Date or the Incremental Term Loan Closing Date, as applicable, each Lender shall make available to the Administrative Agent an amount in dollars and in immediately available funds equal to the Loan to be made by such Lender on the Closing Date or the Incremental Term Loan Closing Date, as applicable. The Administrative Agent shall then make available to Borrower the aggregate of the amounts made available to the Administrative Agent by the Lenders, in like funds as received by the Administrative Agent.
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The obligation of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions: (i) at the time of and immediately after giving effect to the issuance, amendment, renewal or extension of such Letter of Credit, no Default or Event of Default shall have occurred and be continuing, (ii) all representations and warranties of the Loan Parties in each applicable Loan Document shall be true and correct in all material respects on and as of the date of the issuance, amendment, renewal or extension of such Letter of Credit, with the same effect as though made on and as of such date, except in the case of any representation and warranty which (A) expressly relates to a given date, such representation and warranty shall be true and correct in all material respects as of the respective date and (B) is qualified by a materiality or Material Adverse Effect standard in which case such representation and warranty shall be true and correct in all respects, and (iii) the receipt by the Issuing Bank of a request for a Letter of Credit (or an amendment, extension or renewal of a Letter of Credit) in accordance with Section 2.06(b). Each request for the issuance, amendment, renewal or extension of any Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in this paragraph.
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Upon notice thereof by the Administrative Agent to the Borrower, any obligation of the Lenders to make SOFR Loans, and any right of the Borrower to continue SOFR Loans, shall be suspended (to the extent of the affected SOFR Loans or affected Interest Periods) until the Administrative Agent (with respect to clause (b), at the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, (i) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected SOFR Loans or affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to ABR Loans in the amount specified therein and (ii) any outstanding affected SOFR Loans will be deemed to have been converted into ABR Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 5.02.
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and the result of any of the foregoing shall be to increase the cost to such Lender or the Issuing Bank of making, converting into, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, such Issuing Bank or such other Loan Party of issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or Issuing Bank such additional amount or amounts as will compensate such Lender or Issuing Bank for such additional costs incurred or reduction suffered.
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of an Event of Default), (b) the conversion of any Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto or (d) the assignment of any Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 5.04(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
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The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. For purposes of determining compliance with the conditions specified in this Section 6.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or be satisfied with, each document or other matter required under this Section 6.01 to be consented to or approved by a Lender unless the Administrative Agent shall have received notice from such Lender prior to the Closing Date specifying its objection thereto.
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The Administrative Agent shall notify the Borrower and the Incremental Lenders of the Incremental Term Loan Closing Date, and such notice shall be conclusive and binding. For purposes of determining compliance with the conditions specified in this Section 6.02, each Incremental Lender that has signed an Incremental Term Loan Lender Joinder Agreement shall be deemed to have consented to, approved or accepted or be satisfied with, each document or other matter required under this Section 6.02 to be consented to or approved by an Incremental Lender unless the Administrative Agent shall have received notice from such Incremental Lender prior to the Incremental Term Loan Closing Date specifying its objection thereto.
The Borrower and each other Loan Party represents and warrants to the Lenders that:
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other Loan Party or its Properties, or give rise to a right thereunder to require any payment to be made by the Borrower or such other Loan Party and (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any other Loan Party (other than the Liens created by the Loan Documents).
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arrangements creating Liens permitted by Section 9.03(c), but then only on the Property subject of such Finance Lease), or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative Agent and the Lenders on or in respect of their Properties to secure the Secured Obligations and the Loan Documents.
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contract and are not having deliveries curtailed substantially below the subject Property’s delivery capacity), no material agreements exist which are not cancelable on sixty (60) days’ notice or less without penalty or detriment for the sale of production from the Borrower’s or the other Loan Parties’ Hydrocarbons (including, without limitation, calls on or other rights to purchase production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.
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respect to the Money Laundering Laws is pending or, to the best knowledge of the Borrower or any other Loan Party, threatened.
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Until Payment in Full, the Borrower and the other Loan Parties covenant and agree with the Administrative Agent and the Lenders that:
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Notwithstanding the foregoing, (A) the obligations in clauses (a) and (b) of this Section 8.01 may be satisfied by furnishing to the Administrative Agent, at the Borrower’s option, the applicable financial statements of Holdings and its Consolidated Subsidiaries and (B) (i) in the event that the Borrower delivers to the Administrative Agent an Annual Report on Form 10-K of Holdings for any fiscal year, as filed with the SEC or in such form as would have been suitable for filing with the SEC, within the time frames set forth in clause (a) above, such Form 10-K shall satisfy all requirements of clause (a) of this Section 8.01 with respect to such fiscal year to the extent that it contains the information and report and opinion required by such clause (a) and such report and opinion does not contain any qualification or exception as to “going concern” or the scope of the audit (other than any such qualification, exception or explanatory paragraph that is expressly permitted to be contained therein under clause (a) of this Section 8.01) and (ii) in the event that the Borrower delivers to the Administrative Agent a Quarterly Report on Form 10-Q of Holdings for any fiscal quarter, as filed with the SEC or in such form as would have been suitable for filing with the SEC, within the time frames set forth in clause (b) above, such Form 10-Q shall satisfy all requirements of clause (b) of this Section 8.01 with respect to such fiscal quarter to the extent that it contains the information required by such clause (b). To the extent the Borrower elects to satisfy the obligations in clause (a) and (b) of this Section 8.01 by furnishing the financial statements of Holdings and its Consolidated Subsidiaries as described in this paragraph, then, concurrently with the delivery of any financial statements under clause (a) and (b) of this Section 8.01, as applicable, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower executed on its behalf by a Financial Officer setting forth consolidating spreadsheets that show the pro forma adjustments necessary to eliminate the accounts of Holdings from such consolidated financial statements, in such form as would be presentable to the auditors of Holdings.
The Borrower represents and warrants that Holdings and each of its Subsidiaries file the financial statements provided under Section 8.01(a) and Section 8.01(b) with the SEC and/or make such financial statements available to potential holders of their 144A securities, and, accordingly, unless the Borrower has marked such financial statements as “PRIVATE”, the Borrower hereby (1) authorizes the Administrative Agent to make the financial statements to be provided under Section 8.01(a) and Section 8.01(b), along with the Loan Documents, available to Public-Siders and (2) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to Public-Siders without expressly representing and warranting to the Administrative Agent in writing that (1) such materials do not constitute material non-public information within the meaning of the federal securities laws or (2) make such materials that do constitute material non-public information within the meaning of the federal securities laws publicly available by press release or public filing with the SEC.
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Documents required to be delivered pursuant to this Section 8.01 may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the SEC’s Electronic Data Gathering, Analysis and Retrieval system (EDGAR) (or any successor system); or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent); provided that: (A) upon written request by the Administrative Agent (or any Lender through the Administrative Agent) to the Borrower, the Borrower shall deliver paper copies of such documents to the Administrative Agent or such Lender until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely
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responsible for timely accessing posted documents or requesting delivery of paper copies of such document to it and maintaining its copies of such documents.
Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
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Until Payment in Full, the Borrower and the other Loan Parties covenant and agree with the Administrative Agent and the Lenders that:
Total Net Leverage Ratio | |
Fiscal quarters ending March 31, 2025 through and including June 30, 2025 | 2.75 to 1.00 |
Each fiscal quarter thereafter | 2.50 to 1.00 |
Asset Coverage Ratio | |
Fiscal quarters ending March 31, 2025 through and including June 30, 2025 | 1.70 to 1.00 |
Fiscal quarters ending September 30, 2025 through and including December 31, 2025 | 1.85 to 1.00 |
Each fiscal quarter thereafter | 2.00 to 1.00 |
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No intention to subordinate the first priority Lien granted in favor of the Administrative Agent and the Lenders is to be hereby implied or expressed by the permitted existence of Liens permitted under this Section 9.03 or the use of the phrase “subject to” when used in connection with Excepted Liens, Liens permitted by this Section 9.03 or otherwise.
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in the case of each of the foregoing clauses (i) through (vi), so long as Holdings applies the amount of any such Restricted Payment for such purpose and the amount of any such Restricted Payment made in any year does not exceed in the aggregate (a) with respect to Restricted Payments in the foregoing clauses (i) and (iii) through (vi), the maximum annual G&A Expenses permitted under Section 9.19 for such year, and (b) with respect to Restricted Payments for Permitted Tax Distributions, the amount of Taxes for such taxable year that the Borrower and/or its applicable Subsidiary would have paid as standalone companies or as a standalone group taking into account any available deductions, losses and credits.
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Agent and the Secured Parties or restricts any Subsidiary from paying dividends or making distributions to the Borrower or any Guarantor, or which requires the consent of or notice to other Persons in connection therewith; provided, however, the preceding restrictions will not apply to encumbrances or restrictions arising under or by reason of (a) this Agreement or the Security Documents, (b) any leases, licenses or similar contracts as they affect any Property or Lien subject to a lease or license, (c) restriction with respect to a Subsidiary imposed pursuant to an agreement entered into for the direct or indirect sale or Disposition of all or substantially all of the Equity Interests or Property of such Subsidiary (or the Property that is subject to such restriction) pending the closing of such sale or Disposition to the extent such sale is permitted under this Agreement, (d) customary provisions with respect to the distribution of Property of a joint venture contained in joint venture agreements entered into in the ordinary course of business with respect to such joint venture, (e) prohibitions, encumbrances or other restrictions imposed by Governmental Requirements and (f) prohibitions, encumbrances or other restrictions imposed by any agreement relating to secured Indebtedness permitted by Section 9.02 or Indebtedness (including guarantees) under Finance Leases permitted by Section 9.02; provided that such prohibitions, encumbrances or other restrictions apply only to the assets securing such Indebtedness, do not apply to the Collateral and do not otherwise adversely affect the interest of the Secured Parties.
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(iii)Swap Agreements in respect of interest rates with an Approved Counterparty, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated and netted with all other Swap Agreements of the Borrower and the other Loan Parties then in effect effectively converting interest rates from fixed to floating) do not exceed 50% of the then outstanding principal amount of the Borrower’s Indebtedness for borrowed money which bears interest at a fixed rate and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated and netted with all other Swap Agreements of the Borrower and the other Loan Parties then in effect effectively converting interest rates from floating to fixed) do not exceed 50% of the then outstanding principal amount of the Borrower’s Indebtedness for borrowed money which bears interest at a floating rate.
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provided, that:
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(all Capital Expenditures permitted pursuant to this Section 9.20, “Permitted Capital Expenditures”).
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Until Payment in Full, Holdings covenants and agrees with the Administrative Agent and the Lenders that:
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Notwithstanding the foregoing, amounts received from the Borrower or any Guarantor that is not an “eligible contract participant” under the Commodity Exchange Act shall not be applied to any Excluded Swap Obligations (it being understood, that in the event that any amount is applied to Secured Obligations other than Excluded Swap Obligations as a result of this clause, the Administrative Agent shall make such adjustments as it determines are appropriate to distributions pursuant to clause fourth above from amounts received from “eligible contract participants” under the Commodity Exchange Act to ensure, as nearly as possible, that the proportional aggregate recoveries with respect to Secured Obligations described in clause fourth above by the holders of any Excluded Swap Obligations are the same as the proportional aggregate recoveries with respect to other Secured Obligations pursuant to clause fourth above).
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Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing (the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law; rather, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties), (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except as provided in Section 11.03, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of the other Restricted Parties that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. Additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby. Nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof (stating that it is a “notice of default”) is given to the Administrative Agent by the Borrower, a Lender or an Issuing Bank, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document or the occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be items) expressly required to be delivered to the Administrative Agent or as to those conditions precedent expressly required to be to the Administrative Agent’s satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrower and the other Loan Parties or any other obligor or guarantor, or (vii) any failure by the Borrower or any other Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein. For purposes of determining compliance with the conditions specified in Article VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender or an Issuing Bank unless the Administrative Agent shall have received written notice from such Lender or such Issuing Bank prior to the proposed Closing Date specifying its objection thereto.
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or refusing to act hereunder or under any other Loan Documents unless it shall (a) receive written instructions from the Required Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 5.04(b), Section 8.13(c) or Section 12.02) specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or continuing to take any such action. The instructions as aforesaid and any action taken or failure to act pursuant thereto by the Administrative Agent shall be binding on all of the Lenders. If a Default or Event of Default has occurred and is continuing, then the Administrative Agent shall take such action with respect to such Default or Event of Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan Documents or applicable law. The Administrative Agent shall not (i) be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 5.04(b), Section 8.13(c) or Section 12.02), and otherwise the Administrative Agent shall not be liable for any action taken or not taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful misconduct (the absence of which is to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) be responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower or any Guarantor or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of the Borrower or any other Loan Party to perform its obligations hereunder or thereunder.
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any, as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent. The Administrative Agent may rely on the Register to the extent set forth in Section 12.04(b). The Administrative Agent makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of the Borrower or any Guarantor in connection with this Agreement or any other Loan Document.
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connection with the Loan Documents and the matters contemplated therein. Each Lender, by delivering its signature page to this Agreement on the Closing Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document that is explicitly required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Closing Date under this Agreement or any other Loan Document.
Except as specifically contemplated herein, nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or other Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or other Secured Party or to authorize the Administrative Agent to vote in respect of the claim of any Lender or other Secured Party in any such proceeding.
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notice to or consent of any Person except as expressly required by Section 12.02(b)) and (ii) upon Payment in Full. Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to execute and deliver (or instruct the Collateral Agent to execute and deliver) to the Borrower, at the Borrower’s sole cost and expense, any and all (a) releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower (x) upon Payment in Full or (y) in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 9.12 or is otherwise authorized by the terms of the Loan Documents, (b) releases from the Guarantee and Collateral Agreement (A) upon Payment in Full and (B) of any Subsidiary that is sold or otherwise disposed of as permitted by the terms of Section 9.12 or as otherwise specifically authorized by the terms of the Loan Documents and (c) other releases of Collateral that may be specifically authorized by the terms of the Loan Documents or upon Payment in Full.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guarantee and Collateral Agreement pursuant to this Section 11.10 or Section 12.19.
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shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 12.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Secured Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Secured Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds the amount of Secured Obligations credit bid by the acquisition vehicle or otherwise), such Secured Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Secured Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Secured Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid. For the avoidance of doubt, Secured Obligations under a Secured Swap Agreement shall not be subject to a credit bid without the prior written consent of the relevant Secured Swap Provider.
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Loan Party, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions.
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For the avoidance of doubt, the failure to deliver a notice to the Administrative Agent pursuant to this Section 11.15(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 11.15(a) or on whether or not an Erroneous Payment has been made.
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820 Gessner Road, Suite 1100
Houston, TX 77024
Attention: Matthew B. Steele
Telephone: (832) 541-8334
Email: msteele@battalionoil.com
Attention: Walter R. Mayer
Telephone: (713) 652-7039
Email: wmayer@battalionoil.com
With a copy to (such copy shall not constitute notice):
Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300
Dallas, TX 75201
Attention: Courtney S. Marcus
Telephone: (214) 746-8100
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Email: courtney.marcus@weil.com
1345 Avenue of the Americas, 46th Floor
New York, NY 10105
Attention: David N. Brooks, General Counsel, David Sharpe, Credit Operations
Telephone: (212) 798-6100
Email:gccredit@fortress.com; creditoperations@fortress.com
With a copy to (such copy shall not constitute notice):
Blank Rome LLP
717 Texas Avenue, Suite 1400
Houston, TX 77002
Attention: Matthew D. Lea
Telephone: (713) 632-8636
Email: matthew.lea@blankrome.com
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through Approved Electronic Platforms, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).
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Notwithstanding the foregoing, any supplement to Schedule 7.14 (Subsidiaries), Schedule 7.18 (Gas Imbalances), Schedule 7.19 (Marketing Contracts), or Schedule 7.20 (Swap Agreements) shall be effective simply by delivering to the Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the Administrative Agent will promptly deliver a copy thereof to the Lenders.
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accordance with the provisions of Section 10.02(c) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank or their respective Affiliates may have. Each Lender and the Issuing Bank agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
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in connection with ratings issued with respect to such Lender or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower or (j) on a confidential basis to (i) any rating agency in connection with rating the Borrower or the other Loan Parties or the credit facilities provided for herein or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein. For the purposes of this Section 12.11, “Information” means all information received from the Borrower or any other Loan Party relating to the Borrower or any Subsidiary and their businesses, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower or any other Loan Party and other than information pertaining to this Agreement routinely provided by the Administrative Agent to data service providers, including league table providers, that serve the lending industry; provided that, in the case of information received from the Borrower or any other Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Each Lender acknowledges that information furnished to it pursuant to this Agreement or the other Loan Documents may include material non-public information concerning the Borrower and its Affiliates and their related parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with those procedures and applicable law, including Federal and state securities laws.
All information, including requests for waivers and amendments, furnished by the Borrower or the Administrative Agent pursuant to, or in the course of administering, this Agreement or the other Loan Documents will be syndicate-level information, which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that it has identified in its Administrative Questionnaire a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law, including Federal and state securities laws.
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any excess shall be canceled automatically and if theretofore paid shall be credited by such Lender on the principal amount of the Secured Obligations (or, to the extent that the principal amount of the Secured Obligations shall have been or would thereby be paid in full, refunded by such Lender to the Borrower); and (ii) in the event that the maturity of the Loans is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Lender on the principal amount of the Secured Obligations (or, to the extent that the principal amount of the Secured Obligations shall have been or would thereby be paid in full, refunded by such Lender to the Borrower). All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the stated term of the Loans, until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount of interest payable to any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Lender would be less than the amount of interest payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest which would have been payable to such Lender if the total amount of interest had been computed without giving effect to this Section 12.12.
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on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower or any other Loan Party, their stockholders or their Affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise Borrower or any other Loan Party, their stockholders or their Affiliates on other matters) or any other obligation to the Borrower or any of the other Loan Parties except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower or any other Loan Party, their management, stockholders, creditors or any other Person. The Borrower and the other Loan Parties acknowledge and agree that they have consulted their own legal and financial advisors to the extent they deemed appropriate and that they are responsible for making their own independent judgment with respect to such transactions and the process leading thereto. The Borrower and the other Loan Parties agree that they will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such Borrower or Loan Party, in connection with such transaction or the process leading thereto.
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governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, default rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such default rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
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SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE SWAP INTERCREDITOR AGREEMENT. IN THE EVENT OF A CONFLICT BETWEEN THIS AGREEMENT AND THE SWAP INTERCREDITOR AGREEMENT, THE SWAP INTERCREDITOR AGREEMENT SHALL CONTROL.
[SIGNATURES BEGIN NEXT PAGE]
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The parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| HALCÓN HOLDINGS, LLC, | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
| HALCÓN OPERATING CO., INC., as a Loan Party | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
| HALCÓN ENERGY PROPERTIES, INC., as a Loan Party | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
| HALCÓN FIELD SERVICES, LLC, as a Loan Party | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
| HALCÓN PERMIAN, LLC, as a Loan Party | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
Signature Page to Second Amended and Restated Senior Secured Credit Agreement
| BATTALION OIL MANAGEMENT, INC., as a Loan Party | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
Solely with respect to Article IX-A hereof:
| BATTALION OIL CORPORATION, as Holdings | |
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By: | /s/ Matthew B. Steele | |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
| FORTRESS CREDIT CORP., as Administrative Agent and a Lender | |
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By: | /s/ Dustin Schiavi | |
| Name: | Dustin Schiavi |
| Title: | Authorized Signatory |
| MACQUARIE BANK LIMITED, as a Lender | |
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By: | /s/ Charles Angus Pickard | |
| Name: | Charles Angus Pickard |
| Title: | Executive Director |
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By: | /s/ Tom Morgan | |
| Name: | Tom Morgan |
| Title: | Associate Director |
| | |
| (Signed in London under MBL POA | |
Signature Page to Second Amended and Restated Senior Secured Credit Agreement
ANNEX I
Schedule 1.02(a)
[Attached]
Schedule 1.02(b)
Initial Term Loan Commitment
INITIAL TERM LOAN LENDER | INITIAL TERM LOAN COMMITMENT |
Fortress Credit Corp. | $161,900,000.00 |
Macquarie Bank Limited | $100,000 |
TOTAL | $162,000,000.00 |
Schedule 1.02(c)
Incremental Term Loan Commitment
INCREMENTAL LENDER | INCREMENTAL TERM LOAN COMMITMENT |
[_________]1 | $63,000,000.00 |
TOTAL | $63,000,000.00 |
1 To be a Meritz Party designated pursuant to an Incremental Term Loan Joinder Agreement on the Incremental Term Loan Closing Date.
Document and Entity Information |
Dec. 26, 2024 |
|---|---|
| Document and Entity Information [Abstract] | |
| Document Type | 8-K |
| Document Period End Date | Dec. 26, 2024 |
| Entity Registrant Name | Battalion Oil Corp |
| Entity Incorporation, State or Country Code | DE |
| Entity File Number | 001-35467 |
| Entity Tax Identification Number | 20-0700684 |
| Entity Address, Address Line One | 820 Gessner Road |
| Entity Address, Adress Line Two | Suite 1100 |
| Entity Address, City or Town | Houston |
| Entity Address State Or Province | TX |
| Entity Address, Postal Zip Code | 77024 |
| City Area Code | 832 |
| Local Phone Number | 538-0300 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock par value $0.0001 |
| Trading Symbol | BATL |
| Security Exchange Name | NYSEAMER |
| Entity Emerging Growth Company | false |
| Entity Central Index Key | 0001282648 |
| Amendment Flag | false |
1 Year Battalion Oil Chart |
1 Month Battalion Oil Chart |
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