Exhibit 10.33
Execution Version
TENTH AMENDMENT
TO CREDIT AGREEMENT
THIS TENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of January 13, 2024 is among TALOS ENERGY INC., a Delaware corporation (“Holdings”), TALOS PRODUCTION INC., a Delaware corporation (as successor-by-conversion to Talos Production LLC, a Delaware limited liability company) and a direct or indirect Subsidiary of Holdings (the “Borrower”), each other Credit Party, JPMORGAN CHASE BANK, N.A., as the Administrative Agent (the “Administrative Agent”), and each Lender party hereto.
WITNESSETH:
WHEREAS, reference is made to that certain Credit Agreement, dated as of May 10, 2018, among Holdings, the Borrower, the Administrative Agent, the Issuing Banks, the Lenders party thereto, and the other Persons from time to time party thereto (as amended, supplemented, waived or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”; and the Existing Credit Agreement, as amended hereby upon the occurrence (but only if it shall occur) of the Amendment Effective Date, the “Credit Agreement”); and
WHEREAS, the Borrower has informed the Administrative Agent, the Issuing Banks and the Lenders that QuarterNorth Energy Inc., a Delaware corporation (the “Target”), the Borrower and certain of its Affiliates entered that certain Agreement and Plan of Merger dated as of January 13, 2024 (the “Acquisition Agreement”), pursuant to which, after giving effect to a series of transactions, the Borrower shall acquire the Equity Interests of the Target (such acquisition, the “Acquisition”); and
WHEREAS, in connection with the Acquisition, the consideration to be paid by the Borrower shall consist of one or more of the issuance of Equity Interests of Holdings, cash proceeds received by the Borrower from substantially concurrent equity contributions or issuance of new Equity Interests, new junior lien Indebtedness, or one or more Borrowings under the Credit Agreement, or cash-on-hand available to the Borrower at such time; and
WHEREAS, the Borrower has provided to the Administrative Agent and the Lenders a reserve report dated as of September 30, 2023 (the “QuarterNorth Acquisition Reserve Report”), with respect to the Oil and Gas Properties to be acquired by the Borrower as a result of the Acquisition; and
WHEREAS, each of Holdings and the Borrower desires to amend the Existing Credit Agreement on the terms and subject to the conditions set forth herein; and
WHEREAS, Section 13.1 of the Existing Credit Agreement provides that Holdings, the Borrower, the Issuing Banks and the Lenders may amend the Existing Credit Agreement and the other Credit Documents in accordance with the provisions thereof;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements set forth herein, the parties hereto agree as follows:
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The Administrative Agent shall notify the Borrower and the Lenders of the Acquisition Date and the satisfaction of the covenants required by this Section 7, and such notice shall be conclusive and binding.
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(Remainder of Page Left Intentionally Blank)
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the Amendment Effective Date.
TALOS ENERGY INC.,
as Holdings
By: /s/ Sergio Maiworm
Name: Sergio Maiworm
Title: Chief Financial Officer and Senior Vice President
TALOS PRODUCTION INC.,
as the Borrower
By: /s/ Sergio Maiworm
Name: Sergio Maiworm
Title: Chief Financial Officer and Senior Vice President
Signature Page to Tenth Amendment to Credit Agreement
TALOS ERT LLC,
TALOS ENERGY PHOENIX LLC,
TALOS ENERGY OFFSHORE LLC,
TALOS GULF COAST LLC,
TALOS GULF COAST OFFSHORE LLC,
TALOS GULF COAST ONSHORE LLC,
ANRP (TALOS DC), LLC,
CKB PETROLEUM, LLC,
TALOS PETROLEUM LLC,
STONE ENERGY HOLDING, L.L.C.,
TALOS RESOURCES LLC,
TALOS ENERGY HOLDINGS LLC,
TALOS ENERGY LLC,
TALOS ENERGY OPERATING COMPANY LLC,
TALOS PRODUCTION FINANCE INC.,
TALOS ENERGY INTERNATIONAL LLC and
TALOS OIL AND GAS LLC,
TALOS EXPLORATION LLC,
TALOS THIRD COAST LLC,
TALOS ENERGY VENTURES GOM LLC,
TALOS ENERGY CORPORATION SUB LLC,
TALOS ENERGY VENTURES HOLDING, LLC,
TALOS FINANCE CORPORATION,
TALOS ENERGY VENTURES, LLC
as Credit Parties
By: /s/ Sergio Maiworm
Name: Sergio Maiworm
Title: Chief Financial Officer and Senior Vice President
Talos International Holdings SCS, a limited partnership (société en commandite simple), having its registered office address at 6, rue Eugène Ruppert, L-2453 Luxembourg and registered with the RCS Luxembourg under number B 240.942 acting by its general partner, ANRP (Talos DC), LLC, itself represented by:
By: /s/ Sergio Maiworm
Name: Sergio Maiworm
Title: Chief Financial Officer and Senior Vice President
Signature Page to Tenth Amendment to Credit Agreement
JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By: /s/ Jason R. Williams
Name: Jason R. Williams
Title: Authorized Officer
Signature Page to Tenth Amendment to Credit Agreement
DNB Capital LLC,
as a Lender
By: /s/ Kevin Utsey
Name: Kevin Utsey
Title: Senior Vice President
By: /s/ George Philippopoulous
Name: George Philippopoulous
Title: Senior Vice President
Capital One, National Association,
as a Lender
By: /s/ Jason Groll
Name: Jason Groll
Title: Vice President
Keybank National Association,
as a Lender
By: /s/ George McKean
Name: George McKean
Title: Senior Vice President
Societe Generale,
as a Lender
By: /s/ Eric Kim
Name: Eric Kim
Title: Managing Director
CITIBANK, N.A.,
as a Lender
By: /s/ Jeff Ard
Name: Jeff Ard
Title: Vice President
Signature Page to Tenth Amendment to Credit Agreement
Mizuho Bank, Ltd.,
as a Lender
By: /s/ Edward Sacks
Name: Edward Sacks
Title: Executive Director
Regions Bank,
as a Lender
By: /s/ David Valentine
Name: David Valentine
Title: Managing Director
Goldman Sachs Bank USA,
as a Lender
By: /s/ Piryankush Goswami
Name: Piryankush Goswami
Title: Authorized Signatory
Morgan Stanley Senior Funding, Inc.,
as a Lender
By: /s/ Rikin Pandya
Name: Rikin Pandya
Title: Vice President
Signature Page to Tenth Amendment to Credit Agreement
TO TENTH AMENDMENT TO CREDIT AGREEMENT
ADDED TEXT SHOWN UNDERSCORED
DELETED TEXT SHOWN STRIKETHROUGH
CREDIT AGREEMENT
Dated as of May 10, 2018
among
TALOS ENERGY, INC.,
as Holdings,
TALOS PRODUCTION INC.,
as successor-by-conversion to Talos Production LLC,
as the Borrower,
The Several Lenders
from Time to Time Parties Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, Collateral Agent, and Swingline Lender
JPMORGAN CHASE BANK, N.A., DNB BANK ASA, NEW YORK BRANCH, CAPITAL
ONE, NATIONAL ASSOCIATION, KEYBANK NATIONAL ASSOCIATION and
MIZUHO BANK, LTD.,
as Issuing Banks
and
JPMORGAN CHASE BANK, N.A., DNB MARKETS, INC., CAPITAL ONE, NATIONAL
ASSOCIATION, KEYBANC CAPITAL MARKETS INC., SOCIÉTÉ GÉNÉRALE,
CITIBANK, N.A. and MIZUHO BANK, LTD.,
as Lead Arrangers
DNB MARKETS, INC., CAPITAL ONE, NATIONAL ASSOCIATION, KEYBANC
CAPITAL MARKETS INC., SOCIÉTÉ GÉNÉRALE, CITIBANK, N.A. and
MIZUHO BANK, LTD.,
as Syndication Agents
REGIONS BANK,
as Documentation Agent
_____________________________
JPMORGAN CHASE BANK, N.A., DNB MARKETS, INC., CAPITAL ONE, NATIONAL
ASSOCIATION, KEYBANC CAPITAL MARKETS INC., and SOCIÉTÉ GÉNÉRALE,
as Joint Bookrunners
_____________________________
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Table of Contents
Page
SECTION 1. Definitions 3
1.1 Defined Terms 3
1.2 Other Interpretive Provisions 71
1.3 Accounting Terms 71
1.4 Rounding 72
1.5 References to Agreements, Laws, Etc. 7372
1.6 Times of Day 72
1.7 Timing of Payment or Performance 72
1.8 Currency Equivalents Generally 73
1.9 Classification of Loans and Borrowings 73
1.10 Interest Rates; Benchmark Notification 74
1.11 Letter of Credit Amounts 74
1.12 Divisions 7574
SECTION 2. Amount and Terms of Credit 75
2.1 Commitments 75
2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings 76
2.3 Notice of Borrowing 7776
2.4 Disbursement of Funds 7877
2.5 Repayment of Loans; Evidence of Debt 7978
2.6 Conversions and Continuations 79
2.7 Pro Rata Borrowings 80
2.8 Interest 8180
2.9 Interest Periods 81
2.10 Increased Costs 82
2.11 Compensation 83
2.12 Change of Lending Office 84
2.13 Notice of Certain Costs 84
2.14 Borrowing Base 8584
2.15 Defaulting Lenders 89
2.16 Increase of Total Commitment 9291
2.17 [Intentionally Omitted] 92
2.18 Alternate Rate of Interest 9392
SECTION 3. Letters of Credit 94
3.1 Letters of Credit 94
3.2 Letter of Credit Applications 9796
3.3 Letter of Credit Participations 9897
3.4 Agreement to Repay Letter of Credit Drawings 99
3.5 Increased Costs 102101
3.6 New or Successor Issuing Bank 103102
3.7 Role of Issuing Bank 104103
3.8 Cash Collateral 105104
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3.9 Existing Letters of Credit 105
3.10 Applicability of ISP and UCP 106105
3.11 Conflict with Issuer Documents 106105
3.12 Letters of Credit Issued for Restricted Subsidiaries 106105
3.13 Alternate Currency 106105
SECTION 4. Fees; Commitment 105
4.1 Fees 105
4.2 Voluntary Reduction of Commitments 106
4.3 Mandatory Termination of Commitments 108107
SECTION 5. Payments 107
5.1 Voluntary Prepayments 107
5.2 Mandatory Prepayments 109108
5.3 Method and Place of Payment 111110
5.4 Net Payments 112111
5.5 Computations of Interest and Fees 116115
5.6 Limit on Rate of Interest 116115
SECTION 6. Conditions Precedent to Initial Borrowing 117116
SECTION 7. Conditions Precedent to All Subsequent Credit Events 120
SECTION 8. Representations, Warranties and Agreements 122121
8.1 Corporate Status 121
8.2 Corporate Power and Authority; Enforceability 123121
8.3 No Violation 123122
8.4 Litigation 123122
8.5 Margin Regulations 123122
8.6 Governmental Approvals 123122
8.7 Investment Company Act 124122
8.8 True and Complete Disclosure 124122
8.9 Financial Condition; Financial Statements 124123
8.10 Tax Matters 125123
8.11 Compliance with ERISA 125124
8.12 Subsidiaries 126125
8.13 Intellectual Property 126125
8.14 Environmental Laws 126125
8.15 Properties 127125
8.16 Solvency 127126
8.17 Insurance 128126
8.18 Deposit Accounts; Securities Accounts; Commodities Accounts 128126
8.19 Creation of Liens 128126
8.20 Hedge Transactions 128127
8.21 Patriot Act; Sanctions; Anti-Corruption; Anti-Money Laundering 128127
8.22 No Material Adverse Effect 129127
8.23 Foreign Corrupt Practices Act 129127
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8.24 Direct Benefit 129128
8.25 Plan Assets; Prohibited Transactions 129128
8.26 Affected Financial Institutions 129128
SECTION 9. Affirmative Covenants 129128
9.1 Information Covenants 130128
9.2 Books, Records and Inspections 135133
9.3 Maintenance of Insurance 136134
9.4 Payment of Taxes 136135
9.5 Consolidated Corporate Franchises 136135
9.6 Compliance with Statutes, Regulations, Etc. 136135
9.7 ERISA 137135
9.8 Maintenance of Properties 138136
9.9 Transactions with Affiliates 138137
9.10 End of Fiscal Years; Fiscal Quarters 140138
9.11 Additional Guarantors, Grantors and Collateral 140139
9.12 Use of Proceeds 142141
9.13 Further Assurances 143141
9.14 Reserve Reports 144142
9.15 Title Information 145143
9.16 Change in Business 146144
9.17 Holdings and Intermediate Entity Covenant 146145
9.18 Keepwell 147145
9.19 Minimum Hedge Covenant 148146
9.20 Separateness 148146
SECTION 10. Negative Covenants 148146
10.1 Limitation on Indebtedness 148146
10.2 Limitation on Liens 154153
10.3 Limitation on Fundamental Changes 158156
10.4 Limitation on Sale of Assets 160158
10.5 Limitation on Investments 162161
10.6 Limitation on Restricted Payments 166164
10.7 Limitations on Debt Payments and Amendments 170168
10.8 Negative Pledge Agreements 171170
10.9 Limitation on Subsidiary Distributions 173172
10.10 Hedge Transactions 175173
10.11 Financial Performance Ratios 177175
10. 12 Accounts 177175
10.13 Sanctions 177176
10.14 Amendments to Organizational Documents 177176
SECTION 11. Events of Default 178176
11.1 Payments 178176
11.2 Representations, Etc. 178176
11.3 Covenants 178176
11.4 Default Under Other Agreements 178177
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11.5 Bankruptcy, Etc. 179177
11.6 ERISA 179178
11.7 Guarantee 180178
11.8 Security Document 180178
11.9 Judgments 180178
11.10 Change of Control 180179
11.11 Application of Proceeds 181179
11.12 Equity Cure 182180
SECTION 12. The Agents 183182
12.1 Appointment 183182
12.2 Delegation of Duties 184182
12.3 Exculpatory Provisions 184183
12.4 Reliance by Agents 185183
12.5 Notice of Default 186184
12.6 Acknowledgements of Lenders and Issuing Banks 186184
12.7 Indemnification 188186
12.8 Agents in Its Individual Capacities 189187
12.9 Successor Agents 189187
12.10 Withholding Tax 190188
12.11 Security Documents and Collateral Agent under Security Documents and Guarantee 190189
12.12 Right to Realize on Collateral and Enforce Guarantee 191189
12.13 Administrative Agent May File Proofs of Claim 192191
12.14 Certain ERISA Matters 193191
SECTION 13. Miscellaneous 195193
13.1 Amendments, Waivers and Releases 195193
13.2 Notices; Posting of Communications 197195
13.3 No Waiver; Cumulative Remedies 200198
13.4 Survival of Representations and Warranties 200198
13.5 Expenses; Limitation of Liability; Indemnification 200198
13.6 Successors and Assigns; Participations and Assignments 202200
13.7 Replacements of Lenders under Certain Circumstances 209207
13.8 Adjustments; Set-off 210208
13.9 Counterparts; Electronic Execution 211209
13.10 Severability 212210
13.11 Integration 212210
13.12 GOVERNING LAW 213210
13.13 Submission to Jurisdiction; Waivers 213211
13.14 Acknowledgments 214212
13.15 WAIVERS OF JURY TRIAL 215213
13.16 Confidentiality 215213
13.17 Release of Collateral and Guarantee Obligations 216214
13.18 USA PATRIOT Act 217215
13.19 Payments Set Aside 217215
13.20 Reinstatement 218215
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13.21 Disposition of Proceeds 218216
13.22 Collateral Matters; Hedge Agreements 218216
13.23 Agency of the Borrower for the Other Credit Parties 218216
13.24 Acknowledgement and Consent to Bail-In of Affected Financial
Institutions 219216
13.25 Acknowledgement Regarding Any Supported QFCs 219217
13.26 Judgment Currency 220218
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EXHIBITS
Exhibit A Form of Reserve Report Certificate
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Guarantee
Exhibit D Forms of Mortgage/Deed of Trust (Texas and Louisiana)
Exhibit E Form of Collateral Agreement
Exhibit F Form of Intercreditor Agreement
Exhibit G Form of Assignment and Acceptance
Exhibit H-1 Form of Promissory Note (Loan)
Exhibit H-2 Form of Promissory Note (Swingline Loan)
Exhibit I Form of Intercompany Note
Exhibit J Form of Solvency Certificate
Exhibit K Form of Non-Bank Tax Certificate
Exhibit L Form of Notice of Conversion or Continuation
Exhibit M Form of Prepayment Notice
SCHEDULES
Schedule 1.1(a) Commitments
Schedule 1.1(b) Excluded Equity Interests
Schedule 1.1(c) Excluded Subsidiaries
Schedule 1.1(d) Existing Letters of Credit
Schedule 1.1(e) Closing Date Subsidiary Guarantors
Schedule 1.1(f) Closing Date Hedge Banks
Schedule 1.1(g) [Intentionally Omitted]
Schedule 1.1(h) Maximum LC Commitments
Schedule 1.1(i) Excluded Accounts
Schedule 6(b) Local Counsels
Schedule 8.4 Litigation
Schedule 8.12 Subsidiaries
Schedule 8.18 Deposit Accounts; Securities Accounts; Commodities Accounts
Schedule 8.20 Closing Date Hedge Transactions
Schedule 9.9 Closing Date Affiliate Transactions
Schedule 9.13(b) Further Assurances
Schedule 10.1 Closing Date Indebtedness
Schedule 10.2(d) Closing Date Liens
Schedule 10.4(i) Scheduled Dispositions
Schedule 10.5(d) Closing Date Investments
Schedule 10.8 Closing Date Negative Pledge Agreements
Schedule 13.2 Notice Addresses
Schedule 13.22 Legacy Hedge Transactions
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CREDIT AGREEMENT, dated as of May 10, 2018, among TALOS ENERGY, INC., a Delaware corporation (“Holdings”), TALOS PRODUCTION INC., a Delaware corporation (as successor-by-conversion to Talos Production LLC, a Delaware limited liability company) and a wholly owned subsidiary of Holdings (the “Borrower”), the banks, financial institutions and other lending institutions from time to time parties as lenders hereto (each a “Lender” and, collectively, the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent and collateral agent for the Lenders and as the swing line lender, and each Issuing Bank from time to time party hereto.
WHEREAS, the Borrower, as borrower, and Holdings, as parent holding company, heretofore entered into that certain Credit Agreement dated as of February 6, 2013, with Toronto Dominion (Texas) LLC, as administrative agent, collateral agent and swingline lender, Citibank, N.A., and The Toronto-Dominion Bank, New York Branch, as letter of credit issuing banks, and the other banks and financial institutions party thereto (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Talos Credit Agreement”), pursuant to which the Borrower incurred certain Indebtedness as loans or reimbursement obligations in respect of letters of credit issued for its benefit or the benefit of one or more of its Restricted Subsidiaries;
WHEREAS, pursuant to that certain Transaction Agreement, dated as of November 21, 2017 (together with all exhibits and schedules thereto, and as amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), by and among Stone Energy Corporation, a Delaware corporation (“Stone Energy”), Sailfish Energy Holdings Corporation, a Delaware corporation, Sailfish Merger Sub Corporation, a Delaware corporation, Talos Energy LLC, a Delaware limited liability company (“Existing Talos Energy”) and the Borrower, Stone Energy will undergo a reorganization pursuant to which (x) Sailfish Merger Sub Corporation will merge with and into Stone Energy, with Stone Energy as the surviving corporation and a direct wholly owned subsidiary of Sailfish Energy Holdings Corporation; (y) each outstanding share of Stone Energy’s common stock will be converted into the right to receive one share of common stock of Sailfish Energy Holdings Corporation, (z) Sailfish Energy Holdings Corporation will be named “Talos Energy, Inc.” (“New Talos Energy”); through a series of contributions by the direct and indirect owners of all of the equity interests in Borrower, New Talos Energy will receive 100% of the equity interests of Borrower, which at that time will own 100% of the equity interests in Existing Talos Energy, and the contributing parties will receive common stock of New Talos Energy (the transaction described in the foregoing clauses (i) and (ii), herein collectively the “Corporate Reorganization and Merger Transactions”), certain Affiliates of the Sponsors will contribute all outstanding senior unsecured notes issued by the Borrower and Talos Production Finance Inc., in exchange for common stock in New Talos Energy, the Borrower and Stone Energy will offer to exchange their respective second lien notes for second lien notes (the “2018 Junior Lien Notes”) of the Borrower (the “2018 Junior Lien Note Exchange”), and any holders of the existing second lien notes of Stone Energy that accept the exchange offer will execute and deliver an indenture supplement approving certain amendments and modifications to the indenture governing any such existing second lien notes of Stone Energy that remain outstanding after giving effect to the 2018 Junior Lien Note Exchange (the transactions described in the foregoing clauses (i) through (v), collectively, the “Transactions”);
WHEREAS, Stone Energy, as borrower, heretofore entered into, that certain Fifth Amended and Restated Credit agreement, dated as of March 1, 2017, by and among Stone Energy, Bank of America, N.A., as administrative agent and issuing bank, and the lenders and other persons party thereto (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Stone Credit Agreement” and together with the Existing Talos Credit Agreement, the “Existing Credit Agreements”), pursuant to which Stone Energy incurred certain Indebtedness as loans or reimbursement obligations in respect of letters of credit issued for its benefit or the benefit of one or more of its restricted subsidiaries;
WHEREAS, in connection with the foregoing, the Borrower has requested that on the Closing Date, the Lenders provide Loans to the Borrower (but subject to compliance with Section 6(q) regarding minimum remaining Availability) (the “Closing Date Loans”) and at any time and from time to time after the Closing Date, the Lenders provide Loans to the Borrower subject to the Available Commitment, the Borrower has requested that each Issuing Bank issue Letters of Credit (subject to the Available Commitment) at any time and from time to time prior to the L/C Maturity Date (including on the Closing Date to back stop and/or replace any Existing Letter of Credit (subject to the Available Commitment)), in an aggregate Stated Amount at any time outstanding not in excess of $200,000,000, and the Borrower has requested that the Swingline Lender extend credit in the form of Swingline Loans (subject to the Available Commitment) at any time and from time to time prior to the Swingline Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $10,000,000;
WHEREAS, the net proceeds of the Closing Date Loans will be used on the Closing Date to consummate the Transactions, pay Transaction Expenses and repay the Indebtedness outstanding under each of the Existing Credit Agreements outstanding on the Closing Date;
WHEREAS, following the Closing Date, the proceeds of the Loans will be used by the Borrower for the acquisition, development and exploration of Oil and Gas Properties and for working capital and other general corporate purposes of the Borrower and its Restricted Subsidiaries (including Permitted Acquisitions) and to make dividends and distributions to the holders of the Borrower’s Equity Interests (to the extent permitted under this Agreement), and the Letters of Credit will be used by the Borrower and its Restricted Subsidiaries for general corporate purposes, including to secure any surety and bonding requirements and to support deposits required under purchase agreements pursuant to which the Borrower or its Restricted Subsidiaries may acquire Oil and Gas Properties and other assets,;
WHEREAS, the Lenders, the Swingline Lender and the Issuing Banks are willing to make available to the Borrower such revolving credit, swingline and letter of credit facilities upon the terms and subject to the conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:
As used herein, the following terms shall have the meanings specified below:
If the Borrower changes its method of accounting from the full cost method of accounting to the successful efforts or a similar method, “Adjusted Consolidated Net Tangible Assets” will continue to be calculated as if the Borrower were still using the full cost method of accounting.
Utilization Grid
Utilization Percentage | X < 25% | ≥ 25 % X | ≥ 50 % X | ≥ 75% X |
|
|
| < 50 % | < 75 % | < 90% | X ≥ 90% |
Term Benchmark Loans and RFR Loans | 2.75% | 3.00% | 3.25% | 3.50% | 3.75% |
ABR Loans | 1.75% | 2.00% | 2.25% | 2.50% | 2.75% |
Commitment Fee Rate | 0.375% | 0.375% | 0.50% | 0.50% | 0.50% |
Each change in the Commitment Fee Rate or Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) 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).
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).
minus (ttt) the sum of (without duplication and to the extent the amounts described in this clause (b) increased such Consolidated Net Income for the respective period for which EBITDAX is being determined) non-cash items increasing Consolidated Net Income of the Borrower and the Restricted Domestic Subsidiaries for such period (but excluding any such items (A) in respect of which cash was received in a prior period or will be received in a future period or (B) which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDAX in any prior period).
Notwithstanding anything to the contrary contained herein and subject to adjustments as provided under clause (a)(x) above and other adjustments permitted hereunder with respect to acquisitions, Dispositions, and other transactions occurring following the Closing Date and pursuant to the definition of “Pro Forma Basis”, EBITDAX for any period of four-consecutive fiscal quarters ending on or before September 30, 2018, such amounts shall be annualized (i) for the fiscal quarter ending March 31, 2018, by taking EBITDAX for the fiscal quarter ending March 31, 2018, and multiplying it by four (4); (ii) for the fiscal quarter ending June 30, 2018, by taking EBITDAX for the two fiscal quarters ending June 30, 2018 and multiplying it by two (2); and (iii) for the fiscal quarter ending September 30, 2018, by taking EBITDAX for the three (3) fiscal quarters ending September 30, 2018, and multiplying it by four (4) and dividing it by three (3). EBITDAX will be deemed to be $140,000,000 for the fiscal quarter ended March 31, 2018.
Notwithstanding the foregoing, the aggregate amount of add-backs made pursuant to subclause (iv) above and the aggregate amount of operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from the Transactions that are included in EBITDAX in any four-fiscal-quarter period shall not exceed 15% of EBITDAX (prior to giving effect to such add-backs) for such period.
Pro forma calculations made pursuant to the definition of the term “Pro Forma Basis” shall be determined in good faith by a Financial Officer of the Borrower and may include, for any fiscal period ending on or prior to the third anniversary of any relevant pro forma event (but not for any fiscal period ending after such third anniversary), adjustments to reflect operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event (including, to the extent applicable, the Transactions).
For purposes of this definition, any amount in a currency other than Dollars will be converted to Dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDAX for the applicable period.
Notwithstanding anything to the contrary contained above:
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting 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 Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, such Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, such Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
Subject to Section 2.14(h), such amount shall then become the Borrowing Base until the next Scheduled Redetermination Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base pursuant to the Borrowing Base Adjustment Provisions, whichever occurs first. Notwithstanding the foregoing, no Scheduled Redetermination or Interim Redetermination shall become effective until the New Borrowing Base Notice related thereto is received by the Borrower.
For the avoidance of doubt, any such Incremental Increase shall not require any mandatory prepayment or commitment reduction prior to the Maturity Date.
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone, telecopy or electronic mail as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrower delivers a new Notice of Conversion or Continuation in accordance with the terms of Section 2.6 or a new Notice of Borrowing in accordance with the terms of Section 2.3, (1) any Notice of Conversion or Continuation that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Term Benchmark Borrowing and any Notice of Borrowing that requests a Term Benchmark Revolving Borrowing shall instead be deemed to be an Notice of Conversion or Continuation or a Notice of Borrowing, as applicable, for (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.18(a)(i) or (ii) above or (y) an ABR Borrowing if the Adjusted Daily Simple SOFR also is the subject of Section 2.18(a)(i) or (ii) above and (2) any Notice of Borrowing that requests an RFR Borrowing shall instead be deemed to be a Notice of Borrowing, as applicable, for an ABR Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan or RFR Loan is outstanding on the date of the Borrower’s receipt of the notice from the Administrative Agent referred to in this Section 2.18(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan or RFR Loan, then until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrower delivers a new Notice of Conversion or Continuation in accordance with the terms of Section 2.6 or a new Notice of Borrowing in accordance with the terms of Section 2.3, (a) any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan, be converted by the Administrative Agent to, and shall constitute, (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.18(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple SOFR also is the subject of Section 2.18(a)(i) or (ii) above, on such day, and (b) any RFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan.
provided, however, that no L/C Participant shall be obligated to pay to the Administrative Agent for the account of any Issuing Bank its Commitment Percentage of any unreimbursed amount arising from any wrongful payment made by such Issuing Bank under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Issuing Bank.
Each such notice shall specify the date and amount of such prepayment and the Type of Loans to be prepaid. At the Borrower’s election in connection with any prepayment pursuant to this Section 5.1, such prepayment shall not be applied to any Loans of a Defaulting Lender.
Any Non-U.S. Lender that becomes legally ineligible to update any form or certification previously delivered shall promptly notify the Borrower and the Administrative Agent in writing of such Non-U.S. Lender’s inability to do so.
Each Person that shall become a Participant pursuant to Section 13.6 or a Lender pursuant to Section 13.6 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.4(e); provided that in the case of a Participant such Participant shall furnish all such required forms and statements to the Person from which the related participation shall have been purchased.
In addition, to the extent it is legally eligible to do so, each Agent shall deliver to the Borrower (x)(I) prior to the date on which the first payment by the Borrower is due hereunder or (II) prior to the first date on or after the date on which such Agent becomes a successor Agent pursuant to Section 12.9 on which payment by the Borrower is due hereunder, as applicable, two copies of a properly completed and executed IRS Form W-9 certifying its exemption from U.S. Federal backup withholding or a properly completed and executed applicable IRS Form W-8 certifying its non-U.S. status and its entitlement to any treaty benefits, and (y) on or before the date on which any such previously delivered documentation expires or becomes obsolete or invalid, after the occurrence of any event requiring a change in the most recent documentation previously delivered by it to the Borrower, and from time to time if reasonably requested by the Borrower, two further copies of such documentation.
The initial Borrowing under this Agreement is subject to the satisfaction of the following conditions precedent, except as otherwise agreed or waived pursuant to Section 13.1.
The Administrative Agent shall notify the Borrower, the Issuing Banks and the Lenders of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.1) at or prior to 11:59 p.m., New York City time, on May 31, 2018 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).
The agreement of each Lender to make any Loan requested to be made by it (including on the Closing Date) (excluding Mandatory Borrowings and Loans required to be made by the Lenders in respect of Unpaid Drawings pursuant to Sections 3.3 and 3.4), and the obligation of any Issuing Bank to issue Letters of Credit on any date (other than any Existing Letter of Credit) after the Closing Date, is subject to the satisfaction of the following conditions precedent:
The acceptance of the benefits of each Credit Event after the Closing Date shall constitute a representation and warranty by each Credit Party to each of the Lenders that all the applicable conditions specified in Section 7 above have been satisfied as of that time.
In order to induce the Lenders to enter into this Agreement, to make the Loans and issue or participate in Letters of Credit as provided for herein, each of Holdings and the Borrower makes, on the date of each Credit Event, the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit:
The Borrower hereby covenants and agrees that on the Closing Date and thereafter, until the Total Commitment and each Letter of Credit have terminated (unless such Letters of Credit have been collateralized on terms and conditions reasonably satisfactory to each applicable Issuing Bank following the termination of the Total Commitment) and the Loans, the Swingline Loans and Unpaid Drawings, together with interest, fees and all other Obligations incurred hereunder (other than Hedging Obligations under Secured Hedge Transactions, Cash Management Obligations under Secured Cash Management Agreements or contingent indemnification obligations not then due and payable), are paid in full:
All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the response thereto.
It is understood that (A) in the event that in respect of the Junior Lien Indenture, the EnVen Notes Indenture, any indenture or credit agreement in respect of any QuarterNorth Acquisition Debt, any indenture or credit agreement in respect of any Permitted Incremental Junior Lien Debt, or any indenture or credit agreement in respect of any Permitted Refinancing Indebtedness with respect thereto, such Indebtedness permits the Borrower, Holdings or any Parent Entity to report at Holdings’ or such Parent Entity’s level on a consolidated basis, such consolidated reporting at Holdings’ or such Parent Entity’s level in a manner consistent with that described in clauses (a) and (b) of this Section 9.1 for the Borrower (together with a reconciliation showing the adjustments necessary to determine compliance by the Borrower and its Restricted Domestic Subsidiaries with a Financial Performance Covenant) will satisfy the requirements of Section 9.1(a) or Section 9.1(b), as applicable, and (B) documents required to be delivered pursuant to Sections 9.1(a), Section 9.1(b) and Section 9.1(f) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (1) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 13.2 or (2) on which such documents are transmitted by electronic mail to the Administrative Agent; provided that: (a) upon written request by the Administrative Agent, the Borrower shall deliver paper copies of such documents delivered pursuant to Sections 9.1(a), 9.1(b), 9.1(c) and 9.1(f) to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (b) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent 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. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.
The Borrower hereby covenants and agrees that on the Closing Date and thereafter, until the Total Commitment and each Letter of Credit have terminated (unless such Letters of Credit have been collateralized on terms and conditions reasonably satisfactory to the relevant Issuing Banks following the termination of the Total Commitment) and the Loans, the Swingline Loans and Unpaid Drawings, together with interest, fees and all other Obligations incurred hereunder (other than Hedging Obligations under Secured Hedge Transactions, Cash Management Obligations under Secured Cash Management Agreements or contingent indemnification obligations not then due and payable), are paid in full:
Notwithstanding any other provision of this Section 10.1, the maximum aggregate principal amount of outstanding Indebtedness that Restricted Subsidiaries that are not Subsidiary Guarantors permitted by this Section 10.1 shall not exceed $50.0 million at any time outstanding; provided, however, that any Restricted Foreign Subsidiary that is a special purpose vehicle established to finance a project for the acquisition, development, construction, expansion or improvement of the assets or properties relating to the Borrower’s and its Restricted Subsidiaries operations in the United Mexican States, the aggregate principal amount of outstanding Indebtedness permitted by Section 10.1(h) shall not exceed $350.0 million at any time outstanding.
Notwithstanding anything herein to the contrary, any direct or indirect transfer, conveyance or other disposition of Borrowing Base Properties and the Equity Interests of any Restricted Subsidiary or any Minority Investment owning Borrowing Base Properties (whether as a sale, lease, Investment, dividend or due to the issuance of Equity Interests by a Subsidiary Guarantor to a Person other than a Credit Party) shall be subject to Section 10.4(b).
For the purposes of calculating the Consolidated Total Debt to EBITDAX Ratio for the Test Periods ending on September 30, 2018, December 31, 2018 and March 31, 2019 pursuant to this Section 10.11, EBITDAX shall be deemed to equal (i) in the case of the first such Test Period, EBITDAX for the fiscal quarter ending September 30, 2018 multiplied by four (4), (ii) in the case of the second such Test Period, EBITDAX for the two fiscal quarter period ending December 31, 2018, multiplied by two (2) and (iii) in the case of the third such Test Period, EBITDAX for the three fiscal quarter period ending March 31, 2019, multiplied by four-thirds (4/3).
Upon the occurrence of any of the following specified events (each an “Event of Default”):
Then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Majority Lenders, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower or any other Credit Party, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 11.5 shall occur with respect to the Borrower, the result that would occur upon the giving of written notice by the Administrative Agent as specified in clauses (a), (b), and (c) below shall occur automatically without the giving of any such notice): (a) declare the Total Commitment and Swingline Commitment terminated, whereupon the Commitment of each Lender and the Swingline Lender, as the case may be, shall forthwith terminate immediately and any fees theretofore accrued shall forthwith become due and payable without any other notice of any kind; (b) declare the principal of and any accrued interest and fees in respect of any or all Loans and any or all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and/or (c) demand cash collateral in respect of any outstanding Letter of Credit pursuant to Section 3.8(b) in an amount equal to the aggregate Stated Amount of all Letters of Credit issued and then outstanding. In addition, after the occurrence and during the continuance of an Event of Default, the Administrative Agent and the Lenders will have all other rights and remedies available at law and equity.
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, disbursements and other charges of counsel payable under Section 12.7 and amounts payable under Article II) payable to the Administrative Agent and/or Collateral Agent in such Person’s capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the Issuing Banks (including fees, disbursements and other charges of counsel payable under Section 12.7) arising under the Credit Documents and amounts payable under Article II, ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans and Unpaid Drawings, ratably among the Lenders and the Issuing Banks in proportion to the respective amounts described in this clause Third payable to them;
Fourth, (i) to payment of that portion of the Obligations constituting unpaid principal of the Loans, the Unpaid Drawings and Obligations then owing under Secured Hedge Transactions and the Secured Cash Management Agreements and (ii) to Cash Collateralize that portion of Letters of Credit Outstanding comprising the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Section 3.8, ratably among the Lenders, the Issuing Banks, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them; provided that (x) any such amounts applied pursuant to the foregoing clause (ii) shall be paid to the Administrative Agent for the ratable account of the applicable Issuing Bank to Cash Collateralize such Letters of Credit Outstanding, (y) subject to Section 3.8, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to this clause Fourth shall be applied to satisfy drawings under such Letters of Credit as they occur and
(z) upon the expiration of any Letter of Credit, the pro rata share of Cash Collateral attributable to such expired Letter of Credit shall be distributed in accordance with this clause Fourth;
Fifth, to the payment of all other Obligations of the Credit Parties owing under or in respect of the Credit Documents that are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date; and
Last, the balance, if any, after all of the Obligations have been paid in full, to the Borrower or as otherwise required by Requirements of Law.
Subject to Section 3.8, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
Any resignation of any Person as Administrative Agent pursuant to this Section 12.9 shall also constitute its resignation as Swingline Lender.
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, to the extent due under Section 13.5.
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 any plan of reorganization, arrangement, adjustment or composition affecting the Indebtedness or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (A) actual receipt by the relevant party hereto and (B)(1) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (2) if delivered by mail, three Business Days after deposit in the mails, postage prepaid; (3) if delivered by facsimile, when sent and receipt has been confirmed by telephone; (4) if delivered by electronic mail, when delivered; and (5) unless the Administrative Agent otherwise prescribes, notices or communications posted to an Approved Electronic Platform shall be deemed delivered when notification that such notice or communication is available and identifying the website address therefor has been
delivered by electronic mail; provided that notices and other communications to the Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not be effective until received.
For the avoidance of doubt, assignments to Affiliated Institutional Lenders will be permitted hereunder and the foregoing limitations in this clause (h) shall not be applicable to Affiliated Institutional Lenders.
Nothing in this Agreement or in any other Credit Document shall (i) affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower, any Credit Party or its properties in the courts of any jurisdiction, (ii) waive any statutory, regulatory, common law, or other rule, doctrine, legal restriction, provision or the like providing for the treatment of bank branches, bank agencies, or other bank offices as if they were separate juridical entities for certain purposes, including Uniform Commercial Code Sections 4-106, 4-A-105(1)(b), and 5-116(b), UCP 600 Article 3 and ISP98 Rule 2.02, and URDG 758 Article 3(a), or (iii) affect which courts have or do not have personal jurisdiction over the issuing bank or beneficiary of any Letter of Credit or any advising bank, nominated bank or assignee of proceeds thereunder or proper venue with respect to any litigation arising out of or relating to
such Letter of Credit with, or affecting the rights of, any Person not a party to this Agreement, whether or not such Letter of Credit contains its own jurisdiction submission clause.
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 Credit 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 Credit 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.
[End of Credit Agreement]