UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 10, 2018
Talos Energy Inc.
(Exact name of registrant as specified in its charter)
Delaware | 82-3532642 | |||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
||
500 Dallas Street, Suite 2000 Houston, Texas |
77002 | |||
(Address of principal executive offices) | (Zip Code) |
(713) 328-3000
(Registrants telephone number, including area code)
Sailfish Energy Holdings Corporation
625 E. Kaliste Saloom Road, Lafayette, LA 70508
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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. ☐
Introductory | Note |
On May 10, 2018 (the Closing Date ), Talos Energy Inc. (f/k/a Sailfish Energy Holdings Corporation) (the Company ) consummated the transactions contemplated by the Transaction Agreement, dated as of November 21, 2017 (the Transaction Agreement ), among Stone Energy Corporation ( Stone ), the Company, Sailfish Merger Sub Corporation ( Merger Sub ), Talos Energy LLC ( Talos ) and Talos Production LLC ( Talos Production ), pursuant to which each of Stone and Talos became wholly owned subsidiaries of the Company. Substantially concurrent with the consummation of the Transactions, the name of the Company was changed from Sailfish Energy Holdings Corporation to Talos Energy Inc.
Pursuant to the Transaction Agreement, a series of transactions occurred on the Closing Date (the Closing ), including: (i) Stone underwent a reorganization pursuant to which Merger Sub merged with and into Stone, with Stone continuing as the surviving corporation and a direct wholly owned subsidiary of the Company (the Merger ) and each share of Stones common stock outstanding immediately prior to the Merger (other than treasury shares held by Stone, which were cancelled for no consideration) was converted into the right to receive one share of the Companys common stock, par value $0.01 (the Common Stock ); (ii) and (iii) in a series of contributions, entities related to Apollo Management VII, L.P. ( Apollo VII ), Apollo Commodities Management, L.P., with respect to Series I ( Apollo Commodities Management and, together with Apollo VII, Apollo Funds ) and Riverstone Energy Partners V, L.P. ( Riverstone Funds ) contributed all of the equity interests in Talos Production (which at that time owned 100% of the equity interests in Talos) to the Company in exchange for an aggregate of 31,244,085 shares of Common Stock (the Sponsor Equity Exchange ).
Concurrently with the consummation of the Transaction Agreement, the Company consummated the transactions contemplated by the Exchange Agreement, dated as of November 21, 2017 (the Exchange Agreement ), among the Company, Stone, the Talos Issuers (defined below), the various lenders and noteholders of the Talos Issuers listed therein, certain funds controlled by Franklin Advisers, Inc. ( Franklin ) (such controlled noteholders, the Franklin Noteholders ), and certain clients of MacKay Shields LLC ( MacKay Shields ) (such noteholders, the MacKay Noteholders ), pursuant to which (i) the Apollo Funds and Riverstone Funds contributed $102 million in aggregate principal amount of senior notes issued by Talos Production and Talos Production Finance, Inc. (together, the Talos Issuers ) to the Company in exchange for an aggregate of 2,874,049 shares of Common Stock (the Sponsor Notes Exchange and together with the Sponsor Equity Exchange, the Sponsor Exchanges and the Common Stock issued pursuant thereto, the Private Placement ); (ii) the holders (the Bridge Loan Lenders ) of second lien bridge loans (the Bridge Loans ) issued by the Talos Issuers exchanged such second lien bridge loans for $172,023,000 aggregate principal amount of 11.00% Second-Priority Senior Secured Notes due 2022 of the Talos Issuers (the New Second Lien Notes ) and (v) Franklin Noteholders and MacKay Noteholders exchanged their 7.500% Senior Secured Notes due 2022 issued by Stone ( Stone Notes ) for $137,441,992 aggregate principal amount of New Second Lien Notes.
As a result of the closing of the transactions contemplated by the Transaction Agreement and the Exchange Agreement (the Transactions ), AP Talos Energy LLC, AP Talos Energy Debtco LLC (together, the Apollo Feeders ), AP Overseas Talos Holdings Partnership, LLC, AIF VII (AIV), L.P., ANRP DE Holdings, L.P., a Delaware limited partnership (collectively, the Apollo Blockers and, together with the Apollo Feeders, the Apollo Stockholders ), Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC (together, the Riverstone Feeders ) and Riverstone V FT Corp Holdings, L.P. (the Riverstone Blocker and, together with the Riverstone Feeders, the Riverstone Stockholders and, collectively with the Apollo Stockholders, the Sponsor Stockholders ) collectively hold approximately 63% of the Companys outstanding Common Stock, and the former stockholders of Stone, including certain funds controlled by Franklin and certain clients of MacKay Shields, hold approximately 37% of the Companys outstanding Common Stock as of the Closing Date.
Concurrently with the consummation of the Transaction Agreement, the Talos Issuers consummated certain transactions contemplated by the previously announced offer to exchange Stone Notes for New Second Lien Notes and a cash payment (the Exchange Offer ) and solicitation of consents to proposed amendments with respect to the Stone Notes. Approximately $81,497,790 in aggregate principal amount of Stone Notes held by non-affiliates of Stone were validly tendered in the Exchange Offer. As previously disclosed by Stone, Stone entered into a Supplemental Indenture No. 1, dated as of April 3, 2018 ( Supplemental Indenture No. 1 ), with Stone Energy Offshore, L.L.C., as subsidiary guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, which eliminates substantially all of the restrictive covenants and eliminates or modifies certain
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reporting obligations, certain events of default and related provisions contained in the indenture with respect to the Stone Notes. As previously disclosed by Stone, Stone also entered into a Supplemental Indenture No. 2, dated as of April 3, 2018 ( Supplemental Indenture No. 2 ), with Stone Energy Offshore, L.L.C., as subsidiary guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, which releases all of the collateral securing the obligations under the Stone Notes. The amendments to the indenture with respect to the Stone Notes set forth in Supplemental Indenture No. 1 and Supplemental Indenture No. 2 became operative upon the acceptance for exchange of the Stone Notes tendered in the Exchange Offer. As of the Closing Date, approximately $6,060,218 in aggregate principal amount of Stone Notes remain outstanding.
Item 1.01. | Entry into a Material Definitive Agreement. |
Stockholders Agreement
On May 10, 2018, in connection with the Closing, the Company entered into a Stockholders Agreement (the Stockholders Agreement ) with each of the Sponsor Stockholders, that provides, among other things, the following:
| Initial Board Composition. Immediately following the Closing, the board of directors of the Company (the Board ) will consist of ten directors, consisting of (i) two directors designated by the Apollo Stockholders; (ii) two directors designated by the Riverstone Stockholders; (iii) one director designated by the Apollo Stockholders and the Riverstone Stockholders; (iv) the chief executive officer; and (v) four directors, including the Non-Executive Chairman, that are Company Independent Directors (as defined in the Stockholders Agreement) designated by Stone (such directors, the Company Directors ). |
| Board Nomination Rights . Each of the Apollo Stockholders and the Riverstone Stockholders will initially have the right to designate two directors for nomination by the Board for election and maintain its proportional representation on the Board so long as the Apollo Stockholders or the Riverstone Stockholders, as applicable, and their affiliates collectively beneficially own at least (i) 15% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Apollo Funds and the Riverstone Funds, as applicable, at Closing. Upon the Apollo Stockholders and their affiliates ceasing to collectively beneficially own at least (i) 15% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Apollo Funds at Closing, the Apollo Stockholders will have the right to designate one director to the Board for so long as the Apollo Stockholders and their affiliates collectively beneficially own at least (i) 5% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Apollo Funds at Closing. Upon the Apollo Stockholders and their affiliates ceasing to collectively beneficially own at least (i) 5% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Apollo Funds at Closing, the Apollo Stockholders will not have a right to designate a director to the Board. Upon the Riverstone Stockholders and their affiliates ceasing to collectively beneficially own at least (i) 15% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Riverstone Funds at Closing, the Riverstone Stockholders will have the right to designate one director to the Board for so long as the Riverstone Stockholders and their affiliates collectively beneficially own at least (i) 5% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Riverstone Funds at Closing. Upon the Riverstone Stockholders and their affiliates ceasing to collectively beneficially own at least (i) 5% of the outstanding Common Stock or (ii) 50% of the Common Stock that is issued to the Riverstone Funds at Closing, the Riverstone Stockholders will not have a right to designate a director to the Board. |
The successor nominees to the Company Directors shall be selected by the Governance & Nominating Committee of Board, and shall also qualify as Company Directors. The Sponsor Stockholders are required to vote all of their Common Stock (i) in favor of each nominee nominated by a Sponsor Stockholder pursuant to the Stockholders Agreement and (ii) with respect to all other director nominees, in each Sponsor Stockholders sole discretion either, (x) in a manner that is proportionate to the manner in which all shares of Common Stock are voted by stockholders of the Company other than the Sponsor Stockholders with respect to director elections; or (ii) for the Company Directors recommended by the Governance & Nominating Committee of the Board.
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| Committee Composition . The Audit Committee of the Board shall consist solely of Company Directors, the Compensation Committee of the Board shall have at least one Company Director and the Governance & Nominating Committee of the Board shall have at least two Company Directors. |
| Standstill Provisions. For a period of two years beginning on the Closing Date, the Sponsor Stockholders and their respective affiliates have agreed to refrain from taking certain actions, including (i) participating in the solicitation of proxies in opposition to the Company Directors and (ii) calling a special meeting in respect of the foregoing. |
| Transfer Restrictions . For a period of six months beginning on the Closing Date, each of the Apollo Stockholders and Riverstone Stockholders and their respective affiliates may not transfer any shares of the Common Stock without the consent of the Company Directors. On the six-month anniversary of the Closing Date, each of the Apollo Stockholders and Riverstone Stockholders and their respective affiliates will be permitted to transfer, from time to time, up to 50% of the Common Stock issued to the Apollo Funds and Riverstone Funds at the Closing, and on the nine-month anniversary of the Closing Date, each of the Apollo Stockholders and Riverstone Stockholders and their respective affiliates will be permitted to transfer, from time to time, up to 75% of the Common Stock issued to the Apollo Funds and Riverstone Funds at the Closing. |
Until the first anniversary of the Closing Date, subject to certain exceptions, neither of the Apollo Stockholders or Riverstone Stockholders may transfer any shares of Common Stock to any person or group if, to their knowledge, such person or group would beneficially own in excess of 35% of the total outstanding shares of Common Stock following such transfer, without the prior consent of a majority of the Company Directors.
On the first anniversary of the Closing Date, the Apollo Funds and Riverstone Funds will no longer be subject to transfer restrictions in the Stockholders Agreement.
| Related Party Transactions . Any transaction in excess of $120,000 in which the Company or any of its affiliates is a participant and the Apollo Funds or Riverstone Funds or any of their respective affiliates (other than the Company and its subsidiaries) or any director of the Company has a material interest in the transaction must be approved by a majority of the disinterested directors or a majority of the Audit Committee of the Board. |
The foregoing description of the Stockholders Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Stockholders Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.01. | Completion of Acquisition or Disposition of Assets. |
The description of the Transactions set forth under Introductory Note above is incorporated herein by reference.
The issuance of Common Stock as the Merger Consideration was registered under the Securities Act of 1933, as amended (the Securities Act ), pursuant the Companys registration statement on Form S-4 (333-222341) initially filed with the U.S. Securities and Exchange Commission on December 29, 2017 (as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 thereto, the Registration Statement ) and declared effective on April 9, 2018. The definitive consent solicitation statement/prospectus, dated April 9, 2018 (the Consent Solicitation Statement/Prospectus ), that forms a part of the Registration Statement contains additional information about the Transactions and the Transaction Agreement. Additional information about the Transactions is also contained in the Annual Report on Form 10-K for fiscal year ended December 31, 2017 of Stone and additional documents that Stone filed with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act ) (excluding any information furnished pursuant to Item 2.02 or Item 7.01 of any Current Report on Form 8-K) between the date of the Consent Solicitation Statement/Prospectus and the Closing Date.
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The descriptions of the Transaction Agreement and the Exchange Agreement are only summaries, do not purport to be complete and are qualified in their entirety by reference to the Transaction Agreement and Exchange Agreement, which are attached hereto as Exhibits 2.1 and 10.1, respectively, to this Current Report on Form 8-K and are each incorporated into this Item 2.01 by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Credit Facility
On May 10, 2018, Talos Production, LLC (the Borrower ) entered into that certain Credit Agreement (the Credit Agreement ) among the Borrower, as borrower, the Company, as holdings, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders named therein (the Lenders ). The Credit Agreement is a senior secured revolving credit facility (the Credit Facility ) that permits aggregate borrowings of up to $600.0 million as of the Closing Date, including a $200.0 million sublimit for letters of credit and a $10.0 million sublimit for swing line loans, of which $300.0 million was drawn down as of May 10, 2018. Borrowings under the Credit Agreement are subject to a borrowing base which, as of the closing date was $600.0 million. The maximum commitments under the Credit Agreement may be increased, subject to customary requirements, up to an aggregate amount of $1.5 billion.
The obligations of the Borrower under the Credit Agreement are secured by substantially all assets of the Borrower. In addition, the Borrowers subsidiaries, the Company, and certain subsidiaries of the Company who are parent entities of the Borrower have guaranteed the Borrowers obligations under the Credit Agreement and have granted to the Lenders security interests in substantially all of their respective assets.
Borrowings under the Credit Agreement will bear interest at a rate equal to, at the Borrowers option, either (1) a base rate plus an applicable margin ranging between 1.75% per annum and 2.75% per annum, based upon the utilization percentage of the borrowing base under the Credit Agreement or (2) a LIBOR rate plus an applicable margin ranging between 2.75% per annum and 3.75% per annum, based upon the utilization percentage of the borrowing base under the Credit Agreement.
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including limits on the Borrowers and certain of its subsidiaries ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. The Credit Agreement also requires compliance with customary financial covenants, which are a leverage ratio and a current ratio. In addition, it contains customary events of default that entitle the Lenders to cause any or all of the Borrowers indebtedness under the Credit Agreement to become immediately due and payable. The events of default (some of which are subject to applicable grace or cure periods), include among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults.
The foregoing description of the Credit Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated into this Item 2.03 by reference.
Second Lien Indenture
General
On the Closing Date, the Talos Issuers issued $390,867,820 in aggregate principal amount of New Second Lien Notes. The New Second Lien Notes were issued to eligible holders of Stone Notes who participated in the Exchange Offer, the Bridge Loan Lenders and the Franklin Noteholders and MacKay Noteholders pursuant to an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereunder and in compliance with Regulation S thereunder. In exchange for the issuance of the New Second Lien Notes and a cash payment from the Talos Issuers equal to $23.70 per $1,000 principal amount of Stone Notes or Bridge Loans so exchanged, the Stone Notes and Bridge Loans exchanged pursuant to the Exchange Offer and pursuant to the Exchange Agreement were cancelled. The New Second Lien Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.
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The New Second Lien Notes were issued pursuant to an Indenture, dated as of May 10, 2018 (the Second Lien Indenture ), among the Talos Issuers, the Guarantors (as defined below) and Wilmington Trust, National Association, as trustee and collateral agent (in such capacity, the Notes Agent ). The Talos Issuers obligations under the New Second Lien Notes and the Second Lien Indenture are fully and unconditionally guaranteed by each of Talos Productions wholly-owned domestic restricted subsidiaries that guarantees the Credit Facility (the Guarantors ). The New Second Lien Notes and the related guarantees are senior secured obligations of the Talos Issuers and the Guarantors.
Maturity and Interest Payments
The New Second Lien Notes will mature on April 3, 2022. Interest on the New Second Lien Notes will accrue at 11.00% per annum and will be paid semi-annually, in arrears, on April 15 and October 15 of each year, beginning October 15, 2018.
Redemption
On or after May 10, 2019, the Talos Issuers may redeem the New Second Lien Notes at their option, in whole at any time or in part from time to time, at the redemption prices set forth in the Second Lien Indenture plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, prior to May 10, 2019, the Talos Issuers may redeem the New Second Lien Notes at their option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the New Second Lien Notes redeemed, plus a make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, at any time and from time to time on or prior to May 10, 2019, the Talos Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the New Second Lien Notes (calculated after giving effect to any issuance of additional notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 111.00%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Certain Covenants
The Second Lien Indenture contains covenants that limit the Talos Issuers and their restricted subsidiaries ability to, among other things: (i) incur or guarantee additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other distributions in respect of its capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create liens on assets to secure debt; (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (vii) enter into certain transactions with its affiliates. These covenants are subject to a number of important limitations and exceptions. Additionally, upon the occurrence of specified change of control events, the Talos Issuers must offer to repurchase the New Second Lien Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date. The Second Lien Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding New Second Lien Notes to be due and payable immediately.
Collateral
The New Second Lien Notes are secured by second priority security interests in the collateral that secures the Talos Issuers obligations under the Credit Facility. Pursuant to a Collateral Agreement, dated as of May 10, 2018, among the Talos Issuers, the Guarantors and the Notes Agent, the Talos Issuers and the Guarantors have pledged all of the collateral that secures the borrowings under the Credit Facility to secure their obligations under the New Second Lien Notes.
Registration Rights
In connection with the issuance of the New Second Lien Notes, the Talos Issuers and the Guarantors have entered into a Registration Rights Agreement (the Second Lien Registration Rights Agreement ) with certain
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holders of the New Second Lien Notes, in which they have agreed to file an exchange offer registration statement enabling holders to exchange the New Second Lien Notes for registered new second lien notes with terms substantially identical to the terms of the New Second Lien Notes. The Talos Issuers and the Guarantors agreed to use commercially reasonable efforts to cause the registration statement to become effective under the Securities Act within 180 days after the Closing Date and to use commercially reasonable efforts to file a shelf registration statement for the resale of the New Second Lien Notes if they cannot complete an exchange offer within 180 days and in certain other circumstances. The Talos Issuers will be required to pay additional interest on the New Second Lien Notes if they fail to comply with certain of their obligations under the Second Lien Registration Rights Agreement within the specified time periods.
The foregoing descriptions of the New Second Lien Notes, Second Lien Indenture and the Second Lien Registration Rights Agreement are only summaries, do not purport to be complete and are qualified in their entirety by reference to the Second Lien Indenture and the Second Lien Registration Rights Agreement, which are filed as Exhibit 4.5 and Exhibit 4.6, respectively, to this Current Report on Form 8-K and are incorporated into this Item 2.03 by reference.
Intercreditor Agreement
On May 10, 2018, the Company, the Borrower, and certain other subsidiaries of the Company entered into an acknowledgment of and consent to an Intercreditor Agreement, among JPMorgan Chase Bank, N.A., as First Lien Agent, and Wilmington Trust, National Association, as Second Lien Agent (the Intercreditor Agreement ), pursuant to which the liens on the collateral securing the New Second Lien Notes are contractually subordinated to the liens on the collateral that secure the Credit Agreement and certain other obligations. In the event of a foreclosure on the collateral or of insolvency proceedings, subject to the expiration of a customary standstill period, the holders of the New Second Lien Notes will receive proceeds from the collateral only after obligations under the Credit Facility and such other obligations have been paid in full.
The foregoing description of the Intercreditor Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Intercreditor Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated into this Item 2.03 by reference.
Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
Prior to the Transactions, the common stock of Stone was registered pursuant to Section 12(b) of the Exchange Act and listed on the New York Stock Exchange ( NYSE ). As a result of the Transactions, Stone has requested that the NYSE file a Form 25 to withdraw the common stock of Stone from listing on the NYSE. The common stock of Stone was delisted and suspended from trading on the NYSE as of prior to the opening of trading on the Closing Date.
Stone has filed a Form 15 with the Securities and Exchange Commission ( SEC ) to terminate the registration under the Exchange Act of the common stock of Stone and suspend the reporting obligations under Section 15(d) of the Exchange Act of Stone.
Pursuant to Rule 12g-3(b) under the Exchange Act of 1934, as amended (the Exchange Act ), the Company is the successor issuer to Stone. The shares of the Common Stock are deemed to be registered under Section 12(b) of the Exchange Act, and the Company is subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder. The Company hereby reports this succession in accordance with Rule 12g-3(f) under the Exchange Act. The shares of the Common Stock were approved for listing on the NYSE and will trade under the symbol TALO.
The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.01.
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Item 3.02 | Unregistered Sales of Equity Securities. |
The description set forth under Introductory Note above of the Sponsor Exchanges in connection with the Private Placement is incorporated herein by reference. The foregoing transactions were undertaken in reliance on an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof. On the Closing Date, the Company entered into the Warrant Agreement Amendment (as defined below) pursuant to which it succeeded to and was substituted for Stone under the Warrant Agreement (as defined below). The description and terms of the Warrants (as defined below) set forth under Item 3.03 below is incorporated herein by reference. The Warrants were offered and sold by Stone in reliance on an exemption from the registration requirements of the Securities Act pursuant to Section 1145(a)(1) of the Bankruptcy Code.
Item 3.03 | Material Modification of Rights of Security Holders. |
As a result of the consummation of the Transactions, each share of Stones common stock outstanding immediately prior to the Merger (other than treasury shares held by Stone, which were cancelled for no consideration) was converted into the right to receive one share of Common Stock, and the rights of the holders of shares of Stones common stock were modified. The rights of holders of the Common Stock are governed by the Amended and Restated Certificate of Incorporation of the Company (the Amended Certificate of Incorporation ) and the Amended & Restated Bylaws of the Company (the Amended Bylaws ).
The Amended Certificate of Incorporation and the Amended Bylaws are filed as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated into this Item 3.03 by reference.
Registration Rights Agreement
On May 10, 2018, in connection with the Closing, the Company entered into a Registration Rights Agreement (the Registration Rights Agreement ) with each of the Sponsor Stockholders, Franklin and MacKay Shields relating to the registered resale of the Common Units owned by such parties as of Closing (the Registrable Securities ). Under the Registration Rights Agreement, the Company is required to file a shelf registration statement within 30 days of its receipt of written request by a holder of Registrable Securities (a Holder ), provided that the Company will not be required to file a shelf registration statement earlier than 90 days after the Closing. Each Holder will be limited to two demand registrations in any twelve-month period.
The Holders have the right to request that the Company initiate underwritten offerings of Common Stock; provided , that the Apollo Stockholders and Riverstone Stockholders will have the right to demand three underwritten offerings in any twelve-month period, and Franklin and MacKay Shields will only have the collective right to demand one underwritten offering. The Holders have customary piggyback rights with respect to any underwritten offering conducted by the Company for as long as they own 5% of the Registrable Securities. Each Holder will agree to a 90-day lock up with underwriters in the event of an underwritten offering, provided that the lock up will not apply to any Holder who does not have a right to participate in such underwritten offering. The Registration Rights Agreement will terminate with respect to Franklin and MacKay Shields in the event that either Franklin or MacKay Shields ceases to beneficially own 5% or more of the then-outstanding shares of Common Stock. The Registration Rights Agreement will otherwise terminate at such time as there are no Registrable Securities outstanding.
The foregoing description of the Registration Rights Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated into this Item 3.03 by reference.
Amendment to Warrant Agreement
On February 28, 2017, Stone entered into a Warrant Agreement (the Warrant Agreement ) with Computershare Inc. and Computershare Trust Company, N.A., (collectively, Computershare ) pursuant to which Stone issued warrants (the Warrants ) to purchase up to an aggregate of 3,529,412 shares of common stock of Stone at an exercise price of $42.04 per share, exercisable until February 28, 2021.
In accordance with the terms of the Warrant Agreement, each unexercised Warrant outstanding immediately prior to Closing shall be assumed by the successor entity and shall continue to be subject to the same terms and conditions as immediately prior to Closing, and the successor entity shall succeed to and be substituted for Stone with the same effect as if it had been named in the Warrant Agreement as Stone.
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In connection with the Closing and pursuant to the terms of the Warrant Agreement, on the Closing Date, the Company, Stone and Computershare entered into Amendment No. 1 to the Warrant Agreement (the Warrant Agreement Amendment ). The Warrant Agreement Amendment provides that, following the effective time of the Merger, the warrants are exercisable for one share of common stock of the Company in lieu of each share of Stone common stock and Stones obligations under the Warrant Agreement were assumed by the Company. The warrants are exercisable on the same terms and conditions provided in the Warrant Agreement..
The foregoing descriptions of the Warrant Agreement and the Warrant Agreement Amendment are only summaries, do not purport to be complete and are qualified in their entirety by reference to the Warrant Agreement and Warrant Agreement Amendment, which are attached as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are each incorporated into this Item 3.03 by reference.
Item 5.01 | Changes in Control of Registrant. |
The descriptions of the Transactions and the Stockholders Agreement set forth under Introductory Note and Item 1.01 above are incorporated herein by reference.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Principal Officers
In connection with the Transactions, effective as of Closing, James M. Trimble, Kenneth H. Beer and Lisa S. Jaubert were removed as officers of the Company and the following individuals were appointed as executive officers of the Company:
Timothy S. Duncan (44)
Mr. Duncan has been appointed President and Chief Executive Officer of the Company. Mr. Duncan has served as President and Chief Executive Officer of Talos and as a member of the Talos board of directors since April 2012 and was a founder of Talos. Prior to Talos, Mr. Duncan was the Senior Vice President of Business Development and a founder of Phoenix Exploration in April 2006, where he was responsible for all of Phoenixs business development evaluations and negotiations, including the sale of the company to a group of buyers led by Apache Corporation. Prior to Phoenix Exploration, Mr. Duncan served as Manager of Reservoir Engineering and Evaluations for Gryphon Exploration. Mr. Duncan also worked in various reservoir engineering and portfolio evaluation functions for Amerada Hess Corporation, Zilkha Energy Company and Pennzoil E&P Company. Mr. Duncan received his BS in Petroleum Engineering from Mississippi State University, where he was honored in 2012 as a Distinguished Fellow of the College of Engineering. Mr. Duncan also received his MBA from the Bauer Executive Program at the University of Houston. He is an active member of the SPE, IPAA, the National Ocean Industries Association (NOIA) and the Young Presidents Organization. Mr. Duncan also serves on various academically focused advisory boards, including the College of Engineering Deans Advisory Council and the Foundation Board at Mississippi State University. Mr. Duncan was named as Ernst & Young Entrepreneur of the Year Program for the Energy and Energy Services sector in the Gulf Coast in June 2016.
Stephen E. Heitzman (68)
Mr. Heitzman has been appointed Executive Vice President and Chief Operating Officer of the Company. Mr. Heitzman served as Executive Vice President and Chief Operating Officer of Talos since April 2012 and was a founder of Talos. Prior to Talos, Mr. Heitzman was the President and Chief Executive Officer and a founder of Phoenix Exploration Company LP in April 2006. Prior to Phoenix Exploration Company LP, he was a founder and Vice President Operations of Gryphon Exploration and was responsible for the formation, staffing and supervision of Gryphons Operations Team from 2000 through January 2006. Mr. Heitzman began his career as a petroleum engineer with Amoco in the Houston area and held various engineering and management positions both domestically and held various engineering and management positions both domestically and internationally, onshore and offshore for various companies including Huffco Indonesia for Roy M. Huffington, Inc. Mr. Heitzman received his BS in Mechanical Engineering from Texas Tech University and is a member if the Texas Tech University Academy of Mechanical Engineers, Petroleum Engineering Academy, Distinguished Engineering Alumni, Key Society, and has more than 45 years of industry experience.
9
John A. Parker (62)
Mr. Parker has been appointed Executive Vice President of Exploration of the Company. Mr. Parker served as Executive Vice President of Exploration of Talos since April 2012 and was a founder of Talos. Prior to Talos, Mr. Parker was the Senior Vice President of Exploration and a founder of Phoenix Exploration Company LP in April 2006. Prior to Phoenix Exploration Company LP, he was a founder and key contributor to the success of Gryphon Exploration as Exploration Manager of the Texas Shelf. While at Gryphon Exploration, he generated prospects and supervised the prospect generation of the Texas exploration team. Prior to Gryphon Exploration, Mr. Parker worked as an exploration geologist for EOG Resources in the Gulf of Mexico. Mr. Parker started his career at Shell Oil Company where he worked as an exploration geologist in the Gulf Coast onshore. He later worked exploring in international basins at Pecten. Mr. Parker received his BS from Louisiana State University and his MS in Earth Sciences from the University of New Orleans and has more than 34 years of industry experience
Michael L. Harding II (49)
Mr. Harding has been appointed as Executive Vice President, Chief Financial Officer and Treasurer of the Company. Mr. Harding served as Senior Vice President and Chief Financial Officer of Talos since December 2015 after becoming Vice President and Chief Accounting Officer of Talos in October 2014 and Chief Accounting Officer and Controller of Talos in April 2012. Mr. Harding is responsible for financial reporting, planning, audit, tax, information technology and human resources. Prior to joining Talos in February 2012, Mr. Harding was Manager of Business Development for Consulting Services for Pannell Kerr Forster of Texas, P.C., beginning in December 2010. Mr. Harding served from December 2008 to December 2010 as Vice President and Controller for RigNet, Inc. At Apache Corporation, Mr. Harding served from June 2003 to December 2008 in various levels of accounting management including revenue, capital and regional accounting management in Calgary, Alberta. With El Paso Merchant Energy Group, Mr. Harding served seven years in various accounting management roles including financial derivatives and power asset accounting and planning. Mr. Harding earned his BBA in Accounting from Texas A&M University. Mr. Harding is a member of the AICPA. Mr. Harding also serves on the Advisory Council for Texas A&M Universitys McFerrin Center for New Ventures and Entrepreneurship.
William S. Moss III (48)
Mr. Moss has been appointed Executive Vice President, General Counsel and Secretary of the Company. Mr. Moss served as Senior Vice President and General Counsel of Talos since May 2013. Prior to Talos, Mr. Moss was a partner at Mayer Brown LLP in Houston where he was the head of the Houston Corporate Practice. Mr. Moss joined Mayer Brown LLP in May 2005. At Mayer Brown LLP, Mr. Mosss practice focused on mergers and acquisitions, securities offerings and general corporate and securities matters and he represented clients throughout the energy value chain. Mr. Moss joined Talos after having represented Talos as outside counsel in its initial formation and its subsequent acquisition of ERT from Helix in February of 2013. Mr. Moss also represented Phoenix Exploration in its initial formation in April 2006, acquisitions and ultimate sale to a group of buyers led by Apache Corporation. Prior to joining Mayer Brown LLP, Mr. Moss worked at Baker Botts, L.L.P. Mr. Moss has an AB from Dartmouth College, a M. Phil from Cambridge University and a J.D. from the University of Texas School of Law.
Appointment of Directors
In connection with the Closing, James M. Trimble and Lisa S. Jaubert were removed from the Board effective as of Closing. Such removals do not arise from any disagreement with the Company, its management or the Board on any matter relating to the Companys operations, policies or practices, the general direction of the Company, or such directors role on the Board.
Effective as of Closing, the following individuals were each nominated and appointed to the Board: Timothy S. Duncan, Gregory A. Beard, Christine Hommes, Robert M. Tichio, Olivia C. Wassenaar, Neal P. Goldman, John Brad Juneau, James M. Trimble and Charles M. Sledge.
On May 14, 2018, Donald R. Kendall, Jr. was nominated and appointed to the Board. Mr. Kendall was nominated by the Apollo Stockholders and the Riverstone Stockholders pursuant to their right to jointly nominate a director to the Board under the Stockholders Agreement. Upon his appointment, Mr. Kendall replaced Mr. Goldman as a member of the Audit Committee of the Board.
On May 16, 2018, as a result of her departure from Riverstone Holdings LLC, Olivia C. Wassenaar announced to the Board her intent to resign from the Board, including from her position as a member of the Compensation Committee of the Board, effective as of the same date, and the Board accepted her resignation effective as such date. Ms. Wassenaars resignation does not arise from any disagreement with the Company, its management or the Board on any matter relating to the Companys operations, policies or practices, the general direction of the Company, or her role on the Board.
10
On May 16, 2018, Rajen Mahagaokar was nominated and appointed to the Board by the Riverstone Stockholders, effective as of the same date, pursuant to the Riverstone Stockholders right under the Stockholders Agreement to fill the vacancy created by Ms. Wassenaars resignation. Mr. Mahagaokar was appointed to the Compensation Committee of the Board in the place of Ms. Wassenaar.
Following the events described above, the committees of the Board are constituted as follows:
Audit Committee: Charles M. Sledge (Chair), Donald R. Kendall, Jr. and John Brad Juneau
Compensation Committee: James M. Trimble (Chair), Gregory A. Beard and Rajen Mahagaokar
Governance and Nominating Committee: Neal P. Goldman (Chair), Robert M. Tichio and Charles M. Sledge
Safety Committee: Christine Hommes (Chair), John Brad Juneau and James M. Trimble
The Board determined that each of Gregory A. Beard, Christine Hommes, Robert M. Tichio, Olivia C. Wassenaar, Neal P. Goldman, John Brad Juneau, James M. Trimble, Charles M. Sledge, Donald R. Kendall, Jr. and Rajen Mahagaokar is independent pursuant to NYSE rules. Further, the Board determined that each of John Brad Juneau, Charles M. Sledge and Donald R. Kendall, Jr. meets the additional independence criteria to serve as a member of the Audit Committee of the Board and that Charles M. Sledge is an audit committee financial expert and is financially literate.
The Board will be divided into three classes of directors and the directors will serve for staggered three-year terms. The class I directors will include Charles M. Sledge, Robert M. Tichio and Gregory A. Beard; the class II directors will include Timothy S. Duncan, John Brad Juneau and Donald R. Kendall, Jr.; and the class III directors will include Neal P. Goldman, James M. Trimble, Christine Hommes and Rajen Mahagoakar.
Following the Closing, compensation for directors of the Company will be determined by the Board. The Company anticipates that compensation for service on the Board will be provided only to the non-employee directors of the Company who are not officers or employees of the Company or its affiliates, the Apollo Funds or the Riverstone Funds.
There are no arrangements or understandings between any director and any other person pursuant to which the director was selected as a director, other than the provisions of the Stockholders Agreement relating to the appointment of directors, and none of the directors are a participant in any related party transaction required to be reported pursuant to Item 404(a) of Regulation S-K.
Long Term Incentive Plan
In connection with the Closing, the Talos Energy Inc. Long Term Incentive Plan (the LTIP ) became effective on the Closing Date for the benefit of employees, directors and consultants of the Company and its affiliates. The LTIP provides for the grant, from the time to time, of all of any of the following types of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, or substitute awards. Subject to adjustment in accordance with the terms of the LTIP, 5,415,576 shares of Common Stock have been reserved for delivery pursuant to awards under the LTIP. The LTIP will be administered by the Compensation Committee of the Board.
The foregoing description of the LTIP is not complete and is qualified in its entirety by reference to the full text of the LTIP, which is attached as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.
Indemnification Agreements
In connection with the Closing, the Company entered into Indemnification Agreements ( Indemnification Agreements ) with each of the executive officers and directors of the Company. These Indemnification Agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liability that may arise by reason of their service to the Company, and to advance certain expenses incurred as a result of any proceeding against them as to which they could be indemnified.
11
The foregoing description of the Indemnification Agreements is not complete and is qualified in its entirety by reference to the full text of the Indemnification Agreements, which are attached as Exhibits 10.5 through 10.19 to this Current Report on Form 8-K and incorporated into this Item 5.02 by reference.
Item 9.01. | Financial Statements and Exhibits. |
(a) Financial Statements of Business Acquired.
To be filed by amendment not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
To be filed by amendment not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
12
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 16, 2018
TALOS ENERGY INC. | ||
By: |
/s/ William S. Moss III |
|
Name: | William S. Moss III | |
Title: | Executive Vice President, General Counsel and Secretary |
14
Exhibit 2.1
Execution Version
TRANSACTION AGREEMENT
dated as of
November 21, 2017
by and among
STONE ENERGY CORPORATION,
SAILFISH ENERGY HOLDINGS CORPORATION,
SAILFISH MERGER SUB CORPORATION,
TALOS ENERGY LLC
and
TALOS PRODUCTION LLC
TABLE OF CONTENTS
Page | ||||||||
ARTICLE 1 DEFINITIONS |
5 | |||||||
Section 1.01 |
Definitions |
5 | ||||||
ARTICLE 2 THE GREEN REORGANIZATION, THE NEW SAILFISH REORGANIZATION, THE GREEN CONTRIBUTION AND THE DEBT EXCHANGES |
21 | |||||||
Section 2.01 |
Green Reorganization |
21 | ||||||
Section 2.02 |
The Merger |
22 | ||||||
Section 2.03 |
Conversion of Shares |
22 | ||||||
Section 2.04 |
Surrender and Payment |
23 | ||||||
Section 2.05 |
Sailfish Equity-Based Awards |
24 | ||||||
Section 2.06 |
Sailfish Warrants |
25 | ||||||
Section 2.07 |
Adjustments |
25 | ||||||
Section 2.08 |
Withholding Taxes |
25 | ||||||
Section 2.09 |
Lost Certificates |
25 | ||||||
Section 2.10 |
No Dissenters Rights |
26 | ||||||
Section 2.11 |
New Sailfish Contribution |
26 | ||||||
Section 2.12 |
The Conversion |
26 | ||||||
Section 2.13 |
The Green Contribution |
26 | ||||||
Section 2.14 |
The Old Sailfish LLC Contribution |
26 | ||||||
Section 2.15 |
Green Debt Exchange |
26 | ||||||
Section 2.16 |
Bridge Loan Lender Exchange |
27 | ||||||
Section 2.17 |
Sailfish Debt Exchange |
27 | ||||||
ARTICLE 3 CLOSING | 27 | |||||||
Section 3.01 |
Closing |
27 | ||||||
Section 3.02 |
Green Closing Deliverables |
28 | ||||||
Section 3.03 |
Sailfish and New Sailfish Closing Deliverables |
28 | ||||||
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SAILFISH, NEW SAILFISH AND MERGER SUB |
28 | |||||||
Section 4.01 |
Organization, Good Standing and Qualification |
28 | ||||||
Section 4.02 |
Capital Structure |
28 | ||||||
Section 4.03 |
Authorization; No Conflict; Consents and Approvals |
30 | ||||||
Section 4.04 |
Subsidiaries |
31 | ||||||
Section 4.05 |
SEC Documents; Financial Statements |
32 | ||||||
Section 4.06 |
Information Supplied |
33 | ||||||
Section 4.07 |
Absence of Certain Changes or Events |
33 | ||||||
Section 4.08 |
Litigation |
33 | ||||||
Section 4.09 |
No Undisclosed Liabilities |
33 | ||||||
Section 4.10 |
Sailfish Permits; Compliance with Applicable Law |
34 | ||||||
Section 4.11 |
Brokers |
34 | ||||||
Section 4.12 |
Sailfish Benefit Plans |
34 | ||||||
Section 4.13 |
Labor Matters |
35 | ||||||
Section 4.14 |
Taxes |
36 | ||||||
Section 4.15 |
Intellectual Property |
37 | ||||||
Section 4.16 |
Real Property |
37 | ||||||
Section 4.17 |
Surface and Seabed Rights |
37 | ||||||
Section 4.18 |
Oil & Gas Matters |
38 | ||||||
Section 4.19 |
Environmental Matters |
40 | ||||||
Section 4.20 |
Material Contracts |
41 |
i
Page | ||||||||
Section 4.21 |
Insurance |
43 | ||||||
Section 4.22 |
Opinion of Financial Advisor |
44 | ||||||
Section 4.23 |
Derivative Transactions |
44 | ||||||
Section 4.24 |
Related Party Transactions |
44 | ||||||
Section 4.25 |
Corporate Governance |
44 | ||||||
Section 4.26 |
Investment Company |
45 | ||||||
Section 4.27 |
Regulatory Matters |
45 | ||||||
Section 4.28 |
No Additional Representations |
46 | ||||||
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE GREEN SIGNING PARTIES | 47 | |||||||
Section 5.01 |
Organization, Good Standing and Qualification |
47 | ||||||
Section 5.02 |
Capital Structure; Subsidiaries |
47 | ||||||
Section 5.03 |
Authorization; No Conflict |
48 | ||||||
Section 5.04 |
Financial Statements |
49 | ||||||
Section 5.05 |
Information Supplied |
49 | ||||||
Section 5.06 |
Absence of Certain Changes or Events |
50 | ||||||
Section 5.07 |
Litigation |
50 | ||||||
Section 5.08 |
No Undisclosed Liabilities |
50 | ||||||
Section 5.09 |
Green Permits; Compliance with Applicable Law |
50 | ||||||
Section 5.10 |
Brokers Fees |
51 | ||||||
Section 5.11 |
Green Benefit Plans |
51 | ||||||
Section 5.12 |
Labor Matters |
52 | ||||||
Section 5.13 |
Taxes |
53 | ||||||
Section 5.14 |
Intellectual Property |
54 | ||||||
Section 5.15 |
Real Property |
54 | ||||||
Section 5.16 |
Surface and Seabed Rights |
54 | ||||||
Section 5.17 |
Oil & Gas Matters |
55 | ||||||
Section 5.18 |
Environmental Matters |
58 | ||||||
Section 5.19 |
Material Contracts |
59 | ||||||
Section 5.20 |
Insurance |
61 | ||||||
Section 5.21 |
Derivative Transactions |
62 | ||||||
Section 5.22 |
Related Party Transactions |
62 | ||||||
Section 5.23 |
Investment Company |
62 | ||||||
Section 5.24 |
Regulatory Matters |
62 | ||||||
Section 5.25 |
Debt Commitment |
63 | ||||||
Section 5.26 |
No Additional Representations |
63 | ||||||
ARTICLE 6 CONDUCT OF THE BUSINESS | 63 | |||||||
Section 6.01 |
Conduct of Sailfish and the Sailfish Subsidiaries Pending the Transactions |
63 | ||||||
Section 6.02 |
Conduct of the Green Entities Pending the Transactions |
67 | ||||||
ARTICLE 7 ADDITIONAL AGREEMENTS | 69 | |||||||
Section 7.01 |
Preparation of Combined Consent Statement/Prospectus; Stockholders Meeting |
69 | ||||||
Section 7.02 |
Employee Benefit Matters |
71 | ||||||
Section 7.03 |
Tax Matters |
73 | ||||||
Section 7.04 |
Access; Confidentiality |
75 | ||||||
Section 7.05 |
No Solicitation |
76 | ||||||
Section 7.06 |
Reasonable Best Efforts; Notifications, etc. |
79 | ||||||
Section 7.07 |
HSR and Other Approvals |
79 | ||||||
Section 7.08 |
Stockholder Litigation |
81 | ||||||
Section 7.09 |
Public Statements |
81 |
ii
Page | ||||||||
Section 7.10 |
Director and Officer Indemnification and Insurance |
81 | ||||||
Section 7.11 |
Governance Matters |
83 | ||||||
Section 7.12 |
Section 16 Matters |
84 | ||||||
Section 7.13 |
Advice on Certain Matters; Control of Business |
84 | ||||||
Section 7.14 |
Obligations of New Sailfish and Merger Sub |
84 | ||||||
Section 7.15 |
Obligations of Green Entities |
84 | ||||||
Section 7.16 |
Treatment of Sailfish Notes |
84 | ||||||
Section 7.17 |
Other Debt-Related Covenants |
85 | ||||||
Section 7.18 |
Standstill |
86 | ||||||
Section 7.19 |
State Takeover Laws |
86 | ||||||
ARTICLE 8 CONDITIONS | 86 | |||||||
Section 8.01 |
Conditions to Each Partys Obligations to Effect the Transactions |
86 | ||||||
Section 8.02 |
Conditions to Obligations of the Green Signing Parties |
87 | ||||||
Section 8.03 |
Conditions to Obligations of Sailfish, New Sailfish and Merger Sub |
88 | ||||||
ARTICLE 9 TERMINATION | 89 | |||||||
Section 9.01 |
Termination by Mutual Consent |
89 | ||||||
Section 9.02 |
Termination by Sailfish or Green Energy |
89 | ||||||
Section 9.03 |
Termination by Sailfish |
89 | ||||||
Section 9.04 |
Termination by Green Energy |
90 | ||||||
Section 9.05 |
Notice of Termination; Effect of Termination |
90 | ||||||
Section 9.06 |
Expenses and Other Payments |
90 | ||||||
ARTICLE 10 GENERAL PROVISIONS | 93 | |||||||
Section 10.01 |
No Survival of Representations and Warranties |
93 | ||||||
Section 10.02 |
Notices |
93 | ||||||
Section 10.03 |
Rules of Construction |
94 | ||||||
Section 10.04 |
Governing Law; Jurisdiction |
95 | ||||||
Section 10.05 |
Specific Performance | 96 | ||||||
Section 10.06 |
Counterparts; Electronic Transmission of Signatures | 96 | ||||||
Section 10.07 |
Assignment; No Third Party Beneficiaries | 96 | ||||||
Section 10.08 |
Expenses | 97 | ||||||
Section 10.09 |
Severability | 97 | ||||||
Section 10.10 |
Amendment | 97 | ||||||
Section 10.11 |
Waiver | 97 | ||||||
Section 10.12 |
Entire Agreement | 97 |
EXHIBITS |
||
Exhibit A |
Form of Amended and Restated Certificate of Incorporation of New Sailfish | |
Exhibit B |
Form of Registration Rights Agreement | |
Exhibit C |
Form of Stockholders Agreement | |
Exhibit D |
Form of Bylaws of New Sailfish | |
Exhibit E |
Form of Amended and Restated Certificate of Incorporation of the Surviving Entity | |
Exhibit F |
Form of Amended and Restated Bylaws of the Surviving Entity | |
Exhibit G |
Form of Green Contributor Assignment | |
Exhibit H-1 |
Form of Franklin Voting Agreement | |
Exhibit H-2 |
Form of MacKay Voting Agreement | |
Exhibit I |
Form of Support Agreement | |
Exhibit J |
Form of Debt Exchange Agreement | |
Exhibit K |
Listing of Certain Apple Entities |
iii
ANNEXES | ||
Annex 1.01(a) | Example Calculation of Green Total Contribution Consideration | |
Annex 2.02 | Directors, Managers, and Officers of the Surviving Entity | |
Annex 7.11 | New Sailfish Board of Directors, and Executive Officers of New Sailfish and Old Sailfish LLC | |
Annex 8.03(e) | Green Related Party Transactions to be Terminated |
iv
TRANSACTION AGREEMENT
This TRANSACTION AGREEMENT (this Agreement ), dated as of November 21, 2017, is entered into by and among Stone Energy Corporation, a Delaware corporation ( Sailfish ), Sailfish Energy Holdings Corporation, a Delaware corporation and a wholly owned direct subsidiary of Sailfish ( New Sailfish ), Sailfish Merger Sub Corporation, a Delaware corporation and a direct wholly owned subsidiary of New Sailfish ( Merger Sub ), Talos Energy LLC, a Delaware limited liability company ( Green Energy ) and Talos Production LLC, a Delaware limited liability company ( Green Production and, together with Green Energy, the Green Signing Parties ). Sailfish, New Sailfish, Merger Sub, Green Energy and Green Production are referred to individually as a Party and collectively as Parties .
WITNESSETH:
WHEREAS, in anticipation of the transactions contemplated below, (i) Sailfish has formed New Sailfish and (ii) New Sailfish has formed Merger Sub;
WHEREAS, the Parties desire to combine the Green Entities (as defined below) with Sailfish in a transaction involving the following steps (collectively, the Transaction Steps ):
(i) Prior to Closing:
(A) (1) Riverstone V Talos Holdings, L.P., a Delaware limited partnership (the Ride Aggregator ), will distribute the portion of its Class A Equity Interests in Green Energy allocable to Riverstone V Non-U.S. Talos Corp, a Delaware corporation (the Ride Blocker ), to Riverstone Energy V Talos Partnership, L.P., a Delaware limited partnership (the Ride Intermediate Partnership ) and (2) the Ride Intermediate Partnership will distribute (in complete liquidation of the Ride Intermediate Partnership) (x) all of the Class A Equity Interests in Green Energy received from the Ride Aggregator to the Ride Blocker and (y) its Equity Interests in the Ride Aggregator to its general partner;
(B) (1) Apollo Talos Holdings, L.P., a Delaware limited partnership (the Apple Aggregator ), will distribute the portion of its Class A Equity Interests in Green Energy allocable to the Apple Blockers (as defined below) to the Apple Intermediate Partnerships (as defined below) and (2) the Apple Intermediate Partnerships will distribute all of the Class A Equity Interests in Green Energy received from the Apple Aggregator to the Apple Blockers;
(C) The Ride Aggregator will form a new Delaware limited liability company (the Ride Green Feeder );
(D) (1) The Ride Aggregator will contribute all of its remaining Equity Interests in Green Energy to the Ride Green Feeder and (2) the Class B/C Unitholders will contribute a portion (as determined under Section 2.01(e) ) of their Equity Interests, including any Class A Equity Interests held by such Class B/C Unitholders, in Green Energy to the Ride Green Feeder;
(E) The Apple Aggregator will form a new Delaware limited liability company (the Apple Green Feeder , and together with the Ride Green Feeder, the Green Feeders );
(F) (1) The Apple Aggregator will contribute all of its remaining Equity Interests in Green Energy to the Apple Green Feeder and (2) the Class B/C Unitholders will contribute all of their remaining (as described in Section 2.01(h) ) Equity Interests, including any Class A Equity Interests held by such Class B/C Unitholders, in Green Energy to the Apple Green Feeder;
(G) The Equity Interests in Green Production, all of which are and will be at that time indirectly held by Green Energy, will be distributed by Green Energy to the Green Feeders, the Ride Blocker, and the Apple Blockers; and
1
(H) The Equity Interests in Green Energy held by the Green Feeders, the Ride Blocker, and the Apple Blockers (which will at that time constitute all of the Equity Interests in Green Energy) will be contributed to Green Production ((A) (H) collectively and as more specifically described in Section 2.01 and as such steps may be amended pursuant to the Support Agreement, the Green Reorganization );
(ii) On the Closing Date, Merger Sub will merge with and into Sailfish, with Sailfish as the surviving corporation in the merger and a direct wholly owned subsidiary of New Sailfish, on the terms and subject to the conditions set forth herein (the Merger );
(iii) As a result of the Merger, and in accordance with the General Corporation Law of the State of Delaware (the DGCL ), each issued and outstanding share of common stock, par value $0.01 per share, of Sailfish (the Sailfish Common Stock ) will, upon the terms and subject to the conditions set forth herein, be converted into the right to receive one share of common stock, par value $0.01 per share, of New Sailfish (the New Sailfish Common Stock );
(iv) Immediately following the Merger, and in the following order, (A) New Sailfish will contribute all of the Equity Interests in the Surviving Entity to New Sailfish Sub (as defined herein) (the New Sailfish Contribution ) and (B) New Sailfish Sub will cause the Surviving Entity to be converted into a Delaware limited liability company ( Old Sailfish LLC ) by the filing of a Certificate of Formation and a Certificate of Conversion with the Secretary of State of the State of Delaware in accordance with the Delaware Limited Liability Company Act (the DLLCA ), and New Sailfish Sub will become the sole managing member of Old Sailfish LLC (the Conversion and, together with the Merger, and the New Sailfish Contribution, the New Sailfish Reorganization );
(v) Immediately following the New Sailfish Reorganization, (A) the Green Feeders will contribute all of their Equity Interests in Green Production (which pursuant to the Green Reorganization, will then own all of the other Green Entities) to New Sailfish in exchange for New Sailfish Common Stock (the Green Production Contribution ), (B) (i) the Apple Fund VII Blocker Holding Companies (as defined herein) will contribute all of their Equity Interests in the Apple Fund VII Blocker (as defined herein) to AIF VII (AIV), L.P. a Delaware limited partnership, (ii) the Apple ANRP Blocker Holding Company (as defined herein) will contribute all of its Equity Interests in the Apple ANRP Blocker (as defined herein) to ANRP DE Holdings, L.P., a Delaware limited partnership (clauses (B)(i) and (B)(ii) together, the Intermediate Blocker Contributions ) and (iii) the Apple Blocker Holding Companies (as defined herein) will contribute all of their Equity Interests in the Apple Blockers (including, for the avoidance of doubt, the Equity Interests in the Apple Blockers contributed to the Apple Blocker Holding Companies pursuant to the immediately preceding clause) to New Sailfish in exchange for New Sailfish Common Stock, and (C) the Ride Blocker Holding Company (as defined herein) will contribute all of its Equity Interests in the Ride Blocker (together with the Equity Interests in Green Production contributed by the Green Feeders and the Equity Interests in the Apple Blockers contributed by the Apple Blocker Holding Companies, the Contributed Equity Interests ) to New Sailfish in exchange for New Sailfish Common Stock (clauses (B)(iii) and (C) together, the Green Blocker Contributions , and together with the Green Production Contribution, all as more specifically described in Section 2.13 and as such steps may be amended pursuant to the Support Agreement, the Green Contribution );
(vi) Following the Green Contribution, (A) New Sailfish Sub will contribute all of the Equity Interests of Old Sailfish LLC to Green Production in exchange for Equity Interests in Green Production and (B) immediately thereafter, Green Production will contribute all of the Equity Interests of Old Sailfish LLC to Green Energy (together, the Old Sailfish LLC Contributions ) and Green Energy will become the sole managing member of Old Sailfish LLC;
(vii) Immediately following the Old Sailfish LLC Contributions and as part of the plan, (A) the Apple Bondholders and the Ride Bondholders (each as defined below), or any Affiliate of the Apple Bondholder or the Ride Bondholders to which their respective Green Notes (as defined below) have been assigned in
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accordance with the Debt Exchange Agreement, will exchange their Green Notes for New Sailfish Common Stock pursuant to the terms and conditions of the Debt Exchange Agreement (as defined below) (the Green Debt Exchange ), and (B) New Sailfish shall contribute the Green Notes to Green Production in exchange for additional Equity Interests in Green Production. Following such contribution of the Green Notes by New Sailfish to Green Production, the Green Notes shall be cancelled by operation of law;
(viii) Immediately following the Green Debt Exchange and as part of the plan, (A) each of the Bridge Loan Lenders (as defined in the Debt Exchange Agreement) will exchange their respective portions of the $172,023,000 in aggregate principal amount of bridge loans (the Bridge Loans ) borrowed by Green Production and Talos Production Finance Inc., a Delaware corporation ( Green Production Finance ), under the Second Lien Bridge Loan Agreement (as defined below) for newly-issued second lien notes (the New Second Lien Notes ) of Green Production and Green Production Finance and (B) Green Production will pay a work fee (the Bridge Loan Work Fee ) in cash to each Bridge Loan Lender (as defined in the Debt Exchange Agreement) equal to the percentage set forth in the Debt Exchange Agreement of the aggregate principal amount of the Bridge Loans exchanged by such Bridge Loan Lender (as defined in the Debt Exchange Agreement) pursuant to the terms and conditions of the Debt Exchange Agreement (the Bridge Loan Lender Exchange );
(ix) Immediately following the Green Debt Exchange and substantially concurrently with the Bridge Loan Lender Exchange, and as part of the plan, (A) each of (i) Franklin Advisers, Inc., as investment manager on behalf of certain funds and accounts that are holders of the Sailfish Notes (as defined below) ( Franklin Bondholder ), (ii) MacKay Shields LLC, as investment manager on behalf of certain of its clients that are holders of the Sailfish Notes (as defined below), ( MacKay Bondholder ) and (iii) other eligible holders of 7.500% Senior Secured Notes due 2022 of Sailfish ( Sailfish Notes ) beneficially owning at least a majority of all Sailfish Notes (excluding any Sailfish Notes that are required to be disregarded and deemed not to be outstanding for voting purposes under the definition of Outstanding of the indenture dated as of February 28, 2017 governing the Sailfish Notes as in effect on the date hereof (the Sailfish Notes Indenture )) (such eligible other exchanging holders, Other Exchanging Sailfish Noteholders ) will exchange Sailfish Notes pursuant to, (x) in the case of the Franklin Bondholder and MacKay Bondholder, the terms and conditions of the Debt Exchange Agreement (the Franklin/MacKay Debt Exchange ), and (y) in the case of the Other Exchanging Sailfish Noteholders, a tender offer and consent solicitation made after the date hereof and consummated on the Closing Date (the Tender Offer and Consent Solicitation , together with the Franklin/MacKay Debt Exchange, the Sailfish Debt Exchange ), (B) Green Production shall contribute the Sailfish Notes received by it in the Sailfish Debt Exchange to Old Sailfish LLC and following such contribution such Sailfish Notes shall be cancelled by operation of law, (C) a supplemental indenture (the Sailfish Notes Supplemental Indenture ) to the Sailfish Notes Indenture executed by Sailfish and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent under the Sailfish Notes Indenture (the Sailfish Notes Trustee ) amending the terms and provisions of the Sailfish Notes Indenture as described in the Debt Offer Documents (as defined below) shall have become operative on the Closing Date and (D) Green Production will pay a work fee (the Sailfish Notes Work Fee ) in cash to each holder of Sailfish Notes who exchanges its Sailfish Notes for New Second Lien Notes equal to the percentage set forth in the Debt Exchange Agreement of the aggregate principal amount of the Sailfish Notes exchanged by such holders of Sailfish Notes pursuant to the terms and conditions of the Sailfish Debt Exchange;
(x) Immediately following the Green Debt Exchange and as part of the plan, (A) Green Production, Green Production Finance and certain subsidiaries thereof, as guarantors, intend to enter into a new revolving credit facility (the New Revolving Credit Facility ), and related documentation; and
(xi) The Ride Blocker Holding Company and the Apple Blocker Holding Companies will directly or indirectly transfer their New Sailfish Common Stock to the Ride Green Feeder or the Apple Green Feeder, respectively;
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WHEREAS, as a condition to and concurrently with the execution of this Agreement, shareholders of Sailfish representing a majority of the outstanding shares of Sailfish Common Stock, on a fully diluted basis, have entered into voting agreements substantially in the form of Exhibits H-1 and H-2 (each, a Voting Agreement ) pursuant to which (subject to the terms of each such agreement) such shareholders have agreed to vote their shares in favor of the approval and adoption of this Agreement and the Transactions;
WHEREAS, as a condition to and concurrently with the execution of this Agreement, Apple and Ride have entered into a Support Agreement substantially in the form of Exhibit I (the Support Agreement ) pursuant to which, subject to the terms and conditions of such agreement, each such party has agreed, among other things, to cause their Subsidiaries and Affiliates, as applicable, to effect the Green Reorganization and the Green Contribution;
WHEREAS, the Board of Directors of Sailfish (the Sailfish Board ), at a meeting duly noticed and called and held by unanimous vote, (a) determined that the terms of this Agreement and the transactions contemplated hereby (including the Merger, the Green Contribution, the Green Debt Exchange, the Bridge Loan Lender Exchange and the Sailfish Debt Exchange and, in each case, the related documents) are, in each case, in the best interests of Sailfish and Sailfishs stockholders, (b) approved and declared advisable this Agreement and the transactions contemplated hereby (including the Merger, the Green Contribution, the Green Debt Exchange, the Bridge Loan Lender Exchange and the Sailfish Debt Exchange and, in each case, the related documents), (c) directed that this Agreement be submitted to the stockholders of Sailfish for their consideration, and (d) recommended that the holders of Sailfish Common Stock approve and adopt this Agreement and the transactions contemplated hereby, including the Green Contribution, the Green Debt Exchange, the Bridge Loan Lender Exchange and the Sailfish Debt Exchange and, in each case, the related documents;
WHEREAS, the respective boards of directors of New Sailfish and Merger Sub have approved this Agreement and the Transactions (as defined below), and have determined that this Agreement and the Transactions are advisable to, and in the best interests of, their respective companies and their respective equityholders;
WHEREAS, the board of managers of Green Energy and the sole member of Green Production have approved this Agreement and the Transactions (as defined below);
WHEREAS, the Apple Aggregator and the Ride Aggregator have approved the execution, delivery and performance by Green Energy of this Agreement and the consummation of the Transactions in accordance with the DLLCA and its Organizational Documents (as defined below);
WHEREAS, each of the Franklin Bondholder(s), the MacKay Bondholder(s), the Apple Bondholders, the Ride Bondholders and the holders of the Bridge Loans has entered into the Debt Exchange Agreement and has agreed to consummate the exchanges contemplated thereby on the Closing Date, subject to the terms and conditions set forth therein; and
WHEREAS, the sole shareholders of New Sailfish and Merger Sub have approved this Agreement and the consummation of the Transactions in accordance with the DGCL and the DLLCA, as applicable, and their respective Organizational Documents (as defined below).
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NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
DEFINITIONS
Section 1.01 Definitions . (a) As used herein, the following terms have the following meanings:
Affiliate means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. The term control (including its correlative meanings controlled and under common control with) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies of a Person (whether though ownership of 50% or more of such Persons securities or partnership or other ownership interests, or by Contract or otherwise).
Aggregated Group means, with respect to any Person, all entities, trades and businesses (regardless of whether incorporated) that together with such Person would be treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
Apple means Apollo Management VII, L.P., a Delaware limited partnership and Apollo Commodities Management, L.P., with respect to Series I, a Delaware limited partnership.
Apple ANRP Blocker means the entity listed in Exhibit K under the heading Apple ANRP Blocker.
Apple ANRP Blocker Holding Company means the entities listed in Exhibit K under the heading Apple ANRP Blocker Holding Company.
Apple Blockers means the entities listed in Exhibit K under the heading Apple Blockers.
Apple Blocker Holding Companies means the entities listed in Exhibit K under the heading Apple Blocker Holding Companies.
Apple Bondholders means the entities listed in Exhibit K under the heading Apple Bondholders.
Apple Debt Exchange Consideration means the shares of New Sailfish Common Stock to be issued to the Apple Bondholders (or any Affiliate of the Apple Bondholders) at the Closing pursuant to the Debt Exchange Agreement.
Apple Entity means Apple and any Apple Subsidiary or Affiliate (other than any Green Entity) that is party to any Combination Agreement or whose action is necessary to effect any of the Transactions.
Apple Fund VII Blocker means the entity listed in Exhibit K under the heading Apple Fund VII Blocker.
Apple Fund VII Blocker Holding Companies means the entities listed in Exhibit K under the heading Apple Fund VII Blocker Holding Companies.
Apple Intermediate Partnerships means the entities listed in Exhibit K under the heading Apple Intermediate Partnerships.
beneficial ownership , including the correlative terms beneficial owner and beneficially owning , has the meaning ascribed to such term in Section 13(d) of the Exchange Act.
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Business Day means any day that is not a Saturday, a Sunday or other day on which the principal offices of the SEC in Washington, D.C. or banks in the City of Houston in the United States of America are authorized or required by Law to be closed.
CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq ., as amended.
Class A Parent Percentage means, with respect to either Ride or Apple, the percentage determined by dividing (a) the number of Class A Equity Interests in Green Energy held by, in the case of Ride, the Ride Aggregator and the Ride Blocker, or, in the case of Apple, the Apple Aggregator and the Apple Blockers, by (b) the total number of Class A Equity Interests in Green Energy held by the Ride Aggregator, the Ride Blocker, the Apple Aggregator and the Apple Blockers.
Class B/C Unitholders means the holders of Series B Units and/or Series C Units of Green Energy.
Closing Date means the date of the Closing.
Code means the Internal Revenue Code of 1986, as amended.
Combination Agreements means this Agreement and each other agreement executed and delivered, or to be executed and delivered, in connection herewith, including the Support Agreement, the Debt Exchange Agreement, the Registration Rights Agreement, the Stockholders Agreement and the Voting Agreements.
Competing Proposal means any bona fide Contract, proposal, offer, or indication of interest (whether or not in writing) relating to any transaction or series of related transactions (other than transactions with any of the Green Entities) involving: (i) any direct or indirect acquisition (by asset purchase, stock purchase, merger, or otherwise) by any Person or group (as defined in Section 13(d) of the Exchange Act) of any business or assets of Sailfish or any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) where the fair market value of the assets so acquired would represent more than 20% of the fair market value of all the assets of Sailfish and its Subsidiaries, taken as a whole, immediately prior to such transaction, or any license, exchange, transfer, disposition, lease or long-term supply agreement having a similar economic effect; (ii) any direct or indirect acquisition of beneficial ownership by any Person or group of 20% or more of the outstanding shares of Sailfish Common Stock or any tender or exchange offer that if consummated would result in any Person or group beneficially owning 20% or more of the outstanding shares of Sailfish Common Stock; (iii) any merger, consolidation, share exchange, share issuance, business combination, recapitalization, liquidation, dissolution or similar transaction involving Sailfish which is structured to permit any Person or group to acquire beneficial ownership of 20% or more of Sailfishs and its Subsidiaries assets or Equity Interests, including 20% or more of the outstanding Equity Interests of any surviving entity or resulting direct or indirect parent of Sailfish; or (iv) any combination of the foregoing.
Contract means any written or oral contract, indenture, bond, concession, franchise, agreement, lease, license, note, evidence of indebtedness, mortgage, security agreement, understanding, instrument, or other legally binding arrangement.
Debt Commitment Letter means the Debt Commitment Letter, dated as of November 9, 2017, by and among JPMorgan Chase Bank, N.A. and Talos Production LLC, as amended, restated, supplemented, replaced or otherwise modified from time to time.
Debt Exchange Agreement means the Debt Exchange Agreement substantially in the form of Exhibit J dated as of the date hereof among Sailfish, New Sailfish, Green Production, Green Production Finance, and the lenders and noteholders listed on the signature pages and Schedules A through D thereof.
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Debt Provider means the Debt Sources and any of their respective former, current or future general or limited partners, direct or indirect shareholders or equityholders, managers, members, directors, officers, employees, Affiliates, Representatives or agents or any former, current or future general or limited partner, direct or indirect shareholder or equityholder, manager, member, director, officer, employee, Affiliate, representative or agent of any of the foregoing.
Debt Source means JPMorgan Chase Bank, N.A., and any other arranger or lender that is or may become party to the Debt Commitment Letter, any joinder agreements relating thereto and/or the definitive agreements executed in connection with the Debt Commitment Letter.
Decommissioning Obligations means any and all existing and future claims, costs, charges, expenses, obligations and liabilities associated with, and liability for, plugging, abandoning, decommissioning, removing, remediating or restoring all Oil and Gas Properties, whether such claims, costs, charges, expenses, obligations and liabilities are incurred under or pursuant to any contracts or under any Law or Permit, and including any residual liability for anticipated or necessary continuing insurance, maintenance and monitoring costs. Decommissioning Obligations include all of the following: (a) the plugging, replugging and abandonment of all wells, either active or inactive; (b) the removal, abandonment and disposal of all platforms, structures, facilities, foundations, wellheads, tanks, pipelines, flowlines, pumps, compressors, separators, heater treaters, valves, fittings, platforms and equipment and machinery of any nature and all materials contained therein, located on or used in connection with the Oil and Gas Properties; (c) the clearance, restoration and remediation of the lands, groundwater and water-bottoms and the cleanup and complete reclamation of the sea floor portion of the lands, leases or units associated with the Oil and Gas Properties; and (d) the removal, remediation and abatement of any contamination or pollution (including Hazardous Materials) associated with the Oil and Gas Properties.
Derivative Transaction means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction, or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions, or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral, or other similar arrangements related to such transactions.
Employee Benefit Plan of any Person means any employee benefit plan (within the meaning of Section 3(3) of ERISA, regardless of whether such plan is subject to ERISA), and any personnel policy, stock option, restricted stock, stock purchase plan, equity or equity-based compensation plan or arrangement, phantom equity or appreciation rights plan or arrangement, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation or holiday pay policy, retention or severance pay plan, policy or agreement, deferred compensation plan, agreement or arrangement, change in control plan or agreement, employee loan agreement, fringe benefit plan or arrangement, hospitalization or other medical, dental, vision, accident, disability, life or other insurance, executive compensation or supplemental income arrangement, consulting agreement, employment agreement, and any other employee benefit plan, agreement, arrangement, program, practice, or understanding.
Encumbrances means liens, pledges, charges, encumbrances, claims, mortgages, deeds of trust, security interests, restrictions, rights of first refusal, defects in title, or other burdens, options, or encumbrances of any kind.
Environmental Laws means all Laws concerning or relating to prevention of pollution, protection of the environment (including natural resources), remediation of contamination or restoration of environmental quality, or worker/occupational health and safety, including those laws relating to the presence, use, manufacturing, production, generation, handling, transport, treatment, recycling, storage, disposal, importing, labeling, testing,
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processing, discharge, Release, reporting, control, investigation, remediation, or other action or failure to act involving Hazardous Materials.
Environmental Permit means any Permit related to or required by Environmental Laws.
Equity Interest means any share, capital stock, partnership, limited liability company, membership, member, or similar interest in any Person, and any option, warrant, right, equity-based awards or security (including debt securities) convertible, exchangeable, or exercisable thereto or therefor.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.
Exchange Agent means the agent for the surrender of Sailfish Common Stock in exchange for New Sailfish Common Stock, which shall be a nationally recognized bank or trust company designated by Sailfish and reasonably acceptable to Green Energy.
FIRPTA means the sections of the Code and the Treasury Regulations implementing the Foreign Investment in Real Property Tax Act of 1980.
GAAP means generally accepted accounting principles in the United States.
Governmental Entity means any federal, state, local, international, supranational, national or other, whether foreign or domestic, governmental entity, quasi-governmental entity, court, tribunal or arbitral body, commission, board, bureau, agency or instrumentality, or any administrative, executive, governmental or regulatory or self-regulatory body, department, subdivision, branch, agency, or authority thereof.
Green Annual Reports means the Annual Reports for the year ended December 31, 2016 and for the year ended December 31, 2015 as set forth on Section 1.01(GAR) of the Green Disclosure Letter.
Green Benefit Plans means any Employee Benefit Plan (i) under which any current or former employee, director or independent contractor of any Green Entity has any present or future rights to benefits or (ii) that is sponsored, maintained, or contributed to by any Green Entity or any member of its Aggregated Group, to which any Green Entity or any member of its Aggregated Group is a party, to which any Green Entity or any member of its Aggregated Group is obligated to contribute, or with respect to which any Green Entity or any member of its Aggregated Group could have any liability (including any contingent liability).
Green Competing Proposal means any bona fide Contract, proposal, offer, or indication of interest (whether or not in writing) relating to any transaction or series of related transactions (other than the Transactions) that (i) would require the same consents, approvals and other authorizations of Mexican Governmental Entities with respect to any or all of the Mexican Granting Instruments as are required to consummate the Transactions and (ii) involve: (A) any direct or indirect acquisition (by asset purchase, stock purchase, merger, or otherwise) by any Person or group (as defined in Section 13(d) of the Exchange Act) of any business or assets of the Green Entities (including capital stock of or ownership interest in any Green Entity) where the fair market value of the assets so acquired would represent more than 50% of the fair market value of all the assets of the Green Entities, taken as a whole, immediately prior to such transaction, or any license, exchange, transfer, disposition, lease or long-term supply agreement having a similar economic effect; (B) any direct or indirect acquisition of beneficial ownership by any Person or group of 50% or more of the outstanding Equity Interests of Green Energy or Green Production; (C) any merger, consolidation, share exchange, share issuance, business combination, recapitalization, liquidation, dissolution or similar transaction involving one or more Green Entity which is structured to permit any Person or group to acquire beneficial ownership of 50% or
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more of the Green Entities assets or Equity Interests, including 50% or more of the outstanding Equity Interests of any surviving entity or resulting direct or indirect parent of the Green Entities; or (D) any combination of the foregoing.
Green Contribution Consideration means (i) the Green Total Contribution Consideration minus (ii)(A) the Apple Debt Exchange Consideration plus (B) the Ride Debt Exchange Consideration.
Green Contributors means the Green Feeders, the Apple Blocker Holding Companies, and the Ride Blocker Holding Company.
Green Contributor Assignment means an assignment and assumption agreement substantially in the form of Exhibit G .
Green Entities means as of any date, Green Energy, Green Production, and each of their respective Subsidiaries as of such date.
Green Group Representations means the representations and warranties (i) made by the Green Signing Parties in Article 5 or any certificate delivered by any Green Signing Party pursuant to this Agreement, (ii) made by Apple in Article 4 of the Support Agreement or any certificate delivered by an Apple Entity pursuant to that agreement, (iii) made by Ride in Article 5 of the Support Agreement or any certificate delivered by a Ride Entity pursuant to that agreement, (iv) made by the Apple Bondholders in Article IV of the Debt Exchange Agreement or any certificate delivered by the Apple Bondholders pursuant to that agreement, and (v) made by the Ride Bondholders in Article IV of the Debt Exchange Agreement or any certificate delivered by the Ride Bondholders pursuant to that agreement.
Green Independent Petroleum Engineers means Netherland, Sewell & Associates, Inc.
Green Material Adverse Effect means any occurrence, condition, change, fact, development, circumstance, event, or effect that (a) has a material adverse effect on the financial condition, business, assets or results of operations of the Green Entities, taken as a whole, or (b) prevents or materially delays or materially impairs the ability of the Green Entities (and/or any Apple Entity and/or Ride Entity) to consummate the Transactions, excluding, in the case of clause (a), any occurrence, condition, change, fact, development, circumstance, event or effect to the extent resulting from or arising out of:
(i) general economic or political conditions in the United States or any foreign jurisdiction in which the Green Entities conduct business or financial or securities market conditions, including changes in interest rates and changes in exchange rates;
(ii) changes or conditions generally affecting the offshore oil and gas exploration and production industry or markets generally (including changes in commodity prices or general market prices);
(iii) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war or the occurrence of any epidemics, natural disasters (including hurricanes, tornadoes, floods or earthquakes) or other force majeure events or acts of terrorism (except to the extent any such event results in any damage or destruction to or loss of the physical properties of the Green Entities, which may be taken into account when determining whether a Green Material Adverse Effect occurred);
(iv) any failure to meet internal or analysts estimates, projections or forecasts (it being understood that the underlying occurrence, condition, change, fact, development, circumstance, event, or effect, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration in determining whether a Green Material Adverse Effect has occurred or is reasonably expected to occur);
(v) the announcement or pendency of the Transactions;
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(vi) any change in GAAP, or in the interpretation thereof, as imposed upon the Green Entities or their respective businesses, or any change in applicable Law, or in the interpretation thereof (excluding any review of any security held or provided by or on behalf of any Green Entity with respect to plugging and abandonment obligations or liabilities or other Decommissioning Obligations, including the type, amount or adequacy thereof, or the need for replacement or supplemental security);
(vii) the taking by the Green Entities of any action expressly required by terms of this Agreement;
(viii) any Proceeding arising from any alleged breach of fiduciary duty or other violation of applicable Law relating to this Agreement or the Transactions; and
(ix) any downgrade in rating of any Indebtedness or debt securities of any Green Entity (it being understood that any underlying cause of any such downgrade, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration when determining whether a Green Material Adverse Effect has occurred or is reasonably expected to occur);
provided , however , that any occurrence, condition, change, fact, development, circumstance, event or effect referred to in any of the foregoing clauses (i) , (ii), (iii) or ( vi) will be taken into account for purposes of determining whether a Green Material Adverse Effect has occurred in the event, and only to the extent, that such occurrence, condition, change, fact, development, circumstance, event or effect disproportionately affects the Green Entities, taken as a whole, compared to other Persons operating in such industry in the same regions and segments as the Green Entities.
Green Notes means those certain 9.75% Senior Notes due 2022 issued by Green Production and Green Production Finance.
Green Pre-Closing Flow-Through Tax Returns means (i) any IRS Form 1065 (and related Schedules K-1) of Green Energy or Green Production (including as a continuation of Green Energy under Section 708 of the Code) required to be filed for any taxable period ending on or before the Closing Date (for the avoidance of doubt, including its final IRS Form 1065 required to be filed with respect to its taxable year ending on the Closing Date) and any similar Tax Returns for U.S. state or local income tax purposes, and (ii) any other Tax Returns of any Green Entity for income Taxes that are imposed on a flow-through basis and for taxable periods ending on or prior to the Closing Date.
Green Reserve Report means the reserve report prepared by Green Energy management and audited by the Green Independent Petroleum Engineers relating to the interests of the Green Entities referred to therein as of December 31, 2016.
Green Total Contribution Consideration means a number of shares of New Sailfish Common Stock, that, immediately following the issuance of such shares, will represent 63% of the total outstanding number of shares of New Sailfish Common Stock (giving effect to the issuance of the shares of New Sailfish Common Stock pursuant to the Merger and the other Transactions and calculated on a fully diluted basis, taking into account any security, instrument or award (other than the Sailfish Warrants) that is or will be outstanding immediately following the Closing and are or may be convertible, exchangeable or settled into shares of New Sailfish Common Stock) rounded, if necessary, up to the nearest whole share of New Sailfish Common Stock. An example calculation of the Green Total Contribution Consideration is set forth on Annex 1.01(a) .
Hazardous Material means any substance, material or waste which is regulated because of its effect or potential effect on public health or the environment, including any substance, material or waste which is defined as a hazardous waste, hazardous material, hazardous substance, extremely hazardous waste, restricted hazardous waste, solid waste, pollutant or contaminant, toxic waste or toxic substance under any provision of any Environmental Law, and including petroleum or any fraction thereof, petroleum products, natural gas, natural gas liquids, liquefied natural gas or synthetic gas, radioactive material, asbestos or asbestos-containing material, mold, urea formaldehyde and polychlorinated biphenyls.
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HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Hydrocarbons means crude oil, natural gas, casinghead gas, condensate, drip gas, gasoline, natural gas liquids, ethane, propane, iso-butane, nor-butane, scrubber liquids, and all other liquids and gaseous hydrocarbons, and all products, by-products, and other substances (including minerals and gases) produced, derived, refined, or separated therefrom or otherwise associated therewith.
Indebtedness of any Person means, without duplication: (i) indebtedness of such Person for borrowed money; (ii) obligations of such Person to pay the deferred purchase or acquisition price for any property of such Person; (iii) reimbursement obligations of such Person in respect of drawn letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (iv) obligations of such Person under a lease to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP; and (v) indebtedness of others as described in clauses (i) through (iv) above guaranteed by such Person; but Indebtedness does not include accounts payable to trade creditors, or accrued expenses arising in the ordinary course of business consistent with past practice, in each case, that are not yet due and payable, or are being disputed in good faith, and the endorsement of negotiable instruments for collection in the ordinary course of business.
Intellectual Property means any and all proprietary, industrial, and intellectual property rights, under the applicable Law of any jurisdiction or rights under international treaties, both statutory and common law rights, including: (i) utility models, supplementary protection certificates, patents and applications for same, and extensions, divisions, continuations, continuations-in-part, reexaminations, and reissues thereof; (ii) trademarks, service marks, trade names, slogans, domain names, logos, trade dress and other identifiers of source, and registrations and applications for registrations thereof (including all goodwill associated with the foregoing); (iii) copyrights, moral rights, database rights, other rights in works of authorship and registrations and applications for registration of the foregoing; and (iv) trade secrets, know-how, and rights in confidential information, including designs, formulations, concepts, compilations of information, methods, techniques, procedures, and processes, whether or not patentable.
Interstate Commerce Act means the Interstate Commerce Act of 1887, as amended.
Intervening Event means any material development, event, effect, fact, change, circumstance, condition, or occurrence that (i) occurs or arises after the date of this Agreement and (ii) was not known to or reasonably foreseeable by the Sailfish Board as of the date of this Agreement. Notwithstanding the foregoing, in no event shall a Competing Proposal or a Superior Proposal be an Intervening Event.
IRS means the Internal Revenue Service.
knowledge means the actual knowledge, after reasonable inquiry of their respective direct reports, of (a) in the case of Sailfish, New Sailfish and/or Merger Sub, the individuals listed in Section 12.02(a) of the Sailfish Disclosure Letter and (b) in the case of Green Energy, the individuals listed in Section 12.02(b) of the Green Disclosure Letter.
Law means any federal, state, or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar legally enforceable requirement enacted, adopted, promulgated, or applied by a Governmental Entity.
Mexican Granting Instruments means (i) that certain Contrato para la Exploraci ó n y Extracci ó n de Hidrocarburos Bajo la Modalidad de Producci ó n Compartida (Contract for the Exploration and Extraction of Hydrocarbons under Production Sharing Modality), dated September 4, 2015, by and among Talos Energy Offshore Mexico 2, S. de R.L. de C.V., a company organized and existing under the laws of the United Mexican States, Premier Oil Exploration and Production Mexico S.A. de C.V., a company organized and existing under
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the laws of the United Mexican States and Sierra O&G Exploración y Producción S. de R.L. de C.V., a company organized and existing under the laws of the United Mexican States (on one hand), and the United Mexican States acting through the Comisión Nacional de Hidrocarburos (National Hydrocarbons Commission) (on the other hand) covering Contract Area 2 located in shallow waters off the coast of the State of Veracruz and (ii) that certain Contrato para la Exploración y Extracción de Hidrocarburos Bajo la Modalidad de Producción Compartida (Contract for the Exploration and Extraction of Hydrocarbons under Production Sharing Modality), dated September 4, 2015, by and among Talos Energy Offshore Mexico 7, S. de R.L. de C.V., a company organized and existing under the laws of the United Mexican States, Premier Oil Exploration and Production Mexico S.A. de C.V., a company organized and existing under the laws of the United Mexican States and Sierra O&G Exploración y Producción S. de R.L. de C.V., a company organized and existing under the laws of the United Mexican States (on one hand), and the United Mexican States acting through the Comisión Nacional de Hidrocarburos (National Hydrocarbons Commission) (on the other hand) covering Contract Area 7 located in shallow waters off the coast of the State of Tabasco.
Natural Gas Act means the Natural Gas Act of 1938, as amended.
Natural Gas Policy Act means the Natural Gas Policy Act of 1978, as amended.
New Sailfish Amended Certificate means that certain form of Amended and Restated Certificate of Incorporation of New Sailfish, substantially in the form attached hereto as Exhibit A .
New Sailfish Sub means a new Delaware corporation to be formed by New Sailfish no more than two Business Days prior to the Closing Date.
NYSE means the New York Stock Exchange.
Oil and Gas Leases of any Person, means all leases, subleases, licenses, or other occupancy or similar agreements under which such Person or any of its Subsidiaries leases, subleases, or licenses or otherwise acquires or obtains operating rights in and to Hydrocarbons or any other real property (including, with respect to Green, the Mexican Granting Instruments).
Oil and Gas Properties means (i) direct and indirect interests in and rights with respect to Hydrocarbons and related properties and assets of any kind and nature, direct or indirect, including working interests, leasehold interests, record title and operating rights, fee mineral interests, reversionary interests, and royalties, overriding royalties, production payments, net profit interests and other non-working interests and non-operating interests; (ii) all interests in and all rights with respect to Hydrocarbons and all revenues therefrom; (iii) all Oil and Gas Leases and the estates and interests created thereby and the lands covered by the Oil and Gas Leases or included in the units with which the Oil and Gas Leases may have been pooled or unitized; (iv) all surface interests, fee interests, reversionary interests, reservations and concessions; (v) all easements, rights-of-way, rights of use and easement, surface use agreements, licenses and permits and other similar interests associated with, appurtenant to, or necessary for the operation or development of any of the Oil and Gas Leases, the drilling of wells or the production, gathering, processing, storage, disposition, transportation or sale of Hydrocarbons produced from (or otherwise attributable to) any Oil and Gas Leases (or lands unitized or pooled therewith); (vi) all rights and interests in, under or derived from unitization and pooling agreements in effect with respect to the assets, properties and interests described in clauses (i) through (iii) above and the units created thereby which accrue or are attributable to the interest of the holder thereof; (vii) all interests in machinery, equipment (including wells, well equipment and well machinery, whether surface or subsurface), oil and gas production, gathering, transmission, treating, processing and storage facilities (including tanks, tank batteries, pipelines, flow lines, gathering systems and metering equipment), pumps, water plants, electric plants, platforms, processing plants, separation plants, refineries and testing and monitoring equipment, in each case, to the extent associated with, appurtenant to, necessary for, or held for use in connection with, the operation or development of any of the Oil and Gas Leases, the drilling of wells or the production, gathering, processing, storage, disposition, transportation
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or sale of Hydrocarbons produced from (or otherwise attributable to) any Oil and Gas Leases (or lands unitized or pooled therewith); (viii) any contracts, agreements, and instruments applicable to any of the foregoing, including operating agreements (including any resolutions of operating committees or the parties thereunder), unitization, pooling, and communitization agreements, declarations and orders, joint venture agreements, participation agreements, farmin and farmout agreements, exchange agreements, gathering and transportation agreements, processing agreements, production handling agreements, facilities use, operating, and cost sharing agreements, agreements for the sale or purchase of hydrocarbons (including division and transfer orders), drilling, service, and supply agreements; and (ix) all other interests of any kind or character associated with, appurtenant to, or necessary for the development and/or operation of any of the assets, properties and/or interests described in clauses (i) through (iii) above and/or the units created thereby which accrue or are attributable to the interest of the holder thereof.
Organizational Documents means (i) with respect to a corporation, the charter, articles, or certificate of incorporation, as applicable, and bylaws thereof, (ii) with respect to a limited liability company, the certificate of formation or organization, as applicable, and the operating or limited liability company agreement thereof, (iii) with respect to a partnership, the certificate of formation and the partnership agreement, and (iv) with respect to any other Person, the organizational, constituent and/or governing documents and/or instruments of such Person.
Permitted Encumbrances means:
(i) to the extent not applicable to or implicated by the Transactions or otherwise waived (or deemed waived due to the expiration of the exercise period thereof) prior to the Effective Time, preferential purchase rights, rights of first refusal, purchase options and similar rights granted pursuant to any Contract, including joint operating agreements, participation agreements (excluding rights of third Persons to acquire or earn interests by conducting or bearing a disproportionate share of operations), joint ownership agreements, stockholders agreements, Organizational Documents and other similar agreements and documents;
(ii) contractual or statutory mechanics, materialmens, warehousemans, journeymans and carriers liens and other similar liens arising in the ordinary course of business for amounts not yet delinquent and liens for Taxes or assessments that are not yet delinquent or, in all instances, if delinquent, that are being contested in good faith in the ordinary course of business and for which adequate reserves have been established by the party responsible for payment thereof;
(iii) Production Burdens payable to third parties to the extent deducted in the calculation of discounted present value in the Sailfish Reserve Report or the Green Reserve Report, as applicable;
(iv) liens arising in the ordinary course of business under operating agreements (including any Contrato de Prenda sin Transmisión de Posesión (Non-Possessory Pledge) granted under or in connection with or derived from the operating agreements governing operations with respect to the Mexican Granting Instruments), but only if such liens (a) secure obligations that are not Indebtedness or a deferred purchase price and are not delinquent and (b) have no material adverse effect on the value, use or operation of the property encumbered thereby as currently used or operated;
(v) such Encumbrances as Green Energy (in the case of Encumbrances with respect to properties or assets of Sailfish or its Subsidiaries) or Sailfish (in the case of Encumbrances with respect to properties or assets of the Green Entities), as applicable, may have expressly waived in writing;
(vi) all easements, zoning restrictions, rights-of-way, servitudes, permits, surface leases and other similar rights in respect of surface operations, and easements for pipelines, streets, alleys, highways, telephone lines, power lines, railways and other easements and rights-of-way, on, over or in respect of any of the properties of Sailfish and its Subsidiaries or the Green Entities, as applicable that are customarily granted in the oil and gas industry and do not materially interfere with the operation, value or use of the property or asset affected;
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(vii) any Encumbrances discharged at or prior to the Effective Time (including Encumbrances securing any Indebtedness that will be paid off pursuant to the terms of this Agreement in connection with Closing);
(viii) Encumbrances imposed or promulgated by applicable Law or any Governmental Entity with respect to real property, including zoning, building or similar restrictions;
(ix) matters expressly listed in Section 1.01(c) of the Sailfish Disclosure Letter with respect to Sailfish and Section 1.01(c) of the Green Disclosure Letter with respect to the Green Entities;
(x) excepting circumstances in which such rights are triggered prior to the Effective Time, rights of reassignment arising upon final intent to abandon or release any Oil and Gas Lease;
(xi) calls on production under existing contracts that must be exercised (if at all) on an index-based price;
(xii) any Encumbrance the substance, effects, and consequences of which are expressly reflected in the Green Reserve Report or the Sailfish Reserve Report;
(xiii) the terms and conditions of the Mexican Granting Instruments (provided that the actual termination of a Mexican Granting Instrument by its terms shall not be a Permitted Encumbrance);
(xiv) any Production Burden that would not reduce the net revenue interest share of Sailfish and its Subsidiaries or the Green Entities, as applicable, in any Oil and Gas Lease below the net revenue interest share shown in the Sailfish Reserve Report or Green Reserve Report, as applicable, with respect to such Oil and Gas Lease, or increase the working interest of Sailfish and its Subsidiaries or the Green Entities, as applicable, in any Oil and Gas Lease above the working interest shown on the Sailfish Reserve Report or Green Reserve Report, as applicable, with respect to such Oil and Gas Lease and, in each case, that do not, individually or in the aggregate, constitute a Sailfish Material Adverse Effect or Green Material Adverse Effect, as applicable; and
(xv) Encumbrances, exceptions, defects or irregularities in title, easements, imperfections of title, claims, charges, security interests, rights-of-way, covenants, restrictions and other similar matters that would be accepted by a reasonably prudent purchaser of oil and gas interests, that would not reduce the net revenue interest share of Sailfish and its Subsidiaries or the Green Entities, as applicable, in any Oil and Gas Lease below the net revenue interest share shown in the Sailfish Reserve Report or Green Reserve Report, as applicable, with respect to such lease, or increase the working interest of Sailfish and its Subsidiaries or the Green Entities, as applicable, in any Oil and Gas Lease above the working interest shown on the Sailfish Reserve Report or Green Reserve Report, as applicable, with respect to such lease and, in each case, that do not, individually or in the aggregate, constitute a Sailfish Material Adverse Effect or Green Material Adverse Effect, as applicable.
Person means an individual, corporation, partnership, joint venture, association, trust, estate, unincorporated organization, joint stock company, limited liability company, Governmental Entity, or other business or professional entity.
Proceeding means any actual or threatened claim (including a claim of a violation of applicable Law), action, audit, demand, suit, proceeding, investigation or other proceeding at law or in equity or order or ruling, in each case whether civil, criminal, administrative, investigative, or otherwise and whether or not such claim, action, audit, demand, suit, proceeding, investigation or other proceeding or order or ruling results in a formal civil or criminal litigation or regulatory action.
Production Burdens means any royalties (including lessors royalties), overriding royalties, production payments, net profit interests or other burdens upon, measured by or payable out of oil, gas or mineral production, and, with respect to the Mexican Granting Instruments, any amounts due to a Governmental Entity thereunder or under applicable Law, including royalties, percentage of operating profit, Taxes, any Government Entitys share of Hydrocarbons, and contributions to any decommissioning security trust, abandonment trust, or similar decommissioning or abandonment security.
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Registration Rights Agreement means the registration rights agreement, to be dated, executed and delivered as of the Closing Date, substantially in the form attached hereto as Exhibit B .
Release means any spilling, emitting, leaking, pumping, pouring, injecting, escaping, depositing, dumping, emptying, disposing, discharging, or leaching, migration or other release into the environment.
Ride means Riverstone Energy Partners V, L.P., a Delaware limited partnership.
Ride Bondholders means REV TE/ECI (Cayman), L.P., a Cayman Islands exempted limited partnership, and REV Direct (Cayman), L.P., a Cayman Islands exempted limited partnership.
Ride Blocker Holding Company means Riverstone V FT Corp Holdings, L.P., a Delaware limited partnership.
Ride Debt Exchange Consideration means the shares of New Sailfish Common Stock to be issued to the Ride Bondholders (or any Affiliate of the Ride Bondholders) at the Closing pursuant to the Debt Exchange Agreement.
Ride Entity means Ride and any Ride Subsidiary or Affiliate (other than any Green Entity) that is party to any Combination Agreement or whose action is necessary to effect any of the Transactions.
Revolving Credit Agreements means (i) in the case of Sailfish, the Fifth Amended and Restated Credit Agreement dated as of March 1, 2017, by and among Sailfish, Bank of America, N.A., as administrative agent and issuing bank, and the lenders and other Persons party thereto, and (ii) in the case of Green Energy, the Credit Agreement, dated as of February 6, 2013, among Green Production, the guarantors named therein, the financial institutions named therein, and Toronto Dominion (Texas) LLC, as administrative agent, as amended.
Sailfish Benefit Plans means any Employee Benefit Plan (i) under which any current or former employee, director or independent contractor of Sailfish has any present or future rights to benefits or (ii) that is sponsored, maintained or contributed to or by Sailfish or any of its Subsidiaries, or any member of their respective Aggregated Groups, to which Sailfish or any of its Subsidiaries, or any member of their respective Aggregated Groups, is a party, to which Sailfish or any of its Subsidiaries, or any member of their respective Aggregated Groups, is obligated to contribute, or with respect to which Sailfish or any of its Subsidiaries, or any member of their respective Aggregated Groups, could have any liability (including any contingent liability).
Sailfish Common Stock means common stock, par value $0.01 per share, of Sailfish.
Sailfish Group Representations means the representations and warranties made in (i) Article 4 of this Agreement or any certificate delivered by Sailfish or New Sailfish pursuant to this Agreement, (ii) Article 4 of the Support Agreement or any certificate delivered by Sailfish or New Sailfish pursuant to that agreement, and (iii) Article VI and VII of the Debt Exchange Agreement or any certificate delivered by Sailfish or New Sailfish pursuant to that agreement.
Sailfish IE Termination Fee means $43 million.
Sailfish Independent Petroleum Engineers means Netherland, Sewell & Associates, Inc.
Sailfish Material Adverse Effect means any occurrence, condition, change, fact, development, circumstance, event or effect that (a) has a material adverse effect on to the financial condition, business, assets or results of operations of Sailfish and its Subsidiaries, taken as a whole, or (b) prevents or materially delays or materially impairs the ability of Sailfish (and its Subsidiaries, if applicable) to consummate the Transactions,
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excluding, in the case of clause (a), any occurrence, condition, change, fact, development, circumstance, event or effect to the extent resulting from or arising out of:
(i) general economic or political conditions in the United States or any foreign jurisdiction in which Sailfish or its Subsidiaries conduct business or financial or securities market conditions, including changes in interest rates and changes in exchange rates;
(ii) changes or conditions generally affecting the offshore oil and gas exploration and production industry or markets generally (including changes in commodity prices and general market prices);
(iii) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war or the occurrence of any epidemics, natural disasters (including hurricanes, tornadoes, floods or earthquakes) or other force majeure events or acts of terrorism (except to the extent any such event results in any damage or destruction to or loss of Sailfishs physical properties, which may be taken into account when determining whether a Sailfish Material Adverse Effect occurred);
(iv) any failure to meet internal or analysts estimates, projections or forecasts (it being understood that the underlying occurrence, condition, change, fact, development, circumstance, event, or effect, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration in determining whether a Sailfish Material Adverse Effect has occurred or is reasonably expected to occur);
(v) a decline in market price, or a change in trading volume, of Sailfish Common Stock (it being understood that any underlying cause of any such decline or change, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration when determining whether a Sailfish Material Adverse Effect has occurred or is reasonably expected to occur);
(vi) the announcement or pendency of the Transactions;
(vii) any change in GAAP, or in the interpretation thereof, as imposed upon Sailfish, its Subsidiaries or their respective businesses or any change in applicable Law, or in the interpretation thereof (excluding any review of any security held or provided by or on behalf of Sailfish or any of its Subsidiaries with respect to plugging and abandonment obligations or liabilities or other Decommissioning Obligations, including the type, amount, or adequacy thereof, or the need for replacement or supplemental security);
(viii) the taking by Sailfish or its Subsidiaries of any action expressly required by terms of this Agreement;
(ix) any Proceeding arising from any alleged breach of fiduciary duty or other violation of applicable Law relating to this Agreement or the Transactions; and
(x) any downgrade in rating of any Indebtedness or debt securities of Sailfish or any of its Subsidiaries (it being understood that any underlying cause of any such downgrade, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration when determining whether a Sailfish Material Adverse Effect has occurred or is reasonably expected to occur);
provided , however , that any occurrence, condition, change, fact, development, circumstance, event or effect referred to in any of the foregoing clauses (i) , (ii) , (iii) or (vii) will be taken into account for purposes of determining whether a Sailfish Material Adverse Effect has occurred in the event, and only to the extent, that such occurrence, condition, change, fact, development, circumstance, event or effect disproportionately affects Sailfish and its Subsidiaries, taken as a whole, compared to other Persons operating in such industry in the same regions and segments as Sailfish.
Sailfish Reserve Report means the reserve report prepared by the Sailfish Independent Petroleum Engineers relating to the Sailfish interests referred to therein as of December 31, 2016.
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Sailfish SEC Documents means all forms, reports, schedules, and statements required to be filed or furnished by Sailfish with the SEC under the Securities Act or the Exchange Act.
Sailfish Stock Plans means the Sailfish 2017 Long-Term Incentive Plan or the Sailfish Directors Deferred Compensation Plan, each as amended to date.
Sailfish Stockholder Approval means the adoption and approval of this Agreement and the Transactions by the affirmative vote or written consent of the holders of a majority of the Sailfish Common Stock outstanding and entitled to vote.
Sailfish Treasury Stock means Sailfish Common Stock held by Sailfish in its treasury.
Sailfish Warrants means the warrants to purchase shares of Sailfish Common Stock pursuant to the Warrant Agreement.
Sarbanes-Oxley Act means the Sarbanes-Oxley Act of 2002, as amended, together with the rules and regulations promulgated thereunder.
SEC means the United States Securities and Exchange Commission.
Second Lien Bridge Loan Agreement means that certain Second Lien Bridge Loan Agreement, dated as of April 3, 2017, among Green Production and Green Production Finance, the lenders party thereto, and Wilmington Trust, National Association, as administrative agent and collateral agent.
Securities Act means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.
Stockholders Agreement means the Stockholders Agreement, to be dated, executed and delivered as of the Closing Date, substantially in the form attached hereto as Exhibit C .
Subsidiary means, with respect to a subject Person, any other Person of which (i) at least 50% of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions, (ii) a general partner interest, or (iii) a managing member interest, is directly or indirectly owned or controlled by the subject Person or by one or more of its Subsidiaries.
Superior Proposal means an unsolicited, bona fide written Competing Proposal that (i) did not result from any breach of Section 7.05 by Sailfish or its Subsidiaries or its or their Representatives and (ii) in the good faith determination of the Sailfish Board, after consultation with its outside financial advisors and outside legal counsel and after taking into account relevant legal, financial, regulatory, estimated timing of consummation and other aspects of such proposal and the Person or group making such proposal, (A) would, if consummated in accordance with its terms, result in a transaction more favorable to Sailfishs stockholders from a financial perspective than the Transactions and (B) is reasonably likely to be completed on the terms proposed; provided that for purposes of the definition of Superior Proposal, the references to 20% in the definition of Competing Proposal shall be deemed to be references to 50%.
Tax means any federal, state, provincial, local, foreign, or other tax, import, duty or other governmental charge or assessment or escheat payments, or deficiencies thereof, including income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, excise, custom duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real and personal property, ad valorem , intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers compensation, payroll, health care, withholding, estimated, or other similar tax and including all interest and penalties thereon and additions to tax, and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any other Person.
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Tax Return means any return, estimated tax return, report, declaration, form, claim for refund, or information statement (including any schedule or attachment thereto) relating to Taxes required to be filed with any taxing authority with respect to Taxes, including information returns, claims for refunds of Taxes and any amendments or supplements to any of the foregoing.
Tax Sharing Agreements means all existing agreements or arrangements (whether or not written) binding a party or any of its Subsidiaries that provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit (excluding any indemnification agreement or arrangement pertaining to the sale or lease of assets or subsidiaries and any indemnity, sharing or similar agreements or arrangements where the inclusion of a Tax indemnification or allocation provision is customary or incidental to an agreement the primary nature of which is not Tax sharing or indemnification).
Termination Fee means $24 million.
Transactions means the transactions contemplated by this Agreement and the other Combination Agreements.
Treasury Regulations means the regulations promulgated under the Code.
Warrant Agreement means that certain Warrant Agreement dated as of February 28, 2017 among Sailfish, Computershare Inc. and Computershare Trust Company, N.A., as Warrant Agent.
Willful and Material Breach with respect to any Party means a material breach by such Party of any covenant, agreement or obligation hereunder that is a consequence of an act undertaken by such Party (or the failure by such Party to take an act it is required to take hereunder) with knowledge that the taking of (or failure to take) such act would, or would reasonably be expected to, cause a breach of this Agreement.
(b) Each of the following terms is defined in the Section set forth opposite such term:
Definition |
Defined in |
|
Acceptable Confidentiality Agreement | Section 7.05(e)(ii) | |
Agreement | Preamble | |
Annual Incentive Plan | Section 7.02(g) | |
Antitrust Authority | Section 7.07(b) | |
Antitrust Laws | Section 7.07(b) | |
Apple Aggregator | Recitals | |
Apple Green Feeder | Recitals | |
AR Terminable Breach | Section 9.03(b) | |
BSA | Section 4.27(c) | |
Bridge Loans | Recitals | |
Bridge Loan Lender Exchange | Recitals | |
Bridge Loan Work Fee | Recitals | |
Cap | Section 9.06(g) | |
Cap Amount | Section 7.10(d) | |
Certificate of Conversion | Section 3.01(b) | |
Certificate of Merger | Section 3.01(b) | |
Certificates | Section 2.04(a)(i) | |
Chancery Court | Section 10.04(b) | |
Change of Recommendation | Section 7.05(c) | |
Closing | Section 3.01(a) | |
Closing Conditions | Section 3.01(a) | |
Closing Tax Certifications | Section 3.02(b) |
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Definition |
Defined in |
|
Combined Consent Statement/Prospectus | Section 4.03(d) | |
Confidentiality Agreement | Section 7.04(b) | |
Continuing Employees | Section 7.02(a) | |
Contributed Equity Interests | Recitals | |
Conversion | Recitals | |
Creditors Rights | Section 4.03(a) | |
Debt Offer | Section 7.16(a) | |
Debt Offer Documents | Section 7.16(a) | |
DGCL | Recitals | |
DLLCA | Recitals | |
Effective Time | Section 3.01(b) | |
Eligible Costs | Section 5.17(k) | |
End Date | Section 9.02(b) | |
Executive Severance Plan | Section 7.02(f) | |
FCPA | Section 4.27(b) | |
FERC | Section 4.17 | |
Foreign Benefit Plan | Section 5.11(i) | |
Franklin Bondholder | Recitals | |
Franklin/MacKay Debt Exchange | Recitals | |
Green Audited Financial Statements | Section 5.04 | |
Green Blocker Contributions | Recitals | |
Green Budget | Section 6.02(b)(xiii) | |
Green Contracts | Section 5.19(b) | |
Green Contribution | Recitals | |
Green Debt Exchange | Recitals | |
Green Disclosure Letter | Article 5 | |
Green Energy | Preamble | |
Green Energy Audited Financial Statements | Section 5.04 | |
Green Expenses | Section 9.06(g) | |
Green Feeders | Recitals | |
Green Financial Advisor | Section 5.10 | |
Green Financial Statements | Section 5.04 | |
Green Group Terminable Breach | Section 9.03(b) | |
Green Intellectual Property | Section 5.14 | |
Green Interim Financial Statements | Section 5.04 | |
Green Material Insurance Policies | Section 5.20 | |
Green Material Leased Real Property | Section 5.15 | |
Green Material Real Property Lease | Section 5.15 | |
Green Owned Real Property | Section 5.15 | |
Green Permits | Section 5.09(a) | |
Green Production | Preamble | |
Green Production Audited Financial Statements | Section 5.04 | |
Green Production Contribution | Recitals | |
Green Production Finance | Recitals | |
Green Related Party Transaction | Section 5.22 | |
Green Reorganization | Recitals | |
Green Signing Parties | Preamble | |
Green Terminable Breach | Section 9.03(a) | |
IE Notice | Section 7.05(e)(iv)(B) | |
IE Notice Period | Section 7.05(e)(iv)(C) | |
Indemnified Liabilities | Section 7.10(a) |
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Definition |
Defined in |
|
Indemnified Persons | Section 7.10(a) | |
Intended Tax Treatment | Section 7.03(a) | |
Intermediate Blocker Contribution | Recitals | |
MacKay Bondholder | Recitals | |
Merger | Recitals | |
Merger Consideration | Section 2.03(a)(i) | |
Merger Sub | Preamble | |
Mexico Letter Agreements | Section 5.17(t) | |
New Benefit Plan | Section 7.02(b) | |
New Revolving Credit Facility | Recitals | |
New Sailfish | Preamble | |
New Sailfish Common Stock | Recitals | |
New Sailfish Contribution | Recitals | |
New Sailfish Reorganization | Recitals | |
New Sailfish Warrant | Section 2.06(a) | |
New Second Lien Notes | Recitals | |
Notice | Section 7.05(e)(iii)(B) | |
Notice Period | Section 7.05(e)(iii)(C) | |
OFAC | Section 4.27(c) | |
Old Sailfish LLC | Recitals | |
Old Sailfish Assignments | Section 2.14 | |
Old Sailfish LLC Certificate of Formation | Section 3.01(b) | |
Old Sailfish LLC Contributions | Recitals | |
Other Exchanging Sailfish Noteholders | Recitals | |
Party | Recitals | |
Parties | Recitals | |
Prohibited Person | Section 4.27(e) | |
Registration Statement | Section 4.06 | |
Representatives | Section 7.04(a) | |
Required Information | Section 7.17(b) | |
Rights-of-Way | Section 4.17 | |
Ride Aggregator | Recitals | |
Ride Blocker | Recitals | |
Ride Green Feeder | Recitals | |
Ride Intermediate Partnership | Recitals | |
Sailfish | Preamble | |
Sailfish Board | Recitals | |
Sailfish Board Recommendation | Section 4.03(a) | |
Sailfish Budget | Section 6.01(b)(xiii) | |
Sailfish Common Stock | Recitals | |
Sailfish Contracts | Section 4.20(b) | |
Sailfish Debt Exchange | Recitals | |
Sailfish Disclosure Letter | Article 4 | |
Sailfish Expenses | Section 9.06(h) | |
Sailfish Financial Advisor | Section 4.11 | |
Sailfish Financial Statements | Section 4.05(b) | |
Sailfish Incentive Awards | Section 2.05(c) | |
Sailfish Intellectual Property | Section 4.15 | |
Sailfish Internal Controls Disclosures | Section 4.25 | |
Sailfish Material Insurance Policies | Section 4.21 | |
Sailfish Material Leased Real Property | Section 4.16 |
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Definition |
Defined in |
|
Sailfish Material Real Property Lease | Section 4.16 | |
Sailfish Notes | Recitals | |
Sailfish Notes Indenture | Recitals | |
Sailfish Notes Supplemental Indenture | Recitals | |
Sailfish Notes Trustee | Recitals | |
Sailfish Notes Work Fee | Recitals | |
Sailfish Owned Real Property | Section 4.16 | |
Sailfish Permits | Section 4.10(a) | |
Sailfish Preferred Stock | Section 4.02(a) | |
Sailfish Related Party Transaction | Section 4.24 | |
Sailfish Related Parties | Section 10.07(c) | |
Sailfish Restricted Stock | Section 2.05(a) | |
Sailfish Restricted Stock Unit | Section 2.05(b) | |
Sailfish Stockholders Meeting | Section 4.03(d) | |
Sailfish Subsidiaries | Section 4.01(a) | |
Sailfish Terminable Breach | Section 9.04(a) | |
Section 409A | Section 4.12(h) | |
Severance Plan | Section 7.02(a) | |
Special Meeting | Section 7.01(d) | |
Support Agreement | Recitals | |
Surviving Entity | Section 2.02 | |
Tender Offer and Consent Solicitation | Recitals | |
Trade Control Laws | Section 4.27(c) | |
Transaction Steps | Recitals | |
Transfer Taxes | Section 7.03(f) | |
Uncertificated Shares | Section 2.04(a)(ii) | |
Voting Agreement | Recitals | |
WARN Act | Section 6.01(b)(xx) |
THE GREEN REORGANIZATION, THE NEW SAILFISH REORGANIZATION, THE
GREEN CONTRIBUTION AND THE DEBT EXCHANGES
Section 2.01 Green Reorganization . After the date hereof (but in any event prior to Closing), the Green Signing Parties shall cause or, pursuant to the Support Agreement, Apple and Ride shall cause the following steps to occur in the following order:
(a) (i) the Ride Aggregator shall distribute the portion of its Class A Equity Interests in Green Energy allocable to the Ride Blocker to the Ride Intermediate Partnership and (ii) the Ride Intermediate Partnership shall distribute (in complete liquidation of the Ride Intermediate Partnership) all of the Class A Equity Interests in Green Energy received from the Ride Aggregator to the Ride Blocker and the Equity Interests in the Ride Aggregator held by the Ride Intermediate Partnership to its general partner;
(b) (i) the Apple Aggregator shall distribute the portion its Class A Equity Interests in Green Energy allocable to the Apple Blockers to the Apple Intermediate Partnerships and (ii) the Apple Intermediate Partnerships shall distribute the Class A Equity Interests in Green Energy received from the Apple Aggregator to the Apple Blockers;
(c) the Ride Aggregator and the Class B/C Unitholders shall form the Ride Green Feeder;
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(d) the Ride Aggregator shall contribute all of its Class A Equity Interests in Green Energy (which, for the avoidance of doubt, shall not include the Equity Interests distributed to the Ride Blocker pursuant to Section 2.01(a) ) to the Ride Green Feeder in exchange for the same class of Equity Interests in the Ride Green Feeder;
(e) the Class B/C Unitholders shall contribute a percentage equal to Rides Class A Parent Percentage (as determined prior to the effectuation of Section 2.01(d) ) of their Class A, Class B and Class C Equity Interests in Green Energy to the Ride Green Feeder in exchange for the same classes of Equity Interests in the Ride Green Feeder in the same proportions;
(f) the Apple Aggregator and the Class B/C Unitholders shall form the Apple Green Feeder;
(g) the Apple Aggregator shall contribute all of its Class A Equity Interests in Green Energy (which, for the avoidance of doubt, shall not include the Equity Interests distributed to the Apple Blockers pursuant to Section 2.01(b) ) to the Apple Green Feeder in exchange for the same class of Equity Interests in the Apple Green Feeder;
(h) the Class B/C Unitholders shall contribute the remainder of their Class A, Class B and Class C Equity Interests in Green Energy (intended to be Apples Class A Parent Percentage of such Equity Interests held by them as determined prior to the effectuation of Section 2.01(d) ) to the Apple Green Feeder in exchange for the same classes of Equity Interests in the Apple Green Feeder in the same proportions;
(i) Talos Energy Holdings LLC, a Delaware limited liability company, shall distribute 100% of the Equity Interests in Green Production to Green Energy;
(j) Green Energy shall distribute 100% of the Equity Interests in Green Production to the Ride Green Feeder, the Apple Green Feeder, the Ride Blocker, and the Apple Blockers; and
(k) the Ride Green Feeder, the Apple Green Feeder, the Ride Blocker, and the Apple Blockers shall collectively contribute 100% of the Equity Interests in Green Energy to Green Production.
Section 2.02 The Merger . On the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, the Merger will occur and Merger Sub shall be merged with and into Sailfish in accordance with the terms of, and subject to the conditions set forth in, this Agreement, whereupon the separate existence of Merger Sub shall cease, and Sailfish shall be the surviving company in the Merger (sometimes hereinafter referred to as the Surviving Entity ) and a direct wholly owned subsidiary of New Sailfish. From and after the Effective Time, the Surviving Entity will possess all of the rights, powers and privileges and be subject to all of the obligations, liabilities and restrictions of Sailfish and Merger Sub, all as provided under the DGCL. At the Effective Time, the certificate of incorporation and the bylaws of the Surviving Entity shall be amended and restated to be in the forms set forth on Exhibits E and F , respectively, until such certificate of incorporation and bylaws are thereafter amended in accordance with their respective terms and applicable Law. The Parties shall take all necessary action such that from and after the Effective Time, the directors and officers of Merger Sub immediately prior to the Effective Time shall be the directors and officers of the Surviving Entity, in each case except as set forth on Annex 2.02 , as may be updated by Green Energy by written notice to Sailfish prior to the Effective Time, and such directors and officers shall serve until their successors have been duly elected or appointed and qualified or until their death, resignation or removal in accordance with the Organizational Documents of the Surviving Entity.
Section 2.03 Conversion of Shares . (a) At the Effective Time, by virtue of the Merger and without any other action on the part of Sailfish or any holder of any capital stock of Sailfish:
(i) Each share of Sailfish Common Stock outstanding immediately prior to the Effective Time shall be automatically cancelled and shall cease to exist and will be converted into the right to receive one fully paid
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and non-assessable share of New Sailfish Common Stock (the Merger Consideration ), and each holder of Certificates or Uncertificated Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest, subject to compliance with the procedures set forth in this Agreement; and
(ii) Each share of issued and outstanding common stock of Merger Sub owned by New Sailfish shall be automatically converted into one fully paid and non-assessable share of common stock of the Surviving Entity.
(b) The outstanding shares of common stock of New Sailfish held by Sailfish immediately prior to the Effective Time will be repurchased for par value and retired upon the Effective Time.
Section 2.04 Surrender and Payment .
(a) Prior to the Effective Time, New Sailfish shall appoint the Exchange Agent for the purpose of exchanging the Merger Consideration for:
(i) certificates representing shares of Sailfish Common Stock (the Certificates ); or
(ii) uncertificated shares of Sailfish Common Stock (the Uncertificated Shares ).
Prior to the Effective Time, New Sailfish shall provide or shall cause to be provided to the Exchange Agent shares of New Sailfish Common Stock sufficient in order for the Exchange Agent to distribute the aggregate Merger Consideration. Promptly after the Closing Date, New Sailfish will send, or will cause the Exchange Agent to send, to each holder of shares of Sailfish Common Stock at the Effective Time a letter of transmittal and instructions that will specify that the delivery will be effected, and risk of loss and title will pass, only on proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent.
(b) Each holder of shares of Sailfish Common Stock will be entitled to receive, on
(i) surrender to the Exchange Agent of a Certificate, together with a properly completed letter of transmittal (or other evidence, if any, of transfer as the Exchange Agent may reasonably request), or
(ii) receipt of an agents message by the Exchange Agent (or other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares,
the aggregate Merger Consideration that the holder has a right to receive under Section 2.03 . The shares of New Sailfish Common Stock constituting the Merger Consideration will be in uncertificated book-entry form, unless a physical certificate is requested by the holder or is otherwise required under applicable Law. As a result of the Merger, at the Effective Time, all shares of Sailfish Common Stock will cease to be outstanding and each holder of Sailfish Common Stock will cease to have any rights with respect to the Sailfish Common Stock, except the right to receive the Merger Consideration payable in respect of the Sailfish Common Stock under Section 2.03 .
(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it will be a condition to the payment that:
(i) either the surrendered Certificate will be properly endorsed or will otherwise be in proper form for transfer or the applicable Uncertificated Share will be properly transferred, and
(ii) the Person requesting the payment will pay to the Exchange Agent any Transfer Taxes required as a result of the payment to a Person other than the registered holder of the Certificate or Uncertificated Share or establish to the satisfaction of the Exchange Agent that the Tax has been paid or is not payable.
(d) After the Effective Time, there will be no further registration of transfers of shares of Sailfish Common Stock. If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Entity, they will be canceled and exchanged for the Merger Consideration payable in respect of the Sailfish Common Stock provided for, and in accordance with the procedures set forth, in this Article 2 .
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(e) Any portion of the Merger Consideration made available to the Exchange Agent under Section 2.04(a) that remains unclaimed by the holders of shares of Sailfish Common Stock 12 months after the Closing Date will be returned to the Surviving Entity, on demand. Any holder who has not exchanged shares of Sailfish Common Stock for the Merger Consideration in accordance with this Section 2.04 before that date will look only to the Surviving Entity or New Sailfish for payment of the Merger Consideration, and any dividends and distributions with respect to the Merger Consideration, without any interest thereon.
(f) None of the Parties, the Surviving Entity or the Exchange Agent shall be liable to any holder of shares of Sailfish Common Stock for any amounts properly paid or delivered to a public official under applicable abandoned property, escheat or similar Laws. Any amounts remaining unclaimed by holders of shares of Sailfish Common Stock six (6) years after the Closing Date (or that earlier date, immediately before the time when the amounts would otherwise escheat to or become property of any Governmental Entity) will become, to the extent permitted by applicable Law, the property of the Surviving Entity, free and clear of any claims or interest of any Person previously entitled thereto.
Section 2.05 Sailfish Equity-Based Awards .
(a) Sailfish shall take all such actions as are necessary to cause, as of the Effective Time, each share of Sailfish Common Stock subject to vesting repurchase rights or other lapse restrictions ( Sailfish Restricted Stock ) granted and outstanding immediately prior to the Effective Time, to be accelerated and settled in a share of New Sailfish Common Stock.
(b) Sailfish shall take all such actions as are necessary to cause, as of the Effective Time, each restricted stock unit with respect to Sailfish Common Stock (a Sailfish Restricted Stock Unit ) granted and outstanding immediately prior to the Effective Time to be accelerated and converted into a number of shares of New Sailfish Common Stock equal to the total number of shares of Sailfish Common Stock subject to such Sailfish Restricted Stock Unit immediately prior to the Effective Time.
(c) Sailfish and New Sailfish shall be entitled to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from the consideration otherwise payable pursuant to this Section 2.05 to any holders of Sailfish Restricted Stock or Sailfish Restricted Stock Units (collectively, Sailfish Incentive Awards ) such amounts as are required to be withheld or deducted under the Code, or any applicable provisions of state, local or foreign Tax or other Law. To the extent that amounts are so withheld by Sailfish, New Sailfish or the Exchange Agent, as the case may be, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holders of such Sailfish Incentive Awards, as applicable, in respect of which the deduction and withholding was made by Sailfish, New Sailfish or the Exchange Agent, as the case may be.
(d) Prior to the date hereof, Sailfish has provided Green Energy a true and complete list of the Sailfish Incentive Awards outstanding on the date of this Agreement, setting forth, as applicable, (i) the target number of shares deliverable, on a grant by grant basis, (ii) the number of shares remaining subject to such awards on a grant by grant basis, (iii) the dates on which such awards were granted, (iv) the exercise prices applicable to such awards, and (v) the settlement date for each Sailfish Restricted Stock Unit and share of Sailfish Restricted Stock. Promptly following request by Green Energy after the date hereof, Sailfish will deliver to Green Energy an updated version of the list provided by Sailfish to Green Energy.
(e) New Sailfish shall take all actions necessary or appropriate to have available for issuance under an effective registration statement filed with the SEC a sufficient number of shares of New Sailfish Common Stock for delivery upon exercise, settlement, conversion or vesting of the Sailfish Incentive Awards with respect to those individuals, if any, who, subsequent to the Closing, will be subject to the reporting requirements under Section 16(a) of the Exchange Act, where applicable. New Sailfish shall administer the provisions of this Section 2.05 in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent applicable.
(f) Prior to and at Closing, Sailfish and New Sailfish will take all actions with respect to the Sailfish Stock Plans reasonably requested by Green Energy, including, but not limited to, the termination of any or
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all Sailfish Stock Plans, the assumption of any or all Sailfish Stock Plans by New Sailfish, and the filing of a Form S-8 registration statement with respect to shares of Sailfish Common Stock available for grant and delivery under the Sailfish Stock Plans. Prior to and at Closing, Sailfish and New Sailfish will take all actions with respect to the implementation of an omnibus equity incentive plan reasonably requested by Green Energy, including, but not limited to, the adoption of such omnibus equity incentive plan, the provision of any requisite Sailfish or New Sailfish board of director and/or shareholder approval, and the filing of a Form S-8 registration statement with respect to shares of New Sailfish Common Stock available for grant and delivery under any such omnibus equity incentive plan.
Section 2.06 Sailfish Warrants .
(a) At the Effective Time, each unexercised Sailfish Warrant outstanding immediately prior to the Effective Time, shall be assumed by New Sailfish in accordance with the terms of the Warrant Agreement, and each Sailfish Warrant so assumed by New Sailfish will continue to have, and be subject to, the same terms and conditions of such Sailfish Warrant immediately prior to the Effective Time, except that such Sailfish Warrant shall cease to represent a warrant to purchase Sailfish Common Stock and will be converted into a warrant (a New Sailfish Warrant ) exercisable for the Merger Consideration which the Sailfish Common Stock issuable upon exercise of such Sailfish Warrant immediately prior to the Effective Time would have been entitled to receive upon consummation of the Merger. New Sailfish shall reserve for future issuance a number of shares of New Sailfish Common Stock at least equal to the number of shares of New Sailfish Common Stock that will be subject to the New Sailfish Warrants.
(b) In furtherance of the foregoing, prior to the Effective Time and in accordance with the Warrant Agreement, Sailfish shall use its best efforts to take such actions and deliver such documents as are required pursuant to the Sailfish Warrants and by the warrant agent for the Sailfish Warrants.
Section 2.07 Adjustments . If during the period between the date of this Agreement and the Effective Time, the outstanding shares of capital stock of Sailfish shall have been changed into a different number of shares or a different class by reason of any reclassification, recapitalization, stock split, subdivision or combination, exchange or readjustment of shares, or any stock dividend thereon with a record date during such period, or any other similar event, but excluding any change that results from (a) the exercise of stock options or other equity awards to purchase shares of Sailfish Common Stock or the settlement of restricted stock units or (b) the grant of equity-based compensation to directors or employees of Sailfish or under Sailfishs equity compensation plans or arrangements, the Merger Consideration, amounts payable under Section 2.04 and any other amounts payable pursuant to this Agreement, as applicable, shall be appropriately and proportionately adjusted; provided , however , that nothing in this Section 2.07 shall be deemed to permit or authorize any Party to effect any such change that it is not otherwise authorized or permitted to undertake pursuant to this Agreement.
Section 2.08 Withholding Taxes . Each of the Exchange Agent, Sailfish and New Sailfish shall be entitled to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from the consideration otherwise payable to a holder of Sailfish Common Stock pursuant to this Agreement, such amounts as are required to be withheld or deducted under the Code, or any applicable provisions of state, local or foreign Tax Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Sailfish Common Stock in respect of which such deduction and withholding were made.
Section 2.09 Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by New Sailfish, the posting by such Person of a bond, in such reasonable amount as New Sailfish may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Sailfish Common Stock represented by such Certificate, as contemplated by this Article 2 .
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Section 2.10 No Dissenters Rights . No dissenters or appraisal rights shall be available with respect to the Transactions.
Section 2.11 New Sailfish Contribution . On the Closing Date, immediately following the Merger, on the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, New Sailfish shall make the New Sailfish Contribution to New Sailfish Sub and New Sailfish Sub shall accept the New Sailfish Contribution. At the Closing, to effect the New Sailfish Contribution, New Sailfish and New Sailfish Sub shall execute and deliver an assignment evidencing the New Sailfish Contribution. The Parties shall cause the New Sailfish Contribution to become effective immediately after the consummation of the Merger. Upon consummation of the New Sailfish Contribution, New Sailfish Sub shall be the sole shareholder of the Surviving Entity.
Section 2.12 The Conversion . On the Closing Date, immediately following the New Sailfish Contribution, on the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL and the DLLCA: (i) the Conversion shall be effected pursuant to which the Surviving Entity shall be converted to a limited liability company by the filing of the Certificate of Formation and the Certificate of Conversion with the Secretary of State of the State of Delaware in accordance with the DGCL and the DLLCA, with New Sailfish Sub as the sole managing member and (ii) the issued and outstanding shares of the Surviving Entity shall be converted, in the aggregate, into a 100% membership interest in Old Sailfish LLC.
Section 2.13 The Green Contribution . On the Closing Date, immediately following the Conversion, on the terms and subject to the conditions set forth in this Agreement, and in accordance with the DLLCA and the DGCL, the Green Contributors shall make the Green Contribution in exchange for the right to receive their respective proportions (as designated by Green Energy in a written notice to Sailfish no less than one (1) Business Days prior to Closing) of the Green Contribution Consideration. At the Closing, to effect the Green Contribution, (a) the Green Contributors and New Sailfish shall execute and deliver the Green Contributor Assignment and (b) New Sailfish shall deliver to each Green Contributor its respective proportion, as designated by Green Energy pursuant to the foregoing sentence, of the Green Contribution Consideration, in book entry form, together with an executed certificate of the Exchange Agent certifying as to the book entry issuance thereof and any other evidence of issuance reasonably requested by any Green Contributor, or, if requested by any Green Contributor, certificates of the New Sailfish Common Stock representing the requesting Persons share of the Green Contribution Consideration. Upon consummation of the Green Contribution, (x) New Sailfish shall be the sole owner of 100% of the Equity Interests of the Apple Blockers and the Ride Blocker, (y) New Sailfish, the Apple Blockers and the Ride Blocker shall be the sole holders of 100% of the Equity Interests of Green Production, and (z) Green Production shall be the sole holder of 100% of the Equity Interests of Green Energy.
Section 2.14 The Old Sailfish LLC Contribution s . On the Closing Date, (a) following the Green Contribution, New Sailfish Sub shall contribute all of the Equity Interests of Old Sailfish LLC to Green Production and Green Production shall accept the Old Sailfish LLC Equity Interests from New Sailfish Sub and issue additional Equity Interests to New Sailfish Sub and (b) immediately thereafter, Green Production shall contribute all of the Equity Interests of Old Sailfish LLC to Green Energy, and Green Energy shall accept the Equity Interests of Old Sailfish LLC from Green Production. At the Closing, to effect the Old Sailfish LLC Contributions, New Sailfish Sub and Green Production shall execute and deliver an assignment evidencing the contribution, transfer and delivery of the Equity Interests of Old Sailfish LLC from New Sailfish Sub to Green Production, and Green Production and Green Energy shall execute and deliver an assignment evidencing the contribution, transfer and delivery of the Equity Interests of Old Sailfish LLC from Green Production to Green Energy (collectively, the Old Sailfish Assignments ). Upon consummation of the Old Sailfish LLC Contributions, Green Energy shall be the sole member of Old Sailfish LLC.
Section 2.15 Green Debt Exchange . On the Closing Date, immediately following the Old Sailfish LLC Contributions, the transactions contemplated by the Green Debt Exchange shall be consummated in accordance with the Debt Exchange Agreement, pursuant to which New Sailfish shall issue the Apple Debt Exchange
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Consideration to the Apple Bondholders (or any Affiliate of the Apple Bondholders to which their Green Notes have been assigned in accordance with the Debt Exchange Agreement), and the Ride Debt Exchange Consideration to the Ride Bondholders (or any Affiliate of the Ride Bondholders to which their Green Notes have been assigned in accordance with the Debt Exchange Agreement), in exchange for the contribution by such Persons of their Green Notes to New Sailfish as contemplated by the Debt Exchange Agreement. New Sailfish shall thereafter contribute such Green Notes to Green Production in exchange for additional Equity Interests in Green Production. Following such contribution of the Green Notes by New Sailfish to Green Production, the Green Notes shall be cancelled by operation of law.
Section 2.16 Bridge Loan Lender Exchange . On the Closing Date, immediately following the Green Debt Exchange, the Bridge Loan Lender Exchange (as contemplated by the Debt Exchange Agreement) shall be consummated, pursuant to which (a) (i) Green Production and Green Production Finance shall issue New Second Lien Notes to the Bridge Loan Lenders (as defined in the Debt Exchange Agreement) in exchange for the Bridge Loans held by such Persons and (ii) Green Production shall pay the Bridge Loan Work Fee to the Bridge Loan Lenders (as defined in the Debt Exchange Agreement), as contemplated by the Debt Exchange Agreement. Following the Bridge Loan Lender Exchange, the Bridge Loans shall be cancelled by operation of law.
Section 2.17 Sailfish Debt Exchange . On the Closing Date, immediately following the Green Debt Exchange and substantially concurrently with the Bridge Loan Lender Exchange, the Sailfish Debt Exchange shall be consummated in accordance with the Debt Exchange Agreement and the Tender Offer and Consent Solicitation, as applicable, pursuant to which (a) (i) Green Production and Green Production Finance shall issue the New Second Lien Notes to the Franklin Bondholders, the MacKay Bondholders and the Other Exchanging Sailfish Noteholders, as applicable, in exchange for the Sailfish Notes held by such Persons, (ii) Green Production shall pay the Sailfish Notes Work Fee to each holder of Sailfish Notes that exchanges their Sailfish Notes for New Second Lien Notes on the Closing Date and (iii) the Sailfish Notes exchanged by the Franklin Bondholders, the MacKay Bondholders and the Other Exchanging Sailfish Noteholders shall be cancelled and (b) the Sailfish Notes Supplemental Indenture shall become operative.
CLOSING
(a) Subject to the terms and conditions of this Agreement, the closing of the Transactions shall take place at a closing (the Closing ) to be held at the offices of Akin Gump Strauss Hauer & Feld LLP at 9:00 A.M. Houston, Texas time on the day that is three Business Days after the day in which all of the conditions set forth in Article 8 (the Closing Conditions ) have been satisfied or, where legally permissible, waived (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at the Closing).
(b) At Closing, Sailfish will file a certificate of merger (the Certificate of Merger ) with the Delaware Secretary of State and make all other filings or recordings required by the DGCL to effect the Merger. The Merger will become effective on the date and at the time the Certificate of Merger is filed with the Delaware Secretary of State (or at a later date and time specified, if any, in the Certificate of Merger and agreed to by Sailfish and Green Energy). The time when the Merger will become effective is referred to as the Effective Time . Immediately following the Effective Time and the New Sailfish Contribution, New Sailfish Sub shall file a certificate of formation (the Old Sailfish LLC Certificate of Formation ) and a certificate of conversion (the Certificate of Conversion ) with the Delaware Secretary of State and make all other filings or recordings required by the DLLCA to effect the Conversion.
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Section 3.02 Green Closing Deliverables . At the Closing, the Green Signing Parties will deliver, or cause to be delivered, to Sailfish and New Sailfish the following:
(a) duly executed counterparts of each Combination Agreement to which any Green Contributor is a party; and
(b) to the extent applicable, separate certifications, signed under penalties of perjury and dated not more than 30 days prior to the Closing Date, that satisfy the requirements of Treasury Regulation Section 1.1445-2(b)(2) (the Closing Tax Certifications ) from each Green Feeder (or if any such entity is disregarded as an entity from another Person for such purpose, from such other Person) stating that each is not a foreign person as defined in Section 1445 of the Code.
Section 3.03 Sailfish and New Sailfish Closing Deliverables .
(a) At the Closing, New Sailfish will deliver, or cause to be delivered, to the applicable Green Contributors, the following:
(i) duly executed counterparts of each of the Combination Agreements to which it is a party;
(ii) the shares of New Sailfish Common Stock contemplated by Section 2.13 ; and
(iii) duly executed counterparts to the Old Sailfish Assignments.
REPRESENTATIONS AND WARRANTIES OF
SAILFISH, NEW SAILFISH AND MERGER SUB
Except as set forth in (i) the disclosure letter dated as of the date of this Agreement and delivered by Sailfish to Green Energy on or prior to the date of this Agreement (the Sailfish Disclosure Letter ) or (ii) the Sailfish SEC Documents publicly filed with the SEC between December 31, 2016 and the date of this Agreement (excluding any disclosure set forth in any risk factor section or forward-looking statements section or statements that are otherwise forward-looking, predictive, nonspecific or cautionary in nature), where the relevance of the information as an exception to (or disclosure for purposes of) a particular representation is reasonably apparent on the face of such disclosure (it being agreed that this clause (ii) shall not be applicable to Section 4.01 , Section 4.02 , or Section 4.03 , Sailfish, New Sailfish and Merger Sub represent and warrant to the Green Signing Parties as follows:
Section 4.01 Organization, Good Standing and Qualification .
(a) Sailfish and each entity that is a Subsidiary of Sailfish (the Sailfish Subsidiaries ) is a corporation, limited liability company, partnership or other entity duly organized and validly existing under the Laws of the jurisdiction of its organization and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as now conducted.
(b) Sailfish and each of the Sailfish Subsidiaries is duly qualified and/or licensed, as may be required, and in good standing in each of the jurisdictions in which the nature of the business conducted by it or the character of the property owned, leased or used by it makes such qualification and/or licensing necessary, except where the failure to be so qualified and/or licensed has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Sailfish has heretofore made available to Green Energy complete and correct copies of its and its Subsidiaries Organizational Documents as of the date hereof.
Section 4.02 Capital Structure .
(a) As of the date of this Agreement, the authorized capital stock of Sailfish consists solely of (i) 60,000,000 shares of Sailfish Common Stock and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share (the Sailfish Preferred Stock ).
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(b) As of the date of this Agreement, (i) 19,999,112 shares of Sailfish Common Stock were outstanding, of which 1,093 were shares of Sailfish Restricted Stock and 292 were shares of Sailfish Treasury Stock, and (ii) Sailfish Restricted Stock Units with respect to an aggregate of 62,137 shares of Sailfish Common Stock, all of which were issued under a Sailfish Stock Plan were outstanding. As of the date of this Agreement, (i) there are no shares of Sailfish Preferred Stock issued and outstanding and (ii) 6,081,654 shares of Sailfish Common Stock are reserved for issuance in respect of future grants under the Sailfish Stock Plans and no other shares of Sailfish Common Stock are available for issuance of future awards under any other Employee Benefit Plan or other equity compensation plan or arrangement. Since March 31, 2017 through the date of this Agreement, Sailfish has not declared or paid any dividend, or declared or made any distribution on, or authorized the creation of, or authorized or effected any split-up or any other recapitalization of, any of its capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock. Sailfish has not heretofore agreed to take any such action, and there are no outstanding contractual obligations of Sailfish of any kind to redeem, purchase or otherwise acquire any outstanding shares of capital stock of Sailfish. As of the date of this Agreement, there were outstanding Sailfish Warrants to purchase an aggregate of 3,529,412 shares of Sailfish Common Stock. Since March 31, 2017 through the date of this Agreement (i) no shares of Sailfish Common Stock have been issued, except pursuant to awards granted under the Sailfish Stock Plans, in each case outstanding on the date of this Agreement, and (ii) no Sailfish Incentive Awards have been granted under the Sailfish Stock Plans. There are no outstanding bonds, debentures, notes or other indebtedness or warrants or other securities of Sailfish having the right to vote (or, other than the Sailfish Warrants, convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Sailfish may vote. There are no outstanding contingent value rights, phantom stock or similar securities or rights that are derivative of, or provide economic benefits based directly or indirectly on the value or price of any capital stock of, or other securities or ownership interests in, Sailfish.
(c) All issued and outstanding shares of Sailfishs capital stock are, and all shares that may be issued or granted pursuant to the exercise of Sailfish Warrants, or pursuant to the vesting of Sailfish Restricted Stock Unit awards or Sailfish Restricted Stock awards granted under the Sailfish Stock Plans, will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights. The issuance and sale of all of the shares of capital stock described in this Section 4.02 have been in material compliance with United States federal and state securities Laws and rules of the NYSE. Neither Sailfish nor any of the Sailfish Subsidiaries has agreed to register any securities under the Securities Act, or under any state securities Law or granted registration rights to any individual or entity.
(d) Except as set forth in Section 4.02(b) , there are no outstanding or authorized (i) shares of capital stock or other Equity Interest in Sailfish, (ii) options, warrants, preemptive rights, subscriptions, calls or other rights, convertible securities or agreements obligating Sailfish or any of its Subsidiaries to issue, transfer or sell any shares of capital stock or other Equity Interest in Sailfish or any of the Sailfish Subsidiaries or securities convertible into or exchangeable for such shares or other Equity Interest, (iii) contractual obligations of Sailfish or any of the Sailfish Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of Sailfish or any of the Sailfish Subsidiaries or any such securities or agreements listed in clause (i) of this sentence, or (iv) voting trusts or similar agreements to which Sailfish or any of the Sailfish Subsidiaries is a party with respect to the voting of the capital stock of Sailfish or any of the Sailfish Subsidiaries. Immediately after the consummation of the Transactions, except as contemplated by Sections 2.05 and 2.06 there will not be any outstanding subscriptions, options, warrants, calls, preemptive rights, subscriptions, or other rights, convertible or agreements, obligating Sailfish or any of the Sailfish Subsidiaries calling for the purchase or issuance of any shares of the capital stock or other Equity Interest in Sailfish or any of the Sailfish Subsidiaries or securities convertible into or exchangeable for such shares or other such securities.
(e) All of the issued and outstanding Equity Interests of New Sailfish and Merger Sub are, and immediately before the Closing will be, owned by Sailfish and New Sailfish, respectively.
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Section 4.03 Authorization; No Conflict ; Consents and Approvals .
(a) Each of Sailfish, New Sailfish and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to the Sailfish Stockholder Approval, to consummate the Transactions. The execution and delivery of this Agreement by each of Sailfish, New Sailfish and Merger Sub, the performance of its obligations hereunder and the consummation by each of them of the Transactions have been duly authorized by all necessary corporate action on the part of Sailfish, subject to the Sailfish Stockholder Approval. This Agreement has been duly executed and delivered by Sailfish, New Sailfish and Merger Sub and assuming that this Agreement constitutes the valid and binding obligation of the Green Signing Parties, constitutes a valid and binding obligation of Sailfish, New Sailfish and Merger Sub enforceable against Sailfish, New Sailfish and Merger Sub in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other Laws of general applicability relating to or affecting creditors rights and to general principles of equity regardless of whether such enforceability is considered in a Proceeding in equity or at law (collectively, Creditors Rights ). The Sailfish Board, at a meeting duly noticed and called and held, by unanimous vote that (except as permitted by Section 7.05 ) has not been rescinded, modified or withdrawn, (i) determined that the terms of this Agreement and the Transactions (including the Merger, the Bridge Loan Lender Exchange, the Green Contribution, the Sailfish Debt Exchange and the Green Debt Exchange) are, in each case, in the best interests of, Sailfish and its stockholders, (ii) approved and declared advisable this Agreement and the Transactions (including the Merger, the Bridge Loan Lender Exchange, the Green Contribution, the Sailfish Debt Exchange and the Green Debt Exchange), (iii) directed that this Agreement be submitted to the stockholders of Sailfish for their consideration, and (iv) recommended that the holders of Sailfish Common Stock approve and adopt this Agreement and the Transactions, including the Merger, the Bridge Loan Lender Exchange, the Green Contribution, the Sailfish Debt Exchange and the Green Debt Exchange (such recommendation described in this clause (iv) , the Sailfish Board Recommendation ). The Sailfish Stockholder Approval is the only vote or consent of the holders of any class or series of Sailfishs capital stock necessary to approve the Transactions. The boards of directors of New Sailfish and Merger Sub, each at meetings duly noticed and called and held, by unanimous vote that has not been rescinded, modified or withdrawn, (i) determined that the terms of this Agreement and the Transactions (including the Merger, the Bridge Loan Lender Exchange, the Green Contribution, the Sailfish Debt Exchange and the Green Debt Exchange), are, in each case, in the best interests of, New Sailfish and Merger Sub, respectively, and each of their respective stockholders, (ii) approved and declared advisable this Agreement and the Transactions, (iii) directed that this Agreement be submitted to their respective stockholders for consideration, and (iv) recommended that their respective stockholders approve and adopt this Agreement and the transactions contemplated hereby. Sailfish, as the sole stockholder of New Sailfish, and New Sailfish, as the sole stockholder of Merger Sub, have approved and adopted this Agreement and the transactions contemplated hereby by written consents that will become effective following the execution of this Agreement by the Parties.
(b) The execution and delivery of this Agreement does not, and the consummation of the Transactions will not, require any consent of or other action by any Person under or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or acceleration of any material obligation or the loss, suspension, limitation or impairment of the ownership of, or a material benefit or use under, or result in (or give rise to) the creation of any Encumbrance or any rights of termination, cancellation, first offer, first refusal, or other change in any right or obligation or the loss of any benefit, in each case, with respect to any of the properties or assets of Sailfish or any of its Subsidiaries (including, for the avoidance of doubt, any of their Oil and Gas Properties) under, any provision of (i) the Organizational Documents of Sailfish or any of its Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, Contract or other agreement, permit, franchise, certificate or license to which Sailfish or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or its or their respective properties or assets are bound, or (iii) assuming the consents, approvals, orders, authorizations, registrations, filings or permits referred to in Section 4.03(d) are duly and timely obtained or made and the Sailfish Stockholder Approval has been obtained, any Law applicable to Sailfish or any of its Subsidiaries or any of their respective
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properties or assets, other than, in the case of clauses (ii) and (iii) , any such violations, defaults, acceleration, losses, or Encumbrances that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(c) Neither Sailfish nor any of its Subsidiaries is in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the Organizational Documents of Sailfish or any of its Subsidiaries or (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, Contract or other agreement, permit, franchise or license to which Sailfish or any of its Subsidiaries is now a party or by which Sailfish or any of its Subsidiaries or any of their respective properties or assets is bound, except for defaults or violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(d) No consent, approval, order or authorization of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by Sailfish or any of its Subsidiaries in connection with the execution and delivery of this Agreement by Sailfish, New Sailfish and Merger Sub or the consummation by Sailfish, New Sailfish and Merger Sub of the Transactions, except for: (i) (A) the filing of a premerger notification report by Sailfish under the HSR Act, and the expiration or termination of the applicable waiting period with respect thereto, and (B) any filings required with respect to the Comisión Federal de Competencia Económica of the United Mexican States; (ii) the filing with the SEC of (A) a joint consent solicitation statement/prospectus in preliminary and definitive form (the Combined Consent Statement/Prospectus ), which shall include a form of consent that may be executed by the stockholders of Sailfish in connection with the Sailfish Stockholder Approval or, in the event necessary pursuant to Section 7.01 , shall include a proxy statement and form of proxy card relating to a meeting of the stockholders of Sailfish to consider this Agreement and the transactions contemplated hereby, including the Merger, the Green Contribution, the Bridge Loan Lender Exchange, the Sailfish Debt Exchange and the Green Debt Exchange (including any postponement, adjournment or recess thereof, the Sailfish Stockholders Meeting ) and (B) such reports under the Exchange Act, and such other compliance with the Exchange Act and the rules and regulations thereunder, as may be required in connection with this Agreement and the Transactions; (iii) the filings of the Certificate of Merger, the certificate of formation of New Sailfish Sub, the Old Sailfish LLC Certificate of Formation and the Certificate of Conversion with the Office of the Secretary of State of the State of Delaware; (iv) filings with the NYSE; (v) such filings and approvals as may be required by any applicable state securities or blue sky laws; (vi) filings with Governmental Entities, including the U.S. Bureau of Ocean Energy Management, customarily made subsequent to closing; and (vii) any such consent, approval, order, authorization, registration, filing or permit that the failure to obtain or make has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(a) Section 4.04(a) of the Sailfish Disclosure Letter sets forth, as of the date of this Agreement, the name, jurisdiction of organization and the respective Equity Interest ownership of each (i) Sailfish Subsidiary and (ii) entity (other than the Sailfish Subsidiaries) in which Sailfish or any Sailfish Subsidiary owns any interest. Except as set forth on Section 4.04(a) of the Sailfish Disclosure Letter, each Sailfish Subsidiary is directly or indirectly wholly owned by Sailfish.
(b) All of the outstanding Equity Interests in (i) each Sailfish Subsidiary that are owned directly or indirectly by Sailfish, and (ii) each other Person that is a legal entity in which Sailfish has an Equity Interest, in each case that are owned directly or indirectly by Sailfish, are duly authorized, validly issued, fully paid (to the extent required under the Organizational Documents of such Sailfish Subsidiary or other Person) and (in the case of all corporate Subsidiaries) nonassessable, and such Equity Interests are owned by Sailfish or by a Sailfish Subsidiary free and clear of any Encumbrances or limitations on voting rights. There are no subscriptions, options, warrants, calls, rights, convertible securities or other agreements relating to the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange
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under any outstanding security or other instrument) for any of the Equity Interests in any Sailfish Subsidiary.
(c) Neither New Sailfish nor Merger Sub, since its respective date of incorporation, has carried on any business or conducted any operations other than the execution and delivery of this Agreement, the performance of its obligations hereunder, and matters ancillary thereto.
Section 4.05 SEC Documents; Financial Statements .
(a) Since January 1, 2017, Sailfish has filed or furnished with the SEC, on a timely basis, all Sailfish SEC Documents. As of its filing date (or, if amended or supplemented, as of the date of the most recent amendment or supplement and giving effect to such amendment or supplement), each of the Sailfish SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Sailfish SEC Documents and all current listing and corporate governance requirements of NYSE, and none of the Sailfish SEC Documents contained (when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures that are amended) any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Sailfish has made all certifications and statements required by Sections 302 and 906 of the Sarbanes-Oxley Act and the related rules and regulations promulgated thereunder with respect to the Sailfish SEC Documents. As of the date hereof, neither Sailfish nor any of its officers has received notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications. As of the date hereof, there are no outstanding or unresolved comments received by Sailfish from the SEC with respect to any of the Sailfish SEC Documents. None of the Sailfish Subsidiaries is, or has been at any time, subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
(b) The financial statements of Sailfish included in the Sailfish SEC Documents, including all notes and schedules thereto (the Sailfish Financial Statements ), complied in all material respects (when filed or if amended prior to the date of this Agreement, as of the date of such amendment) with the applicable accounting requirements and the rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case of unaudited statements, to normal year-end audit adjustments) the consolidated financial position of Sailfish and its consolidated Subsidiaries as of their respective dates and the consolidated results of operations and the consolidated cash flows of Sailfish and its consolidated Subsidiaries for the periods presented therein. Such consolidated financial statements have been prepared from, and are in accordance with, the books and records of Sailfish and its Subsidiaries. The books and records of Sailfish and its Subsidiaries have been, and are being, maintained in accordance with GAAP and any other applicable legal and accounting requirements. Ernst & Young LLP is an independent public accounting firm with respect to Sailfish and, as of the date of this Agreement, has not resigned or been dismissed as independent public accountants of Sailfish. None of Sailfish or its Subsidiaries is a party to or has any obligation or other commitment to become a party to any securitization transaction, off-balance sheet partnership or any similar Contract (including any structured finance, special purpose or limited purpose entity, on the other hand, or any off-balance sheet arrangements (as defined in Item 303(a) of Regulation S-K under the Exchange Act)) where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, Sailfish in any of Sailfishs published financial statements. To the knowledge of Sailfish, none of the Sailfish SEC Documents is the subject of ongoing SEC review and there are no inquiries or investigations by the SEC or any internal investigations pending or threatened, in each case regarding any accounting practices of Sailfish.
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Section 4.06 Information Supplied . None of the information supplied or to be supplied by Sailfish for inclusion or incorporation by reference in (a) the registration statement on Form S-4 to be filed with the SEC by New Sailfish pursuant to which the issuance of shares of New Sailfish Common Stock pursuant to the Merger will be registered with the SEC and in which the Combined Consent Statement/Prospectus will be included as a prospectus, including any amendments or supplements thereto and any other document incorporated or referenced therein (the Registration Statement ) will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading and (b) the Combined Consent Statement/Prospectus will, at the time the Combined Consent Statement/Prospectus is mailed to stockholders of Sailfish and at the time of the Sailfish Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The portions of the Combined Consent Statement/Prospectus supplied by Sailfish will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. No representation or warranty is made by Sailfish with respect to statements made therein based on information supplied by Green Energy or its Subsidiaries specifically for inclusion in the Combined Consent Statement/Prospectus.
Section 4.07 Absence of Certain Changes or Events .
(a) Since December 31, 2016, there has not been any fact, circumstance, condition, event, change, effect, development or occurrence that, individually or in the aggregate, had or would be reasonably likely to have a Sailfish Material Adverse Effect.
(b) Since December 31, 2016, there has not been any damage, destruction or other casualty loss (whether or not covered by insurance) material to the business of Sailfish and its Subsidiaries, taken as a whole.
(c) From December 31, 2016 through the date of this Agreement, (i) Sailfish and its Subsidiaries have conducted their business in the ordinary course of business consistent with past practices in all material respects and (ii) neither Sailfish nor any of its Subsidiaries has undertaken any action that would be prohibited by Section 6.01(b)(iv) , (v) , (vi) , (vii) , (ix) or (xii) if such provisions were in effect at all times since December 31, 2016.
Section 4.08 Litigation . Except for such matters as have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, there is no (a) Proceeding pending, or, to the knowledge of Sailfish, threatened against Sailfish or any of its Subsidiaries or (b) judgment, decree, injunction, ruling or order of any Governmental Entity or arbitrator outstanding against Sailfish or any of its Subsidiaries. To the knowledge of Sailfish, as of the date hereof, no officer or director of Sailfish is a defendant in any material Proceeding in connection with his or her status as an officer or director of Sailfish or any of its Subsidiaries. There is no judgment, settlement, order, decision, direction, writ, injunction, decree, stipulation or legal or arbitration award of, or promulgated or issued by, any Governmental Entity in effect to which any of Sailfish or any of its Subsidiaries is a party or subject that materially interferes with, or would be reasonably likely to materially interfere with, the business of Sailfish or any of its Subsidiaries as currently conducted.
Section 4.09 No Undisclosed Liabilities . There are no liabilities or obligations of Sailfish or any of its Subsidiaries of any kind whatsoever (whether accrued, contingent, absolute, determined, determinable or otherwise), other than: (a) liabilities or obligations reflected or reserved against on the balance sheet of Sailfish dated as of June 30, 2017 (including the notes thereto) contained in the Sailfish Financial Statements; (b) liabilities or obligations incurred in the ordinary course of business subsequent to June 30, 2017; (c) liabilities or obligations for fees and expenses incurred in connection with the preparation, negotiation and consummation of the Transactions; and (d) liabilities or obligations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
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Section 4.10 Sailfish Permits; Compliance with Applicable Law .
(a) Sailfish and its Subsidiaries hold all franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders of all Governmental Entities (other than Oil and Gas Leases) necessary for the lawful conduct of their respective businesses (the Sailfish Permits ), except where the failure to so hold has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. All Sailfish Permits are valid and in full force and effect, no default (with or without notice or lapse of time or both) has occurred under any such Sailfish Permit, and no suspension or cancellation of such Sailfish Permits is pending or threatened in writing or, to the knowledge of Sailfish, threatened orally, except where the failure to be in full force and effect, suspension or cancellation has not had and would not reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Sailfish and its Subsidiaries are in compliance with the terms of the Sailfish Permits, except where the failure to so comply has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. The businesses of Sailfish and its Subsidiaries are not currently being conducted, and at no time during the past three years have been conducted, in violation of any applicable Law, except for violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. To the knowledge of Sailfish, no investigation or review by any Governmental Entity with respect to Sailfish or any of its Subsidiaries is pending or threatened, other than those the outcome of which has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(b) Sailfish and its Subsidiaries are in compliance with, and are not in default under or in violation of, any applicable Law, except where such non-compliance, default or violation has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Sailfish has not received any written communication since January 1, 2014 from a Governmental Entity that alleges that Sailfish or any of its Subsidiaries is not in compliance with or is in default or violation of any applicable Law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably likely to have a Sailfish Material Adverse Effect.
Section 4.11 Brokers . Except for the fees and expenses payable to Petrie Partners, LLC (the Sailfish Financial Advisor ), no broker, investment banker, or other Person is entitled to any brokers, finders or other similar fee or commission from Sailfish or any of its Subsidiaries in connection with the Transactions based upon arrangements made by or on behalf of Sailfish or any of its Subsidiaries, and the agreements with respect to such engagements have previously been made available to Green Energy.
Section 4.12 Sailfish Benefit Plans .
(a) Set forth on Section 4.12(a) of the Sailfish Disclosure Letter is a true and complete list, as of the date hereof, of each Sailfish Benefit Plan. Sailfish has furnished or made available to Green Energy true, correct and complete copies of each of the Sailfish Benefit Plans (or, with respect to any unwritten Sailfish Benefit Plan, a written summary thereof) and, to the extent applicable, true, correct and complete copies of: (i) related trust documents and any amendments thereto, (ii) the insurance contracts and any amendments thereto, (iii) the most recent favorable determination or opinion letters, (iv) the most recent report filed on Form 5500 and accompanying schedules, (v) the most recent financial statements and actuarial reports, (vi) the current summary plan description (including all summaries of material modifications thereto) and (vii) all material correspondence received from or provided to the Department of Labor, the Pension Benefit Guaranty Corporation, the IRS or any other Governmental Entity during the past three years.
(b) Each Sailfish Benefit Plan has been established and administered in accordance with its terms and in material compliance with all applicable Laws. Each Sailfish Benefit Plan which is intended to be qualified within the meaning of Section 401(a) of the Code satisfies the requirements of Section 401(a) of the Code and has received a favorable determination letter as to its qualification, or, if such Sailfish Benefit Plan is a prototype plan, the opinion letter for each such Sailfish Benefit Plan and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification.
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(c) There are no actions, suits or claims pending (other than routine claims for benefits) or, to the knowledge of Sailfish, threatened against, or with respect to, any of the Sailfish Benefit Plans or their assets, except for such actions, suits or claims that are not material to Sailfish or any of its Subsidiaries and to the knowledge of Sailfish, no facts or circumstances exist that could reasonably be expected to give rise to any such action, suit or claim. There is no audit, inquiry, investigation, proceeding or examination pending or, to the knowledge of Sailfish, threatened by the IRS, the Department of Labor, the Pension Benefit Guaranty Corporation or any other Governmental Entity with respect to any Sailfish Benefit Plan.
(d) Since January 1, 2014, all contributions required to be made to the Sailfish Benefit Plans pursuant to their terms or applicable Laws have been timely made.
(e) There are no material unfunded benefit obligations that have not been properly accrued for in the Sailfish Financial Statements or disclosed in the notes thereto in accordance with GAAP.
(f) Neither Sailfish nor any of its Subsidiaries, nor any member of an Aggregated Group to which any such Person belongs, contributes to, has an obligation to contribute to, or has any liability with respect to (including any contingent liability) and no Sailfish Benefit Plan is, a plan subject to Title IV of ERISA (including a multiemployer plan within the meaning of Section 3(37) or Section 4001(a)(3) of ERISA), Section 302 of ERISA, or Section 412 of the Code or a multiple employer welfare arrangement (as defined in Section 3(40)(A) of ERISA).
(g) No Sailfish Benefit Plan and neither Sailfish nor any of its Subsidiaries provides, or has any obligation to provide, current or former employees of Sailfish or any of its Subsidiaries (or any beneficiaries thereof) welfare benefits (including medical and life or disability insurance benefits) after such Person terminates employment with Sailfish and its Subsidiaries, except for the coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Section 4980B of the Code and Section 601 et. seq . of ERISA. No Sailfish Benefit Plan and neither Sailfish nor any of its Subsidiaries provides, or has any obligation to provide, welfare benefits to any Person who is not an individual currently or formerly designated by Sailfish or any of its Subsidiaries as an employee of Sailfish or any of its Subsidiaries, or a beneficiary thereof.
(h) Except for any items pursuant to the agreements set forth on Section 4.12(h) of the Sailfish Disclosure Letter, neither the execution of this Agreement, shareholder approval of this Agreement nor the consummation of the Transactions (either alone or in combination with another event) will or can be reasonably expected to (i) entitle any current or former director, officer, employee or consultant of Sailfish to any payment or benefit (including severance pay/benefits or similar compensation), any cancellation of indebtedness, or any increase in compensation; (ii) result in the acceleration of payment, funding or vesting under any Sailfish Benefit Plan; or (iii) result in any increase in benefits payable under any Sailfish Benefit Plan. No amount paid or payable (whether in cash, in property, or in the form of benefits or rights) in connection with the Transactions (either alone or in combination with another event or subsequent action) will be an excess parachute payment within the meaning of Section 280G of the Code. Neither Sailfish nor any of its Subsidiaries has any obligation to make a gross-up or similar payment in respect of any Taxes that may become payable under Section 4999 or Section 409A of the Code and the Treasury Regulations issued thereunder (collectively, Section 409A ).
(i) No Sailfish Benefit Plan is maintained outside the jurisdiction of the United States or covers any employee residing or working outside the United States.
(a) Since January 1, 2014, neither Sailfish nor any of its Subsidiaries has been a party to, or bound by, any collective bargaining agreement or other agreement with any labor union.
(b) Since January 1, 2014, there have been no existing or, to the knowledge of Sailfish, threatened unfair labor practices, charges or grievances against Sailfish or any of its Subsidiaries arising out of a collective bargaining agreement, other agreement with any labor union, or other labor-related grievance proceedings.
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(c) Since January 1, 2014, there have been no strikes, disputes, slowdowns, work stoppages or lockouts existing or, to the knowledge of Sailfish, threatened, with respect to any employees of Sailfish or any of its Subsidiaries.
(d) Since January 1, 2014, there have been no union certification or representation petitions or demands with respect to any employees of Sailfish or any of its Subsidiaries and, to the knowledge of Sailfish, no union organizing campaign or similar effort is pending or threatened with respect to any employees of Sailfish or any of its Subsidiaries.
(e) All Sailfish employees are employed at will and all independent contractors are properly classified under all applicable Laws, including federal and state wage and hour laws.
(f) Sailfish does not currently have any employment agreements with any of its employees.
(g) Sailfish and its Subsidiaries are, and since January 1, 2014 have been, in compliance in all material respects with all applicable Laws respecting employment and employment practices including but not limited to Laws relating to wages and hours, including the Fair Labor Standards Act, collective bargaining, unemployment insurance, workers compensation, equal employment opportunity, discrimination, immigration control, employee classifications, misclassification of employees as independent contractors, safety and health, reductions in force, including the WARN Act, and the payment and withholding of Taxes, and there are no Proceedings pending or, to the knowledge of Sailfish, threatened against Sailfish or any of its Subsidiaries, by or on behalf of any applicant for employment, any current or former employee or any class of the foregoing, relating to any of the foregoing applicable Laws, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship, other than any such matters described in this sentence that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Since January 1, 2014, neither Sailfish nor any of its Subsidiaries has received any written notice of the intent of the Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of Labor or any other Governmental Entity responsible for the enforcement of labor or employment Laws to conduct an investigation with respect to Sailfish or any of its Subsidiaries which has had or would be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(a) (i) All material Tax Returns required to be filed by or with respect to Sailfish and its Subsidiaries before the date hereof have been timely filed (taking into account all extensions), and all such Tax Returns are true, correct and complete in all material respects, (ii) Sailfish and its Subsidiaries have timely paid all material Taxes due or claimed to be due, except for those Taxes being contested in good faith and for which adequate reserves have been established in the financial statements of Sailfish, (iii) all material Taxes required to be withheld by Sailfish and its Subsidiaries have been timely withheld and, to the extent required, paid over to the appropriate Governmental Entity, and Sailfish and its Subsidiaries have complied with all information reporting and backup withholding requirements, including maintenance of required forms and other records, and (iv) the charges, accruals and reserves for Taxes with respect to Sailfish and its Subsidiaries reflected in the Sailfish Financial Statements are adequate under GAAP to cover unpaid Tax liabilities accruing through the date thereof.
(b) Neither Sailfish nor any of its Subsidiaries is party to any Tax Sharing Agreement, other than such an agreement exclusively between or among Sailfish and any of its Subsidiaries, and neither Sailfish nor any of its Subsidiaries has been a member of an affiliated group (or similar state, local or foreign filing group) filing a material consolidated income Tax Return (other than a group the common parent of which is Sailfish).
(c) Except for such matters as have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, there is no outstanding material claim, assessment or
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deficiency against Sailfish or any of its Subsidiaries for any Taxes that has been asserted or threatened in writing by any Governmental Entity, and no written claim has been made, within the preceding three years, by a Governmental Entity in a jurisdiction where Sailfish or any of its Subsidiaries does not file Tax Returns or pay Taxes that it is obligated to file Tax Returns or pay Taxes in such jurisdiction. No waiver or extension of any statute of limitations with respect to the assessment or collection of Taxes is in effect for Sailfish or its Subsidiaries.
(d) During the period beginning two years before the date hereof, neither Sailfish nor any of its Subsidiaries has been a distributing corporation or a controlled corporation for purposes of Section 355 of the Code.
Section 4.15 Intellectual Property . Sailfish and its Subsidiaries own or have the right to use all Intellectual Property necessary for the operation of the businesses of each of Sailfish and its Subsidiaries as presently conducted (collectively, the Sailfish Intellectual Property ) free and clear of all Encumbrances except for Permitted Encumbrances, except where the failure to own or have the right to use such properties has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. To the knowledge of Sailfish, the use of the Sailfish Intellectual Property by Sailfish and its Subsidiaries in the operation of the business of each of Sailfish and its Subsidiaries as presently conducted does not infringe upon or misappropriate any Intellectual Property of any other Person, except for such matters that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Sailfish and its Subsidiaries have taken reasonable measures to protect the confidentiality of trade secrets used in the businesses of each of Sailfish and its Subsidiaries as presently conducted, except where failure to do so has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect. The consummation of the Transactions will not diminish or terminate the ownership of or rights in any material Intellectual Property owned or used by Sailfish or its Subsidiaries in their respective businesses as currently conducted and, except as would not reasonably be expected to have a Sailfish Material Adverse Effect, to the knowledge of Sailfish, after the Closing Date Sailfish and its Subsidiaries will have the right to use such Intellectual Property on the same basis as prior to the consummation of the Transactions.
Section 4.16 Real Property . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, and except with respect to any of Sailfishs Oil and Gas Properties, (a) Sailfish and its Subsidiaries have good, valid and defensible title to all material real property owned by Sailfish or any of its Subsidiaries (collectively, the Sailfish Owned Real Property ) and valid leasehold estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to other occupancy arrangements) by Sailfish or any of its Subsidiaries, in each case, including office leases, equipment yards, warehouses, and shore base facilities (collectively, including the improvements thereon, the Sailfish Material Leased Real Property ) free and clear of all Encumbrances, except Permitted Encumbrances, (b) each agreement under which Sailfish or any of its Subsidiaries is the landlord, sublandlord, tenant, subtenant, or occupant with respect to the Sailfish Material Leased Real Property (each, a Sailfish Material Real Property Lease ) to the knowledge of Sailfish is in full force and effect and is valid and enforceable against the parties thereto in accordance with its terms, subject, as to enforceability, to Creditors Rights, and neither Sailfish nor any of its Subsidiaries, or to the knowledge of Sailfish, any other party thereto, has received written notice of any default under any Sailfish Material Real Property Lease, and a true, correct and complete copy of each Sailfish Material Real Property Lease has been made available to Green Energy prior to the date hereof, and (c) there does not exist any pending or, to the knowledge of Sailfish, threatened, condemnation or eminent domain proceedings that affect any of the Sailfish Owned Real Property or Sailfish Material Leased Real Property.
Section 4.17 Surface and Seabed Rights . Each of Sailfish and its Subsidiaries has such consents, easements, rights-of-way, rights of use and easement, fee assets, permits and licenses from each Person (collectively Rights-of-Way ) as are sufficient in all respects to access, construct, operate, maintain, and repair the equipment and facilities related to Sailfishs and its Subsidiaries Oil and Gas Properties, and to produce, gather,
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process and handle, transport, and market Hydrocarbons from or attributable to its and their respective currently-producing Oil and Gas Properties and otherwise to conduct its business in the ordinary course, consistent with past practice, and subject to the limitations, qualifications, reservations and encumbrances contained in any Sailfish SEC Document, except for such Rights-of-Way the absence of which has not had and would not reasonably be expected to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Each of Sailfish and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights-of-Way and conduct their business in a manner that does not violate any of the Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have, individually or in the aggregate, a Sailfish Material Adverse Effect. All flowlines, risers, umbilicals, gathering lines, transportation facilities, platforms, and facilities operated by Sailfish and its Subsidiaries (even if on platforms not owned by Sailfish) are subject to Rights-of-Way, and there are no gaps (including any gap arising as a result of any breach by Sailfish or any of its Subsidiaries of the terms of any Rights-of-Way) in the Rights-of-Way other than gaps that have not had and would not reasonably be expected to have, individually or in the aggregate, a Sailfish Material Adverse Effect. Sailfish has not received any written claim for access to any platforms, gathering lines, transportation lines, or other processing, marketing, or production handling facilities, whether under the Outer Continental Shelf Lands Act, the Natural Gas Act, the Interstate Commerce Act, or otherwise. Any gas gathering system constituting a part of the Oil and Gas Properties of Sailfish or its Subsidiaries has as its primary function the provision of natural gas gathering services, as the term gathering is interpreted under Section 1(b) of the Natural Gas Act, and none of such Oil and Gas Properties have been or are certificated by the Federal Energy Regulatory Commission ( FERC ) under Section 7(c) of the Natural Gas Act or, to the knowledge of Sailfish are now subject to the jurisdiction of the FERC under the Natural Gas Act or Natural Gas Policy Act. None of the Oil and Gas Properties of Sailfish or its Subsidiaries are providing service under Section 311 of the Natural Gas Policy Act or under a tariff or other authorization on file with or approved by any Governmental Entity. None of the Oil and Gas Properties of or other oil pipelines owned by Sailfish or its Subsidiaries are providing service under or subject to the Interstate Commerce Act nor are Sailfish or its Subsidiaries or any such Oil and Gas Properties or oil pipelines subject to the jurisdiction of the FERC pursuant to the Interstate Commerce Act.
Section 4.18 Oil & Gas Matters .
(a) Except as has not had and would not be reasonably likely to have a Sailfish Material Adverse Effect and except for property (i) sold or otherwise disposed of in the ordinary course of business since the date of the Sailfish Reserve Report and that is expressly described in Section 4.18(a) of the Sailfish Disclosure Letter or (ii) reflected in the Sailfish Reserve Report or in the Sailfish SEC Documents as having been sold or otherwise disposed of, as of the date hereof, Sailfish and its Subsidiaries have good and defensible title to all Oil and Gas Properties forming the basis for the reserves reflected in the Sailfish Reserve Report and in each case as attributable to interests owned by Sailfish and its Subsidiaries, free and clear of any Encumbrances, except for Permitted Encumbrances. For purposes of the foregoing sentence, good and defensible title means title of Sailfish or one or more of its Subsidiaries, as applicable (as of the date hereof and as of the Closing) to each of the Oil and Gas Properties held or owned by them (or purported to be held or owned by them), beneficially or of record with any applicable Governmental Entity that (1) entitles Sailfish (or one or more of its Subsidiaries, as applicable) to receive (after satisfaction of all Production Burdens applicable thereto), not less than the net revenue interest share shown in the Sailfish Reserve Report of all Hydrocarbons produced from such Oil and Gas Properties throughout the life of such Oil and Gas Properties (other than decreases in connection with operations in which Sailfish or its applicable Subsidiary may be a non-consenting co-owner, decreases resulting from reversion of interests to co-owners with respect to operations in which such co-owners elected not to consent, decreases resulting from the establishment of pools or units, and decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries), (2) obligates Sailfish (or one or more of its Subsidiaries, as applicable) to bear a percentage of the costs and expenses for the maintenance and
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development of, and operations relating to, such Oil and Gas Properties, of not greater than the working interest shown on the Sailfish Reserve Report for such Oil and Gas Properties (other than increases resulting from contribution requirements with respect to defaulting or non-consenting co-owners under applicable operating agreements or Laws and increases that are accompanied by at least a proportionate increase in the net revenue interest of Sailfish and its applicable Subsidiaries) and (3) is free and clear of all Encumbrances (other than Permitted Encumbrances).
(b) The factual, non-interpretive data (other than title data) supplied by Sailfish to the Sailfish Independent Petroleum Engineers relating to the Sailfish interests referred to in the Sailfish Reserve Report, by or on behalf of Sailfish and its Subsidiaries in connection with the preparation of the Sailfish Reserve Report was, as of the time provided, accurate in all material respects. The oil and gas reserve estimates of Sailfish set forth in the Sailfish Reserve Report are derived from reports that have been prepared by the Sailfish Independent Petroleum Engineers, and such reserve estimates fairly reflect, in all material respects, the oil and gas reserves of Sailfish and its Subsidiaries at the dates indicated therein and are in accordance with SEC guidelines applicable thereto applied on a consistent basis throughout the periods involved. Except for changes generally affecting the oil and gas exploration, development and production industry (including changes in commodity prices) and normal depletion by production, there has been no change in respect of the matters addressed in the Sailfish Reserve Report that has had or would be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(c) Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, (i) all rentals, shut-ins and similar payments owed to any Person or individual under (or otherwise with respect to) any such Oil and Gas Leases have been properly and timely paid, (ii) all royalties, minimum royalties, overriding royalties and other Production Burdens with respect to any Oil and Gas Properties owned or held by Sailfish or any of its Subsidiaries have been timely and properly paid, and (iii) none of Sailfish or any of its Subsidiaries (and, to Sailfishs knowledge, no third party operator) has violated any provision of, or taken or failed to take any act that, with or without notice, lapse of time, or both, would constitute a default under the provisions of any Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Oil and Gas Lease) included in the Oil and Gas Properties owned or held by Sailfish or any of its Subsidiaries.
(d) All proceeds from the sale of Hydrocarbons produced from the Oil and Gas Properties of Sailfish and its Subsidiaries are being received by such selling entities in a timely manner and no proceeds from the sale of Hydrocarbons produced from any such Oil and Gas Properties are being held in suspense (by Sailfish, any of its Subsidiaries, any third party operator thereof or any other Person or individual) for any reason except as reported in the Sailfish SEC Documents. Neither Sailfish nor any of its Subsidiaries is obligated by virtue of a take-or-pay payment, advance payment, or similar payment (other than royalties, overriding royalties, and similar arrangements established in the Oil and Gas Leases) to deliver Hydrocarbons or proceeds from the sale thereof, attributable to such Persons interest in its Oil and Gas Properties at some future time without receiving payment therefor at the time of delivery. As of the dates reflected in the Disclosure Letter, neither Sailfish nor any of its Subsidiaries has any production, platform, transportation, production handling, processing, plant, or other imbalance, and no Person has given notice that any such imbalance constitutes all of the relevant Persons ultimately recoverable reserves from a balancing area.
(e) As of the date of this Agreement, there are no authorizations for expenditure or other commitments to make capital expenditures (or series of related authorizations for expenditure or commitments) binding on Sailfish or any of its Subsidiaries with respect to its or their respective Oil and Gas Properties that Sailfish reasonably anticipates will individually require expenditures after the Effective Time of greater than $10,000,000.
(f) All currently-producing wells and equipment related to Oil and Gas Properties operated by Sailfish or any of its Subsidiaries are in an operable state of repair, adequate to maintain operations in accordance with past practice, ordinary wear and tear excepted.
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(g) As of the date hereof, neither Sailfish nor any of its Subsidiaries has failed to elect to participate in (or affirmatively elected not to participate in) any operation or activity which could result in any of such Persons interest in any of its Oil and Gas Properties becoming subject to a penalty, premium, or forfeiture as a result of such election or lack thereof.
(h) All wells included in the Oil and Gas Properties of Sailfish or its Subsidiaries have been drilled and completed within the limits permitted by all applicable Oil and Gas Leases, contracts, and pooling or unit agreements. There are no wells or other equipment or facilities located on Sailfishs or any of its Subsidiaries Oil and Gas Properties that such Person is, or will within 18 months after the date hereof be, obligated by any Laws or contract to plug, dismantle, decommission, and/or abandon or that have been plugged, dismantled, decommissioned, and/or abandoned in a manner that does not comply in all material respects with applicable Laws.
(i) There are no preferential rights to purchase or required third Person consents which may be applicable to the transactions contemplated by this Agreement, except for consents and approvals of Governmental Entities that are customarily obtained after Closing.
(j) Section 4.18(j) of the Sailfish Disclosure Letter lists all bonds, letters of credit, and other similar credit support instruments maintained by Sailfish or its Subsidiaries with or for the benefit of any Governmental Entity or other third Person with respect to its Oil and Gas Properties.
(k) There are no wells (i) with respect to which Sailfish or any Sailfish Subsidiary has received an order from any Governmental Entity requiring that such well be plugged and abandoned that has not been plugged and abandoned, (ii) that, to the knowledge of Sailfish, formerly produced but that are currently shut in or temporarily abandoned or were dry holes and have not been plugged in accordance with applicable Laws, (iii) that, to the knowledge of Sailfish, have been or are required to be plugged and abandoned but have not been plugged in accordance with applicable Laws or (iv) to the knowledge of Sailfish, with respect to which Sailfish or any Sailfish Subsidiary has any Decommissioning Obligations that are required to have been performed and which have not been performed in accordance with applicable Laws.
(l) Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, there does not exist any pending or, to the knowledge of Sailfish, threatened, condemnation or eminent domain proceedings that affect any of Sailfishs Oil and Gas Properties.
Section 4.19 Environmental Matters .
(a) Except for those matters that have not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect:
(i) Sailfish and its Subsidiaries and their respective operations and assets are in compliance, and at all times since January 1, 2014 have complied, with all Environmental Laws and Environmental Permits;
(ii) Sailfish and its Subsidiaries have obtained all Environmental Permits required under Environmental Laws to operate the business as currently operated and all such Environmental Permits are in full force and effect, free from breach, and the Transactions will not adversely affect them;
(iii) Sailfish and its Subsidiaries are not subject to any pending, or to the knowledge of Sailfish, threatened Proceeding regarding any alleged violation of or liability under Environmental Laws (including liability as a potentially responsible party under CERCLA or any analogous state laws) or any Environmental Permit;
(iv) none of Sailfish or any of its Subsidiaries has received any written notice, report or other information from any Governmental Entity or any third party alleging, with respect to any such entity or any of their respective assets, real properties (whether owned or leased or formerly owned or leased) or operations, the violation of or liability under any Environmental Law (including liability as a
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potentially responsible party under CERCLA or any analogous state laws) or any Environmental Permit that remains pending or unresolved;
(v) neither Sailfish nor any of its Subsidiaries or their respective predecessors has handled, treated, recycled, stored, transported, disposed of, arranged for or permitted the disposal of, or Released any Hazardous Materials, or owned or operated any property or facility (and, to the knowledge of Sailfish, there have been no Releases of Hazardous Materials to or from any property or facility owned, operated or otherwise used by Sailfish or any of its Subsidiaries) in a manner that has given or would give rise to any liability, including any liability for response costs, corrective action costs, personal injury, property damage or natural resource damage, pursuant to CERCLA or any other Environmental Laws;
(vi) neither Sailfish nor any of its Subsidiaries or their respective predecessors has, either expressly or by operation of Law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental Laws; and
(vii) there are no wells, pipelines, facilities, systems, platforms, or other equipment included in (or located on or otherwise attributable to) any of Sailfishs or any of its Subsidiaries respective assets that are currently required to be plugged, abandoned and/or dismantled (whether pursuant to Law or any Contract or Oil and Gas Lease) by Sailfish or any of its Subsidiaries that have not been plugged, abandoned and/or dismantled in compliance therewith.
(b) Sailfish has provided or otherwise made available to Green Energy all environmental reports, studies, audits, site assessments and other similar documents in its, or the Sailfish Subsidiaries, possession or control that are necessary to an understanding of Sailfish and its Subsidiaries compliance with, or liabilities arising under, Environmental Laws or Environmental Permits.
Section 4.20 Material Contracts .
(a) Section 4.20 of the Sailfish Disclosure Letter (together with the lists of exhibits contained in the Sailfish SEC Documents) sets forth a true and complete list, as of the date of this Agreement, of each of the following agreements to which or by which Sailfish or any of its Subsidiaries is bound:
(i) each material contract (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act);
(ii) each Contract that provides for the acquisition, disposition, license, use, distribution or outsourcing of assets, services, rights or properties (other than Oil and Gas Properties) with respect to which Sailfish reasonably expects that Sailfish and its Subsidiaries will make or receive annual payments in excess of $10,000,000;
(iii) each Contract that constitutes a commitment or guarantee relating to Indebtedness for borrowed money or the deferred purchase price of property by Sailfish or any of its Subsidiaries (whether incurred, assumed, guaranteed or secured by any asset) in excess of $20,000,000, other than agreements solely between or among Sailfish and its wholly owned Subsidiaries;
(iv) each Contract for lease of personal property or real property (other than Oil and Gas Properties) involving aggregate payments in excess of $2,000,000 in any calendar year that are not terminable without penalty within 60 days;
(v) each Contract containing any area of mutual interest, joint bidding area, joint acquisition area, or non-compete or similar type of provision that, following the Effective Time, by virtue of the Green Entities becoming Affiliates of Sailfish as a result of the Transactions, would by its terms materially restrict the ability of the Green Entities to compete in any line of business or with any Person or geographic area during any period of time after the Effective Time;
(vi) each Contract involving the pending acquisition or sale of (or option to purchase or sell) any material amount of the assets or properties (including Hydrocarbons) of Sailfish and its Subsidiaries,
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taken as a whole, other than contracts involving the acquisition or sale of (or option to purchase or sell) Hydrocarbons in the ordinary course of business;
(vii) each Contract that relates to the sale, transfer or other disposition of a business or assets by Sailfish or any of its Subsidiaries pursuant to which Sailfish or any of its Subsidiaries has any potential continuing indemnification, guarantee, earnout or other contingent, deferred or fixed payment obligations that would reasonably be expected to result in aggregate payments in excess of $10,000,000, excluding ordinary course indemnification obligations relating to obligations assumed by, or breaches of representations or warranties by, Sailfish or its Affiliates, or its or their respective predecessors in title, as part of the acquisition of any of their respective Oil and Gas Properties;
(viii) each Contract for any Derivative Transaction, and each International Swaps and Derivatives Association Master Agreement;
(ix) each material partnership, joint venture or limited liability company agreement, other than any customary joint operating agreements, unit agreements or participation agreements affecting the Oil and Gas Properties of Sailfish or any of its Subsidiaries;
(x) each joint development agreement, exploration agreement, participation, farmout, farmin or program agreement or similar contract requiring Sailfish or any of its Subsidiaries to make expenditures that would reasonably be expected to be in excess of $10,000,000 in the aggregate during the 12-month period following the date of this Agreement, other than customary joint operating agreements and continuous development obligations under Oil and Gas Leases;
(xi) any material lease or sublease with respect to a Sailfish Material Leased Real Property;
(xii) each collective bargaining agreement to which Sailfish or any of its Subsidiaries is a party or is subject;
(xiii) each consulting, independent contractor, or master services agreement relating to the procurement of independent contractors or consultants through which Sailfish or any Affiliate is provided independent contractors or consultants;
(xiv) each Contract relating to a Sailfish Related Party Transaction;
(xv) each Contract that provides for a take-or-pay clause or any similar prepayment obligation, acreage dedication, minimum volume commitments or capacity reservation fees to a gathering, transportation or other arrangement downstream of the wellhead, that cover, guaranty or commit volumes in excess of 1,000 barrels of oil equivalent per day of Hydrocarbons of Sailfish or any of its Subsidiaries per day over a period of one month (calculated on a yearly average basis) or for a term greater than 10 years;
(xvi) each Contract that, upon the consummation of the Transactions, would (either alone or upon the occurrence of any additional acts or events, including the passage of time) result in any payment or benefit (whether of severance pay or otherwise) becoming due, or the acceleration or vesting of any right to any payment or benefits, from Sailfish or any of its Subsidiaries to any officer, director, consultant or employee of any of the foregoing;
(xvii) each Contract providing for indemnification of any officer, director or employee by Sailfish or any of its Subsidiaries (other than the Organizational Documents of Sailfish or of any of Sailfishs Subsidiaries);
(xviii) each Contract that requires Sailfish or any of its Subsidiaries to make any advance, loan, extension of credit (other than ordinary course trade credit) or capital contribution to, or other investment in, any Person in excess of $10,000,000 (excluding provisions set forth in joint operating agreements or unit operating agreements calling for capital calls or contributions from non-defaulting parties to cover the funding obligations of defaulting parties);
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(xix) any material Contract that contains a change of control provision to which Sailfish or any of its Subsidiaries is a party or is subject;
(xx) each Contract that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions;
(xxi) each Contract that (A) restricts the ability of Sailfish or any of its Subsidiaries to engage in or compete in any business or with any Person in an geographical area, (B) contains exclusivity obligations or restrictions binding on Sailfish or any of its Subsidiaries or (C) contains any standstill, most favored nation or most favored customer provision, preferential right or rights of first or last offer, negotiation or refusal or any similar requirement or right in favor of any third party, in each case other than those contained in (i) any agreement in which such provision is solely for the benefit of Sailfish or any of its Subsidiaries, (ii) customary royalty pricing provisions in Oil and Gas Leases, (iii) customary preferential rights in joint operating agreements, unit agreements or participation agreements affecting the business or the Oil and Gas Properties of Sailfish or any of its Subsidiaries, or (iv) non-circumvent, non-compete, or area of mutual interest provisions in confidentiality agreements executed by Sailfish or its Affiliates as part of a proposed acquisition that was not consummated, the term of which lasts for less than one (1) year and which apply to an area of 5,000 acres or less and 1 block or less, if offshore, and 320 acres or less, if onshore, to which Sailfish or any of its Subsidiaries or any of their respective Affiliates is subject;
(xxii) each Contract or Organizational Document of Sailfish or any of its Subsidiaries that would, on or after the Closing Date, prohibit or restrict the ability of Old Sailfish LLC or any of its Subsidiaries to declare and pay dividends or distributions with respect to their capital stock, grant liens on any property or asset of New Sailfish, issue guarantees with respect to, or pay, any indebtedness, obligations or liabilities from time to time owed to New Sailfish or any of its Subsidiaries (including Old Sailfish LLC and its Subsidiaries), make loans or advances to New Sailfish or any of its Subsidiaries (including Old Sailfish LLC and its Subsidiaries), or transfer any of its properties or assets to New Sailfish or any of its Subsidiaries (including Old Sailfish LLC and its Subsidiaries); and
(xxiii) any Contract for the employment or engagement of any officer, individual employee or other person on a full-time, part-time or consulting basis with base salary in excess of $250,000;
(xxiv) except for intercompany transactions among Sailfish and the Sailfish Subsidiaries in the ordinary course of business consistent with past practices, any Contract for the license or sublicense of any Intellectual Property or other intangible asset (whether as a licensor or a licensee) that provides (A) for payment of $15,000,000 or more per year or (B) material exclusive rights to any third party.
(b) All written agreements of the type described in this Section 4.20 , including those agreements filed with the SEC, shall be collectively referred to herein as the Sailfish Contracts . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, each Sailfish Contract is legal, valid, binding and enforceable in accordance with its terms on Sailfish and each of its Subsidiaries that is a party thereto and, to the knowledge of Sailfish, each other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors Rights. Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect, neither Sailfish nor any of its Subsidiaries is in breach or default under any Sailfish Contract nor, to the knowledge of Sailfish, is any other party to any such Sailfish Contract in breach or default thereunder. Sailfish has heretofore made available to Green Energy complete and correct copies of the Sailfish Contracts and any material amendments thereto as of the date hereof.
Section 4.21 Insurance . Set forth in Section 4.21 of the Sailfish Disclosure Letter is a true, correct and complete list of all material insurance policies held by Sailfish or any of its Subsidiaries as of the date of this Agreement (collectively, the Sailfish Material Insurance Policies ). Each of the Sailfish Material Insurance Policies is in full force and effect on the date of this Agreement and a true, correct and complete copy of each Sailfish Material Insurance Policy has been made available to Green Energy upon Green Energys request prior
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to the date of this Agreement. All premiums payable under the Sailfish Material Insurance Policies prior to the date of this Agreement have been duly paid to date and Sailfish and its Subsidiaries are otherwise in compliance in all material respects with the terms and conditions of all Sailfish Material Insurance Policies. As of the date of this Agreement, no written notice of cancellation or termination has been received with respect to any Sailfish Material Insurance Policy.
Section 4.22 Opinion of Financial Advisor . The Sailfish Board has received the opinion of the Sailfish Financial Advisor addressed to the Sailfish Board to the effect that, as of the date of the opinion and based upon and subject to the limitations, qualifications and assumptions set forth therein, the Green Total Contribution Consideration to be paid pursuant to this Agreement and the Debt Exchange Agreement is fair from a financial point of view to Sailfish.
Section 4.23 Derivative Transactions . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect:
(a) All Derivative Transactions entered into by Sailfish or any of its Subsidiaries or for the account of any of its customers as of the date of this Agreement were entered into in accordance with all applicable Laws, and in accordance with the investment, securities, commodities, risk management and other policies, practices and procedures employed by Sailfish and its Subsidiaries, and were entered into with counterparties believed at the time to be financially responsible and able to understand (either alone or in consultation with their advisers) and to bear the risks of such Derivative Transactions.
(b) Sailfish and each of its Subsidiaries have duly performed in all respects all of their respective obligations under the Derivative Transactions to the extent that such obligations to perform have accrued, and there are no breaches, violations, collateral deficiencies, requests for collateral or demands for payment, or defaults or allegations or assertions of such by any party thereunder.
Section 4.24 Related Party Transactions . As of the date of this Agreement, neither Sailfish nor any of its Subsidiaries is party to any transaction or arrangement under which any (i) present or former executive officer or director of Sailfish or any of its Subsidiaries, (ii) beneficial owner of 5% or more of the Sailfish Common Stock or (iii) Affiliate, associate or member of the immediate family (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing is a party to any actual or proposed loan, lease or other Contract or transaction with or binding upon Sailfish or any of its Subsidiaries or owns or has any interest in any of their respective properties or assets, in each case that have not been disclosed by Sailfish pursuant to Item 404 of Regulation S-K promulgated under the Exchange Act (any Contract, transaction or other arrangement of the type described in this sentence, a Sailfish Related Party Transaction ) in the Sailfish SEC Documents.
Section 4.25 Corporate Governance .
(a) Since January 1, 2014, Sailfish has disclosed to its auditors and the Sailfish Boards audit committee (i) all known significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect in any material respect Sailfishs ability to record, process, summarize and report its consolidated financial information, (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Sailfishs internal controls over financial reporting and (iii) any claim or allegation regarding any of the foregoing (any such disclosures, the Sailfish Internal Controls Disclosures ). Sailfish has made available to Green Energy copies of any Sailfish Internal Controls Disclosures. Since January 1, 2014, neither Sailfish nor any of its Subsidiaries nor Sailfishs independent auditor has received any material written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Sailfish or its Subsidiaries, or their respective internal accounting controls. Since January 1, 2014, neither Sailfish nor any of its Subsidiaries has made or permitted to remain outstanding any extensions of credit (within the meaning of Section 402 of the Sarbanes-Oxley Act) or
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prohibited loans to any executive officer of Sailfish (as defined in Rule 3b-7 under the Exchange Act) or director of Sailfish or any of its Subsidiaries.
(b) Sailfish has established and maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) in compliance in all material respects with Rule 13a-15 under the Exchange Act. Such disclosure controls and procedures are reasonably designed to ensure that material information required to be disclosed by Sailfish in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Sailfishs management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.
Section 4.26 Investment Company . Neither Sailfish nor any of its Subsidiaries is, or on the Closing Date will be, required to register as an investment company under the Investment Company Act of 1940, as amended.
Section 4.27 Regulatory Matters .
(a) Currently and for the past five years, neither Sailfish nor any of its Subsidiaries, nor, to Sailfishs knowledge, its Affiliates, and none of their directors, managers or officers are or have been suspended or debarred from doing business with any Governmental Entity or is or has been the subject of a finding of noncompliance, non-responsibility or ineligibility for contracting with any Governmental Entity; and (ii) to Sailfishs knowledge, Sailfishs and Sailfish Subsidiaries cost accounting systems are in material compliance with applicable Law.
(b) Currently and for the past five years, neither Sailfish, its Subsidiaries, nor, to Sailfishs knowledge, any of their respective directors, managers, officers, agents or employees (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payment or unlawfully offered anything of value to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns, (iii) made any other unlawful payment, or (iv) violated any applicable money laundering or anti-terrorism Law or regulation, nor have any of them otherwise taken any action which would reasonably cause Sailfish, its Subsidiaries or its Affiliates to be in violation of the Foreign Corrupt Practices Act of 1977 ( FCPA ), as amended, or any applicable Law of similar effect.
(c) Currently and for the past five years, Sailfish, its Subsidiaries, and its Affiliates have complied with all material aspects of applicable statutory and regulatory requirements relating to anti-money laundering, export controls, import controls, and trade and economic sanctions, including, in each case to the extent applicable and as amended (except to the extent inconsistent with U.S. law), Currency and Foreign Transactions Reporting Act of 1970, the Bank Secrecy Act of 1970 ( BSA ), the Export Administration Regulations (15 C.F.R. Parts 730 et seq.), the International Traffic in Arms Regulations (22 C.F.R. Parts 120-130), section 999 of the Code, the Trading with the Enemy Act of 1917 (50 U.S.C. §§ 1-44), the International Emergency Economic Powers Act (50 U.S.C. §§ 1701-1706), the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1901-1908, 8 U.S.C. 1182), and the regulations, rules, and executive orders administered by the U.S. Department of the Treasury, Office of Foreign Assets Control ( OFAC ) and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity in any applicable jurisdiction (collectively, Trade Control Laws ).
(d) To Sailfishs knowledge, no Proceeding by or before any Governmental Entity involving Sailfish, its Subsidiaries, or its Affiliates, or any of their directors, officers, employees, or agents, or anyone acting on behalf of Sailfish or its Subsidiaries, with respect to any applicable Trade Control Laws is pending or threatened. For the past five years, no civil or criminal penalties have been imposed on Sailfish, or any of its Subsidiaries or Affiliates with respect to violations of any applicable Trade Control Laws.
(e) Except as would not constitute a Sailfish Material Adverse Effect, neither Sailfish, nor any of its Subsidiaries, Affiliates, directors, officers, employees or agents is a person that is, or is acting under the
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direction of, on behalf of or for the benefit of a person that is, or is owned or controlled by a person that is, or has transacted nor is transacting any business with or for the benefit of (i) a Prohibited Person, (ii) located, organized or ordinarily resident in a country or territory that is, or whose government is, the target of comprehensive trade sanctions under U.S. Trade Control Laws, including, Crimea, Cuba, Iran, North Korea, and Syria, (iii) otherwise a party with which transactions are prohibited under U.S. Trade Control Laws, or (iv) otherwise engaged in any activities that would subject it, or any affiliated company, to affirmative SEC disclosure obligations pursuant to Section 13 of the Exchange Act, as amended by Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012. For purposes of this Agreement, Prohibited Person means: (a) (i) persons identified in the List of Specially Designated Nationals and Blocked Persons, the Foreign Sanctions Evaders List, and the Sectoral Sanctions Identifications List, in each case administered by OFAC, as amended from time to time, and any other sanctions or similar lists administered by the United States Government, including the Department of State and Department of Commerce and (ii) any persons owned 50% or more, directly or indirectly, or controlled by such persons; (b) persons identified on any sanctions lists of the European Union or any other jurisdiction where the Company or any of its Subsidiaries currently has or is proposing to have operations; and (c) persons identified on any list of sanctioned parties identified in a resolution of the United Nations Security Council.
(f) Sailfish has developed and implemented an anti-corruption compliance program which includes corporate policies and procedures designed to ensure compliance with the FCPA.
Section 4.28 No Additional Representations .
(a) Except for the Sailfish Group Representations, none of Sailfish, New Sailfish, Merger Sub, nor any other Person has made or makes any express or implied representation or warranty with respect to Sailfish, New Sailfish, or either of their respective Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) in connection with any Combination Agreement or the Transactions, and each of Sailfish, New Sailfish and Merger Sub hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, none of Sailfish, New Sailfish, Merger Sub nor any other Person makes or has made any representation or warranty to Green Production, Green Energy, or any of their respective Affiliates or Representatives with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to Sailfish, New Sailfish, Merger Sub or any of their Subsidiaries or their respective businesses; or (ii) except for the Sailfish Group Representations, any oral or written information presented to Green Production, Green Energy, or any of their respective Affiliates or Representatives in the course of their due diligence investigation of Sailfish, New Sailfish, and Merger Sub, the negotiation of this Agreement or in the course of the Transactions.
(b) Notwithstanding anything contained in this Agreement to the contrary, Sailfish, New Sailfish and Merger Sub acknowledge and agree that none of Green Production, Green Energy, or any other Person has made or is making any representations or warranties relating to the Green Entities whatsoever, express or implied, beyond the Green Group Representations, including any implied representation or warranty as to the accuracy or completeness of any information regarding the Green Entities furnished or made available to Sailfish, New Sailfish, or Merger Sub, or any of their Representatives and that neither Sailfish, New Sailfish nor Merger Sub has relied on any representation or warranty other than the Green Group Representations; it being acknowledged by Sailfish, New Sailfish and Merger Sub that the Green Signing Parties shall not be responsible for any representations and warranties other than those made by the Green Signing Parties in Article 5 , any certificate delivered by any Green Signing Party pursuant to this Agreement, or any other representations and warranties expressly made by the Green Signing Parties in any other Combination Agreement. Without limiting the generality of the foregoing, Sailfish, New Sailfish and Merger Sub acknowledge that no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to Sailfish, New Sailfish, Merger Sub or any of their Representatives (including in certain data rooms, virtual data rooms, management presentations or in any other form in expectation of, or in connection with, the Transactions).
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REPRESENTATIONS AND WARRANTIES OF
THE GREEN SIGNING PARTIES
Except as set forth in (i) the Green Annual Reports (excluding any disclosure set forth in any risk factor section or forward-looking statements section or statements that are otherwise forward-looking, predictive, nonspecific or cautionary in nature), where the relevance of the information as an exception to (or disclosure for purposes of) a particular representation is reasonably apparent on the face of such disclosure (it being agreed that this clause (i) shall not be applicable to Section 5.01 , Section 5.02 or Section 5.03 ) or (ii) the disclosure letter delivered by the Green Signing Parties to Sailfish at or prior to the execution and delivery of this Agreement (the Green Disclosure Letter ), the Green Signing Parties represent and warrant to Sailfish as follows:
Section 5.01 Organization, Good Standing and Qualification .
(a) Each Green Entity is a corporation, limited liability company, partnership or other entity duly organized and validly existing under the Laws of the jurisdiction of its organization and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as now conducted.
(b) Each Green Entity is duly qualified and/or licensed, as may be required, and in good standing in each of the jurisdictions in which the nature of the business conducted by it or the character of the property owned, leased or used by it makes such qualification and/or licensing necessary, except where the failure to be so qualified and/or licensed has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. Green Energy has heretofore made available to Sailfish complete and correct copies of its and its Subsidiaries Organizational Documents as of the date hereof.
Section 5.02 Capital Structure; Subsidiaries .
(a) Section 5.02(a) of the Green Disclosure Letter sets forth, as of the date of this Agreement and as of the Closing Date, the name and jurisdiction of organization of each (i) Green Entity and (ii) entity (other than the Green Entities) in which any Green Entity owns any Equity Interest.
(b) All of the outstanding Equity Interests in each Green Entity are duly authorized, validly issued, fully paid (to the extent required under the Organizational Documents of each Green Entity) and (in the case of all corporate Green Entities) nonassessable, and such Equity Interests are owned as set forth in Section 5.02(b) of the Green Disclosure Letter (as of the date hereof and as of the Closing Date) free and clear of any Encumbrances or limitations on voting rights. Except as set forth in the Organizational Documents of the Green Entities, there are no subscriptions, options, warrants, calls, rights, convertible securities or other agreements relating to the issuance, transfer, sales, delivery, voting or redemption (including any rights of conversion or exchange under any outstanding security or other instrument) for any of the Equity Interests in any Green Entity. The issuance and sale of all of the Equity Interests of each Green Entity has been in material compliance with all applicable Laws, including United States federal and state securities Laws. Except as set forth in the Organizational Documents of the Green Entities, no Green Entity has agreed to register any securities under any applicable Law, including the Securities Act or any state securities Law, or granted registration rights to any individual or entity. There are no outstanding contingent value rights, phantom stock or similar securities or rights that are derivative of, or provide economic benefits based directly or indirectly on the value or price of any capital stock of, or other securities or ownership interests in, any Green Entity.
(c) Except as required by this Agreement or as set forth in the Organizational Documents of the Green Entities, there are no outstanding or authorized (i) options, warrants, preemptive rights, subscriptions, calls or other rights, convertible securities or agreements obligating any Green Entity to issue, transfer or sell any Equity Interests in any Green Entity or securities convertible into or exchangeable for such Equity Interests, (ii) contractual obligations of any Green Entity to repurchase, redeem or otherwise acquire any Equity
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Interests of any Green Entity or any such securities or agreements listed in clause (i) of this sentence, or (iii) voting trusts or similar agreements to which any Green Entity is a party with respect to the voting of the Equity Interests of any Green Entity. Immediately after the consummation of the Transactions, there will not be any outstanding subscriptions, options, warrants, calls, preemptive rights, or other rights, convertible or agreements, obligating any Green Entity calling for the purchase or issuance of any Equity Interests in any Green Entity or securities convertible into or exchangeable for such Equity Interests.
Section 5.03 Authorization; No Conflict .
(a) Each Green Signing Party has the requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution and delivery of this Agreement by the Green Signing Parties, the performance of its obligations hereunder and the consummation by the Green Signing Parties of the Transactions have been duly authorized by all necessary limited liability company action on the part of each Green Signing Party. Subject to the performance of the Ride Entities and the Apple Entities of their respective obligations under the Support Agreement, the execution and delivery of this Agreement by the Green Signing Parties do not, and the performance of this Agreement by the Green Signing Parties, and the consummation of the Transactions, will not, require any other consent, approval, authorization or permit of, or filing with or notification to any holder of Equity Interests in any Green Entity. This Agreement has been duly executed and delivered by each Green Signing Party and assuming that this Agreement constitutes the valid and binding obligation of Sailfish, New Sailfish and Merger Sub, constitutes a valid and binding obligation of each Green Signing Party enforceable against each Green Signing Party in accordance with its terms, subject, as to enforceability, to Creditors Rights. The Apple Aggregator and the Ride Aggregator have approved this Agreement and the Transactions. The Board of Managers of Green Energy approved this Agreement and the Transactions. The sole member of Green Production approved this Agreement and the Transactions.
(b) The execution and delivery of this Agreement do not, and the consummation of the Transactions will not, require any consent of or other action by any Person under or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or acceleration of any material obligation or the loss, suspension, limitation or impairment of the ownership of, or a material benefit or use under, or result in (or give rise to) the creation of any Encumbrance or any rights of termination, cancellation, first offer, first refusal, or other change in any right or obligation or the loss of any benefit, in each case, with respect to any of the properties or assets of any Green Entity (including, for the avoidance of doubt, any of their Oil and Gas Properties) under, any provision of (i) the Organizational Documents of any Green Entity, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, Contract or other agreement, permit, franchise, certificate or license to which any Green Entity is a party or by which any Green Entity or their respective properties or assets are bound, or (iii) assuming the consents, approvals, orders, authorizations, registrations, filings or permits referred to in Section 5.03(d) are duly and timely obtained or made, any Law applicable to any Green Entity or any of their respective properties or assets, other than, in the case of clauses (ii) and (iii) , any such violations, defaults, acceleration, losses, or Encumbrances that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
(c) No Green Entity is in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the Organizational Documents of any Green Entity or (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, Contract or other agreement, permit, franchise or license to which any Green Entity is now a party or by which any Green Entity or any of their respective properties or assets is bound, except for defaults or violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
(d) No consent, approval, order or authorization of, or registration, declaration or filing with, or permit from any Governmental Entity is required to be obtained or made by any Green Entity in connection with
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the execution and delivery of this Agreement by the Green Signing Parties or the consummation by the Green Signing Parties of the Transactions, except for: (i)(A) the filing of a premerger notification report by Green Energy under the HSR Act, and the expiration or termination of the applicable waiting period with respect thereto, and (B) any filings required with respect to the Comisión Federal de Competencia Económica of the United Mexican States or required under the Mexican Granting Instruments; (ii) such filings and approvals as may be required by any applicable state securities or blue sky laws; (iii) the consent of the Comisión Nacional de Hidrocarburos of the United Mexican States; and (iv) any such consent, approval, order, authorization, registration, filing or permit that the failure to obtain or make has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
Section 5.04 Financial Statements . Set forth on Section 5.04 of the Green Disclosure Letter are (a) copies of the audited consolidated balance sheet of Green Energy and its Subsidiaries as of December 31, 2014, 2015, and 2016, together with the related audited consolidated statements of operations, cash flows, and members equity of Green Energy and its Subsidiaries for the years then ended, and the related notes thereto, accompanied by the reports thereon of Ernst & Young LLP, independent public accountants (the Green Energy Audited Financial Statements ), (b) copies of the audited consolidated balance sheet of Green Production and its Subsidiaries as of December 31, 2014, 2015, and 2016, together with the related audited consolidated statements of operations, cash flows, and members equity of Green Production and its Subsidiaries for the years then ended, and the related notes thereto, accompanied by the reports thereon of Ernst & Young LLP, independent public accountants (the Green Production Audited Financial Statements and together with the Green Energy Audited Financial Statements, the Green Audited Financial Statements ) and (c) the unaudited consolidated balance sheet of Green Energy and its Subsidiaries as of June 30, 2017 and the related unaudited consolidated statements of operations, cash flows, and members equity of Green Energy and its Subsidiaries for the three and six-month periods then ended, and the related notes thereto (collectively, the Green Interim Financial Statements and together with the Green Audited Financial Statements, the Green Financial Statements ). The Green Financial Statements were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case of unaudited statements, to normal year-end audit adjustments) the financial position of Green Energy and its consolidated Subsidiaries and Green Production and its consolidated subsidiaries, as applicable, as of their respective dates and the results of operations and the cash flows of Green Energy and its consolidated Subsidiaries and Green Production and its consolidated Subsidiaries, as applicable, for the periods presented therein. The Green Financial Statements have been prepared from, and are in accordance with, the books and records of the Green Entities. The books and records of the Green Entities have been, and are being, maintained in accordance with GAAP and any other applicable legal and accounting requirements. Ernst & Young LLP is an independent public accounting firm with respect to Green Energy and, as of the date of this Agreement, has not resigned or been dismissed as independent public accountants of Green Energy. No Green Entity is a party to or has any obligation or other commitment to become a party to any securitization transaction, off-balance sheet partnership or any similar Contract (including any structured finance, special purpose or limited purpose entity, on the other hand, or any off-balance sheet arrangements (as defined in Item 303(a) of Regulation S-K under the Exchange Act)) where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, Green Energy in any of the Green Financial Statements.
Section 5.05 Information Supplied . None of the information supplied or to be supplied by the Green Signing Parties for inclusion or incorporation by reference in (a) the Registration Statement will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, and (b) the Combined Consent Statement/Prospectus will, at the time the Combined Consent Statement/Prospectus is mailed to stockholders of Sailfish and at the time of the Sailfish Stockholder Meeting,
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contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The portions of the Combined Consent Statement/Prospectus supplied by the Green Signing Parties will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. No representation or warranty is made by any Green Signing Party with respect to statements made therein based on information supplied by Sailfish or the Sailfish Subsidiaries specifically for inclusion in the Combined Consent Statement/Prospectus.
Section 5.06 Absence of Certain Changes or Events .
(a) Since December 31, 2016, there has not been any fact, circumstance, condition, event, change, effect, development or occurrence that, individually or in the aggregate, had or would be reasonably likely to have a Green Material Adverse Effect.
(b) Since December 31, 2016, there has not been any damage, destruction or other casualty loss (whether or not covered by insurance) material to the business of the Green Entities, taken as a whole.
(c) From December 31, 2016 through the date of this Agreement, (i) the Green Entities have conducted their business in the ordinary course of business consistent with past practices in all material respects and (ii) the Green Entities have not undertaken any action that would be prohibited by Section 6.02(b)(iv) , (v) , (vi) , (vii) , (ix) or (xii) if such provisions were in effect at all times since December 31, 2016.
Section 5.07 Litigation . Except for such matters as have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, there is no (a) Proceeding pending, or, to the knowledge of Green Energy, threatened against the Green Entities or (b) judgment, decree, injunction, ruling or order of any Governmental Entity or arbitrator outstanding against the Green Entities. To the knowledge of Green Energy, as of the date hereof, no officer or director of the Green Entities is a defendant in any material Proceeding in connection with his or her status as an officer or director of the Green Entities. There is no judgment, settlement, order, decision, direction, writ, injunction, decree, stipulation or legal or arbitration award of, or promulgated or issued by, any Governmental Entity in effect to which any of the Green Entities is a party or subject that materially interferes with, or would be reasonably likely to materially interfere with, the business of any of the Green Entities as currently conducted.
Section 5.08 No Undisclosed Liabilities . There are no liabilities or obligations of any of the Green Entities of any kind whatsoever (whether accrued, contingent, absolute, determined, determinable or otherwise), other than: (a) liabilities or obligations reflected or reserved against on the balance sheet of Green Energy dated as of December 31, 2016 (including the notes thereto) contained in the Green Financial Statements; (b) liabilities or obligations incurred in the ordinary course of business subsequent to December 31, 2016; (c) liabilities or obligations for fees and expenses incurred in connection with the preparation, negotiation and consummation of the Transactions; and (d) liabilities or obligations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
Section 5.09 Green Permits; Compliance with Applicable Law .
(a) The Green Entities hold all franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders of all Governmental Entities (other than Oil and Gas Leases) necessary for the lawful conduct of their respective businesses (the Green Permits ), except where the failure to so hold has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. All Green Permits are valid and in full force and effect, no default (with or without notice or lapse of time or both) has occurred under any such Green Permit, and no suspension or cancellation of such Green Permits is pending or threatened in writing or, to the knowledge of Green Energy, threatened orally, except where the failure to be in full force and effect, suspension or cancellation has not had and would not reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. The Green Entities are in compliance with the terms of the Green Permits, except
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where the failure to so comply has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. The businesses of the Green Entities are not currently being conducted, and at no time during the past three years have been conducted, in violation of any applicable Law, except for violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. To the knowledge of Green Energy, no investigation or review by any Governmental Entity with respect to the Green Entities is pending or threatened, other than those the outcome of which has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
(b) The Green Entities are in compliance with, and are not in default under or in violation of, any applicable Law, except where such non-compliance, default or violation has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. No Green Entity has received any written communication since January 1, 2014 from a Governmental Entity that alleges that any Green Entity is not in compliance with or is in default or violation of any applicable Law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably likely to have a Green Material Adverse Effect.
Section 5.10 Broker s Fees . Except for the fees and expenses payable to Citigroup Global Markets Inc. and UBS Securities LLC (the Green Financial Advisor ), no broker, investment banker, or other Person is entitled to any brokers, finders or other similar fee or commission from the Green Entities in connection with the Transactions based upon arrangements made by or on behalf of Green Energy, and the agreements with respect to such engagements have previously been made available to Sailfish.
Section 5.11 Green Benefit Plans .
(a) Set forth on Section 5.11(a) of the Green Disclosure Letter is a true and complete list, as of the date hereof, of each Green Benefit Plan. Green Energy has furnished or made available to Sailfish true, correct and complete copies of each of the Green Benefit Plans (or, with respect to any unwritten Green Benefit Plan, a written summary thereof) and, to the extent applicable, true, correct and complete copies of: (i) related trust documents and any amendments thereto, (ii) the insurance contracts and any amendments thereto, (iii) the most recent favorable determination or opinion letters, (iv) the most recent report filed on Form 5500 and accompanying schedules, (v) the most recent financial statements and actuarial reports, (vi) the current summary plan description (including all summaries of material modifications thereto) and (vii) all material correspondence received from or provided to the Department of Labor, the Pension Benefit Guaranty Corporation, the IRS or any other Governmental Entity during the past three years.
(b) Each Green Benefit Plan has been established and administered in accordance with its terms and in material compliance with all applicable Laws. Each Green Benefit Plan which is intended to be qualified within the meaning of Section 401(a) of the Code satisfies the requirements of Section 401(a) of the Code and has received a favorable determination letter as to its qualification, or, if such Green Benefit Plan is a prototype plan, the opinion or notification letter for each such Green Benefit Plan and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification.
(c) There are no actions, suits or claims pending (other than routine claims for benefits) or, to the knowledge of Green Energy, threatened against, or with respect to, any of the Green Benefit Plans or their assets, except for such actions, suits or claims that are not material to any Green Entity and to the knowledge of Green Energy, no facts or circumstances exist that could reasonably be expected to give rise to any such action, suit or claim. There is no audit, inquiry, investigation, proceeding or examination pending or, to the knowledge of Green Energy, threatened by the IRS, the Department of Labor, the Pension Benefit Guaranty Corporation or any other Governmental Entity with respect to any Green Benefit Plan.
(d) Since January 1, 2014, all contributions required to be made to the Green Benefit Plans pursuant to their terms or applicable Laws have been timely made.
(e) There are no material unfunded benefit obligations that have not been properly accrued for in the Green Financial Statements or disclosed in the notes thereto in accordance with GAAP.
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(f) No Green Entity, nor any member of an Aggregated Group to which any such Person belongs, contributes to, has an obligation to contribute to, or has any liability with respect to (including any contingent liability) and no Green Benefit Plan is, a plan subject to Title IV of ERISA (including a multiemployer plan within the meaning of Section 3(37) or Section 4001(a)(3) of ERISA), Section 302 of ERISA, or Section 412 of the Code or a multiple employer welfare arrangement (as defined in Section 3(40)(A) or ERISA).
(g) No Green Benefit Plan or Green Entity provides, or has any obligation to provide, current or former employees of a Green Entity (or any beneficiaries thereof) welfare benefits (including medical and life or disability insurance benefits) after such Person terminates employment with the Green Entities, except for the coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Section 4980B of the Code and Section 601 et. seq . of ERISA. No Green Benefit Plan and no Green Entity provides, or has any obligation to provide, welfare benefits to any Person who is not an individual currently or formerly designated by a Green Entity as an employee of a Green Entity or a beneficiary thereof.
(h) Except for any items pursuant to the agreements set forth on Section 5.11(h) of the Green Disclosure Letter, neither the execution of this Agreement, shareholder approval of this Agreement nor the consummation of the Transactions (either alone or in combination with another event) will or can be reasonably expected to (i) entitle any current or former director, officer, employee or consultant of any Green Entity to any payment or benefit (including severance pay/benefits or similar compensation), any cancellation of indebtedness, or any increase in compensation; (ii) result in the acceleration of payment, funding or vesting under any Green Benefit Plan; or (iii) result in any increase in benefits payable under any Green Benefit Plan. No amount paid or payable (whether in cash, in property, or in the form of benefits or rights) in connection with the Transactions (either alone or in combination with another event or subsequent action) will be an excess parachute payment within the meaning of Section 280G of the Code. No Green Entity has any obligation to make a gross-up or similar payment in respect of any Taxes that may become payable Section 409A.
(i) Except as set forth on Section 5.11(i) of the Green Disclosure Letter, no Green Benefit Plan is maintained outside the jurisdiction of the United States or covers any employee residing or working outside the United States (any such Green Benefit Plan, a Foreign Benefit Plan ). With respect to each Foreign Benefit Plan, the fair market value of the assets of each funded Foreign Benefit Plan, the liability of each insurer for any Foreign Benefit Plan funded through insurance, or the book reserve established for any Foreign Benefit Plan, together with any accrued contributions, is sufficient to procedure or provide for the accrued benefit obligations, as of the date of this Agreement, with respect to all current and former participants in such Foreign Benefit Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such Foreign Benefit Plan and no transaction contemplated by this Agreement shall cause such assets or insurance obligations to be less than such benefit obligations. Each Green Benefit Plan which, under the Laws of any jurisdiction outside of the United States, is required or approved by any Governmental Entity, has been so registered and approved and, to the knowledge of Green Energy, has been maintained in good standing with the applicable requirements of the Governmental Entities and, if intended to qualify for special Tax treatment, to the knowledge of Green Energy, there are no existing circumstances or events that have occurred that could reasonably be expected to affect adversely the special Tax treatment with respect to such Foreign Benefit Plans.
(a) Since January 1, 2014, no Green Entity has been a party to, or bound by, any collective bargaining agreement or other agreement with any labor union.
(b) Since January 1, 2014, there have been no existing or, to the knowledge of Green Energy, threatened unfair labor practices, charges or grievances against a Green Entity arising out of a collective bargaining agreement, other agreement with any labor union, or other labor-related grievance proceedings.
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(c) Since January 1, 2014, there have been no strikes, disputes, slowdowns, work stoppages or lockouts existing or, to the knowledge of Green Energy, threatened with respect to any employees of the Green Entities.
(d) Since January 1, 2014, there have been no union certification or representation petitions or demands with respect to any employees of the Green Entities and, to the knowledge of Green Energy, no union organizing campaign or similar effort is pending or threatened with respect to any employees of the Green Entities.
(e) All Green Entity employees are employed at will and all independent contractors are properly classified under all applicable Laws, including federal and state wage and hour laws.
(f) The Green Entities are, and since January 1, 2014 have been, in compliance in all material respects with all applicable Laws respecting employment and employment practices including but not limited to Laws relating to wages and hours, including the Fair Labor Standards Act, collective bargaining, unemployment insurance, workers compensation, equal employment opportunity, discrimination, immigration control, employee classifications, misclassification of employees as independent contractors, safety and health, reductions in force, including the WARN Act, and the payment and withholding of Taxes, and there are no Proceedings pending or, to the knowledge of Green Energy, threatened against any Green Entity, by or on behalf of any applicant for employment, any current or former employee or any class of the foregoing, relating to any of the foregoing applicable Laws, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship, other than any such matters described in this sentence that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. Since January 1, 2014, no Green Entity has received any written notice of the intent of the Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of Labor or any other Governmental Entity responsible for the enforcement of labor or employment Laws to conduct an investigation with respect to any Green Entity which has had or would be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
(a) (i) All material Tax Returns required to be filed by or with respect to the Green Entities before the date hereof have been timely filed (taking into account all extensions), and all such Tax Returns are true, correct and complete in all material respects, (ii) the Green Entities have timely paid all material Taxes due or claimed to be due, except for those Taxes being contested in good faith and for which adequate reserves have been established in the Green Financial Statements, (iii) all material Taxes required to be withheld by the Green Entities have been timely withheld and, to the extent required, paid over to the appropriate Governmental Entity and the Green Entities have complied with all information reporting and backup withholding requirements, including maintenance of required forms and other records, and (iv) the charges, accruals and reserves for Taxes with respect to the Green Entities reflected in the December 31, 2016 consolidated balance sheet of Green Energy are adequate under GAAP to cover unpaid Tax liabilities of the Green Entities accruing through the date thereof.
(b) No Green Entity is party to any Tax Sharing Agreement, other than such an agreement exclusively between or among the Green Entities, and no Green Entity has been a member of an affiliated group (or similar state, local or foreign filing group) filing a material consolidated income Tax Return.
(c) Except for such matters as have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, there is no outstanding material claim, assessment or deficiency against any Green Entity for any Taxes that has been asserted or threatened in writing by any Governmental Entity, and no written claim has been made, within the preceding three years, by a Governmental Entity in a jurisdiction where no Green Entity files Tax Returns or pays Taxes that it is obligated to file Tax Returns or pay Taxes in such jurisdiction. No waiver or extension of any statute of limitations with respect to the assessment or collection of Taxes is in effect for the Green Entities.
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(d) During the period beginning two years before the date hereof, no Green Entity has been a distributing corporation or a controlled corporation for purposes of Section 355 of the Code.
(e) Except as provided in Section 5.13 of the Green Disclosure Letter, each Green Entity is classified as a disregarded entity or a partnership for U.S. federal income tax purposes. Any Green Entity that is a partnership for U.S. federal income tax purposes has made or will make a valid election under Section 754 of the Code.
Section 5.14 Intellectual Property . The Green Entities own or have the right to use all Intellectual Property necessary for the operation of the businesses of the Green Entities as presently conducted (collectively, the Green Intellectual Property ) free and clear of all Encumbrances except for Permitted Encumbrances, except where the failure to own or have the right to use such properties has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. To the knowledge of Green Energy, the use of the Green Intellectual Property by the Green Entities in the operation of the business of the Green Entities as presently conducted does not infringe upon or misappropriate any Intellectual Property of any other Person, except for such matters that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. The Green Entities have taken reasonable measures to protect the confidentiality of trade secrets used in the businesses of the Green Entities as presently conducted, except where failure to do so has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect. The consummation of the Transactions will not diminish or terminate the ownership of or rights in any material Intellectual Property owned or used by the Green Entities in their respective businesses as currently conducted and, except as would not reasonably be expected to have a Green Material Adverse Effect, to the knowledge of Green Energy, after the Closing Date the Green Entities will have the right to use such Intellectual Property on the same basis as prior to the consummation of the Transactions.
Section 5.15 Real Property . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, and except with respect to any of the Green Entities Oil and Gas Properties, (a) the Green Entities have good, valid and defensible title to all material real property owned by a Green Entity, in each case, including office leases, equipment yards, warehouses, and shore base facilities (collectively, the Green Owned Real Property ) and valid leasehold estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to other occupancy arrangements) by a Green Entity (collectively, including the improvements thereon, the Green Material Leased Real Property ) free and clear of all Encumbrances, except Permitted Encumbrances, (b) each agreement under which a Green Entity is the landlord, sublandlord, tenant, subtenant, or occupant with respect to the Green Material Leased Real Property (each, a Green Material Real Property Lease ) to the knowledge of Green Energy is in full force and effect and is valid and enforceable against the parties thereto in accordance with its terms, subject, as to enforceability, to Creditors Rights, and no Green Entity, or to the knowledge of Green Energy, any other party thereto, has received written notice of any default under any Green Material Real Property Lease, and a true, correct and complete copy of each Green Material Real Property Lease has been made available to Sailfish prior to the date hereof, and (c) there does not exist any pending or, to the knowledge of Green Energy, threatened, condemnation or eminent domain proceedings that affect any of the Green Owned Real Property or Green Material Leased Real Property.
Section 5.16 Surface and Seabed Rights . Each Green Entity has such Rights-of-Way as are sufficient in all respects to access, construct, operate, maintain, and repair the equipment and facilities related to such Green Entitys Oil and Gas Properties, and to produce, gather, process and handle, transport, and market Hydrocarbons from or attributable to their respective currently-producing Oil and Gas Properties and otherwise to conduct its business in the ordinary course, consistent with past practice, except for such Rights-of-Way the absence of which has not had and would not reasonably be expected to have, individually or in the aggregate, a Green Material Adverse Effect. Each Green Entity has fulfilled and performed all its material obligations with respect to such Rights-of-Way and conducts its business in a manner that does not violate any of the Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof
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or would result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have, individually or in the aggregate, a Green Material Adverse Effect. All flowlines, risers, umbilicals, gathering lines, transportation facilities, platforms, and facilities operated by any Green Entity (even if on platforms not owned by any Green Entity) are subject to Rights-of-Way, and there are no gaps (including any gap arising as a result of any breach by any Green Entity of the terms of any Rights-of-Way) in the Rights-of-Way other than gaps that have not had and would not reasonably be expected to have, individually or in the aggregate, a Green Material Adverse Effect. No Green Entity has received any written claim for access to any platforms, gathering lines, transportation lines, or other processing, marketing, or production handling facilities, whether under the Outer Continental Shelf Lands Act, the Natural Gas Act, the Interstate Commerce Act, or otherwise. Any gas gathering system constituting a part of the Oil and Gas Properties of any Green Entity has as its primary function the provision of natural gas gathering services, as the term gathering is interpreted under Section 1(b) of the Natural Gas Act, and none of such Oil and Gas Properties have been or are certificated by the FERC under Section 7(c) of the Natural Gas Act or, to the knowledge of Green Energy, are now subject to the jurisdiction of the FERC under the Natural Gas Act or Natural Gas Policy Act. None of the Oil and Gas Properties of any Green Entity are providing service under Section 311 of the Natural Gas Policy Act or under a tariff or other authorization on file with or approved by any Governmental Entity. None of the Oil and Gas Properties of or other oil pipelines owned by any Green Entity are providing service under or subject to the Interstate Commerce Act nor is any Green Entity or its Subsidiaries or any such Oil and Gas Properties or oil pipelines subject to the jurisdiction of the FERC pursuant to the Interstate Commerce Act.
Section 5.17 Oil & Gas Matters .
(a) Except as has not had and would not be reasonably likely to have a Green Material Adverse Effect and except for property (i) sold or otherwise disposed of in the ordinary course of business since the date of the Green Reserve Report and expressly described in Section 5.17(a) of the Green Disclosure Letter or (ii) reflected in the Green Reserve Report as having been sold or otherwise disposed of, as of the date hereof, the Green Entities have good and defensible title to all Oil and Gas Properties forming the basis for the reserves reflected in the Green Reserve Report and in each case as attributable to interests owned by the Green Entities, free and clear of any Encumbrances, except for Permitted Encumbrances. For purposes of the foregoing sentence, good and defensible title means that one or more of the Green Entities title (as of the date hereof and as of the Closing) to each of the Oil and Gas Properties held or owned by them (or purported to be held or owned by them), beneficially or of record (other than the Mexican Granting Instruments) with any applicable Governmental Entity that (1) entitles one or more of the Green Entities to receive (after satisfaction of all Production Burdens applicable thereto), not less than the net revenue interest share shown in the Green Reserve Report of all Hydrocarbons produced from such Oil and Gas Properties throughout the life of such Oil and Gas Properties (other than decreases in connection with operations in which any Green Entity may be a non-consenting co-owner, decreases resulting from reversion of interests to co-owners with respect to operations in which such co-owners elected not to consent, decreases resulting from the establishment of pools or units, and decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries), (2) obligates one or more of the Green Entities to bear a percentage of the costs and expenses for the maintenance and development of, and operations relating to, such Oil and Gas Properties, of not greater than the working interest shown on the Green Reserve Report for such Oil and Gas Properties (other than increases resulting from contribution requirements with respect to defaulting or non-consenting co-owners under applicable operating agreements or Laws and increases that are accompanied by at least a proportionate increase in the net revenue interest of the Green Entities) and (3) is free and clear of all Encumbrances (other than Permitted Encumbrances).
(b) The factual, non-interpretive data (other than title data) supplied by the Green Entities to the Green Independent Petroleum Engineers relating to the Green Entities interests referred to in the Green Reserve Report, in connection with the preparation of the Green Reserve Report was, as of the time provided, accurate in all material respects. The oil and gas reserve estimates of the Green Entities set forth in the Green Reserve Report are derived from reports that have been prepared by Green Energy and audited by the
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Green Independent Petroleum Engineers, and such reserve estimates fairly reflect, in all material respects, the oil and gas reserves of the Green Entities at the dates indicated therein. Except for changes generally affecting the oil and gas exploration, development and production industry (including changes in commodity prices) and normal depletion by production, there has been no change in respect of the matters addressed in the Green Reserve Report that has had or would be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect.
(c) Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, (i) all rentals, shut-ins, periodic contractual fees and similar payments owed to any Person or individual under (or otherwise with respect to) any such Oil and Gas Leases have been properly and timely paid, (ii) all royalties, minimum royalties, overriding royalties and other Production Burdens with respect to any Oil and Gas Properties owned or held by any Green Entity have been timely and properly paid and (iii) no Green Entity (and, to Green Energys knowledge, no third party operator) has violated any provision of, or taken or failed to take any act that, with or without notice, lapse of time, or both, would constitute a default under the provisions of any Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Oil and Gas Lease) included in the Oil and Gas Properties owned or held by any Green Entity. Except as set forth in Section 5.17(c) of the Green Disclosure Letter, no portion of the Mexican Granting Instruments, or the lands or rights covered thereby, has been relinquished or surrendered, and the Green Energy Disclosure Letter accurately describes the current geographic area covered thereby after any such relinquishments and surrenders, together with the current phase of each Mexican Granting Instrument or portion thereof.
(d) All proceeds from the sale of Hydrocarbons produced from the Oil and Gas Properties of the Green Entities are being received by such selling entities in a timely manner and no proceeds from the sale of Hydrocarbons produced from any such Oil and Gas Properties are being held in suspense (by any Green Entity, any third party operator thereof or any other Person or individual) for any reason except as set forth on Section 5.17(d) of the Green Disclosure Letter. No Green Entity is obligated by virtue of a take-or-pay payment, advance payment, or similar payment (other than royalties, overriding royalties, and similar arrangements established in the Oil and Gas Leases) to deliver Hydrocarbons or proceeds from the sale thereof, attributable to such Persons interest in its Oil and Gas Properties at some future time without receiving payment therefor at the time of delivery. As of the dates reflected in Section 5.17(d) of the Green Disclosure Letter, no Green Entity has any production, platform, transportation, production handling, processing, plant, or other imbalance, and no Person has given notice that any such imbalance constitutes all of the relevant Persons ultimately recoverable reserves from a balancing area.
(e) As of the date of this Agreement, there are no authorizations for expenditure or other commitments to make capital expenditures (or series of related authorizations for expenditure or commitments) binding on any Green Entity with respect to its or their respective Oil and Gas Properties that Green Energy reasonably anticipates will individually require expenditures after the Effective Time of greater than $10,000,000. Section 5.17(e) of the Green Disclosure Letter contains a true and complete description of any work program and/or budget for the current year and any future year, including any multi-year work program and budget, and any development plan, appraisal plan, exploration plan, or production plan in each case, that is binding or required with respect to the Mexican Granting Instruments or by virtue of Law, has been approved by the operating committee or other governing body under any applicable operating agreement, or has been approved or mandated by any Governmental Entity. No Green Entity is obligated (and has not, during the term of the Mexican Granting Instruments) to make any payment arising out of a failure to comply with minimum work obligations, minimum appraisal obligations, or any approved work program or budget.
(f) All currently-producing wells and equipment related to Oil and Gas Properties operated by any Green Entity are in an operable state of repair, adequate to maintain operations in accordance with past practice, ordinary wear and tear excepted. Section 5.17(f) of the Green Disclosure Letter sets forth any assessment of pre-existing damages provided to an applicable Governmental Entity under the Mexican Granting Instruments.
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(g) As of the date hereof, no Green Entity has failed to elect to participate in (or affirmatively elected not to participate in) any operation or activity which could result in any of such Persons interest in any of its Oil and Gas Properties becoming subject to a penalty, premium, or forfeiture as a result of such election or lack thereof.
(h) All wells included in the Oil and Gas Properties of the Green Entities have been drilled and completed within the limits permitted by all applicable Oil and Gas Leases, contracts, and pooling or unit agreements. There are no wells or other equipment or facilities located on any Green Entitys Oil and Gas Properties that such Person is, or will within 18 months after the date hereof be, obligated by any Laws or contract to plug, dismantle, decommission, and/or abandon or that have been plugged, dismantled, decommissioned, and/or abandoned in a manner that does not comply in all material respects with applicable Laws.
(i) There are no preferential rights to purchase or required third Person consents which may be applicable to the transactions contemplated by this Agreement, except for consents and approvals of Governmental Entities that are customarily obtained after Closing.
(j) Section 5.17(j) of the Green Disclosure Letter lists all bonds, letters of credit, and other similar credit support instruments maintained by or on behalf of any Green Entity with or for the benefit of any Governmental Entity or other third Person with respect to its Oil and Gas Properties.
(k) Section 5.17(k) of the Green Disclosure Letter sets forth all costs and expenses in respect of petroleum operations which, as of September 30, 2017, are attributable to each Mexican Granting Instruments and which the contractor thereunder is entitled to recover from Hydrocarbons produced from, or allocable to, each Mexican Granting Instrument. All such costs are Eligible Costs under the Mexican Granting Instruments.
(l) Each Mexican Granting Instrument, and each amendment or modification issues with respect thereto, or waiver of rights or interpretation by a Governmental Entity thereunder, has been validly issued and approved by the applicable Governmental Entities.
(m) The applicable Green Entity has such rights to export Hydrocarbons from the United Mexican States as are set forth in the Mexican Granting Instruments, and each applicable Green Entitys export rights and privileges as are set forth in the Mexican Granting Instruments have not been curtailed or suspended by any Governmental Entity.
(n) Section 5.17(n) of the Green Disclosure Letter contains an accurate and complete description of any plugging and abandonment or decommissioning trust, surety, or other security, poste, provided , or otherwise held by or on behalf of any Green Entity with respect to the Mexican Granting Instruments.
(o) There are no wells (i) with respect to which any Green Entity has received an order from any Governmental Entity requiring that such well be plugged and abandoned that has not been plugged and abandoned, (ii) that, to the knowledge of Green Energy, formerly produced but that are temporarily abandoned or were dry holes and have not been plugged in accordance with applicable Laws, (iii) that, to the knowledge of Green Energy, have been or are required to be plugged and abandoned but have not been plugged in accordance with applicable Laws or (iv) to the knowledge of Green Energy, with respect to which any Green Entity has any Decommissioning Obligations that are required to have been performed and which have not been performed in accordance with applicable Laws.
(p) Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, there does not exist any pending or, to the knowledge of Green Energy, threatened, condemnation or eminent domain proceedings that affect any of the Green Entities Oil and Gas Properties.
(q) To the knowledge of the Green Entities, solely with respect to the Mexican Granting Instrument described in subsection (ii) of the definition thereof, (i) the minimum work obligations required by such Mexican Granting Instrument have been fully satisfied with respect to the current period of such Mexican
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Granting Instrument and (ii) the requirements in such Mexican Granting Instrument that the parties thereunder utilize a certain minimum percentage of Mexican labor or supply have been fully satisfied.
(r) As of the date of this Agreement, there is no secondee at any Green Entity under any joint operating agreement or similar agreement applicable to a Mexican Granting Instrument, and no third Person has requested or demanded any secondment in writing.
(s) Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, no Green Entity is in default under the Mexican Granting Instruments.
(t) With respect to (i) that certain Agreement Regarding Surety Bond and Operator Substitution Option dated September 4, 2015 by and between Sierra O&G Exploración y Producción, S. de R.L. de C.V., Green Energy LLC, and Green Energy Offshore Mexico 2, S. de R.L. de C.V. and that certain Contribution Letter Agreement dated September 4, 2015 by and between Sierra O&G Exploración y Producción, S. de R.L. de C.V. and Green Energy LLC, in each case with respect to the Mexican Granting Instrument covering Contract Area 2, located in the shallow waters off of the state of Veracruz; and (ii) that certain Agreement Regarding Surety Bond and Operator Substitution Option dated September 4, 2015 by and between Sierra O&G Exploración y Producción, S. de R.L. de C.V., Green Energy LLC, and Green Energy Offshore Mexico 7, S. de R.L. de C.V. and that certain Contribution Letter Agreement dated September 4, 2015 by and between Green Energy and Sierra O&G Exploración y Producción, S. de R.L. de C.V. with respect to the Mexican Granting Instrument covering Contract Area 7, located in the shallow waters off of the state of Tabasco (the Mexico Letter Agreements ), (A) no Green Entity which is a party to a Mexico Letter Agreement has breached any of its obligations thereunder, which breach has not been remedied (and, to the knowledge of Green Energy, no circumstance exists that, with the passage of time, the giving of notice, or both, would cause or constitute such a breach), such that Sierra O&G Exploración y Producción, S. de R.L. de C.V. may exercise its right to remove, or cause the resignation of, a Green Entity as operator under a Joint Operating Agreement applicable to the Mexican Granting Instruments, or cause a Green Entity to forfeit, sell, or otherwise divest or alienate all or any part of its interests in a Mexican Granting Instrument, (B) the Non-Operators (as defined in a Joint Operating Agreement applicable to the Mexican Granting Instruments) have not exercised their rights to remove a Green Operator as operator in accordance with Article 4.10.D.1 or Article 4.10.E.1 of such Joint Operating Agreements or cause a Green Entity to assign all of its interests thereunder pursuant to Article 4.10.D.3 of such Joint Operating Agreements; and (C) there has not been any draw under any Letter of Credit (as such term is defined in the applicable Mexico Letter Agreement).
Section 5.18 Environmental Matters .
(a) Except for those matters that have not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect:
(i) the Green Entities and their respective operations and assets are in compliance, and at all times since January 1, 2012 have complied, with all Environmental Laws and Environmental Permits;
(ii) the Green Entities have obtained all Environmental Permits required under Environmental Laws to operate the business as currently operated and all such Environmental Permits are in full force and effect, free from breach, and the Transactions will not adversely affect them;
(iii) the Green Entities are not subject to any pending, or to the knowledge of Green Energy, threatened Proceeding regarding any alleged violation of or liability under Environmental Laws (including liability as a potentially responsible party under CERCLA or any analogous state laws) or any Environmental Permit;
(iv) no Green Entity has received any written notice, report or other information from any Governmental Entity or any third party alleging, with respect to any such entity or any of its respective assets, real properties (whether owned or leased or formerly owned or leased) or operations, the violation of or liability under any Environmental Law (including liability as a potentially responsible
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party under CERCLA or any analogous state laws) or any Environmental Permit that remains pending or unresolved;
(v) no Green Entity or their respective predecessors has handled, treated, recycled, stored, transported, disposed of, arranged for or permitted the disposal of, or Released any Hazardous Materials, or owned or operated any property or facility (and, to the knowledge of Green Energy, there have been no Releases of Hazardous Materials to or from any property or facility owned, operated or otherwise used by any Green Entity) in a manner that has given or would give rise to any liability, including any liability for response costs, corrective action costs, personal injury, property damage or natural resource damage, pursuant to CERCLA or any other Environmental Laws;
(vi) no Green Entity or their respective predecessors has, either expressly or by operation of Law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental Laws; and
(vii) There are no wells, pipelines, facilities, systems, platforms, or other equipment included in (or located on or otherwise attributable to) any Green Entitys respective assets that are currently required to be plugged, abandoned and/or dismantled (whether pursuant to Law or any Contract or Oil and Gas Lease) by a Green Entity that have not been plugged, abandoned and/or dismantled in compliance therewith.
(b) Green Energy has provided or otherwise made available to Sailfish all environmental reports, studies, audits, site assessments and other similar documents in its, or its Subsidiaries, possession or control that are necessary to an understanding of Green Energy and its Subsidiaries compliance with, or liabilities arising under, Environmental Laws or Environmental Permits.
Section 5.19 Material Contracts .
(a) Section 5.19 of the Green Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of each of the following agreements to which or by which any Green Entity is bound:
(i) each material contract (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act);
(ii) each Contract that provides for the acquisition, disposition, license, use, distribution or outsourcing of assets, services, rights or properties (other than Oil and Gas Properties) with respect to which Green Energy reasonably expects that the Green Entities will make or receive annual payments in excess of $10,000,000;
(iii) each Contract that constitutes a commitment or guarantee relating to Indebtedness for borrowed money or the deferred purchase price of property by any Green Entity (whether incurred, assumed, guaranteed or secured by any asset) in excess of $20,000,000, other than agreements solely between or among the Green Entities;
(iv) each Contract for lease of personal property or real property (other than Oil and Gas Properties) involving aggregate payments in excess of $2,000,000 in any calendar year that are not terminable without penalty within 60 days, other than contracts related to drilling rigs;
(v) each Contract containing any area of mutual interest, joint bidding area, joint acquisition area, or non-compete or similar type of provision that, following the Effective Time, by virtue of the Green Entities becoming Affiliates of Sailfish as a result of the Transactions, would by its terms materially restrict the ability of Sailfish or any of its Subsidiaries to compete in any line of business or with any Person or geographic area during any period of time after the Effective Time;
(vi) each Contract involving the pending acquisition or sale of (or option to purchase or sell) any material amount of the assets or properties (including Hydrocarbons) of the Green Entities, taken as a whole, other than contracts involving the acquisition or sale of (or option to purchase or sell) Hydrocarbons in the ordinary course of business;
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(vii) each Contract that relates to the sale, transfer or other disposition of a business or assets by the Green Entities pursuant to which the Green Entities have any potential continuing indemnification, guarantee, earnout or other contingent, deferred or fixed payment obligations that would reasonably be expected to result in aggregate payments in excess of $10,000,000, excluding ordinary course indemnification obligations relating to obligations assumed by, or breaches of representations or warranties by, Green or its Affiliates, or its or their respective predecessors in title, as part of the acquisition of any of their respective Oil and Gas Properties;
(viii) each Contract for any Derivative Transaction, and each International Swaps and Derivatives Association Master Agreement;
(ix) each material partnership, joint venture or limited liability company agreement, other than any customary joint operating agreements, unit agreements or participation agreements affecting the Oil and Gas Properties of any Green Entity;
(x) each joint development agreement, exploration agreement, participation, farmout, farmin or program agreement or similar contract requiring any Green Entity to make expenditures that would reasonably be expected to be in excess of $10,000,000 in the aggregate during the 12-month period following the date of this Agreement, other than customary joint operating agreements and continuous development obligations under Oil and Gas Leases;
(xi) any material lease or sublease with respect to a Green Material Leased Real Property;
(xii) each collective bargaining agreement to which any Green Entity is a party or is subject;
(xiii) each consulting, independent contractor, or master services agreement relating to the procurement of independent contractors or consultants through which a Green Entity is provided independent contractors or consultants;
(xiv) each Contract relating to a Green Related Party Transaction;
(xv) each Contract that provides for a take-or-pay clause or any similar prepayment obligation, acreage dedication, minimum volume commitments or capacity reservation fees to a gathering, transportation or other arrangement downstream of the wellhead, that cover, guaranty or commit volumes in excess of 1,000 barrels of oil equivalent per day of Hydrocarbons of any Green Entity per day over a period of one month (calculated on a yearly average basis) or for a term greater than 10 years;
(xvi) each Contract that, upon the consummation of the Transactions, would (either alone or upon the occurrence of any additional acts or events, including the passage of time) result in any payment or benefit (whether of severance pay or otherwise) becoming due, or the acceleration or vesting of any right to any payment or benefits, from any Green Entity to any officer, director, consultant or employee of any of the foregoing or any of their Affiliates;
(xvii) each Contract providing for indemnification of any officer, director or employee by a Green Entity (other than the Organizational Documents of the Green Entities);
(xviii) each Contract that requires the Green Entities to make any advance, loan, extension of credit (other than ordinary course trade credit) or capital contribution to, or other investment in, any Person in excess of $10,000,000 (excluding provisions set forth in joint operating agreements or unit operating agreements calling for capital calls or contributions from non-defaulting parties to cover the funding obligations of defaulting parties);
(xix) any material Contract that contains a change of control provision to which a Green Entity is a party or is subject;
(xx) each Contract that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions;
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(xxi) each Contract that (A) restricts the ability of the Green Entities to engage in or compete in any business or with any Person in an geographical area, (B) contains exclusivity obligations or restrictions binding on the Green Entities or (C) contains any standstill, most favored nation or most favored customer provision, preferential right or rights of first or last offer, negotiation or refusal or any similar requirement or right in favor of any third party, in each case other than those contained in (1) any agreement in which such provision is solely for the benefit of a Green Entity, (2) customary royalty pricing provisions in Oil and Gas Leases or (3) customary preferential rights in joint operating agreements, unit agreements or participation agreements affecting the business or the Oil and Gas Properties of a Green Entity, to which any Green Entity or any of their respective Affiliates is subject or (4) non-circumvent, non-compete, or area of mutual interest provisions in confidentiality agreements executed by a Green Entity as part of a proposed acquisition that was not consummated, the term of which lasts for less than one (1) year and which apply to an area of 5,000 acres or less and 1 block or less, if offshore and 320 acres or less, if onshore, to which a Green Entity is subject;
(xxii) each Contract or Organizational Document of a Green Entity that would, on or after the Closing Date, prohibit or restrict the ability of Sailfish, the Surviving Entity, or any of their respective Subsidiaries to declare and pay dividends or distributions with respect to their capital stock, pay any indebtedness, obligations or liabilities from time to time owed to Sailfish or any of its Subsidiaries (including the Surviving Entity and its Subsidiaries), make loans or advances to Sailfish or any of its Subsidiaries (including the Surviving Entity and its Subsidiaries), or transfer any of its properties or assets to Sailfish or any of its Subsidiaries (including the Surviving Entity and its Subsidiaries);
(xxiii) any Contract for the employment or engagement of any officer, individual employee or other person on a full-time, part-time or consulting basis with base salary in excess of $250,000; and
(xxiv) except for intercompany transactions among the Green Entities in the ordinary course of business consistent with past practices, any Contract for the license or sublicense of any Intellectual Property or other intangible asset (whether as a licensor or a licensee) that provides (A) for payment of $15,000,000 or more per year or (B) material exclusive rights to any third party.
(b) All written agreements of the type described in this Section 5.19 , shall be collectively referred to herein as the Green Contracts . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, each Green Contract is legal, valid, binding and enforceable in accordance with its terms on each Green Entity that is a party thereto and, to the knowledge of Green Energy, each other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors Rights. Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect, no Green Entity is in breach or default under any Green Contract nor, to the knowledge of Green Energy, is any other party to any such Green Contract in breach or default thereunder. Green Energy has heretofore made available to Sailfish complete and correct copies of the Green Contracts and any material amendments thereto as of the date hereof.
Section 5.20 Insurance . Set forth in Section 5.20 of the Green Disclosure Letter is a true, correct and complete list of all material insurance policies held by the Green Entities as of the date of this Agreement (collectively, the Green Material Insurance Policies ). Each of the Green Material Insurance Policies is in full force and effect on the date of this Agreement and a true, correct and complete copy of each Green Material Insurance Policy has been made available to Sailfish upon Sailfishs request prior to the date of this Agreement. All premiums payable under the Green Material Insurance Policies prior to the date of this Agreement have been duly paid to date and the Green Entities are otherwise in compliance in all material respects with the terms and conditions of all Green Material Insurance Policies. As of the date of this Agreement, no written notice of cancellation or termination has been received with respect to any Green Material Insurance Policy.
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Section 5.21 Derivative Transactions . Except as has not had and would not be reasonably likely to have, individually or in the aggregate, a Green Material Adverse Effect:
(a) All Derivative Transactions entered into by any Green Entity or for the account of any of its customers as of the date of this Agreement were entered into in accordance with all applicable Laws, and in accordance with the investment, securities, commodities, risk management and other policies, practices and procedures employed by the Green Entities, and were entered into with counterparties believed at the time to be financially responsible and able to understand (either alone or in consultation with their advisers) and to bear the risks of such Derivative Transactions.
(b) Each Green Entity has duly performed in all respects all of its respective obligations under the Derivative Transactions to the extent that such obligations to perform have accrued, and there are no breaches, violations, collateral deficiencies, requests for collateral or demands for payment, or defaults or allegations or assertions of such by any party thereunder.
Section 5.22 Related Party Transactions . As of the date of this Agreement, except as expressly listed in Section 5.22 of the Green Disclosure Letter, no Green Entity is party to any transaction or arrangement under which any (i) present or former executive officer or director of any Green Entity, (ii) beneficial owner of 5% or more of the Equity Interests of Green Energy or (iii) Affiliate, associate or member of the immediate family (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing is a party to any actual or proposed loan, lease or other Contract or transaction with or binding upon any Green Entity or owns or has any interest in any of their respective properties or assets (any Contract, transaction or other arrangement of the type described in this sentence, a Green Related Party Transaction ).
Section 5.23 Investment Company . No Green Entity is, or on the Closing Date will be, required to register as an investment company under the Investment Company Act of 1940, as amended.
Section 5.24 Regulatory Matters .
(a) Currently and for the past five years, no Green Entity or, to Green Energys knowledge, any of their Affiliates, nor any of their directors, managers or officers are or have been suspended or debarred from doing business with any Governmental Entity or is or has been the subject of a finding of noncompliance, non-responsibility or ineligibility for contracting with any Governmental Entity; and (ii) to Green Energys knowledge, the Green Entities cost accounting systems are in material compliance with applicable Law.
(b) Currently and for the past five years, no Green Entity nor, to the Green Energys knowledge, any of their respective directors, managers, officers, agents or employees (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payment or unlawfully offered anything of value to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns, (iii) made any other unlawful payment, or (iv) violated any applicable money laundering or anti-terrorism Law or regulation, nor have any of them otherwise taken any action which would reasonably cause the Green Entities to be in violation of the FCPA or any applicable Law of similar effect.
(c) Currently and for the past five years, the Green Entities have complied with all material aspects of applicable statutory and regulatory requirements relating to anti-money laundering, export controls, import controls, and trade and economic sanctions, including, in each case to the extent applicable and as amended (except to the extent inconsistent with U.S. law), Trade Control Laws.
(d) To Green Energys knowledge, no Proceeding by or before any Governmental Entity involving any Green Entity, or any of their respective directors, officers, employees, or agents, or anyone acting on behalf of any of the Green Entities, with respect to any applicable Trade Control Laws is pending or, to the knowledge of Green Energy, threatened. For the past five years, no civil or criminal penalties have been imposed on any Green Entity with respect to violations of any applicable Trade Control Laws.
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(e) Except as would not constitute a Green Material Adverse Effect, no Green Entity and none of their directors, officers, employees or agents is a person that is, or is acting under the direction of, on behalf of or for the benefit of a person that is, or is owned or controlled by a person that is, or has transacted nor is transacting any business with or for the benefit of (i) a Prohibited Person, (ii) located, organized or ordinarily resident in a country or territory that is, or whose government is, the target of comprehensive trade sanctions under U.S. Trade Control Laws, including, Crimea, Cuba, Iran, North Korea, and Syria, (iii) otherwise a party with which transactions are prohibited under U.S. Trade Control Laws, or (iv) otherwise engaged in any activities that would subject it, or any affiliated company, to affirmative SEC disclosure obligations pursuant to Section 13 of the Exchange Act, as amended by Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012.
(f) The Green Entities have developed and implemented an anti-corruption compliance program which includes corporate policies and procedures designed to ensure compliance with the FCPA.
Section 5.25 Debt Commitment . Green Energy has delivered to Sailfish a complete and correct copy of the Debt Commitment Letter pursuant to which the lender parties thereto have agreed, subject to the terms and conditions thereof, to lend the amounts set forth therein to Green Production and to use commercially reasonable efforts to assemble a syndicate of financial institutions to provide additional lending amounts to Green Production. As of the date of this Agreement, the Debt Commitment Letter is in full force and effect and constitutes the legal, valid and binding obligation of Green Production and, to the knowledge of Green Energy, the other parties thereto.
Section 5.26 No Additional Representations .
(a) Except for the Green Group Representations, neither the Green Signing Parties nor any other Person has made or makes any express or implied representation or warranty with respect to any Green Entity or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) in connection with this Agreement or the Transactions, and the Green Signing Parties hereby disclaim any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Green Signing Parties nor any other Person makes or has made any representation or warranty to Sailfish or any of its Affiliates or Representatives with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to any of the Green Entities or their respective businesses; or (ii) except for the Green Group Representations, any oral or written information presented to Sailfish or any of their respective Affiliates or Representatives in the course of their due diligence investigation of the Green Entities, the negotiation of this Agreement or in the course of the Transactions.
(b) Notwithstanding anything contained in this Agreement to the contrary, the Green Signing Parties acknowledge and agree that neither Sailfish nor any other Person has made or is making any representations or warranties relating to Sailfish or its Subsidiaries whatsoever, express or implied, beyond the Sailfish Group Representations, including any implied representation or warranty as to the accuracy or completeness of any information regarding Sailfish and its Subsidiaries furnished or made available to the Green Signing Parties or any of their Representatives, and that the Green Signing Parties have not relied on any representation or warranty other than the Sailfish Group Representations. Without limiting the generality of the foregoing, the Green Signing Parties acknowledge that no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to the Green Signing Parties or any of their Representatives (including in certain data rooms, virtual data rooms, management presentations or in any other form in expectation of, or in connection with, the Transactions).
CONDUCT OF THE BUSINESS
Section 6.01 Conduct of Sailfish and the Sailfish Subsidiaries Pending the Transactions . Except as set forth in the corresponding subsection of Section 6.01 of the Sailfish Disclosure Letter, as expressly provided by this
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Agreement, as may be required by applicable Law, or otherwise consented to by Green Energy in writing (which consent shall not be unreasonably withheld, delayed or conditioned) Sailfish covenants and agrees that:
(a) until the earlier of the Effective Time and the termination of this Agreement pursuant to Article 9 , it shall, and shall cause each of its Subsidiaries to (i) conduct its businesses in the ordinary course consistent with past practice and, subject to Section 6.01(b)(ix) , shall use reasonable best efforts to preserve intact its present business organization, retain Sailfishs current officers and key employees, and preserve its relationships with Governmental Entities, employees and its key customers and suppliers, (ii) comply, in all material respects, with all applicable Law, and (iii) not voluntarily resign, transfer or relinquish any right as operator of any of their Oil and Gas Properties; and
(b) without limiting the generality of the foregoing, until the earlier of the Effective Time and the termination of this Agreement pursuant to Article 9, Sailfish shall not, and shall cause its Subsidiaries not to:
(i) (A) declare, authorize, establish a record date for, set aside or pay any dividends on, or make any other distribution (in cash, stock or other equity, property or a combination thereof) in respect of any outstanding capital stock of, or other Equity Interests in, Sailfish or its Subsidiaries except for dividends and distributions by a direct or indirect wholly owned Subsidiary of Sailfish to Sailfish or a direct or indirect wholly owned Subsidiary of Sailfish; (B) split, combine or reclassify any capital stock of, or other Equity Interests in, Sailfish or any of its Subsidiaries; or (C) reclassify, split, combine, subdivide or purchase, redeem or otherwise acquire or amend the terms of, or offer to reclassify, split, combine, subdivide or purchase, redeem or otherwise acquire or amend the terms of, directly or indirectly, any capital stock of, or other Equity Interests in, Sailfish, except as required by the terms of any existing capital stock or Equity Interest of a Sailfish Subsidiary or as required by any existing Sailfish Benefit Plan, in each case, as such terms, plans or agreements are in effect as of the date hereof;
(ii) transfer, dispose of, pledge, lease, license, guarantee, offer, issue, deliver, grant or sell, or authorize or propose to transfer, dispose of, pledge, lease, license, guarantee, offer, issue, deliver, grant or sell, any capital stock of, or other Equity Interests in, Sailfish or any of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or Equity Interests, other than: (A) the delivery of Sailfish Common Stock upon the expiration of any restrictions on any restricted stock or the vesting of any restricted stock units, in each case that are outstanding on the date hereof and granted under a Sailfish Stock Plan in accordance with the applicable terms thereof, (B) issuances by a wholly-owned Subsidiary of Sailfish of such Subsidiarys capital stock or other Equity Interests to Sailfish or any other wholly-owned Subsidiary of Sailfish and (C) withholding of Sailfish Common Stock to satisfy any Tax withholding obligations with respect to awards granted pursuant to a Sailfish Stock Plan that are outstanding on the date of this Agreement in accordance with the applicable terms thereof;
(iii) amend or propose to amend the Organizational Documents of Sailfish or any of its Subsidiaries;
(iv) (A) merge, consolidate, combine or amalgamate with any Person other than another wholly-owned Subsidiary of Sailfish, (B) acquire or agree to acquire (including by merging or consolidating with, purchasing any Equity Interest in or the assets of, licensing, or by any other manner), any business or any corporation, partnership, association or other business organization or division thereof, in each case other than (1) pursuant to an agreement of Sailfish or any of its Subsidiaries in effect on the date of this Agreement and listed on Section 6.01(b)(iv) of the Sailfish Disclosure Letter and (2) acquisitions for which the consideration (including all potentially payable earn-out condition or any other obligation to potentially pay consideration in the future) is no more than $10,000,000 individually and $15,000,000 in the aggregate or (C) make any loans, advances or capital contributions to, or investments in, any Person (other than Sailfish or any of its wholly-owned Subsidiaries), except for (1) loans, advances or capital contributions in the form of trade credit granted to customers in the
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ordinary course of business consistent with past practices, and (2) capital contributions to, or investments in, any Person not in excess of $10,000,000 individually or $15,000,000 in the aggregate;
(v) sell, assign, license, transfer, abandon, lease or otherwise dispose of, or agree to sell, assign, license, transfer, abandon, lease or otherwise dispose of, any of its assets or properties, other than (A) pursuant to an agreement of Sailfish or any of its Subsidiaries in effect on the date of this Agreement and listed on Section 6.01(b)(v) of the Sailfish Disclosure Letter, (B) sales, leases or dispositions (1) for which the consideration is $5,000,000 or less or (2) of obsolete equipment made in the ordinary course of business that are not material to the business of Sailfish and its Subsidiaries or (C) sales of Hydrocarbons in the ordinary course of business consistent with past practices;
(vi) adopt, consummate, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Sailfish or any of its Subsidiaries;
(vii) change in any material respect its accounting principles, practices or methods (or underlying assumptions) or annual accounting period, except as required by GAAP or any Governmental Entity or applicable Law;
(viii) except as otherwise done pursuant to an acquisition permitted by Section 6.01(b)(iv) , (A) make or rescind any material election relating to Taxes (including any election for any joint venture, partnership, limited liability company or other investment where Sailfish has the authority to make such binding election, but excluding any election that must be made periodically and consistent with past practice), (B) settle or compromise any material Proceeding relating to Taxes, except where the amount of such settlement or compromise does not exceed the greater of 125% of the reserve for such matter on the Sailfish Financial Statements or $5,000,000, or (C) change in any material respects any of its methods of reporting income or deductions for income Tax purposes from those employed in the preparation of its income Tax Returns that have been filed for prior taxable years;
(ix) except as required by applicable Law or the existing terms of any Sailfish Benefit Plan in effect on the date hereof and made available to Green Energy prior to the date hereof (A) grant any increases in the compensation (including bonuses) or benefits payable or to become payable to any current or former directors, officers or employees of Sailfish or its Subsidiaries, except for increases in the compensation or benefits of such employees made in the ordinary course of business consistent with past practice who are not officers or directors of Sailfish or its Subsidiaries and whose annual cash compensation would not exceed $250,000 after giving effect to any such increase; (B) pay or agree to pay to any director, officer or employee of Sailfish, whether past or present, any pension, retirement allowance or other employee benefit; (C) enter into any new, or materially amend or terminate any existing, employment, retention, change in control or severance or termination agreement with any director, officer or employee; (D) establish, adopt or become obligated under any collective bargaining agreement or any Employee Benefit Plan that was not in existence prior to the date of this Agreement, or amend or terminate any such plan or arrangement in existence on the date of this Agreement; (E) fund (or agree to fund) any compensation or benefits under any Sailfish Benefit Plan, including through a rabbi or similar trust; (F) hire any new employee or independent contractor with an annualized salary or fee of $250,000 or more or terminate the employment or service relationship of any employee or independent contractor with an annualized salary or fee of $250,000 or more, other than for cause; or (G) take any action to accelerate the vesting or payment of compensation or benefits under a Sailfish Benefit Plan or otherwise;
(x) incur, create or assume any Indebtedness or guarantee any such Indebtedness of another Person or create any Encumbrances on any property or assets of Sailfish or any of its Subsidiaries in connection with any Indebtedness thereof, other than Permitted Encumbrances; provided , however , that the foregoing shall not restrict the (A) incurrence of Indebtedness (1) in the ordinary course under existing credit facilities, subject to the limitations set forth on Section 6.01(b)(x)(A)(1) of the Sailfish Disclosure Letter, or (2) by Sailfish that is owed to any wholly-owned Subsidiary of Sailfish or by any
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Subsidiary of Sailfish that is owed to Sailfish or a wholly-owned Subsidiary of Sailfish, or (B) the creation of any Encumbrances securing any Indebtedness permitted to be incurred by clause (A) above;
(xi) (A)(i) enter into any Contract that would be of a type described by clause (xxi) or (xxii) of the defined term Sailfish Contract or (ii) other than in the ordinary course of business consistent with past practice enter into any Contract that would constitute a Sailfish Contract (other than a Contract described by clause (xxi) or (xxii) of the defined term Sailfish Contract, which are the subject of clause (i) of this Section 6.01(b)(xi)(A) ) if in effect on the date hereof, or (B) modify, amend, terminate or assign, waive or assign any material right or benefit under or consent to the termination of, any Sailfish Contract;
(xii) waive, release, discharge, pay, compromise, settle or offer or propose to settle, any Proceeding, or agree to the entry of any order or ruling, involving the payment of monetary damages by Sailfish or any of its Subsidiaries of any amount exceeding $1,000,000 in the aggregate, including costs or revenue reductions associated therewith; provided , however , that neither Sailfish nor any of its Subsidiaries shall settle or compromise any Proceeding, or agree to the entry of any order or ruling, if such settlement, compromise, order or ruling (A) involves a material conduct remedy or material injunctive or similar relief, (B) involves an admission of criminal wrongdoing by Sailfish or any of its Subsidiaries or (C) has a restrictive impact on the business of Sailfish or any of its Subsidiaries in any material respect;
(xiii) (A) authorize or make capital expenditures that are in the aggregate greater than 125% of the aggregate amount of capital expenditures scheduled to be made in Sailfishs capital expenditure budget for the period indicated as set forth in Section 6.01(b)(xiii) of the Sailfish Disclosure Letter ( Sailfish Budget ), except for capital expenditures to repair damage resulting from insured casualty events where there is a reasonable basis for a claim of insurance or made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or otherwise or (B) authorize or commit to make capital expenditures that are not contemplated in the Sailfish Budget that will individually require expenditures of greater than $10,000,000;
(xiv) fail to use reasonable best efforts to maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses as is maintained by it at present;
(xv) take any action that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions;
(xvi) enter into or amend any Sailfish Related Party Transaction;
(xvii) adopt any shareholder rights plan;
(xviii) enter into any new line of business;
(xix) fail to use reasonable best efforts to maintain all bonds, letters of credit, and other similar credit support instruments required with or for the benefit of any Governmental Entity or other third Person with respect to its Oil and Gas Properties;
(xx) implement any employee layoffs that could implicate the Worker Adjustment and Retraining Notification Act or any similar applicable Law (collectively, the WARN Act ); or
(xxi) agree or commit to take any action that is prohibited by this Section 6.01(b) .
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Section 6.02 Conduct of the Green Entities Pending the Transactions . Except as set forth in the corresponding subsection of Section 6.02 of the Green Disclosure Letter, as expressly provided by this Agreement, as is necessary to effect or incidental to the Green Reorganization, as may be required by applicable Law, or as otherwise consented to by Sailfish in writing (which consent shall not be unreasonably withheld, delayed or conditioned) the Green Signing Parties covenant and agree that:
(a) until the earlier of the Effective Time and the termination of this Agreement pursuant to Article 9 , each of them shall, and shall cause each other Green Entity to (i) conduct its businesses in the ordinary course consistent with past practice and, subject to Section 6.02(b)(ix) , shall use reasonable best efforts to preserve intact its present business organization, retain each Green Entitys current officers and key employees, and preserve their relationships with Governmental Entities, employees and its key customers and suppliers, (ii) comply, in all material respects, with all applicable Law, and (iii) not voluntarily resign, transfer or relinquish any right as operator of any of its Oil and Gas Properties; and
(b) without limiting the generality of the foregoing, until the earlier of the Effective Time and the termination of this Agreement pursuant to Article 9 , each Green Signing Party shall not, and shall cause the other Green Entities not to:
(i) (A) declare, authorize, establish a record date for, set aside or pay any dividends on, or make any other distribution (in cash, stock or other equity, property or a combination thereof) in respect of any outstanding capital stock of, or other Equity Interests in, any Green Entity except for dividends and distributions by a direct or indirect wholly owned Subsidiary of Green Energy to Green Energy or another direct or indirect wholly owned Subsidiary of Green Energy; (B) split, combine or reclassify any capital stock of, or other Equity Interests in, any Green Entity; or (C) reclassify, split, combine, subdivide or purchase, redeem or otherwise acquire or amend the terms of, or offer to reclassify, split, combine, subdivide or purchase, redeem or otherwise acquire or amend the terms of, directly or indirectly, any capital stock of, or other Equity Interests in, any Green Entity, except as required by the terms of any existing Equity Interests of any Subsidiary of Green Energy, as such terms are in effect as of the date hereof;
(ii) transfer, dispose of, pledge, lease, license, guarantee, offer, issue, deliver, grant or sell, or authorize or propose to transfer, dispose of, pledge, lease, license, guarantee, offer, issue, deliver, grant or sell, any Equity Interests in, any Green Entity or any securities convertible into, or any rights, warrants or options to acquire, any such Equity Interests, other than: issuances by a wholly-owned Subsidiary of Green Energy of such Green Subsidiarys Equity Interests to Green Energy or any other wholly-owned Green Subsidiary;
(iii) amend or propose to amend the Organizational Documents of any Green Entity;
(iv) (A) merge, consolidate, combine or amalgamate with any Person other than another wholly-owned Subsidiary of Green Energy, (B) acquire or agree to acquire (including by merging or consolidating with, purchasing any Equity Interests in or the assets of, licensing, or by any other manner), any business or any corporation, partnership, association or other business organization or division thereof, in each case other than (1) pursuant to an agreement of any Green Entity in effect on the date of this Agreement and listed on Section 5.19 of the Green Disclosure Letter and (2) acquisitions for which the consideration (including all potentially payable earn-out condition or any other obligation to potentially pay consideration in the future) is no more than $10,000,000 individually and $15,000,000 in the aggregate or (C) make any loans, advances or capital contributions to, or investments in, any Person (other than any Green Entity), except for (1) loans, advances or capital contributions in the form of trade credit granted to customers in the ordinary course of business consistent with past practices, and (2) capital contributions to, or investments in, any Person not in excess of $10,000,000 individually or $15,000,000 in the aggregate;
(v) sell, assign, license, transfer, abandon, lease or otherwise dispose of, or agree to sell, assign, license, transfer, abandon, lease or otherwise dispose of, any of its assets or properties, other than
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(A) pursuant to an agreement of any Green Entity in effect on the date of this Agreement and listed on Section 5.20 of the Green Disclosure Letter, (B) sales, leases or dispositions (1) for which the consideration is $5,000,000 or less or (2) of obsolete equipment made in the ordinary course of business and that are not material to the business of the Green Entities or (C) sales of Hydrocarbons in the ordinary course of business consistent with past practices;
(vi) adopt, consummate, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of any Green Entity;
(vii) change in any material respect its accounting principles, practices or methods (or underlying assumptions) or annual accounting period, except as required by GAAP or any Governmental Entity or applicable Law;
(viii) except as otherwise done pursuant to an acquisition permitted by Section 6.02(b)(iv) , (A) make or rescind any material election relating to Taxes (including any election for any joint venture, partnership, limited liability company or other investment where Green Energy has the authority to make such binding election, but excluding any election that must be made periodically and consistent with past practice), (B) settle or compromise any material Proceeding relating to Taxes, except where the amount of such settlement or compromise does not exceed the greater of 125% of the reserve for such matter on the Green Financial Statements or $5,000,000, or (C) change in any material respects any of its methods of reporting income or deductions for income Tax purposes from those employed in the preparation of its income Tax Returns that have been filed for prior taxable years;
(ix) except as required by applicable Law or the existing terms of any Green Benefit Plan in effect on the date hereof and made available to Sailfish prior to the date hereof, (A) grant any increases in the compensation (including bonuses) or benefits payable or to become payable to any current or former directors, officers or employees of any Green Entity except for increases in the compensation or benefits of such employees made in the ordinary course of business consistent with past practice who are not officers or directors of the Green Entities and whose annual cash compensation would not exceed $250,000 after giving effect to any such increase; (B) pay or agree to pay to any director, officer or employee of any Green Entity, whether past or present, any pension, retirement allowance or other employee benefit; (C) enter into any new, or materially amend or terminate any existing, employment, retention, change in control or severance or termination agreement with any director, officer or employee; (D) establish, adopt or become obligated under any collective bargaining agreement or any Employee Benefit Plan that was not in existence prior to the date of this Agreement, or amend or terminate any such plan or arrangement in existence on the date of this Agreement; (E) fund (or agree to fund) any compensation or benefits under any Green Benefit Plan, including through a rabbi or similar trust; (F) hire any new employee or independent contractor with an annualized salary or fee of $250,000 or more, or terminate the employment or service relationship of any employee or independent contractor with an annualized salary or fee of $250,000 or more, other than for cause; or (G) take any action to accelerate the vesting or payment of compensation or benefits under a Green Benefit Plan or otherwise;
(x) incur, create or assume any Indebtedness or guarantee any such Indebtedness of another Person or create any Encumbrances on any property or assets of any Green Entity in connection with any Indebtedness thereof, other than Permitted Encumbrances; provided , however , that the foregoing shall not restrict the (A) incurrence of Indebtedness (1) in the ordinary course under existing credit facilities, subject to the limitations set forth on Section 6.02(b)(x)(A)(1) of the Green Disclosure Letter or (2) by Green Energy that is owed to any wholly-owned Subsidiary of Green Energy or by any Subsidiary of Green Energy that is owed to Green Energy or a wholly-owned Subsidiary of Green Energy, or (B) the creation of any Encumbrances securing any Indebtedness permitted to be incurred by clause (A) above;
(xi) (A) (i) enter into any Contract that would be of a type described by clause (xvi) or (xvii) of the defined term Green Contract or (ii) other than in the ordinary course of business consistent with
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past practice enter into any Contract that would constitute a Green Contract (other than a Contract described by clause (xvi) or (xvii) of the defined term Green Contract, which are the subject of clause (i) of this Section 6.02(b)(xi)(A) ) if in effect on the date hereof, or (B) modify, amend, terminate or assign, waive or assign any material right or benefit under or consent to the termination of, any Green Contract;
(xii) waive, release, discharge, pay, compromise, settle or offer or propose to settle, any Proceeding, or agree to the entry of any order or ruling, involving the payment of monetary damages by any Green Entity of any amount exceeding $1,000,000 in the aggregate, including costs or revenue reductions associated therewith; provided , however , that no Green Entity shall settle or compromise any Proceeding, or agree to the entry of any order or ruling, if such settlement, compromise, order or ruling (A) involves a material conduct remedy or material injunctive or similar relief, (B) involves an admission of criminal wrongdoing by any Green Entity or (C) has a restrictive impact on the business of any Green Entity in any material respect;
(xiii) (A) authorize or make capital expenditures that are in the aggregate greater than 125% of the aggregate amount of capital expenditures scheduled to be made in the capital expenditure budget for the period indicated as set forth in Section 6.02(b)(xiii) of the Green Disclosure Letter ( Green Budget ), except for capital expenditures to repair damage resulting from insured casualty events where there is a reasonable basis for a claim of insurance or made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or otherwise or (B) authorize or commit to make capital expenditures that are not contemplated in the Green Budget that will individually require expenditures of greater than $10,000,000;
(xiv) fail to use reasonable best efforts to maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses as is maintained by it at present;
(xv) take any action that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions;
(xvi) enter into or amend any Green Related Party Transaction, or make any payment or incur any liability or obligation under any Green Related Party Transaction;
(xvii) enter into any new line of business;
(xviii) fail to use reasonable best efforts to maintain all bonds, letters of credit, and other similar credit support instruments required with or for the benefit of any Governmental Entity or other third Person with respect to its Oil and Gas Properties;
(xix) implement any employee layoffs that could implicate the WARN Act; or
(xx) agree or commit to take any action that is prohibited by this Section 6.02(b) .
ADDITIONAL AGREEMENTS
Section 7.01 Preparation of Combined Consent Statement/Prospectus; Stockholders Meeting .
(a) As promptly as reasonably practicable following the date of this Agreement, and in no event later than 20 Business Days after the date of this Agreement, Sailfish and the Green Signing Parties shall cooperate in preparing, and Sailfish shall cause to be prepared and filed with the SEC, the Combined Consent Statement/Prospectus in preliminary form; provided, however, that the obligation set forth in this sentence shall not be breached if the Combined Consent Statement/Prospectus is not filed within such 20 Business Day period if Sailfish continues to work in good faith to file the Combined Consent Statement/Prospectus as soon as reasonably practicable thereafter. Each of Sailfish and the Green Signing Parties shall
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use its reasonable best efforts to respond as promptly as reasonably practicable to any comments received from the SEC with respect to the Combined Consent Statement/Prospectus and/or the Registration Statement. Sailfish shall promptly notify the other Parties upon the receipt of any oral or written comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Combined Consent Statement/Prospectus or the Registration Statement and shall provide the other Parties with copies of all written correspondence and a summary of all oral communications between it, on the one hand, and the SEC and its staff, on the other hand, relating to the Combined Consent Statement/Prospectus or the Registration Statement. Sailfish shall cooperate and provide the other Parties with a reasonable opportunity to review and comment, which comments Sailfish shall consider implementing in good faith, on any correspondence (including responses to SEC comments), amendments or supplements to the Combined Consent Statement/Prospectus or the Registration Statement prior to filing with the SEC, and shall provide to the others a copy of all such filings made with the SEC. Each Party shall be given an opportunity to participate in any discussions or meetings with the SEC.
(b) As promptly as reasonably practicable following the date of this Agreement, and in no event later than 20 Business Days after the date of this Agreement, New Sailfish shall file with the SEC the Registration Statement containing the Combined Consent Statement/Prospectus; provided, however, that the obligation set forth in this sentence shall not be breached if the Registration Statement is not filed within such 20 Business Day period if Sailfish continues to work in good faith to file the Registration Statement as soon as reasonably practicable thereafter. New Sailfish shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as necessary to consummate the Merger and the other Transactions. New Sailfish shall take any action (other than filing a general consent to service of process in any jurisdiction) required to be taken under any applicable state securities laws in connection with the issuance of shares of New Sailfish Common Stock and Sailfish shall furnish all information concerning Sailfish and the holders of shares of Sailfish Common Stock as may be reasonably requested in connection with any such action. Promptly after the effectiveness of the Registration Statement, Sailfish and New Sailfish shall cause the Combined Consent Statement/Prospectus to be mailed to Sailfishs stockholders, and if necessary, after the definitive Combined Consent Statement/Prospectus has been mailed, promptly circulate amended, supplemented or supplemental proxy materials and, if required in connection therewith, re-solicit proxies or written consents, as applicable. If at any time prior to the Closing, the officers and directors of Green Energy or Sailfish discover any statement which, in light of the circumstances under which it is made, is false or misleading with respect to a material fact or omits to state a material fact necessary to make the statements made in the Combined Consent Statement/Prospectus or Registration Statement not misleading, then such Party shall immediately notify the other Party of such misstatements or omissions. Sailfish shall advise Green Energy and Green Energy shall advise Sailfish, as applicable, promptly after it receives notice thereof, of the time when the Registration Statement becomes effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the shares of New Sailfish Common Stock for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Combined Consent Statement/Prospectus or the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information.
(c) The Green Signing Parties will promptly furnish to Sailfish such data and information relating to the Green Entities as Sailfish may reasonably request for the purpose of including such data and information in the Combined Consent Statement/Prospectus and the Registration Statement, and any amendments or supplements thereto.
(d) Sailfish shall (i) in accordance with Sailfishs certificate of incorporation and bylaws and applicable Law, take all actions to establish a record date (which will be as soon as reasonably practicable after the date upon which the Registration Statement is declared effective) for the purpose of determining Sailfish stockholders entitled to deliver written consents and to otherwise solicit and secure the Sailfish Stockholder Approval via written consent, (ii) in accordance with Sailfishs certificate of incorporation and bylaws and applicable Law, distribute to Sailfishs stockholders the Combined Consent Statement/Prospectus, which
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shall include a form of consent that may be executed by the stockholders of Sailfish in connection with the Sailfish Stockholder Approval, as soon as reasonably practicable after the date upon which the Registration Statement becomes effective and (iii) except as provided in Section 7.05 , use its reasonable best efforts to solicit from stockholders of Sailfish written consents in favor of approval of the Transactions and to take all other action necessary or advisable to secure the Sailfish Stockholder Approval; provided , however , that in the event of a Change of Recommendation, in lieu of seeking the Sailfish Stockholder Approval by written consent, Sailfish shall, in accordance with Sailfishs certificate of incorporation and bylaws and applicable Law, (i) promptly take all actions to establish a record date for, duly call, give notice of, convene and hold a special meeting of its stockholders (the Special Meeting ), for the purpose of voting on the Sailfish Stockholder Approval, (ii) in accordance with Sailfishs certificate of incorporation and bylaws and applicable Law, distribute to Sailfishs stockholders the Combined Consent Statement/Prospectus, which shall include a proxy statement and form of proxy card in connection with the Sailfish Stockholder Approval, as soon as reasonably practicable after the date upon which the Registration Statement becomes effective and (iii) except as provided in Section 7.05 , use its reasonable best efforts to solicit from stockholders of Sailfish proxies with respect to the Transactions. If necessary, after the definitive Combined Consent Statement/Prospectus has been mailed, Sailfish shall promptly circulate amended, supplemented or supplemental proxy materials and, if required in connection therewith, re-solicit proxies. Without limiting the generality of the foregoing but subject to Section 9.03 , Sailfishs obligations pursuant to the first two sentences of this Section 7.01(d) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to Sailfish of any Competing Proposal or (ii) any Change of Recommendation. Once the Special Meeting has been called and noticed, Sailfish shall not postpone or adjourn the Special Meeting without the consent of Green Energy (which consent shall not be unreasonably withheld or delayed) (other than to the extent necessary (i) for the absence of a quorum, or (ii) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Sailfish Board has determined in good faith after consultation with outside counsel is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by Sailfishs stockholders prior to the Special Meeting; provided that in the event that the Special Meeting is delayed to a date after the End Date as a result of either (i) or (ii) of this sentence, then Green Energy may extend the End Date to the fifth Business Day after such date); provided that Sailfish shall, if requested by Green Energy, adjourn or postpone convening the Special Meeting (but in no event for more than 30 days from the date that the Special Meeting was originally scheduled to convene) (i) for the absence of quorum or (ii) to allow additional time to solicit additional proxies if necessary in order to obtain the Sailfish Stockholder Approval. Notwithstanding the foregoing, Sailfish may adjourn or postpone the Special Meeting to a date no later than the second Business Day after the expiration of any time period contemplated by Section 7.05(e)(iii)(B) or (e)(iv)(B) . Except to the extent permitted by Section 7.05 , (i) the Combined Consent Statement/Prospectus shall (x) state that the Sailfish Board has determined that this Agreement and the Transactions are advisable and in the best interests of Sailfish and (y) include the Sailfish Board Recommendation and (ii) neither the Sailfish Board nor any committee thereof shall withdraw, amend or modify, or publicly propose or resolve to withdraw, amend or modify, in a manner adverse to the Green Signing Parties, the Sailfish Board Recommendation.
Section 7.02 Employee Benefit Matters .
(a) With respect to each employee of Sailfish or any of the Sailfish Subsidiaries who is designated as an employee by Sailfish or any Sailfish Subsidiary immediately prior to the Closing Date, including those on vacation, sick leave, maternity leave, military service, disability, Family and Medical Leave Act leave or other approved leave of absence (each, a Continuing Employee ), the Green Entities shall, or shall cause Old Sailfish LLC or one of its Subsidiaries to, (i) for the portion of the 12-month period following the Closing Date in which such Continuing Employee remains employed by Old Sailfish LLC, any of its Subsidiaries, or any of the Green Entities, provide an annualized base salary or base wage rate, as applicable, that is no less favorable than that in effect for such Continuing Employee immediately prior to the Closing Date; (ii) for the portion of the 12-month period following the Closing Date in which such
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Continuing Employee remains employed by Old Sailfish LLC, any of its Subsidiaries, or any of the Green Entities, provide incentive compensation opportunities that are no less favorable than the incentive compensation opportunities provided to similarly situated employees of the Green Entities, New Sailfish or any of their respective subsidiaries; and (iii) for the portion of the period beginning on the Closing Date and ending on May 1, 2018 in which such Continuing Employee remains employed by Old Sailfish LLC, any of its Subsidiaries, or any of the Green Entities, make available a package of employee benefits (excluding equity-based compensation, defined benefits pursuant to qualified and nonqualified retirement plans, retiree health and welfare arrangements other than retiree medical benefits, perquisites and fringe benefits) that is no less favorable, in the aggregate, to the package of employee benefits made available to such Continuing Employee by Sailfish and the Sailfish Subsidiaries immediately prior to the Closing Date.
(b) Effective from and after the Closing Date, to the extent a Continuing Employee becomes eligible to participate in any Green Benefit Plan or any new Employee Benefit Plan sponsored or maintained by New Sailfish or any of its Subsidiaries or Affiliates (each, a New Benefit Plan ) (other than any equity incentive compensation plan, program or arrangement), for purposes of determining eligibility to participate, benefit accrual, level of benefits and vesting, such Continuing Employees service that was recognized for similar purposes under a corresponding Sailfish Benefit Plan shall be treated as service under such Green Benefit Plan or New Benefit Plan, as applicable.
(c) Effective from and after the Closing Date, for purposes of each Employee Benefit Plan providing medical, dental, prescription drug, vision and/or other welfare benefits in which the Continuing Employees are eligible to participate following the Closing Date, if applicable and to the extent permitted by applicable Law, the Green Entities shall use commercially reasonable efforts to cause such Employee Benefit Plan to (i) waive any limitation on health and welfare coverage of any Continuing Employee and his or her eligible spouse and eligible dependents due to pre-existing conditions or waiting periods, active employment requirements and requirements to show evidence of good health under such Employee Benefit Plan to the extent such conditions, periods or requirements are satisfied or waived (or otherwise inapplicable) under the corresponding Sailfish Benefit Plan immediately prior to the Closing Date and (ii) cause each such Employee Benefit Plan to provide each Continuing Employee with credit for all co-payments, deductibles and out-of-pocket limits and other fees paid by such Continuing Employee and his or her covered dependents prior to the Closing Date and in the same plan year in which the Closing Date occurs towards satisfying the applicable co-payments, deductibles, out-of-pocket limits or other fees under such Employee Benefit Plan for the remainder of the calendar year in which the Closing Date occurs.
(d) From and after the Closing Date, the Green Entities shall, or shall cause Old Sailfish LLC or one of its Subsidiaries to, assume and honor, in accordance with its terms, each Sailfish Benefit Plan and all obligations thereunder, including any rights or benefits arising as a result of the consummation of the Transactions (either alone or in combination with any other event, including termination of employment).
(e) The Green Entities hereby agree and acknowledge that the consummation of the Transactions constitutes a change of control or a change in control, as the case may be, to the extent applicable under those Sailfish Benefit Plans set forth on Section 7.02(e) of the Sailfish Disclosure Letter.
(f) The Green Entities shall, or shall cause Old Sailfish LLC or one of its Subsidiaries to, provide to each Continuing Employee who experiences an Involuntary Termination (as defined in the Stone Energy Corporation Executive Severance Plan, as in effect immediately prior to the Closing Date (the Executive Severance Plan ) or in the Stone Energy Corporation Employee Severance Plan, as in effect immediately prior to the Closing Date (the Severance Plan ), as applicable) during the 12-month period immediately following the Closing Date, with the applicable severance payments, rights and benefits provided for under the Executive Severance Plan or the Severance Plan, as applicable.
(g) In the event that the Closing Date occurs after December 31, 2017, but prior to March 15, 2018, Sailfish or one of the Sailfish Subsidiaries, as applicable, shall, in consultation with the Green Entities, be permitted to determine the amounts earned under the Stone Energy Corporation 2017 Annual Incentive Compensation Plan (the Annual Incentive Plan ) in respect of the 2017 calendar year and provide for the
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payment of bonuses thereunder to the Continuing Employees on or prior to the Closing Date; provided, however, that such payments under the Annual Incentive Plan shall be based on actual performance determined by the Sailfish Board or the applicable committee thereof in good faith and in accordance with the criteria set forth in the Annual Incentive Plan (including any exhibits thereto).
(h) The Parties agree to the matters set forth on Section 7.02(h) of the Sailfish Disclosure Letter.
(i) The provisions of this Section 7.02 are solely for the benefit of the Parties hereto and nothing in this Section 7.02 , express or implied, shall confer upon any employee (including any Continuing Employee), or legal representative or beneficiary thereof, any rights or remedies, including any right to employment or continued employment for any specified period, or compensation or benefits of any nature or kind whatsoever under this Agreement. Nothing in this Section 7.02 , express or implied, shall (i) be deemed to create any Employee Benefit Plan or amend any Employee Benefit Plan, (ii) be construed to prevent the Green Entities, Sailfish, any Sailfish Subsidiary or any of their respective Affiliates from terminating or modifying to any extent or in any respect any Employee Benefit Plan that they may establish or maintain in accordance with its terms, (iii) require the Green Entities, Sailfish, or any Sailfish Subsidiary to continue to employ or retain the services of any particular employee or other service provider for any period after the Closing, (iv) create a right in any employee to employment with the Green Entities, Sailfish, or any Sailfish Subsidiary, or (v) limit the right of the Green Entities, Sailfish, or any Sailfish Subsidiary to terminate the employment of any employee following Closing.
(a) For U.S. federal income Tax purposes (and for purposes of any applicable state, local or foreign Tax that follows the U.S. federal income Tax treatment), the parties intend to treat the Transactions described in this Agreement as occurring as follows and in the following order:
(i) the Green Reorganization steps described in subsections (a) and (b) of Section 2.01 will be treated as tax-free distributions under Section 731 of the Code;
(ii) the Green Reorganization steps described in subsections (c) through (h) of Section 2.01 will be treated as nonrecognition transactions under Section 721 of the Code (except to the extent subject to withholding under FIRPTA);
(iii) the Green Reorganization steps described in subsections (i) through (k) of Section 2.01 , collectively, will be treated as a non-taxable partnership continuation (with Green Production treated as a continuation of Green Energy) under Section 708, and the individual steps will be ignored;
(iv) the Merger will be treated as a tax-free reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code, and, together with the Green Contribution and the Green Debt Exchange, as part of a tax-deferred contribution under Section 351 of the Code;
(v) the New Sailfish Contribution and Conversion will be treated as a tax-free reorganization under Section 368(a)(1)(F) of the Code and as a mere change within a larger transaction, as permitted under Treasury Regulation Section 1.368-2(m)(3)(ii), with New Sailfish Sub being treated as a continuation of Sailfish following the Conversion;
(vi) the Green Production Contribution will be treated, together with the Merger, the Green Blocker Contributions and the Green Debt Exchange, as part of a tax-deferred contribution under Section 351 of the Code;
(vii) the Intermediate Blocker Contributions will be treated as nonrecognition transactions under Section 721 of the Code;
(viii) the Green Blocker Contributions will be treated, together with the Merger, the Green Production Contribution and the Green Debt Exchange, as part of a tax-deferred contribution under Section 351 of the Code;
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(ix) the Old Sailfish LLC Contributions will be treated as a nonrecognition transaction under Section 721 of the Code; and
(x) the Green Debt Exchange will be treated, together with the Merger and the Green Contribution, as part of a tax-deferred contribution under Section 351 of the Code.
(collectively, the Intended Tax Treatment ). The parties will prepare and file all Tax Returns in accordance with the Intended Tax Treatment and no party will take any inconsistent position therewith on any Tax Return, or during the course of any audit, litigation or other proceeding with respect to Taxes, except as otherwise required by applicable Law following a final determination by a court of competent jurisdiction or other administrative settlement with or final administrative decision by the relevant Governmental Entity. Furthermore, following the Closing, no party shall take any action that could adversely impact the Intended Tax Treatment, including, among other things, transferring, merging, liquidating or changing the tax classification of any of New Sailfish Sub, the Apple Blockers or the Ride Blocker or changing the tax classification of Old Sailfish LLC.
(b) For purposes of the Merger and the New Sailfish Reorganization, this Agreement is intended to constitute a plan of reorganization within the meaning of Treasury Regulation Section 1.368-2(g).
(c) Any and all existing Tax Sharing Agreements between any of the Green Entities, the Apple Blockers or the Ride Blocker, on the one hand, and any of their respective Affiliates, on the other hand, shall be terminated prior to the Closing and neither the Green Entities, the Apple Blockers nor the Ride Blocker shall have any further liability thereunder.
(d) Between the date hereof and the Closing Date, Sailfish shall prepare or cause to be prepared all Tax Returns of Sailfish and its Subsidiaries for any Tax period which are required to be filed on or before the Closing Date (taking extensions into account) using accounting methods, principles and positions consistent with those used for prior Tax periods, unless a change is required by applicable Law or regulation, and all such Tax Returns shall be timely filed and all related Taxes paid on or before the Closing Date.
(e) The Green Feeders, in their sole discretion, shall be entitled to (i) prepare or cause to be prepared and file or cause to be filed all Green Pre-Closing Flow-Through Tax Returns, (ii) participate in and control any Tax examination, audit, proceeding or similar inquiry or dispute by a Governmental Entity with respect to any such Tax Returns, and (iii) participate in and control any other correspondence regarding any such Tax Returns. Unless otherwise required by applicable Law, which shall be determined in the good faith discretion of the Green Feeders, no amended Tax Return or other Tax elections or changes in Tax methods with respect to a Green Pre-Closing Flow-Through Tax Return shall be filed or made by, on behalf, or with respect to any Green Entity after the Closing Date without the prior written consent of the Green Feeders.
(f) New Sailfish shall be responsible for the payment of all state and local transfer, sales, use, stamp, registration or other similar Taxes resulting from the transactions contemplated by this Agreement or any other Combination Agreement ( Transfer Taxes ). The parties shall cooperate in good faith to minimize, to the extent permissible under applicable Law, the amount of any such Transfer Taxes.
(g) Notwithstanding anything to the contrary in Section 6.02 or otherwise herein, the Green Entities shall be permitted to engage in internal restructuring transactions prior to the Closing solely for the purpose of mitigating any adverse effect resulting from changes in the Tax Laws of the Netherlands reasonably anticipated to take effect on or after the date hereof and prior to Closing; provided, however, that no such transactions shall be undertaken unless, at least five days prior to undertaking such transactions, a written notice (which may be delivered by electronic mail) has been provided to either Ken Beer at beerkh@stoneenergy.com or Karl Meche at mechekd@stoneenergy.com or such other representative identified by Sailfish to Green Energy (each, a Sailfish Tax Representative ), which notice provides a reasonable description of the anticipated transactions and the reasons for undertaking such transactions, and thereafter, the Sailfish Tax Representatives shall be permitted to reasonably consult with the Green Entities regarding such anticipated transactions, pursuant to which the Green Entities shall consider in good faith any comments or concerns of the Sailfish Tax Representatives; provided, further, that if such transactions
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are reasonably expected to (i) have an adverse effect on Sailfish (taking into account any adverse effects that would reasonably be expected to be borne by Sailfish if such transactions were not undertaken), (ii) have an adverse effect on the value of the New Sailfish Common Stock to be issued in the Merger (taking into account any adverse effects that would reasonably be expected to affect the value of the New Sailfish Common Stock to be issued in the Merger if such transactions were not undertaken), (iii) violate applicable Law, or (iv) prevent or materially delay the Closing, then Section 6.02 (and not this Section 7.03(g) ) shall apply to determine whether the Green Entities shall be permitted to engage in such internal restructuring transactions under this Agreement.
Section 7.04 Access; Confidentiality .
(a) Each of Sailfish and Green Energy shall, and each of them shall cause each of its respective Subsidiaries to, (i) afford to the other Party and its officers, directors, employees, accountants, consultants, agents, legal counsel, financial advisors and other representatives (collectively, the Representatives ), during the period prior to the earlier of the Effective Time and the termination of this Agreement pursuant to the terms of Article 9 , reasonable access, at reasonable times upon reasonable prior notice, to the officers, key employees, agents, properties, offices and other facilities of such Party and its Subsidiaries and to their books, records, contracts and documents and (ii) furnish reasonably promptly to the other Party and its Representatives such information concerning its and its Subsidiaries business, properties, contracts, records and personnel as may be reasonably requested, from time to time, by or on behalf of the other Party. Each of Sailfish and Green Energy and their respective Representatives shall conduct any such activities in such a manner as not to interfere unreasonably with the business or operations of the other Party or its Subsidiaries or otherwise cause any unreasonable interference with the prompt and timely discharge by the employees of the other Party and its Subsidiaries of their normal duties. Each Party shall have the right to have a designee of such Party accompany the other Party and its Representatives on any visits or inspections of any properties of such Party and its Subsidiaries. Notwithstanding anything to the contrary in this Agreement, no Party shall be required to, or to cause any of its Subsidiaries to, grant access or furnish information to the other Party or any of its Representatives to the extent that such information is subject to attorney-client privilege or the attorney work-product doctrine or that such access or the furnishing of such information is prohibited by applicable Law or an existing contract or agreement ( provided that each Party shall use its reasonable best efforts to obtain the consent or waiver of any counterparty to such agreement necessary to disclose information otherwise disclosable hereunder), or that such access would jeopardize the protection of competitively sensitive information or that such access would unreasonably disrupt the operations of such Party or any of its Subsidiaries. Notwithstanding anything to the contrary in this Agreement, no Party shall have access to personnel records of the other Party or any of its Subsidiaries relating to individual performance or evaluation records, medical histories or other information that in such other Partys good faith opinion upon the advice of legal counsel the disclosure of which could subject the other Party or any of its Subsidiaries to risk of liability. Notwithstanding the foregoing, no Party shall be permitted to conduct any sampling or analysis of any environmental media or building materials at any facility of the other Party or its Subsidiaries without the prior written consent of such other Party (which may be granted or withheld in such other Partys sole discretion). Each Party agrees that it will not, and will cause its Representatives not to, use any information obtained pursuant to this Section 7.04(a) for any purpose unrelated to the Transactions.
(b) Each of the Green Signing Parties, Sailfish, New Sailfish and Merger Sub acknowledges that the information provided to it and its Representatives in connection with this Agreement and the Transactions is subject to the terms of the Confidentiality Agreement between Green Energy and Sailfish, dated as of April 10, 2017 (as amended or modified from time to time, the Confidentiality Agreement ). The terms of the Confidentiality Agreement are hereby incorporated by reference. The Confidentiality Agreement shall terminate at the Closing.
(c) No investigation by any of the Parties or their respective Representatives made pursuant to this Section 7.04 shall modify, nullify, amend or otherwise affect the representations, warranties, covenants or agreements of the other set forth in this Agreement.
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Section 7.05 No Solicitation .
(a) From and after the date of this Agreement until the Effective Time or if earlier the termination of this Agreement in accordance with Article 9 , Sailfish will, will cause its Subsidiaries and its and their respective officers, directors, and employees to, and will use its reasonable best efforts to cause its other Representatives to, (i) immediately cease, and cause to be terminated, any solicitation, encouragement, discussion or negotiations with any Person with respect to any Competing Proposal or any indication of interest that would reasonably be expected to lead to a Competing Proposal, (ii) immediately terminate access for any Person (other than the Green Entities and their respective Affiliates and Representatives) to any data room containing information with respect to Sailfish or its Subsidiaries and (iii) within one Business Day following the date hereof, request the return or destruction of any non-public information provided to any Person (other than the Green Entities and their respective Affiliates and Representatives) in connection with a Competing Proposal or any indication of interest that would reasonably be expected to lead to a Competing Proposal.
(b) Except as otherwise specifically provided for in this Section 7.05 , from and after the date of this Agreement until the Effective Time or, if earlier, the termination of this Agreement in accordance with Article 9 , Sailfish will not, will cause its Subsidiaries and its and their respective officers, directors, and employees not to, and will use its reasonable best efforts to cause its other Representatives not to, directly or indirectly, (i) initiate, solicit or knowingly encourage, knowingly induce or knowingly facilitate (including by way of furnishing or affording access to any non-public information) any inquiries, proposals or offers which constitute, or could reasonably be expected to lead to, a Competing Proposal, (ii) conduct, participate or engage in any discussions or negotiations with any Person with respect to any inquiry, proposal or offer which constitutes, or could reasonably be expected to lead to, a Competing Proposal, (iii) furnish or provide any non-public information regarding Sailfish or its Subsidiaries, or access to the properties, assets or employees of Sailfish or its Subsidiaries, to any Person (other than the Green Entities and their respective Affiliates and Representatives) in connection with or in response to an inquiry, proposal or offer which constitutes, or could reasonably be expected to lead to, a Competing Proposal, (iv) enter into any letter of intent, agreement in principle, or other agreement providing for a Competing Proposal (other than an Acceptable Confidentiality Agreement as provided in Section 7.05(e)(ii) ), or (v) resolve, agree or publicly propose to, or permit Sailfish or any of its Subsidiaries or any of its or their Representatives to agree or publicly propose to, take any of the actions referred to in this Section 7.05(b) .
(c) Unless specifically permitted by Section 7.05(e) , Sailfish shall not (i) fail to include the Sailfish Board Recommendation in the Combined Consent Statement/Prospectus, (ii) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a manner adverse to the Green Signing Parties, the Sailfish Board Recommendation, (iii) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Competing Proposal, (iv) fail to announce publicly within 10 Business Days after a tender or exchange offer relating to any Sailfish Common Stock shall have been commenced that the Sailfish Board recommends rejection of such tender or exchange offer and reaffirms the Sailfish Board Recommendation or (v) if a Competing Proposal has been publicly known (including by way of media rumors or speculation with respect thereto) or been delivered to the Sailfish Board, fail to publicly recommend against such Competing Proposal within 10 Business Days of the request of Green Energy and to reaffirm the Sailfish Board Recommendation within such 10 Business Day period upon such request (the taking of, or failing to take, as applicable, any action described in this Section 7.05(c) being referred to as a Change of Recommendation ).
(d) From and after the date of this Agreement, Sailfish shall promptly (and in any event within 24 hours thereof) advise Green Energy of the receipt by Sailfish of any Competing Proposal made on or after the date of this Agreement or any request for non-public information or data relating to Sailfish or any of its Subsidiaries made by any Person that has made or would reasonably be expected to make a Competing Proposal or any request for discussions or negotiations with Sailfish or a Representative of Sailfish relating to a Competing Proposal, and, in respect of each such Competing Proposal, Sailfish shall provide to Green Energy (within such 24 hour timeframe) (A) a copy of any such Competing Proposal made in writing
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provided to Sailfish or any of its Subsidiaries or (to Sailfishs knowledge) their respective Representatives as well as copies of all written materials sent or provided to or from Sailfish or any of its Subsidiaries relating to such Competing Proposal and (B) a written summary of any material oral communications addressing such matters. Sailfish shall keep Green Energy reasonably informed of the status and material terms and conditions of any such Competing Proposal and reasonably informed on a prompt basis (and in any event within 24 hours thereof) of any material modification or proposed modification thereto, and shall promptly (and in no event later than 24 hours after transmittal or receipt), provide Green Energy with copies of any material correspondence and written materials and, with respect to material oral communications, a written summary of such correspondence or communications, between: (x) on the one hand, Sailfish or any of its Representatives; and (y) on the other hand, the Person that made or submitted such Competing Proposal or any Representative of such Person. Sailfish shall (i) not release or permit the release of any Person from, or amend, waive or permit the amendment or waiver of any provision of, any standstill, nondisclosure or similar agreement or provision to which Sailfish or any of its Subsidiaries or its Affiliates is or becomes a party or under which any of Sailfish, its Subsidiaries or its Affiliates has any rights and (ii) use its reasonable best efforts to enforce each such agreement or provision; provided , however , that notwithstanding clause (i) and (ii) , Sailfish shall be permitted to release or permit the release of any Person from, or amend, waive or permit the amendment or waiver of any provision of any such agreement solely to the extent necessary to permit any Person to communicate privately with the Sailfish Board in a manner that is otherwise permitted by this Agreement if the Sailfish Board determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be inconsistent with the Sailfish Boards fiduciary duties under applicable Law.
(e) Notwithstanding anything in this Agreement to the contrary, Sailfish or the Sailfish Board, may:
(i) to the extent applicable, comply with Rule 14e-2(a), Item 1012(a) of Regulation M-A and Rule 14d-9 promulgated under the Exchange Act; provided , however , that none of Sailfish, the Sailfish Board or any committee thereof shall, except as expressly permitted by Section 7.05(e)(iii) or Section 7.05(e)(iv) effect a Change of Recommendation, including in any disclosure document or communication filed or publicly issued or made in conjunction with the compliance with such requirements;
(ii) prior to the receipt of the Sailfish Stockholder Approval, engage in discussions and negotiations and furnish non-public information pursuant to an Acceptable Confidentiality Agreement with and to any Person who has made an unsolicited, written, bona fide Competing Proposal that has not been withdrawn and that did not result, directly or indirectly, from a breach of Section 7.05 if (A) prior to engaging in any such activities, the Sailfish Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Competing Proposal is, or would reasonably be expected to lead to, a Superior Proposal and that the failure to engage in such activities would be inconsistent with the Sailfish Boards fiduciary duties under applicable Law, (B) prior to furnishing any non-public information that is prohibited from being furnished pursuant to Section 7.05(b) , Sailfish receives an executed confidentiality agreement from such Person that contains confidentiality and use terms that are, in the aggregate, no less favorable to Sailfish than those contained in the Confidentiality Agreement, that does not contain any provision requiring Sailfish or its Subsidiaries to pay or reimburse the counterpartys expenses and that does not contain any provision that would prevent Sailfish from complying with its obligation to provide any disclosure to Green Energy required pursuant to Section 7.05 (an Acceptable Confidentiality Agreement ) and (C) Sailfish and its Representatives otherwise comply with the provisions of this Section 7.05 . Sailfish shall, and shall cause its Subsidiaries and its and their respective Representatives to, provide to Green Energy any information or access with respect to Sailfish and its Subsidiaries not previously provided to Green Energy that it is providing to another Person pursuant to this Section 7.05 before or immediately after such time as it provides such information or access to such other Person;
(iii) prior to the receipt of the Sailfish Stockholder Approval, in response to a written, unsolicited and bona fide Competing Proposal that has not been withdrawn and that did not result, directly or
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indirectly, from a breach of this Section 7.05 , if the Sailfish Board so chooses, cause Sailfish to take any action contemplated by clause (i) , (ii) , (iv) and/or (v) of the defined term Change of Recommendation, if prior to taking or, as applicable, failing to take, such action:
(A) the Sailfish Board determines in good faith after consultation with its financial advisors and outside legal counsel that such Competing Proposal is a Superior Proposal and that the failure to effect such a Change of Recommendation would be inconsistent with its fiduciary duties under applicable Law (taking into account any adjustment to the terms and conditions of the Transactions proposed by Green Energy in response to such Competing Proposal);
(B) Sailfish shall have given prior written notice to Green Energy at least five (5) Business Days prior to taking such action (1) that Sailfish has received such proposal, specifying the material terms and conditions of such proposal and (2) that Sailfish intends to take such action, and the basis for such Change of Recommendation, attaching the most current version of the proposed agreement under which such Superior Proposal is proposed to be consummated and any other material documents and correspondence in respect of such Superior Proposal (a Notice );
(C) during the five Business Days following such Notice (the Notice Period ), Sailfish and its Representatives shall negotiate in good faith with Green Energy (to the extent Green Energy desires to negotiate) regarding any revisions to the terms of the Transactions proposed by Green Energy in response to such Superior Proposal; and
(D) following the Notice Period, the Sailfish Board, after consultation with its financial advisors and outside legal counsel (and taking into account any legally binding (if accepted by Sailfish) adjustment or modification of the terms of this Agreement proposed in writing by Green Energy), shall have determined in good faith that the Competing Proposal remains a Superior Proposal and that failure to effect such a Change of Recommendation would be inconsistent with its fiduciary duties under applicable Law; provided , however , that each time material modifications to the terms of a Competing Proposal that the Sailfish Board has determined to be a Superior Proposal are made, Sailfish shall be required to deliver a Notice to Green Energy and to again comply with the requirements of this Section 7.05(e)(iii) with respect to such revised Competing Proposal (it being understood that the Notice Period in respect of such revised Competing Proposal shall be the longer of (x) the remaining time of the initial Notice Period and (y) three Business Days); and
(iv) Notwithstanding anything in this Agreement to the contrary, prior to the receipt of the Sailfish Stockholder Approval, in response to an Intervening Event, if the Sailfish Board so chooses, cause Sailfish to take any action contemplated by clause (i) and/or (ii) of the defined term Change of Recommendation, if prior to taking such action:
(A) the Sailfish Board determines in good faith after consultation with its financial advisors and outside legal counsel that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law;
(B) Sailfish shall have given prior written notice (an IE Notice ) to Green Energy at least five (5) Business Days prior to taking such action that Sailfish has determined that an Intervening Event has occurred or arisen (which notice will reasonably describe such Intervening Event, including a detailed description of the events, facts and circumstances relating to such Intervening Event and any material documents and correspondence in respect of such Intervening Event and the reasons for such Change of Recommendation) and that Sailfish intends to effect such Change of Recommendation;
(C) during the five Business Days following such IE Notice (the IE Notice Period ), Sailfish and its Representatives shall negotiate in good faith with Green Energy (to the extent Green Energy desires to negotiate) regarding any revisions to the terms of the transactions contemplated hereby proposed by Green Energy in response to such Intervening Event; and
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(D) following the IE Notice Period, the Sailfish Board, after consultation with its financial advisors and outside legal counsel (and taking into account any legally binding (if accepted by Sailfish) adjustment or modification of the terms of this Agreement proposed in writing by Green Energy), shall have determined in good faith that such proposed changes do not obviate the need for the Sailfish Board to effect such Change of Recommendation and that the failure to make such Change of Recommendation would be inconsistent with the Sailfish Boards fiduciary duties under applicable Law.
(f) Nothing in this Section 7.05 is intended to restrict Sailfish, in response to an unsolicited inquiry related to an actual or potential Competing Proposal, from informing any Person of the existence of the provisions of this Section 7.05 .
(g) Sailfish shall use its reasonable best efforts to inform all Representatives of Sailfish and its Subsidiaries and Affiliates of the restrictions described in this Section 7.05 . The Parties agree that any breach of any of the terms of this Section 7.05 by any Sailfish Subsidiary or by any officer, director or employee of Sailfish or its Subsidiaries shall be deemed to be a breach of this Section 7.05 by Sailfish.
Section 7.06 Reasonable Best Efforts; Notifications, etc .
(a) Subject to the terms and conditions set forth in this Agreement, each of the Parties shall (and shall cause each of its Subsidiaries to) use its reasonable best efforts (subject to, and in accordance with, applicable Law) to take promptly, or to cause to be taken, all actions, and to do promptly, or to cause to be done, and to assist and to cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Laws to consummate and make effective the Transactions, including (i) the obtaining of all necessary, proper or advisable actions or nonactions, waivers, authorizations, expirations or terminations of waiting periods, clearances, consents and approvals from Governmental Entities and the making of all necessary, proper or advisable registrations and filings and the taking of all steps as may be necessary, proper or advisable to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary, proper or advisable consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby and (iv) the execution and delivery of any additional instruments reasonably necessary, proper or advisable to consummate the transactions contemplated hereby; provided , however , that, except as expressly contemplated by this Agreement or any other Combination Agreement, no Party shall be required to pay (and, without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), none of the Parties or their respective Subsidiaries shall pay or agree to pay) any fee, penalty or other consideration to any third party (other than any filing fees paid or payable to any Governmental Entity) for any consent or approval required for the consummation of the Transactions. For the avoidance of doubt, a Change of Recommendation effected in accordance with this Agreement shall not constitute a breach of this Section 7.06(a) .
(b) Each Party shall give prompt notice to the other Parties upon becoming aware of any condition, event or circumstance that will result in any of the conditions in Section 8.02(a) , Section 8.02(b) , Section 8.03(a) or Section 8.03(b) not being met; provided , however , that no such notification shall affect the representations, warranties, covenants or agreements of the Parties or the conditions to the obligations of the Parties under this Agreement.
Section 7.07 HSR and Other Approvals .
(a) Except for the filings and notifications made pursuant to Antitrust Laws to which Sections 7.07(b) and (c) , and not this Section 7.07(a) , shall apply, promptly following the execution of this Agreement, the Parties shall proceed to prepare and file with the appropriate Governmental Entities all authorizations, consents, notifications, certifications, registrations, declarations and filings that are necessary, proper or advisable in order to consummate the Transactions and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such matters.
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(b) As promptly as reasonably practicable following the execution of this Agreement, but in no event later than 15 Business Days following the date of this Agreement, the Parties shall make, or shall cause to be made, any filings required under the HSR Act and any filings, voluntary or required, under the Mexican Law of Economic Competition. Each of the Green Signing Parties, Sailfish and New Sailfish shall cooperate fully with each other and shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filings under any applicable Antitrust Laws. Unless otherwise agreed, the Green Signing Parties, Sailfish and New Sailfish shall each use its reasonable best efforts to ensure the prompt expiration or termination of any applicable waiting period under the HSR Act. The Green Signing Parties, Sailfish and New Sailfish shall each use its reasonable best efforts to respond to and comply with any request for information or documentary material from any Governmental Entity charged with enforcing, applying, administering, or investigating the HSR Act or any other Law designed to prohibit, restrict or regulate actions for the purpose or effect of mergers, monopolization, restraining trade or abusing a dominant position (collectively, Antitrust Laws ), including the Federal Trade Commission, the Antitrust Division of the U.S. Department of Justice, any attorney general of any state of the United States, the Mexico Federal Commission of Economic Competition, or any other competition authority of any jurisdiction ( Antitrust Authority ).
(c) Each of the Green Signing Parties, Sailfish and New Sailfish shall, in connection with the efforts referenced in Section 7.07(b) , (i) use its reasonable best efforts to cooperate in all respects with each other in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) promptly notify the other Parties of any communication concerning this Agreement or any of the transactions contemplated hereby to that Party from or with any Governmental Entity, or from any other Person alleging that the consent of such person (or another Person) is or may be required in connection with the Transactions, and consider in good faith the views of the other Parties and keep the other Parties reasonably informed of the status of matters related to the Transactions, including furnishing the other Parties with any written notices or other communications received by such Party or its Affiliates from, or given by such Party or its Affiliates to, any Governmental Entity and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby, except that any materials concerning one Partys valuation of the other Party may be redacted; and (iii) permit the other Parties to review in draft any proposed communication to be submitted by it to any Governmental Entity with reasonable time and opportunity to comment, and consult with each other in advance of any in-person or telephonic meeting or conference with any Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and, to the extent permitted by the applicable Governmental Entity or Person, not agree to participate in any meeting or discussion with any Governmental Entity relating to any filings or investigations concerning this Agreement or any of the Transactions unless it consults with the other Party and its Representatives in advance and invites the other Partys Representatives to attend in accordance with applicable Laws. Green Energy shall be entitled to direct and control antitrust strategy in connection with the review of the Transactions by any Antitrust Authority or other Person relating to any of the foregoing; provided , however , that it shall (i) afford Sailfish a reasonable opportunity to participate therein, (ii) give Sailfish a reasonable opportunity to review and comment on all filings or responses in connection with any such review, which comments Green Energy shall consider implementing in good faith, acting reasonably and (iii) keep Sailfish apprised of and consult with Sailfish with respect to, proposed strategy and any significant decisions related thereto. The Parties shall take reasonable efforts to share information protected from disclosure under the attorney-client privilege, work product doctrine, joint defense privilege or any other privilege pursuant to this Section 7.07 so as to preserve any applicable privilege.
(d) In furtherance and not in limitation of the foregoing, each of the Green Signing Parties and Sailfish and each of their respective Subsidiaries shall use its reasonable best efforts to resolve objections, if any, as may be asserted with respect to the Transactions under any Laws, including any Antitrust Laws; provided , however , that if, in order to resolve any objections, any Party is asked to divest, sell, dispose of, hold separate or otherwise take or commit to take any action that limits Sailfishs, a Green Signing Partys or the Surviving Entitys post-Closing freedom with respect to its or its Subsidiaries ability to retain any of the
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businesses, product lines, or assets of Sailfish, the Green Signing Parties, the Surviving Entity, or their Subsidiaries, such actions shall be conditioned upon the consummation of the Merger. In furtherance of the foregoing, each of the Green Signing Parties and Sailfish and each of their respective Subsidiaries shall use reasonable best efforts to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions (including seeking to have any stay, temporary restraining order or preliminary injunction entered by any court or other Governmental Entity vacated or reversed).
(e) No Party shall take any action that could reasonably be expected to hinder or delay the obtaining of clearance or the expiration of the required waiting period under the HSR Act or any other applicable Antitrust Law.
Section 7.08 Stockholder Litigation . Each Party shall promptly notify the other Party in writing in the event any Proceeding by any Governmental Entity or other Person is commenced against such Party, its Subsidiaries or any of their respective directors related to this Agreement or the Transactions or that seeks damages in connection therewith, and each Party shall keep the other Party informed on a reasonably current basis with respect to the status thereof. The Parties agree to cooperate and use their reasonable best efforts to defend against and respond thereto. Without limiting the foregoing, Sailfish shall (i) give the Green Signing Parties the opportunity to participate, at their expense and subject to a customary joint defense agreement, in the defense or settlement of any such Proceeding, (ii) give the Green Signing Parties a reasonable opportunity to review and comment on all filings or responses to be made by Sailfish in connection with any such Proceeding, which comments Sailfish shall consider implementing in good faith and (iii) keep the Green Signing Parties apprised of and consult with the Green Signing Parties with respect to, proposed strategy and any significant decisions related thereto, and no settlement shall be agreed to or offered without Green Energys prior written consent (which shall not be unreasonably withheld, delayed or conditioned).
Section 7.09 Public Statements . The initial press release with respect to the execution of this Agreement shall be a joint press release to be reasonably agreed upon by the Parties. Thereafter, so long as this Agreement is in effect, the Parties will not, and each Party will cause its Representatives not to, issue any public announcements or make other public disclosures regarding this Agreement or the Transactions without the prior written approval of the other Party; provided , however , that a Party or its Representatives may issue a public announcement or other public disclosures required by applicable Law or the rules of any stock exchange upon which such Partys capital stock is traded, provided such Party affords the other Party an opportunity to first review the content of the proposed disclosure and provide reasonable comment regarding same, which comments such Party shall consider implementing in good faith; provided further that no provision of this Section 7.09 shall be deemed to (i) restrict in any manner a Partys ability to make internal communications with its employees solely to the extent that they are consistent with (and do not contain any information not already included in) previous press releases, public disclosures or public statements made by a Party in compliance with this Section 7.09 , (ii) restrict any disclosure of any information consistent with (and that does not contain any information not already included in) previous press releases, public disclosures or public statements made by a Party in compliance with this Section 7.09 or (iii) require Sailfish to consult with or obtain any approval from any other Party with respect to a public announcement or press release issued in connection with the receipt and existence of a Competing Proposal and matters related thereto or a Change of Recommendation other than as set forth in Section 7.05 . Notwithstanding anything to the contrary in this Agreement (or anything in the Confidentiality Agreement to the contrary), nothing in this Agreement shall restrict the ability of Green Energy or any of its Affiliates from making customary disclosures to current or prospective general or limited partners, equity holders, members, managers and investors of Apple, Ride or their respective Affiliates in the ordinary course of their business, in each case, who are subject to customary confidentiality restrictions.
Section 7.10 Director and Officer Indemnification and Insurance .
(a) Without limiting any other rights that any Indemnified Person may have pursuant to any employment agreement, indemnification agreement or applicable Law in effect on the date hereof or
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otherwise, from the Effective Time and until the six year anniversary of the Effective Time, New Sailfish shall indemnify, defend and hold harmless each Person who is now, or has been at any time prior to the date of this Agreement or who becomes prior to the Effective Time, a director, officer or employee of any Green Signing Party or of Sailfish or any of its Subsidiaries or who acts as a fiduciary under any Green Benefit Plan or any Sailfish Benefit Plan or is or was serving at the request of any Green Signing Party or of Sailfish or any of its Subsidiaries as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, Employee Benefit Plan, trust or other enterprise (the Indemnified Persons ) against all losses, claims, damages, costs, fines, penalties, expenses (including attorneys and other professionals fees and expenses), liabilities or judgments or amounts that are paid in settlement, of or incurred in connection with any threatened or actual Proceeding to which such Indemnified Person is a party or is otherwise involved, including as a witness, based, in whole or in part, on or arising, in whole or in part, out of the fact that such Person is or was a director, officer or employee of any Green Signing Party or of Sailfish or any of its Subsidiaries, a fiduciary under any Green Benefit Plan or of any Sailfish Benefit Plan or is or was serving at the request of any Green Signing Party or of Sailfish or any of its Subsidiaries as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, Employee Benefit Plan, trust or other enterprise or by reason of anything done or not done by such Person in any such capacity, whether pertaining to any act or omission occurring or existing prior to or at the Effective Time and whether asserted or claimed prior to, at or after the Effective Time ( Indemnified Liabilities ), including all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, or pertaining to, this Agreement or the Transactions, in each case to the fullest extent permitted under applicable Law (and New Sailfish and Old Sailfish LLC shall, jointly and severally, pay expenses incurred in advance of the final disposition of any such Proceeding to each Indemnified Person to the fullest extent permitted under applicable Law). Without limiting the foregoing, in the event any such Proceeding is brought or threatened to be brought against any Indemnified Persons (whether arising before or after the Effective Time), (i) the Indemnified Persons may retain Sailfishs regularly engaged legal counsel or other counsel satisfactory to such Indemnified Persons, and New Sailfish shall pay all reasonable fees and expenses of such counsel for the Indemnified Persons as promptly as statements therefor are received, and (ii) New Sailfish shall use its best efforts to assist in the defense of any such matter. Any Indemnified Person wishing to claim indemnification or advancement of expenses under this Section 7.10(a) , upon learning of any such Proceeding, shall notify New Sailfish (but the failure so to notify shall not relieve a party from any obligations that it may have under this Section 7.10(a) except to the extent such failure materially prejudices such partys position with respect to such claims). With respect to any determination of whether any Indemnified Person is entitled to indemnification by New Sailfish under this Section 7.10(a) , such Indemnified Person shall have the right to require that such determination be made by special, independent legal counsel selected by the Indemnified Person and approved by New Sailfish (which approval shall not be unreasonably withheld or delayed), and who has not otherwise performed material services for New Sailfish, Sailfish, or the Indemnified Person within the last three years. Notwithstanding the foregoing and except as provided in Section 7.10(c) , this Section 7.10(a) shall not require New Sailfish to indemnify, defend or hold harmless, or advance expenses to, any Indemnified Person in connection with any Proceeding (or part thereof) initiated by such Indemnified Person.
(b) New Sailfish shall not amend, repeal or otherwise modify any provision in the Organizational Documents of New Sailfish, or any of its Subsidiaries in any manner that would affect (or manage New Sailfish or any of its Subsidiaries, with the intent to or in a manner that would affect) adversely the rights thereunder or under the Organizational Documents of New Sailfish or any of its Subsidiaries of any Indemnified Person to indemnification, exculpation and advancement except to the extent required by applicable Law. In addition to the rights provided such persons by applicable Law, New Sailfish shall, and shall cause its Subsidiaries to, fulfill and honor all rights to indemnification, advancement of expenses, and exculpation from liability existing in favor of the current or former directors, officers and employees of Sailfish and its Subsidiaries.
(c) To the fullest extent permitted under applicable Law, New Sailfish shall indemnify any Indemnified Person against all reasonable costs and expenses (including reasonable attorneys fees and expenses), such
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amounts to be payable in advance upon request as provided in this Section 7.10 , relating to the enforcement of such Indemnified Persons rights under this Section 7.10 or under any charter, bylaw or contract regardless of whether such Indemnified Person is ultimately determined to be entitled to indemnification hereunder or thereunder.
(d) Notwithstanding any other provision in this Agreement to the contrary, Sailfish will procure tail directors and officers liability and fiduciary liability insurance policies with a claims reporting or discovery period of at least six years from the Effective Time placed with insurance companies having the same or better AM Best Financial rating as Sailfishs current directors and officers liability and fiduciary liability insurance companies with terms and conditions providing retentions, limits and other material terms no less favorable than the current directors and officers liability and fiduciary liability insurance policies maintained by Sailfish with respect to matters, acts or omissions existing or occurring at or prior to the Effective Time; provided , however , that Sailfish may not spend more than 300% (the Cap Amount ) of the last annual premium paid by Sailfish prior to the date hereof for the six years of coverage under such tail policies.
(e) In the event that New Sailfish or any Subsidiary of New Sailfish, or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, in each such case, proper provisions shall be made so that the successors and assigns of New Sailfish or such Subsidiary of New Sailfish, as the case may be, shall assume the obligations set forth in Section 7.10(a) . New Sailfish shall not sell, transfer, distribute or otherwise dispose of any of their assets or the assets of any Subsidiary in a manner that would reasonably be expected to render New Sailfish unable to satisfy its obligations under Section 7.10(a) . The provisions of this Section 7.10 are intended to be for the benefit of, and shall be enforceable by, the parties and each Person entitled to indemnification or insurance coverage or expense advancement pursuant to this Section 7.10 , and his heirs and representatives.
(f) Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors and officers insurance claims under any policy that is or has been in existence with respect to Sailfish or any of its Subsidiaries or their respective officers, directors, employees or agents or fiduciaries under any Sailfish Benefit Plan, it being understood and agreed that the indemnification provided for in this Section 7.10 is not prior to or in substitution for any such claims under any such policies.
Section 7.11 Governance Matters .
(a) Sailfish shall cause the New Sailfish Amended Certificate to be filed with the Secretary of State of Delaware and the bylaws to be in the form attached hereto as Exhibit D immediately prior to Closing.
(b) Prior to the Effective Time, New Sailfish shall take all action necessary to cause New Sailfishs Board of Directors, effective as of the Closing, to consist of the persons identified in Annex 7.11 ; provided , however , that if any person identified on such Annex is unable or unwilling to serve on the New Sailfish Board of Directors as of the Closing, then a substitute shall be designated by the Person or Persons identified on such Annex as designating such identified person.
(c) New Sailfish shall take all necessary action to cause Timothy S. Duncan to become the President and Chief Executive Officer of New Sailfish at the Effective Time.
(d) New Sailfish shall take all necessary action to cause the persons identified on Annex 7.11 to be elected or appointed, as applicable, as certain executive officers of New Sailfish, effective as of the Effective Time, subject to each such persons agreement on terms acceptable to New Sailfish. If any such person is not willing to serve in such capacity then the Board of Directors of New Sailfish or the other governing body of New Sailfish, as applicable, after the Effective Time shall elect or appoint, as applicable, a person to serve in such capacity.
(e) Old Sailfish LLC shall take all necessary action to cause the persons identified on Annex 7.11 to be elected or appointed, as applicable, as certain executive officers of Old Sailfish LLC, effective as of the
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Effective Time, subject to each such persons agreement on terms acceptable to New Sailfish. If any such person is not willing to serve in such capacity then the Board of Directors of Old Sailfish LLC or the other governing body of Old Sailfish LLC, as applicable, after the Effective Time shall elect or appoint, as applicable, a person to serve in such capacity.
Section 7.12 Section 16 Matters . Prior to the Effective Time, New Sailfish and Sailfish shall take all such steps as may be required to cause any dispositions of equity securities of Sailfish (including derivative securities with respect thereto) or acquisitions of equity securities of New Sailfish (including derivative securities with respect thereto) resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(b) of the Exchange Act with respect to Sailfish or who will become subject to such reporting requirements with respect to New Sailfish to be exempt under Rule 16b-3 under the Exchange Act.
Section 7.13 Advice on Certain Matters; Control of Business . Subject to compliance with applicable Law, Sailfish and Green Energy shall confer on a regular basis with each other, report on operational matters and shall promptly advise each other orally and in writing of any change or event having, or which would be reasonably likely to have, individually or in the aggregate, a Sailfish Material Adverse Effect or Green Energy Material Adverse Effect, as the case may be. Except with respect to Antitrust Laws as provided in Section 7.07 , Sailfish and Green Energy shall promptly provide each other (or their respective counsel) copies of all filings made by such Party or its Subsidiaries with the SEC or any other Governmental Entity in connection with this Agreement and the Transactions. Without limiting in any way any Partys rights or obligations under this Agreement, nothing contained in this Agreement shall give any Party, directly or indirectly, the right to control or direct the other Party and its respective Subsidiaries operations prior to the Effective Time. Prior to the Effective Time, each of the Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries respective operations.
Section 7.14 Obligations of New Sailfish and Merger Sub . Sailfish shall take all action necessary to cause New Sailfish and Merger Sub to perform their respective obligations under this Agreement.
Section 7.15 Obligations of Green Entities . Green Energy shall take all action necessary to cause its Subsidiaries to perform their respective obligations under this Agreement.
Section 7.16 Treatment of Sailfish Notes .
(a) The Green Entities will be permitted to commence and conduct offers to purchase and exchange offers, and to conduct consent solicitations (each a Debt Offer and collectively, the Debt Offers ) with respect to any or all of the outstanding aggregate principal amount of the Sailfish Notes pursuant to which, among other things, Green Production and Green Production Finance will (i) offer to all eligible holders of Sailfish Notes who are accredited investors (as defined in Rule 501 of Regulation D of the Securities Act of 1933) (other than Franklin Bondholder and MacKay Bondholder) the right, subject to the Closing, to tender their Sailfish Notes for New Second Lien Notes and (ii) solicit consents from holders of Sailfish Notes that are accredited investors (other than Franklin Bondholder and MacKay Bondholder) to certain amendments to the terms and provisions of the Sailfish Notes Indenture as described in the Debt Offer Documents; provided , that any such Debt Offer is consummated substantially simultaneously with the Closing as contemplated by Sections 2.15 , 2.16 and 2.17 . Green Production and Green Production Finance shall provide Sailfish with an offer to purchase, offer to exchange, consent solicitation, letter of transmittal or other related documentation in connection with the Debt Offer (collectively, the Debt Offer Documents ) a reasonable period of time in advance of commencing the applicable Debt Offer to allow Sailfish and its counsel to review and comment on such Debt Offer Documents. Green Production and Green Production Finance will reasonably consult with Sailfish regarding the timing and commencement of any Debt Offer and any tender deadlines. The closing of any Debt Offer shall be expressly conditioned on the occurrence of the Closing and the Parties shall use reasonable best efforts to cause the Debt Offers to
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close on the Closing Date as contemplated by Sections 2.15 , 2.16 and 2.17 . The Debt Offers shall be conducted in compliance with the Sailfish Notes Indenture and applicable Law, including SEC rules and regulations. Sailfish shall, and shall cause its subsidiaries to, and shall use reasonable best efforts to cause their respective Representatives to, provide all cooperation reasonably requested by Green Production in connection with the Debt Offers.
(b) Subject to the receipt of requisite consents, upon the request of Green Production and Green Production Finance, Sailfish shall execute the Sailfish Notes Supplemental Indenture amending the terms and provisions of the Sailfish Notes Indenture as described in the Debt Offer Documents, which supplemental indenture shall become effective upon execution by all parties thereto but shall become operative no earlier than the Closing Date and Sailfish shall use its reasonable best efforts to cause the Sailfish Notes Trustee to enter into the Sailfish Notes Supplemental Indenture prior to or substantially simultaneously with the Closing, at the request of Green Production and Green Production Finance and in compliance with applicable Law, including SEC rules and regulations. Sailfish shall, and shall cause its subsidiaries to, and shall use reasonable best efforts to cause their respective Representatives to, provide all cooperation reasonably requested by Green Production in connection with the execution of the Sailfish Notes Supplemental Indenture. If requested by Green Production, Sailfishs counsel shall provide all customary legal opinions required by the Sailfish Notes Trustee in connection with its execution of the Sailfish Notes Supplemental Indenture to the extent such legal opinion is required to be delivered prior to the Closing Date. Notwithstanding the foregoing, in no event shall Sailfish or its legal counsel be required to provide an opinion with respect to the Sailfish Notes Supplemental Indenture that in the opinion of Sailfish or its legal counsel does not comply with applicable Law, including SEC rules and regulations, or the applicable indenture.
Section 7.17 Other Debt-Related Covenants .
(a) Each of Sailfish and Green Production agree to use reasonable best efforts to (i) deliver notices of prepayment (which shall be delivered in advance of Closing and conditioned upon the occurrence of the Closing) and take any actions at or prior to the Effective Time that are reasonably necessary to facilitate the prepayment of all outstanding amounts under their respective Revolving Credit Agreements (it being understood and agreed that any prepayment is (and shall be) contingent upon the occurrence of the Closing and no actions shall be required which would obligate Sailfish or Green Production or their respective subsidiaries to complete such prepayment prior to the occurrence of the Closing); (ii) arrange for customary payoff letters, lien terminations and releases and instruments and acknowledgements of discharge in respect of any of the Revolving Credit Agreements on or prior to the Closing Date; and (iii) take all other reasonable actions to facilitate the payoff, discharge and termination in full at the Closing of all amounts outstanding under any of the Revolving Credit Agreements.
(b) Each of Sailfish and Green Production agree to use reasonable best efforts to do (or cause to be done) all things necessary or advisable to arrange and obtain the New Revolving Credit Facility no later than the date the Closing is required to be effected in accordance with Section 3.01, including using reasonable best efforts to (i) furnish the Debt Providers with financial and other pertinent information regarding Sailfish and its subsidiaries and Green Production and its subsidiaries, including providing the Debt Providers with the information required pursuant to the Debt Commitment Letter (all such information, the Required Information ); (ii) participate in a reasonable number of meetings, drafting sessions, road shows, rating agency presentations and due diligence sessions and sessions with rating agencies; (iii) furnish the Debt Providers as promptly as practicable with pertinent information regarding Sailfish and its Subsidiaries and Green Production and its Subsidiaries assets and operations as is customary in connection with the New Revolving Credit Facility and any security required therefor, including providing, as promptly as practicable following a request therefor, monthly financial and operating data relating to Sailfish and its Subsidiaries and Green Production and its Subsidiaries assets and operations; (iv) assist the Debt Providers in the preparation of (A) a customary information memorandum for the New Revolving Credit Facility; and (B) materials for rating agency presentations; (v) use reasonable best efforts to obtain such Uniform
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Commercial Code, bankruptcy, litigation and similar lien searches reasonably requested by the Debt Providers; (vi) take all corporate actions, subject to the consummation of the Closing, to permit the entry into of the New Revolving Credit Facility and to permit the proceeds thereof to be made available to Green Production or its Affiliates on the Closing Date; (vii) cause the appropriate authorized representatives of Sailfish and Green Production, as applicable, to execute and deliver any pledge and security documents, definitive financing documents or other certificates or documents as may be reasonably requested by the Debt Providers or otherwise facilitate the pledging of collateral for delivery at the entry into of the New Revolving Credit Facility on and as of the Closing (unless otherwise specified); (viii) cause the appropriate authorized representatives of Sailfish or Green Production, as applicable, to execute and deliver any credit agreements or indentures or other definitive financing documents on and as of the Closing; (ix) provide authorization letters to the Debt Providers authorizing the distribution of information to prospective lenders; (x) cooperate reasonably with the Debt Providers due diligence, to the extent customary and reasonable; (xi) obtain accountants comfort letters and legal opinions customary for financings similar to the New Revolving Credit Facility; (xii) at least five (5) days prior to the Closing, providing all documentation and other information about Sailfish and each of its Subsidiaries and Green Production and each of its Subsidiaries as is reasonably requested which relates to applicable know your customer and anti-money laundering rules and regulations including without limitation the USA PATRIOT ACT and (xiii) take all actions reasonably necessary to permit the Debt Providers to evaluate Sailfishs and Green Productions inventory, current assets, cash management and accounting systems, policies and procedures relating thereto. Any information provided by Sailfish or Green Production in connection with seeking the New Revolving Credit Facility shall be prepared in good faith. The Parties further agree to consult in good faith and consider each others comments with respect to the documentation, terms and conditions, timing and commencement of efforts to obtain the New Revolving Facility. The closing of the New Revolving Facility shall be expressly conditioned on the occurrence of the Closing.
Section 7.18 Standstill . The Green Signing Parties hereby confirm that the Confidentiality Agreement (including specifically Section 14 thereof) remains binding on Green Energy and, pursuant to the terms thereof, the Green Signing Parties shall (and shall cause their Representatives (as such term is defined in the Confidentiality Agreement) to) continue to comply with such agreement, including specifically Section 14 thereof, except as expressly contemplated and/or permitted by this Agreement and the other Combination Agreements.
Section 7.19 State Takeover Laws . If any fair price, business combination or control share acquisition statute or other similar statute or regulation is or may become applicable to any of the Transactions, the Parties shall use their respective reasonable best efforts to (a) take such actions as are reasonably necessary so that the Transactions may be consummated as promptly as practicable on the terms contemplated hereby and (b) otherwise take all such actions as are reasonably necessary to eliminate or minimize the effects of any such statute or regulation on the Transactions.
CONDITIONS
Section 8.01 Conditions to Each Party s Obligations to Effect the Transactions . The obligations of each Party to effect the Closing are subject to the satisfaction or (to the extent permitted by applicable Law) the waiver on or prior to the Closing Date of each of the following conditions:
(a) Stockholder Approval . The Sailfish Stockholder Approval shall have been obtained in accordance with applicable Law and the Organizational Documents of Sailfish.
(b) Antitrust/Competition . (i) Any applicable waiting period (and extension thereof) under the HSR Act shall have expired or been earlier terminated and (ii) the applicable approval by the Mexican Comisión Federal de Competencia Económica or such other authorities with jurisdiction over antitrust matters in Mexico shall have been obtained (as applicable).
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(c) No Injunctions or Restraints . There shall be no Law, injunction, ruling judgment, order, or decree of any Governmental Entity of competent jurisdiction that is in effect which temporarily or permanently makes illegal, prohibits or enjoins the consummation of the Transactions.
(d) Governmental Consents . All consents, approvals and other authorizations of any Governmental Entity set forth in Section 4.03 of the Sailfish Disclosure Letter or Section 5.03 of the Green Disclosure Letter that are required to consummate the Transactions shall have been obtained.
(e) Effective Registration Statement . The Registration Statement shall have been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect and no proceeding for such purpose shall be pending before or threatened by the SEC.
(f) NYSE Listing . The shares of New Sailfish Common Stock to be issued in connection with the Transactions shall have been approved for listing on the NYSE, subject to official notice of issuance.
(g) Reserved .
(h) Debt Exchange . The conditions to the closing of the transactions contemplated by (i) the Debt Exchange Agreement and (ii) the Tender Offer and Consent Solicitation, in each case, shall have been satisfied or waived and the parties thereto shall be ready, willing and able to close the such Transactions substantially contemporaneously with the other Transactions contemplated to occur at Closing, in the order contemplated by Article 2 . A majority of the Sailfish Notes (excluding Sailfish Notes held by Franklin Bondholder and MacKay Bondholder) shall have been tendered pursuant to the Tender Offer and Consent Solicitation for the consideration offered thereunder and the Sailfish Notes Supplemental Indenture shall have become effective (and the amendments therein (and collateral releases, if any) shall have become operative).
(i) Support Agreement . The conditions to the closing of the transactions contemplated by the Support Agreement shall have been satisfied or waived as contemplated therein and the parties thereto shall be ready, willing and able to close such Transactions substantially contemporaneously with the other Transactions contemplated to occur at Closing, in the order contemplated by Article 2 .
(j) Mexican Granting Instruments . The Green Entities shall have received in each case if, and to the extent, applicable to the Transactions: (i) consent required from any Mexican Governmental Entity with respect to the Mexican Granting Instruments, without material adverse conditions or stipulations thereon, (ii) consent to the transactions contemplated hereby required from any third Person under any operating agreement applicable to a Mexican Granting Instrument, and (iii) waiver (or deemed waiver without exercise) of any third Person preferential right to purchase, right of first refusal, or similar right, and expiration of exclusive negotiations with respect to any right of first offer or negotiation, in each case, under any operating agreement or other agreement applicable to a Mexican Granting Instrument.
Section 8.02 Conditions to Obligations of the Green Signing Parties . The obligations of the Green Signing Parties to effect the Closing are further subject to the satisfaction or (to the extent permitted by applicable Law) the waiver by Green Energy on or prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties .
(i) The representations and warranties of Sailfish, New Sailfish and Merger Sub set forth in Section 4.02 and Section 4.07(a) shall be true and correct (except, with respect to Section 4.02 , for any de minimis inaccuracies) as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date);
(ii) The representations and warranties of Sailfish, New Sailfish and Merger Sub set forth in Section 4.01 , Section 4.03 and Section 4.11 shall be true and correct in all material respects as of the date of this Agreement and the Closing (without regard to qualification or exceptions contained therein
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as to materiality or Sailfish Material Adverse Effect), as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date); and
(iii) all other representations and warranties of Sailfish, New Sailfish and Merger Sub set forth in Article 4 shall be true and correct as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date), except where the failure of such representations and warranties to be so true and correct (without regard to qualification or exceptions contained therein as to materiality or Sailfish Material Adverse Effect) would not have or reasonably be expected to have, individually or in the aggregate, a Sailfish Material Adverse Effect.
(b) Performance of Obligations . Sailfish, New Sailfish and Merger Sub shall have performed in all material respects all obligations required to be performed or complied with by them under this Agreement on or prior to the Closing Date.
(c) Certificate . Sailfish shall have delivered to Green Energy a certificate, dated the Closing Date, signed by the Chief Executive Officer or another senior executive officer of Sailfish certifying to the effect that the conditions set forth in Sections 8.02(a), Section 8.02(b) and Section 8.02(d) have been satisfied.
(d) No Sailfish Material Adverse Effect . Since the date of this Agreement, there shall not have occurred any fact, circumstance, occurrence, event, development, change, effect or condition which, individually or in the aggregate, has had or would reasonably be expected to have a Sailfish Material Adverse Effect.
Section 8.03 Conditions to Obligations of Sailfish, New Sailfish and Merger Sub . The obligations of Sailfish, New Sailfish and Merger Sub to effect the Closing are further subject to the satisfaction or (to the extent permitted by applicable Law) the waiver by Sailfish on or prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties .
(i) The representations and warranties of the Green Signing Parties set forth in Section 5.02 and Section 5.06(a) shall be true and correct (except, with respect to Section 5.02 , for any de minimis inaccuracies) as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date);
(ii) The representations and warranties of the Green Signing Parties set forth in Section 5.01 , Section 5.03 and Section 5.10 shall be true and correct in all material respects (without regard to qualification or exceptions contained therein as to materiality or Green Material Adverse Effect) as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date);
(iii) all other representations and warranties of the Green Signing Parties set forth in Article 5 shall be true and correct as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date), except where the failure of such representations and warranties to be so true and correct (without regard to qualification or exceptions contained therein as to materiality or Green Material Adverse Effect) would not reasonably be expected to have, individually or in the aggregate, a Green Material Adverse Effect;
(b) Performance of Obligations . The Green Signing Parties shall have performed in all material respects all obligations required to be performed or complied with by them under this Agreement on or prior to the Closing Date.
(c) Certificates . The Green Signing Parties shall have delivered to Sailfish a certificate, dated the Closing Date, signed by the Chief Executive Officer or another senior executive officer of Green Energy
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certifying that the conditions set forth in Sections 8.03(a) , Section 8.03(b) and Section 8.03(d) have been satisfied.
(d) No Green Material Adverse Effect . Since the date of this Agreement, there shall not have occurred any fact, circumstance, occurrence, event, development, change, effect or condition which, individually or in the aggregate, has had or would reasonably be expected to have a Green Material Adverse Effect.
(e) Termination of Green Related Party Transactions . The Green Related Party Transactions set forth on Annex 8.03(e) shall have been terminated on or before the Closing Date without the payment of (or the obligation to pay) any amounts in connection therewith by any Green Entity, and evidence of such terminations shall have been delivered to Sailfish.
TERMINATION
Section 9.01 Termination by Mutual Consent . This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing, whether before or after the Sailfish Stockholder Approval has been obtained, by mutual written consent of Green Energy and Sailfish.
Section 9.02 Termination by Sailfish or Green Energy . This Agreement may be terminated at any time prior to the Closing, whether before or after the Sailfish Stockholder Approval has been obtained, by either Sailfish or Green Energy upon written notice to the other if:
(a) any Governmental Entity having jurisdiction over any Party shall have issued any order, decree, ruling or injunction or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the Transactions and such order, decree, ruling or injunction or other action shall have become final and nonappealable or if there shall be adopted any Law that makes consummation of the Transactions illegal or otherwise prohibited; provided , however , that the right to terminate this Agreement under this Section 9.02(a) shall not be available to any Party whose failure to fulfill any covenant or agreement under this Agreement has been the principal cause of or resulted in the action or event described in this Section 9.02(a) occurring;
(b) the Transactions shall not have been consummated on or before 5:00 p.m. Houston time, on May 31, 2018 (such date being the End Date ); provided , however , that the right to terminate this Agreement under this Section 9.02(b) shall not be available to any Party whose failure to fulfill any covenant or agreement under this Agreement has been the principal cause of or resulted in the failure of the Transactions to occur on or before such date; or
(c) the Sailfish Stockholder Approval shall not have been obtained upon a vote taken at the Special Meeting (including adjournments, postponements, or recesses).
Section 9.03 Termination by Sailfish . This Agreement may be terminated at any time prior to the Closing by Sailfish if
(a) any of the Green Signing Parties shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 8.03(a) or Section 8.03(b) , and (ii) is incapable of being satisfied or cured by the Green Signing Parties, as applicable, prior to the End Date or, if capable of being satisfied or cured, is not satisfied or cured by either or both of the Green Signing Parties within 30 calendar days following receipt of written notice from Sailfish of such breach or failure to perform ( Green Terminable Breach ); provided that Sailfish is not then in Sailfish Terminable Breach of any representation, warranty, covenant or other agreement by Sailfish contained in this Agreement; or
(b) Apple or Ride shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in the Support Agreement, which breach or failure to perform
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(i) would give rise to the failure of the condition set forth in Section 8.01(i) , and (ii) is incapable of being satisfied or cured by Apple or Ride, as applicable, prior to the End Date or, if capable of being satisfied or cured, is not satisfied or cured by either or both of Apple and Ride within 30 calendar days following receipt of written notice from Sailfish of such breach or failure to perform ( AR Terminable Breach and together with a Green Terminable Breach, a Green Group Terminable Breach ); provided that Sailfish is not then in Sailfish Terminable Breach of any representation, warranty, covenant or other agreement by Sailfish contained in this Agreement.
Section 9.04 Termination by Green Energy . This Agreement may be terminated at any time prior to the Closing by Green Energy if:
(a) Sailfish shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 8.01(i) , Section 8.02(a) or Section 8.02(b) , and (ii) is incapable of being satisfied or cured by Sailfish prior to the End Date or, if capable of being satisfied or cured, is not satisfied or cured by Sailfish within 30 calendar days following receipt of written notice from Green Energy of such breach or failure to perform ( Sailfish Terminable Breach ); provided that neither Green Signing Party is then in Green Terminable Breach of any representation, warranty, covenant or other agreement by the Green Signing Parties contained in this Agreement;
(b) Sailfish shall have breached its obligations under Section 7.01(d) or Section 7.05 in any material respect, provided that Green Energy may not terminate this Agreement pursuant to this Section 9.04(b) after Sailfish Stockholder Approval has been obtained;
(c) a Change of Recommendation has occurred (in respect of a Superior Proposal), provided that Green Energy may not terminate this Agreement pursuant to this Section 9.04(c) after Sailfish Stockholder Approval has been obtained; or
(d) a Change of Recommendation has occurred in respect of reasons other than a Superior Proposal, provided that Green Energy may not terminate this Agreement pursuant to this Section 9.04(d) after Sailfish Stockholder Approval has been obtained.
Section 9.05 Notice of Termination; Effect of Termination .
(a) A terminating Party shall provide written notice of termination to the other Party specifying with particularity the reason for such termination, and in the event of the termination of this Agreement in compliance with this Article 9 , such termination shall be effective immediately upon delivery of such written notice to the other Party.
(b) In the event of termination of this Agreement by any Party as provided in Section 9.01 , Section 9.02 , Section 9.03 or Section 9.04 , this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any Party except with respect to the Confidentiality Agreement and this Section 9.05 , Section 7.04 , Section 9.06 and Article 1 and Article 10 ; provided , however , that notwithstanding anything to the contrary herein, no such termination shall relieve any Party from liability for any damages for intentional fraud or a Willful and Material Breach or any requirement to make the payments set forth in Section 9.06 .
Section 9.06 Expenses and Other Payments .
(a) Except as otherwise provided in this Agreement, each Party shall pay its own expenses incident to preparing for, entering into and carrying out this Agreement and the consummation of the Transactions, whether or not the Transactions shall be consummated.
(b) If Green Energy terminates this Agreement pursuant to (i) Section 9.04(b) ( Breach of Special Meeting/No Solicitation ) or Section 9.04(c) ( Change of Recommendation ) in respect of a Superior Proposal, then Sailfish shall pay Green Energy the Termination Fee or (ii) Section 9.04(d) ( Other Change of
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Recommendation ) in respect of reasons other than a Superior Proposal, then Sailfish shall pay Green Energy the Sailfish IE Termination Fee. If any fee shall be payable pursuant to the immediately preceding sentence, the fee shall be paid no later than two Business Days after notice of termination of this Agreement. The fee shall be paid in cash by wire transfer of immediately available funds to an account designated by Green Energy.
(c) If either Sailfish or Green Energy terminates this Agreement pursuant to Section 9.02(c) ( Failure to Obtain Sailfish Stockholder Approval ), and Green Energy is then entitled to terminate this Agreement pursuant to Section 9.04(b) ( Breach of Special Meeting/No Solicitation ) or Section 9.04(c) ( Change of Recommendation ), Sailfish shall pay Green Energy the Termination Fee in cash by wire transfer of immediately available funds to an account designated by Green Energy. The fee shall be paid no later than two Business Days after notice of termination of this Agreement.
(d) If either Sailfish or Green Energy terminates this Agreement pursuant to Section 9.02(c) ( Failure to Obtain Sailfish Stockholder Approval ), and Green Energy is then entitled to terminate this Agreement pursuant Section 9.04(d) ( Other Change of Recommendation ), Sailfish shall pay Green Energy the Sailfish IE Termination Fee in cash by wire transfer of immediately available funds to an account designated by Green Energy. The fee shall be paid no later than two Business Days after notice of termination of this Agreement.
(e) If (i) (A) Green Energy or Sailfish terminates this Agreement pursuant to Section 9.02(c) ( Failure to Obtain Sailfish Stockholder Approval ), (B) Sailfish terminates this Agreement pursuant to Section 9.02(b) ( End Date ), or (C) Green Energy terminates this Agreement pursuant to Section 9.04(a) ( Sailfish Terminable Breach ), (ii) on or before the date of any such termination a Competing Proposal shall have been announced, disclosed or otherwise communicated to the Sailfish Board (A) prior to the Sailfish Stockholders Meeting (in the case of a termination pursuant to clause (i)(A) ) or (B) prior to the date of such termination (in the case of a termination pursuant to clauses (i)(B) or (i)(C) ) and (iii) within 12 months after the date of such termination, Sailfish enters into a definitive agreement with respect to a Competing Proposal or consummates any transaction meeting the parameters of a Competing Proposal, then Sailfish shall pay Green Energy the Termination Fee, less any amount previously paid by Sailfish pursuant to this Section 9.06 , in cash by wire transfer of immediately available funds to an account designated by Green Energy, on the earliest date of when such definitive agreement is executed or such transaction is consummated. For purposes of this Section 9.06(e) , any reference in the definition of Competing Proposal to 20% or more shall be deemed to be a reference to more than 50%.
(f) If (i) this Agreement is terminated by (A) Sailfish or Green Energy pursuant to (1) Section 9.02(a) and such restraint, injunction or prohibition relates to any or all of the Mexican Granting Instruments or (2) Section 9.02(b) and all conditions in Section 8.01 and 8.02 have been satisfied or would be satisfied if the Closing were to occur on the End Date (other than any or all of the conditions set forth in Section 8.01(b)(ii) and Section 8.01(j) ), or (B) Sailfish pursuant to Section 9.03 , and such Green Group Terminable Breach related to the Green Signing Parties obligations under this Agreement with respect to the consent, approval, or other authorization of any required Mexican Governmental Entity with respect to the Transactions, (ii) between the date of this Agreement and the date of such termination, any Green Entity, Apple Entity, and/or Ride Entity or any of their respective Representatives received a Green Competing Proposal, and (iii) within 12 months after the date of such termination, Green Energy, Green Production, Apple, Ride and/or any of their respective Affiliates enters into a definitive agreement with respect to a Green Competing Proposal or consummates any transaction meeting the parameters of a Green Competing Proposal, then Green Energy shall pay Sailfish the Termination Fee, in cash by wire transfer of immediately available funds to an account designated by Sailfish, on the earliest date of when such definitive agreement is executed or such transaction is consummated.
(g) If Green Energy terminates this Agreement pursuant to Section 9.04(a) ( Sailfish Terminable Breach ) then Sailfish shall pay Green Energy the Green Expenses in cash by wire transfer of immediately available funds to an account designated by Green Energy. The Green Expenses shall be paid no later than
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two Business Days after notice of termination of this Agreement. For purposes of this Agreement, Green Expenses shall mean a cash amount of up to $2,750,000 (the Cap ) for all fees and expenses actually incurred by the Green Signing Parties and their respective Affiliates in connection with this Agreement and the Transactions, including all fees and expenses of counsel, investment banking firms and financial advisors (and their respective counsel), accountants, experts, consultants and other advisors and any other costs or expenses allocated to the Green Signing Parties pursuant to this Agreement.
(h) If Sailfish terminates this Agreement pursuant to Section 9.03 ( Green Group Terminable Breach ) then Green Energy shall pay Sailfish the Sailfish Expenses in cash by wire transfer of immediately available funds to an account designated by Sailfish. The Sailfish Expenses shall be paid no later than two Business Days after notice of termination of this Agreement. For purposes of this Agreement, Sailfish Expenses shall mean a cash amount of up to the Cap for all fees and expenses actually incurred by Sailfish and its Affiliates in connection with this Agreement and the Transactions, including all fees and expenses of counsel, investment banking firms and financial advisors (and their respective counsel), accountants, experts, consultants and other advisors and any other costs or expenses allocated to Sailfish pursuant to this Agreement.
(i) In no event shall (a) Green Energy be entitled to receive more than one payment of a termination fee, whether the Termination Fee or the Sailfish IE Termination Fee, or both the Termination Fee and the Sailfish IE Termination Fee or (b) Sailfish be entitled to received more than one payment of the Termination Fee. The Parties agree that (i) the agreements contained in this Section 9.06 are an integral part of the Transactions, (ii) neither the Termination Fee nor the Sailfish IE Termination Fee is a penalty, but each is liquidated damages, in a reasonable amount that will compensate such Party in the circumstances in which such fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions, which amount would otherwise be impossible to calculate with precision, and (iii) without these agreements, the Parties would not enter into this Agreement. If a Party fails to promptly pay the amount due by it pursuant to this Section 9.06 , interest shall accrue on such amount from the date such payment was required to be paid pursuant to the terms of this Agreement until the date of payment at the prime rate set forth in The Wall Street Journal in effect on the date such payment was required to be made. If, in order to obtain such payment, the other Party commences a Proceeding that results in judgment for such Party for such amount, the defaulting Party shall pay the other Party its reasonable out-of-pocket costs and expenses (including reasonable attorneys fees and expenses) incurred in connection with such Proceeding. The Parties agree that the monetary remedies set forth in this Section 9.06 and the specific performance remedies set forth in Section 10.05 shall be the sole and exclusive remedies of (i) the Green Signing Parties against Sailfish, New Sailfish and Merger Sub and any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates for any loss suffered as a result of the failure of the Transactions to be consummated except in the case of intentional fraud or a Willful and Material Breach (in which case only Sailfish shall be liable for damages for such intentional fraud or Willful and Material Breach), and upon payment of such amount, none of Sailfish, New Sailfish or Merger Sub or any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions, except for the liability of Sailfish in the case of intentional fraud or a Willful and Material Breach; and (ii) Sailfish, New Sailfish and Merger Sub against the Green Entities and any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates for any loss suffered as a result of the failure of the Transactions to be consummated except in the case of intentional fraud or a Willful and Material Breach (in which case only the Green Signing Parties shall be liable for damages for such intentional fraud or Willful and Material Breach), and upon payment of such amount, none of the Green Entities or any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions, except for the liability of Green Energy in the case of intentional fraud or a Willful and Material Breach.
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GENERAL PROVISIONS
Section 10.01 No Survival of Representations and Warranties . None of the representations, warranties covenants and agreements in this Agreement, or in any schedule, certificate, instrument or other document delivered pursuant to this Agreement, shall survive the Effective Time or, except as provided in Section 9.05 , the termination of this Agreement pursuant to Article 9 , as the case may be. This Section 10.01 shall not limit any covenant or agreement of the Parties which by its terms contemplates performance after the Effective Time.
Section 10.02 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and, in the case of delivery in person or by overnight mail, shall be deemed to have been duly given upon receipt) by delivery in person or overnight mail to the respective parties, delivery by facsimile transmission (providing confirmation of transmission) to the respective parties or delivery by electronic mail transmission (providing confirmation of transmission) to the respective parties. Any notice sent by facsimile transmission or electronic mail transmission shall be deemed to have been given and received at the time of confirmation of transmission. Any notice sent by electronic mail transmission shall be followed reasonably promptly with a copy delivered by overnight mail. All notices, requests, claims, demands and other communications hereunder shall be addressed as follows, or to such other address, facsimile number or email address for a Party as shall be specified in a notice given in accordance with this Section 10.02 :
(a) | if to the Green Signing Parties: |
Talos Energy LLC
500 Dallas St., Suite 2000
Houston, TX 77002
Attention: General Counsel
Facsimile: (713) 351-4100
Email: bmoss@talosenergyllc.com
with a further copy to (which shall not constitute notice):
Vinson & Elkins LLP
1001 Fannin Street, Suite 2500
Houston, TX 77002
Attention: Stephen M. Gill
Lande A. Spottswood
Facsimile: (713) 615-5956
Email: sgill@velaw.com
lspottswood@velaw.com
(b) | if to Sailfish, New Sailfish and/or Merger Sub: |
Stone Energy Corporation
625 East Kaliste Saloom Rd.
Lafayette, LA 70508
Attention: General Counsel
Facsimile: (337) 521-2072
Email: JaubertLS@StoneEnergy.com
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with a copy to (which copy shall not constitute notice):
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana Street, 45 th Floor
Houston, TX 77002
Attention: John Goodgame
Rebecca Tyler
Facsimile: (713) 236-0822
Email: jgoodgame@akingump.com
rtyler@akingump.com
Section 10.03 Rules of Construction .
(a) When a reference is made in this Agreement to an Article, Section, Schedule, Annex or Exhibit, such reference shall be to an Article, Section, Schedule, Annex or Exhibit to this Agreement unless otherwise indicated. The words include, includes and including when used herein shall be deemed in each case to be followed by the words without limitation. Any references in this Agreement to the date hereof refers to the date of execution of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to this Agreement, hereof, herein, and hereunder refer to this Agreement as a whole and not to any particular provision of this Agreement and include any schedules, disclosure letters, annexes, exhibits or other attachments to this Agreement. The Sailfish Disclosure Letter, the Green Disclosure Letter, all annexes and schedules hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto (including the Sailfish Disclosure Letter and the Green Disclosure Letter) unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. Writing, written and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References herein to $ or dollars will refer to United States dollars, unless otherwise specified. References to any period of days will be deemed to be to the relevant number of calendar days unless otherwise specified. The phrase made available with respect to documents shall be deemed to include any documents included and available to Green Energy and its Representatives or Sailfish and its Representatives, as applicable, in the applicable virtual data rooms hosted by Donnelley Financial Solutions in connection with the Merger on or prior to 8:00 p.m. Houston, Texas time on Friday, November 17, 2017. The word or shall not be exclusive. The word extent in the phrase to the extent shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply if. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day.
(b) Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with the advice of said counsel. Each Party and its counsel cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged between the Parties shall be deemed the work product of the Parties and may not be construed against any Party by reason of its preparation. Accordingly, any rule of law or any legal decision that would require interpretation
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of any ambiguities in this Agreement against any Party that drafted it is of no application and is hereby expressly waived.
(c) The inclusion of any information in the Sailfish Disclosure Letter or the Green Disclosure Letter shall not be deemed an admission or acknowledgment, in and of itself and solely by virtue of the inclusion of such information in the Sailfish Disclosure Letter or the Green Disclosure Letter, as applicable, that such information is required to be listed in the Sailfish Disclosure Letter or the Green Disclosure Letter, as applicable, that such items are material to Sailfish and its Subsidiaries, taken as a whole, or Green and its Subsidiaries, taken as a whole, as the case may be, or that such items have resulted in a Sailfish Material Adverse Effect or a Green Material Adverse Effect. The headings, if any, of the individual sections of each of the Sailfish Disclosure Letter and Green Disclosure Letter are inserted for convenience only and shall not be deemed to constitute a part thereof or a part of this Agreement. The Sailfish Disclosure Letter and the Green Disclosure Letter are arranged in sections corresponding to the Sections of this Agreement merely for convenience, and the disclosure of an item in one section of the Sailfish Disclosure Letter or the Green Disclosure Letter, as applicable, as an exception to a particular representation or warranty shall be deemed adequately disclosed as an exception with respect to all other representations or warranties of the applicable Party to the extent that the relevance of such item to such representations or warranties is reasonably apparent on the face of such disclosure, notwithstanding the presence or absence of an appropriate section of the Sailfish Disclosure Letter or the Green Disclosure Letter with respect to such other representations or warranties or an appropriate cross-reference thereto; provided , however , that no such disclosure shall be deemed to qualify Section 4.07(a) , Section 4.07(c) , Section 5.06(a) , Section 5.06(c) , Section 6.01 or Section 6.02 , except to the extent disclosed as an exception to such Section in particular in the Sailfish Disclosure Letter or Green Disclosure Letter, as applicable.
(d) The specification of any dollar amount in the representations and warranties or covenants or otherwise in this Agreement or in the Sailfish Disclosure Letter or the Green Disclosure Letter is not intended and shall not be deemed to be an admission or acknowledgment of the materiality of such amounts or items, nor shall the same be used in any dispute or controversy between the Parties to determine whether any obligation, item or matter (whether or not described herein or included in any schedule) is or is not material for purposes of this Agreement.
Section 10.04 Governing Law; Jurisdiction .
(a) THIS AGREEMENT AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF, OR RELATE TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION, OR PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
(b) Each of the Parties (i) irrevocably consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware (the Chancery Court ) or, if, but only if, the Chancery Court lacks subject matter jurisdiction, any federal court located in the State of Delaware with respect to any dispute arising out of, relating to or in connection with this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action arising out of, relating to or in connection with this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and (iv) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS A GREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY . Nothing in this Section 10.04 shall prevent any Party from bringing an action or proceeding in any jurisdiction to enforce any judgment of the Chancery Court or any federal court located in the State of Delaware, as applicable. Each of the Parties hereby agrees
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that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 10.02 shall be effective service of process for any suit or proceeding in connection with this Agreement or any of the transactions contemplated hereby. The Parties hereby agree that mailing of process or other papers in connection with such action, suit, or proceeding in the manner provided by Section 10.02 or in such other manner as may be permitted by law shall be valid and sufficient service thereof.
Section 10.05 Specific Performance . The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party accordingly agrees that, in the event of any breach or threatened breach by any other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in law or equity, including monetary damages) to (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, including the consummation of the Transactions, and (ii) an injunction restraining such breach or threatened breach. In circumstances where the parties are obligated to consummate the Transactions and the Transactions have not been consummated (other than as a result of the other partys refusal to close in violation of this Agreement) each of the parties expressly acknowledges and agrees that the other party and its stockholders shall have suffered irreparable harm, that monetary damages will be inadequate to compensate such other party and its stockholders, and that such other party on behalf of itself and its stockholders shall be entitled to enforce specifically the breaching partys obligation to consummate the Transactions. Each Party accordingly agrees not to raise any objection to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such Party under this Agreement all in accordance with the terms of this Section 10.05 . Each Party further agrees that no other Party and no other Person shall be required to obtain, furnish, or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10.05 , and each Party irrevocably waives any right it may have to require the obtaining, furnishing, or posting of any such bond or similar instrument.
Section 10.06 Counterparts; Electronic Transmission of Signatures . This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts, and delivered by means of electronic mail transmission or otherwise, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
Section 10.07 Assignment; No Third Party Beneficiaries .
(a) This Agreement and all of the provisions hereto shall be binding upon and inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations set forth herein shall be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of the other Parties and any purported assignment without such consent shall be void; provided that a Party may, without the prior written consent of the other Parties, assign any or all of its rights and obligations under this Agreement to one or more of its Affiliates; provided further that such assignment by a Party shall not limit or affect such Partys obligations under this Agreement.
(b) Nothing in this Agreement shall be construed as giving any Person, other than the Parties and their heirs, successors, legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof, except that (i) after the Closing, each Indemnified Person is intended to be a third party beneficiary of Section 7.10 and may specifically enforce its terms and (ii) the Debt Providers and their respective current, former or future directors, officers, general or limited partners, stockholders, members, managers, controlling persons, Affiliates, employees or Representatives shall be third party beneficiaries of Section 9.05 , Section 10.04 and this Section 10.07 .
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(c) Notwithstanding anything to the contrary herein, Sailfish agrees, on behalf of itself and its Affiliates, stockholders and Representatives (collectively, the Sailfish Related Parties ) that the Debt Providers and their Affiliates, stockholders and Representatives and each of their successors and assigns (i) shall be subject to no liability or claims by the Sailfish Related Parties arising out of or relating to this Agreement, the financing or the transactions contemplated hereby or in connection with the New Revolving Credit Facility, or the performance of services by such Debt Providers or their Affiliates or Representatives with respect to the foregoing and (ii) are express third party beneficiaries of this section (which may not be changed as to any Debt Provider without its prior written consent).
Section 10.08 Expenses . Except as otherwise specifically provided herein, each Party shall bear its own expenses in connection with this Agreement and the transactions contemplated hereby.
Section 10.09 Severability . If any provision of this Agreement shall be held to be illegal, invalid or unenforceable under any applicable Law, then such contravention or invalidity shall not invalidate the entire Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall render it legal, valid and enforceable, then this Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the Parties shall be construed and enforced accordingly.
Section 10.10 Amendment . This Agreement may be amended by the Parties, at any time before or after approval of this Agreement and the Transactions by action by or on behalf of the respective Boards of Directors of the Parties or the stockholders of Sailfish; provided , however , that after the Sailfish Stockholder Approval, no amendment shall be made which by Law would require the approval of such stockholders, without first obtaining such approval. This Agreement (including the Sailfish Disclosure Letter and the Green Disclosure Letter) may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 10.11 Waiver . Any failure of any of the Parties to comply with any obligation, representation, warranty, covenant, agreement or condition herein may be waived at any time prior to the Closing by any of the Parties entitled to the benefit thereof only by a written instrument signed by each such Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, representation, warranty, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
Section 10.12 Entire Agreement . This Agreement (together with the other Combination Agreements, the Confidentiality Agreement, and the other documents and instruments executed pursuant hereto) constitutes the entire agreement, and supersede all other prior agreements and understandings (both written and oral), among the Parties with respect to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed as of the date first written above by its respective officer thereunto duly authorized, all as of the date first written above.
STONE ENERGY CORPORATION |
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By: |
/s/ Neal P. Goldman |
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Name: | Neal P. Goldman | |
Title: | Chairman of the Board | |
SAILFISH ENERGY HOLDINGS CORPORATION | ||
By: |
/s/ James M. Trimble |
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Name: | James M. Trimble | |
Title: | Interim Chief Executive Officer and President | |
SAILFISH MERGER SUB CORPORATION | ||
By: |
/s/ James M. Trimble |
|
Name: | James M. Trimble | |
Title: | Interim Chief Executive Officer and President |
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TALOS ENERGY LLC | ||
By: |
/s/ Timothy S. Duncan |
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Name: | Timothy S. Duncan | |
Title: | President and Chief Executive Officer | |
TALOS PRODUCTION LLC | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President and Chief Executive Officer |
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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SAILFISH ENERGY HOLDINGS CORPORATION
Sailfish Energy Holdings Corporation, a corporation organized and existing under the laws of the State of Delaware (the Corporation ), hereby certifies as follows:
1. The name of the Corporation immediately prior to the effectiveness of this Amended and Restated Certificate of Incorporation was Sailfish Energy Holdings Corporation, and the name of the Corporation upon such effectiveness shall be Talos Energy Inc.
2. The Corporation was incorporated by filing its original Certificate of Incorporation under the name Sailfish Energy Holdings Corporation with the Secretary of State of Delaware on November 14, 2017 (the Original Certificate ).
3. This Amended and Restated Certificate of Incorporation (as amended, restated or modified from time to time, including pursuant to the adoption or amendment of any Preferred Stock Certificate of Designation (as defined below), this Certificate ) amends and restates the Original Certificate and has been duly adopted in accordance with Sections 242, 245 and 228 of the General Corporation Law of the State of Delaware (the DGCL ) and by the Stockholders of the Corporation by written consent in lieu of meeting in accordance with the DGCL.
4. The Original Certificate of the Corporation is hereby amended, integrated and restated in its entirety to read as follows:
ARTICLE I
NAME
The name of the Corporation is Talos Energy Inc..
ARTICLE II
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
ARTICLE III
REGISTERED AGENT
The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of the registered agent of the Corporation at such address is The Corporation Trust Company.
ARTICLE IV
CAPITALIZATION
Section 4.1 Authorized Capital Stock . The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 300,000,000, of which 30,000,000 shares shall be preferred stock, par value of $.01 per share (the Preferred Stock ), and 270,000,000 shares shall be common stock, par value of $.01 per share (the Common Stock ).
Section 4.2 Preferred Stock .
(a) The Board of Directors of the Corporation (the Board ) is authorized to provide for the issuance from time to time of Preferred Stock in one or more series by filing a certificate of the voting powers (if any), designations, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any (a Preferred Stock Certificate of Designation ), pursuant to the applicable provisions of the DGCL, as are stated and expressed in the resolution or resolutions providing for the issuance thereof adopted by the Board and dependent on facts ascertainable outside such Preferred Stock Certificate of Designation or resolution or resolutions providing for the issuance thereof adopted by the Board, including, but not limited to, determination of any of the following:
i. the distinctive designation of the series, whether by number, letter or title, and the number of shares which will constitute the series, which number may be increased or decreased (but not below the number of shares then outstanding and except to the extent otherwise provided in the applicable Preferred Stock Certificate of Designation) from time to time by action of the Board;
ii. the dividend rate or rates on the shares of that series, the terms and conditions upon which and the periods in respect of which dividends shall be payable, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;
iii. whether that series shall have voting rights, in addition to any voting rights required by law, and, if so, the terms of such voting rights;
iv. whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board shall determine;
v. whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in the event of redemption, which amount may vary under different conditions and at different redemption dates;
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vi. whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
vii. the rights of the shares of that series in the event of voluntary or involuntary liquidation, distribution of assets, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and
viii. any other relative rights, powers, and preferences, and the qualifications, limitations and restrictions thereof, of that series.
(b) The terms of any series, including voting rights, may be made dependent upon facts ascertainable outside this Certificate and the Preferred Stock Certificate of Designation, provided that the manner in which such facts shall operate upon such terms is clearly and expressly set forth in this Certificate or in the Preferred Stock Certificate of Designation. Notwithstanding the foregoing, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate or pursuant to the DGCL.
(c) Subject to the rights of the holders of any series of Preferred Stock pursuant to the terms of this Certificate or any resolution or resolutions providing for the issuance of such series of stock adopted by the Board and without limiting the authority of the Board set forth in Section 4.2(a)(i), the number of authorized shares of any class or series of capital stock of the Corporation may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power irrespective of the provisions of Section 242(b)(2) of the DGCL.
(d) All shares of any one series of Preferred Stock so designated by the Board shall be identical, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative.
Section 4.3 Common Stock
(a) Dividends . Subject to the provisions of any Preferred Stock Certificate of Designation, the Board may, in its discretion, out of funds legally available for the payment of dividends and at such times and in such manner as determined by the Board, declare and pay dividends on the Common Stock of the Corporation. No dividend (other than a dividend in capital stock ranking on a parity with the Common Stock or cash in lieu of fractional shares with respect to such stock dividend) shall be declared or paid on any share or shares of any class of stock or series thereof that by the express terms of such class of stock or series thereof ranks on parity with the Common Stock in respect of payment of dividends for any dividend period unless there shall have been declared, for the same dividend period, like proportionate dividends on all shares of Common Stock then outstanding.
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(b) Liquidation . Subject to the provisions of any Preferred Stock Certificate of Designation, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation and payment or setting aside for payment of any preferential amount due to the holders of any other class or series of stock, the holders of the Common Stock shall be entitled to receive ratably any or all assets remaining to be paid or distributed.
(c) Voting Rights . Subject to Section 4.2(b) , the holders of the Common Stock of the Corporation shall be entitled to one vote for each share of such stock held by them on all matters submitted to the holders of Common Stock.
Section 4.4 Prior, Parity or Junior Stock
(a) Whenever reference is made in this Article IV to shares ranking prior to another class of stock or on a parity with another class of stock, such reference shall mean and include all other shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, as applicable, are given preference over, or rank on an equal basis with, as the case may be, the rights of the holders of such other class of stock.
(b) Whenever reference is made to shares ranking junior to another class of stock, such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends and as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation are junior and subordinate to the rights of the holders of such class of stock.
(c) Except as otherwise provided herein or in any Preferred Stock Certificate of Designation (i) each series of Preferred Stock ranks on a parity with each other and each ranks prior to the Common Stock and (ii) Common Stock ranks junior to Preferred Stock.
Section 4.5 Reservation and Retirement of Shares
(a) The Corporation shall at all times reserve and keep available, out of its authorized but unissued shares of Common Stock or out of shares of Common Stock held in its treasury, the full number of shares of Common Stock into which all shares of any series of Preferred Stock having conversion privileges from time to time outstanding are convertible (except, to the extent provided in any Preferred Stock Certificate, where the conversion is conditioned upon the sufficient availability of authorized but unissued shares of Common Stock and shares of Common Stock held in treasury).
(b) Unless otherwise provided in a Preferred Stock Certificate of Designation with respect to a particular series of Preferred Stock, all shares of Preferred Stock redeemed or acquired (as a result of conversion or otherwise) by the Corporation shall be retired and restored to the status of authorized but unissued shares.
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Section 4.6 No Preemptive Rights . No holder of shares of stock of the Corporation shall have any preemptive or other rights, except as such rights are expressly provided by contract, an amendment to this Certificate or any Preferred Certificate of Designation to purchase or subscribe for or receive any shares of any class, or series thereof, of stock of the Corporation, whether now or hereafter authorized, or any warrants, options, bonds, debentures or other securities convertible into, exchangeable for or carrying any right to purchase any shares of any class, or series thereof, of stock; but such additional shares of stock and such warrants, options, bonds, debentures or other securities convertible into, exchangeable for or carrying any right to purchase any shares of any class, or series thereof, of stock may be issued or disposed of by the Board to such persons, and on such terms and for such lawful consideration, as in its discretion it shall deem advisable or as to which the Corporation shall have by binding contract agreed.
ARTICLE V
BOARD OF DIRECTORS
Section 5.1 General Powers . Except as otherwise provided by applicable law or this Certificate, the business and affairs of the Corporation shall be managed by or under the direction of the Board, subject to (i) the Boards right or obligation to delegate any such authority to a committee of the Board as required or permitted by the Bylaws or the Stockholders Agreement and (ii) any limitations or restrictions on the Boards authority expressly provided in the Stockholders Agreement.
Section 5.2 Number and Election . The position of chairman of the Board shall be held by a director qualifying as a Company Independent Director elected by a majority of the directors then in office until the second annual meeting of the stockholders held after the Effective Date, after which time the position of chairman of the Board may be held by any director elected by the majority of the directors then in office. For purposes of this Certificate, Whole Board shall mean the total number of authorized directorships. Unless and except to the extent that the Bylaws shall so require, the election of directors to the Board need not be by written ballot. If the Corporation solicits proxies with respect to the election of directors, the Corporation shall be required, subject to the provisions of the Stockholders Agreement, to include in the Corporations proxy materials (including any form of proxy it distributes), each Green Designee and Non-Green Designee designated in accordance with the Stockholders Agreement.
Section 5.3 Classes of Directors; Term of Office . The Board shall be and is divided into three classes, as nearly equal in number as possible, designated: Class I, Class II and Class III. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class shall be apportioned as nearly equal as possible. No decrease in the number of directors shall shorten the term of any incumbent director. Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such director was elected; provided , that each director initially appointed to Class I shall serve for a term expiring at the first annual meeting of stockholders held after the Effective Date; each director initially appointed to Class II shall serve for a term expiring at the second annual meeting of stockholders held after the Effective Date; and each director initially appointed to Class III shall serve for a term expiring at the third annual meeting of stockholders held after the Effective Date; provided , further , that a director shall continue to serve as a director until the election and qualification of his successor or until his earlier death, resignation or removal. The Board is hereby authorized to assign members of the Board who are already in office to Class I,
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Class II and Class III, with such assignment to be effective at the time this sentence becomes effective. Unless otherwise provided in one or more Preferred Stock Certificates of Designation, the foregoing provisions of this paragraph shall not apply to any director elected exclusively by one or more series of Preferred Stock.
Section 5.4 Quorum . Except as otherwise required by law, this Certificate or the Bylaws, a majority of the Whole Board shall constitute a quorum for the transaction of business at any meeting of the Board. A majority of the directors present (though less than such quorum) may adjourn the meeting from time to time without further notice.
Section 5.5 Manner of Acting . Every act or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be regarded as the act of the Board, unless the act of a greater number is required by law, this Certificate, the Bylaws or the Stockholders Agreement.
Section 5.6 Vacancies . Except as otherwise required by law, and subject to the terms of any Preferred Stock Certificate of Designation, any vacancy or newly created directorships in the Board, however occurring, shall be filled only by a majority of the directors then in office, although less than a quorum, by a sole remaining director, or by a committee of the Board authorized to fill any such vacancies or newly created directorships, and shall not be filled by the stockholders of the Corporation. Notwithstanding the foregoing, in the event a Green Director shall cease to serve as a director for any reason, so long as the nominee for such persons position is subject to nomination pursuant to the Stockholders Agreement, the vacancy therefrom shall be filled either (i) by the same Person(s) who designated such Green Director who has ceased serving as a director on the Board or (ii) by a majority of the directors then in office, but only with the nominee designated by such Person(s) identified in (i). A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, and shall remain in office until the election and qualification of a successor or such directors earlier death, resignation or removal. If any applicable provision of the DGCL expressly confers power on stockholders to fill such a directorship at a special meeting of stockholders, such a directorship may be filled at such meeting only by the affirmative vote of the holders of a majority of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors.
Section 5.7 Removal and Resignation of Directors . Subject to the terms and conditions of the Stockholders Agreement, directors (other than directors elected exclusively by the holders of one or more series of Preferred Stock) may be removed only for cause, and only by the affirmative vote of the stockholders that together hold at least 66 2/3% of the voting power of the outstanding shares of the Corporation entitled to vote in any annual election of directors or class of directors.
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ARTICLE VI
ACTION BY WRITTEN CONSENT
Section 6.1 Action by Written Consent . Before the Sunset Date, the stockholders of the Corporation may consent to any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation without a meeting in accordance with Section 228 of the DGCL and subject to any requirements set forth in the Bylaws. Subject to the terms of any Preferred Stock Certificate of Designation, on and after the Sunset Date any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent or consents of the stockholders in lieu of a stockholder meeting.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Limitation on Director Liability . To the fullest extent that the DGCL or any other law of the State of Delaware as the same exists or is hereafter amended permits the limitation or elimination of the liability of directors, no person who is or was a director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (or any successor provision thereto), or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or amendment of this Section 7.1 by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Certificate inconsistent with this Section 7.1 will, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to further limit or eliminate the liability of directors) and shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal, amendment or adoption of such inconsistent provision with respect to acts or omissions occurring prior to such repeal, amendment or adoption of such inconsistent provision.
Section 7.2 Indemnification and Advancement of Expenses .
(a) To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding ) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an Indemnitee ), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all expenses, liability and loss (including, without limitation, attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably and actually incurred or suffered by such Indemnitee in connection with such Proceeding.
(b) To the fullest extent permitted by law, an Indemnitee shall also have the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any such Proceeding in advance of its final disposition; provided, however, that, if the DGCL requires, an advancement of expenses shall be made only upon delivery to the Corporation of an
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undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the Indemnitee is not entitled to be indemnified for the expenses under this Article VII or otherwise. The rights to indemnification and advancement of expenses conferred by this Article VII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Article VII , except for Proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.
Section 7.3 Cumulative Rights . The rights to indemnification and advancement of expenses conferred on any Indemnitee by this Article VII shall not be exclusive of any other rights that any Indemnitee may have or hereafter acquire under law, this Certificate, the Bylaws, the Stockholders Agreement, an agreement, vote of stockholders or disinterested directors, or otherwise.
Section 7.4 Amendments . Any repeal or amendment of this Article VII by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Certificate inconsistent with this Article VII , shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
Section 7.5 Additional Indemnitees . This Article VII shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than Indemnitees.
ARTICLE VIII
RELATED PERSONS; CORPORATE OPPORTUNITY
Section 8.1 Related Party Transactions .
(a) Neither any contract or other transaction between the Corporation and any other corporation, partnership, limited liability company, joint venture, firm, association, or other entity (an Entity ), nor any other acts of the Corporation with relation to any other Entity will, in the absence of fraud, in any way be invalidated by the fact that any one or more of the directors or officers of the Corporation have a pecuniary interest or are otherwise interested in, or are directors, officers, partners, or members of, such other Entity (such directors, officers, and Entities, each a Related Person ). The fact that any Related Person may be a party to, or may have a pecuniary interest or are otherwise interested in, any contract or transaction of the Corporation, shall not affect the validity of such contract or transaction; provided, that the fact that such person is a Related Person is disclosed or is known to the Board or a majority of directors present at any meeting of the Board at which action upon any such contract or
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transaction is taken; and any director of the Corporation who is also a Related Person may be counted in determining the existence of a quorum at any meeting of the Board during which any such contract or transaction is authorized and may vote thereat to authorize any such contract or transaction, with like force and effect as if such person were not a Related Person. Any director of the Corporation may vote upon any contract or any other transaction between the Corporation and any Subsidiary or affiliated corporation without regard to the fact that such person is also a director or officer of such Subsidiary or affiliated corporation.
(b) Any contract, transaction or act of the Corporation or of the directors that is ratified in good faith at any annual meeting of the stockholders of the Corporation, or at any special meeting of the stockholders of the Corporation called for such purpose, shall not be void or voidable by reason of a Related Persons interest therein insofar as permitted by applicable law; provided, however, that any failure of the stockholders to approve or ratify any such contract, transaction or act, when and if submitted, will not be deemed in any way to invalidate the same or deprive the Corporation, its directors, officers or employees, of its or their right to proceed with such contract, transaction or act.
Section 8.2 Corporate Opportunity .
(a) Subject to any express agreement that may from time to time be in effect, (x) any director or officer of the Corporation (other than a person then serving as a full-time employee of the Corporation) who is also an officer, director, employee, managing director or other affiliate of a Principal Stockholder and (y) the Principal Stockholders, may, and shall have no duty not to, in each case on behalf of the Principal Stockholders (the persons and entities in clauses (x) and (y), each a Covered Person ), (i) carry on and conduct, whether directly, or as a partner in any partnership, or as a joint venturer in any joint venture, or as an officer, director or stockholder of any corporation, or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Corporation, (ii) do business with any client, customer, vendor or lessor of any of the Corporation or its affiliates, and (iii) make investments in any kind of property in which the Corporation may make investments. To the fullest extent permitted by Section 122(17) of the DGCL, the Corporation hereby renounces any interest or expectancy of the Corporation to participate in any business of the Principal Stockholders, and waives any claim against a Covered Person and shall indemnify a Covered Person against any claim that such Covered Person is liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of such persons or entitys participation in any such business. In the event that a Covered Person acquires knowledge of a potential transaction or matter which may constitute a corporate opportunity for both (x) the Covered Person, in his or her Principal Stockholder-related capacity, or a Principal Stockholder and (y) the Corporation, the Covered Person shall not have any duty to offer or communicate information regarding such corporate opportunity to the Corporation. To the fullest extent permitted by Section 122(17) of the DGCL, the Corporation hereby renounces any interest or expectancy of the Corporation in such corporate opportunity and waives any claim against each Covered Person and shall indemnify a Covered Person against any claim, that such Covered Person is liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of the fact that such Covered Person (i) pursues or acquires any corporate opportunity for its own account or the account of any affiliate, (ii) directs, recommends, sells, assigns, or otherwise transfers such corporate
9
opportunity to another person or (iii) does not communicate information regarding such corporate opportunity to the Corporation, provided, however, in each case, that any corporate opportunity which is expressly offered to a Covered Person in writing solely in his or her capacity as an officer or director of the Corporation shall belong to the Corporation. The Corporation shall pay in advance any expenses incurred in defense of such claim as provided in Article VII .
(b) Neither the amendment nor repeal of this Article VIII , nor the adoption of any provision of this Certificate or the Bylaws, nor, to the fullest extent permitted by Delaware law, any modification of law, shall eliminate, reduce or otherwise adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).
(c) If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VIII (including, without limitation, each portion of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by applicable law.
(d) This Article VIII shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Amended and Restated Certificate of Incorporation, the bylaws of the Corporation or applicable law. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in any securities of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article VIII .
ARTICLE IX
AMENDMENTS
Section 9.1 Amendment of Certificate .
(a) The Corporation shall have the right, subject to any express provisions or restrictions contained in this Certificate or the Bylaws, from time to time, to amend this Certificate or any provision thereof in any manner now or hereafter provided by law, and all rights and powers of any kind conferred upon a director or stockholder of the Corporation by this Certificate or any amendment thereof are conferred subject to such right, except as otherwise expressly provided in this Certificate.
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(b) Subject to the terms of any Preferred Stock Certificate of Designation and any greater vote required by law, this Certificate may be amended, modified or repealed upon the affirmative vote of the stockholders that together hold a majority of the voting power of the outstanding shares of the Corporation entitled to vote thereon.
Section 9.2 Amendment of Bylaws .
(a) In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board shall have the power to adopt, amend, alter or repeal the Bylaws. In addition to any other vote required by law or provided by the Bylaws or a Preferred Stock Certificate of Designation, the Board of Directors shall not amend, alter or repeal the Bylaws without obtaining the approval of a majority of the directors then in office.
(b) In addition to any other vote required by law or provided in the Bylaws or a Preferred Stock Certificate of Designation, any provision of the Bylaws may be amended, altered or repealed by the stockholders of the Corporation (i) before the Sunset Date, by the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon and (ii) on and after the Sunset Date, by the affirmative vote of the holders of at least 66 2/3% of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon.
ARTICLE X
WAIVERS
The Corporation shall not be governed by or subject to Section 203 of the DGCL.
ARTICLE XI
SEVERABILITY
If any provision or provisions of this Certificate shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate (including, without limitation, each portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate (including, without limitation, each such portion of any paragraph of this Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.
ARTICLE XII
FORUM SELECTION
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee,
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agent or stockholder (including a beneficial owner of stock) of the Corporation to the Corporation or the Corporations stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate or the Bylaws or (d) any action asserting a claim governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in any share of capital stock of the Corporation shall be deemed to have notice of and consent to the provisions of this Article XII .
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Certain Definitions . Capitalized terms that are used but not defined in this Certificate, but that are defined in the Stockholders Agreement, have the respective meanings assigned to such terms in the Stockholders Agreement. As used herein, the following terms shall have the meanings specified in this Section 13.1 :
Bylaws means the Amended and Restated Bylaws of the Corporation adopted as of May 10, 2018, as the same may be amended, restated or supplemented from time to time.
Effective Date means the date on which the filing of this Amended and Restated Certificate of Incorporation with the Office of the Secretary of State of the State of Delaware becomes effective.
Principal Stockholders means the Apple Parties and the Ride Parties.
Stockholders Agreement means the Stockholders Agreement, dated as of May 10, 2018, by and among the Corporation and the other parties thereto, as the same may be amended, restated or supplemented from time to time.
Sunset Date means the first date on which the Principal Stockholders, in the aggregate, beneficially own (as determined in accordance with the Stockholders Agreement) 50% or less of the Common Stock then outstanding.
Section 13.2. Facts Ascertainable. When the terms of this Certificate refer to a specific agreement or other document or a decision by any body, person or entity to determine the meaning or operation of a provision hereof, the secretary of the Corporation shall maintain a copy of such agreement, document or decision at the principal executive offices of the Corporation and a copy thereof shall be provided free of charge to any stockholder who makes a request therefor. Unless otherwise provided in this Certificate, a reference to any specific agreement or other document shall be deemed a reference to such agreement or document as amended, restated or supplemented from time to time in accordance with the terms of such agreement or document.
[ Signature page follows .]
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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer on this 10th day of May, 2018.
SAILFISH ENERGY HOLDINGS CORPORATION | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President and Chief Executive Officer |
[Signature Page to Amended and Restated Certificate of Incorporation of Sailfish Energy Holdings Corporation]
Exhibit 3.2
AMENDED & RESTATED BYLAWS
(the Bylaws )
OF
TALOS ENERGY INC.
(the Corporation )
A Delaware Corporation
As Amended and Restated May 10, 2018
TABLE OF CONTENTS
ARTICLE I OFFICES |
1 | |||||
Section 1.1. |
Registered Office | 1 | ||||
Section 1.2. |
Other Offices | 1 | ||||
Section 1.3. |
Books and Records | 1 | ||||
ARTICLE II STOCKHOLDERS |
1 | |||||
Section 2.1. |
Place of Meetings | 1 | ||||
Section 2.2. |
Quorum; Withdrawal During Meeting; Adjournment | 1 | ||||
Section 2.3. |
Annual Meetings | 2 | ||||
Section 2.4. |
Special Meetings | 2 | ||||
Section 2.5. |
Record Date | 3 | ||||
Section 2.6. |
Notice of Meetings | 4 | ||||
Section 2.7. |
List of Stockholders | 4 | ||||
Section 2.8. |
Proxies | 5 | ||||
Section 2.9. |
Voting; Elections; Inspectors | 6 | ||||
Section 2.10. |
Conduct of Meetings | 7 | ||||
Section 2.11. |
Treasury Stock | 7 | ||||
Section 2.12. |
Action by Written Consent | 7 | ||||
Section 2.13. |
Business to be Brought Before Annual or Special Meetings | 7 | ||||
ARTICLE III BOARD OF DIRECTORS |
12 | |||||
Section 3.1. |
Power; Number; Classes; Term of Office | 12 | ||||
Section 3.2. |
Quorum; Required Vote for Director Action | 13 | ||||
Section 3.3. |
Place of Meetings; Order of Business | 13 | ||||
Section 3.4. |
Annual Meeting | 14 | ||||
Section 3.5. |
Regular Meetings | 14 | ||||
Section 3.6. |
Special Meetings | 14 | ||||
Section 3.7. |
Vacancies; Increases in the Number of Directors | 14 | ||||
Section 3.8. |
Compensation | 14 | ||||
Section 3.9. |
Action Without a Meeting; Telephone Conference Meeting | 14 | ||||
ARTICLE IV COMMITTEES |
15 | |||||
Section 4.1. |
Designation; Powers | 15 | ||||
Section 4.2. |
Procedure; Meetings; Quorum | 16 | ||||
Section 4.3. |
Dissolution | 16 | ||||
Section 4.4. |
Audit Committee | 16 | ||||
Section 4.5. |
Governance & Nominating Committee | 16 | ||||
ARTICLE V OFFICERS |
17 | |||||
Section 5.1. |
Number, Titles and Term of Office | 17 | ||||
Section 5.2. |
Compensation | 17 | ||||
Section 5.3. |
Removal | 17 | ||||
Section 5.4. |
Vacancies | 17 |
Section 5.5. |
Chief Executive Officer | 17 | ||||
Section 5.6. |
Chairman of the Board | 18 | ||||
Section 5.7. |
President | 18 | ||||
Section 5.8. |
Vice Presidents | 18 | ||||
Section 5.9. |
Chief Financial Officer | 18 | ||||
Section 5.10. |
Chief Operating Officer | 18 | ||||
Section 5.11. |
Chief Accounting Officer | 19 | ||||
Section 5.12. |
General Counsel | 19 | ||||
Section 5.13. |
Treasurer | 19 | ||||
Section 5.14. |
Secretary | 19 | ||||
Section 5.15. |
Assistant Secretaries | 19 | ||||
Section 5.16. |
Action with Respect to Securities of Other Corporations | 20 | ||||
ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS |
20 | |||||
Section 6.1. |
Right to Indemnification | 20 | ||||
Section 6.2. |
Advance Payment | 21 | ||||
Section 6.3. |
Indemnification of Employees and Agents | 21 | ||||
Section 6.4. |
Appearance as a Witness | 21 | ||||
Section 6.5. |
Right of Claimant to Bring Suit | 21 | ||||
Section 6.6. |
Nonexclusivity of Rights | 22 | ||||
Section 6.7. |
Insurance | 22 | ||||
Section 6.8. |
Amendments | 22 | ||||
Section 6.9. |
Severability | 22 | ||||
Section 6.10. |
Definitions | 22 | ||||
ARTICLE VII CAPITAL STOCK |
23 | |||||
Section 7.1. |
Certificates of Stock; Signatures | 23 | ||||
Section 7.2. |
Transfer of Shares | 23 | ||||
Section 7.3. |
Effect of Corporations Restriction on Transfer | 24 | ||||
Section 7.4. |
Ownership of Shares | 24 | ||||
Section 7.5. |
Regulations Regarding Certificates | 24 | ||||
Section 7.6. |
Lost, Stolen, Destroyed or Mutilated Certificates | 24 | ||||
ARTICLE VIII MISCELLANEOUS PROVISIONS |
25 | |||||
Section 8.1. |
Fiscal Year | 25 | ||||
Section 8.2. |
Corporate Seal | 25 | ||||
Section 8.3. |
Waiver of Notice | 25 | ||||
Section 8.4. |
Resignations | 25 | ||||
Section 8.5. |
Facsimile Signatures | 25 | ||||
Section 8.6. |
Reliance upon Books, Reports and Records | 25 | ||||
Section 8.7. |
Meeting Attendance via Remote Communication Equipment | 26 | ||||
Section 8.8. |
Dividends | 26 | ||||
Section 8.9. |
Reserves | 26 | ||||
Section 8.10. |
Notice to Stockholders Sharing Same Address | 26 |
Section 8.11. |
Exceptions to Notice Requirements | 26 | ||||
Section 8.12. |
Capitalized Terms | 26 | ||||
ARTICLE IX AMENDMENTS |
27 |
Exhibit 3.2
AMENDED & RESTATED BYLAWS
OF
TALOS ENERGY INC.
A DELAWARE CORPORATION
ARTICLE I
OFFICES
Section 1.1. Registered Office . The registered office of the Corporation required by the General Corporation Law of the State of Delaware to be maintained in the State of Delaware shall be the registered office named in the original Certificate of Incorporation of the Corporation, as the same may be amended or restated from time to time (the Certificate of Incorporation ), or such other office as may be designated from time to time by the Board of Directors of the Corporation (the Board ) in the manner provided by law. If the Corporation maintains a principal office within the State of Delaware, the registered office need not be identical to such principal office of the Corporation.
Section 1.2. Other Offices . The Corporation may, in addition to its registered office in the State of Delaware, have other offices at such places both within and without the State of Delaware as the Board may from time to time determine or as the business of the Corporation may require.
Section 1.3. Books and Records . The books and records of the Corporation may be kept outside the State of Delaware.
ARTICLE II
STOCKHOLDERS
Section 2.1. Place of Meetings . All meetings of the stockholders shall be held at the principal office of the Corporation, or at such other place either within or without the State of Delaware as shall be specified or fixed by the Board as set forth in the notices thereof.
Section 2.2. Quorum; Withdrawal During Meeting; Adjournment .
(a) Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting of stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting
power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. Where there is a required quorum present when any duly organized meeting convenes, the stockholders present may continue to transact business until adjournment, notwithstanding the subsequent withdrawal of sufficient stockholders or proxies to reduce the total number of voting shares below the number of shares required for a quorum.
(b) Notwithstanding other provisions of the Certificate of Incorporation or these Bylaws, the chairman of the meeting of stockholders or the holders of a majority of the voting power of the issued and outstanding stock entitled to vote at such meeting, present in person or represented by proxy, at any meeting of stockholders, whether or not a quorum is present, shall have the power to adjourn such meeting from time to time, without any notice other than the announcement at the meeting of the time and place of the holding of the adjourned meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the General Corporation Law of the State of Delaware (as may be amended or supplemented from time to time, the DGCL ), and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. At such adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called.
Section 2.3. Annual Meetings . An annual meeting of the stockholders of the Corporation shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board shall fix and set forth in the notice of the meeting; provided that the Board may, in its sole discretion, determine that the meeting shall not be held at any physical location, but may instead be held solely by means of remote communication pursuant to Section 8.7 . If the Board has not fixed a place for the holding of the annual meeting of stockholders in accordance with this Section 2.3 , or otherwise such annual meeting shall be held at the principal place of business of the Corporation. No business may be conducted at the annual meeting of stockholders except in accordance with the procedures set forth in Section 2.13 .
Section 2.4. Special Meetings . Except as otherwise provided by applicable law or in the Certificate of Incorporation, special meetings of the stockholders for any proper purpose or purposes may be called at any time by (a) the Chairman of the Board, (b) the President, (c) a majority of the Board, (d) a majority of the executive committee (if any), or (e) by the Secretary at the direction of a stockholder, or a group of stockholders, holding at least 25% of the capital stock of the Corporation, and special meetings may not be called by any other person or persons. Only business within the proper purpose or purposes described in the notice required by these Bylaws with respect to a special meeting may be conducted at such special meeting of the stockholders. A special meeting of the stockholders shall be held at such place, within or without the State of Delaware, on such date and time as fixed in accordance with this paragraph; provided that the Board may, in its sole discretion, determine that the meeting shall not be held at any physical location, but may instead be held solely by means of remote communication pursuant to Section 8.7 .
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Section 2.5. Record Date .
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.
(b) If the Board does not fix a record date for any meeting of the stockholders, the record date for determining stockholders entitled to notice and to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice of such meeting is given, or, if notice is waived in accordance with Section 8.3 of these Bylaws, the close of business on the day next preceding the day on which the meeting is held.
(c) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date for determining stockholders entitled to consent in writing to such corporate action, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 10 days subsequent to the date upon which the resolution fixing the record date is adopted by the Board.
(d) If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the DGCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or to an officer or to agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporations registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the DGCL, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the close of business on the day on which the Board adopts the resolution taking such prior action.
(e) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or the stockholders entitled to exercise any rights in connection with any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a
3
record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board adopts the resolution relating thereto.
(f) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 2.5 at the adjourned meeting.
Section 2.6. Notice of Meetings . Written or printed notice stating the place, day and hour of all meetings, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting (and in the case of a special meeting, the purpose or purposes for which the meeting is called) shall be delivered by or at the direction of the President, the Secretary or the other person(s) calling the meeting not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. Such notice may be delivered by electronic transmission in the manner provided by Section 232 of the DGCL (except to the extent prohibited by Section 232(e) of the DGCL) or by mail. If mailed, notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. If notice is given by electronic transmission, such notice shall be deemed to be given at the times provided in the DGCL. Such further notice shall be given as may be required by law. An affidavit of the Secretary, an Assistant Secretary or the transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Section 2.7. List of Stockholders . The Corporation shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing contained in this section shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to
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stockholders of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication as permitted by Section 8.7 , then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled by this section to examine the list required by this section or to vote in person or by proxy at any meeting of stockholders.
Section 2.8. Proxies .
(a) Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may execute a writing authorizing another person or persons to act for him by proxy. Execution may be accomplished by the stockholder or such stockholders authorized officer, director, employee or agent signing such writing or causing such persons signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature. A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
(b) Proxies for use at any meeting of stockholders shall be filed with the Secretary, or such other officer as the Board may from time to time determine by resolution, before or at the time of such meeting.
(c) No proxy shall be valid after 3 years from the date of its execution, unless such proxy provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and only as long as it is coupled with an interest sufficient in law to support an irrevocable power.
(d) If a proxy designates two or more persons to act as proxies, unless such instrument shall expressly provide to the contrary, a majority of such persons present at any meeting at which their powers thereunder are to be exercised shall have and may exercise all the powers of voting or consent thereby conferred, or if only one be present, then such powers may be exercised by that one; or, if an even number attend and a majority cannot agree on any particular issue, the Corporation shall not be required to recognize such proxy with respect to such issue, if such proxy does not specify how the shares that are the subject of such proxy are to be voted with respect to such issue.
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Section 2.9. Voting; Elections; Inspectors .
(a) Unless otherwise required by law or provided in the Certificate of Incorporation, each stockholder shall, on each matter submitted to a vote at a meeting of stockholders, have one vote for each share of capital stock entitled to vote thereon that is registered in his or her name on the record date for such meeting. Shares registered in the name of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the bylaws (or comparable instrument) of such corporation may prescribe, or in the absence of such provision, as the board (or comparable body) of such corporation may determine. Shares registered in the name of a deceased person may be voted by his or her executor or administrator, either in person or by proxy.
(b) At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy.
(c) At any meeting of stockholders at which a vote is to be taken by ballot, the Corporation shall in advance of the meeting appoint one or more inspectors, each of whom shall sign an oath or affirmation to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The chairman of the meeting may appoint any person to serve as an inspector, including without limitation employees of the Corporation, except that no candidate for an office at an election shall be appointed as an inspector. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots.
(d) Except as otherwise provided by the Certificate of Incorporation or these Bylaws, and subject to the rights of the holders of one or more series of preferred stock of the Corporation, voting separately by class or series, to elect directors pursuant to the terms of one or more series of preferred stock, each director shall be elected by the vote of a majority of the votes cast with respect to that directors election at any meeting for the election of directors at which a quorum is present; provided that if, as of the 10th day preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders of the Corporation, the number of nominees exceeds the number of directors to be elected at such meeting (a Contested Election ), then the directors shall be elected by the vote of a plurality of the votes cast. For purposes of this paragraph, a majority of the votes cast shall mean that the number of votes cast for a directors election exceeds the number of votes cast against the directors election (with abstentions and broker nonvotes not counted as a vote cast either for or against that directors election). The Corporations corporate governance guidelines may establish procedures with respect to the contingent resignation of any director who does not receive a majority of the votes cast in an election that is not a Contested Election.
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(e) In all matters other than the election of directors, when a quorum is present, a majority of the votes cast affirmatively or negatively on the subject matter shall be the act of the stockholders, except where a larger vote is required by law, the Certificate of Incorporation or these Bylaws, in which case such larger vote shall control the decision of such matter.
(f) Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited.
Section 2.10. Conduct of Meetings . All meetings of the stockholders shall be presided over by the chairman of the meeting, who shall be the Chairman of the Board, or if he is not present, the President, or if neither the Chairman of the Board nor President is present, a chairman elected by a majority of the voting power of the stockholders present, either in person or by proxy, at the meeting. The Secretary, if present, shall act as secretary of such meetings, or if he is not present, an Assistant Secretary (if any) shall so act; if neither the Secretary nor an Assistant Secretary (if any) is present, then a secretary shall be appointed by the chairman of the meeting. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion, as seem to the chairman in order.
Section 2.11. Treasury Stock . Shares of its own capital stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Nothing in this Section 2.11 shall be construed as limiting the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Section 2.12. Action by Written Consent . Before the Sunset Date, the stockholders of the Corporation may consent to any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation without a meeting in accordance with Section 228 of the DGCL and subject to any procedures required by the Bylaws. Subject to the terms of any Preferred Stock Certificate of Designation, on and after the Sunset Date any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent or consents in writing by the Stockholders.
Section 2.13. Business to be Brought Before Annual or Special Meetings . All matters to be considered and brought before any annual or special meeting of stockholders of the Corporation, whether or not such matter is to be included in the Corporations proxy statement prepared pursuant to the federal securities laws, including the proxy rules set forth under the Securities Exchange Act of 1934, as amended (the Exchange Act ), shall be properly brought before any such meeting only if in compliance with the procedures set forth in this Section 2.13 .
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(a) Annual Meetings of Stockholders .
(i) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders (A) pursuant to the Corporations proxy materials with respect to such meeting, (B) by or at the direction of the Board or (C) by any stockholder of the Corporation who (1) was a stockholder of record at the time of giving of notice provided for in this by-law and at the time of the annual meeting, (2) is entitled to vote at the meeting and (3) complies with the notice procedures and form requirements set forth in this Section 2.13 as to such proposal of business or nomination; clause (C) shall be the exclusive means for a stockholder to make nominations or submit other business before an annual meeting of stockholders (other than proposals included in the Corporations proxy materials pursuant to Rule 14a-8 promulgated under the Exchange Act and other than nominees included in the Corporations proxy materials pursuant to the Certificate of Incorporation or the Stockholders Agreement).
(ii) Without qualification, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.13(a)(i)(C) , the stockholder must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholders notice shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding years annual meeting; provided , however , that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary date of the preceding years annual meeting, or if no meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 100th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholders notice as described above.
(iii) To be in proper form, a stockholders notice (whether given pursuant to Section 2.13(a)(ii) or Section 2.13(b) ) to the Secretary must set forth (without incorporation by reference from any other document or writing not prepared in response to the requirements of this Section 2.13 ), as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Corporations books, and of such beneficial owner, if any, (B) (1) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (2) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a Derivative Instrument ) directly or indirectly owned beneficially by
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such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (3) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation, (4) any short interest in any security of the Corporation (for purposes of this by-law a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (5) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation, (6) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholders immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and (C) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(iv) if the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, to be in proper form, a stockholders notice to the Secretary (whether given pursuant to Section 2.13(a)(ii) or Section 2.13(b) ) must set forth (without incorporation by reference from any other document or writing not prepared in response to the requirements of this Section 2.13 ) (A) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business and (B) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder;
(v) to be in proper form, a stockholders notice to the Secretary (whether given pursuant to Section 2.13(a)(ii) or Section 2.13(b) ) must set forth (without incorporation by reference from any other document or writing not prepared in response to the requirements of this Section 2.13 ), as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board (A) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such persons written consent to being
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named in the proxy statement as a nominee and to serving as a director if elected) and (B) a description of all direct and indirect compensation and other material financial or monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all biographical and related party transaction and other information that would be required to be disclosed pursuant to the federal and state securities laws if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the registrant for purposes of such rule and the nominee were a director or executive officer of such registrant; and
(vi) with respect to each nominee for election or reelection to the Board, to be in proper form, a stockholders notice to the Secretary (whether given pursuant to Section 2.13(a)(ii) or Section 2.13(b) ) must include (without incorporation by reference from any other document or writing not prepared in response to the requirements of this Section 2.13 ) a completed and signed questionnaire, representation and agreement required by Section 2.13(e) below. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholders understanding of the independence, or lack thereof, of such nominee.
(b) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporations notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporations notice of meeting (i) by or at the direction of the Board or (ii) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (A) is a stockholder of record at the time of giving of notice provided for in this by-law and at the time of the special meeting, (B) is entitled to vote at the meeting, and (C) complies with the notice procedures and form requirements set forth in this Section 2.13 as to such nomination. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporations notice of meeting, if the stockholders notice required by Section 2.13(a)(ii) with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 2.13(e) below) shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 100th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period for the giving of a stockholders notice as described above.
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(c) Action by Written Consent . Any person seeking to take a corporate action by written consent without a meeting, without prior notice and without a vote, may do so if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and such consent shall be delivered to the Corporations registered office, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which the proceedings of meetings of stockholders are recorded. Delivery made to a Corporations registered office shall be by hand or by certified or registered mail, return receipt requested. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the first date on which a written consent is delivered to the Corporation in the manner required by this Section 2.13(c) , written consents signed by a sufficient number of holders to take action are delivered to the Corporation.
(d) General .
(i) Only such persons who are nominated in accordance with the procedures set forth in this Section 2.13 shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.13 . Except as otherwise provided by law, or the Certificate of Incorporation or these Bylaws, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.13 and, if any proposed nomination or business is not in compliance with this Section 2.13 , to declare that such defective proposal or nomination shall be disregarded.
(ii) For purposes of this Section 2.13 , public announcement shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
(iii) Notwithstanding the foregoing provisions of this Section 2.13 , a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.13 ; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.13(a)(i)(C) or Section 2.13(b) above. Nothing in this Section 2.13 shall eliminate or limit any obligations of any stockholder pursuant to Rule 14a-8 under the Exchange Act or any other applicable federal or state securities law with respect to that stockholders request to include proposals in the Corporations proxy statement.
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(iv) For purposes of this Section 2.13 , the 2018 annual meeting of the stockholders of the Corporation shall be deemed to have been held on May 10, 2018.
(e) Submission of Questionnaire, Representation and Agreement . To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 2.13 or, in the case of a nomination made by or at the direction of the Board, in accordance with such time periods as the Board may from time to time prescribe) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (i) consents to serving as a director if elected and (if applicable) to being named in the Corporations proxy statement and form of proxy as a nominee, and currently intends to serve as a director for the full term for which such person is standing for election, (ii) is not and will not become a party to (a) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a Voting Commitment ) that has not been disclosed to the Corporation or (b) any Voting Commitment that could limit or interfere with such persons ability to comply, if elected as a director of the Corporation, with such persons fiduciary duties under applicable law, (iii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (iv) in such persons individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1. Power; Number; Classes; Term of Office .
(a) Subject to the provisions of the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all the powers of the Corporation and do all such lawful acts and things as are not by statute, by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.
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(b) Unless the Stockholders Agreement provides or the applicable parties thereto agree otherwise, at all times before the expiration of Section 3.1 of the Stockholders Agreement (the Final Termination Date ), the size of the Board shall be comprised of ten authorized directorships. On and after the Final Termination Date, the number of directors, other than those who may be elected by the holders of one or more series of Preferred Stock voting separately by class or series, shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Whole Board, provided, that in no event shall the total number of directors constituting the Whole Board be less than three nor more than 13. The number of directors, other than those who may be elected by the holders of one or more series of preferred stock voting separately by class or series, shall be fixed in accordance with the provisions of the Certificate of Incorporation. For purposes of these Bylaws, the Whole Board shall mean the total number of authorized directorships. Notwithstanding anything to the contrary in these Bylaws, this subsection (b) shall not be amended, altered or repealed (and no provision inconsistent herewith shall be adopted) by the Board without the approval of either all of the directors then in office or a majority of the directors then qualifying as Company Independent Directors.
(c) Directors shall serve for the terms set forth in the Certificate of Incorporation.
Section 3.2. Quorum; Required Vote for Director Action . Unless otherwise required by law or in the Certificate of Incorporation or these Bylaws, a majority of the total Whole Board shall constitute a quorum for the transaction of business of the Board. If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting without further notice. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board (x) unless the Certificate of Incorporation, these Bylaws or applicable law shall require the vote of a greater number and (y) except as provided in the Stockholders Agreement. In addition to any other vote required by law, the Certificate of Incorporation or these Bylaws: (i) each Related Party Transaction that is not approved by the Audit Committee of the Board or a majority of the directors then qualifying as Disinterested Directors shall require the approval of all of the directors then in office, and (ii) any action by the Board (or a committee thereof) to authorize or issue preferred stock with the right to elect directors separately as a class or series shall require the approval of either all of the directors then in office or a majority of the directors then qualifying as Company Independent Directors. Notwithstanding anything to the contrary in these Bylaws, this sentence and the preceding sentence shall not be amended, altered or repealed (and no provision inconsistent therewith shall be adopted) by the Board without the approval of either all of the directors then in office or a majority of the directors then qualifying as Company Independent Directors.
Section 3.3. Place of Meetings; Order of Business . The directors may hold their meetings and may have an office, except as otherwise provided by law, in such place or places, within or without the State of Delaware, as the Board may from time to time determine by resolution. At all meetings of the Board, business shall be transacted in such order as shall from time to time be determined by the Chairman of the Board, or in his or her absence by the President (if the President is a director) or by resolution of the Board.
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Section 3.4. Annual Meeting . The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting.
Section 3.5. Regular Meetings . Regular meetings of the Board shall be held at such times and places as shall be designated from time to time by resolution of the Board. Notice of such regular meetings shall not be required.
Section 3.6. Special Meetings . Special meetings of the Board may be called by the Chairman of the Board, the Chief Executive Officer, or, upon written request of any two directors, by the Secretary, in each case on at least 24 hours written notice given by the Secretary, or such officer of the Corporation designated by the Secretary, to each director. Such written notice shall be deemed given effectively if given in person, facsimile, e-mail or by other means of electronic transmission. Such notice, or any waiver thereof pursuant to Section 8.3 hereof, need not state the purpose or purposes of such meeting, except as may otherwise be required by law, the Certificate of Incorporation or these Bylaws. If the Secretary shall fail or refuse to give, or cause to be given, such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting.
Section 3.7. Vacancies; Increases in the Number of Directors . Any vacancy or newly created directorships in the Board, however occurring, shall be filled in the manner required by the Certificate of Incorporation.
Section 3.8. Compensation . Unless otherwise provided in the Certificate of Incorporation, the Board shall have the authority to fix the compensation, if any, of directors.
Section 3.9. Action Without a Meeting; Telephone Conference Meeting .
(a) Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board, or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given for purposes of this subsection at such effective time so long as such person is then a director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to its becoming effective.
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(b) Unless otherwise restricted by the Certificate of Incorporation, subject to the requirement for notice of meetings, members of the Board, or members of any committee designated by the Board, may participate in a meeting of such Board or committee, as the case may be, by means of conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE IV
COMMITTEES
Section 4.1. Designation; Powers .
(a) The Board may, by resolution passed by a majority of the Whole Board, designate one or more committees, including a governance and nominating committee, an audit committee, and a compensation committee, and delegate to any such committee such power, authority and responsibility as the Board determines is appropriate, subject to the limitations set forth in the DGCL or the establishment of the committee. Each such committee shall consist of one or more of the directors of the Corporation and, to the extent permitted by applicable law, rules and regulations (including securities laws and regulations and listing rules and requirements), the composition of each such committee shall be consistent with the committee composition provisions of the Stockholders Agreement. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee may, to the extent permitted by law exercise such powers and shall have such responsibilities as shall be specified in the designating resolution. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Each committee shall keep written minutes of its proceedings and shall report such proceedings to the Board when required.
(b) Any such committee shall have and may exercise such of the powers and authority of the Board in the management of the business and affairs of the Corporation as may be provided in such resolution and only to the extent authorized by applicable law; provided that, for the avoidance of doubt, no such committee shall have the power or authority of the Board with regard to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (ii) adopting, amending or repealing any by-law of the Corporation. Any such designated committee may authorize the seal of the Corporation to be affixed to all papers which may require it.
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Section 4.2. Procedure; Meetings; Quorum . Any committee designated pursuant to Section 4.1 hereof, shall choose its own chairman and secretary, shall keep regular minutes of its proceedings and report the same to the Board when requested, shall fix its own rules or procedures, and shall meet at such times and at such place or places as may be provided by such rules or procedures, or by resolution of such committee or resolution of the Board. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution.
Section 4.3. Dissolution . Subject to the committee composition provisions of the Stockholders Agreement, applicable law and these Bylaws, the Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.
Section 4.4. Audit Committee . The Audit Committee shall have such members as designated by the Board, and may exercise such power and authority as delegated to such committee from time to time by the Board. Notwithstanding the foregoing, until the Final Termination Date: (i) only directors who qualify as Company Independent Directors shall be qualified for appointment and continued service on the Audit Committee; and (ii) a directors service on the Audit Committee shall terminate at such time as he or she ceases to qualify as a Company Independent Director. In the event an alternate director is appointed to serve as a member of the Audit Committee in the absence or disqualification of a member of the Audit Committee, such alternate must be a Company Independent Director. Notwithstanding anything to the contrary in these Bylaws, this paragraph shall not be amended, altered or repealed (and no provision inconsistent with this paragraph shall be adopted) by the Board without the approval of either all of the directors then in office or a majority of the directors then qualifying as Company Independent Directors.
Section 4.5. Governance & Nominating Committee . The governance and nominating committee of the Board (the Governance & Nominating Committee ) shall have such members as designated by the Board, and may exercise such power and authority as delegated to such committee from time to time by the Board or as set forth in these Bylaws. The Governance & Nominating Committee shall have the full power and authority of the Board to take any actions required or permitted to be taken by such committee pursuant to the Stockholders Agreement. Notwithstanding the first sentence of this paragraph, at all times until the Final Termination Date, a majority of the members of the Governance & Nominating Committee must qualify as Company Independent Directors. Any action required or permitted to be taken by the Governance & Nominating Committee may be taken by the affirmative vote of a simple majority of the members of such committee, and no greater vote shall be imposed by resolution or action of the Board or these Bylaws. In the event an alternate director is appointed to serve as a member of the Governance & Nominating Committee in the absence or disqualification of a Company Independent Director, such alternate must be a Company Independent Director. Notwithstanding anything to the contrary in these Bylaws, this paragraph shall not be amended, altered or repealed (and no provision inconsistent with this paragraph shall be adopted) by the Board without the approval of either all of the directors then in office or a majority of the directors then qualifying as Company Independent Directors. The unanimous consent of the Board shall be required to eliminate the Governance & Nominating Committee or to modify, limit or eliminate the powers granted to the Governance & Nominating Committee pursuant to the Certificate of Incorporation, these Bylaws or the Stockholders Agreement.
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ARTICLE V
OFFICERS
Section 5.1. Number, Titles and Term of Office . The officers of the Corporation shall consist of a Chief Executive Officer, a President, a Chief Financial Officer, a Chief Operating Officer, a General Counsel, a Chief Accounting Officer, a Treasurer and a Secretary and a Chairman of the Board and such other officers as the Board may from time to time elect or appoint. All officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article V . Such officers shall also have such powers and duties as from time to time may be conferred by the Board or by any committee thereof. In addition, the Board or any committee thereof may from time to time elect, or the Chief Executive Officer may appoint, such other officers (including one or more Senior Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers, Assistant Controllers and Tax Officers) and such agents, as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in these Bylaws or as may be prescribed by the Board or such committee or by the Chief Executive Officer, as the case may be. All officers elected by the Board shall hold office until his or her successor shall be duly elected and shall qualify, or until his or her death, resignation or removal in the manner hereinafter provided. Any number of offices may be held by the same person, unless the Certificate of Incorporation provides otherwise. Except for the Chairman of the Board, if any, no officer need be a director.
Section 5.2. Compensation . The salaries or other compensation, if any, of the officers and agents of the Corporation shall be fixed from time to time by the Board.
Section 5.3. Removal . Any officer or agent elected or appointed by the Board may be removed, either with or without cause, by the Board. Election or appointment of an officer or agent shall not of itself create contractual rights.
Section 5.4. Vacancies . Any vacancy occurring in any office of the Corporation may be filled by the Board.
Section 5.5. Chief Executive Officer . The President shall be the chief executive officer of the Corporation (the Chief Executive Officer ) unless the Board designates the Chairman of the Board or other officer as the Chief Executive Officer. Subject to the control of the Board and the executive committee (if any), the Chief Executive Officer shall have general executive charge, management and control of the properties, business and operations of the Corporation with all such powers as may be reasonably incident to such responsibilities; and the Chief Executive Officer may agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation and may sign all certificates for shares of capital stock of the Corporation; and shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board.
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Section 5.6. Chairman of the Board . The Chairman of the Board shall be a director of the Corporation; and shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board. The Chairman of the Board shall be a Company Independent Director elected by a majority of the Whole Board until the Corporations second annual meeting of the stockholders held after the Effective Date, after which time the Chairman of the Board may be any director elected by a majority of the Whole Board.
Section 5.7. President . Unless the Board otherwise determines, the President shall have the authority to agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation; and the President shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board.
Section 5.8. Vice Presidents . In the absence of the Chairman of the Board or the President, or in the event of their inability or refusal to act, a Vice President designated by the Board or, in the absence of such designation, the Vice President who is present and who is senior in terms of time as a Vice President of the Corporation, shall perform the duties of the Chairman of the Board or the President, as the case may be, and when so acting shall have all the powers of and be subject to all the restrictions upon the President; provided, however, that such Vice President shall not preside at meetings of the Board unless he or she is a director. Each Vice President shall perform such other duties and have such other powers as the Board may from time to time prescribe.
Section 5.9. Chief Financial Officer . The Chief Financial Officer shall have the custody of the corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. He or she shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositaries as may be designated by the Board. He or she shall disburse the funds of the Corporation as may be ordered by the Board, the Chairman of the Board, or a President, taking proper vouchers for such disbursements. He or she shall render to the Chairman of the Board, the President and the Board at the regular meetings of the Board, or whenever they may request it, an account of all his or her transactions as Chief Financial Officer and of the financial condition of the Corporation. The Chief Executive Officer may direct the Treasurer to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and the Treasurer shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer shall designate from time to time; provided, however, that if the offices of the Chief Financial Officer and the Treasurer are held by the same person, then the Chief Executive Officer may direct the Chief Accounting Officer to assume and perform the duties of the Chief Financial Officer.
Section 5.10. Chief Operating Officer . The Chief Operating Officer shall have direct management responsibility for the general business operations of the Corporation, and he or she shall have such powers and perform such duties as may be incident to the office of chief operating officer of a corporation, those duties assigned to him or her by other provisions of these Bylaws, and such other duties as may from time to time be assigned to him or her either directly or indirectly by the Board or the Chief Executive Officer.
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Section 5.11. Chief Accounting Officer . The Chief Accounting Officer shall have such general powers and duties of supervision and management as shall be assigned to him or her by the Board. The Chief Accounting Officer shall perform such other duties commonly incident to his or her office and shall have such other powers as the Board shall designate from time to time. In addition, the Board may direct the Chief Accounting Officer to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer.
Section 5.12. General Counsel . The General Counsel shall be the chief legal advisor of the Corporation and shall have responsibility for the management of the legal affairs and litigation of the Corporation and, in general, he or she shall perform the duties incident to the office of general counsel of a corporation and such other duties as may be assigned to him or her either directly or indirectly by the Board or the Chief Executive Officer, or as may be provided by law.
Section 5.13. Treasurer . The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board, at its regular meetings, or when the Board so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. In case of the Treasurers death, resignation, retirement or removal from office, all books, papers, vouchers, money and other property of whatever kind in the Treasurers possession or under the Treasurers control belonging to the Corporation shall be restored to the Corporation.
Section 5.14. Secretary . The Secretary shall keep the minutes of all meetings of the Board, committees of directors and of the stockholders in books provided for such purpose; shall attend to the giving and serving of all notices; may in the name of the Corporation affix the seal of the Corporation to all contracts of the Corporation and attest thereto; may sign with the other appointed officers all certificates for shares of capital stock of the Corporation; shall have charge of the certificate books, transfer books and stock ledgers, and such other books and papers as the Board may direct, all of which shall at all reasonable times be open to inspection by any director upon application at the office of the Corporation during business hours; shall have such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the Board; and shall generally perform all acts incident to the office of Secretary, subject to the control of the Chief Executive Officer and the Board.
Section 5.15. Assistant Secretaries . Each Assistant Secretary (if any) shall have the usual powers and duties pertaining to his or her office, together with such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the Chief Executive Officer, the Board or the Secretary. The Assistant Secretaries shall exercise the powers of the Secretary during the Secretarys absence or inability or refusal to act.
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Section 5.16. Action with Respect to Securities of Other Corporations . Unless otherwise determined by the Board, the Chief Executive Officer shall have the power to vote and otherwise to act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of any other corporation, or with respect to any action of security holders thereof, in which the Corporation may hold securities and otherwise, to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other corporation.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 6.1. Right to Indemnification . Subject to the limitations and conditions as provided in this Article VI , each person who was or is made a party to or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (hereinafter a proceeding ), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was or has agreed to become a director or officer of the Corporation, or while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving or having agreed to serve as a director or officer of the Corporation, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended against all reasonable expense, liability and loss (including without limitation, attorneys fees, judgments, fines, ERISA excise or similar taxes, punitive damages or penalties and amounts paid or to be paid in settlement) reasonably and actually incurred or suffered by such person in connection with such proceeding, and such indemnification under this Article VI shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 6.5 , the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of the Corporation. The right to indemnification granted pursuant to this Article VI shall be a contractual right, and no amendment, modification or repeal of this Article VI shall have the effect of limiting or denying any such rights with respect to actions taken or proceedings arising prior to any such amendment, modification or repeal. The Corporation shall be the indemnitor of first resort for any such person entitled to indemnification under this Article VI , which such person entitled to indemnification also has certain rights to indemnification, advancement or expenses and/or insurance in favor of such person and not the Corporation, provided by one or more other persons or entities. IT IS EXPRESSLY ACKNOWLEDGED THAT THE INDEMNIFICATION CONFERRED IN THIS ARTICLE VI COULD INVOLVE INDEMNIFICATION FOR NEGLIGENCE OR UNDER THEORIES OF STRICT LIABILITY.
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Section 6.2. Advance Payment . The right to indemnification conferred in this Article VI shall include the right to be paid or reimbursed by the Corporation for the reasonable expenses (including, without limitation, attorneys fees) reasonably incurred by a person of the type entitled to be indemnified under Section 6.1 , who was, is or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without any determination as to the persons ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of a written affirmation by such director or officer of such persons good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article VI and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Article VI or otherwise.
Section 6.3. Indemnification of Employees and Agents . The Corporation may, by action of its Board, provide indemnification to employees and agents of the Corporation, individually or as a group, with the same scope and effect as the indemnification of directors and officers provided for in this Article VI .
Section 6.4. Appearance as a Witness . Notwithstanding any other provision of this Article VI , the Corporation may pay or reimburse expenses incurred by a director or officer in connection with his or her appearance as a witness or other participation in a proceeding at a time when such person is not a named defendant or respondent in the proceeding.
Section 6.5. Right of Claimant to Bring Suit . If a written claim received by the Corporation from or on behalf of an indemnified party under this Article VI is not paid in full by the Corporation within 60 days after such receipt, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim (including, without limitation, attorneys fees). It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board, its committees, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, its committees, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by (a) a claimant to enforce a right to indemnification hereunder (but not in a suit brought by a claimant to enforce a right to an advancement of expenses), and (b) the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the claimant has not met any applicable standard for indemnification set forth in the DGCL.
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Section 6.6. Nonexclusivity of Rights . The right to indemnification and advancement and payment of expenses conferred in this Article VI shall not be exclusive of any other rights which a director or officer or other person indemnified pursuant to this Article VI may have or hereafter acquire under any law (common or statutory), provision of the Certificate of Incorporation, these Bylaws, any agreement, vote of stockholders or Disinterested Directors or otherwise.
Section 6.7. Insurance . The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was serving as a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, employee, agent or similar functionary of another domestic or foreign corporation, partnership, joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss asserted against any such person and incurred in any such capacity, or arising out of the persons status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under this Article VI .
Section 6.8. Amendments . Any repeal or amendment of this Article VI by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this Article VI , shall, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to claimants on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
Section 6.9. Severability . If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VI shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, each such portion of this Article VI containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Section 6.10. Definitions . For purposes of this Article, reference to the Corporation shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger prior to (or, in the case of an entity specifically designated in a resolution of the Board, after) the adoption hereof and which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
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ARTICLE VII
CAPITAL STOCK
Section 7.1. Certificates of Stock ; Signatures . The shares of the capital stock of the Corporation shall be represented by certificates, provided, however, that the Board may determine by resolution that some or all of any or all the classes or series of the Corporations stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and, upon request, every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by any two authorized officers of the Corporation representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 7.2. Transfer of Shares .
(a) The shares of stock of the Corporation shall only be transferable on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives upon surrender and cancellation of certificates for a like number of shares (or upon compliance with the provisions of Article VII , Section 6 hereof, if applicable). Upon surrender to the Corporation or a transfer agent of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer (or upon compliance with the provisions of Article VII , Section 6 hereof, if applicable) and of compliance with any transfer restrictions applicable thereto contained in any agreement to which the Corporation is a party, or of which the Corporation has knowledge by reason of a legend with respect thereto placed upon any such surrendered stock certificate, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books; provided, that such other conditions for such transfer as shall be provided for under applicable law have been satisfied.
(b) Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.
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Section 7.3. Effect of Corporation s Restriction on Transfer .
(a) A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated shares, contained in a notice sent by the Corporation to the registered owner of such shares within a reasonable time after the issuance or transfer of such shares, may be enforced against the holder of such shares or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder.
(b) A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless: (i) the shares are certificated and such restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated and such restriction was contained in a notice sent by the Corporation to the registered owner of such shares within a reasonable time after the issuance or transfer of such shares.
Section 7.4. Ownership of Shares . The Corporation shall be entitled to treat the holder of record of any share or shares of capital stock of the Corporation as the owner in fact thereof at that time for purposes of voting such shares, receiving distributions thereon or notices in respect thereof, transferring such shares, exercising rights of dissent, exercising or waiving any preemptive rights, or giving proxies with respect to such shares; and, neither the Corporation nor any of its officers, directors, employees, or agents shall be liable for regarding that person as the owner of those shares at that time for those purposes, regardless of whether or not that person possesses a certificate for those shares.
Section 7.5. Regulations Regarding Certificates . To the extent allowable by the Certificate of Incorporation and applicable law, the Board shall have the power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
Section 7.6. Lost, Stolen , Destroyed or Mutilated Certificates . The Board may determine the conditions upon which a new certificate of stock may be issued in place of any certificate which is alleged to have been lost, stolen, destroyed or mutilated; and may, in its discretion, require the owner of such certificate or his or her legal representative to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent and registrar against any and all losses or claims which may arise by reason of the issuance of a new certificate in the place of the one so lost, stolen, destroyed or mutilated.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Fiscal Year . The fiscal year of the Corporation shall be such as established from time to time by the Board.
Section 8.2. Corporate Seal . The Board may provide a suitable seal containing the name of the Corporation. The Secretary shall have charge of the seal (if any). If and when so directed by the Board or a committee thereof, duplicates of the seal may be kept and used by an Assistant Secretary.
Section 8.3. Waiver of Notice . Whenever notice is required to be given, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these Bylaws.
Section 8.4. Resignations . Any director, member of a committee or officer may resign at any time. Such resignation may be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Chief Executive Officer or Secretary. The acceptance of a resignation shall not be necessary to make such resignation effective, unless expressly so provided in the resignation.
Section 8.5. Facsimile Signatures . In addition to the provisions for the use of facsimile signatures elsewhere specifically authorized elsewhere in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used as determined by the Board.
Section 8.6. Reliance upon Books, Reports and Records . A member of the Board, or a member of any committee thereof, shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board, or by any other person as to matters the director reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid, or with which the Corporations stock might properly be purchased or redeemed.
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Section 8.7. Meeting Attendance via Remote Communication Equipment . If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication: (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.
Section 8.8. Dividends . The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporations capital stock) on the Corporations outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.
Section 8.9. Reserves . The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
Section 8.10. Notice to Stockholders Sharing Same Address . Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholders consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.
Section 8.11. Exceptions to Notice Requirements . Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
Section 8.12. Capitalized Terms . Capitalized terms that are used but not defined herein, but that are defined in the Certificate of Incorporation, shall have the respective meanings assigned to them in the Certificate of Incorporation. Capitalized terms that are used but not defined herein or in the Certificate of Incorporation, but that are defined in the Stockholders Agreement, shall have the respective meanings assigned to them in the Stockholders Agreement.
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ARTICLE IX
AMENDMENTS
In addition to any other vote required by law or provided in the Certificate of Incorporation, these Bylaws or a Preferred Stock Certificate of Designations, the Board shall not amend, alter or repeal these Bylaws without obtaining the approval of a majority of the directors then in office. In addition to any other vote required by law or provided in the Certificate of Incorporation, these Bylaws or a Preferred Stock Certificate of Designations, any provision of these Bylaws may be amended altered or repealed by the stockholders of the Corporation (i) before the Sunset Date, by the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon and (ii) on and after the Sunset Date, by the affirmative vote of the holders of at least 66 2/3% of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon.
As amended and restated through May 10, 2018.
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Exhibit 4.1
STOCKHOLDERS AGREEMENT
dated as of
May 10, 2018
among
TALOS ENERGY INC.,
AP TALOS ENERGY LLC,
AP TALOS ENERGY DEBTCO LLC,
AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC,
AIF VII (AIV), L.P.,
ANRP DE HOLDINGS, L.P.,
RIVERSTONE TALOS ENERGY EQUITYCO LLC,
RIVERSTONE TALOS ENERGY DEBTCO LLC,
and
RIVERSTONE V FT CORP HOLDINGS, L.P.
TABLE OF CONTENTS
Page | ||||||
Article I DEFINITIONS |
2 | |||||
Section 1.1 |
Certain Definitions | 2 | ||||
Article II TERM |
7 | |||||
Section 2.1 |
Term and Termination | 7 | ||||
Article III CORPORATE GOVERNANCE MATTERS |
7 | |||||
Section 3.1 |
Board Composition | 7 | ||||
Section 3.2 |
Director Nomination Rights | 8 | ||||
Section 3.3 |
Committees of the Company Board | 12 | ||||
Section 3.4 |
Nominating Stockholders Agreement to Vote | 13 | ||||
Section 3.5 |
Meeting of Stockholders | 13 | ||||
Section 3.6 |
Related Party Transactions | 13 | ||||
Article IV OTHER AGREEMENTS |
14 | |||||
Section 4.1 |
Sharing of Information; Confidentiality | 14 | ||||
Section 4.2 |
Restrictions on Transferability and Acquisitions | 15 | ||||
Section 4.3 |
Bylaws | 17 | ||||
Article V DISPUTE RESOLUTION |
17 | |||||
Section 5.1 |
General Provisions | 17 | ||||
Article VI MISCELLANEOUS |
18 | |||||
Section 6.1 |
Corporate Power | 18 | ||||
Section 6.2 |
Governing Law | 18 | ||||
Section 6.3 |
Notices | 19 | ||||
Section 6.4 |
Severability | 21 | ||||
Section 6.5 |
Entire Agreement | 21 | ||||
Section 6.6 |
Assignment; No Third-Party Beneficiaries | 21 | ||||
Section 6.7 |
Amendment; Waiver | 21 | ||||
Section 6.8 |
Interpretations | 22 | ||||
Section 6.9 |
Counterparts; Electronic Transmission of Signatures | 22 | ||||
Section 6.10 |
Enforceable by the Company Independent Directors | 22 | ||||
Section 6.11 |
Apollo Representative | 23 | ||||
Section 6.12 |
Riverstone Representative | 23 |
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this Agreement ) is entered into on May 10, 2018, by and among AP Talos Energy LLC, a Delaware limited liability company, AP Talos Energy Debtco LLC, a Delaware limited liability company (together, the Apollo Feeders ), AP Overseas Talos Holdings Partnership, LLC, a Delaware limited liability company, AIF VII (AIV), L.P., a Delaware limited partnership, ANRP DE Holdings, L.P., a Delaware limited partnership (collectively, the Apollo Blocker Holding Companies and, together with the Apollo Feeders and any other member of the Apollo Group executing a joinder, the Apollo Parties ), Riverstone Talos Energy Equityco LLC, a Delaware limited liability company, Riverstone Talos Energy Debtco LLC, a Delaware limited liability company (together, the Riverstone Feeders ), Riverstone V FT Corp Holdings, L.P., a Delaware limited partnership (the Riverstone Blocker Holding Company and, together with the Riverstone Feeders and any other member of the Riverstone Group executing a joinder, the Riverstone Parties ), on the one hand, and Talos Energy Inc., a Delaware corporation (the Company ), on the other hand. The Apollo Parties and the Riverstone Parties are sometimes referred to herein as the Stockholders and the Stockholders and the Company are sometimes referred to herein individually as a Party and collectively as the Parties .
WITNESSETH:
WHEREAS, on November 21, 2017 (the Signing Date ), (i) Stone Energy Corporation, a Delaware corporation ( Stone Energy ), Sailfish Merger Sub Corporation, a Delaware corporation, the Company, Talos Energy LLC, a Delaware limited liability company ( Talos Energy LLC ), and Talos Production LLC, a Delaware limited liability company ( Talos Production ), entered into that certain Transaction Agreement (as may be amended from time to time, the Transaction Agreement ), (ii) Apollo Management VII, L.P., a Delaware limited partnership and Apollo Commodities Management, L.P., with respect to Series I, a Delaware limited partnership, Riverstone Energy Partners V, L.P., a Delaware limited partnership and Stone Energy entered into that certain Support Agreement (as may be amended from time to time, the Support Agreement ), and (iii) Stone Energy, the Company, Talos Production, Talos Production Finance Inc., and the lenders and noteholders listed on the signature pages and Schedules A through D thereof entered into that certain Debt Exchange Agreement (the Debt Exchange Agreement and collectively with the Support Agreement and the Transaction Agreement, the Relevant Agreements );
WHEREAS, pursuant to the transactions contemplated by the Relevant Agreements, as of the date hereof the Stockholders were issued an aggregate of 34,118,134 shares of Company Common Stock (as defined herein), consisting of an aggregate of 14,926,683 shares of Company Common Stock issued to the Apollo Parties (the Initial Apollo Group Shares ) and 19,191,451 shares of Company Common Stock issued to the Riverstone Parties (the Initial Riverstone Group Shares and, together with the Initial Apollo Group Shares, the Initial Stockholder Shares ); and
WHEREAS, the Stockholders and the Company desire to enter into this Agreement in order to, inter alia , (i) set forth certain of their rights, duties and obligations as a result of the transactions contemplated by the Relevant Agreements; (ii) provide for the management, operation and governance of the Company; and (iii) set forth restrictions on certain activities in respect of the Company Common Stock, corporate governance, and other related corporate matters.
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, and intending to be legally bound, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions . For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1 :
Action means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any federal, state, local, foreign or international Governmental Entity or any arbitration or mediation tribunal.
Affiliate means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided , however , that neither the Apollo Parties nor the Riverstone Parties shall be deemed to be Affiliates of the Company or any of its Subsidiaries for purposes of this Agreement and neither the Company nor any of its Subsidiaries shall be deemed to be Affiliates of the Apollo Parties or the Riverstone Parties for purposes of this Agreement.
Agreement has the meaning set forth in the introduction.
Apollo Blocker Holding Companies has the meaning set forth in the introduction.
Apollo Designee has the meaning set forth in Section 3.2 .
Apollo Director has the meaning set forth in Section 3.2 .
Apollo Feeders has the meaning set forth in the introduction.
Apollo Group means the Apollo Parties and their respective Affiliates. For the avoidance of doubt, for the purposes of this Agreement no member of the Company Group shall be a member of the Apollo Group.
Apollo Parties has the meaning set forth in the introduction.
beneficial ownership , including the correlative terms beneficially own , beneficial owner , own , and beneficially owning , has the meaning ascribed to such term in Section 13(d) of the Exchange Act.
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Business Day means any day that is not a Saturday, Sunday or other day on which the principal offices of the SEC in Washington, D.C., or banks in the City of Houston in the United States of America are authorized or required by Law to be closed.
Bylaws means the Bylaws of the Company, as amended from time to time.
Chancery Court shall have the meaning set forth in Section 5.1(a) .
Charter means the Amended and Restated Certificate of Incorporation of the Company, as amended from time to time.
Closing has the meaning given such term in the Transaction Agreement.
Company has the meaning set forth in the introduction.
Company Board means the board of directors of the Company.
Company Common Stock means the common stock, par value $0. 01 per share, of the Company.
Company Confidential Information has the meaning set forth in Section 4.1(b) .
Company Group means the Company, each Subsidiary of the Company from and after the Closing (in each case so long as such Subsidiary remains a Subsidiary of the Company) and each other Person that is controlled either directly or indirectly by the Company immediately after the Closing (in each case for so long as such Person continues to be controlled either directly or indirectly by the Company).
Company Independent Director means each director of the Company who (i) is an Independent Director and (ii) without limiting (i), (A) is not an Apollo Director or a Riverstone Director, (B) for so long as this Agreement has not terminated with respect to the Apollo Parties, is not a current director, officer or employee of, any member of the Apollo Group, (C) for so long as this Agreement has not terminated with respect to the Riverstone Parties, is not a current director, officer or employee of, any member of the Riverstone Group, (D) for so long as this Agreement has not terminated with respect to the Apollo Parties, has been determined by the Governance & Nominating Committee in good faith not to have any relationship with any member of the Apollo Group that would be material to the directors ability to be independent from the Apollo Parties, (E) for so long as this Agreement has not terminated with respect to the Riverstone Parties, has been determined by the Governing & Nominating Committee in good faith not to have any relationship with any member of the Riverstone Group that would be material to the directors ability to be independent from the Riverstone Parties and (F) is designated by the Governance & Nominating Committee as a Company Independent Director.
Debt Exchange Agreement has the meaning set forth in the preamble.
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Disinterested Director means, with respect to any Related Party Transaction, each Independent Director of the Company other than any of the following: (i) with respect to any Related Party Transaction in which the Apollo Parties or any member of the Apollo Group has a direct or indirect material interest, each Apollo Director, (ii) with respect to any Related Party Transaction in which the Riverstone Parties or any member of the Riverstone Group has a direct or indirect material interest, each Riverstone Director, and (iii) with respect to any Related Party Transaction in which one or more individual directors has a direct or indirect material interest, each such director; provided, however, that (1) with respect to any Related Party Transaction involving any member of the Apollo Group, the Audit Committee may request that the Riverstone Directors confirm that the Riverstone Group has no direct or indirect material interest and, if the Audit Committee so requests, no Riverstone Director shall be a Disinterested Director unless the Riverstone Directors have provided such confirmation to the Audit Committee and (2) with respect to any Related Party Transaction involving any member of the Riverstone Group, the Audit Committee may request that the Apollo Directors confirm that the Apollo Group has no direct or indirect material interest and, if the Audit Committee so requests, no Apollo Director shall be a Disinterested Director unless the Apollo Directors have provided such confirmation to the Audit Committee.
Exchange Act means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.
Final Termination Date has the meaning set forth in Section 2.1 .
GAAP means United States generally accepted accounting principles.
Governance & Nominating Committee has the meaning set forth in Section 3.3(c) .
Governmental Entity means any United States federal, state or local, or foreign, international or supranational, government, court or tribunal, or administrative, executive, governmental or regulatory or self-regulatory body, agency or authority thereof.
Group means the Apollo Group, the Riverstone Group, the Stockholder Group, or the Company Group, as the context requires.
Independent Director means a director who is independent under the NYSE listing rules.
Information means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other object and source code versions of computer programs and associated documentation, training materials and configurations to use and modify such programs, including programmer, administrator, end user and other documentation, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.
Initial Apollo Group Shares has the meaning set forth in the preamble.
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Initial Riverstone Group Shares has the meaning set forth in the preamble.
Initial Stockholder Shares has the meaning set forth in the preamble.
Law means any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar legally enforceable requirement enacted, adopted, promulgated or applied by a Governmental Entity.
Necessary Action means, with respect to any party and a specified result, all actions (to the extent such actions are permitted by Law and within such partys control) necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Common Stock owned by such party, (ii) causing the adoption of stockholders resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.
Nominating Stockholders means the Apollo Parties and the Riverstone Parties.
Non-Talos Designee has the meaning set forth in Section 3.2(f) .
Non-Talos Director has the meaning set forth in Section 3.2(f) .
NYSE means the New York Stock Exchange.
Other Stockholder means a holder of Company Common Stock that is not a member of the Stockholder Group.
Party and collectively, Parties , has the meaning set forth in the introduction.
Person means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization, limited liability company or governmental or other entity.
Related Party Transaction means any transaction (including any merger or consolidation of the Company with any other entity or association) or series of related transactions in which the Company or any member of the Company Group is a participant and any Stockholder or member of any Stockholder Group (in each case, with respect to which this Agreement has not terminated) or any director has a direct or indirect material interest (other than an interest as a stockholder in the Company proportionate to its Company Stock ownership) other than a transaction or series of related transactions that involves goods, services, property or other consideration valued at less than $120,000 or that is otherwise de minimis in nature.
Relevant Agreements has the meaning set forth in the preamble.
Representatives has the meaning set forth in Section 4.1(b) .
Riverstone Blocker Holding Company has the meaning set forth in the introduction.
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Riverstone Designee has the meaning set forth in Section 3.2(b) .
Riverstone Director has the meaning set forth in Section 3.2(b) .
Riverstone Feeders has the meaning set forth in the introduction.
Riverstone Group means the Riverstone Parties and their respective Affiliates. For the avoidance of doubt, for the purposes of this Agreement no member of the Company Group shall be a member of the Riverstone Group.
Riverstone Parties has the meaning set forth in the introduction.
SEC means the Securities and Exchange Commission.
Signing Date has the meaning set forth in the preamble.
Standstill Period has the meaning set forth in Section 4.2(c)(i) .
Stockholder Group means the Apollo Group and the Riverstone Group.
Stockholders has the meaning set forth in the introduction.
Stone Energy has the meaning set forth in the preamble.
Subsidiary means, with respect to a subject Person, any other Person of which (i) at least 50% of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions, (ii) a general partner interest, or (iii) a managing member interest, is directly or indirectly owned or controlled by the subject Person or by one or more of its Subsidiaries.
Support Agreement has the meaning set forth in the preamble.
Talos Designees has the meaning set forth in Section 3.2(c) .
Talos Directors has the meaning set forth in Section 3.2(c) .
Talos Energy LLC has the meaning set forth in the preamble.
Talos Non-Aligned Designee has the meaning set forth in Section 3.2(c) .
Talos Non-Aligned Director has the meaning set forth in Section 3.2(c) .
Talos Production has the meaning set forth in the preamble.
Termination Date has the meaning set forth in Section 2.1 .
Transaction Agreement has the meaning set forth in the preamble.
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Transaction Documents means, collectively, this Agreement, the Relevant Agreements and the other Ancillary Agreements (as defined in the Transaction Agreement).
Transactions has the meaning given such term in the Transaction Agreement.
Transfer means, directly or indirectly (whether by merger, operation of Law or otherwise), to sell, transfer, assign, pledge, hypothecate or otherwise dispose of or encumber any direct or indirect economic, voting or other rights in or to any Company Common Stock, including by means of (i) the Transfer of an interest in a Person that directly or indirectly holds such Company Common Stock or (ii) a hedge, swap or other derivative. Transferred and Transferring shall have correlative meanings.
ARTICLE II
TERM
Section 2.1 Term and Termination . This Agreement is effective as of the date hereof and shall terminate automatically (a) with respect to the Apollo Parties, on the first date that the Apollo Parties, based on their collective ownership of Company Common Stock, would no longer have the right to nominate an Apollo Designee pursuant to Section 3.2(a) and (b) with respect to the Riverstone Parties, on the first date that the Riverstone Parties, based on their collective ownership of Company Common Stock, would no longer have the right to nominate a Riverstone Designee pursuant to Section 3.2(b) . Notwithstanding the foregoing, the provisions of Section 4.1 , Article V and Article VI , and any claim for breach of the covenants set forth in this Agreement, shall survive the termination of this Agreement. The date that this Agreement terminates with respect to the Apollo Parties or the Riverstone Parties, as applicable, is referred to herein as such Parties Termination Date . The first date that this Agreement has terminated with respect to both the Apollo Parties and the Riverstone Parties is referred to herein as the Final Termination Date .
ARTICLE III
CORPORATE GOVERNANCE MATTERS
Section 3.1 Board Composition .
(a) The Company Board shall initially consist of ten members comprised of (i) two directors designated by the Apollo Parties, (ii) two directors designated by the Riverstone Parties, (iii) one Independent Director jointly designated by the Nominating Stockholders, (iv) the Chief Executive Officer of the Company and (v) four directors, including the chairman of the Company Board, that are Company Independent Directors, initially designated by Stone Energy in accordance with the Transaction Agreement. Until the second annual meeting of stockholders held after the date of this Agreement, the Company and each Stockholder shall take all Necessary Action to cause the Chairman of the Company Board to be a Company Independent Director.
(b) The Company and each Stockholder shall take all Necessary Action to cause the directors contemplated by Section 3.1(a) to be divided into three classes of directors, each of which directors shall serve for staggered three-year terms as follows:
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(i) the class I directors shall include: one Apollo Director specified by the Apollo Parties, one Riverstone Director specified by the Riverstone Parties and one Company Independent Director designated by the Company in accordance with the Transaction Agreement;
(ii) the class II directors shall include: one Company Independent Director designated by the Company in accordance with the Transaction Agreement, the Chief Executive Officer of the Company and the one Independent Director jointly designated by the Nominating Stockholders pursuant to Section 3.1(a)(iii) ; and
(iii) the class III directors shall include: one Apollo Director specified by the Apollo Parties, one Riverstone Director specified by the Riverstone Parties and two Company Independent Directors designated by the Company in accordance with the Transaction Agreement.
Notwithstanding the foregoing, the initial term of the class I directors shall expire at the first annual meeting of stockholders of the Company held following the date of this Agreement. The initial term of the class II directors shall expire at the second annual meeting of stockholders of the Company held following the date of this Agreement. The initial term of the class III directors shall expire at the third annual meeting of stockholders of the Company held following the date of this Agreement.
(c) The Company and each Stockholder shall take all Necessary Action to cause the Company Board to be comprised of a total of ten authorized directorships.
(d) In the event the Nominating Stockholders have not jointly designated an Independent Director to serve on the Company Board pursuant to Section 3.1(a) prior to the Closing, from and after the Closing, there shall be deemed a vacancy on the Company Board and the Nominating Stockholders shall, as promptly as practicable, jointly designate an Independent Director to fill such vacancy, as if such vacancy had resulted due to the death, resignation, retirement or disqualification of a Green Non-Aligned Director pursuant to Section 3.2(h) .
Section 3.2 Director Nomination Rights .
(a) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, (i) for so long as the Apollo Group collectively owns Company Common Stock representing at least one of the following: (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Apollo Parties shall have the right to designate two persons for nomination by the Company Board for election to the Company Board, (ii) upon the Apollo Group ceasing to collectively own Company Common Stock representing at least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Apollo Parties shall have the right to designate one person for nomination by
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the Company Board for election to the Company Board for so long as the Apollo Group collectively owns Company Common Stock representing at least one of the following (x) 5% of the outstanding shares of Company Common Stock or (y) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares) (each person designated pursuant to (i) or (ii), an Apollo Designee ), and (iii) upon the Apollo Group ceasing to collectively own Company Common Stock representing at least one of the following (A) 5% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Apollo Parties shall thereafter not have the right to designate any Apollo Designee pursuant to this Agreement. Any Apollo Designee that is serving on the Company Board, together with any director designated in accordance with Section 3.1(a )( i ), is an Apollo Director .
(b) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, (i) for so long as the Riverstone Group collectively owns Company Common Stock representing at least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Riverstone Parties shall have the right to designate two persons for nomination by the Company Board for election to the Company Board, (ii) upon the Riverstone Group ceasing to collectively own Company Common Stock representing at least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Riverstone Parties shall have the right to designate one person for nomination by the Company Board for election to the Company Board for so long as the Riverstone Group collectively owns Company Common Stock representing at least one of the following (x) 5% of the outstanding shares of Company Common Stock or (y) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares) (each person designated pursuant to (i) or (ii), a Riverstone Designee ), and (iii) upon the Riverstone Group ceasing to collectively own Company Common Stock representing at least one of the following (A) 5% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Riverstone Parties shall thereafter not have the right to designate any Riverstone Designee pursuant to this Agreement. Any Riverstone Designee that is serving on the Company Board, together with any director designated in accordance with Section 3.1(a )( ii) , is a Riverstone Director .
(c) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, (i) for so long as the Stockholders collectively own Company Common Stock representing at least one of the following: (A) 50% of the outstanding shares of Company Common Stock or (B) at least 80% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any
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shares), the Nominating Stockholders shall have the collective right to designate two additional persons for nomination by the Company Board for election to the Company Board, one of which shall qualify as an Independent Director and the other of whom shall either be the Chief Executive Officer of the Company or shall also qualify as an Independent Director and (ii) upon the Stockholders ceasing to collectively own Company Common Stock representing at least one of the following: (A) 50% of the outstanding shares of Company Common Stock or (B) at least 80% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Nominating Stockholders shall have the collective right to designate one additional person for nomination by the Company Board for election to the Company Board, whom shall either be the Chief Executive Officer of the Company or qualify as an Independent Director, for so long as the Nominating Stockholders collectively own Company Common Stock representing at least one of the following (x) 40% of the outstanding shares of Company Common Stock or (y) at least 60% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares) (each person designated pursuant to this Section 3.2(c) , a Talos Non-Aligned Designee and, together with the Apollo Designees and Riverstone Designees, the Talos Designees ). Upon the Nominating Stockholders ceasing to collectively own Company Common Stock representing at least one of the following (x) 40% of the outstanding shares of Company Common Stock or (y) at least 60% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Nominating Stockholders shall thereafter not have the right to designate any Talos Non-Aligned Designee pursuant to this Agreement. Any Talos Non-Aligned Designee that is serving on the Company Board is a Talos Non-Aligned Director , and the Apollo Director(s), Riverstone Director(s) and Talos Non-Aligned Director(s) are sometimes referred to herein as the Talos Directors .
(d) If at any time, the number of outstanding shares of Company Common Stock owned by the Apollo Group is less than the number necessary to designate the number of Apollo Designees then on the Company Board, then the applicable number of Apollo Directors then on the Company Board shall, and the Apollo Parties shall take all Necessary Action to cause such Apollo Directors to, immediately offer to resign from their directorships, effective as of the Companys next annual meeting of stockholders. If such resignation is then accepted by the vote of a majority of the Company Independent Directors, the Apollo Parties shall take all Necessary Action to cooperate with the other directors and the Company in removing such Apollo Director(s) as of such time. If at any time, the number of outstanding shares of Company Common Stock owned by the Riverstone Group is less than the number necessary to designate the number of Riverstone Designees then on the Company Board, then the applicable number of Riverstone Directors then on the Company Board shall, and the Riverstone Parties shall take all Necessary Action to cause such Riverstone Directors to, immediately offer to resign from their directorships, effective as of the Companys next annual meeting of stockholders. If such resignation is then accepted by the vote of a majority of the Company Independent Directors, the Riverstone Parties shall take all Necessary Action to cooperate with the other directors and the Company in removing such Riverstone Director(s) as of such time. Following such resignation of any Apollo Designee or Riverstone Designee in accordance with this Section 3.2(d) , the Governance & Nominating Committee shall have the exclusive right to fill the resulting vacant directorships with persons who qualify as Company Independent Directors to replace such resigned directors.
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(e) No Nominating Stockholder shall designate any Talos Designee who it believes does not satisfy the requirements for service on the Company Board set forth in Section 2.13(e) of the Bylaws or the rules and regulations of the NYSE or applicable Law. Upon the identification of any Talos Designee by a Nominating Stockholder, the Governance & Nominating Committee shall promptly and in good faith consider each Talos Designee. In the event that the Governance & Nominating Committee determines that the Talos Designee fails to meet such requirements, such Talos Designee shall not be nominated for election to the Company Board, and the applicable Nominating Stockholder(s) shall have the right to designate an alternative applicable Talos Designee for consideration. Upon their nomination to the Company Board and from time to time thereafter if reasonably requested by any Nominating Stockholder, the Governance & Nominating Committee shall in good faith consider whether any Talos Designee qualifies as a Company Independent Director.
(f) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, the Governance & Nominating Committee shall have the right to designate persons who qualify as Company Independent Directors as nominees of the Company Board for election to each directorship for which a Nominating Stockholder is not entitled to designate a Talos Designee (each such designee, a Non- Talos Designee and each such designee serving on the Company Board and each of the Company Independent Directors initially designated to serve on the Company Board by the Company in accordance with the Transaction Agreement, a Non- Talos Director ).
(g) The Company shall cause each Talos Designee and Non-Talos Designee to be included in the Companys proxy materials and form of proxy disseminated to stockholders in connection with the election of directors (including at any special meeting of stockholders held for the election of directors), and the Company Board shall recommend such designees for election by the holders of Company Common Stock. The Company shall use its reasonable best efforts to cause the election of each such Talos Designee and Non-Talos Designee, including soliciting proxies in favor of the election of such persons.
(h) Subject to Section 3.2(e) , in the event that any Talos Director shall cease to serve as a director for any reason, so long as the nominee for such persons position is subject to nomination pursuant to Section 3.2(a) , (b) or (c) , the vacancy resulting therefrom shall be filled by the Company Board with a substitute individual, to be designated and appointed by the same Person(s) who designated such Talos Director who has ceased serving as a director on the Company Board.
(i) From and after the date hereof, in the event of a vacancy on the Company Board upon the death, resignation, retirement, disqualification, removal from office or other cause of a Non-Talos Director, the Governance & Nominating Committee shall have the sole right to fill such vacancy or designate an individual for nomination for election to the Company Board to fill such vacancy.
(j) So long as the Stockholder Group owns at least a majority of the outstanding shares of Company Common Stock, the Company shall avail itself of all available controlled company exceptions to the corporate governance listing standards of the NYSE, and, thereafter, the Company shall comply with the corporate governance listing standards of the NYSE, including those relating to the composition of the committees of the Company Board.
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(k) For the avoidance of doubt, each Nominating Stockholder shall have the right, in its sole discretion, to waive any and all of the rights granted to it under this Section 3.2 , by delivery of written notice to the Company.
Section 3.3 Committees of the Company Board . The Company and each Stockholder shall take all Necessary Action to cause the following committees of the Board of Directors to be comprised as set forth in this Section 3.3 .
(a) Audit Committee . The Company shall cause the Audit Committee of the Company Board to consist solely of Company Independent Directors. Each of the Nominating Stockholders shall have the right to have a director designated by such Nominating Stockholder serve as an observer on the Audit Committee (with the right to attend meetings and receive materials provided to members of such committee) for so long as such Nominating Stockholder has the right to designate at least one (1) director for election to the Company Board. Notwithstanding the foregoing, a director designated as an observer may be excluded from any Audit Committee meeting or portion thereof, and the Company may withhold information from such director, if the Audit Committee determines in good faith, after consulting with counsel, that the directors attendance or access to such information would be reasonably likely to result in the loss of privilege with respect to legal advice or if the matter considered by the Audit Committee involves a Related Party Transaction and the director is not a Disinterested Director with respect thereto.
(b) Compensation Committee . The Company shall cause the Compensation Committee of the Company Board to consist of three directors, including at least one Non-Talos Director. Each of the Nominating Stockholders shall have the right to have a director designated by such Nominating Stockholder appointed to serve on the Compensation Committee for so long as such Nominating Stockholder has the right to designate at least one (1) director for election to the Company Board.
(c) Governance & Nominating Committee . The Company shall cause the Governance & Nominating Committee of the Company Board ( Governance & Nominating Committee ) to consist of three directors, including at least two Company Independent Directors. Any Nominating Stockholder who does not have a director designated by such Nominating Stockholders serving as a member of the Governance & Nominating Committee shall have the right to have a director designated by such Nominating Stockholder serve as an observer on the Governance & Nominating Committee (with the right to attend meetings and receive materials provided to members of such committee) for so long as such Nominating Stockholder has the right to designate at least one (1) director for election to the Company Board. Notwithstanding the foregoing, a director designated as an observer may be excluded from any Governance & Nominating Committee meeting or portion thereof, and the Company may withhold information from such director, if the Governance & Nominating Committee Committee determines in good faith, after consulting with counsel, that the directors attendance or access to such information would be reasonably likely to result in the loss of privilege with respect to legal advice or if the matter considered by the Governance & Nominating Committee involves a Related Party Transaction and the director is not a Disinterested Director with respect thereto.
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Section 3.4 Nominating Stockholders Agreement to Vote . From and after the date hereof, each Stockholder shall:
(a) cause their respective shares of Company Common Stock to be present for quorum purposes at any Company stockholder meeting at which directors shall be elected;
(b) cause their respective shares to be voted in favor of the election of each Talos Designee designated and nominated for election at such meeting in accordance with this Agreement;
(c) with respect to each nominee for election other than a Talos Designee, cause their respective shares to be voted, to the fullest extent practicable, in the respective Stockholders sole discretion either (A) in a manner that is proportionate to the manner in which all shares of Company Common Stock owned by Other Stockholders are voted with respect to such nominees, so that, for any such nominee, the shares of Company Common Stock owned by a Stockholder (or its Affiliates) shall reflect voting results with respect to shares voted for shares voted against shares abstained shares withheld and broker non-votes proportionate to the aggregate voting results for shares of Company Common Stock that are owned by Other Stockholders and that are deemed present in person or by proxy at such stockholder meeting, or (B) in a manner that is consistent with the recommendation of the Governance & Nominating Committee; and
(d) cause their respective shares to be voted against any amendment to the following provisions of the Charter or Bylaws that has not been approved by a majority of the Company Independent Directors: Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7 and 13.1 of the Charter and Sections 3.1(b), 3.2, 4.4, 4.5 and 5.6 of the Bylaws.
Section 3.5 Meeting of Stockholders . Except with respect to the filling of vacancies on the Company Board in accordance with Section 3.2 , the Company and each Stockholder shall take all Necessary Action to conduct the election or removal of Company Independent Directors only at a meeting of stockholders and not by consent in lieu of a stockholder meeting. Except with respect to the filling of vacancies on the Company Board in accordance with Section 3.2 , each Stockholder shall refrain from, and shall cause its Affiliates to refrain from, executing a consent in lieu of a stockholder meeting for the purpose of electing or removing Company Independent Directors.
Section 3.6 Related Party Transactions . The Company shall not enter into or effect any Related Party Transaction unless such transaction has been approved by a majority of the Disinterested Directors or a majority of the Audit Committee. The Stockholders shall not, and shall cause their respective controlled Affiliates not to, take any action to cause the Company to enter into or effect a Related Party Transaction unless such transaction has been approved by a majority of the Disinterested Directors or a majority of the Audit Committee.
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ARTICLE IV
OTHER AGREEMENTS
Section 4.1 Sharing of Information; Confidentiality .
(a) To the extent permitted by antitrust, competition or any other applicable Law, each Stockholder and the Company agrees and acknowledges that the Apollo Directors and Riverstone Directors may share Company Confidential Information with the Apollo Parties and the Riverstone Parties, respectively, subject to the provisions of Section 4.1(b) and Section 4.1(c) , and except to the extent sharing such information would reasonably be expected to in a loss of privilege with respect to legal advice.
(b) For a period of one year following the Termination Date for any Party or such longer period pursuant to the last sentence of this Section 4.1(a) , subject to Section 4.1(d) and except as contemplated by this Agreement or any Transaction Document, such Party shall not, and shall cause its Affiliates and its and their respective officers, directors, employees, and other agents and representatives (collectively, Representatives ) not to, directly or indirectly, disclose, reveal, divulge or communicate to any Person, other than its Representatives or its Affiliates who reasonably need to know such information in providing services to such Party or its Affiliates, or its limited partners, members or shareholders, any Company Confidential Information. Each Party shall, and shall cause its Affiliates to, use the same degree of care to prevent and restrain the unauthorized disclosure of the Company Confidential Information by any of their Representatives as they currently use for their own confidential information of a like nature. For purposes of this Section 4.1(a) , any Information, material or documents relating to the business currently or formerly conducted, or proposed to be conducted, by any member of the Company Group furnished to or in possession of any member of the Apollo Group or the Riverstone Group, irrespective of the form of communication, and all notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents prepared by any member of either such Group or their respective officers, directors and Affiliates, that contain or otherwise reflect such information, material or documents is hereinafter referred to as Company Confidential Information . Company Confidential Information does not include, and there shall be no obligation hereunder with respect to, information that (i) is or becomes generally available to the public, other than as a result of a use or disclosure by any member of such Group not otherwise permissible hereunder, (ii) such Party can demonstrate was or became available to any member of such Group from a source other than the Company or its Affiliates or (iii) is developed independently by a member of such Group without reference to the Company Confidential Information; provided , however , that, in the case of clause (ii), the source of such information was not known by such member of such Group to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, any member of the Company Group with respect to such information.
(c) Without limiting Section 4.1(a) , from the date hereof until the applicable Termination Date, the Stockholders shall, and shall cause their Affiliates to, use the same degree of care to prevent and restrain the unauthorized disclosure of the Company Confidential Information by them and their Representatives, limited partners, members or shareholders as they currently use for their own confidential information of a like nature; provided that, for the avoidance of doubt, following the Termination Date the disclosure and use of Company Confidential Information shall be governed by Section 4.1(a) .
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(d) If any Stockholder or its Affiliate is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Entity or pursuant to applicable Law or stock exchange requirements to disclose or provide any Company Confidential Information (other than with respect to any such information furnished pursuant to the provisions of Article V of this Agreement), the Person receiving such request or demand, or so required by applicable Law or stock exchange requirements, shall use all reasonable efforts to provide the Company with written notice of such request, demand or requirement as promptly as practicable under the circumstances so that the Company shall have an opportunity to seek an appropriate protective order. The Stockholders agree to take, and cause their Representatives to take, at the Companys expense, all other reasonable steps necessary to obtain confidential treatment by the Stockholders. Subject to the foregoing, the Stockholders may thereafter disclose or provide any Company Confidential Information to the extent required by such Law or stock exchange requirement (as so advised by counsel) or by lawful process or such Governmental Entity.
Section 4.2 Restrictions on Transferability and Acquisitions .
(a) Apollo Lockup . For a period of 12 months beginning on the date hereof, the Apollo Parties shall not, and shall not permit any member of the Apollo Group to, Transfer or agree to Transfer any shares of Company Common Stock to any Person that is not an Affiliate of the Apollo Group (other than to a member of the Riverstone Group), unless approved by a majority of the Company Independent Directors; provided, however, that the Transfer restrictions in this Section 4.2(a) shall cease to apply to 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Apollo Parties) on the six-month anniversary of the date hereof and shall cease to apply to an additional 25% of the Initial Apollo Group Shares as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Apollo Parties) on the nine-month anniversary of the date hereof.
(b) Riverstone Lockup . For a period of 12 months beginning on the date hereof, the Riverstone Parties shall not, and shall not permit any member of the Riverstone Group to, Transfer or agree to Transfer any shares of Company Common Stock to any Person that is not an Affiliate of the Riverstone Group (other than to a member of the Apollo Group), unless approved by a majority of the Company Independent Directors; provided, however, that the Transfer restrictions in this Section 4.2(a) shall cease to apply to 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Riverstone Parties) on the six-month anniversary of the date hereof and shall cease to apply to an additional 25% of the Initial Riverstone Group Shares as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Riverstone Parties) on the nine-month anniversary of the date hereof.
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(c) Standstill .
(i) For a period of two years beginning on the date hereof (the Standstill Period ), the Stockholders shall not, and shall cause their Representatives and controlled Affiliates not to, directly or indirectly, in any manner, (A) effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or otherwise participate in, any solicitation of proxies (as such terms are used in the proxy rules of the SEC) to vote any Company Common Stock in connection with the election of the Non-Talos Directors or the removal of any Non-Talos Director, (B) solicit, knowingly encourage or knowingly facilitate, directly or indirectly, any third party to engage in any such solicitation, (C) make any public statement (or statement to an Other Stockholder) in support of any such third-party solicitation or against any of the Companys director nominees, (D) form, join or in any way participate in a group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any Company Common Stock or (E) call, request the calling of, or otherwise seek or assist in the calling of a special meeting of the stockholders of the Company; provided that subclauses (D) and (E) shall only apply if taken in furtherance of the actions described in subclauses (A), (B) and (C) of this subsection (i).
(d) None of the Stockholders or any member of a Stockholder Group shall Transfer any shares of Company Common Stock to any other Stockholder or member of a Stockholder Group unless such transferee executes a joinder to this Agreement, in form and substance reasonably acceptable to the Company, to become a party to this Agreement and be subject to the restrictions and obligations applicable to the Person effecting the Transfer (or, in the case of a Transfer of Company Common Stock between members of the Apollo Group and the Riverstone Group, to be subject to the restrictions and obligations applicable to the other members of the receiving partys Group) and otherwise become a party for all purposes of this Agreement; provided that no such Transfer shall relieve the Stockholders or any Person effecting the Transfer from its obligations under this Agreement. Any Transfer in violation of this Agreement shall be void ab initio and of no force or effect.
(e) Until the first anniversary of the date of this Agreement, none of the Stockholders or any member of a Stockholder Group shall, without the prior approval of a majority of the Company Independent Directors, Transfer any shares of Company Common Stock pursuant to a block sale, market transaction or private sale in which, to the knowledge of any of the Nominating Stockholders or any member of a Stockholder Group, would result in a single purchaser (together with its Affiliates and associates) acquiring beneficial ownership of such number of shares of Company Common Stock which, when combined with the number of shares beneficially owned thereby immediately prior to such sale or transaction, will cause such purchaser to beneficially own in excess of 35% of the Company Common Stock at such time, unless such purchaser agrees in writing to be bound by substantially the same provisions as the Stockholders are bound by pursuant to this Agreement.
(f) Each certificate representing shares of Company Common Stock held of record by the Stockholders or any member of a Stockholder Group shall bear the following legend on the face thereof:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT DATED AS OF MAY 10, 2018 AMONG TALOS ENERGY INC., AP TALOS ENERGY LLC, AP TALOS ENERGY DEBTCO LLC, AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC, AIF VII (AIV), L.P., ANRP DE HOLDINGS, L.P., RIVERSTONE TALOS ENERGY EQUITYCO LLC, RIVERSTONE TALOS ENERGY DEBTCO LLC, AND RIVERSTONE V FT CORP HOLDINGS, L.P., COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND SHALL BE PROVIDED TO A STOCKHOLDER OF THE COMPANY FREE OF CHARGE UPON A REQUEST THEREFOR.
The legend set forth herein shall remain on all certificates representing such shares until the applicable Termination Date.
Section 4.3 Bylaws . The Company and each Stockholder shall take all Necessary Action to cause the Bylaws to include provisions requiring that: (A) the Governance & Nominating Committee shall have the full power and authority of the Company Board to take any actions required or permitted to be taken by such committee pursuant to this Agreement; (B) a majority of the members of the Governance & Nominating Committee shall qualify as Company Independent Directors; (C) any action of the Governance & Nominating Committee may be approved by a simple majority of the persons then serving as members of such committee, and no greater vote shall be imposed by the Company Board or the Bylaws; (D) all members of the Audit Committee must qualify as Company Independent Directors; (E) each Related Party Transaction that is not approved by the Audit Committee or a majority of the Disinterested Directors shall require the approval of all of the directors then in office; and (F) in addition to any vote required by the governing documents of the Company, the Company Board shall not approve or adopt any Bylaw contrary to the foregoing without the approval of either all of the directors then in office or a majority of the Company Independent Directors.
ARTICLE V
DISPUTE RESOLUTION
Section 5.1 General Provisions .
(a) Each of the Parties (i) irrevocably consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware (the Chancery Court ) or, if, but only if, the Chancery Court lacks subject matter jurisdiction, any federal court located in the State of Delaware with respect to any dispute arising out of, relating to or in connection with this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action arising out of, relating to or in connection with this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and (iv) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. Nothing in this Section 5.1 shall prevent any Party from bringing an action or proceeding in any jurisdiction to enforce any judgment of the Chancery Court or any federal court located in the State of Delaware, as applicable. The Parties hereby agree that mailing of process or other papers in connection with such action, suit, or proceeding in the manner provided by Section 6.3 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.
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(b) The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party accordingly agrees that, in the event of any breach or threatened breach by any other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in Law or equity, including monetary damages) to (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach. In circumstances where a Party is obligated to take action under this Agreement and such Party fails to take such action each of the Parties expressly acknowledges and agrees that the other Party shall have suffered irreparable harm, that monetary damages will be inadequate to compensate such other Party, and that such other Party shall be entitled to enforce specifically the breaching Partys obligations under this Agreement. Each Party accordingly agrees not to raise any objection to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such Party under this Agreement all in accordance with the terms of this Section 5.1(b) . Each Party further agrees that no other Party and no other Person shall be required to obtain, furnish, or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 5.1(b) , and each Party irrevocably waives any right it may have to require the obtaining, furnishing, or posting of any such bond or similar instrument.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Corporate Power .
(a) Each Stockholder represents on behalf of itself and the Company represents on behalf of itself, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.
Section 6.2 Governing Law . This Agreement shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, regardless of any Laws or legal principles that might otherwise govern under the applicable principles of conflicts of law thereof.
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Section 6.3 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and, in the case of delivery in person or by overnight mail, shall be deemed to have been duly given upon receipt) by delivery in person or overnight mail to the respective parties or delivery by electronic mail transmission (providing confirmation of transmission) to the respective Parties. Any notice sent by electronic mail transmission shall be deemed to have been given and received at the time of confirmation of transmission. Any notice sent by electronic mail transmission shall be followed reasonably promptly with a copy delivered by overnight mail. All notices, requests, claims, demands and other communications hereunder shall be addressed as follows, or to such other address or email address for a Party as shall be specified in a notice given in accordance with this Section 6.3 :
If to the Apollo Parties, to:
AP Talos Energy LLC
9 West 57 th Street
New York, NY 10019
Attention: Gregory Beard
Facsimile: (646) 514-5668
Email: gbeard@apollolp.com
and
AP Talos Energy Debtco LLC
9 West 57 th Street
New York, NY 10019
Attention: Gregory Beard
Facsimile: (646) 514-5668
Email: gbeard@apollolp.com
With a copy to:
Apollo Management VII, L.P.
9 West 57th Street
New York, NY 10019
Attention: Laurie Medley
Facsimile: (646) 607-0528
Email: lmedley@apollolp.com
and
Apollo Commodities Management, L.P. with respect to Series I
9 West 57th Street
New York, NY 10019
Attention: Laurie Medley
Facsimile: (646) 607-0528
Email: lmedley@apollolp.com
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with a further copy to (which shall not constitute notice):
Vinson & Elkins LLP
666 Fifth Avenue, 26th Floor
New York, NY 10103
Attention: James Fox
Dan Komarek
Facsimile: (917) 849-5366
Email: jfox@velaw.com
dkomarek@velaw.com
If to the Riverstone Parties, to:
Riverstone Talos Energy Equityco LLC
c/o Riverstone Holdings LLC
712 Fifth Avenue, 36 th Floor
New York, NY 10019
Attention: General Counsel
Facsimile: (888) 801-9301
Email: legal@riverstonellc.com
and
Riverstone Talos Energy Debtco LLC
c/o Riverstone Holdings LLC
712 Fifth Avenue, 36th Floor
New York, NY 10019
Attention: General Counsel
Facsimile: (888) 801-9301
Email: legal@riverstonellc.com
with a further copy to (which shall not constitute notice):
Vinson & Elkins LLP
666 Fifth Avenue, 26th Floor
New York, NY 10103
Attention: James Fox
Dan Komarek
Facsimile: (917) 849-5366
Email: jfox@velaw.com
dkomarek@velaw.com
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If to the Company, to:
Talos Energy Inc.
500 Dallas St., Suite 2000
Houston, Texas 77002
Attention: General Counsel
Facsimile: (713) 351-4100
Email: bmoss@talosenergyllc.com
with a copy to (which copy shall not constitute notice):
Vinson & Elkins L.L.P.
1001 Fannin St., Suite 2500
Houston, Texas 77002
Attention: Stephen M. Gill
Lande A. Spottswood
Facsimile: (713) 615-5956
Email: sgill@velaw.com
lspottswood@velaw.com
Section 6.4 Severability . If any provision of this Agreement shall be held to be illegal, invalid or unenforceable under any applicable Law, then such contravention or invalidity shall not invalidate the entire Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall render it legal, valid and enforceable, then this Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the Parties shall be construed and enforced accordingly.
Section 6.5 Entire Agreement . This Agreement (including the annexes, exhibits and letters hereto) and the other Relevant Agreements constitute the entire agreement, and supersede all other prior agreements and understandings (both written and oral), among the Parties with respect to the subject matter hereof and thereof.
Section 6.6 Assignment; No Third-Party Beneficiaries . This Agreement shall not be assigned by any Party without the prior written consent of the other Party. This Agreement is for the sole benefit of the Parties to this Agreement and the members of their respective Group and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or entity (other than the Company Independent Directors pursuant to Section 6.7 or Section 6.10 ) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 6.7 Amendment; Waiver . No provision of this Agreement may be amended or modified except by a written instrument signed by all the Parties to this Agreement; provided that any amendment or modification of this Agreement shall require the prior written approval of the Company Independent Directors. Either Party may, in its sole discretion, waive any and all rights granted to it in this Agreement; provided, that no waiver by any Party of any provision
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hereof shall be effective unless explicitly set forth in writing and executed by the Party so waiving; provided, further, that any waiver of any or all of the Companys rights granted under this Agreement shall require the prior written approval of the Company Independent Directors. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 6.8 Interpretations . When a reference is made in this Agreement to an Article, Section or Schedule, such reference shall be to an Article, Section or Schedule to this Agreement unless otherwise indicated. The words include, includes and including when used herein shall be deemed in each case to be followed by the words without limitation. Any references in this Agreement to the date hereof refers to the date of execution of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to this Agreement, hereof, herein, and hereunder refer to this Agreement as a whole and not to any particular provision of this Agreement and include any schedules, annexes, exhibits or other attachments to this Agreement. The word or shall be deemed to mean and/or. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. The Parties have participated jointly in the negotiation and drafting of this Agreement with the assistance of counsel and other advisors and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement or interim drafts of this Agreement.
Section 6.9 Counterparts; Electronic Transmission of Signatures . This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts, and delivered by means of electronic mail transmission or otherwise, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
Section 6.10 Enforceable by the Company Independent Directors . All of the Companys rights under this Agreement and the other Transaction Documents may be enforced exclusively by the Company Independent Directors; provided that nothing in this Agreement shall require the Company Independent Directors to act on behalf of, or enforce any rights of, the Company. Any recovery in connection with an Action brought by the Company Independent Directors hereunder or thereunder shall be for the proportionate benefit of all Other Stockholders.
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Section 6.11 Apollo Representative . Each Apollo Party, by executing and delivering this Agreement or a joinder hereto, hereby appoints each Apollo Feeder as the representative to act on behalf of the Apollo Parties for all purposes under this Agreement (the Apollo Representative ), including the exercise of all rights of the Apollo Parties hereunder and the making of all elections and decisions to be made by the Apollo Parties pursuant to this Agreement. The Company hereby acknowledges and agrees that the Apollo Representative shall have the power and authority to act on behalf of the Apollo Parties pursuant to this Agreement and that the act of the Apollo Representative shall constitute the act of each Apollo Party for all purposes under this Agreement. The Apollo Representative may assign the power and authority granted to the Apollo Representative pursuant to this Section 6.11 to any other Apollo Party, who shall thereafter serve as the Apollo Representative. The Company shall be entitled to rely on any act or writing executed by the Apollo Representative.
Section 6.12 Riverstone Representative . Each Riverstone Party, by executing and delivering this Agreement or a joinder hereto, hereby appoints each Riverstone Feeder as the representative to act on behalf of the Riverstone Parties for all purposes under this Agreement (the Riverstone Representative ), including the exercise of all rights of the Riverstone Parties hereunder and the making of all elections and decisions to be made by the Riverstone Parties pursuant to this Agreement. The Company hereby acknowledges and agrees that the Riverstone Representative shall have the power and authority to act on behalf of the Riverstone Parties pursuant to this Agreement and that the act of the Riverstone Representative shall constitute the act of each Riverstone Party for all purposes under this Agreement. The Riverstone Representative may assign the power and authority granted to the Riverstone Representative pursuant to this Section 6.12 to any other Riverstone Party, who shall thereafter serve as the Riverstone Representative. The Company shall be entitled to rely on any act or writing executed by the Riverstone Representative.
[The remainder of this page has been intentionally left blank; the next page is the signature page.]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed as of the date first written above by its respective officer thereunto duly authorized, all as of the date first written above.
TALOS ENERGY INC. | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President and Chief Executive Officer | |
AP TALOS ENERGY LLC | ||
a Delaware limited liability company | ||
By: |
/s/ Christopher R. Gruszczynski |
|
Name: | Christopher R. Gruszczynski | |
Title: | Vice President | |
AP TALOS ENERGY DEBTCO LLC | ||
a Delaware limited liability company | ||
By: |
/s/ Christopher R. Gruszczynski |
|
Name: | Christopher R. Gruszczynski | |
Title: | Vice President |
[Signature Page to Stockholders Agreement]
AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC | ||
a Delaware limited liability company | ||
By: | Apollo Management VII, L.P., | |
its manager | ||
By: | AIF VII Management, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary | |
By: |
Apollo Commodities Management, L.P.,
with respect to Series I, |
|
its manager | ||
By: | Apollo Commodities Management GP, LLC, its general partner | |
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
[Signature Page to Stockholders Agreement]
AIF VII (AIV), L.P. | ||
a Delaware limited partnership | ||
By: | Apollo Advisors VII (APO DC), L.P., | |
its general partner | ||
By: | Apollo Advisors VII (APO DC-GP), LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
[Signature Page to Stockholders Agreement]
ANRP DE HOLDINGS, L.P. | ||
a Delaware limited partnership | ||
By: | Apollo ANRP Advisors (APO DC), L.P., | |
its general partner | ||
By: | Apollo Advisors VII (APO DC-GP), LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
[Signature Page to Stockholders Agreement]
RIVERSTONE TALOS ENERGY EQUITYCO LLC | ||
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director | |
RIVERSTONE TALOS ENERGY DEBTCO LLC | ||
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director | |
RIVERSTONE V FT CORP HOLDINGS, L.P. | ||
a Delaware limited partnership | ||
By: | Riverstone Energy Partners V, L.P., | |
its general partner | ||
By: | Riverstone Energy GP V, LLC | |
its general partner | ||
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director |
[Signature Page to Stockholders Agreement]
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this Agreement ) is made and entered into as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and each of the other parties set forth on the signature pages hereto. The Company and the other parties hereto are sometimes collectively referred to herein as the Parties and each is sometimes referred to herein as a Party .
WHEREAS, this Agreement is made in connection with the transactions (the Transactions ) contemplated by the Transaction Agreement by and among Stone Energy Corporation ( Legacy Stone ), the Company, Sailfish Merger Sub Corporation, Talos Energy LLC ( Parent ), and Talos Production LLC, dated as of November 21, 2017 (the Transaction Agreement );
WHEREAS, immediately prior to the consummation of the Transactions, the Registration Rights Agreement dated as of February 28, 2017 among Stone and the holders listed on Schedule I thereto was terminated pursuant to the Voting Agreements, each dated November 21, 2017 among Parent, Legacy Stone and the Legacy Holders (defined herein); and
WHEREAS, in consideration of the mutual benefits to be derived from the Transactions, the Company and the parties hereto desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . As used in and for purposes of this Agreement, the following terms have the following meanings:
Affiliate means, with respect to a specified Person, any other Person that directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such specified Person. For the purposes of this definition, control means the power to direct or cause the direction of the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
Agreement has the meaning given to such term in the introductory paragraph.
Apollo Entities means, collectively, AP Talos Energy LLC, a Delaware limited liability company, AP Talos Energy Debtco LLC, a Delaware limited liability company, AP Overseas Talos Holdings Partnership, LLC, a Delaware limited liability company, AIF VII (AIV), L.P., a Delaware limited partnership, and ANRP DE Holdings, L.P., a Delaware limited partnership.
Commission has the meaning given to such term in Section 1.02 .
Common Stock means the common stock of the Company, par value $0. 01 per share.
Company has the meaning given to such term in the preamble.
Effectiveness Period has the meaning given to such term in Section 2.01 .
Equity Security has the meaning ascribed to such term in Rule 405 under the Securities Act, and in any event includes any security having the attendant right to vote for directors or similar representatives.
Exchange Act has the meaning given to such term in Section 2.08(a) .
Franklin means Franklin Advisers, Inc., as investment manager on behalf of certain funds and accounts.
Holder means the record holder of any Registrable Securities.
Included Registrable Securities has the meaning given to such term in Section 2.03(a) .
Losses has the meaning given to such term in Section 2.08(a) .
Legacy Holders means, collectively, Franklin and MacKay.
MacKay means MacKay Shields LLC, as investment manager on behalf of certain of its clients.
Managing Underwriter(s) means, with respect to any Underwritten Offering, the book-running lead manager(s) of such Underwritten Offering.
Notice has the meaning given to such term in Section 2.01 .
Person means any individual, corporation, partnership, limited liability company, voluntary association, joint venture, trust, limited liability partnership, unincorporated organization, government or any agency, instrumentality or political subdivision thereof, or any other form of entity.
Principal Holders means, collectively, the Apollo Entities and the Riverstone Entities.
Registrable Securities means (i) any Common Stock held by any of the Principal Holders and the Legacy Holders or any of their respective Affiliates as of the date of this Agreement (after giving effect to the consummation of the Transactions) and (ii) any Common Stock of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization, which Registrable Securities are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof. For the avoidance of doubt, any Person that (or whose Common Stock) is managed by a Legacy Holder or by the same investment manager as a Legacy Holder shall be considered an Affiliate of such Legacy Holder for purposes of the definition of Registrable Securities in this Agreement.
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Registration Expenses means all expenses (other than Selling Expenses) incident to the Companys performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01 and/or in connection with an Underwritten Offering pursuant to Section 2.02(a) or Section 2.03(a) , and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and securities exchange fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes and the fees and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or cold comfort letters required by or incident to such performance and compliance.
Registration Statement has the meaning given to such term in Section 2.01 .
Riverstone Entities means, collectively, Riverstone Talos Energy Equityco LLC, a Delaware limited liability company, Riverstone Talos Energy Debtco LLC, a Delaware limited liability company, and Riverstone V FT Corp Holdings, L.P., a Delaware limited Partnership.
Securities Act has the meaning given to such term in Section 1.02 .
Selling Expenses means all underwriting fees, discounts and selling commissions applicable to the sale of Registrable Securities.
Selling Holder means a Holder who is selling Registrable Securities pursuant to a Registration Statement.
Shelf Registration Statement has the meaning given to such term in Section 2.01 .
Subsidiary means any subsidiary of the Company.
Testing-the-Waters Communication means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
Transaction Agreement has the meaning given to such term in the recitals of this Agreement.
Transactions has the meaning given to such term in the recitals of this Agreement.
Underwritten Offering means an offering (including an offering pursuant to a Registration Statement) in which Registrable Securities are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a bought deal with one or more investment banks.
Written Testing-the-Waters Communication means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
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Section 1.02. Registrable Securities . Any Registrable Security will cease to be a Registrable Security (a) at the time a Registration Statement covering such Registrable Security has been declared effective by the Securities and Exchange Commission (the Commission ), or otherwise has become effective, and such Registrable Security has been sold or disposed of pursuant to such Registration Statement; (b) at the time such Registrable Security has been disposed of pursuant to Rule 144 (or any similar provision then in effect under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the Securities Act )); (c) if such Registrable Security is held by the Company or one of its subsidiaries or (d) at the time such Registrable Security has been sold in a private transaction in which the Transferors rights under this Agreement are not assigned to the transferee of such securities.
ARTICLE II
REGISTRATION RIGHTS
Section 2.01. Demand Registration . Upon the written request (a Notice ) by a Principal Holder, Legacy Holder or any other Holder owning or controlling at least five percent (5%) of the then outstanding Registrable Securities (subject to adjustment pursuant to Section 3.04 ), the Company shall file with the Commission, as soon as reasonably practicable, but in no event more than 30 days following the receipt of the Notice, a registration statement (each, a Registration Statement ) under the Securities Act providing for the resale of the Registrable Securities (which may, at the option of the Holders giving such Notice, be a registration statement under the Securities Act that provides for the resale of the Registrable Securities pursuant to Rule 415 from time to time by the Holders (a Shelf Registration Statement )); provided that in no event shall the Company be required to file a Registration Statement prior to the date that is 90 days after the consummation of the Transactions. The Company shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Any Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders of any and all Registrable Securities covered by such Registration Statement. To the extent the initial Registration Statement is not made on Form S-3, the Company shall, upon becoming eligible to file a registration statement on Form S-3, prepare and file a new Registration Statement on Form S-3 to replace the initial Registration Statement and use its best efforts to cause such subsequent Registration Statement to be declared effective by the Commission as soon as reasonably practicable thereafter. The Company shall use its commercially reasonable efforts to cause each Registration Statement filed pursuant to this Section 2.01 to be continuously effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities by the Holders until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the Effectiveness Period ). Each Registration Statement when effective (and the documents incorporated therein by reference) shall comply as to form in all material respects with all applicable requirements of the Securities Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Holder shall be limited to two demand registrations under this Section 2.01 in any twelve-month period ( provided, however , that there shall be no limit on the number of Shelf Registration Statements that may be required by the Holders hereunder), and the Company shall not be obligated to file more than one Registration Statement within 120 days after the effective date of any Registration Statement filed by the Company.
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Section 2.02. Underwritten Offerings .
(a) Request for Underwritten Offering . Subject to Section 2.02(b) , in the event that a Holder elects to dispose of Registrable Securities having an aggregate value of at least five percent (5%) of the then-outstanding Registrable Securities (subject to adjustment pursuant to Section 3.04 ) under a Registration Statement pursuant to an Underwritten Offering, the Company shall, upon written request by such Holder, retain underwriters in order to permit such Holder to effect such sale through an Underwritten Offering. The obligation of the Company to retain underwriters shall include entering into an underwriting agreement in customary form with the Managing Underwriter(s), which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08 and taking all reasonable actions as are requested by the Managing Underwriter(s) to expedite or facilitate the disposition of such Registrable Securities. The Company shall, upon request of the Holder, cause its management to participate in a roadshow or similar marketing effort on behalf of the Holder.
(b) Limitation on Underwritten Offerings . In no event shall the Company be required under Section 2.02(a) to participate in more than three Underwritten Offerings requested by a Holder in any twelve-month period. Notwithstanding anything to the contrary herein, the Legacy Holders (and their respective permitted transferees) shall be permitted to collectively request no more than one Underwritten Offering pursuant to this Section 2.02 .
(c) General Procedures . In connection with any Underwritten Offering under this Agreement, the Holders of a majority of the Registrable Securities being sold in such Underwritten Offering shall be entitled, subject to the Companys consent (which is not to be unreasonably withheld, conditioned or delayed), to select the Managing Underwriter(s). In connection with any Underwritten Offering under this Agreement, each Selling Holder and the Company shall be obligated to enter into an underwriting agreement that contains such representations and warranties, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters also be made to and for such Selling Holders benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to such Selling Holders obligations. If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw from the Underwritten Offering by notice to the Company and the Managing Underwriter(s); provided, however , that such withdrawal must be made at a time prior to the time of pricing of such Underwritten Offering. No such withdrawal shall affect the Companys obligation to pay Registration Expenses.
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Section 2.03. Piggyback Rights .
(a) Participation . If the Company proposes to file (i) a registration statement or (ii) a prospectus supplement to an effective shelf registration statement and Holders may be included in the offering to which such prospectus supplement relates without the filing of a post-effective amendment to such shelf registration statement, in each case, for the sale of Common Stock in an Underwritten Offering for its own account and/or another Person, then as soon as practicable following the engagement of counsel by the Company to prepare the documents to be used in connection with such Underwritten Offering, the Company shall give notice (including notification by electronic mail) of such proposed Underwritten Offering to each Holder holding at least five percent (5%) of the then outstanding Registrable Securities and such notice shall offer such Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the Included Registrable Securities ) as each such Holder may request in writing; provided, however , that if the Company has been advised by the Managing Underwriter(s) that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Common Stock in the Underwritten Offering, then (A) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter(s), the Company shall not be required to offer such opportunity to the Holders or (B) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter(s), then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.03(b) . Subject to Section 2.03(b) , the Company shall include in such Underwritten Offering all included Registrable Securities with respect to which the Company has received requests within two (2) Business Days (or one (1) Business Day in connection with a bought deal or an overnight Underwritten Offering) after the Companys notice has been delivered in accordance with Section 3.01 . If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Company shall determine for any reason not to undertake or to delay such Underwritten Offering, the Company may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holders request for inclusion of such Selling Holders Registrable Securities in such Underwritten Offering by giving written notice to the Company of such withdrawal at or prior to the time of pricing of such Underwritten Offering.
(b) Priority of Registration . If the Managing Underwriter(s) of any proposed Underwritten Offering advises the Company that the total amount of Registrable Securities that the Selling Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect in any material respect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of shares of Common Stock that such Managing Underwriter(s) advises the Company can be sold without having such adverse effect, with such number to be allocated (i) first, to the Company unless a Holder initiates the Underwritten Offering, in which case it shall
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be to the Holders who initiated the Underwritten Offering and (ii) second, and if any, the number of included Registrable Securities that, in the opinion of such Managing Underwriter(s), can be sold without having such adverse effect, with such number to be allocated pro rata among the Holders (or the Company if a Holder initiates the Underwritten Offering) that have requested to participate in such Underwritten Offering based on the relative number of Registrable Securities then held by each such Holder (provided that any securities thereby allocated to a Holder that exceed such Holders request shall be reallocated among the remaining requesting Holders in like manner).
Section 2.04. Delay Rights . If the Companys board of directors determines that the Companys compliance with its obligations under this Article II would be materially detrimental to the Company and its shareholders because such registration would (a) materially interfere with a significant acquisition, reorganization, financing or other similar transaction involving the Company, (b) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (c) render the Company unable to comply with applicable securities laws, then the Company shall have the right to postpone compliance with its obligations under this Article II for a period of not more than three months, provided, that such right pursuant to this Section 2.04 may not be utilized more than twice in any twelve-month period.
Section 2.05. Sale Procedures . In connection with its obligations under this Article II , the Company will, as expeditiously as reasonably practicable:
(a) prepare and file with the Commission such amendments and supplements to each Registration Statement and the prospectus used in connection therewith as may be necessary to keep each Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;
(b) if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering and the Managing Underwriter(s) notifies the Company in writing that, in the sole judgment of such Managing Underwriter(s), inclusion of detailed information in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, use its commercially reasonable efforts to include such information in such prospectus supplement;
(c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Registration Statement or supplement or amendment thereto, and (ii) such number of copies of such Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement;
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(d) if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by a Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter(s), shall reasonably request; provided, however , that the Company will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any jurisdiction where it is not then so subject;
(e) promptly notify each Selling Holder and each underwriter, at any time when a prospectus is required to be delivered under the Securities Act, of (i) the filing of a Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any post-effective amendment thereto, when the same has become effective; and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to a Registration Statement or any prospectus or prospectus supplement thereto;
(f) immediately notify each Selling Holder and each underwriter, at any time when a prospectus is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading (in the case of the prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Company agrees to, as promptly as practicable, amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(g) upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to any offering of Registrable Securities;
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(h) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel for the Company dated the date of the closing under the underwriting agreement and (ii) a cold comfort letter, dated the pricing date of such Underwritten Offering (to the extent available) and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Companys financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the cold comfort letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuers counsel and in accountants letters delivered to the underwriters in Underwritten Offerings of securities by the Company or its predecessors and such other matters as such underwriters and Selling Holders may reasonably request;
(i) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(j) make available to the appropriate representatives of the Managing Underwriter(s) and Selling Holders access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act;
(k) cause all Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Company are then listed;
(l) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders to consummate the disposition of the Registrable Securities;
(m) provide a transfer agent and registrar for all Registrable Securities covered by a Registration Statement not later than the effective date of such registration statement; and
(n) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of the Registrable Securities.
Except to the extent required by applicable law, the Company shall not file any Registration Statement with respect to any Registrable Securities, or any prospectus used in connection therewith, and shall not file or make any amendment to any such Registration Statement or any amendment of or supplement to any such prospectus, that refers to any Selling Holder covered thereby by name, or otherwise identifies such Selling Holder as the holder of any securities of the Company, without the consent of such Selling Holder, such consent not to be unreasonably withheld, conditioned or delayed, unless and to the extent such disclosure is required by law or regulation, in which case the Company shall provide written notice to such Selling Holder no less than two (2) Business Days prior to the filing of such Registration Statement or any amendment to any such Registration Statement or any prospectus used in connection therewith or any amendment of or supplement to any such Prospectus.
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Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (f) of this Section 2.05 , shall forthwith discontinue disposition of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holders receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 2.05 or until it is advised in writing by the Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus.
Section 2.06. Cooperation by Holders . The Company shall have no obligation to include in a Registration Statement, or in an Underwritten Offering pursuant to Section 2.02(a) , Registrable Securities of a Selling Holder who has failed to timely furnish such information that, in the opinion of counsel to the Company, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.
Section 2.07. Expenses .
(a) The Company will pay all reasonable Registration Expenses, including in the case of an Underwritten Offering, regardless of whether any sale is made in such Underwritten Offering. Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities hereunder
(b) In connection with each Underwritten Offering, the Company shall reimburse the Selling Holders included in such Underwritten Offering for the reasonable fees and disbursements of one counsel chosen by the holders of a majority of the Registrable Securities included in such registration or participating in such Shelf Registration Statement and reasonable disbursements of each additional counsel reasonably retained by any Selling Holder for the purpose of rendering a legal opinion to the underwriter(s) on behalf of such Selling Holder in connection with any Underwritten Offering.
Section 2.08. Indemnification .
(a) By the Company . In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless each Selling Holder participating therein, its directors, officers, employees and agents, and each Person, if any, who controls such Selling Holder within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the Exchange Act ), and its directors, officers, employees or agents, against any losses, claims, damages, expenses or liabilities (including reasonable attorneys fees and expenses) (collectively, Losses ), joint or several, to which such Selling Holder, director, officer, employee, agent or controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus or any Written Testing-the-Waters Communication, in the light of the circumstances under which such statement is made) contained in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement
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thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus or any Written Testing-the-Waters Communication, in the light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder, its directors, officers, employees and agents, and each such controlling Person, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings as such expenses are incurred; provided, however , that the Company will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder, its directors, officers, employees and agents or such controlling Person in writing specifically for use in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement thereto, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such directors, officers, employees agents or controlling Person, and shall survive the transfer of such securities by such Selling Holder.
(b) By Each Selling Holder . Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Company, its directors, officers, employees and agents and each Person, if any, who controls the Company within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement thereof; provided, however , that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.
(c) Notice . Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission to so notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party. In any action brought against any indemnified party, the indemnified party shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however , that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified
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party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party.
(d) Contribution . If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however , that in no event shall the Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of fraudulent misrepresentation.
(e) Other Indemnification . The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.
Section 2.09. Rule 144 Reporting . With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:
12
(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;
(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act at all times from and after the date hereof; and
(c) so long as a Holder owns any Registrable Securities, unless otherwise available via EDGAR, furnish to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.
Section 2.10. Transfer or Assignment of Registration Rights . The rights to cause the Company to register Registrable Securities granted to a Holder by the Company under this Article II may be transferred or assigned by such Holder to one or more transferee(s) or assignee(s) of such Registrable Securities; provided, however , that (a) unless such transferee or assignee is an Affiliate of a Principal Holder, each such transferee or assignee holds Registrable Securities representing at least five percent (5%) of the then-outstanding Registrable Securities (subject to adjustment pursuant to Section 3.04 ), (b) the Company is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee agrees to be bound by this Agreement.
Section 2.11. Restrictions on Public Sale by Holders of Registrable Securities . Each Holder agrees to enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of the Registrable Securities during the 90 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of an Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Company or the officers, directors or any other stockholder of the Company on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.11 shall not apply to (x) any Holder who does not have the right to participate in an Underwritten Offering pursuant to Section 2.03 , (y) any Holder whose Registrable Securities are not included in an Underwritten Offering after such Holder makes a request to participate in such Underwritten Offering in accordance with the terms of Section 2.03(b) and (z) any Registrable Securities that are included in such Underwritten Offering by such Holder.
ARTICLE III
MISCELLANEOUS
Section 3.01. Communications . All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:
(a) if to the Apollo Entities:
13
Apollo Talos Holdings, L.P.
9 West 57th Street
New York, NY 10019
Attention: Gregory Beard
Facsimile: (646) 514-5668
Email: gbeard@apollolp.com
With a copy to:
Apollo Management VII, L.P.
9 West 57th Street
New York, NY 10019
Attention: Laurie Medley
Facsimile: (646) 607.0528
Email: lmedley@apollolp.com
and
Apollo Commodities Management, L.P. with respect to Series I
9 West 57th Street
New York, NY 10019
Attention: Laurie Medley
Facsimile: (646) 607.0528
Email: lmedley@apollolp.com
(b) if to the Riverstone Entities:
c/o Riverstone Holdings LLC
712 Fifth Avenue, 36th Floor
New York, NY 10019
Attention: General Counsel
Facsimile: (888) 801-9301
Email: legal@riverstonellc.com
(c) if to Franklin:
c/o Franklin Advisers, Inc.
One Franklin Parkway
San Mateo, CA 94403
Attn: Brendan Circle brendan.circle@franklintempleton.com
Christopher Chen chris.chen@franklintempleton.com
(d) if to MacKay:
c/o MacKay Shields LLC.
1345 Avenue of the Americas
New York, NY 10105
14
Attn: Dohyun Cha
Dohyun.cha@mackayshields.com
with a copy to:
Attn: Young Lee
Young.lee@mackayshields.com
(e) if to a transferee of a Holder, to such Holder at the address provided pursuant to Section 2.10 ; and
(f) if to the Company:
Talos Energy Inc.
500 Dallas St., Suite 2000
Houston, Texas 77002
Attention: General Counsel
Facsimile: (713) 351-4100
Email: bmoss@talosenergyllc.com
With a copy to (which copy shall not constitute notice):
Vinson & Elkins L.L.P.
1001 Fannin St., Suite 2500
Houston, Texas 77002
Attention: Stephen M. Gill
Lande A. Spottswood
Facsimile: (713) 615-5956
Email: sgill@velaw.com
lspottswood@velaw.com
All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via electronic mail; and when actually received, if sent by courier service or any other means.
Section 3.02. Successor and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.
Section 3.03. Assignment of Rights . All or any portion of the rights and obligations of the Holders under this Agreement may be transferred or assigned by the Holders in accordance with Section 2.10 hereof.
15
Section 3.04. Recapitalization, Exchanges, Etc. Affecting the Registrable Securities . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all securities of the Company, its subsidiaries, or any successor or assign of the Company or its subsidiaries (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, splits, recapitalizations, pro rata distributions and the like occurring after the date of this Agreement.
Section 3.05. Specific Performance . Damages in the event of a breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each party, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such party from pursuing any other rights and remedies at law or in equity that such party may have.
Section 3.06. Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. The delivery of an executed counterpart copy of this Agreement by facsimile or electronic transmission in PDF format shall be deemed to be the equivalent of delivery of the originally executed copy thereof.
Section 3.07. Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Section 3.08. Governing Law . The laws of the State of New York shall govern this Agreement.
Section 3.09. Severability of Provisions . Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.
Section 3.10. Scope of Agreement . This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Company set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
Section 3.11. Amendment . This Agreement may be amended only by means of a written amendment signed by the Company and the Holders of a majority of the then outstanding Registrable Securities; provided, however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
16
Section 3.12. Termination . In the event that a given Legacy Holder ceases to beneficially own (as such term is defined under the Exchange Act) five percent (5%) or more of the then-outstanding shares of Common Stock, all of such Legacy Holders rights and obligations under this Agreement shall expire and such Legacy Holder will cease to be a Holder for all purposes hereunder, without any further action of the Company or any other party hereto. This Agreement shall otherwise terminate at such time as there are no Registrable Securities outstanding.
Section 3.13. No Presumption . If any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.
Section 3.14. Aggregation of Registrable Securities . All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
Section 3.15. Obligations Limited to Parties to Agreement . Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Company and the Holders shall have any obligation hereunder and that, notwithstanding that one or more of the Holders may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Holders under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any assignee of the Holders hereunder.
Section 3.16. Interpretation . All references to Articles and Sections shall be deemed to be references to Articles and Sections of this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word including shall mean including but not limited to. Whenever any determination, consent or approval is to be made or given by the Holders under this Agreement, such action shall be in the Holders sole discretion unless otherwise specified.
[Signature pages follow]
17
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
TALOS ENERGY INC. | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President and Chief Executive Officer |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
AP TALOS ENERGY LLC |
||
a Delaware limited liability company |
||
By: |
/s/ Christopher R. Gruszczynski |
|
Name: Christopher R. Gruszczynski |
||
Title: Vice President |
||
AP TALOS ENERGY DEBTCO LLC | ||
a Delaware limited liability company |
||
By: |
/s/ Christopher R. Gruszczynski |
|
Name: Christopher R. Gruszczynski |
||
Title: Vice President |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC | ||
a Delaware limited liability company | ||
By: | Apollo Management VII, L.P., | |
its manager | ||
By: | AIF VII Management, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary | |
By: | Apollo Commodities Management, L.P., with respect to Series I, | |
its manager | ||
By: | Apollo Commodities Management GP, LLC, its general partner | |
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
AIF VII (AIV), L.P. | ||
a Delaware limited partnership | ||
By: | Apollo Advisors VII (APO DC), L.P., | |
its general partner | ||
By: | Apollo Advisors VII (APO DC-GP), LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
ANRP DE HOLDINGS, L.P. | ||
a Delaware limited partnership | ||
By: | Apollo ANRP Advisors (APO DC), L.P., | |
its general partner | ||
By: | Apollo Advisors VII (APO DC-GP), LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: | Laurie D. Medley | |
Title: | Vice President and Assistant Secretary |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
RIVERSTONE TALOS ENERGY EQUITYCO LLC | ||
a Delaware limited liability company | ||
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director | |
RIVERSTONE TALOS ENERGY DEBTCO LLC | ||
a Delaware limited liability company | ||
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director | |
RIVERSTONE V FT CORP HOLDINGS, L.P. | ||
a Delaware limited partnership | ||
By: |
Riverstone Energy Partners V, L.P., its general partner |
|
By: |
Riverstone Energy GP V, LLC its general partner |
|
By: |
/s/ Peter Haskopoulos |
|
Name: | Peter Haskopoulos | |
Title: | Managing Director |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
FRANKLIN ADVISERS, INC., as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Richard Hsu |
|
Name: | Richard Hsu | |
Title: | Vice President |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
MACKAY SHIELDS LLC , as investment manager on behalf of certain of its clients | ||
By: |
/s/ Young Lee |
|
Name: | Young Lee | |
Title: | Senior Managing Director |
S IGNATURE P AGE
TO
R EGISTRATION R IGHTS A GREEMENT
Exhibit 4.3
Execution Version
WARRANT AGREEMENT
dated as of February 28, 2017
among
STONE ENERGY CORPORATION
(AS REORGANIZED),
COMPUTERSHARE INC.
and
COMPUTERSHARE TRUST COMPANY, N.A.,
as Warrant Agent
TABLE OF CONTENTS
Page | ||||||
Article 1 Definitions |
1 | |||||
Section 1.01 |
Certain Definitions |
1 | ||||
Article 2 Issuance, Execution and Transfer of Warrants |
6 | |||||
Section 2.01 |
Issuance of Warrants |
6 | ||||
Section 2.02 |
Execution and Authentication of Warrants |
7 | ||||
Section 2.03 |
Registration, Transfer, Exchange and Substitution |
8 | ||||
Section 2.04 |
Form of Global Warrant Certificate |
9 | ||||
Section 2.05 |
Cancellation of Global Warrant Certificate |
9 | ||||
Section 2.06 |
Restrictions on Transfer |
9 | ||||
Article 3 Exercise and Settlement of Warrants |
10 | |||||
Section 3.01 |
Exercise of Warrants |
10 | ||||
Section 3.02 |
Procedure for Exercise |
10 | ||||
Section 3.03 |
Settlement of Warrants |
11 | ||||
Section 3.04 |
Delivery of Common Stock |
12 | ||||
Section 3.05 |
No Fractional Shares to Be Issued |
13 | ||||
Section 3.06 |
Obligations of the Warrant Agent |
13 | ||||
Section 3.07 |
Validity of Exercise |
14 | ||||
Section 3.08 |
Direction of Warrant Agent |
14 | ||||
Article 4 Adjustments |
15 | |||||
Section 4.01 |
Adjustments to Exercise Price |
15 | ||||
Section 4.02 |
Adjustments to Number of Warrants |
18 | ||||
Section 4.03 |
Certain Distributions of Rights and Warrants |
19 | ||||
Section 4.04 |
Stockholder Rights Plans |
19 | ||||
Section 4.05 |
Restrictions on Adjustments |
20 | ||||
Section 4.06 |
Successor upon Consolidation, Merger and Sale of Assets |
21 | ||||
Section 4.07 |
Adjustment upon Reorganization Event |
22 | ||||
Section 4.08 |
Common Stock Outstanding; Shares Reserved for Issuance on Exercise |
24 | ||||
Section 4.09 |
Calculations |
24 | ||||
Section 4.10 |
Notice of Adjustments |
25 | ||||
Section 4.11 |
Warrant Agent Not Responsible for Adjustments or Validity |
25 | ||||
Section 4.12 |
Statements on Warrants |
25 | ||||
Section 4.13 |
Effect of Adjustment |
26 | ||||
Article 5 Other Provisions Relating to Rights of Global Warrant Holder |
26 | |||||
Section 5.01 |
No Rights as Stockholders |
26 | ||||
Section 5.02 |
Mutilated or Missing Warrant Certificates |
26 | ||||
Section 5.03 |
No Impairment |
27 | ||||
Section 5.04 |
Modification, Waiver and Meetings |
27 | ||||
Section 5.05 |
Notices of Record Date, etc. |
28 | ||||
Article 6 Concerning the Warrant Agent and Other Matters |
29 | |||||
Section 6.01 |
Payment of Certain Taxes |
29 |
i
Section 6.02 |
Certain Tax Filings |
29 | ||||
Section 6.03 |
Change of Warrant Agent |
30 | ||||
Section 6.04 |
Compensation; Further Assurances |
31 | ||||
Section 6.05 |
Reliance on Counsel |
31 | ||||
Section 6.06 |
Proof of Actions Taken |
32 | ||||
Section 6.07 |
Correctness of Statements |
32 | ||||
Section 6.08 |
Validity of Agreement |
32 | ||||
Section 6.09 |
Use of Agents |
32 | ||||
Section 6.10 |
Liability of Warrant Agent |
33 | ||||
Section 6.11 |
Legal Proceedings |
33 | ||||
Section 6.12 |
Actions as Agent |
34 | ||||
Section 6.13 |
Appointment and Acceptance of Agency |
34 | ||||
Section 6.14 |
Successors and Assigns |
34 | ||||
Section 6.15 |
Notices |
34 | ||||
Section 6.16 |
Applicable Law; Jurisdiction |
35 | ||||
Section 6.17 |
Waiver of Jury Trial |
36 | ||||
Section 6.18 |
Benefit of this Warrant Agreement |
36 | ||||
Section 6.19 |
Registered Global Warrant Holder |
36 | ||||
Section 6.20 |
Headings |
36 | ||||
Section 6.21 |
Counterparts |
36 | ||||
Section 6.22 |
Entire Agreement |
37 | ||||
Section 6.23 |
Severability |
37 | ||||
Section 6.24 |
Damages |
37 | ||||
Section 6.25 |
Survival |
37 | ||||
Section 6.26 |
Confidential Information |
37 | ||||
Section 6.27 |
Force Majeure |
37 |
SCHEDULE A |
SCHEDULE OF INCREASES OR DECREASES IN WARRANTS |
|
EXHIBIT A |
FORM OF GLOBAL WARRANT CERTIFICATE |
|
EXHIBIT B |
FORM OF EXERCISE NOTICE |
|
EXHIBIT C |
WARRANT AGENT FEE SCHEDULE |
ii
WARRANT AGREEMENT
This Warrant Agreement ( Warrant Agreement ) dated as of February 28, 2017 is among Stone Energy Corporation, a Delaware corporation (the Company ), Computershare Inc., a Delaware corporation ( Computershare ), and its wholly owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare, the Warrant Agent ).
WITNESSETH THAT:
WHEREAS, pursuant to the terms and conditions of the Second Amended Joint Prepackaged Plan of Reorganization of the Company and its debtor affiliates, dated December 28, 2016, as the same may be amended, modified or restated from time to time (the Plan ) relating to the reorganization under Chapter 11 of title 11 of the United States Code (the Bankruptcy Code ) of the Company and certain of its direct and indirect Subsidiaries (as defined below), the holders of Common Stock (as defined below) to be cancelled on the date the Plan becomes effective (such parties, the Initial Warrant Holders ) are to be issued Warrants (as defined below) exercisable until the Expiration Date (as defined below), to purchase up to an aggregate of 3,529,412 shares of Common Stock at an exercise price of $42.04 per share, as the same may be adjusted pursuant to Article 4 hereof (the Exercise Price );
WHEREAS, the Warrants and the underlying shares of Common Stock are being issued in an offering in reliance on the exemption from the registration requirements of the Securities Act (as defined below) afforded by Section 1145 of the Bankruptcy Code, and of any applicable state securities or blue sky laws; and
WHEREAS, the Company desires that the Warrant Agent act on behalf of the Company, and the Warrant Agent is willing to act, in connection with the issuance, exchange, Transfer (as defined below), substitution and exercise of Warrants.
NOW THEREFORE in consideration of the mutual agreements herein contained, the Company and the Warrant Agent agree as follows:
Article 1
Definitions
Section 1.01 Certain Definitions . As used in this Warrant Agreement, the following terms shall have their respective meanings set forth below:
Appropriate Officer means the Chief Executive Officer, President, the Chief Financial Officer, any Executive Vice President, any Senior Vice President or any Vice President, any Treasurer or Secretary of the Company.
Authentication Order means a Company Order for authentication and delivery of Warrants.
1
Affiliate shall mean, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first specified Person.
Authorized Share Failure has the meaning set forth in Section 4.08(c) .
Bankruptcy Code has the meaning set forth in the Recitals.
Beneficial Owner means any Person beneficially owning an interest in a Global Warrant, which interest is credited to the account of a direct participant in the Depository for the benefit of such Person through the book-entry system maintained by the Depository (or its agent)). For the avoidance of doubt, a Participant may also be a Beneficial Owner.
Board means the board of directors of the Company or any committee of such board duly authorized to exercise the power of such board with respect to the matters provided for in this Warrant Agreement as to which the board is authorized or required to act.
Business Day means any day other than a Saturday or Sunday or other day on which the New York Stock Exchange or banking institutions in the state of New York are authorized or obligated by law or executive order to close.
Capital Stock means any and all shares, interests, participations or other equivalents (however designated) of capital stock of the Company and all warrants or options to acquire such capital stock.
Cash means such coin or currency of the United States as at any time of payment is legal tender for the payment of public and private debts.
Charter means the certificate of incorporation of the Company, as amended.
Close of Business means 5:00 p.m., New York City time.
Closing Date means the effective date of the Plan.
Common Stock means the common stock, par value $0.01 per share, of the Company.
Company has the meaning set forth in the preamble.
Company Order means a written order signed in the name of the Company by any two officers, at least one of whom must be Chief Executive Officer, Chief Financial Officer, Treasurer, Assistant Treasurer or Controller, and delivered to the Warrant Agent.
Computershare has the meaning set forth in the preamble.
Confidential Fees has the meaning set forth in Section 6.26.
Confidential Information has the meaning set forth in Section 6.26.
2
Convertible Securities means options, rights, warrants or other securities convertible into or exchangeable or exercisable for shares of Common Stock.
Depository means The Depository Trust Company, its nominees, and their respective successors.
Ex-Date means with respect to an issuance or distribution, the first date on which the Common Stock can be traded without the right to receive an issuance or distribution.
Exempt Transaction shall mean a merger, reorganization or consolidation that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent immediately following such merger, reorganization or consolidation (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (or the ultimate parent company of the Company or such surviving entity).
Excepted Combination means a Fundamental Equity Change where (i) the acquirer is a true third party and not an Affiliate of the Company or any of its or its Affiliates officers, directors, employees or stockholders and (ii) all of the equity held by equity holders of the Company (other than existing management) is extinguished or replaced by equity in a different Person (other than a Fundamental Equity Change in which the equity interests in the Company are replaced in a merger or other corporate combination with equity in the surviving Person that represents more than 50% of the total equity in the surviving Person).
Exercise Date has the meaning set forth in Section 3.02(b) .
Exercise Notice means, for any Warrant, the exercise notice set forth on the reverse of the Warrant Certificate, substantially in the form set forth in Exhibit B hereto.
Exercise Price has the meaning set forth in the Recitals.
Expiration Date means, for any Warrant, the earlier of (i) February 28, 2021 and (ii) the date of consummation of (A) any Qualified Asset Sale, (B) the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer or (C) any Excepted Combination.
Fair Value means the price per share of the Common Stock as of a specified date or the fair market value of distributed property as of a specified date, per share, determined as follows:
(i) if the shares of Common Stock or other security are listed on the New York Stock Exchange, the closing sale price per share of Common Stock or other security (or if no closing sale price is reported, the last reported sale price) on such date on the New York Stock Exchange;
(ii) if the shares of Common Stock or other security are not listed on the New York Stock Exchange, the closing sale price per share of Common Stock or other security
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(or if no closing sale price is reported, the last reported sale price) on such date in composite trading for the principal U.S. national or regional securities exchange on which the shares of Common Stock or other security are then listed;
(iii) if the shares of Common Stock or other security are not listed on a U.S. national or regional securities exchange, the last quoted bid price per share of Common Stock or other security in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization; or
(iv) if the shares of Common Stock or other security are not listed on a U.S. national or regional securities exchange or quoted as described in clause (iii) above or in the case of other distributed property, the price per share of the Common Stock as of a specified date or the fair market value of distributed property as of a specified date, per share, as applicable, on the relevant date as determined in good faith by the Board and, if the Board elects to engage the same, upon the advice of an independent appraiser selected by the Board.
Full Physical Settlement means the settlement method pursuant to which an exercising Beneficial Owner shall be entitled to receive from the Company, for each Warrant exercised, a number of shares of Common Stock equal to the Full Physical Share Amount in exchange for payment by the Beneficial Owner of the Exercise Price.
Full Physical Share Amount has the meaning set forth in Section 3.03(b) .
Fundamental Equity Change has the meaning set forth in Section 4.06(a) .
Funds has the meaning set forth in Section 3.02(d) .
Funds Account has the meaning set forth in Section 3.02(d) .
Global Warrant means a Warrant in the form of a Global Warrant Certificate.
Global Warrant Certificate means any certificate representing the Warrants satisfying the requirements set forth in Section 2.04 .
Global Warrant Holder means Cede & Co. or such other entity designated by the Depository.
Initial Warrant Holders has the meaning set forth in the Recitals.
Management Stock Option Plan has the meaning set forth in the Plan.
Net Share Amount has the meaning set forth in Section 3.03(c) .
Net Share Settlement means the settlement method pursuant to which an exercising Beneficial Owner shall be entitled to receive from the Company, for each Warrant exercised, a number of shares of Common Stock equal to the Net Share Amount without any payment therefor.
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Non-Public Information has the meaning set forth in Section 6.26.
Non-Qualified Asset Sale has the meaning set forth in Section 4.06(d) .
Number of Warrants means the Number of Warrants specified on the face of the Global Warrant Certificate, subject to adjustment pursuant to Article 4 .
Offer Expiration Date has the meaning set forth in Section 4.01(c) .
Officers Certificate means a certificate signed by any two officers of the Company, at least one of whom must be its Chief Executive Officer, its Chief Financial Officer, its Treasurer, an Assistant Treasurer, or its Controller.
Open of Business means 9:00 a.m., New York City time.
Participant means any direct participant of the Depository, the account of which is credited with a beneficial interest in the Global Warrant for the benefit of a Beneficial Owner through the book-entry system maintained by the Depository (or its agent).
Person means an individual, partnership, firm, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.
Plan has the meaning set forth in the Recitals.
Qualified Asset Buyer means any Person (i) who is not a true third party or is an Affiliate of the Company or any of its or its Affiliates officers, directors, employees or stockholders or (ii) a majority of which Persons total outstanding equity upon consummation of a Qualified Asset Sale shall be held by Persons who are equityholders in the Company immediately prior to the consummation of such Qualified Asset Sale.
Qualified Asset Sale has the meaning set forth in Section 4.06(c) .
Record Date means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any Cash, securities or other property or in which Common Stock (or other applicable security) is exchanged for or converted into any combination of Cash, securities or other property, the date fixed for determination of holders of Common Stock entitled to receive such Cash, securities or other property (whether such date is fixed by the Board or by statute, contract or otherwise).
Redemption Price has the meaning set forth in Section 4.06(d) .
Reference Property has the meaning set forth in Section 4.07(a) .
Reorganization Event has the meaning set forth in Section 4.07(a) .
SEC means the United States Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
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Settlement Date means, in respect of a Warrant that is exercised hereunder, the third Business Day immediately following the Exercise Date for such Warrant.
Subsidiary means, as to any Person, any corporation, partnership, limited liability company or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or other interests having by their terms voting power to elect a majority of the Board or others performing similar functions with respect to such corporation or other organization is directly or indirectly beneficially owned or controlled by such party or by any one or more of its subsidiaries, or by such party and one or more of its subsidiaries.
Transfer means, with respect to any Warrant, to directly or indirectly (whether by act, omission or operation of law), sell, exchange, transfer, hypothecate, negotiate, gift, convey in trust, pledge, assign, encumber, or otherwise dispose of, or by adjudication of a Person as bankrupt, by assignment for the benefit of creditors, by attachment, levy or other seizure by any creditor (whether or not pursuant to judicial process), or by passage or distribution of Warrants under judicial order or legal process, carry out or permit the transfer or other disposition of, all or any portion of such Warrant.
Transferee means a Person to whom any Warrant (or interest in the Global Warrant) is Transferred.
Trigger Event has the meaning set forth in Section 4.03(a) .
Unit of Reference Property has the meaning set forth in Section 4.07(a) .
Warrant means a warrant of the Company exercisable for one share of Common Stock as provided herein, and issued pursuant to this Warrant Agreement with the terms, conditions and rights set forth in this Warrant Agreement.
Warrant Agent has the meaning set forth in the preamble.
Warrant Agreement has the meaning set forth in the preamble.
Warrant Register has the meaning set forth in Section 2.03(a) .
Article 2
Issuance, Execution and Transfer of Warrants
Section 2.01 Issuance of Warrants .
(a) On the Closing Date, the Company shall initially issue and execute the Global Warrant (in accordance with Section 2.02 ) evidencing an initial aggregate Number of Warrants equal to 3,529,412 (such Number of Warrants to be subject to adjustment from time to time as described herein) in accordance with the terms of this Warrant Agreement and the Plan and deliver such Global Warrant to the Warrant Agent, for authentication, along with a duly executed Authentication Order. The Warrant Agent shall then Transfer such Global Warrant to the Global Warrant Holder for crediting to the accounts of the applicable Participants for the
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benefit of the applicable Initial Warrant Holders pursuant to the procedures of the Depository and in accordance with the Plan on or after the Closing Date. The Global Warrant shall evidence one or more Warrants. Each Warrant evidenced thereby shall be exercisable (upon payment of the Exercise Price (in the case of a Full Physical Settlement) or pursuant to Net Share Settlement and compliance with the procedures set forth in this Warrant Agreement) for one share of Common Stock.
(b) All Warrants issued under this Warrant Agreement shall in all respects be equally and ratably entitled to the benefits hereof, without preference, priority, or distinction on account of the actual time of the issuance and authentication or any other terms thereof. Each Warrant shall be, and shall remain, subject to the provisions of this Warrant Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been canceled in accordance with the terms hereof. The Global Warrant Holder shall be bound by all of the terms and provisions of this Warrant Agreement as fully and effectively as if the Global Warrant Holder had signed the same.
(c) Any Warrant that is forfeited by a Beneficial Owner, cancelled as a result of being unclaimed in accordance with Section E of Article VII of the Plan, or repurchased by the Company shall be deemed to be no longer outstanding for all purposes of this Warrant Agreement.
Section 2.02 Execution and Authentication of Warrants .
(a) The Global Warrant Certificate shall be executed on behalf of the Company by the Chief Executive Officer, any Executive Vice President, any Senior Vice President or any Vice President of the Company and attested by its Secretary or any one of its Assistant Secretaries. The signature of any of these officers on the Global Warrant Certificate may be manual or in the form of a facsimile or other electronically transmitted signature (including, without limitation, electronic transmission in portable document format (.pdf)).
(b) A Global Warrant Certificate bearing the manual or facsimile signatures of individuals, each of whom was, at the time he or she signed the Global Warrant Certificate or his or her facsimile signature was affixed to the Global Warrant Certificate, as the case may be, a proper officer of the Company, shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Global Warrant by the Warrant Agent or did not hold such offices at the date of such Global Warrant.
(c) The Global Warrant shall not be entitled to any benefit under this Warrant Agreement or be valid or obligatory for any purpose unless there appears on the Global Warrant Certificate a certificate of authentication substantially in the form provided for herein executed by the Warrant Agent, and such signature upon the Global Warrant Certificate shall be conclusive evidence, and the only evidence, that such Global Warrant has been duly authenticated and delivered hereunder. The Global Warrant shall not be entitled to any benefit under this Warrant Agreement or be valid or obligatory for any purpose unless there appears on such Warrant the countersignature of the Global Warrant Holder. The signature of the Warrant Agent on the Global Warrant Certificate may be in the form of a facsimile or other electronically transmitted signature (including, without limitation, electronic transmission in portable document format (.pdf)).
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Section 2.03 Registration, Transfer, Exchange and Substitution .
(a) The Warrant Agent shall, upon receipt of such Global Warrant and Authentication Order, authenticate the Global Warrant in accordance with Section 2.02 and register such Global Warrant in the Warrant Register. The Global Warrant shall be dated as of the Closing Date and, subject to the terms hereof, shall evidence the only Warrants issued or outstanding under this Warrant Agreement. The Global Warrant shall be deposited with the Warrant Agent as custodian for the Depository. The Company shall cause to be kept at the office of the Warrant Agent, and the Warrant Agent shall maintain, a register (the Warrant Register ) in which the Company shall provide for the registration of the Global Warrant and Transfers, exchanges or substitutions of the Global Warrant as provided herein. Any Global Warrant issued upon any registration of Transfer or exchange of or substitution for the Global Warrant shall be a valid obligation of the Company, evidencing the same obligations, and entitled to the same benefits under this Warrant Agreement, as the Global Warrant surrendered for such registration of Transfer, exchange or substitution.
(b) Transfers of a Global Warrant shall be limited to Transfers in whole, and not in part, to the Company, the Depository, their successors, and their respective nominees. A Global Warrant may be Transferred to such parties upon the delivery of a written instruction of Transfer in form reasonably satisfactory to the Warrant Agent and the Company, duly executed by the Global Warrant Holder or by such Global Warrant Holders attorney, duly authorized in writing. No such Transfer shall be effected until, and the Transferee shall succeed to the rights of the Global Warrant Holder only upon, final acceptance and registration of the Transfer in the Warrant Register by the Warrant Agent. Prior to the registration of any Transfer of the Global Warrant by the Global Warrant Holder as provided herein, the Company, the Warrant Agent, and any agent of the Company or the Warrant Agent may treat the Person in whose name such Global Warrant is registered as the owner thereof for all purposes, notwithstanding any notice to the contrary. To permit a registration of a Transfer of a Global Warrant, the Company shall execute the Global Warrant Certificate at the Warrant Agents request and the Warrant Agent shall authenticate such Global Warrant Certificate. The Global Warrant Certificate shall be deposited on or after the date hereof with the Warrant Agent. No service charge shall be made for any such registration of Transfer. A party requesting transfer of the Global Warrant must provide any evidence of authority that may be required by the Warrant Agent, including but not limited to, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, Inc.
(c) Interests of Beneficial Owners in a Global Warrant registered in the name of the Depository or its nominee shall only be Transferred in accordance with the procedures of the Depository, the applicable Participant and applicable Law.
(d) So long as any Global Warrant is registered in the name of the Depository or its nominee, the Beneficial Owners shall have no rights under this Warrant Agreement with respect to such Global Warrant held on their behalf by the Depository, and the Depository may be treated by the Company, the Warrant Agent and any agent of the Company or the Warrant
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Agent as the absolute owner of such Global Warrant for all purposes. Accordingly, any such Beneficial Owners interest in such Global Warrant will be shown only on, and the Transfer of such interest shall be effected only through, records maintained by the Depository or its nominee or the applicable Participant, and neither the Company nor the Warrant Agent shall have any responsibility or liability with respect to such records maintained by the Depository or its nominee or the applicable Participant. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair the operation of customary practices of the Depository or Participants governing the exercise of the rights of a Beneficial Owner.
Section 2.04 Form of Global Warrant Certificate . The Global Warrant Certificate shall be in substantially the form set forth in Exhibit A hereto and shall have such insertions as are appropriate or required by this Warrant Agreement and may have such letters, numbers or other marks of identification and such legends and endorsements, stamped, printed, lithographed or engraved thereon, as the Company may deem appropriate and as are not inconsistent with the provisions of this Warrant Agreement, such as may be required to comply with this Warrant Agreement, any law or any rule of any securities exchange on which Warrants may be listed, and such as may be necessary to conform to customary usage.
Section 2.05 Cancellation of Global Warrant Certificate . The Global Warrant Certificate shall be promptly cancelled by the Warrant Agent upon the earlier of (i) the Expiration Date, (ii) the replacement of the Global Warrant Certificate as described in Section 5.02 , or (iii) registration of Transfer or exercise of all Warrants represented thereby and, except as provided in this Article 2 in case of a Transfer or Section 5.02 in case the Global Warrant Certificate is mutilated, defaced, lost, destroyed or stolen, no Global Warrant Certificate shall be issued hereunder in lieu thereof.
Section 2.06 Restrictions on Transfer . Notwithstanding any other provision of this Warrant Agreement, the Warrants are being offered and sold, and the shares of Common Stock issuable upon exercise thereof are being offered and sold, pursuant to an exemption from the registration requirement of Section 5 of the Securities Act provided by Section 1145 of the Bankruptcy Code, and to the extent that any Beneficial Owner is an underwriter as defined in Section 1145(b)(1) of the Bankruptcy Code, such Beneficial Owner may not be able to sell or transfer any Warrants in the absence of an effective registration statement under the Securities Act or an exemption from registration thereunder. Notwithstanding anything contained in this Warrant Agreement (but without limiting or modifying any express obligation of the Warrant Agent hereunder), the Warrant Agent shall not be under any duty or responsibility to ensure compliance by the Company, the Global Warrant Holder, any Beneficial Owner or any other Person with any applicable federal or state securities or bankruptcy Laws. By accepting a Transfer of a Warrant, (i) the applicable Participant agrees to inform the Beneficial Owner of the limitations on Transfer set forth in this Section 2.06 , and shall instruct and direct such Beneficial Owner to conform to the restrictions set forth herein and shall maintain any applicable legends in its books and records and (ii) the Beneficial Owner acknowledges the foregoing.
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Article 3
Exercise and Settlement of Warrants
Section 3.01 Exercise of Warrants . At any time prior to Close of Business on the Expiration Date, each Warrant (which may include fractional Warrants) may be exercised in accordance with this Article 3 . Any Warrants not exercised prior to such time shall expire unexercised and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease as of the Close of Business on the Expiration Date.
Section 3.02 Procedure for Exercise .
(a) To exercise each Warrant, a Beneficial Owner must arrange for (i) the delivery of the Exercise Notice properly completed and duly executed by its applicable Participant to the office of the Warrant Agent designated for such purpose and the Company, (ii) if Full Physical Settlement is elected, payment to the Warrant Agent in an amount equal to the respective Exercise Price for each Warrant to be exercised together with all applicable taxes and charges thereto, (iii) delivery of each Warrant to be exercised through the facilities of the Depository and (iv) compliance with all other procedures established by the Depository, the applicable Participant and the Warrant Agent for the exercise of Warrants.
(b) The date on which all requirements for exercise set forth in this Section 3.02 in respect of a Warrant are satisfied is the Exercise Date for such Warrant.
(c) Subject to Section 3.02(f) , any exercise of a Warrant pursuant to the terms of this Warrant Agreement shall be irrevocable and enforceable in accordance with its terms.
(d) All funds received by the Warrant Agent under this Warrant Agreement that are to be distributed or applied by the Warrant Agent in the performance of services in accordance with this Warrant Agreement (the Funds ) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for the Company (the Funds Account ). Until paid pursuant to the terms of this Warrant Agreement, Computershare will hold the Funds through the Funds Account in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moodys (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating), each as reported by Bloomberg Finance L.P. Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by the Warrant Agent in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits. The Warrant Agent shall not be obligated to pay such interest, dividends or earnings to the Company, any Beneficial Owner or any other party.
(e) The Company shall assist and cooperate with any Beneficial Owner required to make any governmental filings or obtain any governmental approvals prior to or in connection with any exercise of a Warrant (including, without limitation, making any filings required to be made by the Company), and any exercise of a Warrant may be made contingent upon the making of any such filing and the receipt of such approval.
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(f) Notwithstanding any other provision of this Warrant Agreement, if the exercise of a Warrant is to be made in connection with a registered public offering, a Fundamental Equity Change, any Qualified Asset Sale, the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer, any Excepted Combination or any other transaction or event, such exercise may, at the election of the Beneficial Owner, be conditioned upon consummation of such transaction or event in which case such exercise shall not be deemed effective until the consummation of such transaction or event.
(g) The Warrant Agent shall forward funds deposited in the Funds Account in a given month by the fifth Business Day of the following month by wire transfer to an account designated by the Company.
(h) The Company hereby instructs the Warrant Agent to record tax basis for newly issued shares of Common Stock as follows: the tax basis of each newly issued share of Common Stock equals the tax basis of the exercised Warrant plus the applicable Exercise Price. The Company shall provide to the Warrant Agent a completed Internal Revenue Service Form 8937 no later than 90 days after the Closing Date. 1
(i) Payment of the Exercise Price by or on behalf of a Beneficial Owner upon exercise of Warrants, in the case of Full Physical Settlement, shall be by federal wire or other immediately available funds payable to the order of the Company to the account maintained by the Warrant Agent in its name as agent for the Company. The Warrant Agent shall provide an exercising Beneficial Owner, upon request, with the appropriate payment instructions.
Section 3.03 Settlement of Warrants .
(a) Full Physical Settlement shall apply to each Warrant unless the Beneficial Owner elects Net Share Settlement to apply upon exercise of such Warrant. Such election shall be made in the Exercise Notice for such Warrant.
(b) If Full Physical Settlement is applicable with respect to the exercise of a Warrant, then, for each Warrant exercised by a Beneficial Owner, on the Settlement Date for such Warrant, the Company shall cause to be delivered to the Beneficial Owner one share of Common Stock (the Full Physical Share Amount ), together with Cash in respect of any fractional Warrant as provided in Section 3.05 .
(c) If Net Share Settlement is applicable with respect to the exercise of a Warrant, then, for each Warrant exercised by a Beneficial Owner, on the Settlement Date for such Warrant, the Company shall cause to be delivered to the Beneficial Owner a number of
1 |
NTD: Parties to discuss method of obtaining tax basis information with respect to Warrants. |
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shares of Common Stock (which in no event will be less than zero) (the Net Share Amount ) equal to (i) the Fair Value as of the relevant Exercise Date, minus the Exercise Price (determined as of such Exercise Date), divided by (ii) such Fair Value, together with Cash in respect of any fractional shares of Common Stock or fractional Warrants as provided in Section 3.05 .
(d) In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the shares of Common Stock to be delivered to a Beneficial Owner, the Company shall promptly issue to the applicable Beneficial Owner the number of shares of Common Stock that are not disputed.
Section 3.04 Delivery of Common Stock .
(a) In connection with the delivery of shares of Common Stock to a Beneficial Owner pursuant to Section 3.03(b) or Section 3.03(c) , as the case may be, the Warrant Agent shall:
(1) promptly deposit in the Funds Account all Funds received in payment of the applicable Exercise Price in connection with Full Physical Settlement of Warrants;
(2) provided that the Company has delivered sufficient cash to the Warrant Agent pursuant to Section 3.08(b), on the Settlement Date deliver Cash to such Beneficial Owner in respect of any fractional shares of Common Stock or fractional Warrants, as provided in Section 3.05 ;
(3) promptly cancel and destroy the applicable Global Warrant Certificate if all Warrants represented thereby have been exercised in full and deliver a certificate of destruction to the Company, unless the Company shall otherwise direct in writing; and
(4) if all Warrants represented by a Global Warrant Certificate shall not have been exercised in full, note and authenticate such decrease in the Number of Warrants on Schedule A of such Global Warrant Certificate.
(b) With respect to each properly exercised Warrant in accordance with this Warrant Agreement, the Company shall cause its transfer agent to issue, in book-entry form at the transfer agent or through the Depository, the shares of Common Stock due in connection with such exercise for the benefit and in the name of the Person designated by the Beneficial Owner submitting the applicable Exercise Notice. The Person on whose behalf and in whose name any shares of Common Stock are registered shall for all purposes be deemed to have become the holder of record of such shares of Common Stock as of the Close of Business on the applicable Exercise Date.
(c) Each Person in whose name any shares of Common Stock are issued shall for all purposes be deemed to have become the holder of record of such shares as of the Exercise Date or, in the case of a Warrant subject to Full Physical Settlement only, the date of payment by the Beneficial Owner of the Exercise Price in accordance with Section 3.03(b) , if later. The Company shall not close its books against the Transfer of a Warrant or any share of Common Stock issued or issuable upon the exercise of a Warrant in any manner which interferes with the timely exercise of a Warrant.
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(d) Promptly after the Warrant Agent shall have taken the action required by this Section 3.04 (or at such later time as may be mutually agreeable to the Company and the Warrant Agent), the Warrant Agent shall account to the Company with respect to any Warrants exercised (including, without limitation, with respect to any Exercise Price paid to the Warrant Agent). The Company shall reimburse the Warrant Agent for any amounts paid by the Warrant Agent in respect of a fractional share of Common Stock or fractional Warrant upon such exercise in accordance with Section 3.05 hereof.
(e) All shares of Common Stock issuable upon exercise of a Warrant will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer, other than restrictions on transfer under the Charter or any agreement between a Beneficial Owner and the Company and under applicable state and federal securities laws, and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic stock exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).
Section 3.05 No Fractional Shares to Be Issued .
(a) Notwithstanding anything to the contrary in this Warrant Agreement, the Company shall not be required to issue any fraction of a Warrant or of a share of Common Stock upon exercise of any Warrants.
(b) If any fraction of a Warrant shall be exercised hereunder, the Company shall pay the relevant Beneficial Owner Cash in lieu of the corresponding fraction of a share of Common Stock valued at the Fair Value on the Exercise Date in excess of the corresponding fraction of the Exercise Price. However, if more than one Warrant shall be exercised hereunder at one time by the Warrant Holder, the number of full shares that shall be issuable upon exercise thereof shall be computed on the basis of all Warrants (including any fractional Warrants) so exercised. If any fraction of a share of Common Stock would, except for the provisions of this Section 3.05 , be issuable on the exercise of any Warrant or Warrants (including any fractional Warrants), the Company shall pay Cash in lieu of such fractional shares valued at the Fair Value on the Exercise Date.
(c) Each Beneficial Owner, by its acceptance of an interest in a Warrant, expressly waives its right to receive any fraction of a share of Common Stock or a stock certificate representing a fraction of a share of Common Stock upon its exercise of such Warrant.
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Section 3.06 Obligations of the Warrant Agent . The Warrant Agent shall:
(a) examine all Exercise Notices and all other documents delivered to it by or on behalf of a Beneficial Owner to ascertain whether, on their face, such Exercise Notices and any such other documents have been executed and completed in accordance with their terms;
(b) where an Exercise Notice or other document appears on its face to have been improperly completed or executed or some other irregularity in connection with the exercise of the Warrant exists, the Warrant Agent shall endeavor to inform the appropriate parties (including the Person submitting such instrument) of the need for fulfillment of all requirements, specifying those requirements which appear to be unfulfilled;
(c) inform the Company of and cooperate with and assist the Company in resolving any reconciliation problems between the Exercise Notices received and delivery of Warrants to the Warrant Agents account;
(d) advise the Company with respect to an exercise, as promptly as practicable following the satisfaction of each of the applicable procedures for exercise set forth in Section 3.02(a) , of (i) the receipt of such Exercise Notice and the number of Warrants exercised in accordance with the terms and conditions of this Warrant Agreement, (ii) the instructions with respect to issuance of the shares of Common Stock, subject to the timely receipt from the Depository of the necessary information, (iii) the number of Persons who will become holders of record of the Company (who were not previously holders of record) as a result of receiving shares of Common Stock upon exercise of the Warrants and (iv) such other information as the Company shall reasonably require; and
(e) provide to the Company, upon the Companys request, the number of Warrants previously exercised, the number of shares of Common Stock issued in connection with such exercises and the number of remaining Warrants.
Section 3.07 Validity of Exercise . All questions as to the validity, form and sufficiency (including time of receipt) of a Warrant exercise shall be determined by the Company, which determination shall be final and binding with respect to the Warrant Agent. The Warrant Agent shall incur no liability for or in respect of and, except to the extent such liability arises from the Warrant Agents gross negligence, willful misconduct or bad faith (each as determined in a final non-appealable judgment by a court of competent jurisdiction), shall be indemnified and held harmless by the Company for acting or refraining from acting upon, or as a result of such determination by the Company. The Company reserves the absolute right to waive any of the conditions to the exercise of Warrants or defects in Exercise Notices with regard to any particular exercise of Warrants.
Section 3.08 Direction of Warrant Agent .
(a) The Company shall be responsible for performing all calculations required in connection with the exercise and settlement of the Warrants and the payment or delivery, as the case may be, of Cash and/or Common Stock as described in this Article 3 . In connection therewith, the Company shall provide prompt written notice to the Warrant Agent of the amount of Cash and the number of shares of Common Stock payable or deliverable, as the case may be, upon exercise and settlement of the Warrants, including, without limitation, the Net Share Amount or the Full Physical Share Amount, as applicable.
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(b) Any Cash to be paid, or shares of Common Stock to be delivered, to a Beneficial Owner shall be delivered to the Warrant Agent by the Company (or, in the case of Common Stock, by the transfer agent) no later than the Business Day immediately preceding the date such consideration is required to be delivered to such Beneficial Owner.
(c) The Warrant Agent shall have no liability for any failure or delay in performing its duties hereunder caused by any failure or delay of the Company in providing such calculations or items to the Warrant Agent. The Warrant Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or Units of Reference Property that may at any time be issued or delivered upon the exercise of any Warrant, and it makes no representation with respect thereto. The Warrant Agent shall not be responsible, to the extent not arising from the Warrant Agents gross negligence, willful misconduct or bad faith (each as determined in a final non-appealable judgment by a court of competent jurisdiction), for any failure of the Company to make any Cash payment or to issue, transfer or deliver any shares of Common Stock or stock certificates or Units of Reference Property, or to comply with any of the covenants of the Company contained in this Article 3 .
Article 4
Adjustments
Section 4.01 Adjustments to Exercise Price . After the date on which the Warrants are first issued and while any Warrants remain outstanding and unexpired, the Exercise Price for the Warrants shall be subject to adjustment (without duplication) upon the occurrence of any of the following events:
(a) The issuance of Common Stock as a dividend or distribution to all holders of Common Stock, or a subdivision, combination, split, reverse split or reclassification of the outstanding shares of Common Stock into a greater or smaller number of shares, in which event the Exercise Price shall be adjusted based on the following formula:
E 1 = E 0 × |
N 0 | |||
N 1 |
where:
E 1 | = | the Exercise Price in effect immediately after (i) the Open of Business on the Ex-Date in the case of a dividend or distribution or (ii) the consummation of the transaction in the case of a subdivision, combination, split, reverse split or reclassification; | ||
E 0 | = | the Exercise Price in effect immediately prior to (i) the Open of Business on the Ex-Date in the case of a dividend or distribution or (ii) the consummation of the transaction in the case of a subdivision, combination, split, reverse split or reclassification; |
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N 0 | = | the number of shares of Common Stock outstanding immediately prior to (i) the Open of Business on the Record Date in the case of a dividend or distribution or (ii) the consummation of the transaction in the case of a subdivision, combination, split, reverse split or reclassification; and | ||
N 1 | = | the number of shares of Common Stock equal to (i) in the case of a dividend or distribution, the sum of the number of shares outstanding immediately prior to the Open of Business on the Record Date for such dividend or distribution plus the total number of shares issued pursuant to such dividend or distribution or (ii) in the case of a subdivision, combination, split, reverse split or reclassification, the number of shares outstanding immediately after such subdivision, combination, split, reverse split or reclassification. |
Such adjustment shall become effective immediately after (i) the Open of Business on the Ex-Date in the case of a dividend or distribution or (ii) the consummation of the transaction in the case of a subdivision, combination, split, reverse split or reclassification. If any dividend or distribution or subdivision, combination, split, reverse split or reclassification of the type described in this Section 4.01(a) is declared or announced but not so paid or made, the Exercise Price shall again be adjusted to the Exercise Price that would then be in effect if such dividend or distribution or subdivision, combination, split, reverse split or reclassification had not been declared or announced, as the case may be.
(b) The issuance as a dividend or distribution to all holders of Common Stock of evidences of indebtedness, shares of capital stock or other securities (other than Common Stock), Cash or other property (excluding any dividend or distribution covered by Section 4.01(a) ), in which event the Exercise Price will be adjusted based on the following formula:
E 1 = E 0 × |
P - FMV | |||
P |
where:
E 1 | = | the Exercise Price in effect immediately after the Open of Business on the Ex-Date for such dividend or distribution; | ||
E 0 | = | the Exercise Price in effect immediately prior to the Open of Business on the Ex-Date for such dividend or distribution; | ||
P | = | the Fair Value of a share of Common Stock immediately prior to the Open of Business on the second business day preceding the Ex-Date for such dividend or distribution; and | ||
FMV | = | the Fair Value of the portion of such dividend or distribution applicable to one share of Common Stock on the Open of Business on the date of such dividend or distribution. |
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Such decrease shall become effective immediately after the Open of Business on the Ex-Date for such dividend or distribution. In the event that such dividend or distribution is declared or announced but not so paid or made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such distribution had not been declared or announced.
(c) The payment in respect of any tender offer or exchange offer by the Company for Common Stock, where the Cash and Fair Value of any other consideration included in the payment per share of the Common Stock exceeds the Fair Value of a share of Common Stock as of the Open of Business on the second Business Day preceding the expiration date of the tender or exchange offer (the Offer Expiration Date ), in which event the Exercise Price will be adjusted based on the following formula:
E 1 = E 0 × |
(N 0 x P) - A | |||
(P x N 1 ) |
where:
E 1 | = | the Exercise Price in effect immediately after the Close of Business on the Offer Expiration Date; | ||
E 0 | = | the Exercise Price in effect immediately prior to the Close of Business on the Offer Expiration Date; | ||
N 0 | = | the number of shares of Common Stock outstanding immediately prior to the expiration of the tender or exchange offer (prior to giving effect to the purchase or exchange of shares); | ||
N 1 | = | the number of shares of Common Stock outstanding immediately after the expiration of the tender or exchange offer (after giving effect to the purchase or exchange of shares); | ||
A | = | the aggregate Cash and Fair Value of any other consideration payable for shares of Common Stock purchased in such tender offer or exchange offer; and | ||
P | = | the Fair Value of a share of Common Stock as of the Open of Business on the second Business Day preceding the Offer Expiration Date. |
An adjustment, if any, to the Exercise Price pursuant to this clause (c) shall become effective immediately after the Close of Business on the Offer Expiration Date. In the event that the Company or a Subsidiary of the Company is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Company or such Subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such
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purchases are rescinded, then the Exercise Price shall again be adjusted to be the Exercise Price that would then be in effect if such tender offer or exchange offer had not been made. Except as set forth in the preceding sentence, if the application of this clause (c) to any tender offer or exchange offer would result in an increase in the Exercise Price, no adjustment shall be made for such tender offer or exchange offer under this clause (c).
(d) If any single action would require adjustment of the Exercise Price pursuant to more than one subsection of this Section 4.01 , only one adjustment shall be made and such adjustment shall be the amount of adjustment that has the highest, relative to the rights and interests of the registered holders of the Warrants then outstanding, absolute value. For the purpose of calculations pursuant to Section 4.01 , the number of shares of Common Stock outstanding shall be equal to the sum of (i) the number of shares of Common Stock issued and outstanding and (ii) the number of shares of Common Stock issuable pursuant to the conversion or exercise of Convertible Securities that are outstanding, in each case on the applicable date of determination.
(e) The Company may from time to time, to the extent permitted by law, decrease the Exercise Price and/or increase the Number of Warrants for the Global Warrant Certificate by any amount for any period of at least twenty days. In that case, the Company shall give the Global Warrant Holder and the Warrant Agent at least ten days prior written notice of such increase or decrease, and such notice shall state the decreased Exercise Price and/or increased Number of Warrants for the Global Warrant Certificate and the period during which the decrease and/or increase will be in effect. The Company may make such decreases in the Exercise Price and/or increases in the Number of Warrants for the Global Warrant Certificate, in addition to those set forth in this Article 4, as the Board deems advisable, including to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.
(f) Notwithstanding this Section 4.01 or any other provision of this Warrant Agreement or the Warrants, if an Exercise Price adjustment becomes effective on any Ex-Date, and a Warrant has been exercised on or after such Ex-Date and on or prior to the related Record Date resulting in the Person issued shares of Common Stock being treated as the record holder of the Common Stock on or prior to the Record Date, then, notwithstanding the Exercise Price adjustment provisions in this Section 4.01 , the Exercise Price adjustment relating to such Ex-Date will not be made with respect to such Warrant. Instead, such Person will be treated as if it were the record owner of shares of Common Stock on an un-adjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.
Section 4.02 Adjustments to Number of Warrants . Concurrently with any adjustment to the Exercise Price under Section 4.01 , the Number of Warrants for the Global Warrant Certificate will be adjusted such that the Number of Warrants for the Global Warrant Certificate in effect immediately following the effectiveness of such adjustment will be equal to the Number of Warrants for the Global Warrant Certificate in effect immediately prior to such adjustment, multiplied by a fraction, (i) the numerator of which is the Exercise Price in effect immediately prior to such adjustment and (ii) the denominator of which is the Exercise Price in effect immediately following such adjustment.
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Section 4.03 Certain Distributions of Rights and Warrants .
(a) Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Companys Capital Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (a Trigger Event ):
(1) are deemed to be transferred with such shares of Common Stock;
(2) are not exercisable; and
(3) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of Article 4 (and no adjustment to the Exercise Price or the Number of Warrants under this Article 4 will be made) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Exercise Price and the Number of Warrants shall be made under this Article 4 (subject in all respects to Section 4.04 ).
(b) If any such right or warrant is subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights or warrants with such rights (subject in all respects to Section 4.04 ).
(c) In addition, except as set forth in Section 4.04 , in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in Section 4.03(b) ) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Exercise Price and the Number of Warrants under Article 4 was made (including any adjustment contemplated in Section 4.04 ):
(1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by the holders thereof, the Exercise Price and the Number of Warrants shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a distribution under Section 4.01(b) , equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase; and
(2) in the case of such rights or warrants that shall have expired or been terminated without exercise by the holders thereof, the Exercise Price and the Number of Warrants shall be readjusted as if such rights and warrants had not been issued or distributed.
Section 4.04 Stockholder Rights Plans . If the Company has a stockholder rights plan in effect with respect to the Common Stock, upon exercise of a Warrant the applicable Beneficial Owner shall be entitled to receive, in addition to the share of Common Stock, the rights under
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such stockholder rights plan, unless, prior to such exercise, such rights have separated from the Common Stock, in which case the Exercise Price and the Number of Warrants shall be adjusted at the time of separation as if the Company had made a distribution to all holders of Common Stock as described in the first paragraph of Section 4.01(b) , subject to readjustment in the event of the expiration, termination or redemption of such rights.
Section 4.05 Restrictions on Adjustments .
(a) Except in accordance with Section 4.01 , the Exercise Price and the Number of Warrants will not be adjusted for the issuance of shares of Common stock or other securities of the Company.
(b) For the avoidance of doubt, neither the Exercise Price nor the Number of Warrants will be adjusted:
(1) upon the issuance of any securities by the Company on or after the Closing Date pursuant to the Plan or upon the issuance of shares of Common Stock upon the exercise of such securities;
(2) upon the issuance of any shares of Common Stock (or Convertible Securities) pursuant to the Management Stock Option Plan;
(3) upon any issuance of any shares of Common Stock (or Convertible Securities) pursuant to the exercise of the Warrants; or
(4) for a change in the par value of the Common Stock.
(c) No adjustment shall be made to the Exercise Price or the Number of Warrants for any of the transactions described in Section 4.01 if the Company makes provisions for participation in any such transaction with respect to Warrants without exercise of such Warrants on the same basis as with respect to Common Stock with notice that the Board determines in good faith to be fair and appropriate.
(d) No adjustment shall be made to the Exercise Price, nor will any corresponding adjustment be made to the Number of Warrants, unless the adjustment would result in a change of at least 1% of the Exercise Price; provided, however, that any adjustment of less than 1% that was not made by reason of this Section 4.05(d) shall be carried forward and made as soon as such adjustment, together with any other adjustments not previously made by reason of this Section 4.05(d), would result in a change of at least 1% in the aggregate. All calculations under this Article 4 shall be made to the nearest cent or to the nearest 1/100th of a share of Common Stock, as the case may be.
(e) If the Company takes a record of the holders of Common Stock for the purpose of entitling them to receive a dividend or other distribution, and thereafter (and before the dividend or distribution has been paid or delivered to stockholders) legally abandons its plan to pay or deliver such dividend or distribution, then thereafter no adjustment to the Exercise Price or the Number of Warrants then in effect shall be required by reason of the taking of such record.
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Section 4.06 Successor upon Consolidation, Merger and Sale of Assets; Mandatory Redemption .
(a) Other than with respect to an Excepted Combination, the Company may only consolidate or merge with any other Person (a Fundamental Equity Change ), so long as the Company is the surviving Person, or, in the event that the Company is not the surviving Person:
(1) the successor to the Company assumes all of the Companys obligations under this Warrant Agreement and the Warrants in form and substance reasonably satisfactory to Warrant Holders representing a majority of the aggregate Number of Warrants at the time outstanding; and
(2) the successor to the Company provides written notice of such assumption to the Warrant Agent.
(b) In the case of any Fundamental Equity Change other than an Excepted Combination, the successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company; provided, however, such successor entity shall provide the Warrant Agent with any such identifying corporate information as reasonably required by the Warrant Agent. Such successor entity thereupon may cause to be signed, and may issue any or all of the Global Warrants issuable pursuant to this Warrant Agreement which theretofore shall not have been signed by the Company; and, upon the order of such successor entity, instead of the Company, and subject to all the terms, conditions and limitations in this Warrant Agreement prescribed, the Warrant Agent shall authenticate and deliver, as applicable, any Global Warrants that previously shall have been signed and delivered by the officers of the Company to the Warrant Agent for authentication, and any Global Warrants which such successor entity thereafter shall cause to be signed and delivered to the Warrant Agent for such purpose.
(c) In the event that the Company desires to sell, lease, convey or otherwise transfer in one transaction or a series of related transactions all or substantially all of the consolidated assets of the Company and its Subsidiaries to any Qualified Asset Buyer (a Qualified Asset Sale ), the Company may only consummate such Qualified Asset Sale if such Qualified Asset Buyer agrees (i) to enter into a warrant agreement on terms and conditions substantially similar to this Warrant Agreement, and (ii) issue warrants for the equity in such Qualified Asset Buyer to the Warrant Holders on terms and conditions substantially similar to the Warrants, in each case, in form and substance reasonably satisfactory to Warrant Holders representing a majority of the aggregate Number of Warrants at the time outstanding.
(d) In the event that the Company consummates an Excepted Combination or sells, conveys or otherwise transfers in one transaction or a series of related transactions all or substantially all of the consolidated assets of the Company and its Subsidiaries to any Person that is not a Qualified Asset Buyer (a Non-Qualified Asset Sale ) on or prior to April 29, 2017 the Company shall mandatorily redeem all outstanding Warrants at a purchase price equal to 10% of the Black-Scholes valuation of such Warrants (the Redemption Price ), assuming (i) an expiration date equal to the date set forth in clause (i) of the definition of Expiration Date, (ii) a
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volatility of 40%, (iii) the assumed risk-free rate will equal the yield on the U.S. Treasury security with a maturity closest to the fourth anniversary of the Closing Date, as the yield on that security exists as of the date of the consummation of the Excepted Combination or Non-Qualified Asset Sale, provided, however, that if the period from the redemption date to the fourth anniversary of the Closing Date is not equal to the constant maturity of a U.S. Treasury security for which a weekly average yield is given, the risk-free rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of U.S. Treasury securities for which such yields are given and (iv) a stock price equal to the Fair Value of the Common Stock underlying such Warrant, in each case as determined based on the thirty-day volume-weighted average price from the period beginning thirty-one calendar days before the announcement of an Excepted Combination or Non-Qualified Asset Sale that is expected to be consummated on or prior to April 29, 2017 and ending one calendar day prior to such announcement, provided, however, that if the announcement of an Expected Combination or Non-Qualified Asset Sale occurs less than thirty days from the Closing Date, then the volume-weighted average price shall be determined from the Closing Date to the date prior to such announcement; provided further that any such mandatory redemption effected pursuant to this Section 4.06(d) shall only be effected if the price per share of Common Stock is less than the Exercise Price. Notwithstanding anything herein to the contrary, (1) the obligation of the Company to pay the amounts due pursuant to this Section 4.06(d), if any, shall survive the termination of the Warrants and this Agreement and (2) the Company shall use commercially reasonable efforts to effect the mandatory redemption on or promptly following the consummation of the Excepted Combination, and in any event within 30 days thereafter.
Section 4.07 Adjustment upon Reorganization Event .
(a) If there occurs any Fundamental Equity Change (other than an Excepted Combination) or any recapitalization, reorganization, consolidation, reclassification, change in the outstanding shares of Common Stock (other than changes resulting from a subdivision or combination to which Section 4.07 (a) . applies), statutory share exchange or other transaction (each such event a Reorganization Event ), in each case as a result of which the Common Stock would be converted into, changed into or exchanged for, stock, other securities, other property or assets (including Cash or any combination thereof) (the Reference Property ), then following the effective time of the Reorganization Event, the right to receive shares of Common Stock upon exercise of a Warrant shall be changed to a right to receive, upon exercise of such Warrant, the kind and amount of shares of stock, other securities or other property or assets (including Cash or any combination thereof) that a holder of one share of Common Stock would have owned or been entitled to receive in connection with such Reorganization Event (such kind and amount of Reference Property per share of Common Stock, a Unit of Reference Property ). In the event holders of Common Stock have the opportunity to elect the form of consideration to be received in a Reorganization Event, the type and amount of consideration into which the Warrants shall be exercisable from and after the effective time of such Reorganization Event shall be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock in such Reorganization Event. The Company hereby agrees not to become a party to any Reorganization Event unless its terms are consistent with this Section 4.07 .
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(b) At any time from, and including, the effective time of a Reorganization Event:
(1) if Full Physical Settlement applies upon exercise of a Warrant, the Full Physical Share Amount per Warrant shall be equal to a single Unit of Reference Property;
(2) if Net Share Settlement applies upon exercise of a Warrant, the Net Share Amount per Warrant shall be a number of Units of Reference Property in accordance with Section 3.03(c) ;
(3) the Company shall pay Cash in lieu of delivering any fraction of a Unit of Reference Property or any fractional Warrant in accordance with Section 3.05 based on the Fair Value of the Unit of Reference Property as of the Exercise Date; and
(4) the Fair Value shall be calculated with respect to a Unit of Reference Property.
(c) On or prior to the effective time of any Reorganization Event (other than an Excepted Combination), the Company or the successor or purchasing Person, as the case may be, shall execute an amendment to this Warrant Agreement providing that the Warrants shall be exercisable for Units of Reference Property in accordance with the terms of this Section 4.07 . If the Reference Property in connection with any Reorganization Event includes shares of stock or other securities and assets of a Person other than the successor or purchasing Person, as the case may be, in such Reorganization Event, then the Company shall cause such amendment to this Warrant Agreement to be executed by such other Person and such amendment shall contain such additional provisions to protect the interests of the Global Warrant Holder (for the benefit of the Beneficial Owners under this Warrant Agreement) as the Board and Warrant Holders representing a majority of the aggregate Number of Warrants at the time outstanding shall reasonably consider necessary by reason of the foregoing. Any such amendment to this Warrant Agreement shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 4 . In the event the Company shall execute an amendment to this Warrant Agreement pursuant to this Section 4.07 , the Company shall promptly file with the Warrant Agent an Officers Certificate briefly stating the reasons therefor, the kind or amount of Cash, securities or property or assets that will comprise a Unit of Reference Property after the relevant Reorganization Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with. The Company shall cause notice of the execution of the amendment to be mailed to the Global Warrant Holder, at its address appearing on the Warrant Register, within 20 Business Days after execution thereof.
(d) The above provisions of this Section 4.07 shall similarly apply to successive Reorganization Events.
(e) If this Section 4.07 applies to any event or occurrence, no other provision of this Article 4 shall apply to such event or occurrence (other than Section 4.06).
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Section 4.08 Common Stock Outstanding; Shares Reserved for Issuance on Exercise .
(a) For the purposes of this Article 4 , the number of shares of Common Stock at any time outstanding shall not include shares held, directly or indirectly, by the Company or any of its Subsidiaries.
(b) The Board has authorized and reserved for issuance such number of shares of Common Stock as will be issuable upon the exercise of all outstanding Warrants for shares of Common Stock (assuming, for purposes of this covenant, that Full Physical Settlement applies to all Warrants exercised hereunder). The Company covenants that all shares of Common Stock that shall be so issuable shall be duly and validly issued, fully paid and non-assessable.
(c) The Company agrees to authorize and direct its current and future transfer agents for the Common Stock to reserve for issuance the number of shares of Common Stock specified in this Section 4.08 and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation or to permit the exercise of a Warrant (an Authorized Share Failure ). Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than 180 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall use its best efforts to solicit its stockholders approval of such increase in authorized shares of Common Stock and to cause its Board to recommend to the stockholders that they approve such proposal. The Company shall instruct the transfer agent to deliver to the Warrant Agent, upon written request from the Warrant Agent, stock certificates (or beneficial interests therein) required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Warrant Agreement. The Company shall pay to the Warrant Agent, as agent for the Global Warrant Holder, any Cash that may be payable as provided in this Article 4 . Promptly after the date of expiration of any Warrants, the Warrant Agent shall certify to the Company the aggregate Number of Warrants then outstanding, and thereafter no shares shall be required to be reserved in respect of such Warrants.
Section 4.09 Calculations .
(a) Subject to Section 4.09(b) , the Company shall be responsible for making all calculations called for under this Warrant Agreement, including the Exercise Date, the Fair Value, the Exercise Price, the Number of Warrants and the number of shares of Common Stock or Units of Reference Property, if any, to be issued upon exercise of any Warrants. The Company shall make the foregoing calculations in good faith. Such calculations and determinations shall be final and binding on the Global Warrant Holder and all Beneficial Owners absent manifest error. The Company shall provide a schedule of the Companys calculations to the Warrant Agent, and the Warrant Agent is entitled to rely upon the accuracy of the Companys calculations without independent verification.
(b) In the event the Board engages an independent appraiser to advise it with respect to the determination of Fair Value, the Board shall be entitled to rely upon the determination of such independent appraiser. The Company shall pay the fees and expenses of such independent appraiser. The Global Warrant Holder shall be notified promptly of any consideration other than Cash to be received or paid by the Company and furnished with a description of the consideration and the Fair Value thereof, as determined in accordance with the foregoing provisions.
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Section 4.10 Notice of Adjustments . The Company shall mail, or cause to be mailed, to the Global Warrant Holder and the Warrant Agent, in accordance with Section 6.15 , a notice of any adjustment or readjustment to the Exercise Prices or the Number of Warrants no less than three Business Days prior to the effective date of such adjustment or readjustment. The Company shall file with the Warrant Agent such notice and an Officers Certificate setting forth such adjustment or readjustment and kind and amount of securities, Cash or other property for which a Warrant shall thereafter be exercisable and the applicable Exercise Price, showing in reasonable detail the facts upon which such adjustment or readjustment is based. The Officers Certificate shall be conclusive evidence that the adjustment or readjustment is correct, and the Warrant Agent shall not be deemed to have any knowledge of any adjustments or readjustments unless and until it has received such Officers Certificate. The Warrant Agent shall not be under any duty or responsibility with respect to any such Officers Certificate except to exhibit the same to the Global Warrant Holder.
Section 4.11 Warrant Agent Not Responsible for Adjustments or Validity . The Warrant Agent shall at no time be under any duty or responsibility to determine whether any facts exist that may require an adjustment or readjustment of the Exercise Price and the Number of Warrants, or with respect to the nature or extent of any such adjustment or readjustment when made, or with respect to the method employed, herein or in any supplemental agreement provided to be employed, in making the same. The Warrant Agent shall have no duty to verify or confirm any calculation called for hereunder. The Warrant Agent shall have no liability for any failure or delay in performing its duties hereunder caused by any failure or delay of the Company in providing such calculations to the Warrant Agent. The Warrant Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or of any securities or property which may at any time be issued or delivered upon the exercise of any Warrant or upon any adjustment or readjustment pursuant to this Article 4 , and it makes no representation with respect thereto. The Warrant Agent shall not be responsible for any failure of the Company to make any Cash payment or to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or scrip upon the surrender of any Warrant for the purpose of exercise or upon any adjustment pursuant to this Article 4 , or to comply with any of the covenants of the Company contained in this Article 4 . The Warrant Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein or in any notice from the Company. The Warrant Agent may rely conclusively, and shall be protected in acting, upon any notice, instruction, request, order, judgment, certification, opinion or advice of counsel, statement, demand or other instrument or document, not only as to its due execution, validity (including the authority of the person signing or presenting the same) and effectiveness, but also as to the truth and accuracy of any information contained therein, which the Warrant Agent shall believe to be genuine and to have been signed or presented by the person or parties purporting to sign the same.
Section 4.12 Statements on Warrants . Other than notation of any applicable increase or decrease in the Number of Warrants on Schedule A of the Global Warrant Certificate, the form of
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the Global Warrant Certificate need not be changed because of any adjustment or readjustment made pursuant to this Article 4 , and the Global Warrant Certificate issued after such adjustment or readjustment may state the same information (other than the applicable adjusted Exercise Price and the adjusted Number of Warrants) as is stated in the Global Warrant Certificate initially issued pursuant to this Warrant Agreement.
Section 4.13 Effect of Adjustment . The Depository and applicable Participants shall effect any applicable adjustments, changes or payments to the Beneficial Owners with respect to beneficial interests in the Global Warrants resulting from any adjustments or readjustments, changes or payments effected pursuant to this Article 4 in accordance with the procedures of the Depository and the applicable Participants.
Article 5
Other Provisions Relating to Rights of Global Warrant Holder
Section 5.01 No Rights as Stockholders . Nothing contained in this Warrant Agreement or in the Global Warrant Certificate shall be construed as conferring upon any Person, by virtue of holding or having a beneficial interest in a Global Warrant, the right to vote, to consent, to receive any Cash dividends, stock dividends, allotments or rights or other distributions paid, allotted or distributed or distributable to the holders of Common Stock, or to exercise any rights whatsoever as the Companys stockholders unless, until and only to the extent such Beneficial Owners become holders of record of shares of Common Stock issued upon settlement of the Warrants; provided however, the Global Warrant Holder shall be entitled to notice of all stockholder meetings as required to be made to all stockholders in accordance with the Companys bylaws. Notwithstanding the foregoing, in the event (a) the Company effects a split of the Common Stock by means of a stock dividend and the Exercise Price of and the number of Warrants are adjusted as of the date of the distribution of the dividend, and (b) a Beneficial Owner exercises a Warrant between the Record Date and the distribution date for such stock dividend, the Beneficial Owner shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such exercise, notwithstanding the fact that such shares were not outstanding as of the Close of Business on the Record Date for such stock dividend.
Section 5.02 Mutilated or Missing Warrant Certificates . If a Global Warrant Certificate held by the Warrant Agent as custodian for the Depository at any time is mutilated, defaced, lost, destroyed or stolen, then on the terms set forth in this Warrant Agreement, such Global Warrant Certificate may be replaced with a new Global Warrant Certificate, of like date and tenor and representing the same number of Warrants, at the cost of the Company at the office of the Warrant Agent subject to the replacement procedures of the Warrant Agent which shall include obtaining an open penalty surety bond satisfactory to the Warrant Agent holding the Company and the Warrant Agent harmless. Any such new Global Warrant Certificate shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Global Warrant Certificate shall be at any time enforceable by anyone. All Global Warrant Certificates shall be issued upon the express condition that the foregoing provisions are exclusive with respect to the substitution for lost, stolen, mutilated or destroyed Global Warrant Certificates, and shall preclude any and all other rights or remedies notwithstanding any Law or statute existing or hereafter enacted to the contrary with respect to the substitution for and replacement of negotiable instruments or other securities without their surrender.
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Section 5.03 No Impairment .
(a) The Company will not, by amendment of the Charter or through reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of a Warrant or this Warrant Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Global Warrant Holder and the Beneficial Owners under this Warrant Agreement against impairment.
(b) Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock obtainable upon the exercise of this Warrant and (b) take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of a Warrant.
(c) Before taking any action that would cause an adjustment reducing the Exercise Price below the then par value of the Common Stock, the Company will take any corporate action that may be necessary in order that the Company may validly and legally issue paid and non-assessable shares of Common Stock at such adjusted Exercise Price.
Section 5.04 Modification, Waiver and Meetings .
(a) This Warrant Agreement may be modified or amended by the Company and the Warrant Agent, without the consent of the Global Warrant Holder, any Beneficial Owner of any Warrant, or any applicable Participant with respect to any Warrant, for the purposes of curing any ambiguity or correcting or supplementing any defective provision contained in this Warrant Agreement or to make any other provisions in regard to matters or questions arising in this Warrant Agreement which the Company and the Warrant Agent may deem necessary or desirable; provided that such modification or amendment does not adversely affect the interests of the Global Warrant Holder or any of the Beneficial Owners under this Agreement in any material respect. As a condition precedent to the Warrant Agents execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from an Appropriate Officer that states that the proposed amendment is in compliance with the terms of this Section 5.04 .
(b) Modifications and amendments to this Warrant Agreement or to the terms and conditions of Warrants not contemplated by Section 5.04(a) may also be made by the Company and the Warrant Agent, and noncompliance with any provision of the Warrant Agreement or Warrants may be waived by the Global Warrant Holder (pursuant to a proper vote or consent of the Beneficial Owners holding a majority of the aggregate Number of Warrants at the time outstanding). Notwithstanding anything to the contrary herein, the Company may amend Schedule A from time to time to accurately reflect the name and address of the Global Warrant Holder after the Closing Date without any further consent or agreement from any other Person.
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(c) However, no such modification, amendment or waiver may, without the written consent of:
(1) The Global Warrant Holder (pursuant to a proper vote or consent of each Beneficial Owner of Warrants under this Warrant Agreement):
(A) change the Expiration Date; or
(B) increase the Exercise Price or decrease the Number of Warrants (except as set forth in Article 4 );
(2) the Global Warrant Holder (pursuant to a proper vote or consent of the Beneficial Owners of two-thirds of the Warrants affected under this Warrant Agreement):
(A) impair the right to institute suit for the enforcement of any payment or delivery with respect to the exercise and settlement of any Warrant;
(B) except as otherwise expressly permitted by provisions of this Warrant Agreement concerning specified reclassifications or corporate reorganizations, impair or adversely affect the exercise rights of Beneficial Owners, including any change to the calculation or payment of the Full Physical Share Amount or the Net Share Amount, as applicable;
(C) reduce the percentage of Warrants outstanding necessary to modify or amend this Warrant Agreement or to waive any past default; or
(D) reduce the percentage in Warrants outstanding required for any other waiver under this Warrant Agreement.
Section 5.05 Notices of Record Date, etc. In the event (i) the Company commences any tender offer (including any exchange offer) as announced from time to time for all or a portion of the outstanding shares of Common Stock; (ii) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of a Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; (iii) of any Reorganization Event; (iv) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; (v) any Qualified Asset Sale, (vi) the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer or (vii) any Excepted Combination, then, and in each such case, the Company will mail or cause to be mailed to the Global Warrant Holder (with a copy to the Warrant Agent) at least 15 days (35 days in the case of an Excepted Combination or a Non-Qualified Asset Sale) prior to the Record Date or the effective date, as applicable a notice specifying, as the case may be, (A) the Record Date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (B) the effective date on which such other event is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or Securities
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at the time deliverable upon the exercise of a Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or Securities) for Securities or other property deliverable upon such other event. Nothing herein shall prohibit the Global Warrant Holder from exercising its Warrant during the 15 day period (35 days in the case of an Excepted Combination or a Non-Qualified Asset Sale) commencing on the date of such notice.
Article 6
Concerning the Warrant Agent and Other Matters
Section 6.01 Payment of Certain Taxes .
(a) The Company shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable upon the initial issuance of the Global Warrants hereunder and delivery to the Global Warrant Holder.
(b) The Company shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable upon the issuance of Common Stock upon the exercise of Warrants hereunder and the issuance of stock certificates in respect thereof in the respective names of, or in such names as may be directed by, the exercising Beneficial Owners.
(c) The Warrant Agent shall not register any Transfer or issue or deliver any Global Warrant Certificate or shares of Common Stock unless or until the persons requesting the registration or issuance has either (i) paid to the Warrant Agent for the account of the Company the amount of the taxes described in Section 6.01(a) or Section 6.01(b) payable with respect to such Transfer, if any, or (ii) established to the reasonable satisfaction of the Warrant Agent that such tax, if any, has been paid by the Company.
(d) Nothing herein shall prejudice the applicability of Section 1146 of the Bankruptcy Code and the rights of the Company and other interested parties thereunder.
(e) Notwithstanding anything to the contrary, if the Company pays or is obligated to pay withholding taxes or backup withholding on or with respect to any deemed (or constructive) distribution on behalf of a Beneficial Owner as a result of an adjustment to the Exercise Price or the lack thereof, or for any other adjustment or other reason, the Company may, at its option, set off such payments against payments of cash or other deliveries on the Warrant to such Beneficial Owner. If the Company is required to remit an amount of tax in respect of any such withholding taxes or backup withholding, then, without duplication for any amount that the Company has set off pursuant to the foregoing sentence, the amount so required to be remitted shall be payable by the Beneficial Owner within 10 business days of written demand by the Company.
Section 6.02 Certain Tax Filings . The Warrant Agent shall prepare and file with the appropriate governmental agency all appropriate tax information forms in respect of any payments made by the Warrant Agent hereunder (including, without limitation, Internal Revenue Service Form 1099-B) during each calendar year, or any portion thereof, during which the Warrant Agent performs services hereunder.
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Section 6.03 Change of Warrant Agent .
(a) The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder (except for liability arising as a result of the Warrant Agents own gross negligence, willful misconduct or bad faith (each as determined in a final non-appealable judgment by a court of competent jurisdiction)) after giving sixty days notice in writing to the Company, except that such shorter notice may be given as the Company shall, in writing, accept as sufficient. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor warrant agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty days after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated warrant agent or by the Global Warrant Holder (who shall, with such notice, submit his Global Warrant Certificate for inspection by the Company), then the Global Warrant Holder may apply to any court of competent jurisdiction for the appointment of a successor warrant agent.
(b) The Warrant Agent may be removed by the Company at any time upon thirty days written notice to the Warrant Agent; provided, however, that the Company shall not remove the Warrant Agent until a successor warrant agent meeting the qualifications hereof shall have been appointed.
(c) Any successor warrant agent, whether appointed by the Company or by such a court, shall be a corporation or banking association organized, in good standing and doing business under the laws of the United States of America or any state thereof or the District of Columbia, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority and having a combined capital and surplus (together with its affiliates) of not less than $50,000,000. The combined capital and surplus of any such successor warrant agent shall be deemed to be the combined capital and surplus as set forth in the most recent report of its condition published prior to its appointment; provided that such reports are published at least annually pursuant to law or to the requirements of a federal or state supervising or examining authority. After acceptance in writing of such appointment by the successor warrant agent, such successor warrant agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor warrant agent with like effect as if originally named as warrant agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor warrant agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor warrant agent all the authority, powers and rights of such predecessor warrant agent hereunder; and upon request of any successor warrant agent, the Company shall make, execute, acknowledge and deliver any and all instruments in writing to more fully and effectually vest in and conform to such successor warrant agent all such authority, powers, rights, immunities, duties and obligations. Upon assumption by a successor warrant agent of the duties and responsibilities hereunder, the predecessor warrant agent shall deliver and transfer, at the expense of the Company, to the successor warrant agent any property at the time held by it hereunder. As soon as practicable after such appointment, the Company shall give notice thereof to the predecessor warrant agent, the Global Warrant Holder and each transfer agent for the shares of its Common Stock. Failure to give such notice, or any defect therein, shall not affect the validity of the appointment of the successor warrant agent.
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(d) Any entity into which the Warrant Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any Person succeeding to all or substantially all of the corporate trust or agency business of the Warrant Agent, shall be the successor warrant agent under this Warrant Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such entity would be eligible for appointment as a successor warrant agent under Section 6.03(c) . In case at the time such successor to the Warrant Agent shall succeed to the agency created by this Warrant Agreement, the Global Warrant Certificate shall have been countersigned but not delivered, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent and deliver such Global Warrant Certificate so countersigned, and in case at that time the Global Warrant Certificate shall not have been countersigned, any successor to the Warrant Agent may countersign such Global Warrant Certificate either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases the Global Warrant Certificate shall have the full force provided in the Global Warrant Certificate and in this Warrant Agreement.
(e) In case at any time the name of the Warrant Agent shall be changed and at such time the Global Warrant Certificate shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignatures under its prior name and deliver such Global Warrant Certificate so countersigned; and in case at that time the Global Warrant Certificate shall not have been countersigned, the Warrant Agent may countersign such Global Warrant Certificate either in its prior name or in its changed name; and in all such cases such Global Warrant Certificate shall have the full force provided in the Global Warrant Certificate and in this Warrant Agreement.
Section 6.04 Compensation; Further Assurances . The Company agrees that it will (a) pay the Warrant Agent reasonable compensation for its services as Warrant Agent in accordance with Exhibit C attached hereto and, except as otherwise expressly provided, will pay or reimburse the Warrant Agent upon written demand for all reasonable and documented expenses, disbursements and advances incurred or made by the Warrant Agent in accordance with any of the provisions of this Warrant Agreement (including the reasonable compensation, expenses and disbursements of its agents and counsel incurred in connection with the execution and administration of this Warrant Agreement), except any such expense, disbursement or advance as may arise from its or any of their gross negligence, willful misconduct or bad faith (each as determined in a final non-appealable judgment by a court of competent jurisdiction), and (b) perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Warrant Agreement.
Section 6.05 Reliance on Counsel . The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and the written opinion of such counsel or any advice of legal counsel subsequently confirmed by a written opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in the absence of bad faith and in accordance with such written opinion or advice.
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Section 6.06 Proof of Actions Taken . Whenever in the performance of its duties under this Warrant Agreement the Warrant Agent shall deem it necessary or desirable that any matter be proved or established by the Company prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Warrant Agent, be deemed to be conclusively proved and established by an Officers Certificate delivered to the Warrant Agent; and such Officers Certificate shall, in the absence of bad faith on the part of the Warrant Agent, be full warrant to the Warrant Agent for any action taken, suffered or omitted in the absence of bad faith by it under the provisions of this Warrant Agreement in reliance upon such Officers Certificate; but in its discretion the Warrant Agent may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as to it may seem reasonable. In the event the Warrant Agent reasonably believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent shall promptly notify the Company of any such ambiguity or uncertainty, and it may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to the Company, a Global Warrant Holder or any other person or entity for refraining from taking such action, except for its own gross negligence, willful misconduct or bad faith (each as determined by a final non-appealable judgment of a court of competent jurisdiction). unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.
Section 6.07 Correctness of Statements . The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Warrant Agreement or in the Global Warrant Certificate (except its countersignature thereof) or be required to verify the same, and all such statements and recitals are and shall be deemed to have been made by the Company only.
Section 6.08 Validity of Agreement . From time to time, the Warrant Agent may apply to any officer of the Company for instruction and the Company shall provide the Warrant Agent with such instructions concerning the services to be provided hereunder. The Warrant Agent shall not be held to have notice of any change of authority of any Person, until receipt of notice thereof from the Company. The Warrant Agent shall not be under any responsibility in respect of the validity of this Warrant Agreement or the execution and delivery hereof or in respect of the validity or execution of the Global Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Warrant Agreement or in the Global Warrant Certificate; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any Warrants or as to whether any shares of Common Stock will, when issued, be validly issued and fully paid and nonassessable. The Warrant Agent and its agents shall not be liable and shall be indemnified by the Company for any action taken or omitted, in the absence of bad faith, by the Warrant Agent in reliance upon any instructions from the Company.
Section 6.09 Use of Agents . The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents provided that the Warrant Agent shall remain responsible for the activities or omissions of any such agent or attorney and reasonable care has been exercised in the selection and in the continued employment of such attorney or agent.
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Section 6.10 Liability of Warrant Agent . The Warrant Agent shall incur no liability or responsibility to the Company or to the Global Warrant Holder for any action taken, suffered or omitted to be taken in reliance on any notice, resolution, waiver, consent, order, certificate, or other paper, document or instrument believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all costs, losses, expenses, liabilities and damages that the Warrant Agent has paid, incurred or suffered (or which it becomes obligated to pay, incur or suffer) by or to which it becomes subject, including judgments, costs and reasonable counsel fees, for any action taken, suffered or omitted to be taken by the Warrant Agent in the execution or performance of this Warrant Agreement or otherwise arising in connection with this Warrant Agreement, except as a result of the Warrant Agents gross negligence, willful misconduct or bad faith (each as determined by a final non- appealable judgment of a court of competent jurisdiction). For the avoidance of doubt, nothing herein shall obligate the Company to advance any amounts to the Warrant Agent in respect of contingent liabilities until such liabilities actually are or become paid or payable. Notwithstanding anything contained herein to the contrary, the Warrant Agents aggregate liability during any term of this Warrant Agreement with respect to, arising from, or arising in connection with this Warrant Agreement, or from all services provided or omitted to be provided under this Warrant Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to the Warrant Agent as fees and charges, but not including reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from Warrant Agent is being sought. Neither party to this Warrant Agreement shall be liable to the other party for any consequential, indirect, punitive, special or incidental damages under any provisions of this Warrant Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility of such damages.
Section 6.11 Legal Proceedings . The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense or that it reasonably believes would subject it to expense or liability or risk of incurring expense or liability, unless the Company, the Global Warrant Holder or any applicable Participant on behalf of a Beneficial Owner shall furnish the Warrant Agent with indemnity or other assurances for payment reasonably satisfactory to the Warrant Agent for any costs and expenses which may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider proper, whether with or without any such security or indemnity. The Warrant Agent shall promptly notify the Company and the Global Warrant Holder in writing of any claim made or action, suit or proceeding instituted against it arising out of or in connection with this Warrant Agreement. The Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any Beneficial Owner with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
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Section 6.12 Actions as Agent . The Warrant Agent shall act hereunder solely as agent and not in a ministerial or fiduciary capacity. The duties and obligations of the Warrant Agent shall be determined solely by the express provisions of the Warrant Agreement, and the Warrant Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Warrant Agreement. No implied covenants or obligations shall be read into the Warrant Agreement against the Warrant Agent. Subject to Section 6.26 below and applicable securities laws, the Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Warrant Agreement. Notwithstanding anything to the contrary herein, none of the Warrant Agent or its officers, directors, managers, employees, agents or other representatives shall use Confidential Information (as defined in Section 6.26) (a) for any purpose other than carrying out the transactions contemplated by this Warrant Agreement, and (b) in contravention of applicable securities laws (including, without limitation, laws prohibiting insider trading). The Warrant Agent shall not be liable for any action taken, suffered or omitted to be taken in connection with this Warrant Agreement except for its own gross negligence, willful misconduct or bad faith (each as determined by a final non-appealable judgement of a court of competent jurisdiction).
Section 6.13 Appointment and Acceptance of Agency . The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth in this Warrant Agreement, and the Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions herein set forth or as the Company and the Warrant Agent may hereafter agree.
Section 6.14 Successors and Assigns . All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
Section 6.15 Notices . Any notice or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the Global Warrant Holder to or on the Company shall be sufficiently given or made if in writing and sent by mail first-class, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Stone Energy Corporation
625 E. Kaliste Saloom Road
Lafayette, Louisiana 70508
Attn: Lisa S. Jaubert
via Email to: jaubertls@stoneenergy.com
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with a copy to:
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Attn: Michael E. Dillard
Facsimile: 713-546-5401
via Email to: michael.dillard@lw.com
Any notice or demand authorized by this Warrant Agreement to be given or made by the Global Warrant Holder or by the Company to or on the Warrant Agent shall be sufficiently given or made if sent by mail first-class, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Computershare
8742 Lucent Boulevard, Suite 225
Highlands Ranch, CO 80129
Attention: Relationship Manager
Fax: 303-262-0610
With a copy to:
Computershare Inc.
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
Attention: Legal Department
Any notice or demand authorized by this Warrant Agreement to be given or made to the Global Warrant Holder shall be sufficiently given or made if sent by first-class mail, postage prepaid to the last address of the Global Warrant Holder as it shall appear on the Warrant Register.
Section 6.16 Applicable Law; Jurisdiction . The validity, interpretation and performance of this Warrant Agreement and the Global Warrant Certificate shall be governed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws thereof that would result in the application of law of another jurisdiction. The parties hereto irrevocably consent to the jurisdiction of the courts of the State of New York and any federal court located in such state in connection with any action, suit or proceeding arising out of or relating to this Warrant Agreement. The Company hereby acknowledges and agrees that its failure to perform its agreements and covenants hereunder will cause irreparable injury to the Global Warrant Holder for which damages, even if available, will not be an adequate remedy. Accordingly, the Company hereby consents to the issuance of injunctive relief by courts of the State of New York and any federal court located in such state to compel performance of the Companys obligations and to the granting by courts of the State of New York and any federal court located in such state of the remedy of specific performance of the Companys obligations hereunder.
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Section 6.17 Waiver of Jury Trial . EACH OF THE COMPANY AND THE WARRANT AGENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS WARRANT AGREEMENT OR A WARRANT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PERSON HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS WARRANT AGREEMENT OR A WARRANT. EACH OF THE COMPANY AND THE WARRANT AGENT CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) SUCH PERSON UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) SUCH PERSON MAKES THIS WAIVER VOLUNTARILY, AND (d) SUCH PERSON HAS BEEN INDUCED TO ENTER INTO THIS WARRANT AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 6.18 Benefit of this Warrant Agreement . Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any Person or corporation other than the parties hereto and the Global Warrant Holder any right, remedy or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements in this Warrant Agreement contained shall be for the sole and exclusive benefit of the parties hereto and their successors and of the Global Warrant Holder.
Section 6.19 Registered Global Warrant Holder . Prior to due presentment for registration of Transfer, the Company and the Warrant Agent may deem and treat the Person in whose name any Warrants are registered in the Warrant Register as the absolute owner thereof for all purposes whatever (notwithstanding any notation of ownership or other writing thereon made by anyone other than the Company or the Warrant Agent) and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary or be bound to recognize any equitable or other claim to or interest in any Warrants on the part of any other Person and shall not be liable for any registration of Transfer of Warrants that are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of Transfer or with such knowledge of such facts that its participation therein amounts to bad faith.
Section 6.20 Headings . The Article and Section headings herein are for convenience only and are not a part of this Warrant Agreement and shall not affect the interpretation thereof.
Section 6.21 Counterparts . This Warrant Agreement may be executed in any number of counterparts on separate counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. A signature to this Warrant Agreement transmitted/executed electronically or by facsimile shall have the same authority, effect and enforceability as an original signature.
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Section 6.22 Entire Agreement . This Warrant Agreement and the Global Warrant Certificate constitute the entire agreement of the Company, the Warrant Agent and the Global Warrant Holder with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Company, the Warrant Agent and the Global Warrant Holder with respect to the subject matter hereof.
Section 6.23 Severability . Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant Agreement.
Section 6.24 Damages . Without limiting any other provision of this Warrant Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant Agreement or a Warrant, which failure results in any material damages to the Global Warrant Holder, the Company shall pay to the Global Warrant Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys fees, including those of appellate proceedings, incurred by the Global Warrant Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
Section 6.25 Survival . All provisions regarding indemnification, warranty, liability and limits thereon shall survive the termination or expiration of this Warrant Agreement.
Section 6.26 Confidential Information . The Warrant Agent and the Company agree that (a) inter alia, personal, non-public holder information ( Non-Public Information ) which is exchanged or received pursuant to the negotiation or the carrying out of this Warrant Agreement and (b) the fees for services set forth in the attached schedule ( Confidential Fees , together with Non-Public Information, Confidential Information ) shall remain confidential, and shall not be voluntarily disclosed to any other person, except disclosures pursuant to bankruptcy proceedings, applicable securities laws or otherwise as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities.
Section 6.27 Force Majeure . Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
[ signature pages follow ]
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IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.
STONE ENERGY CORPORATION | ||
By: |
/s/ Kenneth H. Beer |
|
Name: | Kenneth H. Beer | |
Title: | Executive Vice President and Chief Financial Officer |
[Signature Page to Warrant Agreement]
COMPUTERSHARE INC. and | ||
COMPUTERSHARE TRUST COMPANY, N.A ., | ||
collectively as Warrant Agent: | ||
By: |
/s/ Daniel Deweever |
|
Name: |
Daniel Deweever |
|
Title: |
Product Director |
[Signature Page to Warrant Agreement]
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN WARRANTS
The initial Number of Warrants is 3,529,412. In accordance with the Warrant Agreement dated as of February 28, 2017 among the Company and Computershare Inc., a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively as the Warrant Agent, the following increases or decreases in the Number of Warrants have been made:
Date |
Amount of increase
in Number of Warrants Evidenced by this Global Warrant |
Amount of
decrease in Number of Warrants Evidenced by this Global Warrant |
Number of
Warrants evidenced by this Global Warrant following such increase or decrease |
Signature of
authorized signatory |
||||||||||||
EXHIBIT A
FORM OF GLOBAL WARRANT CERTIFICATE
[FACE]
No. [ ] |
CUSIP No. 861642114 |
UNLESS THIS GLOBAL WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO STONE ENERGY CORPORATION (THE COMPANY), THE CUSTODIAN OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE, AND NOT IN PART, TO THE COMPANY, DTC, THEIR SUCCESSORS AND THEIR RESPECTIVE NOMINEES.
A-1
STONE ENERGY CORPORATION
February 28, 2017
NUMBER OF WARRANTS: Initially, 3,529,412 Warrants, subject to adjustment as described in the Warrant Agreement dated as of February 28, 2017 between Stone Energy Corporation and Computershare Inc. ( Computershare ), a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively, with Computershare, as the Warrant Agent (the Warrant Agreement ), each of which is exercisable for one share of Common Stock.
EXERCISE PRICE: Initially, $42.04 per Warrant, subject to adjustment as described in the Warrant Agreement.
FORM OF PAYMENT OF EXERCISE PRICE: Cash, if Full Physical Settlement is applicable, or Net Share Settlement.
FORM OF SETTLEMENT: Upon exercise of any Warrants represented hereby, the Beneficial Owner shall be entitled to receive, at the Beneficial Owners election, either (a) upon payment to the Warrant Agent of the Exercise Price (determined as of the relevant Exercise Date), one share of Common Stock per Warrant exercised, together with Cash in lieu of any fractional Warrants, or (b) without any payment therefor, a number of shares of Common Stock equal to the Net Share Amount, together with Cash in lieu of any fractional shares or fractional Warrants, in each case, as described in the Warrant Agreement.
DATES OF EXERCISE: At any time, and from time to time, prior to 5:00 p.m., New York City time, on the Expiration Date, each Beneficial Owner shall be entitled to exercise all Warrants then represented hereby and outstanding (which may include fractional Warrants) or any portion thereof (which shall not include any fractional Warrants).
PROCEDURE FOR EXERCISE: Warrants may be exercised by surrendering the Warrant Certificate evidencing such Warrant at the principal office of the Warrant Agent (or successor warrant agent), with the Exercise Notice set forth on the reverse of the Warrant Certificate duly completed and executed.
EXPIRATION DATE: The earlier of (i) February 28, 2021 and (ii) the date of consummation of (A) any Qualified Asset Sale, (B) the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer or (C) any Excepted Combination.
This Global Warrant Certificate certifies that:
Cede & Co., or its registered assigns, is the Global Warrant Holder of the Number of Warrants (the Warrants ) specified above (such number subject to adjustment from time to time as described in the Warrant Agreement).
A-2
In connection with the exercise of any Warrants, (a) the Company shall determine the Full Physical Share Amount or Net Share Amount, as applicable, for each Warrant, and (b) the Company shall, or shall cause the Warrant Agent to, deliver to the exercising Beneficial Owner, on the applicable Settlement Date, for each Warrant exercised, a number of shares of Common Stock equal to the relevant Full Physical Share Amount or Net Share Amount, as applicable, together with Cash in lieu of any fractional shares or fractional Warrants as described in the Warrant Agreement.
Prior to the relevant Exercise Date as described more fully in the Warrant Agreement, subject to Section 5.01 of the Warrant Agreement, Warrants will not entitle the Global Warrant Holder to any of the rights of the holders of shares of Common Stock.
Reference is hereby made to the further provisions of this Global Warrant Certificate set forth on the reverse hereof, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This Global Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.
In the event of any inconsistency between the Warrant Agreement and this Global Warrant Certificate, the Warrant Agreement shall govern.
A-3
IN WITNESS WHEREOF, Stone Energy Corporation has caused this instrument to be duly executed.
Dated: February 28, 2017
STONE ENERGY CORPORATION | ||
By: |
|
|
Name: | Kenneth H. Beer | |
Title: | Executive Vice President and Chief Financial Officer |
A-4
Certificate of Authentication
These are the Warrants referred to in the above-mentioned Warrant Agreement.
Countersigned as of the date above written:
Computershare Inc. and Computershare Trust Company, N.A., collectively, as Warrant Agent
By: |
|
|
Authorized Officer |
A-5
[FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE]
Stone Energy Corporation
The Warrants evidenced by this Global Warrant Certificate are part of a duly authorized issue of Warrants issued by the Company pursuant to the Warrant Agreement, dated as of February 28, 2017 (the Warrant Agreement ), between the Company and Computershare Inc., a Delaware corporation and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively, with Computershare, as the Warrant Agent , and are subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Global Warrant Holder consents by acceptance of this Global Warrant Certificate. Without limiting the foregoing, all capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant Agreement. A copy of the Warrant Agreement is on file at the Warrant Agents Office.
The Warrant Agreement and the terms of the Warrants are subject to amendment as provided in the Warrant Agreement.
This Global Warrant Certificate shall be governed by, and interpreted in accordance with, the laws of the State of New York without regard to the conflicts of laws principles thereof.
A-6
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and Transfers the Warrant(s) represented by this Certificate to:
|
||
Name, Address and Zip Code of Assignee | ||
and irrevocably appoints |
|
|
Name of Agent |
as its agent to Transfer this Warrant Certificate on the books of the Warrant Agent.
[Signature page follows]
A-7
Date: [ ]
|
||
Name of Transferee | ||
By: |
|
|
Name: | ||
Title: |
(Sign exactly as your name appears on the other side of this Certificate)
NOTICE: The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
A-8
EXHIBIT B
FORM OF EXERCISE NOTICE
Computershare Trust Company, NA
Address
Attention: Transfer Department
Re: Stone Energy Corporation Warrant Agreement, dated as of February 28, 2017 (the Warrant Agreement )
The undersigned (the Registered Warrant Holder ) hereby irrevocably exercises the right represented by the Global Warrant Certificate No. [ ] held for its benefit through the book-entry facilities of The Depository Trust Company (the Depository ), to exercise warrants and receive the consideration deliverable in exchange therefor pursuant to the following settlement method (check one):
☐ elects for Full Physical Settlement to apply to the Exercised Warrants pursuant to Section 3.03(b) of the Warrant Agreement and confirms that it will, prior to 11:00 a.m., New York City time, on the Settlement Date, pay an amount equal to the Exercise Price (determined as of the relevant Exercise Date), multiplied by the number of Exercised Warrants, by federal wire or other immediately available funds payable to the order of the Company to the account maintained by the Warrant Agent; or
☐ elects for Net Share Settlement to apply to the Exercised Warrants pursuant to Section 3.03(c) of the Warrant Agreement.
Please check below if this exercise is contingent upon a registered public offering, Fundamental Equity Change, any Qualified Asset Sale, the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer, any Excepted Combination or any other transaction or event in accordance with Section 3.02(f) of the Warrant Agreement.
☐ This exercise is being made in connection with a registered public offering, Fundamental Equity Change, any Qualified Asset Sale, the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer, any Excepted Combination or any other transaction or event; provided, that in the event that such transaction shall not be consummated, then this exercise shall be deemed revoked.
THIS EXERCISE NOTICE MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO CLOSE OF BUSINESS ON THE EXPIRATION DATE. THE WARRANT AGENT SHALL NOTIFY YOU OF THE ADDRESS AND PHONE NUMBER WHERE YOU CAN CONTACT THE WARRANT AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED.
B-1
ALL CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANINGS SET FORTH IN THE WARRANT AGREEMENT.
B-2
By: |
|
|
Authorized Signature | ||
Address: | ||
Telephone: |
B-3
EXHIBIT C
FEE SCHEDULE
The Company shall pay the Warrant Agent for performance of its services under this Warrant Agreement such compensation as shall be agreed in writing between the Company and the Warrant Agent.
C-1
Exhibit 4.4
AMENDMENT NO. 1 TO WARRANT AGREEMENT
This Amendment No. 1 to Warrant Agreement (this Amendment ), dated as of May 10, 2018, is among Stone Energy Corporation, a Delaware corporation ( Stone Energy ), Sailfish Energy Holdings Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Stone Energy ( New Talos ), Computershare Inc., a Delaware corporation ( Computershare ), and its wholly owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare, the Warrant Agent ).
RECITALS
WHEREAS , Stone Energy and the Warrant Agent are parties to that certain Warrant Agreement (the Warrant Agreement ), dated as of February 28, 2017;
WHEREAS , Stone Energy, New Talos, Sailfish Merger Sub Corporation, a Delaware corporation and a direct, wholly owned subsidiary of New Talos ( Merger Sub ), Talos Energy LLC, a Delaware limited liability company, and Talos Production LLC, a Delaware limited liability company, are parties to that certain Transaction Agreement, dated as of November 21, 2017 (the Transaction Agreement ), pursuant to which, among other things, Merger Sub will merge with and into Stone Energy (the Merger ), with Stone Energy surviving the Merger as a direct, wholly owned subsidiary of New Talos;
WHEREAS , pursuant to Section 2.03(a)(i) of the Transaction Agreement, at the time the Merger becomes effective as set forth in a certificate of merger to be filed with the Delaware Secretary of State (the Merger Effective Time ), by virtue of the Merger and without any other action on the part of Stone Energy or any holder of any capital stock of Stone Energy, each share of common stock of Stone Energy ( Stone Energy Common Stock ), par value $0.01 per share, outstanding immediately prior to the Merger Effective Time shall be automatically cancelled and shall cease to exist and will be converted into the right to receive one fully paid and non-assessable share of common stock of New Talos ( New Talos Common Stock ), par value $0.01 per share (the Merger Consideration );
WHEREAS , after the completion of the Merger, New Taloss name will be changed to Talos Energy Inc.;
WHEREAS , pursuant to Section 4.06(b) of the Warrant Agreement, in the case of any Fundamental Equity Change other than an Excepted Combination, the successor entity shall succeed to and be substituted for Stone Energy with the same effect as if it had been named in the Warrant Agreement as Stone Energy;
WHEREAS , pursuant to Section 4.07(a) of the Warrant Agreement, if any Reorganization Event occurs as a result of which Stone Energy Common Stock is exchanged for stock, among other things, then following the effective time of the Reorganization Event, the right to receive shares of Stone Energy Common Stock upon exercise of a Warrant shall be changed to a right to receive, upon exercise of such Warrant, the kind and amount of shares of stock that a holder of one share of Stone Energy Common Stock would have owned or been entitled to receive in connection with such Reorganization Event;
WHEREAS , pursuant to Section 4.07(c) of the Warrant Agreement, on or prior to the effective time of any Reorganization Event (other than an Excepted Combination), Stone Energy or the successor shall execute an amendment to the Warrant Agreement providing that the Warrants shall be exercisable for Units of Reference Property in accordance with the terms of Section 4.07 of the Warrant Agreement; and
WHEREAS , the parties have agreed to enter into this Amendment.
NOW, THEREFORE , in consideration of the premises and the respective agreements set forth in this Amendment, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms.
(a) Capitalized terms that are defined in this Amendment shall have the meanings ascribed in this Amendment to such terms. All other capitalized terms shall have the meanings ascribed to such terms in the Warrant Agreement as amended by this Amendment. Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular; references to the singular include the plural; the words include, includes, and including will be deemed to be followed by without limitation; and the term or has, except where otherwise indicated, the inclusive meaning represented by the phrase and/or.
(b) Each reference to hereof, hereunder, herein and hereby and each other similar reference contained in the Warrant Agreement, each reference to this Agreement, the Warrant Agreement and each other similar reference contained in the Warrant Agreement and each reference contained in this Amendment to the Warrant Agreement shall on and after the Amendment Effective Date (as defined below) refer to the Warrant Agreement as amended by this Amendment. Any notices, requests, certificates and other instruments executed and delivered on or after the Amendment Effective Date may refer to the Warrant Agreement without making specific reference to this Amendment but nevertheless all such references shall mean the Warrant Agreement as amended by this Amendment unless the context otherwise requires.
ARTICLE 2
AMENDMENTS; ASSUMPTION, SUCCESSION AND RELIEF
2.1 Amendments to the Warrant Agreement.
(a) References in the Warrant Agreement (i) to the Company shall refer to Talos Energy Inc. and (ii) to the Common Stock shall refer to the common stock, par value $0.01 per share, of Talos Energy Inc.
2
(b) Pursuant to Section 4.07(c) of the Warrant Agreement, following the Merger Effective Time, the Warrants shall be, and the Warrant Agreement and the Warrants are hereby amended to provide that the Warrants thenceforth shall be, exercisable for one share of New Talos Common Stock (such one share of New Talos Common Stock comprising, for purposes of the Warrant Agreement and the Warrants, the Unit of Reference Property deliverable upon exercise of Warrants, in lieu of each share of Stone Energy Common Stock theretofore so deliverable, after, and as a result of, the Reorganization Event constituting the Merger) in lieu of each share of Stone Energy Common Stock theretofore receivable upon exercise of such Warrants, at the Exercise Price of $42.04 per share of New Talos Common Stock, with such adjustments as to future transactions, if any, as provided in Article 4 of the Warrant Agreement.
(c) The first paragraph of Section 6.15 of the Warrant Agreement is hereby deleted in its entirety and replaced as follows:
Any notice or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the Global Warrant Holder to or on the Company shall be sufficiently given or made if in writing and sent by mail first-class, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attention: General Counsel
Facsimile: (713) 328-3000
with a copy to:
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Attention: Stephen M. Gill
Lande A. Spottswood
Facsimile: (713) 615-5956
(d) Exhibit A of the Warrant Agreement is hereby deleted in its entirety and replaced by a new Exhibit A in the form of Annex A to this Amendment.
(e) Section 5.04 of the Warrant Agreement is hereby amended by adding to the end thereof a new subsection (d) to read as follows:
Any Global Warrant Certificate executed and issued after the effectiveness of any modification or amendment pursuant to this Section 5.04 may, and shall if required by the Warrant Agent, bear a notation in form approved by the Warrant Agent as to any matter provided for in such modification or amendment. If the Company shall so determine, a new Global Warrant Certificate in the form of Exhibit A attached hereto as then in effect upon the effectiveness of any modification or amendment to this Warrant Agreement and evidencing the same number of Warrants as any outstanding Global Warrant Certificate may be prepared
3
and executed by the Company and authenticated and delivered by the Warrant Agent in replacement of and exchange for such outstanding Global Warrant Certificate; and the Warrant Agent shall thereupon make appropriate notations in the Warrant Register to reflect the issuance of such new Global Warrant Certificate and the cancellation of the Global Warrant Certificate so replaced.
(f) Section 2.05 of the Warrant Agreement is hereby amended by deleting the phrase the replacement of the Global Warrant Certificate as described in Section 5.02 in clause (ii) thereof and substituting therefor the phrase the exchange or replacement of the Global Warrant Certificate as described in Section 5.02 or Section 5.04(d) .
(g) Section 4.12 of the Warrant Agreement is hereby amended by deleting the word Other in the beginning thereof and substituting therefor the phrase Except as otherwise provided in Section 5.04(d) , other.
2.2 Assumption of Obligations . Pursuant to Sections 4.07 and 6.14 of the Warrant Agreement, New Talos hereby expressly assumes the due and punctual delivery of the Units of Reference Property deliverable upon exercise pursuant to the Warrants and the Warrant Agreement, each as hereby amended, and the due and punctual performance and observance of all other obligations and covenants to the Global Warrant Holder and the Warrant Agent to be performed or observed by the Company under the Warrant Agreement and the Warrants, each as hereby amended.
2.3 Succession to Rights and Powers . Pursuant to Sections 4.07 and 6.14 of the Warrant Agreement, New Talos shall hereby succeed to, and be substituted for, and may exercise every right and power of, the Company under the Warrants and the Warrant Agreement, each as hereby amended, with the same effect as if New Talos had been named as the Company therein.
2.4 Relief of Obligations . At the Amendment Effective Date, except with respect to clause (a) of Section 6.04 and the indemnification provisions contained in Section 6.10 of the Warrant Agreement, Stone Energy shall hereby be relieved of all obligations and covenants of the Company under the Warrant Agreement and the Warrants, each as hereby amended.
ARTICLE 3
EFFECTIVENESS
3.1 Effectiveness . Upon the execution and delivery of a counterpart hereof by each of the parties hereto, this Amendment shall become effective at the Merger Effective Time (the Amendment Effective Date ).
4
ARTICLE 4
MISCELLANEOUS
4.1 Ratification and Confirmation . Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Warrant Agreement are hereby ratified and confirmed and shall remain unchanged and in full force and effect without interruption or impairment of any kind.
4.1 Benefit of this Amendment . Nothing in this Amendment expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any Person or corporation other than the parties hereto and the Global Warrant Holder any right, remedy or claim under or by reason of this Amendment or of any covenant, condition, stipulation, promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements in this Amendment contained shall be for the sole and exclusive benefit of the parties hereto and their successors and of the Global Warrant Holder.
4.2 Applicable Law . The validity, interpretation and performance of this Amendment shall be governed in accordance with the laws of the State of New York, without giving effect to any conflict of law principles thereof that would result in the application of the laws of any other jurisdiction.
4.3 Headings . The Article and Section headings contained in this Amendment are for convenience only and are not a part of this Amendment and shall not affect the interpretation of this Amendment.
4.4 Counterparts . This Amendment may be executed in any number of counterparts on separate counterparts, each of which so executed shall be be deemed an original, but all such counterparts shall together constitute one and the same instrument. A signature to this Amendment transmitted/executed electronically or by facsimile shall have the same authority, effect and enforceability as an original signature.
4.5 Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.
4.6 Amendment . This Amendment may not be amended or modified except in the manner specified for an amendment of or modification to the Warrant Agreement in the Warrant Agreement.
4.7 Authority . Each of Stone Energy and New Talos represents and warrants that: (a) it is a corporation, duly organized and validly existing under the laws of the State of Delaware; (b) it has all requisite power and authority to execute, deliver and perform its obligations under this Amendment; and (c) this Amendment has been duly authorized, executed and delivered by the each of Stone Energy and New Talos and constitutes each of its legal, valid and binding obligation, enforceable against it in accordance with its terms, except to the extent the enforceability hereof is subject to applicable bankruptcy, insolvency, reorganization and other laws affecting the enforcement of creditors rights generally and to equitable principles.
[signature page follows]
5
IN WITNESS WHEREOF , the parties have executed this Amendment, or caused this Amendment to be executed by their authorized representatives, as of the date stated in the introductory paragraph of this Amendment.
STONE ENERGY CORPORATION | ||
By: |
/s/ Kenneth H. Beer |
|
Name: | Kenneth H. Beer | |
Title: | Chief Financial Officer | |
SAILFISH ENERGY HOLDINGS CORPORATION | ||
By: |
/s/ Kenneth H. Beer |
|
Name: | Kenneth H. Beer | |
Title: | Chief Financial Officer |
[Signature Page to Amendment No. 1 to Warrant Agreement]
COMPUTERSHARE INC. and | ||
COMPUTERSHARE TRUST COMPANY, N.A., collectively as Warrant Agent | ||
By: |
/s/ Thomas Borbely |
|
Name: | Thomas Borbely | |
Title: | Manager, Corporate Actions |
[Signature Page to Amendment No. 1 to Warrant Agreement]
ANNEX A
Exhibit A
FORM OF GLOBAL WARRANT CERTIFICATE
[FACE]
No. [ ] |
CUSIP No. 87484T116 |
UNLESS THIS GLOBAL WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ( DTC ), TO TALOS ENERGY INC. (THE COMPANY ), THE CUSTODIAN OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE, AND NOT IN PART, TO THE COMPANY, DTC, THEIR SUCCESSORS AND THEIR RESPECTIVE NOMINEES.
A-1
TALOS ENERGY INC.
May 10, 2018
NUMBER OF WARRANTS: 3,528,381 Warrants, subject to adjustment as described in the Warrant Agreement (as amended, the Warrant Agreement ), dated as of February 28, 2017, among Stone Energy Corporation ( Stone Energy ), Computershare Inc. ( Computershare ), a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare, the Warrant Agent ), as amended by Amendment No. 1 to the Warrant Agreement, dated as of May 10, 2018, among Stone Energy, Sailfish Energy Holdings Corporation, a Delaware corporation that has been renamed Talos Energy Inc., and the Warrant Agent, each of which is exercisable for one share of the common stock, par value $0.01 per share, of Talos Energy Inc. ( Common Stock ).
EXERCISE PRICE: $42.04 per Warrant, subject to adjustment as described in the Warrant Agreement.
FORM OF PAYMENT OF EXERCISE PRICE: Cash, if Full Physical Settlement is applicable, or Net Share Settlement.
FORM OF SETTLEMENT: Upon exercise of any Warrants represented hereby, the Beneficial Owner shall be entitled to receive, at the Beneficial Owners election, either (a) upon payment to the Warrant Agent of the Exercise Price (determined as of the relevant Exercise Date), one share of Common Stock per Warrant exercised, together with Cash in lieu of any fractional Warrants, or (b) without any payment therefor, a number of shares of Common Stock equal to the Net Share Amount, together with Cash in lieu of any fractional shares or fractional Warrants, in each case, as described in the Warrant Agreement.
DATES OF EXERCISE: At any time, and from time to time, prior to 5:00 p.m., New York City time, on the Expiration Date, each Beneficial Owner shall be entitled to exercise all Warrants then represented hereby and outstanding (which may include fractional Warrants) or any portion thereof (which shall not include any fractional Warrants).
PROCEDURE FOR EXERCISE: Warrants may be exercised by surrendering the Warrant Certificate evidencing such Warrant at the principal office of the Warrant Agent (or successor warrant agent), with the Exercise Notice set forth on the reverse of the Warrant Certificate duly completed and executed.
EXPIRATION DATE: The earlier of (i) February 28, 2021 and (ii) the date of consummation of (A) any Qualified Asset Sale, (B) the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer or (C) any Excepted Combination.
This Global Warrant Certificate certifies that:
A-2
Cede & Co., or its registered assigns, is the Global Warrant Holder of the Number of Warrants (the Warrants ) specified above (such number subject to adjustment from time to time as described in the Warrant Agreement).
In connection with the exercise of any Warrants, (a) the Company shall determine the Full Physical Share Amount or Net Share Amount, as applicable, for each Warrant, and (b) the Company shall, or shall cause the Warrant Agent to, deliver to the exercising Beneficial Owner, on the applicable Settlement Date, for each Warrant exercised, a number of shares of Common Stock equal to the relevant Full Physical Share Amount or Net Share Amount, as applicable, together with Cash in lieu of any fractional shares or fractional Warrants as described in the Warrant Agreement.
Prior to the relevant Exercise Date as described more fully in the Warrant Agreement, subject to Section 5.01 of the Warrant Agreement, Warrants will not entitle the Global Warrant Holder to any of the rights of the holders of shares of Common Stock.
Reference is hereby made to the further provisions of this Global Warrant Certificate set forth on the reverse hereof, and such further provisions shall for all purposes have the same effect as though fully set forth in this place.
This Global Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.
In the event of any inconsistency between the Warrant Agreement and this Global Warrant Certificate, the Warrant Agreement shall govern.
A-3
IN WITNESS WHEREOF, Talos Energy Inc. has caused this instrument to be duly executed.
Dated: , 2018
TALOS ENERGY INC. | ||
By: |
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|
Name: | ||
Title: |
A-4
Certificate of Authentication
These are the Warrants referred to in the above-mentioned Warrant Agreement.
Countersigned as of the date above written:
Computershare Inc. and Computershare Trust Company, N.A., collectively, as Warrant Agent
By: |
|
|
Authorized Officer |
A-5
[FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE]
Talos Energy Inc.
The Warrants evidenced by this Global Warrant Certificate are part of a duly authorized issue of Warrants issued by the Company pursuant to the Warrant Agreement, dated as of February 28, 2017 (as amended, the Warrant Agreement ), among Stone Energy Corporation ( Stone Energy ), Computershare Inc. ( Computershare ), a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare, the Warrant Agent ), as amended by Amendment No. 1 to the Warrant Agreement, dated as of May 10, 2018, among Stone Energy, Sailfish Energy Holdings Corporation, a Delaware corporation that has been renamed Talos Energy Inc., and the Warrant Agent, and are subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Global Warrant Holder consents by acceptance of this Global Warrant Certificate. Without limiting the foregoing, all capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant Agreement. A copy of the Warrant Agreement is on file at the Warrant Agents Office.
The Warrant Agreement and the terms of the Warrants are subject to amendment as provided in the Warrant Agreement.
This Global Warrant Certificate shall be governed by, and interpreted in accordance with, the laws of the State of New York without regard to the conflicts of laws principles thereof.
A-6
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and Transfers the Warrant(s) represented by this Certificate to:
Name, Address and Zip Code of Assignee |
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and irrevocably appoints |
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Name of Agent |
as its agent to Transfer this Warrant Certificate on the books of the Warrant Agent.
[Signature page follows]
A-7
Date: [ ]
Name of Transferee |
||
By: |
|
|
Name: | ||
Title: |
(Sign exactly as your name appears on the other side of this Certificate)
NOTICE: The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
A-8
Exhibit 4.5
TALOS PRODUCTION LLC
and
TALOS PRODUCTION FINANCE INC.
as Issuers
and the Subsidiary Guarantors party hereto from time to time
11.00% Second-Priority Senior Secured Notes due 2022
INDENTURE
Dated as of May 10, 2018
and
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee and Collateral Agent
TABLE OF CONTENTS
Page | ||||||
ARTICLE I | ||||||
DEFINITIONS AND INCORPORATION BY REFERENCE | ||||||
SECTION 1.01 |
Definitions | 1 | ||||
SECTION 1.02 |
Other Definitions |
46 | ||||
SECTION 1.03 |
Rules of Construction |
48 | ||||
SECTION 1.04 |
Incorporation by Reference of TIA |
49 | ||||
ARTICLE II | ||||||
THE NOTES | ||||||
SECTION 2.01 |
Amount of Notes |
49 | ||||
SECTION 2.02 |
Form and Dating |
50 | ||||
SECTION 2.03 |
Execution and Authentication |
50 | ||||
SECTION 2.04 |
Registrar and Paying Agent |
51 | ||||
SECTION 2.05 |
Paying Agent to Hold Money in Trust |
52 | ||||
SECTION 2.06 |
Holder Lists |
52 | ||||
SECTION 2.07 |
Transfer and Exchange |
52 | ||||
SECTION 2.08 |
Replacement Notes |
53 | ||||
SECTION 2.09 |
Outstanding Notes |
54 | ||||
SECTION 2.10 |
Cancellation |
54 | ||||
SECTION 2.11 |
Defaulted Interest |
54 | ||||
SECTION 2.12 |
CUSIP Numbers, ISINs, Etc. |
55 | ||||
SECTION 2.13 |
Calculation of Principal Amount of Notes |
55 | ||||
ARTICLE III | ||||||
REDEMPTION | ||||||
SECTION 3.01 |
Redemption |
55 | ||||
SECTION 3.02 |
Applicability of Article |
55 | ||||
SECTION 3.03 |
Notices to Trustee |
55 | ||||
SECTION 3.04 |
Selection of Notes to Be Redeemed |
56 | ||||
SECTION 3.05 |
Notice of Optional Redemption |
56 | ||||
SECTION 3.06 |
Effect of Notice of Redemption |
57 | ||||
SECTION 3.07 |
Deposit of Redemption Price |
58 | ||||
SECTION 3.08 |
Notes Redeemed in Part |
58 | ||||
ARTICLE IV | ||||||
COVENANTS | ||||||
SECTION 4.01 |
Payment of Notes |
58 | ||||
SECTION 4.02 |
Reports and Other Information |
58 | ||||
SECTION 4.03 |
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock |
61 | ||||
SECTION 4.04 |
Limitation on Restricted Payments |
69 |
i
TABLE OF CONTENTS
(contd)
Page | ||||||
SECTION 4.05 |
Dividend and Other Payment Restrictions Affecting Subsidiaries |
77 | ||||
SECTION 4.06 |
Asset Sales |
79 | ||||
SECTION 4.07 |
Transactions with Affiliates |
83 | ||||
SECTION 4.08 |
Change of Control |
85 | ||||
SECTION 4.09 |
Compliance Certificate |
88 | ||||
SECTION 4.10 |
[Reserved] |
88 | ||||
SECTION 4.11 |
Future Guarantors |
88 | ||||
SECTION 4.12 |
Liens |
88 | ||||
SECTION 4.13 |
[Intentionally Omitted] |
89 | ||||
SECTION 4.14 |
Maintenance of Office or Agency |
89 | ||||
SECTION 4.15 |
Covenant Suspension Event |
90 | ||||
SECTION 4.16 |
After-Acquired Property |
91 | ||||
ARTICLE V | ||||||
SUCCESSOR COMPANY | ||||||
SECTION 5.01 |
When Holdings May Merge or Transfer Assets |
92 | ||||
ARTICLE VI | ||||||
DEFAULTS AND REMEDIES | ||||||
SECTION 6.01 |
Events of Default |
95 | ||||
SECTION 6.02 |
Acceleration |
97 | ||||
SECTION 6.03 |
Other Remedies |
98 | ||||
SECTION 6.04 |
Waiver of Past Defaults |
99 | ||||
SECTION 6.05 |
Control by Majority |
99 | ||||
SECTION 6.06 |
Limitation on Suits |
99 | ||||
SECTION 6.07 |
Contractual Rights of the Holders to Receive Payment |
100 | ||||
SECTION 6.08 |
Collection Suit by Trustee |
100 | ||||
SECTION 6.09 |
Trustee May File Proofs of Claim |
100 | ||||
SECTION 6.10 |
Application of Funds |
100 | ||||
SECTION 6.11 |
Undertaking for Costs |
100 | ||||
SECTION 6.12 |
Waiver of Stay or Extension Laws |
101 | ||||
ARTICLE VII | ||||||
TRUSTEE | ||||||
SECTION 7.01 |
Duties of Trustee |
101 | ||||
SECTION 7.02 |
Rights of Trustee |
102 | ||||
SECTION 7.03 |
Individual Rights of Trustee |
104 | ||||
SECTION 7.04 |
Trustees Disclaimer |
104 | ||||
SECTION 7.05 |
Notice of Defaults |
104 | ||||
SECTION 7.06 |
Reports by Trustee to the Holders |
105 | ||||
SECTION 7.07 |
Compensation and Indemnity |
105 | ||||
SECTION 7.08 |
Replacement of Trustee |
106 |
ii
TABLE OF CONTENTS
(contd)
Page | ||||||
SECTION 7.09 |
Successor Trustee by Merger |
107 | ||||
SECTION 7.10 |
Eligibility; Disqualification |
107 | ||||
SECTION 7.11 |
Preferential Collection of Claims Against the Issuers |
108 | ||||
SECTION 7.12 |
Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification |
108 | ||||
ARTICLE VIII | ||||||
DISCHARGE OF INDENTURE; DEFEASANCE | ||||||
SECTION 8.01 |
Discharge of Liability on Notes; Defeasance |
109 | ||||
SECTION 8.02 |
Conditions to Defeasance |
110 | ||||
SECTION 8.03 |
Application of Trust Money |
111 | ||||
SECTION 8.04 |
Repayment to Issuer |
111 | ||||
SECTION 8.05 |
Indemnity for U.S. Government Obligations |
112 | ||||
SECTION 8.06 |
Reinstatement |
112 | ||||
ARTICLE IX | ||||||
AMENDMENTS AND WAIVERS | ||||||
SECTION 9.01 |
Without Consent of the Holders |
112 | ||||
SECTION 9.02 |
With Consent of the Holders |
114 | ||||
SECTION 9.03 |
Revocation and Effect of Consents and Waivers |
115 | ||||
SECTION 9.04 |
Notation on or Exchange of Notes |
115 | ||||
SECTION 9.05 |
Trustee to Sign Amendments |
115 | ||||
SECTION 9.06 |
Additional Voting Terms; Calculation of Principal Amount |
116 | ||||
SECTION 9.07 |
Compliance with Trust Indenture Act |
116 | ||||
ARTICLE X | ||||||
RANKING OF NOTE LIENS | ||||||
SECTION 10.01 |
Relative Rights |
116 | ||||
ARTICLE XI | ||||||
COLLATERAL | ||||||
SECTION 11.01 |
Security Documents |
116 | ||||
SECTION 11.02 |
Collateral Agent |
117 | ||||
SECTION 11.03 |
Authorizations of Actions to Be Taken |
118 | ||||
SECTION 11.04 |
Release of Liens |
119 | ||||
SECTION 11.05 |
Powers Exercisable by Receiver or Trustee |
121 | ||||
SECTION 11.06 |
Release Upon Termination of the Issuers Obligations |
121 | ||||
SECTION 11.07 |
Designations |
122 | ||||
SECTION 11.08 |
Certificates and Opinions |
122 |
iii
TABLE OF CONTENTS
(contd)
Page | ||||||
ARTICLE XII | ||||||
GUARANTEE | ||||||
SECTION 12.01 |
Subsidiary Guarantee |
123 | ||||
SECTION 12.02 |
Limitation on Liability |
125 | ||||
SECTION 12.03 |
[Reserved] |
126 | ||||
SECTION 12.04 |
Successors and Assigns |
126 | ||||
SECTION 12.05 |
No Waiver |
126 | ||||
SECTION 12.06 |
Modification |
126 | ||||
SECTION 12.07 |
Execution of Supplemental Indenture for Future Subsidiary Guarantors |
126 | ||||
SECTION 12.08 |
Non-Impairment |
127 | ||||
ARTICLE XIII | ||||||
MISCELLANEOUS | ||||||
SECTION 13.01 |
Trust Indenture Act Controls |
127 | ||||
SECTION 13.02 |
Notices |
127 | ||||
SECTION 13.03 |
Communications by Holders with Other Holders |
128 | ||||
SECTION 13.04 |
Certificate and Opinion as to Conditions Precedent |
128 | ||||
SECTION 13.05 |
Statements Required in Certificate or Opinion |
129 | ||||
SECTION 13.06 |
When Notes Disregarded |
129 | ||||
SECTION 13.07 |
Rules by Trustee, Paying Agent and Registrar |
129 | ||||
SECTION 13.08 |
Legal Holidays |
129 | ||||
SECTION 13.09 |
GOVERNING LAW |
129 | ||||
SECTION 13.10 |
No Recourse Against Others |
130 | ||||
SECTION 13.11 |
Successors |
130 | ||||
SECTION 13.12 |
Multiple Originals |
130 | ||||
SECTION 13.13 |
Table of Contents; Headings |
130 | ||||
SECTION 13.14 |
Indenture Controls |
130 | ||||
SECTION 13.15 |
Severability |
130 | ||||
SECTION 13.16 |
Intercreditor Agreement |
130 | ||||
SECTION 13.17 |
Waiver of Jury Trial |
130 | ||||
SECTION 13.18 |
U.S.A. Patriot Act |
130 |
Appendix A Provisions Relating to Initial Notes and Additional Notes
iv
TABLE OF CONTENTS
(contd)
EXHIBIT INDEX
Exhibit A | | Form of Initial Note | ||
Exhibit B | | Form of Transferee Letter of Representation | ||
Exhibit C | | Form of Supplemental Indenture |
v
CROSS-REFERENCE TABLE
TIA Section |
Indenture
|
|||
310 | (a)(1) | 7.10 | ||
(a)(2) | 7.10 | |||
(a)(3) | 7.10 | |||
(a)(4) | 7.10 | |||
(b) | 7.08; 7.10 | |||
(c) | N.A. | |||
311 | (a) | 7.11 | ||
(b) | 7.11 | |||
(c) | N.A. | |||
312 | (a) | 2.06 | ||
(b) | 13.03 | |||
(c) | 13.03 | |||
313 | (a) | 7.06 | ||
(b)(1) | 7.06 | |||
(b)(2) | 7.06 | |||
(c) | 7.06 | |||
(d) | 7.06 | |||
314 | (a) | 4.02; 4.09 | ||
(b) | 4.09 | |||
(c)(1) | 13.04 | |||
(c)(2) | 13.04 | |||
(c)(3) | N.A. | |||
(d) | 11.08 | |||
(e) | 13.05 | |||
(f) | 4.10 | |||
315 | (a) | 7.01 | ||
(b) | 7.05 | |||
(c) | 7.01 | |||
(d) | 7.01 | |||
(e) | 6.11 | |||
316 | (a) (last sentence) | 13.06 | ||
(a)(1)(A) | 6.05 | |||
(a)(1)(B) | 6.04 | |||
(a)(2) | N.A. | |||
(b) | 6.07 | |||
317 | (a)(1) | 6.08 | ||
(a)(2) | 6.09 | |||
(b) | 2.05 | |||
318 | (a) | 13.01 |
N.A. Means Not Applicable.
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.
vi
INDENTURE, dated as of May 10, 2018 among TALOS PRODUCTION LLC, a Delaware limited liability company (together with its successors and assigns, Holdings ), TALOS PRODUCTION FINANCE INC., a Delaware corporation (together with its successors and assigns, the Co-Issuer and, together with Holdings, the Issuers ), the Subsidiary Guarantors party hereto from time to time (as defined below) and WILMINGTON TRUST,
NATIONAL ASSOCIATION, as trustee (the Trustee ) and as collateral agent.
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $390,867,820 aggregate principal amount of the Issuers 11.00% Second-Priority Senior Secured Notes due 2022 issued on the date hereof (the Initial Notes ), (ii) Exchange Notes issued in exchange for the Initial Notes and (iii) Additional Notes issued from time to time (together with the Initial Notes and the Exchange Notes, the Notes ):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions .
Acquired Indebtedness means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
Additional Assets means:
(1) any properties or assets used or useful in the Oil and Gas Business;
(2) capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;
(3) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or
(4) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;
provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.
Additional Notes means the Notes issued under the terms of this Indenture subsequent to the Issue Date.
Additional Refinancing Amount means, in connection with the Incurrence of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease any existing Indebtedness, Disqualified Stock or Preferred Stock, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith.
Adjusted Consolidated Net Tangible Assets means (without duplication), as of the date of determination, the remainder of:
(a) the sum of:
(i) estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided , that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such
2
prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of Borrowing Base and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each of cases (A), (B), (C) and (D) as estimated by Holdings petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;
(ii) the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings books and records as of a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements;
(iii) the Net Working Capital on a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements;
(iv) assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business; and
(v) the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements, and (B) the appraised value, as estimated by independent appraisers within the immediately preceding 12 months, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus
3
(b) the sum of:
(i) any amount included in clauses (a)(i) through (a)(v) above that is attributable to minority interests;
(ii) any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings latest audited consolidated financial statements;
(iii) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in clause (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and
(iv) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in clause (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in clause (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).
If Holdings 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 Holdings were still using the full cost method of accounting.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Aggregate Special Cap means an amount equivalent to 20% of EBITDA for the applicable four quarter period, prior to giving effect to the exclusions, add-backs and operating expense reductions and other operating improvements or synergies that are subject to the Aggregate Special Cap.
All-in Yield means the yield payable to all lenders providing the applicable Indebtedness in the primary syndication thereof, whether in the form of interest rate, premiums, margin, original issue discount, up-front fees, rate floors or otherwise; provided , that original issue discount and up-front fees shall be equated to interest rate assuming a 4-year life to maturity (or, if less, the remaining life of such loans); and, provided, further, that All-in Yield
4
shall not include arrangement, commitment, underwriting, structuring or similar fees paid to arrangers for such loans (not to exceed 2.00%) or customary consent fees for an amendment paid generally to consenting lenders, default rate of 2.00%, customary administrative agency and collateral agency fees, changes in the underlying LIBOR rate (or similar rate) or base rate not caused by any amendment, supplement, modification, or replacement to such Indebtedness, and customary letter of credit issuance fees.
Applicable Premium means the excess of (A) the present value of all remaining required interest payments through the first anniversary of the Issue Date (excluding accrued and unpaid interest), plus the present value of the redemption price of the Notes being redeemed set forth in Paragraph 5 of the Note, assuming a redemption date of the first anniversary of the Issue Date, in each case computed by the Issuers using a discount rate equal to the Treasury Rate plus 50 basis points over (B) the then outstanding principal amount of the Notes being redeemed. For purposes of this definition, Treasury Rate means the rate per annum equal to the yield to maturity at the time of computation of the United States Treasury securities with a constant maturity as compiled and published in the most recent Federal Reserve Statistical Release H-15 (519) that has become publicly available at least two (2) Business Days prior to such time (or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from such date of prepayment to the first anniversary of the Issue Date; provided , however , that if the period from such date of prepayment to the first anniversary of the Issue Date is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given.
Approved Petroleum Engineers shall mean (a) Netherland, Sewell & Associates, Inc., (b) Ryder Scott Company, L.P., (c) W. D. Van Gonten & Co. Petroleum Engineering, (d) DeGolyer and MacNaughton, (e) Cawley, Gillespie & Associates, Inc., (f) Miller and Lents, Ltd. and (g) at the Issuers option, any other independent petroleum engineers selected by the Issuers and reasonably acceptable to the administrative agent under the Credit Agreement governing Indebtedness incurred under Section 4.03(b)(i).
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) (each referred to in this definition as a disposition ); or
(2) the issuance or sale of Equity Interests (other than directors qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),
5
in each case other than:
(a) a disposition of cash, Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;
(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;
(d) any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $15.0 million, provided that dispositions pursuant to this clause (d) shall not exceed $20.0 million in any 12 month consecutive period;
(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;
(f) [reserved];
(g) foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;
(h) [reserved];
(i) the lease, assignment or sublease of, or any transfer related to a reverse build to suit or similar transaction in respect of, any real or personal property in the ordinary course of business;
(j) the disposition of (i) inventory and other goods held for sale, including Hydrocarbons and other mineral products in the ordinary course of business, (ii) obsolete, worn out, used or surplus equipment, vehicles and other assets (other than accounts receivable) in the ordinary course of business (including any asset (other than Oil and Gas Properties) that is no longer necessary, used or useful for the business of Holdings or its Restricted Subsidiaries or is replaced by equipment of at least comparable value and use), and (iii) dispositions to landlords of improvements made to leased real property pursuant to customary terms of leases entered into in the ordinary course of business;
(k) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l) in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
6
(m) [reserved];
(n) any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;
(o) dispositions in connection with Permitted Liens;
(p) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q) the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;
(r) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(s) any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(t) [reserved];
(u) any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to an Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;
(v) the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by an Issuer or any Restricted Subsidiary in the ordinary course of business and which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and
7
(w) a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved or probable reserves are attributable at the time of such disposition;
provided that, notwithstanding anything above to the contrary, no Production Payment and Reserve Sale shall be deemed to not constitute an Asset Sale pursuant to clauses (a) through (w) above, other than pursuant to clauses (d) and (u) above.
Authorized Officer means as to any Person, the Chairman of the Board of Directors, the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Assistant or Vice Treasurer, the Vice President-Finance, the General Counsel, the Secretary, the Assistant Secretary and any manager, managing member or general partner, in each case, of such Person, and any other senior officer designated as such in writing to the Trustee by such Person. Any document delivered hereunder that is signed by an Authorized Officer shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of an Issuer or any Subsidiary Guarantor and such Authorized Officer shall be conclusively presumed to have acted on behalf of such Person.
Bank Indebtedness means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including any agreement extending the maturity thereof, refinancing or replacing all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements or increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Holdings whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by Holdings to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
Board of Directors means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. In the case of Holdings, the Board of Directors of Holdings shall be deemed to include the Board of Directors of Holdings or any direct or indirect parent of Holdings, as appropriate.
8
Borrowing Base means, at any date of determination, an amount equal to the amount of (a) 65% of the net present value discounted at 9% of proved developed producing (PDP) reserves, plus (b) 35% of the net present value discounted at 9% of proved developed non-producing (PDNP) reserves, plus (c) 25% of the net present value discounted at 9% of proven undeveloped (PUD) reserves, plus or minus (d) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus or minus (e) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 1.5% per annum.
Business Day means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.
Calculation Date shall have the meaning set forth in the definition of Fixed Charge Coverage Ratio.
Capital Stock means:
(1) in the case of a corporation, corporate stock or shares;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations of Holdings or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Holdings and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any
9
recharacterization described below (or any refinancings thereof) (i) that were not included on the consolidated balance sheet of Holdings as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Holdings and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.
Capitalized Software Expenditures shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.
Cash Equivalents means:
(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated A or the equivalent thereof by Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5) commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least A-1 or the equivalent thereof by Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
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(7) Indebtedness issued by Persons (other than the Significant Issue Date Equityholders or any of their Affiliates) with a rating of A or higher from S&P or A-2 or higher from Moodys (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and
(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.
CFC means a controlled foreign corporation within the meaning of Section 957 of the Code.
Change of Control means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2) Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.
Code means the Internal Revenue Code of 1986, as amended.
Co-Investors shall mean the Significant Issue Date Equityholders, excluding in each case any of their respective operating portfolio companies.
Collateral means all property subject or purported to be subject, from time to time, to a Lien under any Security Documents.
Collateral Agent means Wilmington Trust, National Association, acting in its capacity as Collateral Agent under this Indenture and under the Security Documents and any successor thereto in such capacity.
Collateral Agreement means the Collateral Agreement (Second Lien) among the Issuers, each Subsidiary Guarantor and the Collateral Agent, entered into on the Issue Date, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms and in accordance with this Indenture.
Collateral Coverage Minimum means that the Mortgaged Properties shall represent at least 90% of the PV-10 of the Issuers and the Subsidiary Guarantors total Proved Reserves and at least 90% of the PV-10 of the Issuers and the Subsidiary Guarantors total Proved Developed Producing Reserves, in each case, included in the most recent Reserve Report prepared as of each June 30th and December 31st of each fiscal year.
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Consolidated Depreciation, Depletion and Amortization Expense means, with respect to any Person for any period, the total amount of depreciation, depletion and amortization expense, including accretion on asset retirement obligations in accordance with ASC 410 Asset Retirement and Environmental Obligations, the amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
Consolidated Interest Expense means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus
(3) [reserved]; minus
(4) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Consolidated Leverage Ratio means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness as of the last day of the then applicable Test Period to (b) EBITDA for such Test Period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but prior to the event for which the calculation of the Consolidated Leverage Ratio is made (the Leverage Ratio Calculation Date ), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the
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beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Leverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event on or prior to the date that is 12 months after such applicable event; provided that the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to this paragraph or the third paragraph of the definition of Fixed Charge Coverage Ratio, plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Leverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation
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has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. 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 EBITDA for the applicable period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided , however , that, without duplication:
(1) any (a) net after-tax extraordinary or nonrecurring gains or losses (less all fees and expenses relating thereto) or expenses or charges, (b) any severance expenses, acquisition integration costs, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful) and (c) hurricane costs and charges, shall be excluded; provided that the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to this clause (1), plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, plus the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to the third paragraph of the definition of Fixed Charge Coverage Ratio or the third paragraph of the definition of Consolidated Leverage Ratio, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap;
(2) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss (less all fees and expenses or charges relating thereto) from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets or attributable to business dispositions or other asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;
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(5) [reserved];
(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (xii) of Section 4.04(b) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;
(11) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12) [reserved];
(13) [reserved];
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(14) [reserved];
(15) [reserved];
(16) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded; and
(17) (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period less a deduction for any amounts so added back to the extent not so received within 365 days).
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or Restricted Subsidiaries to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Section 4.04 pursuant to clauses (4) and (5) of the definition of Cumulative Credit.
Consolidated Non-Cash Charges means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation, Depletion and Amortization Expense) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
Consolidated Taxes means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.
Consolidated Total Indebtedness means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified
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Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ( primary obligations ) of any other Person (the primary obligor ) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Contractual Requirement means any term, covenant, condition or provision of any indenture, loan agreement, lease agreement, mortgage, deed of trust, agreement or other instrument to which Holdings or any of the Restricted Subsidiaries is a party or by which it or any of its property or assets is bound.
Corporate Trust Office means the designated office of the Trustee in the United States of America at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the holders and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Issuers).
Credit Agreement means (i) the Credit Agreement entered into on May 10, 2018 among Talos Energy, Inc., Holdings, as borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, Issuing Bank and Swingline Lender, the lenders from time to time parties thereto and the other Persons from time to time party thereto, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), repaid, refunded, refinanced or otherwise modified from time to time, including any agreement extending the maturity thereof, refinancing or replacing all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements or increasing the amount loaned or issued thereunder or altering the maturity thereof; provided , that in no event shall any lenders under the Credit Agreement include (i) any affiliates of each of Apollo Global Management, LLC or Riverstone Holdings LLC or (ii) any funds managed, advised or sub-advised by the persons described in the foregoing clause (i).
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Credit Agreement Documents means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.
Cumulative Credit means the sum of (without duplication):
(1) 50% of the Consolidated Net Income of Holdings for the period from the Issue Date to the end of Holdings most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the Reference Period ) (or, in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus
(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.03(b)(xiii)) from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus
(3) 100% of the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to Section 4.03(b)(xiii)), plus
(4) 100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus
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(5) 100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash received by Holdings or any Restricted Subsidiary from:
(A) the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and its Restricted Subsidiaries by any Person (other than Holdings or any of its Restricted Subsidiaries) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments,
(B) the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C) a distribution or dividend from an Unrestricted Subsidiary, plus
(6) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or its Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the Fair Market Value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment).
Customary Intercreditor Agreement means (a) in connection with the incurrence of Pari Passu Indebtedness that is to be secured by Liens on the Collateral securing such Pari Passu Indebtedness that shall rank equal in priority to the Liens on the Collateral securing the Notes Obligations, an intercreditor agreement among the Trustee, the Collateral Agent and one or more agents for holders of such Pari Passu Indebtedness in the form delivered by the Issuers to the Trustee and Collateral Agent providing that, inter alia, the Liens on the Collateral in favor of the Collateral Agent shall be pari passu to such Liens in favor of such agent for holders of Pari Passu Indebtedness, provided that such intercreditor agreement shall provide that the largest series of Pari Passu Indebtedness by outstanding principal amount shall control the enforcement of rights and remedies with respect to the Collateral and such intercreditor agreement shall otherwise contain customary terms consistent with then prevailing market terms as determined in good faith by the Issuers (and a joinder to the Senior Lien Intercreditor Agreement shall be executed with respect to such Pari Passu Indebtedness) and (b) to the extent executed in connection with the incurrence of Indebtedness secured by junior Liens, an intercreditor agreement substantially in the form of the Senior Lien Intercreditor Agreement where the Notes Obligations shall be the senior obligations thereunder (with such modifications as may be necessary or appropriate in light of prevailing market conditions and are not materially adverse to the holders of Notes, taken as a whole).
Debt Exchange Agreement means that certain exchange agreement, dated as of November 21, 2017, among the Issuers, Stone Energy Corporation, the lenders listed on the signature pages thereto, the noteholders listed on the signature pages thereto, providing for the exchange of the Notes for the Issuers 11.00% Second Lien Bridge Loans and for the Stone Notes.
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Default means any event which is, or after notice or passage of time or both would be, an Event of Default.
Designated Non-cash Consideration means the Fair Market Value (as determined in good faith by Holdings) of non-cash consideration received by Holdings or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of Holdings or any direct or indirect parent of Holdings (other than Disqualified Stock), that is issued for cash (other than to Holdings or any of its Subsidiaries or an employee stock ownership plan or trust established by Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate, on the issuance date thereof.
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or
(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),
in each case prior to 91 days after the earlier of the maturity date applicable to any Notes or the date the Notes are no longer outstanding; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employees termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
Dollar-Denominated Production Payments means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.
Domestic Subsidiary means a Restricted Subsidiary that is not a Foreign Subsidiary.
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EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus , without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Fixed Charges; plus
(3) Consolidated Depreciation, Depletion and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) hurricane costs and charges (for the avoidance of doubt, without duplication of amounts excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income); plus
(6) business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); provided that the aggregate amount of cash items added back to EBITDA pursuant to this clause (6), plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to the third paragraph of the definition of Fixed Charge Coverage Ratio or the third paragraph of the definition of Consolidated Leverage Ratio, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap; plus
(7) [reserved]; plus
(8) any costs or expense Incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus
(9) the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Significant Issue Date Equityholders (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by Section 4.07, including, if applicable the amount of termination fees paid pursuant to clause (xx) thereof, in an aggregate amount not to exceed $500,000 in any calendar year pursuant to this clause (9); plus
(10) [reserved]; plus
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(11) [reserved]; plus
(12) exploration expenses or costs (to the extent Holdings adopts the successful efforts method); and
less , without duplication, to the extent the same increased Consolidated Net Income,
(13) the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments; and
(14) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
Equity Offering means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of Holdings or any direct or indirect parent of Holdings, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to Holdings or such direct or indirect parents common stock registered on Form S-4 or Form S-8; and
(2) issuances to any Subsidiary of Holdings.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes means the Notes of the Issuers issued pursuant to this Indenture in exchange for, and in an aggregate principal amount equal to or not in excess of, the Initial Notes or any Additional Notes, if applicable, in compliance with the terms of the Registration Rights Agreement.
Exchange Offer Registration Statement means the registration statement filed with the SEC in connection with the Registered Exchange Offer.
Excluded Property has the meaning set forth in the Collateral Agreement.
E xcluded Subsidiary means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a Wholly Owned Subsidiary (for so long as such Subsidiary remains a non-Wholly Owned Subsidiary), (c) any Foreign Subsidiary, (d) any FSHCO, (e) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary and (f) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of Holdings most
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recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date.
Fair Market Value means, with respect to any asset or property, the price which could be negotiated in an arms-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
Farm-In Agreement means an agreement whereby a Person agrees to pay all or a share of the drilling, completion or other expenses of one or more exploratory or development wells (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interests therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.
Farm-Out Agreement means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.
First-Priority After-Acquired Property means any property of Holdings or any Subsidiary Guarantor that secures any Secured Bank Indebtedness that is not already subject to the Lien under the Security Documents.
First-Priority Lien Obligations means (i) all Secured Bank Indebtedness that is secured by the Collateral on a senior basis to the Liens securing the Notes Obligations and (ii) all other obligations of Holdings or any of its Restricted Subsidiaries in respect of Hedging Obligations or obligations in respect of cash management services that is secured by the Collateral on a senior basis to the Liens securing the Notes Obligations in each case owing to a Person that is a holder of Secured Bank Indebtedness or an Affiliate of such holder at the time of entry into such Hedging Obligations or obligations in respect of cash management services.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date ), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
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For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event on or prior to the date that is 12 months after such applicable event; provided that the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to this paragraph or the third paragraph of the definition of Consolidated Leverage Ratio, plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be
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deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. 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 EBITDA for the applicable period.
Fixed Charges means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.
Foreign Subsidiary means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
FSHCO shall mean any Domestic Subsidiary that owns (directly or through its Subsidiaries) no material assets other than the Equity Interests of one or more Foreign Subsidiaries that are CFCs.
GAAP means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term consolidated with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
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Hedging Obligations means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.
holder or noteholder means the Person in whose name a Note is registered on the Registrars books.
Holdings means Talos Production LLC, together with its successors or assigns.
Hydrocarbons means oil, natural gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.
Incur means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
Indebtedness means, with respect to any Person:
(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
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(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;
provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) [reserved]; (5) [reserved]; (6) Production Payments and Reserve Sales; (7) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property; (8) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the Board of Directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of this Indenture; (9) obligations in respect of surety and bonding requirements of Holdings and its Restricted Subsidiaries; and (10) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.
Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.
Indenture means this Indenture, as amended or supplemented from time to time.
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Independent Financial Advisor means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of Holdings, qualified to perform the task for which it has been engaged.
Interest Payment Date has the meaning set forth in Exhibit A hereto.
Investment Grade Rating means a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.
Investment Grade Securities means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moodys and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 4.04:
(1) Investments shall include the portion (proportionate to Holdings equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of a Subsidiary of Holdings at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary equal to an amount (if positive) equal to:
(a) Holdings Investment in such Subsidiary at the time of such redesignation less
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(b) the portion (proportionate to Holdings equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.
Issue Date means May 10, 2018.
Junior Lien Obligations means the Obligations with respect to other Indebtedness permitted to be Incurred under this Indenture, which is by its terms intended to be secured by the Collateral on a basis junior to the Notes; provided such Lien is permitted to be Incurred under this Indenture.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.
Management Group means the group consisting of the directors, managers, executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as the case may be, on the Issue Date together with (1) any new directors or managers whose election by such boards of directors or managers or whose nomination for election by the shareholders of Holdings or any direct or indirect parent of Holdings, as applicable, was approved by a vote of a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors or managers on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors or managers on the Issue Date together with the directors or managers so approved constituted a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business thereof.
Mortgaged Properties means each parcel of real estate and improvements thereto with respect to which a Mortgage is required to be granted on the Issue Date pursuant to the Debt Exchange Agreement or thereafter pursuant to Section 4.16.
Mortgages means, collectively, the mortgages, trust deeds, deeds of trust, deeds to secure debt, assignment of as-extracted collateral, fixture filing and other security documents delivered with respect to Mortgaged Properties substantially in the form of Exhibit D hereto (with such changes thereto as may be necessary to account for local law matters).
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Net Income means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, amounts paid in connection with the termination of Hedging Obligations related to Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
Net Working Capital means (a) all current assets of Holdings and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business less (b) all current liabilities of Holdings and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of Holdings prepared in accordance with GAAP.
Notes Documents means this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and any Customary Intercreditor Agreement.
Notes Early Maturity Test Date means the date that is 91 days prior to April 3, 2022 (or, if such date is not a Business Day, the Business Day immediately preceding such date).
Notes Maturity Date means April 3, 2022; provided that if, on the Notes Early Maturity Test Date, the aggregate principal amount of Stone Notes outstanding exceeds $25.0 million, the Notes Maturity Date shall be the Notes Early Maturity Test Date.
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Notes Obligations means Obligations in respect of the Notes, this Indenture, the Subsidiary Guarantees and the Security Documents, including, for the avoidance of doubt, Obligations in respect of Exchange Notes and guarantees thereof.
NYMEX means the New York Mercantile Exchange.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided , that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee, the Collateral Agent and the holders of the Notes.
Officers Certificate means a certificate signed on behalf of Holdings by two Authorized Officers of Holdings, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holdings, which meets the requirements set forth in this Indenture.
Oil and Gas Business means:
(1) the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;
(2) the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;
(3) any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;
(4) any business relating to oil field sales and service; and
(5) any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.
Oil and Gas Properties means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and gas reserves or other reserves of Hydrocarbons.
Opinion of Counsel means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.
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Other Second-Lien Obligations means other Indebtedness of Holdings and its Restricted Subsidiaries that is equally and ratably secured with the Notes as permitted by this Indenture and is designated by Holdings as an Other Second-Lien Obligation in an Officers Certificate delivered to the Trustee; provided that the authorized representative of the holders of such Pari Passu Indebtedness (and any Obligations in respect of such Pari Passu Indebtedness) shall have become a party to (and such holders shall be bound by) (i) the Collateral Agreement and (ii) the terms of the Senior Lien Intercreditor Agreement and a Customary Intercreditor Agreement.
Pari Passu Indebtedness means: (a) with respect to an Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and (b) with respect to any Subsidiary Guarantor, its Subsidiary Guarantee and any Indebtedness which ranks pari passu in right of payment to such Subsidiary Guarantors Subsidiary Guarantee.
Permitted Business Investment means any Investment and/or expenditure made in the ordinary course of business and which are of a nature that is or shall have become customary in the Oil and Gas Business generally or in the geographic region in which such activities occur, including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, distributing, storing, or transporting oil, natural gas or other Hydrocarbons and minerals (including with respect to plugging and abandonment) through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including:
(1) Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;
(2) Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and
(3) Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.
Permitted Holders means, at any time, each of (i) the Co-Investors, (ii) the Management Group, (iii) any direct or indirect parent entity of Holdings as of the Issue Date, (iv) any Person that has no material assets other than the Capital Stock of Holdings and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings,
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and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof and (v) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings (a Permitted Holder Group ), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other group (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in Holdings or any Restricted Subsidiary; provided however , that the primary business of such Restricted Subsidiary is the Oil and Gas Business;
(2) any Investment in Cash Equivalents or Investment Grade Securities;
(3) any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(6) advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $2.0 million at any one time outstanding;
(7) any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
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(8) Hedging Obligations permitted under clause (x) of Section 4.03(b);
(9) [reserved];
(10) additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $37.5 million (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(11) loans and advances to officers, directors, managers or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such persons purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;
(12) Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of Cumulative Credit;
(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.07(b) (except transactions described in clauses (ii), (iv), (vi), (ix)(B) and (xvi) of such Section);
(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15) (x) guarantees issued in accordance with Section 4.03 and Section 4.11 including, without limitation, any guarantee or other obligation issued or Incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;
34
(16) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(17) [reserved];
(18) [reserved];
(19) [reserved];
(20) Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01(a) after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21) any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(22) Permitted Business Investments.
Permitted Liens means, with respect to any Person:
(1) pledges or deposits by such Person under workmens compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as landlords, carriers, warehousemens, mechanics, materialmens, repairmens, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;
(4) Liens (A) in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business and (B) securing other obligations in respect of surety and bonding requirements in connection with the Transactions;
35
(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) (A) Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.03;
(B) Liens securing Indebtedness Incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be Incurred pursuant to clause (i) of Section 4.03(b);
(C) Liens securing Indebtedness permitted to be Incurred pursuant to clause (xvi) of Section 4.03(b); provided that in the case of clause (xvi), such Lien extends only to the assets acquired and, after giving effect to such acquisition, on a pro forma basis, the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.25 to 1.00;
(D) Liens securing the Notes Obligations issued on the Issue Date; and
(E) Liens securing Other Second-Lien Obligations permitted to be Incurred pursuant to clause (iv) of Section 4.03(b);
(7) Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement and Liens securing the Notes Obligations) 1 ;
(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary;
1 |
Note to Draft : Stone Notes that remain outstanding following the Issue Date may remain secured under this basket (if the collateral is not stripped). |
36
(9) Liens on assets or property at the time Holdings or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into Holdings or any Restricted Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(10) Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03;
(11) Liens securing Hedging Obligations not Incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;
(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;
(15) Liens in favor of Holdings or any Subsidiary Guarantor;
(16) [reserved];
(17) deposits made in the ordinary course of business to secure liability to insurance carriers;
(18) Liens on the Equity Interests of Unrestricted Subsidiaries;
(19) grants of software and other technology licenses in the ordinary course of business;
(20) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided , however , that (w) such new Lien shall be limited to all or part of the same property that secured the original Lien ( plus improvements on such property), (x) the Indebtedness secured by such Lien at such time is not increased to any
37
amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any interest, premiums or defeasance costs required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise) and fees and expenses Incurred in connection therewith, (y) if the Indebtedness being refinanced, refunded, extended, renewed or replaced is secured by a Lien that is junior to the Liens securing the Notes, such new Lien shall be junior to the Liens securing the Notes and (z) if the Indebtedness being refinanced, refunded, extended, renewed or replaced is secured by a lien that is pari passu to the Liens securing the Notes, such new Lien shall be either pari passu or junior to the Liens securing the Notes;
(21) Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings or such Restricted Subsidiarys client at which such equipment is located;
(22) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(24) Liens (A) Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business and (B) on cash and Cash Equivalents and letters of credit securing any surety and bonding requirements;
(25) other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens Incurred under this clause (25) that are at that time outstanding, exceed $50.0 million; provided that First-Priority Lien Obligations and Other Second-Lien Obligations secured under this clause (25) shall be subject to the Senior Lien Intercreditor Agreement and any Junior Lien Obligations and Other Second-Lien Obligations secured under this clause (25) shall be subject to a Customary Intercreditor Agreement; provided, further , that unsecured Indebtedness and Junior Lien Obligations shall not be exchanged for Other Second-Lien Obligations or Indebtedness that is secured on a senior basis to the Notes pursuant to this clause (25);
(26) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(27) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions;
38
(28) Liens arising by virtue of any statutory or common law provisions relating to bankers Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;
(29) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;
(30) Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(31) Liens in respect of Production Payments and Reserve Sales;
(32) Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided , however , in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract; provided further such Liens shall not secure Indebtedness for borrowed money;
(33) Liens on pipelines or pipeline facilities that arise by operation of law;
(34) any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics liens, tax liens and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b); and
(35) Liens securing Junior Lien Obligations, provided that the Notes are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien; provided further that Junior Lien Obligations secured under this clause (35) shall be subject to a Customary Intercreditor Agreement.
39
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Petroleum Industry Standards shall mean 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.
Preferred Stock means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
Prior Notes Exchange means the exchange on April 3, 2017 of the Issuers 9.75% Senior Notes due 2018 for the Issuers 11.00% Second Lien Bridge Loans.
Production Payments and Reserve Sales means the grant or transfer by Holdings or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar-denominated), partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers.
Proved Developed Reserves shall mean 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 or (b) Developed Non-Producing Reserves.
Proved Reserves shall mean 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.
Public Parent Company means any direct or indirect parent company of Holdings that has any class of its Capital Stock listed for trading on a United States national securities exchange.
PV-10 shall mean, with respect to any Proved Reserves expected to be produced from any Oil and Gas Properties, the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to the Issuers and the Subsidiary Guarantors collective interests in such reserves during the remaining expected economic lives of such reserves, calculated in accordance with the most recent Bank Price Deck (as defined in the Credit Agreement) provided to Holdings by the administrative agent under the Credit Agreement governing Indebtedness incurred under Section 4.03(b)(i) pursuant to Section 2.14(i) of such Credit Agreement (or any analogous provision).
40
Rating Agency means (1) each of Moodys and S&P and (2) if Moodys or S&P ceases to rate the Notes for reasons outside of Holdings control, a nationally recognized statistical rating organization within the meaning of Rule 17g-1 under the Exchange Act selected by Holdings or any direct or indirect parent of Holdings as a replacement agency for Moodys or S&P, as the case may be.
RBL Agent means the agent for secured parties holding First-Priority Lien Obligations, as appointed pursuant to the Senior Lien Intercreditor Agreement. The RBL Agent is initially the administrative agent under the Credit Agreement.
Record Date has the meaning specified in Exhibit A hereto.
Registration Rights Agreement means, with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among the Issuers, the Subsidiary Guarantors party thereto and certain holders of the Notes.
Reserve Report shall mean a reserve engineers report, internally prepared by Holdings and audited by an Approved Petroleum Engineer, with respect to the Oil and Gas Properties of the Issuers and the Subsidiary Guarantors, or any other reserve report in form and substance reasonably equivalent (as determined in good faith by Holdings), setting forth, as of each June 30th or December 31st the Proved Reserves and the Proved Developed Reserves attributable to the Oil and Gas Properties of the Issuers and the Subsidiary Guarantors, together with a projection of the rate of production and future net revenues, operating expenses (including production taxes and ad valorem expenses) and capital expenditures with respect thereto as of such date, based upon the most recent Bank Price Deck (as defined in the Credit Agreement) provided to Holdings by the administrative agent under the Credit Agreement pursuant to Section 2.14(i) thereof (or any analogous provision).
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Payments shall have the meaning set forth in Section 4.04(a) .
Restricted Subsidiary means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.
S&P means S&P Global Ratings or any successor to the rating agency business thereof.
Sale/Leaseback Transaction means an arrangement relating to property now owned or hereafter acquired by Holdings or a Restricted Subsidiary whereby Holdings or such Restricted Subsidiary transfers such property to a Person and Holdings or such Restricted Subsidiary leases it from such Person, other than leases between Holdings and a Restricted Subsidiary or between Restricted Subsidiaries.
SEC means the Securities and Exchange Commission.
41
Second Priority Lien Obligations means (a) the Notes Obligations and (b) all Other Second-Lien Obligations.
Secured Bank Indebtedness means any Bank Indebtedness that is secured by a Permitted Lien Incurred or deemed Incurred pursuant to (i) clause (6)(B) of the definition of Permitted Liens or (ii) clause (25) of the definition of Permitted Liens that is secured by Liens on the Collateral that are pari passu with the Liens securing Indebtedness described in clause (i).
Secured Indebtedness means any Consolidated Total Indebtedness secured by a Lien.
Secured Parties means, collectively, the Trustee, the Collateral Agent and the holders of the Notes.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the Collateral Agreement, the security agreements, pledge agreements, collateral assignments, mortgages and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the Collateral Agent and the other Secured Parties as contemplated by this Indenture.
Senior Lien Intercreditor Agreement means (i) the intercreditor agreement among the RBL Agent, the Collateral Agent, and the other parties from time to time party thereto, entered into on the Issue Date, as it may be amended, restated, supplemented or otherwise modified from time to time or (ii) any replacement thereof that contains terms not materially less favorable to the holders of the Notes than the intercreditor agreement referred to in clause (i).
Significant Subsidiary means any Restricted Subsidiary that would be a Significant Subsidiary of Holdings within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
Similar Business means a business, the majority of whose revenues are derived from the activities of Holdings and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.
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Significant Issue Date Equityholders means (i) each of Apollo Global Management, LLC, Riverstone Holdings LLC, Franklin Advisers, Inc., MacKay Shields LLC and any of their respective Affiliates other than any portfolio companies (collectively, the Equity Investor ) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.
Stated Maturity means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
Stone Notes means the 7.500% Senior Secured Notes due 2022 issued by Stone Energy Corporation pursuant to that certain indenture, dated as of February 28, 2017, by and among Stone Energy Corporation, as issuer thereunder, Stone Energy Offshore, L.L.C., as subsidiary guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee.
Subordinated Indebtedness means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.
Subsidiary means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary Guarantee means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary Guarantor in accordance with the provisions of this Indenture.
Subsidiary Guarantor means any Subsidiary that Incurs a Subsidiary Guarantee; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with this Indenture, such Subsidiary ceases to be a Subsidiary Guarantor.
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Tax Distributions means any distributions described in Section 4.04(b)(xii).
Test Period means on any date of determination, four consecutive fiscal quarters of Holdings then last ended (taken as one accounting period) for which financial statements have been delivered pursuant to Section 4.02(a); provided that prior to the first date financial statements have been delivered pursuant to Section 4.02(a), the Test Period in effect shall be the four fiscal quarter period ended March 31, 2018.
TIA means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
Total Assets means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any amortization of the amount of intangible assets since September 30, 2012, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.
Transaction Expenses means any fees or expenses incurred or paid by Holdings or any of its Subsidiaries in connection with the Transactions, this Indenture and the other Notes Documents and the transactions contemplated hereby and thereby.
Transactions means, collectively, (i) the Prior Notes Exchange, (ii) the combination of Talos Energy LLC and its subsidiaries with Stone Energy Corporation pursuant to the Transaction Agreement, dated as of November 21, 2017 and (iii) the execution and delivery of this Indenture, the payment of Transaction Expenses and the other transactions contemplated by the Transaction Agreement, the Debt Exchange Agreement, this Indenture and the Notes Documents.
Trust Officer means:
(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, trust officer, assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject and who will shall have direct responsibility for the administration of this Indenture, and
(2) who shall have direct responsibility for the administration of this Indenture.
Trustee means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code or UCC means the New York Uniform Commercial Code as in effect from time to time.
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Unrestricted Subsidiary means:
(1) any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary;
Holdings may designate any Subsidiary of Holdings (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Holdings or any other Subsidiary of Holdings that is not a Subsidiary of the Subsidiary to be so designated; provided , however , that
(i) the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings or any of the Restricted Subsidiaries (other than pursuant to customary Liens or related arrangements under any oil and gas royalty trust or master limited partnership); and
(ii) (a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.
Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:
(x) (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under Section 4.03(a), or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be no less than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
U.S. Government Obligations means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
45
which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.
Volumetric Production Payments means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
Wholly Owned Restricted Subsidiary is any Wholly Owned Subsidiary that is a Restricted Subsidiary.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02 Other Definitions .
Term |
Section |
|
$ |
1.03(j) | |
Additional Interest |
Appendix A | |
Affiliate Transaction |
4.07(a) | |
Agent Members |
Appendix A | |
Asset Sale Offer |
4.06(b)(iii) | |
Bankruptcy Law |
6.01 | |
Change of Control Offer |
4.08(b) | |
Co-Issuer |
Preamble | |
covenant defeasance option |
8.01(b) | |
Covenant Suspension Event |
4.15 |
46
Term |
Section |
|
Custodian |
6.01 |
|
Definitive Note |
Appendix A |
|
Depository |
Appendix A |
|
Event of Default |
6.01 |
|
Excess Proceeds |
4.06(b)(iii) |
|
Global Notes |
Appendix A |
|
Global Notes Legend |
Appendix A |
|
Holdings |
Preamble |
|
IAI |
Appendix A |
|
incorporated provision |
13.01 |
|
Increased Amount |
4.12(d) |
|
Initial Notes |
Preamble |
|
Issuers |
Preamble |
|
legal defeasance option |
8.01(b) |
|
Notes |
Preamble |
|
Notes Custodian |
Appendix A |
|
Notice of Default |
6.01 |
|
Offer Period |
4.06(f) |
|
Paying Agent |
2.04(a) |
|
protected purchaser |
2.08 |
|
QIB |
Appendix A |
|
Refinancing Indebtedness |
4.03(b)(xv) |
|
Refunding Capital Stock |
4.04(b)(ii) |
|
Registrar |
2.04(a) |
|
Regulation S |
Appendix A |
|
Regulation S Global Notes |
Appendix A |
|
Regulation S Notes |
Appendix A |
|
Reporting Entity |
4.02(b) |
|
Restricted Notes Legend |
Appendix A |
|
Restricted Payments |
4.04(a) |
|
Restricted Period |
Appendix A |
|
Retired Capital Stock |
4.04(b)(ii) |
|
Reversion Date |
4.15 |
|
Rule 144A |
Appendix A |
|
Rule 144A Global Notes |
Appendix A |
|
Rule 144A Notes |
Appendix A |
|
Rule 501 |
Appendix A |
|
Subsidiary Guaranteed Obligations |
12.01(a) |
|
Successor Holdco |
5.01(a)(i) |
|
Successor Subsidiary Guarantor |
5.01(b)(i) |
|
Suspended Covenants |
4.15 |
|
Transfer Restricted Definitive Notes |
Appendix A |
|
Transfer Restricted Global Notes |
Appendix A |
|
Transfer Restricted Notes |
Appendix A |
|
U.S. dollars |
1.03(j) |
|
Unrestricted Definitive Notes |
Appendix A |
|
Unrestricted Global Notes |
Appendix A |
47
SECTION 1.03 Rules of Construction . Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) or is not exclusive;
(d) including means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness and Secured Indebtedness shall not be deemed subordinate or junior to other Secured Indebtedness merely because it has a junior priority with respect to the same collateral;
(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;
(h) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;
(i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;
(j) $ and U.S. dollars each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts; and
(k) whenever in this Indenture or the Notes there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Notes, such mention shall be deemed to include mention of the payment of Additional Interest, to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof.
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SECTION 1.04 Incorporation by Reference of TIA . Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
indenture securities means the Notes;
indenture security holder means a holder of a Note;
indenture to be qualified means this Indenture;
indenture trustee or institutional trustee means the Trustee; and
obligor on the Notes and the Subsidiary Guarantees means the Issuers and the Subsidiary Guarantors, respectively, and any successor obligor upon the Notes and the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
ARTICLE II
THE NOTES
SECTION 2.01 Amount of Notes . The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $390,867,820.
The Issuers may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and the Liens with respect thereto are permitted by Section 4.12 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09, 3.08, 4.06(g), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors of each Issuer and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;
(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue;
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(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof; and
(4) if applicable, that such Additional Notes that are not Transfer Restricted Notes shall not be issued in the form of Initial Notes as set forth in Exhibit A hereto.
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors of each Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of each Issuer and delivered to the Trustee at or prior to the delivery of the Officers Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.
The Initial Notes and any Additional Notes may, at the Issuers option, be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.
SECTION 2.02 Form and Dating . Provisions relating to the Initial Notes and the Exchange Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustees certificate of authentication, (ii) any Additional Notes and the Trustees certificate of authentication and (iii) the Exchange Notes and the Trustees certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuers or any Subsidiary Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1.00 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by participants of the Depository in denominations of less than $2,000.
SECTION 2.03 Execution and Authentication . The Trustee shall authenticate and make available for delivery upon a written order of the Issuers signed by one Officer of each Issuer (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $390,867,820, (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein and (c) the Exchange Notes for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes exchanged pursuant thereto or
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otherwise pursuant to an effective registration statement under the Securities Act. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, the registered holder of each of the Notes and delivery instructions. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1.00 in excess thereof.
One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee may appoint one or more authenticating agents reasonably acceptable to Holdings to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to Holdings. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.04 Registrar and Paying Agent .
(a) The Issuers shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar ) and (ii) an office or agency where Notes may be presented for payment (the Paying Agent ). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrars. The term Paying Agent includes the Paying Agent and any additional paying agents. The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.
(b) The Issuers may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. Holdings shall notify the Trustee in writing of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Holdings or any of its domestically organized Subsidiaries may act as Paying Agent or Registrar.
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(c) The Issuers may remove any Registrar or Paying Agent upon five Business Days prior written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor Registrar or Paying Agent, as the case may be, as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuers and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05 Paying Agent to Hold Money in Trust . Prior to or on each due date of the principal of and interest on any Note, the Issuers shall deposit with each Paying Agent (or if Holdings or a Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee in writing of any default by the Issuers in making any such payment. If Holdings or a Subsidiary of Holdings acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06 Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders. If the Trustee is not the Registrar, Holdings shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders.
SECTION 2.07 Transfer and Exchange . The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A . When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrars request. The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. The Issuers shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed or between a record date and the related interest payment date.
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Prior to the due presentation for registration of transfer of any Note, the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the holder of such Global Note (or its agent) or (b) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depository.
SECTION 2.08 Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies any requirement of the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a protected purchaser ) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee. If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee, with respect to the Trustee, and the Issuers, with respect to the Issuers, to protect the Issuers, the Trustee, the Paying Agent and the Registrar, as applicable, from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment. The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including, without limitation, attorneys fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and
payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.
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Every replacement Note is an additional obligation of the Issuers.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.09 Outstanding Notes . Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 13.06, a Note does not cease to be outstanding because one of the Issuers or an Affiliate of one of the Issuers holds the Note.
If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10 Cancellation . The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures. The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.11 Defaulted Interest . If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest then borne by the Notes ( plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Issuers may pay the defaulted interest to the Persons who are holders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly deliver or cause to be delivered to each affected holder (with a copy to the Trustee) a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
54
SECTION 2.12 CUSIP Numbers, ISINs, Etc . The Issuers in issuing the Notes may use CUSIP numbers, ISINs and Common Code numbers (if then generally in use), and the Trustee shall use any such CUSIP numbers, ISINs and Common Code numbers in notices of redemption as a convenience to holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of redemption, that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee in writing of any change in any such CUSIP numbers, ISINs and Common Code numbers.
SECTION 2.13 Calculation of Principal Amount of Notes . The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture. Any calculation of the Applicable Premium made pursuant to this Indenture or the Notes shall be made by Holdings and delivered to the Trustee pursuant to an Officers Certificate. The Trustee shall have no liability or responsibility for any calculation made hereunder or in connection herewith or for any information used in any such calculation.
ARTICLE III
REDEMPTION
SECTION 3.01 Redemption . The Notes may be redeemed, in whole or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the form of Note set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
SECTION 3.02 Applicability of Article . Redemption of Notes at the election of the Issuers or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article III.
SECTION 3.03 Notices to Trustee . If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the Note, Holdings shall deliver to the Trustee in an Officers Certificate that states (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. Holdings shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is a redemption pursuant to Paragraph 5 of the Note. Holdings may also include a request in such Officers Certificate that the Trustee give the notice of redemption in the Issuers name and at their expense and setting forth the information to be stated in such notice as
55
provided in Section 3.05. Any such notice may be canceled if written notice from the Issuer of such cancellation is actually received by the Trustee prior to notice of such redemption being mailed to any holder or otherwise delivered in accordance with the applicable procedures of the Depository and shall thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.04.
SECTION 3.04 Selection of Notes to Be Redeemed . In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed (and the Issuers shall notify the Trustee in writing of any such listing), or if the Notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in each case, in such manner that complies with the requirements of the Depository, if applicable); provided that no Notes of $2,000 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000. Notes and portions of them the Trustee selects shall be in amounts of $2,000 or integral multiples of $1.00 in excess thereof. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Upon selection, the Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.05 Notice of Optional Redemption .
(a) At least 30 but not more than 60 days before a redemption date pursuant to Paragraph 5 of the Note, the Issuers shall mail or cause to be mailed by first-class mail at its registered address, or otherwise deliver in accordance with the procedures of the Depository, a notice of redemption to each holder whose Notes are to be redeemed (with a copy to the Trustee), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article VIII.
Any such notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest (including Additional Interest, if any) to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the Trustee or Paying Agent to collect the redemption price, plus accrued and unpaid interest and Additional Interest, if any;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;
56
(vi) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, ISIN and/or Common Code number, if any, printed on the Notes being redeemed;
(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or Common Code number, if any, listed in such notice or printed on the Notes;
(ix) if the redemption is subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed; and
(x) at the Issuers option, that the payment of the redemption price and performance of the Issuers obligations with respect to such redemption may be performed by another Person.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
(b) At Holdings request, the Trustee shall deliver the notice of redemption in the Issuers name and at the Issuers expense subject to the terms of Section 3.03 hereof. In such event, Holdings shall notify the Trustee of such request at least three (3) Business Days (or such shorter period as is acceptable to the Trustee) prior to the date such notice is to be provided to holders.
SECTION 3.06 Effect of Notice of Redemption . Once notice of redemption is mailed or otherwise delivered in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice, except as provided in the final paragraph of Paragraph 5 of the Notes or Section 3.05(a). Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date; provided , however , that if the redemption date is after a regular Record Date and on or prior to the next Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed Notes registered on the relevant Record Date. Failure to give notice or any defect in the notice to any holder shall not affect the validity of the notice to any other holder.
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SECTION 3.07 Deposit of Redemption Price . With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if Holdings or a Subsidiary of Holdings is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest and Additional Interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest, if any, on, the Notes or portions therof to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.
SECTION 3.08 Notes Redeemed in Part . If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. Upon surrender and cancellation of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the holder (at the Issuers expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered and cancelled.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Notes . The Issuers shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds as of 11:00 a.m. New York City time money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful.
SECTION 4.02 Reports and Other Information .
(a) Notwithstanding that Holdings may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, Holdings will file with the SEC (and provide the Trustee and holders with copies thereof, without cost to each holder, within 15 days after it files them with the SEC):
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(i) within the time period specified in the SECs rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information that would have been required to be contained therein (or required in such successor or comparable form) if Holdings were subject to Section 13 or 15(d) of the Exchange Act, except to the extent permitted to be excluded by the SEC;
(ii) within the time period specified in the SECs rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information that would have been required to be contained therein (or required in such successor or comparable form) if Holdings were subject to Section 13 or 15(d) of the Exchange Act, except to the extent permitted to be excluded by the SEC;
(iii) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SECs rules and regulations), such other reports on Form 8-K (or any successor or comparable form) that would have been required if Holdings were subject to Section 13 or 15(d) of the Exchange Act; and
(iv) subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;
provided , however , that Holdings shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event Holdings will make available such information to prospective purchasers of Notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act. In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) and (iii), by posting such information to its website or on IntraLinks or any comparable online data system or website.
If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary, then the annual and quarterly information required pursuant to clauses (i) and (ii) of this Section 4.02(a) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.
(b) Notwithstanding the foregoing, Holdings will not be required to furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, as applicable.
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(c) In the event that:
(i) the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entitys level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or
(ii) any direct or indirect parent of Holdings is or becomes a Guarantor of the Notes,
consolidated reporting at such parent entitys level in a manner consistent with that described in this Section 4.02 for Holdings will satisfy this Section 4.02, and Holdings is permitted to satisfy its obligations in this Section 4.02 with respect to financial information relating Holdings by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than Holdings and its Subsidiaries, on the one hand, and the information relating to Holdings, the Subsidiary Guarantors and the other Subsidiaries of Holdings on a standalone basis, on the other hand. In addition, Holdings will make such information available to prospective investors upon request.
(d) Holdings will make such information available to prospective investors upon request. Holdings shall, for so long as any Notes remain outstanding during any period when neither it nor another Reporting Entity is subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) Notwithstanding the foregoing, Holdings will be deemed to have furnished the reports and information referred to in this Section 4.02 to the Trustee and the holders if Holdings has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied (1) prior to the commencement of the exchange offer contemplated by the Registration Rights Agreement relating to the Notes or the effectiveness of the Shelf Registration Statement, by the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration Statement in accordance with the provisions of such Registration Rights Agreement, and any amendments thereto, if such registration statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in Section 4.02(a) or (2) the posting of reports and information that would be required to be provided to the holders on Holdings website (or that of any of Holdings parent companies). The Trustee shall have no obligation to monitor whether the Issuers post such reports, information and documents on the SECs EDGAR filing system or Holdings (or that of any of Holdings parent companies) website, or collect any such information from the SECs EDGAR filing system or Holdings (or that of any of Holdings parent companies) website.
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(f) Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Issue Date, for all holders of the Notes, prospective investors and securities analysts to discuss such financial information no later than ten Business Days after the distribution of such information required by clauses (i) or (ii) of Section 4.02(a) and, prior to the date of each such conference call, will announce the time and date of such conference call and either include all information necessary to access the call or inform holders of the Notes, prospective investors and securities analysts how they can obtain such information, including, without limitation, the applicable password or login information (if applicable).
(g) The Trustee shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated hereby. Delivery of such reports, information and documents to the Trustee pursuant to this Section 4.02 is for informational purposes only, and the Trustees receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers compliance with any of their covenants under this Indenture (as to which the Trustee is entitled to rely exclusively on Officers Certificates).
SECTION 4.03 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and Holdings shall not permit any of its Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided , however , that Holdings and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary of Holdings that is not a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.25 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred (together with any other Indebtedness incurred pursuant to clause (b) below), or the Disqualified Stock or Preferred Stock had been issued (together with any other Disqualified Stock or Preferred Stock issued pursuant to clause (b) below), as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that any Restricted Subsidiary that is not a Subsidiary Guarantor may not Incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of an amount together with any Refinancing Indebtedness thereof pursuant to clause (b)(xv) below, equal to, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), $25.0 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
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(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement (or any permitted refinancing) not to exceed the greater of (x) $600.0 million and (y) the borrowing base (as defined in and determined from time to time pursuant to the Credit Agreement (or any permitted refinancing thereof)); provided, however, that the maximum principal amount of the borrowing base under the Credit Agreement (or any permitted refinancing thereof) shall not exceed either (1) the maximum amount of the borrowing base under the Credit Agreement (or any permitted refinancing thereof) at the time of Incurrence equal to the aggregate lending value to be ascribed to Oil and Gas Properties of the Issuers and the Subsidiary Guarantors against which the lenders thereunder are prepared to provide loans and letters of credit based on customary practices and standards at the time for reserve based loans and which are generally applied at the time by commercial lenders to borrowers in the Oil and Gas Business or (2) the Borrowing Base at the time of Incurrence; provided , further, that the Credit Agreement (or any permitted refinancing thereof) has a lender group that includes one or more commercial financial institutions which engage in oil and gas reserved based lending in the ordinary course of their respective businesses (an RBL Lending Financial Institution ); provided , further, that the All-In Yield of such Credit Agreement (or any permitted refinancing thereof) shall not exceed Adjusted LIBOR (as calculated under the Credit Agreement as of the Issue Date) plus 6.00%; provided , further that if the lender group does not include at least one RBL Lending Financial Institution, then the maximum principal amount available under this Section 4.03(b)(i) shall not exceed $600.0 million;
(ii) the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes (including any guarantee thereof (including the Subsidiary Guarantees)) (including Exchange Notes and related guarantees thereof) (not including any Additional Notes);
(iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i), (ii) and (iv) of this Section 4.03(b));
(iv) Indebtedness in respect of the Stone Notes, together with any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease the Stone Notes, in an aggregate principal amount not to exceed $6,060,218 (plus, in the case of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease the Stone Notes, the Additional Refinancing Amount); provided , that any such Indebtedness, Disqualified Stock or Preferred Stock refunding, refinancing or defeasing the Stone Notes constitutes unsecured Indebtedness, Junior Lien Obligations or Other Second-Lien Obligations; provided, further, that to the extent any Indebtedness, Disqualified Stock or Preferred Stock refunding or refinancing the Stone Notes pursuant to this clause (iv) is secured, such Indebtedness, Disqualified Stock or Preferred Stock constituting Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and a Customary Intercreditor Agreement and any such Indebtedness, Disqualified Stock or Preferred Stock constituting Junior Lien Obligations shall be subject to a Customary Intercreditor Agreement; provided, further, that any such Indebtedness, Disqualified Stock or Preferred Stock refunding, refinancing or defeasing the Stone Notes shall (1) have a maturity date no earlier than the scheduled maturity of the Notes, (2) not have any scheduled amortization of principal prior to the scheduled maturity of the Notes (other than scheduled amortization of principal in an amount not to exceed 1.0% per annum), (3) not include covenants and events of default that are materially more restrictive than those contained in the Notes and (4) have an All-in-Yield no greater than the All-in-Yield of the Notes;
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(v) Indebtedness Incurred by Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims;
(vi) Indebtedness arising from agreements of Holdings or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary
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Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are not Incurred for speculative purposes but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, does not exceed $50.0 million (plus, in the case of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided that to the extent Indebtedness Incurred pursuant to this clause (xii) is secured, such Indebtedness constituting First-Priority Lien Obligations and Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and any Junior Lien Obligations and Other Second-Lien Obligations shall be subject to a Customary Intercreditor Agreement; provided , further , that unsecured Indebtedness and Junior Lien Obligations shall not be exchanged for Other Second-Lien Obligations or Indebtedness that is secured on a senior basis to the Notes pursuant to this clause (xii);
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(xiii) Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to clause (b) of Section 4.04 or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xiv) any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (i) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Subsidiary Guarantee, as applicable and (ii) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent such covenant is applicable;
(xv) the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiii), (xv) and (xvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xiii), (xv) and (xvi) of this Section 4.03(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise) and fees and expenses Incurred in connection therewith) (subject to the following proviso, Refinancing Indebtedness ) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:
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(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date ( provided that this clause (1) will not apply to any refunding or refinancing of any First-Priority Lien Obligations);
(2) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Subsidiary Guarantee, as applicable, (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock or (c) unsecured Indebtedness, such Refinancing Indebtedness is unsecured Indebtedness; and
(3) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
provided, further, that to the extent Refinancing Indebtedness Incurred pursuant to this clause (xv) is secured, such Indebtedness constituting First-Priority Lien Obligations and Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and any such Indebtedness constituting Junior Lien Obligations and Other Second-Lien Obligations shall be subject to a Customary Intercreditor Agreement;
(xvi) Indebtedness, Disqualified Stock or Preferred Stock of (A) Holdings or any Restricted Subsidiary Incurred to finance an acquisition or (B) Persons that are acquired by Holdings or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either:
(1) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio of Holdings would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
(xvii) [reserved];
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(xviii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided , that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xix) Indebtedness of Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xx) Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings and any Restricted Subsidiary; provided , however , that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed $25.0 million (it being understood that any Indebtedness Incurred pursuant to this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for the purposes of Section 4.03(a) from and after the first date on which such Restricted Subsidiary could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx));
(xxi) Indebtedness of Holdings or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in clause (iv) of Section 4.04(b).
For purposes of determining compliance with this Section 4.03:
(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) of Section 4.03(b) above or is entitled to be Incurred pursuant to Section 4.03(a), then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03; provided that Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed Incurred under Section 4.03(b)(i) and may not be reclassified;
(2) [reserved];
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(3) if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and
(4) if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.
Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness other than as provided in clauses (3) and (4) above, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt.
Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Subsidiaries that are not Subsidiary Guarantors may Incur pursuant to this Section 4.03 shall not exceed an aggregate principal amount or liquidation preference at any time outstanding of $50.0 million.
Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.
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SECTION 4.04 Limitation on Restricted Payments .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of any of Holdings or any of its Restricted Subsidiaries Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(ii) purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings held by Persons other than Holdings or a Restricted Subsidiary;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of Holdings or any Subsidiary Guarantor, any Other Second-Lien Obligations or Notes owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, any Junior Lien Obligations of Holdings or any Subsidiary Guarantor and any unsecured Indebtedness representing Indebtedness for borrowed money of Holdings or any Subsidiary Guarantor, (collectively, the Restricted Indebtedness) (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) (i) in the case of Indebtedness not owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, Subordinated Indebtedness, any Junior Lien Obligations and unsecured Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement, (ii) in the case of Indebtedness owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, Subordinated Indebtedness, any Junior Lien Obligations and unsecured Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within 90 days of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b); or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as Restricted Payments ), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under Section 4.03(a);
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(3) immediately after giving effect to such transaction on a pro forma basis, the Consolidated Leverage Ratio is not greater than 3.00 to 1.00; and
(4) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i), (ii) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (C) thereof), (vi)(C), (viii) and (xiii)(B) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the amount equal to the Cumulative Credit.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of this Indenture;
(ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity Interests ( Retired Capital Stock ) or Restricted Indebtedness of Holdings, any direct or indirect parent of Holdings or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of Holdings or any direct or indirect parent of Holdings or contributions to the equity capital of Holdings (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of Holdings) (collectively, including any such contributions, Refunding Capital Stock ),
(B) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and
(C) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this Section 4.04(b) and not made pursuant to clause (ii)(B), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;
(iii) (A) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
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(w) such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith),
(x) such Indebtedness is subordinated to the Notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(y) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and
(z) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;
(B) the redemption, repurchase, defeasance or other acquisition or retirement of Other Second-Lien Obligations or Notes of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
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(x) | such Indebtedness constitutes Other Second-Lien Obligations, Notes, Junior Lien Obligations, Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date; |
(C) the redemption, repurchase, defeasance or other acquisition or retirement of Junior Lien Obligations of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
(x) | such Indebtedness constitutes Junior Lien Obligations, Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date; |
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(D) the redemption, repurchase, defeasance or other acquisition or retirement of unsecured Indebtedness representing Indebtedness for borrowed money of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
(x) | such Indebtedness constitutes Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date, |
(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of Holdings or any direct or indirect parent of Holdings held by any future, present or former employee, director, manager or consultant of Holdings or any direct or indirect parent of Holdings or any Subsidiary of Holdings pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided , however , that the aggregate Restricted Payments made under this clause (iv) do not exceed $5.0 million in any calendar year, with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $10.0 million in any calendar year; provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:
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(A) the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors, managers or consultants of Holdings and its Restricted Subsidiaries or any direct or indirect parent of Holdings ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (iii) of the definition of Cumulative Credit, plus
(B) the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Issue Date;
provided , that Holdings may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year and provided , further , that cancellation of Indebtedness owing to Holdings or any of its Restricted Subsidiaries from any present or former employees, directors, officers or consultants of Holdings, any Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;
(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Holdings or any of its Restricted Subsidiaries issued or Incurred in accordance with Section 4.03;
(vi) (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;
(B) a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (B) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and
(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this Section 4.04(b);
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provided , however , in the case of each of clauses (A) and (C) above of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Holdings would have had a Fixed Charge Coverage Ratio of at least 2.25 to 1.00;
(vii) [reserved];
(viii) [reserved];
(ix) [reserved];
(x) other Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (x) that are at that time outstanding, not to exceed $10.0 million;
(xi) [reserved];
(xii) (A) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; and (B) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (A)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);
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(xiii) any Restricted Payment, if applicable:
(A) in amounts required for any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) and general corporate operating and overhead expenses of any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;
(B) in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with Section 4.03; and
(C) in amounts required for any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;
(xiv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(xv) [reserved];
(xvi) Restricted Payments by Holdings or any Restricted Subsidiary of Holdings to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(xvii) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to provisions similar to those described in Section 4.06 and Section 4.08; provided that all Notes tendered by holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value; and
(xviii) payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and its Restricted Subsidiaries, taken as a whole, that complies with Section 5.01; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by this Indenture) and that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value;
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provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi)(B), (x) and (xiii)(B) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof; provided , further , that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by Holdings) of such property.
(c) As of the Issue Date, all of the Subsidiaries of Holdings shall be Restricted Subsidiaries. Holdings shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Holdings and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
SECTION 4.05 Dividend and Other Payment Restrictions Affecting Subsidiaries . Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to Holdings or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any of its Restricted Subsidiaries;
(b) make loans or advances to Holdings or any of its Restricted Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to Holdings or any of its Restricted Subsidiaries;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) (A) contractual encumbrances or restrictions in effect on the Issue Date and (B) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
(2) this Indenture, the Notes (and any Exchange Notes) or the Subsidiary Guarantees;
(3) applicable law or any applicable rule, regulation or order;
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(4) any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5) contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;
(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
(11) in the case of clause (c) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;
(12) [reserved];
(13) other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers ability to make anticipated principal or interest payments on the Notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.03;
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(14) an Investment otherwise permitted by this Indenture;
(15) any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of Permitted Business Investment; or
(16) any encumbrances or restrictions of the type referred to in clauses (a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Holdings or a Restricted Subsidiary to other Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
SECTION 4.06 Asset Sales .
(a) Holdings shall not, and shall not permit any Restricted Subsidiary to, cause or make an Asset Sale, unless (x) Holdings or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (if the consideration for such Asset Sale is less than or equal to $25.0 million, as determined in good faith by Holdings or if the consideration for such Asset Sale exceeds $25.0 million, as determined by an Independent Financial Advisor) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:
(i) any liabilities (as shown on Holdings or a Restricted Subsidiarys most recent balance sheet or in the notes thereto) of Holdings or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,
(ii) any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),
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(iii) with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof),
(iv) [reserved],
(v) [reserved], and
(vi) any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this clause (vi) that is at that time outstanding, not to exceed $25.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),
shall be deemed to be Cash Equivalents for the purposes of this Section 4.06.
(b) Within 365 days of an Issuers or any Restricted Subsidiarys receipt of the Net Proceeds of any Asset Sale, the Issuers or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:
(i) to repay (v) Indebtedness constituting First-Priority Lien Obligations (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (w) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor ( provided that the assets disposed of in such Asset Sale were not assets of an Issuer or a Subsidiary Guarantor), (x) Obligations under the Notes, (D) other Pari Passu Indebtedness so long as the Net Proceeds from such Asset Sale are with respect to (A) assets that secure such other Pari Passu Indebtedness on a senior basis to the Notes Obligations or (B) assets not constituting Collateral) or (z) Other Second-Lien Obligations ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Other Second-Lien Obligations under this clause (z) (which for the avoidance of doubt will not constitute Indebtedness under clauses (v), (w), (x) or (y), the Issuers will equally and ratably reduce Obligations under the Notes pursuant to Section 3.01, through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof (or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes, in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings;
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(ii) to make an Investment in any one or more businesses ( provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (x) used or useful in a Similar Business or (y) that replace the properties and assets that are the subject of such Asset Sale; provided that if the assets that were disposed of in the Asset Sale constituted Collateral, the assets acquired must also be Collateral; or
(iii) to invest in Additional Assets; provided that if the assets that were disposed of in the Asset Sale constituted Collateral, the Additional Assets must also be Collateral.
(c) Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (i) of this Section 4.06(b), shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute Excess Proceeds . When the aggregate amount of Excess Proceeds exceeds $20,000,000, the Issuers shall make an offer to all holders of Notes (and, at the option of the Issuers, to holders of any Other Second-Lien Obligations) (an Asset Sale Offer ) to purchase the maximum principal amount of Notes (and such Other Second-Lien Obligations), that is at least $2,000 and an integral multiple of $1.00 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event the Notes or such Other Second-Lien Obligations was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Other Second-Lien Obligations, such lesser price, if any, as may be provided for by the terms of such Other Second-Lien Obligations), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $20,000,000 by delivering the notice required pursuant to the terms of Sections 3.05 and 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Other Second-Lien Obligations) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuers may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Other Second-Lien Obligations) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) Pending the final application of any such Net Proceeds pursuant to this Section 4.06, Holdings or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
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(e) The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.
(f) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, Holdings shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On the Asset Sale Offer purchase date, the Issuers shall also irrevocably deposit with the Trustee or with a paying agent (or, if an Issuer or a Wholly Owned Restricted Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Asset Sale Offer purchase price to be paid in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the Offer Period ), the Issuers shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuers. The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering holder in the amount of the purchase price. In the event that the Excess Proceeds delivered by the Issuers to the Trustee are greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuers immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.
(g) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or an Issuer receives not later than one Business Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such Notes for purchase shall be made by the Issuers in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuers shall notify the Trustee of any such listing), or if such Notes are not so listed, on a pro rata basis, to the extent practicable, by lot or by such other method as the Issuers shall deem fair and appropriate (and in such manner as complies with the requirements of the Depository, if applicable); provided that no Notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Pari Passu Indebtedness.
(h) Notices of an Asset Sale Offer shall be mailed by the Issuers by first class mail, postage prepaid, or otherwise delivered in accordance with the applicable procedures of the Depository, at least 30 but not more than 60 days before the purchase date to each holder of Notes at such holders registered address (with a copy to the Trustee). If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.
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SECTION 4.07 Transactions with Affiliates .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an Affiliate Transaction ) involving aggregate consideration in excess of $2.0 million, unless:
(i) such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person;
(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (i) above; and
(iii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, Holdings delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view.
(b) The provisions of Section 4.07(a) shall not apply to the following:
(i) transactions between or among Holdings and/or any of its Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;
(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;
(iii) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, managers, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company);
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(iv) transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);
(v) payments or loans (or cancellation of loans) to officers, directors, managers, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) which are approved by a majority of the Board of Directors of Holdings in good faith;
(vi) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;
(vii) [reserved];
(viii) the execution of the Transactions, and the payment of all fees and expenses related to the Transactions (but not including fees and expenses paid to the Co-Investors, other than reimbursement of certain expenses to Franklin Advisers, Inc., MacKay Shields LLC and any of their respective Affiliates);
(ix) (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to Holdings and its Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(x) [reserved];
(xi) the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;
(xii) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;
(xiii) the entering into of any tax sharing agreement or arrangement that complies with clause (xii) of Section 4.04(b);
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(xiv) any contribution to the capital of Holdings;
(xv) transactions permitted by, and complying with, Section 5.01;
(xvi) transactions between Holdings or any of its Restricted Subsidiaries and any Person, a director or manager of which is also a director or manager of Holdings or any direct or indirect parent of Holdings; provided , however , that such director or manager abstains from voting as a director or manager of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person; provided, further , that such transaction is not with an Unrestricted Subsidiary;
(xvii) pledges of Equity Interests of Unrestricted Subsidiaries;
(xviii) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(xix) any employment agreements entered into by Holdings or any of its Restricted Subsidiaries in the ordinary course of business;
(xx) [reserved];
(xxi) [reserved];
(xxii) transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;
(xxiii) [reserved]; and
(xxiv) customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.
SECTION 4.08 Change of Control .
(a) Upon the occurrence of a Change of Control, each holder shall have the right to require the Issuers to repurchase all or any part of such holders Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Notes in accordance with Article III of this Indenture. In the event that at the time of such Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the delivering of the notice to the holders
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provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Issuers shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).
(b) Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the Notes in accordance with Article III of this Indenture, the Issuers shall mail, or otherwise deliver in accordance with the applicable procedures of the Depository, a notice (a Change of Control Offer ) to each holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holders Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase;
(ii) the circumstances and relevant facts and financial information regarding such Change of Control;
(iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent);
(iv) that unless the Issuers default in making the payment, all Notes accepted for repurchase pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Offer Payment Date;
(v) that holders of Notes electing to have any Notes repurchased pursuant to a Change of Control Offer will be required to notify the Trustee prior to the close of business on the third Business Day preceding the Change of Control Offer Payment Date; and
(vi) the other instructions determined by the Issuers or as reasonably requested by the Trustee, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased.
(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. The holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered for purchase by the holder and a statement that such holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
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(d) On the purchase date, all Notes purchased by the Issuers under this Section 4.08 shall be delivered to the Trustee for cancellation, and the Issuers shall pay the purchase price, plus accrued and unpaid interest and Additional Interest, if any, to the holders entitled thereto.
(e) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(f) Notwithstanding the foregoing provisions of this Section 4.08, the Issuers shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(g) [reserved].
(h) Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuers. Notes purchased by a third party pursuant to clauses (f) and (g) will have the status of Notes issued and outstanding.
(i) At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, Holdings shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering holder.
(j) The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section by virtue thereof.
(k) If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuers, or any third party making a Change of Control Offer in lieu of the Issuers as described above, purchases all of the Notes validly tendered and not withdrawn by such holders, the Issuers or such third party will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the date of redemption. Any such redemption shall be effected pursuant to Article III.
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(l) Prior to any Change of Control Offer, Holdings shall deliver to the Trustee an Officers Certificate stating that all conditions precedent contained herein to the right of the Issuers to make such offer have been complied with.
SECTION 4.09 Compliance Certificate . Holdings shall deliver to the Trustee within 120 days after the end of each fiscal year of Holdings, beginning with the fiscal year ending on December 31, 2018, an Officers Certificate stating that in the course of the performance by the signers of their duties as Authorized Officers of Holdings they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action Holdings is taking or proposes to take with respect thereto. The Issuers also shall comply with Sections 314(a)(4) and 314(b) of the TIA. In addition, Holdings shall deliver to the Trustee, within five Business Days after the occurrence thereof, written notice of any Default or Event of Default, its status and what action Holdings is taking or proposes to take in respect thereof. Except with respect to receipt of payments of principal and interest on the Notes and any Event of Default information contained in the Officers Certificate delivered to it pursuant to this Section 4.09, the Trustee shall have no duty to review, ascertain or confirm the Issuers compliance with or the breach of any representation, warranty or covenant made in this Indenture.
SECTION 4.10 [Reserved] .
SECTION 4.11 Future Guarantors . Holdings shall cause (i) each Wholly Owned Restricted Subsidiary (other than any Excluded Subsidiary), (ii) any Subsidiary that ceases to be an Excluded Subsidiary and is a Wholly Owned Restricted Subsidiary and (iii) any other Subsidiary that guarantees any Indebtedness of either of the Issuers or any of the Subsidiary Guarantors to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C hereto pursuant to which such Subsidiary will guarantee the Issuers Obligations under the Notes and this Indenture on the terms and conditions set forth in this Indenture, a joinder to the Collateral Agreement, and, to the extent required pursuant to Section 4.16, a joinder agreement to each applicable Security Document or new Security Documents, and, if required by the Senior Lien Intercreditor Agreement, a joinder to the Senior Lien Intercreditor Agreement. Each Subsidiary Guarantee shall be released in accordance with Section 12.02 .
SECTION 4.12 Liens .
(a) Holdings shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or any of its Restricted Subsidiaries.
(b) [Reserved].
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(c) For purposes of determining compliance with this Section 4.12, (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in the definition of Permitted Liens or pursuant to Section 4.12(a) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in the definition of Permitted Liens, Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.12 and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of Permitted Liens and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses.
(d) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The Increased Amount of any Indebtedness means any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness.
SECTION 4.13 [Intentionally Omitted] .
SECTION 4.14 Maintenance of Office or Agency .
(a) The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee as set forth in Section 13.02.
(b) The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission shall in any manner relieve an Issuer of its obligation to maintain an office or agency for such purposes. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
(c) The Issuers hereby designates the Corporate Trust Office of the Trustee or its agent as such office or agency of the Issuers in accordance with Section 2.04.
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SECTION 4.15 Covenant Suspension Event . If on any date following the Issue Date, (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing, then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a Covenant Suspension Event ), the following provisions of this Indenture will no longer be applicable (collectively, the Suspended Covenants ):
(1) Section 4.03 (Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock);
(2) Section 4.04 (Limitation on Restricted Payments);
(3) Section 4.05 (Dividend and Other Payment Restrictions Affecting Subsidiaries);
(4) Section 4.06 (Asset Sales);
(5) Section 4.07 (Transactions with Affiliates);
(6) Section 4.11 (Future Guarantors);
(7) Section 4.16 (After-Acquired Property); and
(8) Section 5.01(a)(iv) (Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets).
In the event that Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the Reversion Date ) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then Holdings and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events. The period of time between the Covenant Suspension Event and the Reversion Date is referred to as the Suspension Period.
On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to Sections 4.03(a) or one of the clauses set forth in Section 4.03(b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Sections 4.03(a) or (b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (iii) of Section 4.03(b). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 4.04(a). No Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, Holdings must comply with the terms of Section 4.11.
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For purposes of Section 4.06, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.
The Issuers shall provide the Trustee with written notice of each Covenant Suspension Event or Reversion Date within five Business Days of the occurrence thereof. The Trustee shall have no duty to monitor or provide notice to the holders of Notes of any such Covenant Suspension Event or Reversion Date.
SECTION 4.16 After-Acquired Property .
(a) Upon the acquisition by Holdings or any Subsidiary Guarantor of any First-Priority After-Acquired Property, or upon any additional Restricted Subsidiary becoming a Subsidiary Guarantor that has First-Priority After-Acquired Property, Holdings or such Subsidiary Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and other Security Documents as shall be reasonably necessary to vest in the Collateral Agent a perfected second-priority security interest, subject only to Permitted Liens, in such First-Priority After-Acquired Property and to have such First-Priority After-Acquired Property (but subject to the limitations described in the Security Documents, the Senior Lien Intercreditor Agreement and limitations under applicable local law) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such First-Priority After-Acquired Property to the same extent and with the same force and effect.
(b) Notwithstanding the foregoing, if granting a security interest in any property pursuant to the foregoing clause (a) requires the consent of a third party, Holdings will use commercially reasonable efforts to obtain such consent with respect to such security interest for the benefit of the Collateral Agent on behalf of the Secured Parties. If such third party does not consent to the granting of such security interest after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such security interest.
(c) Holdings shall review each Reserve Report prepared as of each June 30th and December 31st (which shall be prepared by no later than September 30th of the same year for Reserve Reports as of June 30th and March 31st of the following year for Reserve Reports as of December 31st) and the list of current Mortgaged Properties, to ascertain whether the PV-10 of the Mortgaged Properties (calculated at the time of redetermination) meets the Collateral Coverage Minimum after giving effect to exploration and production activities, acquisitions, dispositions and production. In the event that the PV-10 of the Mortgaged Properties (calculated at the time of review) does not meet the Collateral Coverage Minimum, then the Issuers shall use best efforts, and shall cause the Subsidiary Guarantors to use best efforts to, grant, no later than (i) with respect to the Reserve Report prepared as of December 31st, April 30th of the following fiscal year and (ii) with respect to the Reserve Report prepared as of June 30th, October 31st of the same fiscal year, to the Collateral Agent as security for the Obligations a second-priority Lien interest (subject to Liens permitted by this Indenture) on
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additional Oil and Gas Properties not already subject to a Lien of the Security Documents such that, after giving effect thereto, the PV-10 of the Mortgaged Properties (calculated at the time of review) meets the Collateral Coverage Minimum. All such Liens will be created and perfected by and in accordance with the provisions of the Security Documents, including, if applicable, any additional Mortgages. In order to comply with the foregoing, if any Restricted Subsidiary places a Lien on its property and such Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with the provisions of Section 4.16(a) and (b).
Notwithstanding anything herein to the contrary, (i) if the Issuers or any Subsidiary Guarantor grants a lien on any assets to secure any Secured Bank Indebtedness, the Issuers or the applicable Subsidiary Guarantor shall be required to provide a perfected second-priority security interest in such assets, subject to only Permitted Liens, to secure the Notes Obligations and (ii) if the Issuers or any Subsidiary Guarantor grants a lien on any assets to secure any Other Second-Lien Obligations, the Issuers or the applicable Subsidiary Guarantor shall be required to provide a perfected second-priority security interest in such assets, pari passu with such Other Second-Lien Obligations, subject to only Permitted Liens, to secure the Notes Obligations.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01 When Holdings May Merge or Transfer Assets .
(a) Holdings may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Holdings is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:
(i) Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the Successor Company );
(ii) the Successor Company (if other than Holdings) expressly assumes all the obligations of Holdings under this Indenture, the Security Documents and the Registration Rights Agreement pursuant to supplemental indentures;
(iii) immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;
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(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company, or such Restricted Subsidiary at the time of such transaction), either
(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be no less than such ratio for Holdings and its Restricted Subsidiaries immediately prior to such transaction;
(v) if Holdings is not the Successor Company, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Persons obligations under this Indenture and the Notes; and
(vi) the Successor Company shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with this Indenture.
The Successor Company (if other than Holdings) will succeed to, and be substituted for, Holdings under this Indenture and the Notes, and in such event Holdings shall be automatically released and discharged from its obligations under this Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (a) Holdings or any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to Holdings or to a Restricted Subsidiary, and (b) Holdings may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating Holdings in another state of the United States, the District of Columbia or any territory of the United States or may convert into a corporation, partnership or limited liability company, so long as the amount of Indebtedness of Holdings and its Restricted Subsidiaries is not increased thereby. This Article V will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Holdings and the Restricted Subsidiaries.
For purposes of this Section 5.01(a) only, the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of Holdings, which properties and assets, if held by Holdings instead of such Subsidiaries, would constitute all or substantially all the properties and assets of Holdings on a consolidated basis, shall be deemed to be the transfer of all or substantially all the properties and assets of Holdings.
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(b) Subject to the provisions of Section 12.02(b)(i), no Subsidiary Guarantor shall, and Holdings shall not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) either (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Subsidiary Guarantor ) and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and
(ii) the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.
Except as otherwise provided in this Indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under this Indenture and its Subsidiary Guarantee. Notwithstanding the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Issuer or another Subsidiary Guarantor.
In addition, notwithstanding the foregoing, a Subsidiary Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to an Issuer or any Subsidiary Guarantor.
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ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default . An Event of Default with respect to Notes occurs if:
(a) there is a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,
(b) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,
(c) there is a failure by Holdings for 60 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements in Section 4.02,
(d) there is a failure by Holdings or any of the Restricted Subsidiaries for 30 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (a), (b) or (c) above or (k) below) contained in the Notes, this Indenture or the Security Documents,
(e) there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million or its foreign currency equivalent,
(f) Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,
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(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against Holdings or any Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of Holdings or any Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of Holdings or any Significant Subsidiary or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,
(h) there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $25.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days,
(i) the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the Notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Subsidiary Guarantee with respect to the Notes and such Default continues for 10 days,
(j) unless such Liens have been released in accordance with the provisions of this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement, Liens in favor of the Holders with respect to Collateral with a Fair Market Value in excess of $100.0 million cease to be valid or enforceable and such Default continues for 30 days, or an Issuer shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any Subsidiary Guarantor, Holdings fails to cause such Subsidiary Guarantor to rescind such assertions within 30 days after Holdings has actual knowledge of such assertions; or
(k) there is a failure by Holdings to comply for 15 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee) with any of its obligations, covenants or agreements under Section 5.01(a).
The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
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However, a default under clause (c), (d) or (k) above shall not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding Notes (with a copy to the Trustee) notify the Issuers of the Default and the Issuers do not cure such Default within the time specified in clause (c), (d) or (k) as applicable, after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default .
The term Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
SECTION 6.02 Acceleration . If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to Holdings) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes (with a copy to the Trustee) by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon the Trustees or the holders of at least 30% in principal amount of outstanding Notes notification to the Issuers of such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Issuers occurs, the principal of, premium, if any, and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders. The holders of a majority in principal amount of outstanding Notes by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the Notes, if within 20 days after such Event of Default arose the Issuers deliver an Officers Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.
If the Notes are accelerated or otherwise become due prior to their maturity date, in each case, as a result of an Event of Default (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)) on or after the first anniversary of the Issue Date, the amount of principal of, accrued and unpaid interest and premium on the Notes that becomes due and payable shall equal the optional redemption price, plus accrued and unpaid interest to such date, applicable with respect to an optional redemption of the Notes, in effect on the date of such acceleration as if such acceleration were an optional redemption of the Notes accelerated. If the Notes are accelerated or otherwise become due prior to their maturity date, in each case, as a result of an Event of Default (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)) prior to the first anniversary of the
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Issue Date, the amount of principal of, accrued and unpaid interest and premium on the Notes that becomes due and payable shall equal 100% of the principal amount of the Notes prepaid plus the Applicable Premium in effect on the date of such acceleration, plus accrued and unpaid interest to such date, as if such acceleration were an optional redemption of the Notes accelerated.
In any such case, the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall constitute part of the Notes, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the Issuers and the Subsidiary Guarantors, on the one hand, and the holders of the Notes, on the other hand, as to a reasonable calculation of each holders lost profits as a result thereof. Any amounts payable pursuant to the above shall be presumed to be the liquidated damages sustained by each holder of Notes, and each of the Issuers and the Subsidiary Guarantors agrees that it is reasonable under the circumstances currently existing. The optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall also be payable in the event the Notes are satisfied or released by foreclosure (whether by power of judicial proceeding, deed in lieu of foreclosure or by any other means). EACH OF THE ISSUERS AND THE SUBSIDIARY GUARANTORS EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING AMOUNTS IN CONNECTION WITH ANY SUCH ACCELERATION. Each of the Issuers and the Subsidiary Guarantors expressly agrees (to the fullest extent it may lawfully do so) that: (A) each of the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, is reasonable and is the product of an arms length transaction between sophisticated business people, ably represented by counsel; (B) the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the holders of the Notes, the Issuers and the Subsidiary Guarantors giving specific consideration in this transaction for such agreement to pay the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable; and (D) the Issuers and the Subsidiary Guarantors shall be estopped hereafter from claiming differently than as agreed to in this paragraph. Each of the Issuers and the Subsidiary Guarantors expressly acknowledges that its agreement to pay the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, to the holders of the Notes as herein described is a material inducement to the holders of the Notes to receive the Notes.
SECTION 6.03 Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. To the extent required by law, all available remedies are cumulative.
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SECTION 6.04 Waiver of Past Defaults . Provided the Notes are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes then outstanding by written notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each holder affected. When a Default is waived, it is deemed cured and the Issuers, the Trustee and the holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05 Control by Majority . The holders of a majority in principal amount of then outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Article VII, that the Trustee determines is unduly prejudicial to the rights of any other holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders) or that would involve the Trustee in personal liability or expenses for which it is not adequately indemnified; provided, however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.
SECTION 6.06 Limitation on Suits .
(a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to this Indenture, the Notes or the Security Documents unless:
(i) such holder has previously given the Trustee written notice that an Event of Default is continuing,
(ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy,
(iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
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(b) A holder may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder.
SECTION 6.07 Contractual Rights of the Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the contractual right of any holder to receive payment of principal of and interest on the Note held by such holder, on or after the respective due dates thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder.
SECTION 6.08 Collection Suit by Trustee . If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and any amount due hereunder.
SECTION 6.09 Trustee May File Proofs of Claim . The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the holders allowed in any judicial proceedings relative to the Issuer, the Subsidiary Guarantors, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee hereunder. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.
SECTION 6.10 Application of Funds . After the exercise of remedies (or after all Notes have automatically become immediately due and payable), any amounts received by the Trustee on account of the Obligations shall, subject to the Senior Lien Intercreditor Agreement, be applied by the Trustee in accordance with Section 4.02 of the Collateral Agreement.
SECTION 6.11 Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Article VI does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the Notes.
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SECTION 6.12 Waiver of Stay or Extension Laws . Neither the Issuers nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuers and the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee .
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and
(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the form of certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
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(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good faith unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and the TIA.
SECTION 7.02 Rights of Trustee .
(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be responsible or liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided , however , that the Trustees conduct does not constitute willful misconduct or negligence as determined by a court of competent jurisdiction in a final non-appealable order.
(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
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(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the holders of not less than a majority in principal amount of the Notes at the time outstanding, and indemnified in accordance with Section 6.05, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney, at the expense of the Issuers and shall Incur no liability of any kind by reason of such inquiry or investigation.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or the Security Documents at the written request or direction of any of the holders pursuant to this Indenture, unless, subject to the terms hereof, such holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be Incurred by it in compliance with such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder, including the Collateral Agent.
(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.
(j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding upon future holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.
(k) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes and this Indenture.
(l) The Trustee may request that the Issuers deliver an Officers Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers Certificate may be signed by any Person authorized to sign an Officers Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
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(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.
(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.
(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.
SECTION 7.03 Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10 and 7.11.
SECTION 7.04 Trustee s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Subsidiary Guarantees or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers or any Subsidiary Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustees certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j) or (k), or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 13.02 hereof from the Issuers, any Subsidiary Guarantor or any holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of Notes and the Issuers having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.
SECTION 7.05 Notice of Defaults . If a Default occurs and is continuing and is actually known to a Trust Officer, the Trustee shall mail, or deliver electronically if held by the Depository, to each holder of the Notes notice of the Default within the later of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee at the Corporate Trust Office. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold
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notice if and so long it in good faith determines that withholding notice is in the interests of the noteholders. Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year and whether such Default is continuing and, if so, proposed steps to cure such Default. Holdings also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.
SECTION 7.06 Reports by Trustee to the Holders . As promptly as practicable after each November 1 beginning with the November 1 following the date of this Indenture, and in any event prior to December 1 in each year, the Trustee shall send to each holder a brief report dated as of such November 1 that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA.
Pursuant to Section 313(d) of the TIA, a copy of each report at the time of its sending to the holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed if the Notes are listed. Holdings agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. All reports pursuant to this Section 7.06 shall be provided in accordance with Section 313(c) of the TIA.
SECTION 7.07 Compensation and Indemnity . The Issuers shall pay to the Trustee (acting in any capacity hereunder) and the Collateral Agent from time to time compensation for their acceptance of this Indenture and their services hereunder. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee and the Collateral Agent upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees and the Collateral Agents agents, counsel, accountants and experts. The Issuers and the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee (acting in any capacity hereunder) and the Collateral Agent or any predecessor Trustee or Collateral Agent and their directors, officers, employees and agents against any and all loss, liability, claim, damage or expense (including reasonable attorneys fees and expenses and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) Incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or any Subsidiary Guarantee against any Issuer or any Subsidiary Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by any Issuer, any Subsidiary Guarantor, any holder or any other Person). The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee and/or the Collateral Agent. The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided , however , that any failure so to notify the Issuers shall not relieve any Issuer or any Subsidiary Guarantor of its indemnity obligations hereunder. The Issuers shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers expense in the defense. Such indemnified parties may have separate counsel and the Issuers and such Subsidiary Guarantors, as applicable, shall pay the fees and expenses of such
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counsel; provided , however , that the Issuers shall not be required to pay such fees and expenses if it assumes such indemnified parties defense and, in such indemnified parties reasonable judgment, there is no actual or potential conflict of interest between the Issuers and the Subsidiary Guarantor, as applicable, and such parties in connection with such defense. The Issuers need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such partys own willful misconduct or negligence.
To secure the Issuers and the Subsidiary Guarantors payment obligations hereunder, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Issuers and the Subsidiary Guarantors payment obligations pursuant to this Indenture shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee and/or the Collateral Agent. Without prejudice to any other rights available to the Trustee or the Collateral Agent under applicable law, when the Trustee or the Collateral Agent Incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
No provision of this Indenture shall require the Trustee or the Collateral Agent to expend or risk its own funds or otherwise Incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.
SECTION 7.08 Replacement of Trustee .
(a) The Trustee may resign at any time by so notifying the Issuer. The holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuers may upon five Business Days notice remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuers or by the holders of a majority in principal amount of the Notes and such holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.
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(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail, or otherwise deliver in accordance with the procedures of the Depository, a notice of its succession to the holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07. The retiring (or removed) Trustee shall have no liability or responsibility for the actions or inaction of any successor Trustee.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the holders of 10% in principal amount of the Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the Trustees duty to resign is stayed as provided in Section 310(b) of the TIA, any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers obligations under Article VII shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification . The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided , however , that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.
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SECTION 7.11 Preferential Collection of Claims Against the Issuers . The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
SECTION 7.12 Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification .
(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee and the Collateral Agent in good faith.
(b) The Trustee and the Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Issuers to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 7.01 of this Indenture, the Trustee and the Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Senior Lien Intercreditor Agreement, the Collateral Agreement or any other Security Document by the Issuers, the Subsidiary Guarantors or the Collateral Agent (in the case of the Trustee). The Trustee and the Collateral Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Issuers or by the Trustee or the Collateral Agent, in relation to any matter arising in the administration of this Indenture or the Security Documents.
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ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Discharge of Liability on Notes; Defeasance .
(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights, indemnities and immunities of the Trustee and rights of registration or transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when:
(i) either (A) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (B) all of the Notes (1) have become due and payable, (2) will become due and payable at their Stated Maturity within one year or (3) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in U.S. dollars in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit (in the case of Notes that have become due and payable) or to the date of maturity or redemption, as applicable, together with irrevocable written instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption;
(ii) the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under this Indenture; and
(iii) the Issuers have delivered to the Trustee an Officers Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time may terminate (i) all of their obligations under the Notes and this Indenture with respect to the holders of the Notes ( legal defeasance option ), and (ii) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.15, 4.16 and the operation of Section 5.01 for the benefit of the holders of the Notes, and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and 6.01(g) with respect to Significant Subsidiaries only), 6.01(h), 6.01(i) 6.01(j) and 6.01(k) ( covenant defeasance option ). The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. In the event that the Issuers terminate all of their obligations under the Notes and this Indenture (with respect to such Notes) by exercising their legal defeasance option or their covenant defeasance option, the obligations of each Subsidiary Guarantor with respect to its Subsidiary Guarantee and the Security Documents shall be terminated simultaneously with the termination of such obligation.
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If the Issuers exercises their legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuers exercise their covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and (g), with respect to Significant Subsidiaries only), 6.01(h), 6.01(i), 6.01(j) or 6.01(k) or because of the failure of Holdings to comply with Section 5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09 and Article VII, including, without limitation, Sections 7.07 and 7.08, and in this Article VIII and the rights, indemnities and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full. Thereafter, the Issuers obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights, indemnities and immunities of the Trustee under this Indenture shall survive such satisfaction and discharge.
SECTION 8.02 Conditions to Defeasance .
(a) The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee cash in U.S. dollars, U.S. Government Obligations or a combination thereof sufficient to pay the principal of and premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be;
(ii) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;
(iii) no Default specified in Section 6.01(f) or (g) with respect to the Issuers shall have occurred or is continuing on the date of such deposit;
(iv) the deposit does not constitute a default under any other material agreement or instrument binding on the Issuers;
(v) in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S.
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federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;
(vi) such exercise does not impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates thereof or to institute suit for the enforcement of any payment on or with respect to such holders Notes;
(vii) in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(viii) the Issuers deliver to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with.
(b) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III.
SECTION 8.03 Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. The Trustee shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.
SECTION 8.04 Repayment to Issuer . Each of the Trustee and each Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it as provided in this Article VIII that, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article VIII.
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Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
SECTION 8.05 Indemnity for U.S. Government Obligations . The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06 Reinstatement . If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Issuers have made any payment of principal of, or interest on, any such Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.
ARTICLE IX
AMENDMENTS AND WAIVERS
SECTION 9.01 Without Consent of the Holders .
(a) The Issuers, the Trustee and the Collateral Agent may amend this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and/or any Customary Intercreditor Agreements without notice to or consent of any holder:
(i) to cure any ambiguity, omission, mistake, defect or inconsistency;
(ii) to provide for the assumption by a Successor Company (with respect to an Issuer) of the obligations of an Issuer under this Indenture, the Notes, the Security Documents and the Senior Lien Intercreditor Agreement;
(iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under this Indenture, its Subsidiary Guarantee, the Security Documents and the Senior Lien Intercreditor Agreement;
(iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;
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(v) [reserved];
(vi) to add a Subsidiary Guarantee or collateral with respect to the Notes,
(vii) [intentionally omitted];
(viii) to release Collateral or a Subsidiary Guarantee as permitted by this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement;
(ix) to add additional secured creditors holding First-Priority Lien Obligations, Other Second-Lien Obligations or Junior Lien Obligations so long as such obligations are not prohibited by this Indenture;
(x) to add to the covenants of the Issuers or any Subsidiaries for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers or any Subsidiary;
(xi) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of, this Indenture under the TIA;
(xii) to make any change that does not adversely affect the rights of any holder;
(xiii) to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities; or
(xiv) to effect any provision of this Indenture.
(b) The Senior Lien Intercreditor Agreement may be amended without the consent of any holder of Notes, the Trustee or the Collateral Agent in connection with the permitted entry into the Senior Lien Intercreditor Agreement of any class of additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or Junior Lien Obligations to effectuate such entry into the Senior Lien Intercreditor Agreement and to make the lien of such class equal and ratable with, as applicable, the lien of the First-Priority Lien Obligations, the Other Second-Lien Obligations or the Junior Lien Obligations, in each case, to the extent such First-Priority Lien Obligations, Other Second-Lien Obligations or Junior Lien Obligations are expressly permitted to be incurred pursuant to this Indenture.
(c) After an amendment under this Section 9.01 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.
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SECTION 9.02 With Consent of the Holders . The Issuers, the Trustee and the Collateral Agent may amend this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and/or any Customary Intercreditor Agreements with the consent of the Issuers and the holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each holder of an outstanding Note affected, an amendment may not:
(1) reduce the amount of Notes whose holders must consent to an amendment,
(2) reduce the rate of or extend the time for payment of interest on any Note,
(3) reduce the principal of or extend the Stated Maturity of any Note,
(4) reduce the premium payable (if any) upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article III,
(5) make any Note payable in money other than that stated in such Note,
(6) expressly subordinate the Notes or any Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor,
(7) impair the contractual right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holders Notes,
(8) make any change in the amendment provisions which require each holders consent or in the waiver provisions, or
(9) make any change in the provisions dealing with the application of proceeds of Collateral in the Senior Lien Intercreditor Agreement, the Security Documents or this Indenture that would adversely affect the holders of Notes.
Except as expressly provided by this Indenture or the Security Documents, without the consent of the holders of at least 66.67% in aggregate principal amount of the Notes then outstanding, no amendment may modify or release the Subsidiary Guarantee of any Significant Subsidiary in any manner adverse to the holders of Notes. Without the consent of the holders of at least 66.67% in aggregate principal amount of the Notes then outstanding, no amendment or waiver may release all or substantially all of the Collateral from the Lien of the Security Documents with respect to the Notes.
It shall not be necessary for the consent of the holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
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SECTION 9.03 Revocation and Effect of Consents and Waivers .
(a) A consent to an amendment or a waiver by a holder of a Note shall bind the holder and every subsequent holder of that Note or portion of the Note that evidences the same debt as the consenting holders Note, even if notation of the consent or waiver is not made on the Note. However, any such holder or subsequent holder may revoke the consent or waiver as to such holders Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers Certificate from Holdings certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuers or the Trustee of consents by the holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuers, the Subsidiary Guarantors and the Trustee.
(b) The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
SECTION 9.04 Notation on or Exchange of Notes . If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the holder. Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.05 Trustee to Sign Amendments . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities, privileges, protections, indemnities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, (i) an Officers Certificate, (ii) an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and
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complies with the provisions hereof, (iii) a copy of the resolution of the Board of Directors, certified by the Secretary or Assistant Secretary of Holdings, authorizing the execution of such amendment, supplement or waiver and (iv) if such amendment, supplement or waiver is executed pursuant to Section 9.02, evidence reasonably satisfactory to the Trustee of the consent of the holders required to consent thereto.
SECTION 9.06 Additional Voting Terms; Calculation of Principal Amount . All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.
SECTION 9.07 Compliance with Trust Indenture Act . From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.
ARTICLE X
RANKING OF NOTE LIENS
SECTION 10.01 Relative Rights . The Senior Intercreditor Agreement governs the relative rights and remedies, as lienholders, among holders of Liens securing First-Priority Lien Obligations and holders of Liens securing Second Priority Lien Obligations.
ARTICLE XI
COLLATERAL
SECTION 11.01 Security Documents . The payment of the principal of and interest and premium, if any, on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Issuers pursuant to the Notes or by the Subsidiary Guarantors pursuant to the Subsidiary Guarantees, the payment of all other Notes Obligations and the performance of all other obligations of the Issuers and the Subsidiary Guarantors under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents shall be secured as provided in the Security Documents, which the Issuers and the applicable Subsidiary Guarantors entered into on the Issue Date and will be secured by Security Documents hereafter delivered as required or permitted by this Indenture. Holdings shall, and shall cause each Restricted Subsidiary to, and each Restricted Subsidiary shall, make all filings (including filings of continuation statements and amendments to UCC financing statements that may be necessary to continue the effectiveness of such UCC financing statements) and all other actions as are necessary or required by the Security Documents to maintain (at the sole cost and expense of Holdings and the Restricted Subsidiaries) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a continuing perfected security interest subject only to Permitted Liens and Liens permitted by Section 4.12.
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SECTION 11.02 Collateral Agent .
(a) The Collateral Agent is authorized and empowered to appoint one or more co-Collateral Agents or sub-agents as it deems necessary or appropriate.
(b) Subject to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency, continuation, maintenance or protection of any Lien securing Second Priority Lien Obligations or otherwise granted in connection with the Transactions, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens securing Second Priority Lien Obligations or the Security Documents or any delay in doing so.
(c) The Collateral Agent will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture); provided that in the event of conflict between directions received pursuant to the Security Documents and the Senior Lien Intercreditor Agreement and directions received hereunder, the Collateral Agent will be subject to directions received pursuant to the Security Documents and the Senior Lien Intercreditor Agreement. Except as directed by the Trustee as required or permitted by this Indenture and any other representatives or pursuant to the Security Documents or the Senior Lien Intercreditor Agreement, the Collateral Agent will not be obligated:
(1) to act upon directions purported to be delivered to it by any other Person;
(2) to foreclose upon or otherwise enforce any Lien securing Second Priority Lien Obligations; or
(3) to take any other action whatsoever with regard to any or all of the Liens securing Second Priority Lien Obligations (or any Lien), Security Documents or Collateral.
(d) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing Second Priority Lien Obligations or the Security Documents.
(e) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each co-Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits of the Trustee under Article VII hereof.
(f) The holders of Notes agree that the Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by this Indenture and the Security Documents. Furthermore, each holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the Collateral Agent to enter into and perform each of the Senior Lien Intercreditor Agreement and Security Documents in each of its capacities thereunder.
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(g) If the Issuers (i) Incur First-Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First-Priority Lien Obligations entitled to the benefit of the Senior Lien Intercreditor Agreement is concurrently retired, and (ii) deliver to the Collateral Agent an Officers Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Senior Lien Intercreditor Agreement) in favor of a designated agent or representative for the holders of the First-Priority Lien Obligations so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
(h) At all times when the Trustee is not itself the Collateral Agent, the Issuers will deliver to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all documents delivered to the Collateral Agent pursuant to this Indenture and the Security Documents.
(i) If the Issuers Incur any Other Second-Lien Obligations or any Junior Lien Obligations and deliver to the Collateral Agent and/or the Trustee, as applicable, an Officers Certificate requesting the Collateral Agent and/or the Trustee, as applicable, to enter into a Customary Intercreditor Agreement with a designated agent or representative for the holders of the Other Second-Lien Obligations or the Junior Lien Obligations, as applicable, so Incurred, the Collateral Agent and/or the Trustee, as applicable, shall (and each is hereby authorized to) enter into such Customary Intercreditor Agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
SECTION 11.03 Authorizations of Actions to Be Taken . (a) Each holder of Notes, by its acceptance thereof, consents and agrees to the terms hereof and of each Security Document and the Senior Lien Intercreditor Agreement as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee and/or the Collateral Agent to enter into the Senior Lien Intercreditor Agreement and the Security Documents to which it is a party, authorizes and empowers the Trustee to direct the Collateral Agent to enter into, and the Collateral Agent to execute and deliver, the Security Documents and the Senior Lien Intercreditor Agreement and authorizes and empowers the Trustee and the Collateral Agent to bind the holders of Notes and other holders of Obligations as set forth in the Security Documents to which it is a party and the Senior Lien Intercreditor Agreement and to perform its obligations and exercise its rights and powers thereunder.
(b) Subject to the provisions of the Senior Lien Intercreditor Agreement and the Security Documents, the Trustee and the Collateral Agent are authorized and empowered to receive for their benefit and for the benefit of the holders of Notes any funds collected or distributed under the Security Documents to which the Collateral Agent or Trustee is a party and to make further distributions of such funds to the holders of Notes according to the provisions of this Indenture.
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(c) Subject to the provisions of Article VI, Section 7.01 and Section 7.02 hereof, the Senior Lien Intercreditor Agreement and the Security Documents, upon the occurrence and continuance of an Event of Default, the Trustee may, in its sole discretion and without the consent of the holders, direct, on behalf of the holders, the Collateral Agent to take all actions necessary or appropriate in order to:
(1) foreclose upon or otherwise enforce any or all of the Liens securing the Second Priority Lien Obligations;
(2) enforce any of the terms of the Security Documents to which the Collateral Agent or Trustee is a party; or
(3) collect and receive payment of any and all Notes Obligations.
Subject to the Senior Lien Intercreditor Agreement, the Trustee is authorized and empowered to institute and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings as are necessary to protect or enforce the Liens securing the Second Priority Lien Obligations or the Security Documents to which the Collateral Agent or the Trustee is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of the Security Documents to which the Collateral Agent or the Trustee is a party or this Indenture, and such suits and proceedings as are necessary to preserve or protect its interests and the interests of the holders of Notes in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of holders, the Trustee or the Collateral Agent.
SECTION 11.04 Release of Liens . (a) Notwithstanding anything to the contrary in the Security Documents, Collateral may be released from the Lien and security interest created by the Security Documents to secure the Notes and Obligations under this Indenture at any time or from time to time in accordance with the provisions of the Senior Lien Intercreditor Agreement or the Security Documents or as provided hereby. The applicable assets included in the Collateral shall be automatically released from the Liens securing the Notes, and the applicable Subsidiary Guarantor shall be automatically released from its obligations under this Indenture and the Security Documents, under any one or more of the following circumstances or any applicable circumstance as provided in the Senior Lien Intercreditor Agreement or the Security Documents:
(1) to enable the Issuers and its Subsidiaries to consummate the disposition of such property or assets to a Person that is not an Issuer or a Subsidiary Guarantor to the extent permitted under Section 4.06 or not otherwise constituting an Asset Sale;
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(2) in respect of the property and assets of a Subsidiary Guarantor, (i) upon the designation of such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.04 and the definition of Unrestricted Subsidiary, and such Subsidiary Guarantor shall be automatically released from its obligations hereunder and under the Security Documents or (ii) upon the release or discharge of the Subsidiary Guarantee of such Subsidiary Guarantor in accordance with Section 12.02(b);
(3) in respect of the property and assets of the Issuers, upon the release or discharge of the Issuers Notes Obligations in accordance with this Indenture;
(4) [reserved];
(5) [reserved];
(6) pursuant to an amendment or waiver in accordance with Article IX; and
(7) if the Notes have been discharged or defeased pursuant to Section 8.01.
In addition, the security interests granted pursuant to the Security Documents securing the Obligations shall automatically terminate and/or be released all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the applicable Pledgors (as defined in the Collateral Agreement), as of the date when all the Obligations under this Indenture, the Notes and the Security Documents (other than contingent or unliquidated obligations or liabilities not then due) have been paid in full in cash or immediately available funds.
In connection with any termination or release pursuant to this Section 11.04(a), the Collateral Agent shall execute and deliver to any Pledgor (as defined in the Collateral Agreement), at such Pledgors expense, all documents that such Pledgor shall reasonably request to evidence such termination or release (including, without limitation, UCC termination statements), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral (as defined in the Collateral Agreement) that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to this Indenture or the Security Documents. Any execution and delivery of documents pursuant to this Section 11.04(a) shall be without recourse to or warranty by the Collateral Agent. In connection with any release pursuant to this Section 11.04(a), the Pledgors shall be permitted to take any action in connection therewith consistent with such release including, without limitation, the filing of UCC termination statements.
Upon the receipt of an Officers Certificate and Opinion of Counsel from the Issuers, as described in Section 11.04(b) below, if applicable, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuers, the Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement.
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(b) Notwithstanding anything herein to the contrary, in connection with (x) any release of Collateral pursuant to Section 11.04(a)(2) or (3), such Collateral may not be released from the Lien and security interest created by the Security Documents and (y) any release of Collateral pursuant to Section 11.04(a)(1) and (7), the Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release unless, in each case, an Officers Certificate and Opinion of Counsel certifying that all conditions precedent, including, without limitation, this Section 11.04, have been met and stating under which of the circumstances set forth in Section 11.04(a) above the Collateral is being released have been delivered to the Collateral Agent on or prior to the date of such release or, in the case of clause (y) above, the date on which the Collateral Agent executes any such instrument.
(c) Notwithstanding anything herein to the contrary, at any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the holders, except as otherwise provided in the Senior Lien Intercreditor Agreement.
SECTION 11.05 Powers Exercisable by Receiver or Trustee . In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI upon the Issuers or the Subsidiary Guarantors with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuers or the Subsidiary Guarantors or of any officer or officers thereof required by the provisions of this Article XI; and if the Trustee, the Collateral Agent or a nominee of the Trustee or the Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, the Collateral Agent or a nominee of the Trustee or the Collateral Agent.
SECTION 11.06 Release Upon Termination of the Issuers Obligations . In the event (i) that the Issuers deliver to the Trustee an Officers Certificate and Opinion of Counsel certifying that all the obligations under this Indenture, the Notes and the Security Documents have been satisfied and discharged by the payment in full of the Issuers obligations under the Notes, this Indenture and the Security Documents, and all such obligations have been so satisfied, or (ii) a discharge, legal defeasance or covenant defeasance of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuers and the Collateral Agent a notice stating that the Trustee, on behalf of the holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary at the request and expense of the Issuer to release such Lien as soon as is reasonably practicable.
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SECTION 11.07 Designations . Except as provided in the next sentence, for purposes of the provisions hereof and the Senior Lien Intercreditor Agreement and any Customary Intercreditor Agreement requiring the Issuer to designate Indebtedness for the
purposes of the terms First-Priority Lien Obligations, Other Second-Lien Obligations, Junior Lien Obligations or any other such designations hereunder or under the Senior Lien Intercreditor Agreement, any such designation shall be sufficient if the relevant designation provides in writing that such First-Priority Lien Obligations, Other Second-Lien Obligations, Junior Lien Obligations or such other designations are permitted under this Indenture and is signed on behalf of the Issuers by an Officer and delivered to the Trustee and the Collateral Agent. For all purposes hereof and the Senior Lien Intercreditor Agreement, the Issuers hereby designate the Obligations pursuant to the Credit Agreement as in effect on the Issue Date as First-Priority Lien Obligations.
SECTION 11.08 Certificates and Opinions . (a) Any release of Collateral permitted by Section 11.04 hereof will be deemed not to impair the Liens under this Indenture and the Security Documents in contravention thereof and any Person that is required to deliver an Officers Certificate or Opinion of Counsel pursuant to TIA Section 314(d) shall be entitled to rely upon the foregoing as a basis for delivery of such certificate or opinion. The Trustee may, to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing provisions the appropriate statements contained in such documents and Opinion of Counsel.
(b) If any Collateral is released in accordance with this Indenture, the Senior Lien Intercreditor Agreement or any Security Document and if the Issuers have delivered the certificates and documents required by the Security Documents and Section 11.04, the Trustee will determine whether it has received all documentation required by TIA Section 314(d) in connection with such release and, based on such determination, will, upon request, deliver a certificate to the collateral agent for the First-Priority Obligations setting forth such determination.
(c) Any certificate or opinion required pursuant to TIA Section 314(d) may be made by an Authorized Officer of the Issuers, except in cases where Section 314(d) requires that such certificate or opinion be made by an independent engineer, appraiser or other expert.
(d) Notwithstanding anything to the contrary herein, Holdings and its Subsidiaries will not be required to comply with all or any portion of TIA Section 314(d) if they determine, in good faith based on advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including no action letters or exemptive orders, all or any portion of TIA Section 314(d) is inapplicable to the released Collateral.
Without limiting the generality of the foregoing, certain no action letters issued by the SEC have permitted an indenture qualified under the TIA to contain provisions permitting the release of collateral from Liens under such indenture in the ordinary course of business without requiring the issuer to provide certificates and other documents under TIA Section 314(d).
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ARTICLE XII
GUARANTEE
SECTION 12.01 Subsidiary Guarantee .
(a) Each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior basis, as a primary obligor and not merely as a surety, to each holder, to the Trustee and to the Collateral Agent and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest (or Additional Interest, if any) on the Notes and all other monetary obligations of the Issuers under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations ). The Guaranteed Obligations of all Subsidiary Guarantors shall be secured by security interests (subject to Permitted Liens and Liens permitted by Section 4.12) in the Collateral owned by such Subsidiary Guarantor pursuant to the terms of the Security Documents (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement) Each Subsidiary Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Subsidiary Guarantor, and that each Subsidiary Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any holder, the Collateral Agent or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any holder, the Collateral Agent or the Trustee for the Guaranteed Obligations or each Subsidiary Guarantor; (v) the failure of any holder, the Collateral Agent or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of each Subsidiary Guarantor, except as provided in Section 12.02(b). Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Subsidiary Guarantors, such that such Subsidiary Guarantors obligations would be less than the full amount claimed.
(c) Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers or such Subsidiary Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Subsidiary Guarantor hereunder. Each Subsidiary Guarantor hereby waives any right to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Subsidiary Guarantor.
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(d) Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder or the Trustee to any security held for payment of the Guaranteed Obligations.
(e) The Subsidiary Guarantee of each Subsidiary Guarantor is, to the extent and in the manner set forth in Article XII, equal in right of payment to all existing and future Pari Passu Indebtedness (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement), senior in right of payment to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor.
(f) Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder, the Collateral Agent or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of any Subsidiary Guarantor as a matter of law or equity.
(g) Each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.
(h) In furtherance of the foregoing and not in limitation of any other right which any holder, the Collateral Agent or the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee or Collateral Agent, forthwith pay, or cause to be paid, in cash, to the holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to the holders, the Collateral Agent and the Trustee.
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(i) Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, as between it, on the one hand, and the holders, the Collateral Agent and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purposes of this Section 12.01.
(j) Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys fees and expenses) Incurred by the Trustee, the Collateral Agent or any holder in enforcing any rights under this Section 12.01.
(k) Upon request of the Trustee, each Subsidiary Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 12.02 Limitation on Liability .
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Subsidiary Guarantor without rendering the Subsidiary Guarantee or this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.
(b) A Subsidiary Guarantee as to any Restricted Subsidiary that is (or becomes) a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.11 hereof and provides a guarantee shall terminate and be of no further force or effect and such Subsidiary Guarantee shall be deemed to be automatically released from all obligations under this Article XII upon any of the following:
(i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made to a person that is not an Issuer or a Restricted Subsidiary of Holdings in a transaction that is permitted by this Indenture;
(ii) the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the provisions of Section 4.04 and the definition of Unrestricted Subsidiary;
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(iii) [reserved];
(iv) the Issuers exercise of their legal defeasance option or covenant defeasance option under Article VIII or if the Issuers obligations under this Indenture are discharged in accordance with the terms of this Indenture;
(v) such Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First-Priority Lien Obligations or other exercise of remedies in respect thereof, subject to, in each case, the application of the proceeds of such foreclosure or exercise of remedies in the manner described in the Senior Lien Intercreditor Agreement; and
(vi) as provided in Article IX.
SECTION 12.03 [Reserved] .
SECTION 12.04 Successors and Assigns . This Article XII shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the holders and, in the event of any transfer or assignment of rights by any holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 12.05 No Waiver . Neither a failure nor a delay on the part of either the Trustee or the holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise.
SECTION 12.06 Modification . No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Subsidiary Guarantor in any case shall entitle any Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 12.07 Execution of Supplemental Indenture for Future Subsidiary Guarantors . Each Subsidiary which is required to become a Subsidiary Guarantor of the Notes pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article XII and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, Holdings shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate certifying that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
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similar laws relating to creditors rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary Guarantor is a valid and binding obligation of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request.
SECTION 12.08 Non-Impairment . The failure to endorse a Subsidiary Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls . If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an incorporated provision ) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.
SECTION 13.02 Notices .
(a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:
if to the Issuers or a Subsidiary Guarantor:
c/o Talos Production LLC
1600 Smith Street, Suite 5000
Houston, TX 77002
Attention: Chief Financial Officer
Fax: 713-351-4100
with copies to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Gregory Ezring
Tracey Zaccone
Fax: 212-757-3990
if to the Trustee:
Wilmington Trust, National Association
15950 N. Dallas Parkway, Suite 550
Dallas, TX 75248
Attention: Shawn Goffinet
Fax: (888) 316-6238
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The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a holder shall be mailed, first class mail, to the holder at the holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
(c) Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.
The Trustee may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Indenture sent by e-mail, facsimile transmission or other similar electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustees understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustees reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the holders may be made electronically in accordance with procedures of the Depository.
SECTION 13.03 Communications by Holders with Other Holders . The holders may communicate pursuant to Section 312(b) of the TIA with other holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA.
SECTION 13.04 Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee at the request of the Trustee:
(a) an Officers Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
128
SECTION 13.05 Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:
(a) a statement that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officers Certificate or certificates of public officials.
SECTION 13.06 When Notes Disregarded . In determining whether the Holders of the requisite principal amount of the Notes have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other Act hereunder as of any date, Notes owned by the Issuers or any other obligor upon the Notes or any Affiliate of either Issuer or such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which a Trust Officer of the Trustee actually knows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as outstanding if the Issuers certify to the Trustee in an Officers Certificate the pledgees right so to act with respect to such Notes and that the pledgee is not an Issuer or any other obligor upon the Notes or any Affiliate of an Issuer or of such other obligor. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or a meeting of the holders. The Registrar and a Paying Agent may make reasonable rules for their functions.
SECTION 13.08 Legal Holidays . If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular Record Date is not a Business Day, the Record Date shall not be affected.
SECTION 13.09 GOVERNING LAW . THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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SECTION 13.10 No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests in Holdings or of any Subsidiary Guarantor or any direct or indirect parent companies, as such, shall have any liability for any obligations of the Issuers or any Subsidiary Guarantor under the Notes, the Subsidiary Guarantees or this Indenture, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
SECTION 13.11 Successors . All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Notes shall bind such persons successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12 Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original (which may be delivered in original form or facsimile or an electronic file thereof), but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 13.13 Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 13.14 Indenture Controls . If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.
SECTION 13.15 Severability . In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
SECTION 13.16 Intercreditor Agreement . The terms of this Indenture are subject to the terms of the Senior Lien Intercreditor Agreement.
SECTION 13.17 Waiver of Jury Trial . EACH OF THE ISSUERS, THE SUBSIDIARY GUARANTORS, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 13.18 U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
TALOS PRODUCTION LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OPERATING COMPANY LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OPERATING GP LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OFFSHORE LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Signature Page to Senior Secured Notes Indenture]
TALOS ERT LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
CKB PETROLEUM, LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST OFFSHORE LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST ONSHORE LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY INTERNATIONAL LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Signature Page to Senior Secured Notes Indenture]
TALOS PETROLEUM LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS MANAGEMENT INTERMEDIARY LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS MANAGEMENT HOLDINGS LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
STONE ENERGY HOLDING, L.L.C. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Signature Page to Senior Secured Notes Indenture]
TALOS RESOURCES LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY PHOENIX LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY HOLDINGS LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ARGO INC. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Signature Page to Senior Secured Notes Indenture]
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee | ||
By: |
/s/ Shawn Goffinet |
|
Name: Shawn Goffinet | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Collateral Agent | ||
By: |
/s/ Shawn Goffinet |
|
Name: Shawn Goffinet | ||
Title: Assistant Vice President |
[Signature Page to Senior Secured Notes Indenture]
APPENDIX A
PROVISIONS RELATING TO INITIAL NOTES, ADDITIONAL NOTES AND EXCHANGE NOTES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix A the following terms shall have the meanings indicated below:
Additional Interest has the meaning set forth in the Registration Rights Agreement.
Definitive Note means a certificated Initial Note or Additional Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.
Depository means The Depository Trust Company, its nominees and their respective successors.
Global Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
IAI means an institutional accredited investor as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
Notes Custodian means the custodian with respect to a Global Note (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.
QIB means a qualified institutional buyer as defined in Rule 144A.
Registered Exchange Offer means the offer by the Issuers, pursuant to the Registration Rights Agreement, to certain holders of Initial Notes, to issue and deliver to such holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.
Regulation S means Regulation S under the Securities Act.
Regulation S Notes means all Initial Notes offered and sold outside the United States in reliance on Regulation S.
Restricted Notes Legend means the legend set forth in Section 2.2(f)(i) herein.
Restricted Period , with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuers to the Trustee, and (b) the Issue Date, and with respect to any Additional Notes that are Transfer Restricted Notes, it means the comparable period of 40 consecutive days.
Appendix A-1
Rule 501 means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
Rule 144A means Rule 144A under the Securities Act.
Rule 144A Notes means all Initial Notes initially offered and sold to QIBs in reliance on Rule 144A.
Shelf Registration Statement means the registration statement filed by the Issuers in connection with the offer and sale of Initial Notes pursuant to the Registration Rights Agreement.
Transfer Restricted Definitive Notes means Definitive Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
Transfer Restricted Global Notes means Global Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
Transfer Restricted Notes means the Transfer Restricted Definitive Notes and Transfer Restricted Global Notes.
Unrestricted Definitive Notes means Definitive Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
Unrestricted Global Notes means Global Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
1.2 Other Definitions .
Term: | Defined in Section: | |
Agent Members | 2.1(b) | |
Global Notes | 2.1(b) | |
Regulation S Global Notes | 2.1(b) | |
Regulation S Permanent Notes | 2.1(b) | |
Regulation S Temporary Global Notes | 2.1(b) | |
Rule 144A Global Notes | 2.1(b) |
2. The Notes.
2.1 Form and Dating; Global Notes.
(a) The Initial Notes issued on the date hereof will be (i) privately placed by the Issuers pursuant to the Offering Memorandum and (ii) sold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more agreements in accordance with applicable law.
Appendix A-2
(b) Global Notes . (i) Except as provided in clause (d) of Section 2.2 below, Rule 144A Notes initially shall be represented by one or more Notes in definitive, fully registered, global form without interest coupons (collectively, the Rule 144A Global Notes ).
Regulation S Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the Regulation S Temporary Global Note and, together with the Regulation S Permanent Global Note (defined below), the Regulation S Global Notes ), which shall be registered in the name of the Depository or the nominee of the Depository for the accounts of designated agents holding on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear system ( Euroclear ) or Clearstream Banking, Société Anonyme ( Clearstream ).
Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a permanent Global Note (the Regulation S Permanent Global Note ) pursuant to the applicable procedures of the Depository. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
The provisions of the Operating Procedures of the Euroclear System and Terms and Conditions Governing Use of Euroclear and the General Terms and Conditions of Clearstream Banking and Customer Handbook of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by participants through Euroclear or Clearstream.
The term Global Notes means the Rule 144A Global Notes and the Regulation S Global Notes. The Global Notes shall bear the Global Note Legend. The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear the Restricted Notes Legend.
Members of, or direct or indirect participants in, the Depository (collectively, the Agent Members ) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes. The Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository, or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.
Appendix A-3
(ii) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depository and the provisions of Section 2.2. In addition, a Global Note shall be exchangeable for Definitive Notes if (x) the Depository (1) notifies the Issuers that it is unwilling or unable to continue as depository for such Global Note and the Issuers thereupon fail to appoint a successor depository or (2) has ceased to be a clearing agency registered under the Exchange Act or (y) there shall have occurred and be continuing an Event of Default with respect to such Global Note and a request has been made for such exchange; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository in accordance with its customary procedures.
(iii) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.
(iv) Any Transfer Restricted Note delivered in exchange for an interest in a Global Note pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Notes Legend.
(v) Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in a Regulation S Global Note may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.
(vi) The holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes.
2.2 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred as a whole except as set forth in Section 2.1(b). Global Notes will not be exchanged by the Issuers for Definitive Notes except under the circumstances described in Section 2.1(b)(ii). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.08 of this Indenture. Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b).
Appendix A-4
(b) Transfer and Exchange of Beneficial Interests in Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Transfer Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Transfer Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. A beneficial interest in an Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository directing the Depository to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(g).
(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Note if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
Appendix A-5
(A) if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note; and
(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note.
(iv) Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
(A) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate in accordance with Section 2.01 of this Indenture, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Transfer Restricted Global Note . Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
Appendix A-6
(c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes . A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.1(b)(ii). A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii). In any case, beneficial interests in Global Notes shall be transferred or exchanged only for Definitive Notes.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes . Transfers and exchanges of Definitive Notes for beneficial interests in the Global Notes also shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:
(i) Transfer Restricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . If any holder of a Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in a Transfer Restricted Global Note or to transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Transfer Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Note for a beneficial interest in a Transfer Restricted Global Note, a certificate from such holder in the form attached to the applicable Note;
(B) if such Transfer Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(C) if such Transfer Restricted Definitive Note is being transferred to a Non U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(D) if such Transfer Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(E) if such Transfer Restricted Definitive Note is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such holder in the form attached to the applicable Note, including the certifications, certificates and Opinion of Counsel, if applicable; or
(F) if such Transfer Restricted Definitive Note is being transferred to Holdings or a Subsidiary thereof, a certificate from such holder in the form attached to the applicable Note;
the Trustee shall cancel the Transfer Restricted Definitive Note, and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Note.
Appendix A-7
(ii) Transfer Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of a Transfer Restricted Definitive Note may exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Transfer Restricted Definitive Note to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Note transferred or exchanged pursuant to this subparagraph (ii).
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of an Unrestricted Definitive Note may exchange such Unrestricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of the Unrestricted Definitive Note transferred or exchanged pursuant to this subparagraph (iii).
Appendix A-8
(iv) Unrestricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a holder of Definitive Notes and such holders compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by its attorney, duly authorized in writing. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).
(i) Transfer Restricted Definitive Notes to Transfer Restricted Definitive Notes . A Transfer Restricted Note may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(C) if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Note;
(D) if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Note; and
(E) if such transfer will be made to Holdings or a Subsidiary thereof, a certificate in the form attached to the applicable Note.
(ii) Transfer Restricted Definitive Notes to Unrestricted Definitive Notes . Any Transfer Restricted Definitive Note may be exchanged by the holder thereof for an Unrestricted Definitive Note or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note; or
Appendix A-9
(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A holder of an Unrestricted Definitive Note may transfer such Unrestricted Definitive Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the holder thereof.
(iv) Unrestricted Definitive Notes to Transfer Restricted Definitive Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Note.
At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.
(f) Legend.
(i) Except as permitted by the following paragraph (iii), (iv) or (v), each Note certificate evidencing the Global Notes and any Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):
Appendix A-10
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS OFFSHORE TRANSACTION, UNITED STATES AND U.S. PERSON HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AMONG JPMORGAN CHASE BANK, N.A., AS FIRST LIEN FACILITY AGENT AND APPLICABLE FIRST LIEN AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS SECOND LIEN FACILITY
Appendix A-11
AGENT AND APPLICABLE SECOND LIEN AGENT, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, ENTERED INTO ON THE ISSUE DATE, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.
Each Regulation S Note shall bear the following additional legend:
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
Each Definitive Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Definitive Note, the Registrar shall permit the holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Note if the holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).
(iii) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note acquired pursuant to Regulation S, all requirements that such Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.
(iv) After a transfer of any Initial Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to the Restricted Notes Legend on any such Initial Note will cease to apply, the requirements requiring any such Initial Note issued to certain holders be issued in global form will continue to apply, and an Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the holder of such Initial Notes upon exchange of such transferring holders certificated Initial Note or directions to transfer such holders interest in the Global Note, as applicable.
Appendix A-12
(v) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes pursuant to which holders of such Initial Notes are offered Exchange Notes in exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain holders be issued in global form will still apply with respect to holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the Restricted Notes Legend, will be available to holders that exchange such Initial Notes in such Registered Exchange Offer.
(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend (other than the portion thereof relating to the Senior Lien Intercreditor Agreement).
(g) Cancellation or Adjustment of Global Note . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.
(h) Obligations with Respect to Transfers and Exchanges of Notes .
(i) To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrars request.
(ii) No service charge shall be made for any registration of transfer or exchange of Notes, but the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
Appendix A-13
(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
(i) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the holders and all payments to be made to the holders under the Notes shall be given or made only to the registered holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Appendix A-14
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
[Restricted Notes Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY)
Exhibit A-1
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS OFFSHORE TRANSACTION, UNITED STATES AND U.S. PERSON HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AMONG JPMORGAN CHASE BANK, N.A., AS FIRST LIEN FACILITY AGENT AND APPLICABLE FIRST LIEN AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS SECOND LIEN FACILITY AGENT AND APPLICABLE SECOND LIEN AGENT, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, ENTERED INTO ON THE ISSUE DATE, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.
[Definitive Notes Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
A-2
[FORM OF INITIAL NOTE]
TALOS PRODUCTION LLC
TALOS PRODUCTION FINANCE INC.
No. [ ] | 144A CUSIP No. 87484JAD2 | |
144A ISIN No. US87484JAD28 | ||
REG S CUSIP No. U83041AC4 | ||
REG S ISIN No. USU83041AC48
AI CUSIP No. 87484JAE0
AI ISIN No. US87484JAE01 |
||
$[ ] |
11.00% Second-Priority Senior Secured Note due 2022
TALOS PRODUCTION LLC, a Delaware limited liability company, and TALOS PRODUCTION FINANCE INC., a Delaware corporation, jointly and severally, promise to pay to Cede & Co., or registered assigns, the principal sum set forth on the Schedule of Increases or Decreases in Global Note attached hereto on the Notes Maturity Date.
Interest Payment Dates: April 15 and October 15, commencing October 15, 2018
Record Dates: April 1 and October 1
Additional provisions of this Note are set forth on the other side of this Note.
A-3
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
TALOS PRODUCTION LLC | ||
By: |
|
|
Name: | ||
Title: | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
|
|
Name: | ||
Title: |
Dated:
A-4
TRUSTEES CERTIFICATE OF | ||
AUTHENTICATION | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION |
||
as Trustee, certifies that this is one of the Notes referred to in the Indenture. |
||
By: |
|
|
Authorized Signatory | ||
Dated: |
*/ | If the Note is to be issued in global form, add the Global Notes Legend and the attachment from Exhibit A captioned TO BE ATTACHED TO GLOBAL NOTES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE. |
A-5
[FORM OF REVERSE SIDE OF INITIAL NOTE]
11.00% Second-Priority Senior Secured Note Due 2022
1. Interest
TALOS PRODUCTION LLC, a Delaware limited liability company (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called Holdings ), and TALOS PRODUCTION FINANCE INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Co-Issuer and, together with Holdings, the Issuer ), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above; provided , however , that if a Registration Default (as defined in the Registration Rights Agreement) occurs, Additional Interest will accrue on this Note at a rate of 0.25% per annum from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Issuers shall pay interest semiannually on April 15 and October 15 of each year (each an Interest Payment Date ), commencing October 15, 2018. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from May 10, 2018 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on April 1 or October 1 (each a Record Date ) immediately preceding the Interest Payment Date even if Notes are canceled after the Record Date and on or before the Interest Payment Date (whether or not a Business Day). Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary. The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided , however , that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
A-6
3. Paying Agent and Registrar
Initially, Wilmington Trust, National Association, as trustee under the Indenture (the Trustee ), will act as Paying Agent and Registrar. The Issuers may appoint and change any Paying Agent or Registrar without notice. The Issuers or any of their domestically incorporated Subsidiaries may act as Paying Agent or Registrar.
4. Indenture
The Issuers issued the Notes under an Indenture dated as of May 10, 2018 (the Indenture ), among the Issuers, the Subsidiary Guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent. Capitalized terms used herein are used as defined in the Indenture, unless otherwise indicated. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the TIA ). The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.
The Notes are senior secured obligations of the Issuers. [This Note is one of the Initial Notes referred to in the Indenture.] The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell certain Capital Stock of Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.
To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed the Guaranteed Obligations pursuant to the terms of the Indenture and any Subsidiary Guarantor that executes a Subsidiary Guarantee will unconditionally guarantee the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture.
A-7
5. Redemption
On or after May 10, 2019 the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to each holders registered address, or delivered electronically if held by DTC, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period commencing on May 10 of the years set forth below:
Period |
Redemption Price | |||
2019 |
105.500 | % | ||
2020 |
102.750 | % | ||
2021 and thereafter |
100.000 | % |
In addition, prior to May 10, 2019, the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by the Issuers by first-class mail to each holders registered address, or delivered electronically if held by DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
Notwithstanding the foregoing, at any time and from time to time on or prior to May 10, 2019, the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or are used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 111.000%, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date; provided , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days notice mailed by the Issuer to each holder of Notes being redeemed, or delivered electronically if held by DTC, and otherwise in accordance with the procedures set forth in the Indenture.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
6. Mandatory Redemption
The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.
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7. Notice of Redemption
Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date, to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of The Depository Trust Company ( DTC ), except that redemption notices may be sent more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
8. Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales
Upon the occurrence of a Change of Control, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holders Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.
9. Ranking and Collateral .
From the Issue Date, the Notes and the Subsidiary Guarantees will be secured by security interests (subject to Permitted Liens and Liens permitted by Section 4.12 of the Indenture) in the Collateral pursuant to the Security Documents (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement). The Liens upon any and all Collateral are, to the extent and in the manner provided in the Senior Lien Intercreditor Agreement, junior in ranking with all present and future Liens securing First-Priority Lien Obligations, are equal in ranking to all present and future Liens securing Other Second-Lien Obligations and will be senior in ranking to all present and future Liens securing Junior Lien Obligations.
10. Denominations; Transfer; Exchange
The Notes are in registered form, without coupons, in denominations of $2,000 principal amount and integral multiples of $1.00 in excess thereof. A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed or between a record date and the related interest payment date.
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11. Persons Deemed Owners
The registered holder of this Note shall be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuers at their written request unless an abandoned property law designates another Person. After any such payment, the holders entitled to the money must look to the Issuers for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
14. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and the Senior Lien Intercreditor Agreement may be amended with the written consent of the holders of at least a majority in aggregate principal amount of the Notes then outstanding and (ii) any past default or compliance with any provisions may be waived with the written consent of the holders of at least a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuers, the Collateral Agent and the Trustee may amend the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and/or a Customary Intercreditor Agreement (i) to cure any ambiguity, omission, mistake, defect or inconsistency; (ii) to provide for the assumption by a Successor Company (with respect to an Issuer) of the obligations of an Issuer under the Indenture, the Notes, the Security Documents, the Senior Lien Intercreditor Agreement and a Customary Intercreditor Agreement; (iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the Indenture, its Subsidiary Guarantee, the Security Documents and the Senior Lien Intercreditor Agreement; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (v) [reserved]; (vi) to add a Subsidiary Guarantee or collateral with respect to the Notes; (vii) to release collateral as permitted by the Indenture, the Security Documents and the Senior Lien Intercreditor Agreement; (viii) to comply with any requirement
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of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA, (ix) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (x) to make any change that does not adversely affect the rights of any holder in any material respect; or (xi) to make changes to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities; or (xii) to effect any provision of the Indenture.
In addition, the Senior Lien Intercreditor Agreement may be amended without notice to or the consent of any holder, the Trustee or the Collateral Agent in connection with the permitted entry into the Senior Lien Intercreditor Agreement of any class of additional secured creditors holding First-Priority Lien Obligations or Other Second-Lien Obligations.
15. Defaults and Remedies
If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings) occurs and is continuing, the Trustee by notice to the Issuer or the holders of at least 30% in principal amount of outstanding Notes by notice to the Issuer with a copy to the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuers occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture or the Security Documents at the written request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given the Trustee written notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested in writing that the Trustee pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder (it being understood that the Trustee does not have an affirmative duty
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to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders) or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.
16. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any Subsidiary Guarantor or any direct or indirect parent companies, as such, will have any liability for any obligations of an Issuer or any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
19. Abbreviations
Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
21. CUSIP Numbers; ISINs
The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
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The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuers. The agent may substitute another to act for him.
Date: |
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Your Signature: |
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Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee | Signature of Signature Guarantee |
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
☐ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depository a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above); |
☐ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate occurring while this Note is still a Transfer Restricted Definitive Note or a Transfer Restricted Global Note, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ☐ | to the Issuers; or | ||
(2) | ☐ | to the Registrar for registration in the name of the holder, without transfer; or | ||
(3) | ☐ | pursuant to an effective registration statement under the Securities Act of 1933; or | ||
(4) | ☐ | inside the United States to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||
(5) | ☐ | outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or | ||
(6) | ☐ | to an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or | ||
(7) | ☐ | pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933. |
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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers or the Trustee have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Date: |
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Your Signature: |
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Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee | Signature of Signature Guarantee |
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TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: |
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NOTICE: To be executed by an executive officer |
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $ . The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in
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Amount of increase in
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Principal amount of this
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Signature of authorized
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:
Asset Sale ☐ Change of Control ☐
If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1.00 in excess thereof):
$ |
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Date: |
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Your Signature: |
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(Sign exactly as your name appears on the | ||||||
other side of this Note) |
Signature Guarantee: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee |
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EXHIBIT B
[FORM OF TRANSFEREE LETTER OF REPRESENTATION]
TRANSFEREE LETTER OF REPRESENTATION
TALOS PRODUCTION LLC
TALOS PRODUCTION FINANCE INC.
c/o Wilmington Trust, National Association
Global Capital Markets
15950 N. Dallas Parkway, Suite 550
Dallas, TX 75248
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the 11.00% Second-Priority Senior Secured Notes due 2022 (the Notes ) of TALOS PRODUCTION LLC and TALOS PRODUCTION FINANCE INC. (collectively with their successors and assigns, the Issuers ).
Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the Securities Act )), purchasing for our own account or for the account of such an institutional accredited investor at least $100,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which either of the Issuers or any affiliate of such Issuers was the owner of such Notes (or any predecessor thereto) (the Resale Restriction Termination Date ) only (a) in the United States to a person whom we reasonably
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believe is a qualified institutional buyer (as defined in rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (b) outside the United States in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if applicable) or (d) pursuant to an effective registration statement under the Securities Act, in each of cases (a) through (d) in accordance with any applicable securities laws of any state of the United States. In addition, we will, and each subsequent holder is required to, notify any purchaser of the Note evidenced hereby of the resale restrictions set forth above. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made to an institutional accredited investor prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuers and the Trustee, which shall provide, among other things, that the transferee is an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuers and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause 1(b), 1(c) or 1(d) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuers and the Trustee.
Dated:
TRANSFEREE: | , |
By: |
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EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this Supplemental Indenture ) dated as of [DATE], among [SUBSIDIARY GUARANTOR] (the New Subsidiary Guarantor ), a subsidiary of TALOS PRODUCTION LLC (or its successor), a Delaware limited liability company ( Holdings ), and Wilmington Trust, National Association, as trustee under the indenture referred to below (the Trustee ).
W I T N E S S E T H :
WHEREAS Holdings, Talos Production Finance Inc. (or its successor), a Delaware corporation (the Co-Issuer and, together with Holdings, the Issuers ), certain Subsidiary Guarantors and the Trustee have heretofore executed an indenture, dated as of May 10, 2018 (as amended, supplemented or otherwise modified, the Indenture ), providing for the issuance of the Issuers 11.00% Second-Priority Senior Secured Notes due 2022 ( the Notes ), initially in the aggregate principal amount of $390,867,820;
WHEREAS Sections 4.11 and 12.07 of the Indenture provide that under certain circumstances Holdings is required to cause the New Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee all the Issuers Obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:
1. Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term holders in this Supplemental Indenture shall refer to the term holders as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words herein , hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2. Agreement to Guarantee . The New Subsidiary Guarantor hereby agrees, jointly and severally with all existing Subsidiary Guarantors (if any), to unconditionally guarantee the Issuers Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.
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3. Notices . All notices or other communications to the New Subsidiary Guarantor shall be given as provided in Section 13.02 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
5. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
7. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
[ Remainder of page intentionally left blank. ]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
TALOS PRODUCTION LLC | ||
By: |
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Name: | ||
Title: | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
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Name: | ||
Title: | ||
[ NEW SUBSIDIARY GUARANTOR ], as a Subsidiary Guarantor | ||
By: |
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Name: | ||
Title: | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION , not in its individual capacity, but solely as Trustee | ||
By: |
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Name: | ||
Title: |
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Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
Dated May 10, 2018
among
TALOS PRODUCTION LLC
TALOS PRODUCTION FINANCE INC.
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
THE EXCHANGE AGREEMENT HOLDERS NAMED HEREIN
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of May 10, 2018 (this Agreement ), among Talos Production LLC, a Delaware limited liability company (the Company ), Talos Production Finance Inc., a Delaware corporation (the Co-Issuer ), the guarantors as set forth on Annex I hereto (the Subsidiary Guarantors and, together with the Company and the Co-Issuer , the Issuers ), and funds or other Persons (as defined below) managed by or advised by or affiliated with Franklin Advisers, Inc. ( Franklin ), MacKay Shields LLC ( MacKay ), Bain Capital Credit, LP ( Bain ), FS Investments ( FS ) and GSO Capital Partners LP ( GSO and together with Franklin, MacKay, Bain and FS, the Exchange Agreement Holders ), as holders of the Issuers 11.00% Second-Priority Senior Secured Notes due 2022 (the Notes ) and for the benefit of all other holders of the Notes.
This Agreement is entered into in connection with the Exchange Agreement, dated as of November 21, 2017 (the Exchange Agreement ), among the Issuers, Stone Energy Corporation, a Delaware corporation ( Stone ), Sailfish Energy Holdings Corporation, a Delaware Corporation, the lenders listed on Schedule A thereto, the lenders listed on Schedule B thereto, the noteholders listed on Schedule C thereto and the noteholders listed on Schedule D thereto, pursuant to which, among other things, (i) the holders of the Issuers second lien bridge loans exchanged their bridge loans for the Notes and (ii) Franklin and MacKay exchanged the 7.500% Senior Secured Notes due 2022 issued by Stone (the Stone Notes ) held by them for the Notes. In addition, the Issuers effected a tender offer and consent solicitation for the Stone Notes held by holders other than Franklin and MacKay (those holders, other than the Exchange Agreement Holders, that validly tendered Stone Notes in the tender offer and consent solicitation, the Exchange Holders ). The Notes will be fully and unconditionally guaranteed (the Guarantees ) on a senior secured basis by the Subsidiary Guarantors. The Notes and the Guarantees together are herein referred to as the Securities . In order to induce the Exchange Agreement Holders to enter into the Exchange Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Exchange Agreement Holders, the Exchange Holders and their respective direct and indirect transferees and assigns.
In consideration of the foregoing, the parties hereto agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) of the Securities:
1. Definitions .
As used in this Agreement, the following capitalized defined terms shall have the following meanings:
Additional Interest shall have the meaning set forth in Section 2(e) hereof.
Affiliate shall mean with respect to any specified Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by, and under common control with) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or otherwise.
Agreement shall have the meaning set forth in the preamble.
Bain shall have the meaning set forth in the preamble.
Closing Date shall have the meaning ascribed thereto in the Exchange Agreement.
Co-Issuer shall have the meaning set forth in the preamble and shall also include the Co-Issuers successors and assigns.
Company shall have the meaning set forth in the preamble and shall also include the Companys successors and assigns.
Effectiveness Date shall mean the date of effectiveness of any Registration Statement.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.
Exchange Agreement shall have the meaning set forth in the preamble.
Exchange Agreement Holders shall have the meaning set forth in the preamble.
Exchange Dates shall have the meaning set forth in Section 2(a)(ii) hereof.
Exchange Guarantees shall mean the guarantees issued by the Subsidiary Guarantors under the Indenture containing terms identical to the Guarantees (except that the Exchange Guarantees will not contain restrictions on transfer) and to be offered to Holders of Guarantees in exchange for Guarantees pursuant to the Exchange Offer.
Exchange Holders shall have the meaning set forth in the preamble.
Exchange Notes shall mean the notes issued by the Issuers under the Indenture containing terms identical to the Notes (except that the Exchange Notes will not contain restrictions on transfer) and to be offered to Holders of Notes in exchange for Notes pursuant to the Exchange Offer.
Exchange Offer shall each mean the exchange offer by the Issuers of Transfer Restricted Securities for Exchange Securities pursuant to Section 2(a) hereof.
Exchange Offer Registration shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.
Exchange Offer Registration Statement shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
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Exchange Securities shall mean the Exchange Notes and the Exchange Guarantees.
Franklin shall have the meaning set forth in the preamble.
FS shall have the meaning set forth in the preamble.
GSO shall have the meaning set forth in the preamble.
Guarantees shall have the meaning set forth in the preamble.
Holder shall mean a holder of Transfer Restricted Securities, for so long as such holder owns any Transfer Restricted Securities, and each of such holders successors, assigns and direct and indirect transferees who become registered owners of Transfer Restricted Securities under the Indenture or who become beneficial owners of Transfer Restricted Securities, so long as in the case of beneficial owners, such owners have so notified the Company in writing; provided that for purposes of Sections 4 and 5 of this Agreement, the term Holder shall include Participating Broker-Dealers.
Indenture shall mean the Indenture relating to the Securities dated the date hereof among the Issuers and Wilmington Trust, National Association, as trustee and collateral agent, pursuant to which the Securities are being issued, and as the same may be amended from time to time in accordance with the terms thereof.
Issuers shall have the meaning set forth in the preamble.
Issuer FWP shall have the meaning set forth in Section 5(a).
MacKay shall have the meaning set forth in the preamble.
Majority Holders shall mean the Holders of a majority of the aggregate principal amount of outstanding Transfer Restricted Securities; provided that whenever the consent or approval of Holders of a specified percentage of Transfer Restricted Securities is required hereunder, Transfer Restricted Securities held by the Issuers or any of their respective Affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount; provided further that whenever the consent or approval of Majority Holders is required hereunder in connection with an offering pursuant to a Shelf Registration, such consent shall only be required of Holders of a majority of the aggregate principal amount of outstanding Transfer Restricted Securities included in the applicable Shelf Registration Statement.
Notes shall have the meaning set forth in the preamble.
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Participating Broker-Dealer shall have the meaning set forth in Section 4(a) hereof.
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Prospectus shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Transfer Restricted Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including all material incorporated by reference therein.
Registration Default shall have the meaning set forth in Section 2(e) hereof.
Registration Expenses shall mean any and all expenses incident to performance of or compliance by the Issuers with this Agreement, including, without limitation: (i) all SEC, stock exchange or Financial Industry Regulatory Authority registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Transfer Restricted Securities) (x) within the United States, (y) where the Holders are located, in the case of the Exchange Securities, or (z) as provided in Section 3(d) hereof, in the case of Transfer Restricted Securities to be sold by a Holder pursuant to a Shelf Registration Statement, (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, Securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Issuers and, in the case of a Shelf Registration Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders) and (viii) the fees and disbursements of the independent public accountants of the Issuers, including the expenses of any special audits or cold comfort letters required by or incident to such performance and compliance, but excluding fees and expenses of counsel to the underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions and out-of-pocket expenses incurred by the Holders and transfer taxes, if any, relating to the sale or disposition of Transfer Restricted Securities by a Holder.
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Registration Statement shall mean any registration statement of the Issuers that covers any of the Exchange Securities or Transfer Restricted Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
SEC shall mean the Securities and Exchange Commission.
Securities shall have the meaning set forth in the preamble.
Securities Act shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.
Shelf Effectiveness Target Date means (i) with respect to a Shelf Registration Statement required to be filed pursuant to Section 2(b)(i), the 180th day after the Closing Date and (ii) with respect to the Shelf Registration Statement required to be filed pursuant to Sections 2(b)(ii), (iii) or (iv), as promptly as reasonably practicable after the 180th day after the Closing Date (or, in the case of 2(b)(iii) or (iv), the 75th day after the delivery of notice, if later than such 180th day after the Closing Date).
Shelf Registration shall mean a registration effected pursuant to Section 2(b) hereof.
Shelf Registration Statement shall mean a shelf registration statement of the Issuers pursuant to the provisions of Section 2(b) of this Agreement which covers all of the Transfer Restricted Securities (but no other securities unless approved by the Holders whose Transfer Restricted Securities are covered by such Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
Stone shall have the meaning set forth in the preamble.
Stone Notes shall have the meaning set forth in the preamble.
Subsidiary Guarantors shall have the meaning set forth in the preamble.
TIA shall have the meaning set forth in Section 3(l) hereof.
Transfer Restricted Securities shall mean the Securities; provided , however , that the Securities shall cease to be Transfer Restricted Securities (i) when, in the case of a Holder of such Securities who was entitled to participate in the Exchange Offer, an Exchange Offer Registration Statement with respect to such Securities shall have been declared effective under the Securities Act and either (a) such Securities shall have been exchanged pursuant to the Exchange Offer for Exchange Securities or (b) such Securities were not tendered by the Holder thereof in the Exchange Offer, (ii) when a Shelf Registration Statement with respect to such Securities shall have been declared effective
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under the Securities Act and such Securities shall have been disposed of pursuant to such Shelf Registration Statement, (iii) when such Securities have been sold to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the Securities Act or (iv) when such Securities shall have ceased to be outstanding.
Trustee shall mean the trustee with respect to the Securities under the Indenture.
Underwriters shall have the meaning set forth in Section 3 hereof.
Underwritten Offering shall mean a registration in which Transfer Restricted Securities are sold to an Underwriter for reoffering to the public.
2. Registration Under the Securities Act .
(a) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the SEC, the Issuers shall: prepare and use commercially reasonable efforts to file with the SEC an Exchange Offer Registration Statement covering the offer by the Issuers to the Holders to exchange all of the Transfer Restricted Securities for Exchange Securities and use their respective commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective as promptly as reasonably practicable after the filing thereof; have such Exchange Offer Registration Statement remain effective until the closing of the Exchange Offer; commence the Exchange Offer as soon as practicable after the Effectiveness Date; and keep the Exchange Offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the Exchange Offer is mailed or otherwise furnished to Holders pursuant to the next paragraph.
The Issuers shall commence the Exchange Offer by mailing or otherwise furnishing the related exchange offer Prospectus and accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement and that all Transfer Restricted Securities validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at least 20 business days from the date such notice is mailed or otherwise furnished) (the Exchange Dates );
(iii) that any Transfer Restricted Security not tendered by a Holder who was eligible to participate in the Exchange Offer will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement;
(iv) that Holders electing to have a Transfer Restricted Security exchanged pursuant to the Exchange Offer will be required to surrender such Transfer Restricted Security, together with the enclosed letters of transmittal, to the institution and at the address specified in the notice prior to 5:00 p.m. New York City time on the last Exchange Date; and
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(v) that Holders will be entitled to withdraw their election, not later than 5:00 p.m. New York City time, on the last Exchange Date, by sending to the institution and at the address specified in the notice a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Transfer Restricted Securities delivered for exchange and a statement that such Holder is withdrawing such Holders election to have such Transfer Restricted Securities exchanged.
As soon as practicable after the last Exchange Date, the Issuers shall (and shall cause the Subsidiary Guarantors to):
(i) accept for exchange Transfer Restricted Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for cancellation all Transfer Restricted Securities or portions thereof so accepted for exchange by the Issuers and issue, and cause the Trustee to promptly authenticate and mail or otherwise deliver to each Holder, an Exchange Security equal in principal amount to the principal amount of the Transfer Restricted Securities surrendered by such Holder; provided , that in the case of any Transfer Restricted Securities held in global form by a depositary, authentication and delivery to such depositary of one or more Exchange Securities in global form in an equivalent principal amount thereto for the account of such Holders in accordance with the Indenture shall satisfy such authentication and delivery requirement.
Interest on each Exchange Note issued pursuant to the Exchange Offer will accrue from the last interest payment date on which interest was paid on the Note surrendered in exchange therefor or, if no interest has been paid on such Note, from the Closing Date.
Each Holder (including, without limitation, each Participating Broker-Dealer) who participates in the Exchange Offer will be required to represent to the Issuers, in writing (which may be contained in the applicable letter of transmittal) that: (i) any Exchange Securities acquired in exchange for Transfer Restricted Securities tendered are being acquired in the ordinary course of business of the Person receiving such Exchange Securities, whether or not such recipient is a Holder of Transfer Restricted Securities, (ii) at the time of the commencement of the Exchange Offer, neither such Holder nor, to the actual knowledge of such Holder, any other Person receiving Exchange Securities from such Holder has an arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (iii) the Holder is not an Affiliate of any Issuer or if it is an Affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a Participating Broker-Dealer, that it has not engaged in, and does not intend to engage in, the distribution of Exchange Securities, and (v) if such Holder is a Participating Broker-Dealer, such Holder acquired the Transfer Restricted Securities as a result of market-making activities or other trading activities, that the Transfer Restricted Securities do not represent an unsold allotment from the original sale of the Transfer Restricted Securities and that it will comply with the applicable provisions of the Securities Act with respect to resale of any Exchange Securities.
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The Issuers shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer does not violate applicable law or any applicable interpretation of the Staff of the SEC, (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency with respect to the Exchange Offer and no material adverse development shall have occurred with respect to the Issuers, (iii) all governmental approvals shall have been obtained, which approvals the Issuers deem necessary for the consummation of the Exchange Offer, (iv) the conditions precedent to the obligations of the Issuers under this Agreement shall have been fulfilled and (v) such other conditions as shall be deemed necessary or appropriate by the Issuers in their reasonable judgment.
(b) In the event that (i) the Issuers determine that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be consummated as soon as practicable after the last Exchange Date because it would violate applicable law or the applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any other reason consummated by the 180th day after the Closing Date, (iii) a Holder notifies the Issuers in writing on or before the 25th day after the consummation of the Exchange Offer that the Transfer Restricted Securities held by it were not eligible to be exchanged for Exchange Securities under the Exchange Offer or (iv) if any Holder is not entitled to participate in the Exchange Offer (as a result of being prohibited by law, SEC policy or otherwise) or is not able to resell the Exchange Securities acquired by such Holder in the Exchange Offer without delivering a prospectus in connection with such resale and so requests in writing on or prior to the 25th day after the consummation of the Exchange Offer, the Issuers shall, in each case, cause to be filed as soon as practicable after such event and shall use their commercially reasonable efforts to have a Shelf Registration Statement declared effective by the SEC by the Shelf Effectiveness Target Date.
In the event the Issuers are required to file a Shelf Registration Statement solely as a result of the matters referred to in clauses (iii) or (iv) of the preceding sentence, the Issuers shall file and use their commercially reasonable efforts to have declared effective (unless it becomes effective automatically upon filing) by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Transfer Restricted Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Transfer Restricted Securities held by Holders described in clauses (iii) or (iv) of the preceding sentence after completion of the Exchange Offer.
The Issuers agree to use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective until the earliest of (i) the date that all outstanding Transfer Restricted Securities are permitted to be sold pursuant to Rule 144 (or any successor rule that permits the Transfer Restricted Securities to be eligible for resale without registration and without being subject to volume restrictions or public
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information requirements, but not Rule 144A) without any limitations under clauses (c), (d), (e), (f) and (h) thereof, (ii) the date that is two years from the Closing Date and (iii) the date on which all Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. The Issuers further agree to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Issuers for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder with respect to information relating to such Holder, and to use their best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as thereafter practicable. The Issuers agree to furnish to the Holders of Transfer Restricted Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.
(c) The Issuers shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the registration of such Holders Transfer Restricted Securities pursuant to the Exchange Offer Registration Statement or the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided , however , that, if, after it has been declared effective, the offering of Transfer Restricted Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference until the offering of Transfer Restricted Securities pursuant to such Registration Statement may legally resume.
(e) In the case of the events set forth in clauses (i) and (ii) below (each a Registration Default ), the annual interest rate on the Securities will be increased (the Additional Interest ):
(i) if the Issuers have failed to consummate the Exchange Offer by the 180 th day following the Closing Date; or
(ii) the Shelf Registration Statement is not declared effective by the SEC on or prior to the Shelf Effectiveness Target Date.
Additional Interest shall accrue on the principal amount of the Transfer Restricted Securities at a rate of 0.25% per annum until the Exchange Offer is completed, the Shelf Registration Statement, if required hereby, is declared effective or all outstanding Securities become freely tradable under the Securities Act and without limitation on volume or manner of sale; provided , however , that in no event shall the Issuers be obligated to pay Additional Interest under more than one of the Registration Defaults at any one time with respect to any Transfer Restricted Security; provided , further ,
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however , that in the case of a Registration Default with respect to a Shelf Registration Statement, it is expressly understood that Additional Interest should be payable only with respect to the Transfer Restricted Securities so requested to be registered if pursuant to Sections 2(b)(iii) or (iv) hereof.
Notwithstanding anything to the contrary, any Additional Interest payable under this Agreement shall cease to accrue on and after the earlier of (i) the date on which all Registration Defaults have been cured and (ii) the date that all outstanding Securities become freely tradable under the Securities Act and without limitation on volume or manner of sale (which, for the avoidance of doubt, shall not, however, affect the Issuers obligations hereunder to pay Additional Interest that has accrued to such date and that remains unpaid).
(f) Without limiting the remedies available to the Holders, the Issuers acknowledge that any failure by the Issuers to comply with their obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, any Holder may obtain such relief as may be required to specifically enforce the obligations of the Issuers under Section 2(a) and Section 2(b) hereof.
(g) No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration unless and until such Holder furnishes to the Issuers, in writing within 30 days after receipt of a request therefor, the information with respect to such Holder specified in Items 507 and 508 (as applicable) of Regulation S-K under the Securities Act and any other applicable rules, regulations or policies of the SEC for use in connection with any Shelf Registration Statement or Prospectus included therein, on a form to be provided by the Issuers. No Holder of Transfer Restricted Securities shall be entitled to Additional Interest pursuant to Section 2(e) hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to furnish promptly to the Issuers additional information to be disclosed so that the information previously furnished to the Issuers by such Holder does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(h) Additional Interest due on the Securities pursuant to Section 2(e) hereof will be payable in cash semiannually in arrears on the same interest payment dates as the Securities, commencing with the first interest payment date occurring after any such Additional Interest commences to accrue.
(i) The Issuers shall notify the Trustee in writing within one business day after each and every date on which (i) an event occurs in respect of which Additional Interest is required to be paid and (ii) an event occurs in respect of which Additional Interest ceases to be required to be paid.
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3. Registration Procedures .
In connection with the obligations of the Issuers with respect to the Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the Issuers shall:
(a) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (x) shall be selected by the Issuers and (y) shall, in the case of a Shelf Registration, be available for the sale of the Transfer Restricted Securities by the selling Holders thereof and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period and cause each Prospectus to be supplemented by any prospectus supplement required by applicable law and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; to keep each Prospectus current during the period described under Section 4(a)(3) and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Transfer Restricted Securities or Exchange Securities.
(c) in the case of a Shelf Registration, furnish to each Holder of Transfer Restricted Securities, to counsel for the Holders and to each Underwriter of an Underwritten Offering of Transfer Restricted Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or Underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Transfer Restricted Securities; and the Issuers consent to the use of such Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the selling Holders of Transfer Restricted Securities and any such Underwriters in connection with the offering and sale of the Transfer Restricted Securities covered by and in the manner described in such Prospectus or any amendment or supplement thereto in accordance with applicable law;
(d) use its commercially reasonable efforts to register or qualify the Transfer Restricted Securities under all applicable state securities or blue sky laws of such jurisdictions as any Holder of Transfer Restricted Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement is declared effective by the SEC, to cooperate with such Holders in connection with any filings required to be made with the Financial Industry Regulatory Authority and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Transfer Restricted Securities owned by such Holder; provided , however , that no Issuer shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject;
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(e) in the case of a Shelf Registration, notify each Holder of Transfer Restricted Securities and counsel for the Holders promptly and, if requested by any such Holder or counsel, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, of the issuance by the SEC or any state securities authority of a notification of objection to the use of the form on which the Shelf Registration Statement has been filed, and of the happening of any event that causes the Company to become an ineligible issuer, as defined in SEC Rule 405, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Transfer Restricted Securities covered thereby, the representations and warranties of the Issuers contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects or if the Issuers receive any notification with respect to the suspension of the qualification of the Transfer Restricted Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (v) of the happening of any event during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading and (vi) of any determination by the Issuers that a post-effective amendment to a Registration Statement would be appropriate, except, in the case of clauses (iv), (v) and (vi), with respect to any event, development or transaction permitted to be kept confidential, the Issuers shall not be required to describe such event, development or transaction in the written notice provided;
(f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of Transfer Restricted Securities, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested). The Issuers shall not, without the prior consent of the Underwriters, if applicable, make any offer relating to the Securities or the Exchange Securities that would constitute a free-writing prospectus, as defined in SEC Rule 405;
(h) in the case of a Shelf Registration, cooperate with the selling Holders of Transfer Restricted Securities to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends and enable such Transfer Restricted Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders may reasonably request at least one business day prior to the closing of any sale of Transfer Restricted Securities;
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(i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(e)(v) or 3(e)(vi) hereof, as promptly as practicable prepare and file with the SEC a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Transfer Restricted Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; the Company agrees to notify the Holders, and confirm such notice in writing, to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and the Holders hereby agree to suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and expressly agree to maintain the information contained in such notice confidential (except that such information may be disclosed to its counsel) until it has been publicly disclosed by the Company; notwithstanding the foregoing, the Company shall not be required to amend or supplement a Registration Statement, any related Prospectus or any document incorporated or deemed to be incorporated therein by reference if (i) an event occurs and is continuing as a result of which the Shelf Registration, any related Prospectus or any document incorporated or deemed to be incorporated therein by reference, would, in the Issuers good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading (with respect to such a Prospectus only, in light of the circumstances under which they were made), and (ii) (a) the Company determines in its good faith judgment that the disclosure of such event at such time would have a material adverse effect on the business, operations or prospects of the Issuers, or (b) the disclosure otherwise relates to a pending material business transaction that has not yet been publicly disclosed;
(j) in the case of a Shelf Registration Statement, a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to, the Holders and their counsel and make such of the representatives of the Issuers as shall be reasonably requested by the Holders or their counsel available for discussion of such document, and shall not at any time file or make any amendment to the Registration Statement, any Prospectus or any amendment of or supplement to a Registration Statement or a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus, of which the Holders and their counsel shall not have previously been advised and furnished a copy or to which the Holders or their counsel shall reasonably object on a timely basis, except for any Registration Statement or amendment thereto or related Prospectus or supplement thereto (a copy of which has been previously furnished as provided in the preceding sentence) which counsel to the Company has advised the Issuers in writing is required to be filed in order to comply with applicable law;
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(k) obtain a CUSIP number for all Exchange Securities or Transfer Restricted Securities, as the case may be, not later than the effective date of a Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the TIA ), in connection with the registration of the Exchange Securities or Transfer Restricted Securities, as the case may be, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for inspection upon written request by a representative of the Holders of the Transfer Restricted Securities, any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and attorneys and accountants designated by the Holders, at reasonable times and in a reasonable manner, all pertinent financial and other records, pertinent documents and properties of the Issuers as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the respective officers, directors and employees of the Issuers to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with their due diligence responsibilities under a Shelf Registration Statement; provided , that each such representative, Underwriter, attorney or accountant shall agree in writing that it will keep such information confidential and that it will not disclose any of the information that the Company determines, in good faith, to be confidential and notifies them in writing are confidential unless (i) the disclosure of such information is necessary to avoid or correct a material misstatement or material omission in such Registration Statement or Prospectus, (ii) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) the information has been made generally available to the public other than by any of such persons or its Affiliates; provided , however , that prior notice shall be provided as soon as practicable to the Company of the potential disclosure of any information by such person pursuant to clause (i) or (ii) of this sentence in order to permit the Company to obtain a protective order (or waive the provisions of this paragraph (m));
(n) if reasonably requested by any Holder of Transfer Restricted Securities covered by a Registration Statement, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company has received notification of the matters to be incorporated in such filing;
(o) in the case of an Underwritten Offering pursuant to a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those requested by the Majority Holders) in order to expedite or facilitate the disposition of such Transfer Restricted Securities and in such connection, (i) to the extent
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possible, make such representations and warranties to the Holders and any Underwriters of such Transfer Restricted Securities with respect to the business of the Issuers and their respective subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same in writing if and when requested, (ii) obtain opinions of counsel to the Issuers (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders and such Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of Transfer Restricted Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (iii) obtain cold comfort letters from the independent certified public accountants of the Issuers (and, if necessary, any other certified public accountant of any subsidiary of the Company, or of any business acquired by any of the Issuers for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder and Underwriter of Transfer Restricted Securities, such letters to be in customary form and covering matters of the type customarily covered in cold comfort letters in connection with underwritten offerings, (iv) if an underwriting agreement is entered into, include in such underwriting agreement indemnification provisions and procedures no less favorable to the selling Holders and underwriters, if any, than those set forth in Section 5 hereof (or such other provisions and procedures acceptable to the Majority Holders and the underwriters (if any), and (v) deliver such documents and certificates as may be reasonably requested by the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Issuers made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in an underwriting agreement; and
(p) in the case of a Shelf Registration pursuant to Sections 2(b)(iii) or (iv), cause to be delivered a cold comfort letter with respect to the Prospectus in the form existing on the Effective Date of the Shelf Registration Statement and with respect to each subsequent amendment or supplement, if any, effected during the period ending on the 180th day following the Effective Date of the Shelf Registration Statement (as such period may be extended pursuant to the penultimate paragraph of Section 3 of this Agreement).
In the case of a Shelf Registration Statement, the Company may require each Holder of Transfer Restricted Securities to furnish to the Company such information regarding the Holder and the proposed distribution by such Holder of such Transfer Restricted Securities as the Company may from time to time reasonably request in writing. The Company may exclude from such registration the Transfer Restricted Securities of any seller so long as such seller fails to furnish such information within a reasonable time after receiving such request. No Holder of Transfer Restricted Securities shall be entitled to Additional Interest pursuant to Section 2(e) hereof unless and until such Holder shall have provided all such information. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such seller not materially misleading.
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In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to a Registration Statement until such Holders receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in its possession, other than permanent file copies then in such Holders possession, of the Prospectus covering such Transfer Restricted Securities current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Transfer Restricted Securities pursuant to a Registration Statement, the Company shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions.
The Holders of Transfer Restricted Securities covered by a Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers (the Underwriters ) that will administer the offering will be selected by the Majority Holders.
4. Participation of Broker-Dealers in Exchange Offer .
(a) The Staff of the SEC has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a Participating Broker-Dealer ), may be deemed to be an underwriter within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities.
The Issuers understand that it is the Staffs position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.
(b) In light of the above, notwithstanding the other provisions of this Agreement, the Issuers agree that the provisions of this Agreement as they relate to a Shelf Registration shall also apply to an Exchange Offer Registration to the extent, and with such reasonable modifications thereto as may be, reasonably requested by one or more Participating Broker-Dealers (or other Holders, if any, with similar prospectus delivery
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obligations under the Securities Act) as provided in clause (ii) below, in order to expedite or facilitate the disposition of any Exchange Securities by such Participating Broker-Dealers (or other Holder with a similar prospectus delivery obligation) consistent with the positions of the Staff recited in Section 4(a) above; provided that:
(i) the Issuers shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 3(i), for a period exceeding 180 days after the Effectiveness Date of such Exchange Offer Registration Statement (as such period may be extended pursuant to the penultimate paragraph of Section 3 of this Agreement) and Participating Broker-Dealers (or other Holders with a similar prospectus delivery obligation) shall not be authorized by the Issuers to deliver and shall not deliver such Prospectus after such period in connection with the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set forth in Section 3 of this Agreement to an Exchange Offer Registration, to the extent not required by the positions of the Staff of the SEC or the Securities Act and the rules and regulations thereunder, will be in conformity with the reasonable request in writing to the Issuers by one or more persons who certify to the Issuers in writing that they anticipate that they will be Participating Broker-Dealers or otherwise subject to a similar prospectus delivery obligation under the Securities Act; and provided , further that, in connection with such application of the Shelf Registration procedures set forth in Section 3 to an Exchange Offer Registration, the Issuers shall be obligated (x) to deal only with one entity representing such Participating Broker-Dealers and such other Holders subject to a prospectus delivery obligation and (y) to pay the fees and expenses of only one counsel representing the Participating Broker-Dealers and such other Holders subject to a prospectus delivery obligation.
5. Indemnification .
(a) The Issuers agree, jointly and severally, to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the Indemnified Parties ) from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or issuer free writing prospectus, as defined in SEC Rule 433 ( Issuer FWP ) relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein
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or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided , however , that the Issuers shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Issuers by or on behalf of such Holder specifically for inclusion therein; provided further , however , that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Issuers shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders.
(b) Each Holder, severally and not jointly, will indemnify and hold harmless the Issuers and each person, if any, who controls an Issuer within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Issuers or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Issuers by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Issuers for any legal or other expenses reasonably incurred by the Issuers or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Issuers or any of their respective controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate
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therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the transactions contemplated by the Exchange Agreement, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Transfer Restricted Securities or Exchange Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Transfer Restricted Securities or Exchange Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
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entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls an Issuer within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Issuers.
(e) The agreements contained in this Section 5 shall survive the sale of the Transfer Restricted Securities or Exchange Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.
6. Miscellaneous .
(a) No Inconsistent Agreements . None of the Issuers has entered into, and on or after the date of this Agreement none of the Issuers will enter into, any agreement which is inconsistent with the rights granted to the Holders of Transfer Restricted Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Companys other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers . The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Issuers have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Transfer Restricted Securities affected by such amendment, modification, supplement, waiver or consent; provided , however , that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Transfer Restricted Securities unless consented to in writing by such Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Transfer Restricted Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Transfer Restricted Securities may be given by Holders of at least a majority in aggregate principal amount of the Transfer Restricted Securities being sold pursuant to such Registration Statement.
(c) Notices . All communications hereunder will be in writing and, if sent to the Exchange Agreement Holders will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them as follows:
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If sent to Franklin, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them at:
Franklin Advisers, Inc.
One Franklin Parkway
San Mateo, CA 94403
Attention: Brendan Circle; Christopher Chen
With a copy (which shall not constitute notice hereunder)
To: DLA Piper LLP (US)
555 Mission Street, Suite 2400
San Francisco, CA 94105-2933
Attn: Joshua Morse and Ann Lawrence
If sent to MacKay, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them at:
MacKay Shields LLC
1345 Avenue of the Americas
New York, NY 10105
Attention: Dohyun Cha
If sent to Bain, GSO or FS, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them at:
Bain Capital Credit, LP
200 Clarendon Street
Boston MA 02116
Andrew Hailey
AHailey@baincapital.com
GSO Capital Partners LP
345 Park Ave, 31st Floor
New York, NY 10154
Valerie Kritsberg
Valerie.Kritsberg@gsocap.com
FS Investments
201 Rouse Boulevard
Philadelphia, PA 19112
Grace Hutchinson
Grace.Hutchinson@fsinvestments.com
With a copy (which shall not constitute notice hereunder)
To: Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
New York, NY 10036-6745
Attn: Frederick Lee
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If sent to the Issuers, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them at:
Talos Production LLC
1600 Smith Street, Suite 5000
Houston, TX 77002
Attention: Chief Financial Officer
With a copy (which shall not constitute notice hereunder)
To: Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Gregory A. Ezring and Tracey A. Zaccone.
(d) Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms of the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Securities, in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Trustee (in its capacity as Trustee under the Indenture or acting on behalf of the Holders pursuant to this Agreement) shall have no liability or obligation to either (i) the Issuers with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement or (ii) any Holder with respect to any failure by the Issuers to comply with, or any breach by the Issuers of, any of the obligations of the Issuers under this Agreement.
(e) Entire Agreement . This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.
(f) Third Party Beneficiary . The Holders shall be third party beneficiaries to the agreements made hereunder between the Issuers, on the one hand, and the Exchange Agreement Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.
(g) Counterparts . This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
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(h) Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law . The internal laws of the State of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereto without giving effect to conflicts of laws, rules or principles.
(j) Severability . In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
TALOS PRODUCTION LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OPERATING COMPANY LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OPERATING GP LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY OFFSHORE LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Registration Rights Agreement]
TALOS ERT LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
CKB PETROLEUM, LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST OFFSHORE LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS GULF COAST ONSHORE LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY INTERNATIONAL LLC | ||
By: |
/s/ Michael L. Hartis |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Registration Rights Agreement]
TALOS PETROLEUM LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS MANAGEMENT INTERMEDIARY LLC |
||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS MANAGEMENT HOLDINGS LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
STONE ENERGY HOLDING, L.L.C. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Registration Rights Agreement]
TALOS RESOURCES LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY PHOENIX LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ENERGY HOLDINGS LLC | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer | ||
TALOS ARGO INC. | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Chief Financial Officer |
[Registration Rights Agreement]
BLACKSTONE/GSO STRATEGIC CREDIT FUND | ||
By: GSO / Blackstone Debt Funds Management LLC, as investment adviser | ||
By: |
/s/ Marisa J. Beeney |
|
Name: | Marisa J. Beeney | |
Title: | Authorized Signatory |
[Registration Rights Agreement]
Foxfield Funding LLC | ||
By: FS Energy and Power Fund, its sole member | ||
By: FS/EIG Advisor, LLC, its investment adviser | ||
By: |
/s/ Andrew P. Jamison |
|
Name: Andrew P. Jamison | ||
Title: Authorized Person | ||
By: |
/s/ Clayton R. Taylor |
|
Name: Clayton R. Taylor | ||
Title: Authorized Person | ||
Bryn Mawr Funding LLC | ||
By: FS Energy and Power Fund, its sole member | ||
By: FS/EIG Advisor, LLC, its investment adviser | ||
By: |
/s/ Andrew P. Jamison |
|
Name: Andrew P. Jamison | ||
Title: Authorized Person | ||
By: |
/s/ Clayton R. Taylor |
|
Name: Clayton R. Taylor | ||
Title: Authorized Person |
[Registration Rights Agreement]
FS INVESTMENT CORPORATION II | ||
By: |
/s/ Philip S. Davidson |
|
Name: | Philip S. Davidson | |
Title: | Authorized Signatory | |
FS INVESTMENT CORPORATION III | ||
By: |
/s/ Philip S. Davidson |
|
Name: | Philip S. Davidson | |
Title: | Authorized Signatory |
[Registration Rights Agreement]
FUTURE FUND BOARD OF GUARDIANS | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL HIGH INCOME PARTNERSHIP, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
KAISER FOUNDATION HOSPITALS | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
KAISER PERMANENTE GROUP TRUST | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL CREDIT MANAGED ACCOUNT (PSERS), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Registration Rights Agreement]
CHI OPERATING INVESTMENT PROGRAM L.P. | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND PUBLIC LIMITED COMPANY | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL CREDIT RIO GRANDE FMC, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
SUNSUPER POOLED SUPERANNUATION TRUST | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
FIRSTENERGY SYSTEM MASTER RETIREMENT TRUST | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Registration Rights Agreement]
CATHOLIC HEALTH INITIATIVES MASTER TRUST | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
AON HEWITT GROUP TRUST HIGH YIELD PLUS BOND FUND | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
SEARS HOLDINGS PENSION TRUST | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND (SRI), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Registration Rights Agreement]
BAIN CAPITAL DISTRESSED AND SPECIAL SITUATIONS 2013 (D), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL DISTRESSED AND SPECIAL SITUATIONS 2013 (AIV II MASTER), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL CREDIT MANAGED ACCOUNT (E), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
SAN FRANCISCO CITY AND COUNTY EMPLOYEES RETIREMENT SYSTEM | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC. AC ALTERNATIVES INCOME FUND | ||
By: Bain Capital Credit, LP, as Subadvisor | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BLUE CROSS OF CALIFORNIA | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Registration Rights Agreement]
FRANKLIN ADVISERS, INC. , as investment manager on behalf of certain funds and accounts that are holders of Notes, as set forth on Schedule A attached hereto. | ||
By: |
/s/ Richard Hsu |
|
Name: | Richard Hsu | |
Title: | Vice President, Franklin Advisers | |
MACKAY SHIELDS LLC , as investment manager on behalf of certain of its clients that are holders of Stone Notes, which clients hold on the date hereof an aggregate principal amount of Notes set forth on Schedule A attached hereto. | ||
By: |
/s/ Young Lee |
|
Name: | Young Lee | |
Title: | Senior Managing Director |
[Registration Rights Agreement]
Schedule A
FRANKLIN ADVISERS, INC.
Noteholder
FCF-Franklin Income Fund
FTVIPT-Franklin Income VIP Fund
FTIF-Franklin Income Fund
JNL/Franklin Templeton Income Fund
FT Opportunistic Distressed Fund, Ltd.
MACKAY SHIELDS LLC
Noteholder |
Principal Amount of Notes | |||
MacKay Shields clients |
$ | 51,561,250 |
ANNEX I
LIST OF SUBSIDIARY GUARANTORS
Jurisdiction of Organization |
||
Talos Energy Operating Company LLC |
Delaware | |
Talos Energy Operating GP LLC |
Delaware | |
Talos Energy International LLC |
Delaware | |
Talos Energy Offshore LLC |
Delaware | |
Talos Gulf Coast LLC |
Delaware | |
Talos Gulf Coast Offshore LLC |
Delaware | |
Talos Gulf Coast Onshore LLC |
Delaware | |
Talos ERT LLC |
Delaware | |
CKB Petroleum, LLC |
Delaware | |
Talos Management Intermediary LLC |
Delaware | |
Talos Management Holdings LLC |
Delaware | |
Talos Energy LLC |
Delaware | |
Talos Petroleum LLC |
Delaware | |
Stone Energy Holding, L.L.C |
Delaware | |
Talos Resources LLC |
Delaware | |
Talos Energy Phoenix LLC |
Delaware | |
Talos Energy Holdings LLC |
Delaware | |
Talos Argo Inc. |
Delaware |
Execution Version
EXCHANGE AGREEMENT
This Exchange Agreement (this Agreement ) is made and entered into as of November 21, 2017, by and among Talos Production LLC, a Delaware limited liability company (the Company ), Talos Production Finance Inc., a Delaware corporation (the Co-Issuer and, together with the Company, the Issuers ), Stone Energy Corporation, a Delaware corporation ( Stone ), Sailfish Energy Holdings Corporation, a Delaware Corporation ( New Stone ), the lenders listed on Schedule A hereto (collectively, the Institutional Bridge Loan Lenders ), the lenders listed on Schedule B hereto (collectively, the Sponsor Bridge Loan Lenders and together with the Institutional Bridge Loan Lenders, the Bridge Loan Lenders ), the noteholders listed on Schedule C (or their permitted assigns) hereto (collectively, the Sponsor Noteholders ) and the noteholders listed on Schedule D hereto (the Stone Noteholders ). The Company, the Co-Issuer, Stone, New Stone, the Institutional Bridge Loan Lenders, the Sponsor Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders are collectively referred to herein as the Parties and individually as a Party as the context may require.
RECITALS
WHEREAS, reference is made to that Second Lien Bridge Loan Agreement, dated as of April 3, 2017 (the Bridge Loan Agreement ), by and among the Issuers, as borrowers thereunder, the subsidiary guarantors party thereto from time to time, the Bridge Loan Lenders and Wilmington Trust, National Association, as administrative agent and collateral agent, pursuant to which the Bridge Loan Lenders made loans of $172,023,000 in aggregate principal amount to the Issuers (the Bridge Loans );
WHEREAS, reference is made to that certain indenture, dated as of February 28, 2017 (the Stone Indenture ), by and among Stone Energy Corporation ( Stone ), as issuer thereunder, Stone Energy Offshore, L.L.C., as subsidiary guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (the Stone Notes Trustee ) and collateral agent, pursuant to which Stone issued $225,000,000 in aggregate principal amount of 7.500% Senior Secured Notes due 2022 (the Stone Notes );
WHEREAS, reference is made to that certain indenture, dated as of April 3, 2017 (the Sponsor Notes Indenture ), by and among the Issuers, as issuers thereunder, the subsidiary guarantors party thereto from time to time and Wilmington Trust, National Association, as trustee (the Sponsor Notes Trustee ), pursuant to which the Borrowers issued $102,000,000 in aggregate principal amount of 9.75% Senior Notes due 2022 (the Sponsor Notes );
WHEREAS, on November 21, 2017, Stone, New Stone, Sailfish Merger Sub Corporation ( Merger Sub ), Talos Energy LLC ( Talos Energy ) and the Company have entered into a Transaction Agreement (the Transaction Agreement ), providing for, among other things, the combination of Talos Energy and its subsidiaries with Stone (the Transactions (as defined in the Transaction Agreement), other than the transactions described in Sections (vii) through (x) of the second recital to the Transaction Agreement, the Combination );
WHEREAS, on the Closing Date (as defined below), on the terms and subject to the conditions set forth herein, the Sponsor Noteholders desire to exchange (the Sponsor Notes Exchange and together with, the Bridge Loan Lender Exchange and the Stone Noteholder Exchange, the Exchange ) Sponsor Notes in the principal amounts set forth opposite each Sponsors name on Schedule C hereto (the Applicable Sponsor Note Amount ) for a number of shares of common stock of New Stone equal to, with respect to each Sponsor, the quotient of (x) the Applicable Sponsor Note Amount divided by (y) the last reported trading price of one share of common stock of Stone, par value $0.01 per share ( Stone Common Stock) prior to the close of trading on the New York Stock Exchange on the last full trading day prior to the Closing Date as reported by Bloomberg ;
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WHEREAS, on the Closing Date, immediately following the Sponsor Notes Exchange, on the terms and subject to the conditions set forth herein, the Bridge Loan Lenders desire to exchange (the Bridge Loan Lender Exchange ) Bridge Loans in the principal amounts set forth opposite each Bridge Loan Lenders name on Schedules A and B for 11.00% senior secured second-priority notes of the Issuers (the New Second Lien Notes ) in the principal amounts set forth opposite each Bridge Loan Lenders name on Schedules A and B hereto;
WHEREAS, on the Closing Date, concurrently with the Bridge Loan Lender Exchange, on the terms and subject to the conditions set forth herein, the Stone Noteholders desire to exchange (the Stone Noteholder Exchange ) Stone Notes in the principal amounts set forth opposite each Stone Noteholders name on Schedule D hereto for New Second Lien Notes in the principal amounts set forth opposite each Stone Noteholders name on Schedule D hereto;
WHEREAS, the New Second Lien Notes will be issued pursuant to an indenture to be entered into on the Closing Date (the New Second Lien Notes Indenture ) by and among the Issuers, certain subsidiaries of the Issuers as guarantors thereunder, and Wilmington Trust, National Association or another trustee and collateral agent reasonably acceptable to the Parties (the New Second Lien Notes Trustee ), substantially in the form attached hereto as Exhibit A , with such changes as are required by the New Second Lien Notes Trustee and shall accrue interest from the Closing Date;
WHEREAS, the New Second Lien Notes will be delivered in book-entry form through the facilities of the Depositary Trust Company ( DTC ), and will be deposited with, or on behalf of DTC, and registered in the name of Cede & Co., as DTCs nominee;
WHEREAS, the Exchange will result in no new proceeds to the Issuers;
WHEREAS, following the date of this Agreement and prior to the Closing Date, the Issuers shall make an offer to all holders of Stone Notes that are not party to this Agreement and may make an offer to any or all holders of the Issuers 9.75% Senior Notes due 2018 (the 2018 Notes ), and that, in each case, are accredited investors within the meaning of Regulation D of the U.S. Securities Act of 1933 (the Securities Act ), to exchange their Stone Notes or 2018 Notes, as the case may be, for New Second Lien Notes;
NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Exchange
Section 1.1 Exchange of the Sponsor Notes . On the terms and subject to the satisfaction of the conditions set forth in this Agreement, the Issuers, New Stone and the Sponsor Noteholders, severally and not jointly, agree to consummate the Sponsor Notes Exchange and certain of the transactions contemplated hereby on the Closing Date as follows:
a) Sponsor Notes Exchange . Each Sponsor Noteholder shall, severally and not jointly, surrender, transfer and deliver to New Stone its Applicable Sponsor Notes Amount of Sponsor Notes. New Stone shall then transfer and deliver such Sponsor Notes to the Company in exchange for additional equity interests in the Company (following which the Sponsor Notes shall be cancelled by operation of law), and the Company shall surrender, transfer and deliver such Sponsor Notes to the Sponsor Notes Trustee for cancellation in accordance with the terms of the Sponsor Notes Indenture through the Deposit/Withdrawal at Custodian procedures of DTC (and the
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Company shall promptly effect such cancellation), together with all right, title and interest to the Sponsor Notes. Such transfer of Sponsor Notes shall be made solely in exchange for the following:
(i) On the Closing Date, New Stone shall issue and deliver to each Sponsor Noteholder a number of shares of common stock of New Stone, par value $0.01 per share ( New Stone Common Stock ) equal to, with respect to such Sponsor, the quotient of (x) its Applicable Sponsor Note Amount divided by (y) the last reported trading price of Stone Common Stock prior to the close of trading on the New York Stock Exchange on the last full trading day prior to the Closing Date as reported by Bloomberg .
(ii) On the Closing Date, the Company shall make a cash payment directly to each Sponsor Noteholder equal to the accrued and unpaid interest in respect of the principal amount of Sponsor Notes so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Sponsor Notes Indenture) by wire transfer in immediately available funds to the account(s) previously provided by such Sponsor Noteholder in accordance with the Sponsor Notes Indenture.
Section 1.2 Exchange of the Bridge Loans . On the terms and subject to the satisfaction of the conditions set forth in this Agreement, the Issuers and the Bridge Loan Lenders, severally and not jointly, agree to consummate the Bridge Loan Exchange and certain of the transactions contemplated hereby on the Closing Date as follows:
a) Bridge Loan Lender Exchange . Each Bridge Loan Lender shall, severally and not jointly, transfer and deliver to the Issuers for cancellation Bridge Loans in the aggregate principal amount set forth opposite such Bridge Loan Lenders name on Schedule A or B , as applicable, together with all right, title and interest to the Bridge Loans. Such transfer of Bridge Loans shall be made solely in exchange for the following:
(i) On the Closing Date, the Issuers shall issue and deliver to each Bridge Loan Lender New Second Lien Notes in the aggregate principal amount set forth opposite such Bridge Loan Lenders name on Schedule A or B hereto, as applicable.
(ii) On the Closing Date, the Issuers shall issue and deliver to each Bridge Loan Lender who so elects, New Second Lien Notes in an amount equal to the accrued and unpaid interest in respect of the principal amount of Bridge Loans so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Bridge Loan Agreement).
(iii) On the Closing Date, the Issuers shall make a cash payment directly to each Bridge Loan Lender equal to the accrued and unpaid interest in respect of the principal amount of Bridge Loans so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Bridge Loan Agreement) by wire transfer in immediately available funds to the account(s) previously provided by such Bridge Loan Lender in accordance with the Bridge Loan Agreement; provided, that the Issuers will not make such payment to Bridge Loan Lenders who elect to receive the treatment set forth in Section 1.2(a)(ii).
(iv) On the Closing Date, the Company shall pay a work fee in cash to each Bridge Loan Lender equal to 2.37% of the aggregate principal amount of Bridge Loans exchanged by such Bridge Loan Lender (the Bridge Loan Lender Work Fee ).
Section 1.3 Exchange of the Stone Notes . On the terms and subject to the satisfaction of the conditions set forth in this Agreement, the Issuers, Stone and the Stone Noteholders, severally and not jointly, agree to consummate the Stone Noteholder Exchange and certain of the transactions contemplated hereby on the Closing Date as follows:
a) Stone Noteholder Exchange . Each Stone Noteholder shall, severally and not jointly, surrender, transfer and deliver to the Issuers Stone Notes in the aggregate principal amount set forth on Schedule D . The Issuers shall then transfer and deliver such Stone Notes to Stone, and Stone shall surrender, transfer and deliver such Stone Notes to the Stone Notes Trustee for cancellation in accordance with the terms of the Stone Indenture
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through the Deposit/Withdrawal at Custodian procedures of DTC (and Stone shall promptly effect such cancellation), together with all right, title and interest to the Stone Notes. Such transfer of Stone Notes shall be made solely in exchange for the following:
(i) On the Closing Date, the Issuers shall issue and deliver to the Stone Noteholders New Second Lien Notes in the principal amount set forth opposite each Stone Noteholders name on Schedule D hereto.
(ii) On the Closing Date, the Issuers shall issue and deliver to each Stone Noteholder who so elects, New Second Lien Notes in an amount equal to the accrued and unpaid interest in respect of the principal amount of Stone Notes so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Stone Indenture).
(iii) On the Closing Date, the Issuers shall make a cash payment directly to each Stone Noteholder equal to the accrued and unpaid interest in respect of the principal amount of Stone Notes so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Stone Indenture) by wire transfer in immediately available funds to the account(s) previously provided by such Stone Noteholder in accordance with the Stone Indenture; provided, that the Issuers will not make such payment to Stone Noteholders who elect to receive the treatment set forth in Section 1.3(a)(ii).
(iv) On the Closing Date, the Company shall pay a work fee in cash to each Stone Noteholder and any other holder of Stone Notes who exchanges its Stone Notes for New Second Lien Notes equal to 2.37% of the aggregate principal amount of Stone Notes exchanged by such Stone Noteholder (the Stone Noteholder Work Fee ).
b) Certain Matters Relating to MacKay Shields . Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge that MacKay Shields LLC ( MacKay ) will have no obligation hereunder with respect to any Stone Notes that are on loan pursuant to a securities lending program or with respect to which MacKay is no longer the legal owner, beneficial owner, and/or investment advisor (but not as a result of any affirmative action or election of MacKay). MacKay agrees that it shall (i) use its reasonable efforts to cause Stone Notes not to be lent out under a securities lending program and (ii) not (and shall cause its Affiliates not to) directly or indirectly knowingly encourage, induce or facilitate any revocation of discretionary management authority with respect to any Stone Notes for which it is the investment manager.
Section 1.4 Closing . The closing of the Exchange (the Closing ) will take place immediately following the consummation of the Combination after the satisfaction (or waiver by the applicable Parties) of the conditions set forth in Sections 1.5(a), 1.5(b) and 1.5(c) below at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Issuers, or on such other date and at such other place as the Parties may agree in writing (the Closing Date ). The transactions set forth in Sections 1.2 and 1.3 shall be deemed to take place in the order set forth in Article 2 of the Transaction Agreement. None of the Issuers, Talos Energy or Stone will pay or owe any prepayment or redemption premium or any other amount under the Bridge Loan Agreement, the Stone Indenture or the Sponsor Notes Indenture in respect of the Bridge Loans, the Stone Notes or the Sponsor Notes exchanged for New Second Lien Notes or New Stone Common Stock, as the case may be.
Section 1.5 Conditions to Closing .
(a) Obligations of the Bridge Loan Lenders . The obligation of the Bridge Loan Lenders hereunder to consummate the Bridge Loan Exchange and the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions; provided, that these conditions are for the Bridge Loan Lenders sole benefit and may be waived by the Bridge Loan Lenders at any time in their sole discretion by providing the other Parties with prior written notice thereof:
(i) Transaction Documents . (A) This Agreement, the New Second Lien Notes Indenture, the Collateral Agreement (as defined below), the New Second Lien Notes and a registration rights agreement consistent with
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the description thereof on Exhibit B hereto for the New Second Lien Notes (the Registration Rights Agreement ) shall have been duly and validly authorized, executed and delivered (and in the case of the New Second Lien Notes, duly and validly authenticated) by all of the parties thereto, and (B) each of the New Second Lien Notes Trustee and the Bridge Loan Lenders shall have received either (x) a counterpart of this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and the New Second Lien Notes signed on behalf of each party thereto or (y) written evidence reasonably satisfactory to it (which may include telecopy or electronic transmission of a signed signature page) that each party to this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and the New Second Lien Notes has signed a counterpart of the requisite agreements.
(ii) Combination . The Combination shall have been consummated on the terms described in the Transaction Agreement on or prior to 11:59 p.m. EST on May 31, 2018 (the Outside Date ), without giving effect to any amendment, consent, waiver or other modification thereof that is materially adverse to interests of the Bridge Loan Lenders (in their capacities as such).
(iii) Collateral . The New Second Lien Notes Trustee and the Bridge Loan Lenders shall have received:
(A) | from the Issuers and the Subsidiary Guarantors (as defined below), a counterpart of the collateral agreement and ancillary security documents (in each case in form and substance consistent with the collateral agreement and ancillary security documents with respect to the Bridge Loans and the New Second Lien Notes Indenture attached hereto as Exhibit A , and otherwise reasonably acceptable to the Stone Noteholders and the Bridge Loan Lenders) to be entered into among the Issuers, the Subsidiary Guarantors and the New Second Lien Notes Trustee, as collateral agent (the Collateral Agreement ); |
(B) | all documents and instruments, including Uniform Commercial Code or other applicable personal property and financing statements, reasonably requested by the New Second Lien Notes Trustee to be filed, registered or recorded to create the liens intended to be created by any security document and perfect such liens to the extent required by, and with the priority required by, such security document shall have been delivered to the New Second Lien Notes Trustee for filing, registration or recording and none of the collateral shall be subject to any other pledges, security interests or mortgages, except for liens permitted under the New Second Lien Notes Indenture; |
(C) | all Equity Interests (as defined in the Bridge Loan Agreement) of the Co-Issuer and all Equity Interests of each Restricted Subsidiary (as defined in the Bridge Loan Agreement) directly owned by the Issuers or any Subsidiary Guarantor, in each case as of the date hereof, and required to be delivered to the agent under the new reserve-based revolving credit agreement dated on or about the Closing Date (the Credit Agreement ) pursuant to the terms thereof, shall have been pledged pursuant to the Collateral Agreement and the New Second Lien Notes Trustee (or the agent under the Credit Agreement as bailee for the New Second Lien Notes Trustee pursuant to the Senior Lien Intercreditor Agreement (as defined below)) shall have received all certificates, if any, representing such securities pledged under the Collateral Agreement, accompanied by instruments of transfer and/or undated powers endorsed in blank; and |
(D) | the results of a search of the Uniform Commercial Code filings made with respect to the Issuers and the Subsidiary Guarantors in the jurisdictions reasonably requested by the New Second Lien Notes Trustee or the Institutional Bridge Loan Lenders and the copies of the financing statements disclosed by such search. |
(iv) Fees and Expenses . (A) The New Second Lien Notes Trustee shall have received all fees payable thereto pursuant to a fee agreement (the Fee Agreement ) to be entered into with the Issuers on or prior to the Closing Date, and (B) to the extent invoiced, each Institutional Bridge Loan Lender shall have received reimbursement or payment of all reasonable out-of-pocket expenses in connection with the Bridge Loan Exchange, this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and other agreements and documents relating thereto and the negotiation thereof.
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(v) Representations, Warranties and Agreements . (x) The representations and warranties of the Issuers contained in Article V hereof shall be true and correct, in the case of representations and warranties which are qualified as to materiality, and shall be true and correct in all material respects, in the case of representations and warranties that are not so qualified, and (y) the Issuers and the other subsidiaries of the Company party to the New Second Lien Notes Indenture as guarantors (the Subsidiary Guarantors ) shall have complied in all material respects with all of their agreements set forth herein, in the New Second Lien Notes Indenture and the Collateral Agreement to be performed or satisfied at or prior to the Closing Date;
(vi) Officers Certificate . The Issuers shall have furnished to the Bridge Loan Lenders a certificate, dated as of the Closing Date, of the President or any Vice President and a Secretary or Treasurer of the Issuers in which such officers, to their knowledge, shall state that as of the Closing Date (x) the representations and warranties of the Issuers contained in Article V hereof are true and correct, in the case of representations and warranties which are qualified as to materiality, and true and correct in all material respects, in the case of representations and warranties that are not so qualified and (y) the Issuers and the Subsidiary Guarantors have complied in all material respects with all of their agreements set forth herein and in the New Second Lien Notes Indenture and the Collateral Agreement to be performed or satisfied at or prior to the Closing Date.
(vii) Secretarys Certificate . With respect to the New Second Lien Notes Indenture, the New Second Lien Notes Trustee shall have received:
(i) a copy of the certificate of formation or incorporation, as applicable, including all amendments thereto, of each of the Issuers and the Subsidiary Guarantors, certified as of a recent date by the Secretary of State of Delaware or the certifying authority in such other jurisdiction in which such party is organized, and a certificate as to the good standing of the Issuers and the Subsidiary Guarantors as of a recent date from such Secretary of State or other certifying authority;
(ii) a certificate of an officer of each of the Issuers and the Subsidiary Guarantors dated the Closing Date and certifying:
(a) that attached thereto is a true and complete copy of the limited liability company agreement or by-laws, as applicable, of such person, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (b) below;
(b) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or managing general partner, managing member or equivalent) of such person authorizing the execution, delivery and performance, as applicable, of the New Second Lien Notes Indenture, the Collateral Agreement, this Agreement, the Exchange, the issuance of the New Second Lien Notes, the guarantees by the Subsidiary Guarantors (the Guarantees ) and the grants of collateral entered into on the Closing Date, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Closing Date;
(c) that the certificate of formation or incorporation, as applicable, of such person has not been amended since the date of the last amendment thereto disclosed pursuant to clause (i) above;
(d) as to the incumbency and specimen signature of each officer executing the New Second Lien Notes Indenture, the Collateral Agreement or any other document delivered in connection therewith on behalf of Issuers and the Subsidiary Guarantors; and
(e) as to the absence of any pending proceeding for the dissolution or liquidation of the Issuers or the Subsidiary Guarantors; and
(iii) a certificate of a director or an officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer executing the certificate pursuant to clause (ii) above.
(viii) Intercreditor Agreement . An intercreditor agreement substantially consistent with that certain Intercreditor Agreement, dated as of April 3, 2017, between Toronto Dominion (Texas) LLC, as first lien agent
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and Wilmington Trust, Nation Association, as second lien agent, with only such modifications thereto as are determined in good faith by the Issuers, the Institutional Bridge Loan Lenders and the Stone Noteholders as not being material and adverse to the holders of the New Second Lien Notes, and setting out the lien priorities between the Credit Agreement and the New Second Lien Notes Indenture (the Senior Lien Intercreditor Agreement ) shall have been executed and delivered; provided, that if the Stone Notes that remain outstanding after the Closing Date are secured, such Stone Notes shall also be made subject to intercreditor arrangements so that such Stone Notes rank junior in lien priority to the Credit Agreement and rank pari passu in lien priority to the New Second Lien Notes with respect to collateral securing the Stone Notes immediately prior to the Closing Date.
(ix) No Prohibitions . No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or other legal restraint or prohibition shall be in effect preventing the consummation by the Issuers, the Subsidiary Guarantors or any Bridge Loan Lender, as applicable, of the Bridge Loan Exchange, the issuance of the New Second Lien Notes or the other transactions hereby intended to be consummated on the Closing Date.
(x) Work Fee . The Bridge Loan Lenders shall have received the Bridge Loan Lender Work Fee concurrently with the closing of the Bridge Loan Lender Exchange.
(xi) Mortgages . Second-priority mortgages securing the obligations with respect to the New Second Lien Notes shall have been recorded in respect of the properties of the Company and its subsidiaries and of Stone and its subsidiaries that are subject to mortgages, as of the date hereof, securing the Bridge Loans or the Stone Notes, as applicable, and such mortgage shall be sufficient to satisfy the Collateral Coverage Minimum (as defined in the New Second Lien Notes Indenture) based on the most recent Reserve Report (as defined in the New Second Lien Notes Indenture).
(xii) Stone and Sponsor Exchange . The Stone Noteholder Exchange shall have been consummated concurrently with the closing of the Bridge Loan Lender Exchange and immediately following the Sponsor Notes Exchange.
(xiii) Tender Offer and Consent Solicitation . (i) A majority of the Stone Notes (excluding Stone Notes held by the Stone Noteholders) shall have been tendered pursuant to the Tender Offer and Consent Solicitation (as defined in the Transaction Agreement) for the consideration offered thereunder, the supplemental indenture to the Stone Notes Indenture shall have become effective (and the amendments therein (and collateral releases, if any) shall have become operative) and, after giving effect to such supplemental indenture, the transactions contemplated by this Agreement and the Transaction Agreement shall not result in a default or breach of the Stone Indenture and (ii) any remaining Stone Notes immediately upon the consummation of the transactions contemplated by this Agreement shall be unsecured or secured only by the collateral securing such Stone Notes immediately prior to the Closing Date equally and ratably with the New Second Lien Notes.
(xiv) Legal Opinion . The holders of the New Second Lien Notes and the New Second Lien Notes Trustee shall have received a written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Issuers, (A) dated the Closing Date, (B) addressed to the holders of the New Second Lien Notes and the New Second Lien Notes Trustee and (C) solely with respect to the opinions set forth on Exhibit D hereto.
(xv) Single CUSIP . As of the Closing Date, (i) all indebtedness issued in connection with this Agreement or the Tender Offer and Consent Solicitation shall be New Second Lien Notes and (ii) all New Second Lien Notes issued on the Closing Date that are (x) IAI notes shall trade under a single IAI CUSIP number, (y) Reg S notes shall trade under a single Reg S CUSIP number and (z) 144A notes shall trade under a single 144A CUSIP number.
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(b) Obligations of the Stone Noteholders . The obligation of the Stone Noteholders hereunder to consummate the Stone Noteholder Exchange and the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions; provided, that these conditions are for the Stone Noteholders sole benefit and may be waived by the Stone Noteholders at any time in their sole discretion by providing the other Parties with prior written notice thereof:
(i) Transaction Documents . (A) This Agreement, the New Second Lien Notes Indenture, the Collateral Agreement, the New Second Lien Notes and the Registration Rights Agreement shall have been duly and validly authorized, executed and delivered (and in the case of the New Second Lien Notes, duly and validly authenticated) by all of the parties thereto, and (B) each of the New Second Lien Notes Trustee and the Stone Noteholders shall have received either (x) a counterpart of this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and the New Second Lien Notes signed on behalf of each party thereto or (y) written evidence reasonably satisfactory to it (which may include telecopy or electronic transmission of a signed signature page) that each party to this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and the New Second Lien Notes has signed a counterpart of the requisite agreements.
(ii) Combination . The Combination shall have been consummated on the terms described in the Transaction Agreement on or prior to the Outside Date, without giving effect to any amendment, consent, waiver or other modification thereof that is materially adverse to interests of the Stone Noteholders (in their capacities as such).
(iii) Collateral . The New Second Lien Notes Trustee and the Stone Noteholders shall have received:
(A) | from the Issuers and the Subsidiary Guarantors, a counterpart of the Collateral Agreement; |
(B) | all documents and instruments, including Uniform Commercial Code or other applicable personal property and financing statements, reasonably requested by the New Second Lien Notes Trustee to be filed, registered or recorded to create the liens intended to be created by any security document and perfect such liens to the extent required by, and with the priority required by, such security document shall have been delivered to the New Second Lien Notes Trustee for filing, registration or recording and none of the collateral shall be subject to any other pledges, security interests or mortgages, except for liens permitted under the New Second Lien Notes Indenture; |
(C) | all Equity Interests of the Co-Issuer and all Equity Interests of each Restricted Subsidiary directly owned by the Issuers or any Subsidiary Guarantor, in each case as of the date hereof, and required to be delivered to the agent under the Credit Agreement pursuant to the terms thereof, shall have been pledged pursuant to the Collateral Agreement and the New Second Lien Notes Trustee (or the agent under the Credit Agreement as bailee for the New Second Lien Notes Trustee pursuant to the Senior Lien Intercreditor Agreement) shall have received all certificates, if any, representing such securities pledged under the Collateral Agreement, accompanied by instruments of transfer and/or undated powers endorsed in blank; and |
(D) | the results of a search of the Uniform Commercial Code filings made with respect to the Issuers and the Subsidiary Guarantors in the jurisdictions reasonably requested by the New Second Lien Notes Trustee or the Stone Noteholders and the copies of the financing statements disclosed by such search. |
(iv) Fees and Expenses . (A) The New Second Lien Notes Trustee shall have received all fees payable thereto pursuant to the Fee Agreement to be entered into with the Issuers on or prior to the Closing Date and (B) to the extent invoiced, each Stone Noteholder shall have received reimbursement or payment of all reasonable out-of-pocket expenses in connection with the Stone Noteholder Exchange, this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and other agreements and documents relating thereto and the negotiation thereof.
(v) Representations, Warranties and Agreements . (x) The representations and warranties of the Issuers contained in Article V hereof shall be true and correct, in the case of representations and warranties which are
8
qualified as to materiality, and shall be true and correct in all material respects, in the case of representations and warranties that are not so qualified, and (y) the Issuers and the Subsidiary Guarantors shall have complied in all material respects with all of their agreements set forth herein, in the New Second Lien Notes Indenture and the Collateral Agreement to be performed or satisfied at or prior to the Closing Date;
(vi) Officers Certificate . The Issuers shall have furnished to the Stone Noteholders a certificate, dated as of the Closing Date, of the President or any Vice President and a Secretary or Treasurer of the Issuers in which such officers, to their knowledge, shall state that as of the Closing Date (x) the representations and warranties of the Issuers contained in Article V hereof are true and correct, in the case of representations and warranties which are qualified as to materiality, and true and correct in all material respects, in the case of representations and warranties that are not so qualified and (y) the Issuers and the Subsidiary Guarantors have complied in all material respects with all of their agreements set forth herein and in the New Second Lien Notes Indenture and the Collateral Agreement to be performed or satisfied at or prior to the Closing Date.
(vii) Secretarys Certificate . With respect to the New Second Lien Notes Indenture, the New Second Lien Notes Trustee shall have received:
(i) a copy of the certificate of formation or incorporation, as applicable, including all amendments thereto, of each of the Issuers and the Subsidiary Guarantors, certified as of a recent date by the Secretary of State of Delaware or the certifying authority in such other jurisdiction in which such party is organized, and a certificate as to the good standing of the Issuers and the Subsidiary Guarantors as of a recent date from such Secretary of State or other certifying authority;
(ii) a certificate of an officer of each of the Issuers and the Subsidiary Guarantors dated the Closing Date and certifying:
(a) that attached thereto is a true and complete copy of the limited liability company agreement or by-laws, as applicable, of such person, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (b) below;
(b) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or managing general partner, managing member or equivalent) of such person authorizing the execution, delivery and performance, as applicable, of the New Second Lien Notes Indenture, the Collateral Agreement, this Agreement, the Exchange, the issuance of the New Second Lien Notes, the Guarantees and the grants of collateral entered into on the Closing Date, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Closing Date;
(c) that the certificate of formation or incorporation, as applicable, of such person has not been amended since the date of the last amendment thereto disclosed pursuant to clause (i) above;
(d) as to the incumbency and specimen signature of each officer executing the New Second Lien Notes Indenture, the Collateral Agreement or any other document delivered in connection therewith on behalf of Issuers and the Subsidiary Guarantors; and
(e) as to the absence of any pending proceeding for the dissolution or liquidation of the Issuers or the Subsidiary Guarantors; and
(iii) a certificate of a director or an officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer executing the certificate pursuant to clause (ii) above.
(viii) Intercreditor Agreement . The Senior Lien Intercreditor Agreement shall have been executed and delivered; provided, that if the Stone Notes that remain outstanding after the Closing Date are secured, such Stone Notes shall also be made subject to intercreditor arrangements so that such Stone Notes rank junior in lien priority to the Credit Agreement and rank pari passu in lien priority to the New Second Lien Notes with respect to collateral securing the Stone Notes immediately prior to the Closing Date.
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(ix) Work Fee . The Stone Noteholders and any other holders of Stone Notes who exchange their Stone Notes for New Second Lien Notes shall have received the Stone Noteholder Work Fee concurrently with the closing of the Stone Noteholder Exchange.
(x) Mortgages . Second-priority mortgages securing the obligations with respect to the New Second Lien Notes shall have been recorded in respect of the properties of the Company and its subsidiaries and of Stone and its subsidiaries that are subject to mortgages, as of the date hereof, securing the Bridge Loans or the Stone Notes, as applicable, and such mortgage shall be sufficient to satisfy the Collateral Coverage Minimum (as defined in the New Second Lien Notes Indenture) based on the most recent Reserve Report (as defined in the New Second Lien Notes Indenture).
(xi) No Prohibitions . No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or other legal restraint or prohibition shall be in effect preventing the consummation by the Issuers, the Subsidiary Guarantors or any Stone Noteholder, as applicable, of the Stone Noteholder Exchange, the issuance of the New Second Lien Notes or the other transactions hereby intended to be consummated on the Closing Date.
(xii) Bridge Loan Lender and Sponsor Notes Exchange . The Bridge Loan Lender Exchange shall have been consummated concurrently with the closing of the Stone Noteholder Exchange and immediately following the Sponsor Notes Exchange.
(xiii) Tender Offer and Consent Solicitation . (i) A majority of the Stone Notes (excluding Stone Notes held by the Stone Noteholders) shall have been tendered pursuant to the Tender Offer and Consent Solicitation (as defined in the Transaction Agreement) for the consideration offered thereunder, the supplemental indenture to the Stone Notes Indenture shall have become effective (and the amendments therein (and collateral releases, if any) shall have become operative) and, after giving effect to such supplemental indenture, the transactions contemplated by this Agreement and the Transaction Agreement shall not result in a default or breach of the Stone Indenture and (ii) any remaining Stone Notes immediately upon the consummation of the transactions contemplated by this Agreement shall be unsecured or secured only by the collateral securing such Stone Notes immediately prior to the Closing Date equally and ratably with the New Second Lien Notes.
(xiv) Legal Opinion . The holders of the New Second Lien Notes and the New Second Lien Notes Trustee shall have received a written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Issuers, (A) dated the Closing Date, (B) addressed to the holders of the New Second Lien Notes and the New Second Lien Notes Trustee and (C) solely with respect to the opinions set forth on Exhibit D hereto.
(xv) Single CUSIP . As of the Closing Date, (i) all indebtedness issued in connection with this Agreement or the Tender Offer and Consent Solicitation shall be New Second Lien Notes and (ii) all New Second Lien Notes issued on the Closing Date that are (x) IAI notes shall trade under a single IAI CUSIP number, (y) Reg S notes shall trade under a single Reg S CUSIP number and (z) 144A notes shall trade under a single 144A CUSIP number.
(c) Obligations of the Sponsor Noteholders . The obligation of the Sponsor Noteholders hereunder to consummate the Sponsor Notes Exchange and the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions; provided, that these conditions are for the Sponsor Noteholders sole benefit and may be waived by the Sponsor Noteholders at any time in their sole discretion by providing the other Parties with prior written notice thereof:
(i) Transaction Documents . This Agreement shall have been duly and validly authorized, executed and delivered by all of the parties thereto.
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(ii) Combination . The Combination shall have been consummated on the terms described in the Transaction Agreement on or prior to the Outside Date, without giving effect to any amendment, consent, waiver or other modification thereof that is materially adverse to interests of the Sponsor Noteholders (in their capacities as such).
(iii) Issuer Representations, Warranties and Agreements . (x) The representations and warranties of the Issuers contained in Article V hereof shall be true and correct, in the case of representations and warranties which are qualified as to materiality, and shall be true and correct in all material respects, in the case of representations and warranties that are not so qualified, and (y) the Issuers shall have complied in all material respects with all of their agreements set forth herein to be performed or satisfied at or prior to the Closing Date.
(iv) New Stone Representations, Warranties and Agreements . (x) The representations and warranties of New Stone contained in Article VI hereof shall be true and correct, in the case of representations and warranties which are qualified as to materiality, and shall be true and correct in all material respects, in the case of representations and warranties that are not so qualified, and (y) New Stone shall have complied in all material respects with all of their agreements set forth herein to be performed or satisfied at or prior to the Closing Date.
(v) Officers Certificate . The Issuers shall have furnished to the Sponsor Noteholders a certificate, dated as of the Closing Date, of the President or any Vice President and a Secretary or Treasurer of the Issuers in which such officers, to their knowledge, shall state that as of the Closing Date (x) the representations and warranties of the Issuers contained in Article V hereof are true and correct, in the case of representations and warranties which are qualified as to materiality, and true and correct in all material respects, in the case of representations and warranties that are not so qualified and (y) the Issuers have complied in all material respects with all of their agreements set forth herein to be performed or satisfied at or prior to the Closing Date.
(vi) Officers Certificate . New Stone shall have furnished to the Sponsor Noteholders a certificate, dated as of the Closing Date, of the President or any Vice President and a Secretary or Treasurer of New Stone in which such officers, to their knowledge, shall state that as of the Closing Date (x) the representations and warranties of New Stone contained in Article VI hereof are true and correct, in the case of representations and warranties which are qualified as to materiality, and true and correct in all material respects, in the case of representations and warranties that are not so qualified and (y) New Stone has complied in all material respects with all of its agreements set forth herein to be performed or satisfied at or prior to the Closing Date.
(vii) Secretarys Certificate . With respect to the New Stone Common Stock, the Sponsor Noteholders shall have received:
(i) a copy of the certificate of formation or incorporation, as applicable, including all amendments thereto, of New Stone, certified as of a recent date by the Secretary of State of Delaware or the certifying authority in such other jurisdiction in which such party is organized, and a certificate as to the good standing of New Stone as of a recent date from such Secretary of State or other certifying authority;
(ii) a certificate of an officer of New Stone dated the Closing Date and certifying:
(a) that attached thereto is a true and complete copy of the limited liability company agreement or by-laws, as applicable, of such person, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (b) below;
(b) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or managing general partner, managing member or equivalent) of such person authorizing the execution, delivery and performance, as applicable, of this Agreement and the Exchange and the issuance of the New Stone Common Stock on the Closing Date, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Closing Date;
(c) that the certificate of formation or incorporation, as applicable, of such person has not been amended since the date of the last amendment thereto disclosed pursuant to clause (i) above;
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(d) as to the incumbency and specimen signature of each officer executing any document delivered in connection with this Agreement, the Exchange or the issuance of the New Common Stock on behalf of New Stone; and
(e) as to the absence of any pending proceeding for the dissolution or liquidation of New Stone; and
(iii) a certificate of a director or an officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer executing the certificate pursuant to clause (ii) above.
(viii) No Prohibitions . No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or other legal restraint or prohibition shall be in effect preventing the consummation by the Issuers, New Stone or any Sponsor Noteholder, as applicable, of the Sponsor Notes Exchange, the issuance of the New Stone Common Stock or the other transactions hereby intended to be consummated on the Closing Date.
(ix) Bridge Loan Lender and Stone Noteholder Exchange . The Bridge Loan Lender Exchange and the Sponsor Notes Exchange shall have been consummated immediately following the closing of the Sponsor Notes Exchange.
ARTICLE II
Representations and Warranties of the Bridge Loan Lenders
Each Bridge Loan Lender hereby makes the following representations and warranties on behalf of itself individually and each such Bridge Loan Lender makes no representation as to the Issuers or any other Bridge Loan Lender:
Section 2.1 Organization; Requisite Authority . Each Bridge Loan Lender is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Bridge Loan Lender possesses all requisite power and authority necessary to consummate the Bridge Loan Exchange and the transactions contemplated by this Agreement and to transfer the Bridge Loans to the Issuers.
Section 2.2 Authorization . The execution, delivery and performance of this Agreement has been duly authorized by each Bridge Loan Lender. This Agreement, when executed and delivered by each Bridge Loan Lender in accordance with the respective terms hereof, shall constitute a valid and binding obligation of such Bridge Loan Lender, enforceable against such Bridge Loan Lender in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors rights generally and by general equitable principles.
Section 2.3 Information; Consultation with Counsel and Advisors . Each Bridge Loan Lender is entering into this Agreement as principal (and not as agent or in any other capacity); none of the Issuers, or any of the Issuers affiliates or agents, are acting as a fiduciary for it; it is entering into this Agreement with a full understanding of the terms, conditions and risks thereof. Each Bridge Loan Lender (a) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent such Bridge Loan Lender has deemed necessary, (b) has had a reasonable opportunity to ask questions of and receive answers from officers and representatives of the Issuers concerning its financial condition and results of operations and the Bridge Loan Exchange to which this Agreement relates, and any such questions have been answered to its satisfaction, and (c) has conducted its own due diligence on the Issuers and the Bridge Loan Exchange and has made its own investment decisions based upon its own judgment, due diligence and advice from such advisers as such Bridge Loan Lender has deemed necessary and not upon any view expressed by or on behalf of the Issuers.
Section 2.4 Brokers Fees . None of the Bridge Loan Lenders has retained or authorized any investment banker, broker, finder or other intermediary to act on behalf of such Bridge Loan Lender or incurred any liability
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for any bankers, brokers or finders fees or commissions in connection with the transactions contemplated by this Agreement.
Section 2.5 Ownership . Each Bridge Loan Lender is the beneficial owner of the aggregate principal amount of and is entitled to any and all accrued and unpaid interest on the Bridge Loans set forth on Schedule A or Schedule B , as the case may be. Upon delivery to the Issuers of the Bridge Loans, and upon each Bridge Loan Lenders receipt of the New Second Lien Notes, as consideration in respect thereof as set forth herein, pursuant to this Agreement, good and valid title to the Bridge Loans owned by each Bridge Loan Lender will pass to the Issuers, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind.
Section 2.6 Accredited Investor . Each Bridge Loan Lender is an accredited investor within the meaning of Regulation D of the Securities Act.
Section 2.7 No Registration . Each Bridge Loan Lender acknowledges that on the Closing Date the New Second Lien Notes will have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act.
ARTICLE III
Representations and Warranties of the Stone Noteholders
Each Stone Noteholder hereby makes the following representations and warranties on behalf of itself individually and each such Stone Noteholder makes no representation as to Stone or any other Stone Noteholder:
Section 3.1 Organization; Requisite Authority . Each Stone Noteholder is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Stone Noteholder possesses all requisite power and authority necessary to consummate the Stone Notes Exchange and the transactions contemplated by this Agreement and to transfer Stone Notes to the Issuers as contemplated by Section 1.3(a).
Section 3.2 Authorization . The execution, delivery and performance of this Agreement has been duly authorized by each Stone Noteholder. This Agreement, when executed and delivered by each Stone Noteholder in accordance with the respective terms hereof, shall constitute a valid and binding obligation of such Stone Noteholder, enforceable against such Stone Noteholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors rights generally and by general equitable principles.
Section 3.3 Information; Consultation with Counsel and Advisors. Each Stone Noteholder is either (i) the sole owner of its Stone Notes or (ii) has all necessary investment or voting discretion with respect to its Stone Notes and has the power and authority to bind the owner(s) of such Stone Notes to the terms of this Agreement; none of the Issuers, or any of the Issuers affiliates or agents, are acting as a fiduciary for any Stone Noteholder; each Stone Noteholder is entering into this Agreement with a full understanding of the terms, conditions and risks thereof. Each Stone Noteholder or its investment advisor (a) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent such Stone Noteholder has deemed necessary, (b) has had a reasonable opportunity to ask questions of and receive answers from officers and representatives of the Issuers concerning its financial condition and results of operations and the Stone Notes Exchange to which this Agreement relates, and any such questions have been answered to its satisfaction, and (c) has conducted its own due diligence on the Issuers and the Stone Notes Exchange and has made its own investment decisions based upon its own judgment, due diligence and advice from such advisers as such Stone Noteholder has deemed necessary and not upon any view expressed by or on behalf of the Issuers.
Section 3.4 Brokers Fees . None of the Stone Noteholders has retained or authorized any investment banker, broker, finder or other intermediary to act on behalf of such Stone Noteholder or incurred any liability for any
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bankers, brokers or finders fees or commissions in connection with the transactions contemplated by this Agreement.
Section 3.5 Ownership . Each Stone Noteholder is the beneficial owner of (or otherwise has sole discretionary management authority with respect to) the aggregate principal amount of and is entitled to any and all accrued and unpaid interest on the Stone Notes set forth on Schedule D . Upon delivery to the Issuers of the Stone Notes, and upon each Stone Noteholders receipt of the New Second Lien Notes, as consideration in respect thereof as set forth herein, pursuant to this Agreement, good and valid title to the Stone Notes delivered by such Stone Noteholder will pass to the Issuers, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind.
Section 3.6 Accredited Investor . Each Stone Noteholder is an accredited investor within the meaning of Regulation D of the Securities Act.
Section 3.7 No Registration . Each Stone Noteholder acknowledges that as of the Closing Date the New Second Lien Notes will have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act.
ARTICLE IV
Representations and Warranties of the Sponsor Noteholders
Each Sponsor Noteholder hereby makes the following representations and warranties on behalf of itself individually and each such Sponsor Noteholder makes no representation as to the Issuers or any other Sponsor Noteholder:
Section 4.1 Organization; Requisite Authority . Each Sponsor Noteholder is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Sponsor Noteholder possesses all requisite power and authority necessary to consummate the Sponsor Notes Exchange and the transactions contemplated by this Agreement and to transfer the Sponsor Notes to New Stone.
Section 4.2 Authorization . The execution, delivery and performance of this Agreement has been duly authorized by each Sponsor Noteholder. This Agreement, when executed and delivered by each Sponsor Noteholder in accordance with the respective terms hereof, shall constitute a valid and binding obligation of such Sponsor Noteholder, enforceable against such Sponsor Noteholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors rights generally and by general equitable principles.
Section 4.3 Information; Consultation with Counsel and Advisors . Each Sponsor Noteholder is entering into this Agreement as principal (and not as agent or in any other capacity); none of New Stone, or any of New Stones affiliates or agents, are acting as a fiduciary for it; it is entering into this Agreement with a full understanding of the terms, conditions and risks thereof. Each Sponsor Noteholder (a) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent such Sponsor Noteholder has deemed necessary, (b) has had a reasonable opportunity to ask questions of and receive answers from officers and representatives of New Stone concerning its financial condition and results of operations and the Sponsor Notes Exchange to which this Agreement relates, and any such questions have been answered to its satisfaction, and (c) has conducted its own due diligence on New Stone and the Sponsor Noteholder and has made its own investment decisions based upon its own judgment, due diligence and advice from such advisers as such Sponsor Noteholder has deemed necessary and not upon any view expressed by or on behalf of New Stone.
Section 4.4 Brokers Fees . None of the Sponsor Noteholders has retained or authorized any investment banker, broker, finder or other intermediary to act on behalf of such Sponsor Noteholder or incurred any liability
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for any bankers, brokers or finders fees or commissions in connection with the transactions contemplated by this Agreement.
Section 4.5 Ownership . Each Sponsor Noteholder is the beneficial owner of the aggregate principal amount of and is entitled to any and all accrued and unpaid interest on the Sponsor Notes set forth on Schedule C . Upon delivery to New Stone of the Sponsor Notes, and upon each Sponsor Noteholders receipt of the New Stone Common Stock, as consideration in respect thereof as set forth herein, pursuant to this Agreement, good and valid title to the Sponsor Notes owned by each Sponsor Noteholder will pass to New Stone, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind.
Section 4.6 Accredited Investor . Each Sponsor Noteholder is an accredited investor within the meaning of Regulation D of the Securities Act.
ARTICLE V
Representations, Warranties and Covenants of the Issuers
The Issuers hereby make the following representations as of the date hereof:
Section 5.1 Representations and Warranties .
(i) Each of the Company and the Co-Issuer has been duly incorporated or formed and is a validly existing limited liability company or corporation in good standing under the laws of the State of Delaware, with power and authority (corporate or other) to own its properties and conduct its business; and each of the Company and the Co-Issuer is duly qualified to do business as a foreign entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing would not individually or in the aggregate have a material adverse effect on the condition (financial or other), business, properties, results of operations or prospects of the Company and its subsidiaries taken as a whole (a Material Adverse Effect ).
(ii) Each subsidiary of the Company listed on Schedule E (the Company Subsidiaries ) hereto has been duly incorporated or formed and is an existing corporation or other entity in good standing under the laws of the jurisdiction of its incorporation or formation, with corporate and/or other similar power and authority to own its properties and conduct its business; and each Company Subsidiary is duly qualified to do business as a foreign corporation or other entity in good standing (in each case, to the extent such concept exists) in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing would not individually or in the aggregate have a Material Adverse Effect; all of the issued and outstanding capital stock or other ownership interests of each Company Subsidiary has been duly authorized and validly issued and, in the case of any such corporation, is fully paid and non-assessable; and the capital stock or other ownership interests of each Company Subsidiary, directly or through subsidiaries, is owned free from liens, encumbrances and defects except liens permitted by both the Bridge Loan Agreement and the Sponsor Notes Indenture.
(iii) Each of the Company, the Co-Issuer and the Company Subsidiaries that will be Subsidiary Guarantors has (or will have on the Closing Date) all requisite limited liability company, corporate, partnership or similar, as applicable, power and authority to execute, as applicable, the New Second Lien Notes Indenture and the Collateral Agreement and carry out the transactions contemplated thereby and perform its obligations contemplated thereunder. The New Second Lien Notes Indenture and the Collateral Agreement will be, as of the Closing Date, duly authorized by the Company, the Co-Issuer and Company Subsidiaries that will be Subsidiary Guarantors; the New Second Lien Notes will be, as of the Closing Date, duly authorized by the Issuers and the guarantees of the New Second Lien Notes by the Subsidiary Guarantors (the Guarantees ) will be duly authorized by the Subsidiary Guarantors; and the New Second Lien Notes Indenture and the Collateral
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Agreement, when executed and delivered by the Company, the Co-Issuer and the Subsidiary Guarantors and assuming due authorization, execution and delivery by the New Second Lien Notes Trustee, will have been duly executed and delivered by the Company, the Co-Issuer and the Subsidiary Guarantors, and, on the Closing Date, the New Second Lien Indenture, the New Second Lien Notes and the Collateral Agreement will constitute valid and legally binding obligations of the Issuers, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles, and, on the Closing Date, the Guarantees and the Collateral Agreement will constitute valid and legally binding obligations of the Company Subsidiaries that will be Subsidiary Guarantors, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
(iv) This Agreement has been duly authorized, executed and delivered by the Company and the Co-Issuer and is a valid and binding agreement of the Company and the Co-Issuer, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
(v) Assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required (except as may be required as a result of the identity or status of the Bridge Loan Lenders, the Stone Noteholders or the Sponsor Noteholders) for the consummation of the transactions contemplated by this Agreement, or the execution, delivery and performance of the New Second Lien Notes Indenture, the Collateral Agreement, the New Second Lien Notes, the consummation of the Exchange or the Guarantees or the issuance of the New Second Lien Notes, except such as will have been obtained on or prior to the Closing Date; for such other consents, approvals, authorizations or orders as would not have a Material Adverse Effect; and with respect to deliverables permitted to be provided after the Closing Date pursuant to this Agreement or the New Second Lien Notes Indenture, such filings and recordings as may be required to perfect liens in connection with the New Second Lien Notes Indenture and the Collateral Agreement and any other security documents for the New Second Lien Notes.
(vi) When the New Second Lien Notes are issued, the guarantees of the Company Subsidiaries that will be Subsidiary Guarantors with respect to the New Second Lien Notes will be duly authorized by each Company Subsidiary that will be a Subsidiary Guarantor. When the New Second Lien Notes are issued, executed and authenticated in accordance with the terms of the New Second Lien Notes Indenture, and assuming the New Second Lien Notes have been delivered pursuant to this Agreement, the guarantees of each Company Subsidiary that will be a Subsidiary Guarantor endorsed thereon will constitute valid and legally binding obligations of the Company Subsidiaries that will be Subsidiary Guarantors, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
(vii) The execution, delivery and performance of the New Second Lien Notes Indenture, the Collateral Agreement and this Agreement and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or result in the imposition of any lien or encumbrance (other than Permitted Liens (as defined in the New Second Lien Notes Indenture)) upon any property or assets of the Company or any Company Subsidiary pursuant to, (i) assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any Company Subsidiary or any of their properties, or (ii) any agreement or instrument to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary is bound or to which any of the properties of the Company or any Company Subsidiary is subject, or (iii) the charter or by-laws or any equivalent organizational document of the Company or any Company Subsidiary, except, in the case of clauses (i) and (ii), where such breach, violation or default would not, individually or in the aggregate, have a Material Adverse Effect.
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(viii) None of the Company, the Co-Issuer or any Company Subsidiary that will be a Subsidiary Guarantor is an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the Investment Company Act ); and none of the Company, the Co-Issuer or any Company Subsidiary that will be a Subsidiary Guarantor, is, and after giving effect to the Exchange and the issuance of the New Second Lien Notes, will be an investment company as defined in the Investment Company Act.
(ix) After due inquiry, the Company and its subsidiaries (the Applicable Group ), on a consolidated basis taken as a whole, are, and immediately after giving effect to the transactions contemplated by this Agreement, including the consummation of the Exchange and the issuance of the New Second Lien Notes, will be, Solvent. As used herein, the term Solvent means, with respect to the Applicable Group (on a consolidated basis, taken as a whole), that as of the date of determination (a) the sum of the Applicable Groups debt (including contingent liabilities) does not exceed the present fair saleable value, taken on a going concern basis of the Applicable Groups assets; (b) the Applicable Groups capital is not unreasonably small in relation to its business as contemplated on the date hereof; and (c) the Applicable Group does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they mature in the ordinary course of business. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that the Applicable Group reasonably expects to become an actual or matured liability. The New Second Lien Notes are not being issued with the intent to hinder, delay or defraud either present or future creditors of any member of the Applicable Group.
ARTICLE VI
Representations, Warranties and Covenants of New Stone
New Stone hereby make the following representations as of the date hereof:
Section 6.1 Representations and Warranties .
(i) New Stone has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business; and New Stone is duly qualified to do business as a foreign entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing would not individually or in the aggregate have a material adverse effect on the condition (financial or other), business, properties, results of operations or prospects of New Stone and its subsidiaries and affiliates, taken as a whole (a New Stone Material Adverse Effect ).
(ii) This Agreement has been duly authorized, executed and delivered by New Stone and is a valid and binding agreement of New Stone, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
(iii) Assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required (except as may be required as a result of the identity or status of the Bridge Loan Lenders, the Stone Noteholder or the Sponsor Noteholders) for the consummation of the transactions contemplated by this Agreement, or the issuance of the New Stone Common Stock, except such as will have been obtained on or prior to the Closing Date and for such other consents, approvals, authorizations or orders as would not have a New Stone Material Adverse Effect.
(iv) The shares of New Stone Common Stock when issued and delivered in the Sponsor Notes Exchange in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable and
17
free of any liens or encumbrances (other than those imposed by applicable law) and issued in compliance with all applicable federal and state securities laws.
(v) New Stone is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the Investment Company Act ); and New Stone is not, and after giving effect to the Sponsor Notes Exchange and the issuance of the New Stone Common Stock, will not be an investment company as defined in the Investment Company Act.
(vi) The execution, delivery and performance of this Agreement and compliance with the terms and provisions thereof (including the issuance of the New Stone Common Stock) will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or result in the imposition of any lien or encumbrance (other than Permitted Liens (as defined in the New Second Lien Notes Indenture)) upon any property or assets of New Stone or any subsidiary thereof pursuant to, (i) assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over New Stone or any subsidiary thereof or any of their properties, or (ii) any agreement or instrument to which New Stone or any subsidiary thereof is a party or by which New Stone or any subsidiary thereof is bound or to which any of the properties of New Stone or any subsidiary thereof is subject, or (iii) the charter or by-laws or any equivalent organizational document of New Stone or any subsidiary thereof, except, in the case of clauses (i) and (ii), where such breach, violation or default would not, individually or in the aggregate, have a New Stone Material Adverse Effect.
ARTICLE VII
Representations, Warranties and Covenants of Stone
Stone hereby make the following representations as of the date hereof:
Section 7.1 Representations and Warranties .
(i) Stone has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business; and Stone is duly qualified to do business as a foreign entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing would not individually or in the aggregate have a material adverse effect on the condition (financial or other), business, properties, results of operations or prospects of Stone and its subsidiaries and affiliates, taken as a whole (a Stone Material Adverse Effect ).
(ii) This Agreement has been duly authorized, executed and delivered by Stone and is a valid and binding agreement of Stone, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
(iii) Assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required (except as may be required as a result of the identity or status of the Bridge Loan Lenders, the Stone Noteholder or the Sponsor Noteholders) for the consummation of the transactions contemplated by this Agreement, except such as will have been obtained on or prior to the Closing Date and for such other consents, approvals, authorizations or orders as would not have a Stone Material Adverse Effect.
(iv) Stone is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the
18
Investment Company Act ); and Stone is not, and after giving effect to the Exchange and other transactions contemplated hereby, will not be an investment company as defined in the Investment Company Act.
(v) The execution, delivery and performance of this Agreement and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or result in the imposition of any lien or encumbrance (other than Permitted Liens (as defined in the New Second Lien Notes Indenture)) upon any property or assets of Stone or any subsidiary thereof pursuant to, (i) assuming the accuracy of the representations and warranties of the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders made pursuant to Articles II, III and IV, any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over Stone or any subsidiary thereof or any of their properties, or (ii) any agreement or instrument to which Stone or any subsidiary thereof is a party or by which Stone or any subsidiary thereof is bound or to which any of the properties of Stone or any subsidiary thereof is subject, or (iii) the charter or by-laws or any equivalent organizational document of Stone or any subsidiary thereof, except, in the case of clauses (i) and (ii), where such breach, violation or default would not, individually or in the aggregate, have a Stone Material Adverse Effect.
ARTICLE VIII
Miscellaneous Provisions
Section 8.1 Termination . In the event that (i) the Closing Date does not occur on or before the date that is the Outside Date or (ii) the Transaction Agreement is terminated without the consummation of the Combination having occurred, then this Agreement and the Parties agreements to consummate the Exchange, shall automatically terminate without further action or notice and without further obligation to any Party. In the event that the payment of the principal amount of the Stone Notes is accelerated in accordance with Section 602 of the Stone Notes Indenture, the Bridge Loan Lenders may terminate their obligations under this Agreement. In the event that payment of the principal amount of the Bridge Loans is accelerated in accordance with Section 7.02 of the Bridge Loan Agreement, the Stone Noteholders may terminate their obligations under this Agreement.
Section 8.2 Notice . Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid). Notices will be deemed to have been given hereunder when delivered personally, three business days after deposit in the U.S. mail postage prepaid with return receipt requested and one business day after deposit postage prepaid with a reputable overnight courier service for delivery on the next business day. The addresses and facsimile numbers for any such notices shall be, unless changed by the applicable Party via notice to the other Parties in accordance herewith:
If to the Issuers:
c/o Talos Production LLC
1600 Smith Street, Suite 5000
Houston, TX 77002
Attention: Chief Financial Officer
Fax: 713-351-4100
and
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Gregory Ezring
Tracey Zaccone
Fax: 212-757-3990
19
and
Vinson & Elkins LLP
1001 Fannin Street, Suite 2500
Houston, TX 77002
Attention: Stephen M. Gill
Lande A. Spottswood
Fax: 713-615-5956
If to the Sponsor Bridge Loan Lenders or Sponsor Noteholders:
c/o Apollo Management, L.P.
9 West 57th Street, 43rd Floor
New York, NY 10019
Attention: Rakesh Wilson and Chief Legal Officer
Fax: 646-417-6651
and
c/o Riverstone Holdings LLC
712 5th Avenue, 51st Floor
New York, NY 10019
Attention: Robert Tichio and Chief Legal Officer
Fax: 212-933-0077
If to Institutional Bridge Loan Lenders:
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston MA 02116
and
c/o GSO Capital Partners LP
345 Park Ave, 31st Floor
New York, NY 10154
If to Stone Noteholders:
c/o Franklin Advisers, Inc.
One Franklin Parkway
San Mateo, CA 94403
Attention: Brendan Circle; Chris Chen
Email: Brendan.circle@franklintempleton.com;
chris.chen@franklintempleton.com
c/o MacKay Shields LLC
1345 Avenue of the Americas
New York, NY 10105
Attention: Dohyun Cha ( Dohyun.cha@mackayshields.com )
With a copy to: Young Lee ( young.lee@mackayshields.com )
20
With a copy to (which shall not constitute notice):
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana Street, 45 th Floor
Houston, TX 77002
Attention: John Goodgame
Rebecca Tyler
Facsimile: (713) 236-0822
Email: jgoodgame@akingump.com
rtyler@akingump.com
c/o Josh Morse
Ann Lawrence
DLA Piper LLP (US)
555 Mission Street, Suite 2400
San Francisco, CA 94105-2933
Section 8.3 Entire Agreement . This Agreement and the other documents and agreements executed and delivered among the parties hereto and thereto in connection with the Exchange embody the entire agreement and understanding of the parties hereto and thereto with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents exchanged in connection with the negotiation of the Exchange or otherwise.
Section 8.4 Assignment; Binding Agreement . This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns. No Party hereto shall assign (a) this Agreement or any rights or obligations hereunder, (b) any of the Bridge Loans or Sponsor Notes held by such Parties, or (c) so long as such Party remains the legal owner, beneficial owner and/or investment advisor or manager of or with power and/or authority to bind such Stone Notes, any of the Stone Notes, without in each case the prior written consent of the other Parties hereto; provided, however, that the Bridge Loan Lenders, the Stone Noteholders and the Sponsor Noteholders may assign their rights and obligations hereunder and their Bridge Loans, Stone Notes or Sponsor Notes, as applicable, to any other person without the prior written consent of any other Party, so long such other person executes a joinder to this Agreement in the form attached as Exhibit C by which such other person agrees to be bound by the obligations of such transferring person under this Agreement.
Section 8.5 Counterparts . This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered by facsimile or other electronic transmission shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such Party.
Section 8.6 Remedies Cumulative . Each party hereto acknowledges that the remedies at law of the other parties for a breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond or furnishing other security, and in addition to all other remedies that may be available, shall be entitled to equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available and no party shall oppose the granting of such relief on the basis that money damages would be sufficient. Except as otherwise provided herein, all rights and remedies of the parties under this Agreement are cumulative and without prejudice to any other rights or remedies available at law; provided, however, that if a Party hereto has exercised its remedies in connection with a purported event of default under the Bridge Loan Agreement, the Stone Indenture or the Sponsor Notes Indenture, such Party shall not be entitled to seek specific performance of any provisions of this Agreement.
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Section 8.7 Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York; provided , however , that the determination as to whether the Combination has been consummated in accordance with the terms of the Transaction Agreement shall be governed by the law governing the Transaction Agreement. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such Party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
Section 8.8 No Third Party Beneficiaries or Other Rights . Nothing herein shall grant to or create in any person not a party hereto, or any such persons dependents or heirs, any right to any benefits hereunder, and no such party shall be entitled to sue any Party to this Agreement with respect thereto.
Section 8.9 Waiver; Consent . This Agreement may not be changed, amended, terminated, augmented, rescinded or discharged (other than in accordance with its terms), in whole or in part, except by a writing executed by the Parties hereto. No waiver of any of the provisions or conditions of this Agreement or any of the rights of a Party hereto shall be effective or binding unless such waiver shall be in writing and signed by the Party claimed to have given or consented thereto. Except to the extent otherwise agreed in writing, no waiver of any term, condition or other provision of this Agreement, or any breach thereof shall be deemed to be a waiver of any other term, condition or provision or any breach thereof, or any subsequent breach of the same term, condition or provision, nor shall any forbearance to seek a remedy for any non-compliance or breach be deemed to be a waiver of a Partys rights and remedies with respect to such non-compliance or breach.
Section 8.10 Word Meanings . The words such as herein, hereinafter, hereof and hereunder refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires.
Section 8.11 Further Assurances . The Parties hereto each hereby agree to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions, including giving any further assurances, as any Party may reasonably request in connection with the transactions contemplated by and in this Agreement. In addition, subject to the terms and conditions set forth in this Agreement, each of the Parties shall use its reasonable best efforts (subject to, and in accordance with, applicable law) to take promptly, or to cause to be taken, all actions, and to do promptly, or to cause to be done, and to assist and to cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable laws to consummate and make effective the transactions contemplated hereby, including the obtaining of all necessary, proper or advisable consents, approvals or waivers from third parties and the execution and delivery of any additional instruments reasonably necessary, proper or advisable to consummate the transactions contemplated hereby.
Section 8.12 Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
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Section 8.13 Severability . If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Section 8.14 Tax Treatment . The Parties agree (i) that for U.S. federal and other applicable income tax purposes, exchange of a Bridge Loan or a Stone Note for a New Second Lien Note, pursuant to the terms of this Agreement, is an exchange, for purposes of applying Section 1.1001-1(a) of the United States Treasury Regulations, of each such Bridge Loan or Stone Note pursuant to Section 1.1001-3 of the United States Treasury Regulations, (ii) that the New Second Lien Notes are part of the same issue pursuant to Section 1.1275-1(f) of the United States Treasury Regulations, (iii) that the issue price of the New Second Lien Notes shall be determined in accordance with the applicable provisions of Section 1.1273-2 of the United States Treasury Regulations, and (iv) to file all U.S. federal income tax and state income tax and franchise tax returns in a manner consistent with the foregoing.
Section 8.15 Fees and Expenses of Bridge Loan Lenders . Whether or not the transactions contemplated by this Agreement are consummated, the Company agrees to reimburse the Institutional Bridge Loan Lenders for all invoices, reasonable out-of-pocket expenses in connection with the Bridge Loan Exchange, this Agreement, the New Second Lien Notes Indenture, the Collateral Agreement and other agreements and documents relating thereto, including fees, expenses and disbursements of one primary legal counsel and one local counsel in each applicable jurisdiction. This Section 8.15 shall survive the termination or expiration of this Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first above written.
Institutional Bridge Loan Lenders: | ||
BLACKSTONE/GSO STRATEGIC CREDIT FUND | ||
By: GSO / Blackstone Debt Funds Management LLC, as Collateral Manager | ||
By: |
/s/ Sean Cort |
|
Name: | Sean Cort | |
Title: | Authorized Signatory | |
FOXFIELDS FUNDING LLC | ||
BRYN MAWR FUNDING LLC | ||
By: FS Energy and Power Fund, as Sole Member | ||
By: GSO Capital Partners LP, as Sub-Adviser | ||
By: |
/s/ Sean Cort |
|
Name: | Sean Cort | |
Title: | Authorized Signatory | |
FS INVESTMENT CORPORATION II | ||
By: GSO / Blackstone Debt Funds Management LLC, as Sub-Adviser | ||
By: |
/s/ Sean Cort |
|
Name: | Sean Cort | |
Title: | Authorized Signatory | |
FS INVESTMENT CORPORATION III | ||
By: GSO / Blackstone Debt Funds Management LLC, as Sub-Adviser | ||
By: |
/s/ Sean Cort |
|
Name: | Sean Cort | |
Title: | Authorized Signatory |
[Signature Page to Exchange Agreement]
24
FUTURE FUND BOARD OF GUARDIANS | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL HIGH INCOME PARTNERSHIP, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL CREDIT MANAGED ACCOUNT (TCCC), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
KAISER FOUNDATION HOSPITALS | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
KAISER PERMANENTE GROUP TRUST | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
25
BAIN CAPITAL CREDIT MANAGED ACCOUNT (PSERS), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
CHI OPERATING INVESTMENT PROGRAM L.P. | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND PUBLIC LIMITED COMPANY | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL CREDIT RIO GRANDE FMC, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND, L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
26
SUNSUPER POOLED SUPERANNUATION TRUST | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
FIRSTENERGY SYSTEM MASTER RETIREMENT TRUST | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
CATHOLIC HEALTH INITIATIVES MASTER TRUST | ||
By: Bain Capital Credit, LP, as Investment Adviser and Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
AON HEWITT GROUP TRUST HIGH YIELD PLUS BOND FUND | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
27
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
SEARS HOLDINGS PENSION TRUST | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL SENIOR LOAN FUND (SRI), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL DISTRESSED AND SPECIAL SITUATIONS 2013 (D), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BAIN CAPITAL DISTRESSED AND SPECIAL SITUATIONS 2013 (AIV II MASTER), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
28
BAIN CAPITAL CREDIT MANAGED ACCOUNT (E), L.P. | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
SAN FRANCISCO CITY AND COUNTY EMPLOYEES RETIREMENT SYSTEM | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC. AC ALTERNATIVES INCOME FUND | ||
By: Bain Capital Credit, LP, as Subadvisor | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President | |
BLUE CROSS OF CALIFORNIA | ||
By: Bain Capital Credit, LP, as Investment Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
29
BAIN CAPITAL CREDIT (AUSTRALIA) PTY LTD IN ITS CAPACITY AS TRUSTEE OF QCT | ||
By: Bain Capital Credit, LP, as Manager | ||
By: |
/s/ Andrew S. Viens |
|
Name: | Andrew S. Viens | |
Title: | Executive Vice President |
[Signature Page to Exchange Agreement]
30
Sponsor Bridge Loan Lenders: | ||
REV DIRECT (CAYMAN), L.P. | ||
By: |
/s/ Thomas Walker |
|
Name: | Thomas Walker | |
Title: | Authorized Person | |
REV TE/ECI (CAYMAN), L.P. | ||
By: |
/s/ Thomas Walker |
|
Name: | Thomas Walker | |
Title: | Authorized Person |
[Signature Page to Exchange Agreement]
31
THETA I, LLC | ||
By: | Apollo Investment Fund VII, L.P. | |
its sole member | ||
By: | Apollo Advisors VII, L.P., | |
its general partner | ||
By: | Apollo Capital Management VII, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President | ||
THETA II, LLC | ||
By: | Apollo Overseas Partners (Delaware 892) VII, L.P. | |
its sole member | ||
By: | Apollo Advisors VII, L.P., | |
its general partner | ||
By: | Apollo Capital Management VII, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President | ||
THETA III, LLC | ||
By: | Apollo Overseas Partners (Delaware) VII, L.P. | |
its sole member | ||
By: | Apollo Advisors VII, L.P., | |
its general partner | ||
By: | Apollo Capital Management VII, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President |
[Signature Page to Exchange Agreement]
32
THETA IV, LLC | ||
By: | Apollo Overseas Partners VII, L.P. | |
its sole member | ||
By: | Apollo Advisors VII, L.P., | |
its managing partner | ||
By: | Apollo Capital Management VII, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President | ||
THETA NR, LLC | ||
By: | Apollo Natural Resources Partners, L.P. | |
its sole member | ||
By: | Apollo ANRP Advisors, L.P., | |
its general partner | ||
By: | Apollo ANRP Capital Management, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President | ||
THETA V, LLC | ||
By: | Apollo Investment Fund (PB) VII, L.P. | |
its sole member | ||
By: | Apollo Advisors VII, L.P., | |
its general partner | ||
By: | Apollo Capital Management VII, LLC, | |
its general partner | ||
By: |
/s/ Laurie D. Medley |
|
Name: Laurie D. Medley | ||
Title: Vice President |
[Signature Page to Exchange Agreement]
33
Stone Noteholders: | ||
FRANKLIN ADVISERS, INC. , as investment manager on behalf of certain funds and accounts that are holders of Stone Notes, as set forth on Schedule D attached hereto. | ||
By: |
/s/ Edward Perks |
|
Name: | Edward Perks | |
Title: | Executive Vice President | |
MACKAY SHIELDS LLC , as investment manager on behalf of certain of its clients that are holders of Stone Notes, which clients hold on the date hereof an aggregate principal amount of Stone Notes set forth on Schedule D attached hereto. | ||
By: |
/s/ Andrew Susser |
|
Name: | Andrew Susser | |
Title: | Executive Managing Director |
[Signature Page to Exchange Agreement]
34
TALOS PRODUCTION LLC | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President & CEO | |
TALOS PRODUCTION FINANCE INC. | ||
By: |
/s/ Timothy S. Duncan |
|
Name: | Timothy S. Duncan | |
Title: | President & CEO |
[Signature Page to Exchange Agreement]
35
SAILFISH ENERGY HOLDINGS CORPORATION | ||
By: |
/s/ James M. Trimble |
|
Name: | James M. Trimble | |
Title: | Interim Chief Executive Officer and President | |
STONE ENERGY CORPORATION | ||
By: |
/s/ Neal P. Goldman |
|
Name: | Neal P. Goldman | |
Title: | Chairman of the Board |
[Signature Page to Exchange Agreement]
36
Schedule A
Institutional Bridge Loan Lenders |
Principal Amount of Bridge Loans | |||
Blackstone/GSO Strategic Credit Fund |
$ | 2,000,000 | ||
Bryn Mawr Funding LLC |
$ | 32,450,000 | ||
Foxfields Funding LLC |
$ | 10,800,000 | ||
FS Investment Corporation II |
$ | 4,500,000 | ||
FS Investment Corporation III |
$ | 4,500,000 | ||
Future Fund Board of Guardians |
$ | 9,020,000 | ||
Bain Capital High Income Partnership, L.P. |
$ | 19,848,000 | ||
Bain Capital Credit Managed Account (TCCC), L.P. |
$ | 2,350,000 | ||
Kaiser Foundation Hospitals |
$ | 1,100,000 | ||
Kaiser Permanente Group Trust |
$ | 1,050,000 | ||
Bain Capital Credit Managed Account (PSERS), L.P. |
$ | 2,879,000 | ||
CHI Operating Investment Program L.P. |
$ | 1,050,000 | ||
Bain Capital Senior Loan Fund Public Limited Company |
$ | 1,125,000 | ||
Bain Capital Credit Rio Grande FMC, L.P. |
$ | 525,000 | ||
Bain Capital Senior Loan Fund, L.P. |
$ | 2,250,000 | ||
Sunsuper Pooled Superannuation Trust |
$ | 650,000 | ||
FirstEnergy System Master Retirement Trust |
$ | 1,075,000 | ||
Catholic Health Initiatives Master Trust |
$ | 550,000 | ||
Aon Hewitt Group Trust High Yield Plus Bond Fund |
$ | 550,000 | ||
Los Angeles County Employees Retirement Association |
$ | 1,324,000 | ||
Sears Holdings Pension Trust |
$ | 3,550,000 | ||
Bain Capital Senior Loan Fund (SRI), L.P. |
$ | 325,000 | ||
Bain Capital Distressed and Special Situations 2013 (D), L.P. |
$ | 4,462,000 | ||
Bain Capital Distressed and Special Situations 2013 (AIV II Master), L.P. |
$ | 10,395,000 | ||
Bain Capital Credit Managed Account (E), L.P. |
$ | 11,425,000 | ||
San Francisco City and County Employees Retirement System |
$ | 25,000 | ||
American Century Capital Portfolios, Inc. AC Alternatives Income Fund |
$ | 500,000 | ||
Blue Cross of California |
$ | 800,000 | ||
Bain Capital Credit (Australia) Pty Ltd in its capacity as trustee of QCT |
$ | 1,050,000 |
37
Schedule B
Sponsor Bridge Loan Lender |
Principal Amount of Bridge Loans | |||
REV DIRECT (CAYMAN), L.P |
$ | 11,155,000 | ||
REV TE/ECI (CAYMAN), L.P |
$ | 6,298,000 | ||
Theta I, LLC |
$ | 7,669,000 | ||
Theta II, LLC |
$ | 2,917,000 | ||
Theta III, LLC |
$ | 1,165,000 | ||
Theta IV, LLC |
$ | 2,913,000 | ||
Theta V, LLC |
$ | 298,000 | ||
Theta NR, LLC |
$ | 7,480,000 |
38
Schedule D
Stone Noteholder |
Principal Amount of Stone Notes | |||
MacKay Shields clients |
$ | 49,472,557 | ||
FCF-Franklin Income Fund |
$ | 72,845,556 | ||
FTVIPT-Franklin Income VIP Fund |
$ | 6,452,837 | ||
FTIF-Franklin Income Fund |
$ | 3,454,104 | ||
JNL/Franklin Templeton Income Fund |
$ | 2,518,350 | ||
FT Opportunistic Distressed Fund, Ltd. |
$ | 605,745 |
40
Schedule E
1. |
Talos Production Finance Inc. |
|
2. |
Talos Energy Operating Company LLC |
|
3. |
Talos Energy Operating GP LLC |
|
4. |
Talos Energy International LLC |
|
5. |
Talos Energy Offshore LLC |
|
6. |
Talos Gulf Coast LLC |
|
7. |
Talos Gulf Coast Offshore LLC |
|
8. |
Talos Gulf Coast Onshore LLC |
|
9. |
Energy Resource Technology GOM, LLC |
|
10. |
CKB Petroleum, LLC |
|
11. |
Talos Mex Holding Coöperatief U.A. |
|
12. |
Talos Mex B.V. |
|
13. |
Rio Norte Offshore Company, S. DE R.L. DE C.V |
|
14. |
TALOS ENERGY MÉXICO 2, S. DE R.L. DE C.V. |
|
15. |
TALOS ENERGY MÉXICO 7, S. DE R.L. DE C.V. |
|
16. |
Phoenix-Durango Offshore Company, S. DE R.L. DE C.V. |
|
17. |
TALOS ENERGY OFFSHORE MÉXICO 2, S. DE R.L. DE C.V. |
|
18. |
TALOS ENERGY OFFSHORE MÉXICO 7, S. DE R.L. DE C.V. |
|
19. |
Talos Management Intermediary LLC |
|
20. |
Talos Management Holdings LLC |
41
EXHIBIT A Form of Indenture
(Attached.)
42
TALOS PRODUCTION LLC
and
TALOS PRODUCTION FINANCE INC.
as Issuers
and the Subsidiary Guarantors party hereto from time to time
11.00% Second-Priority Senior Secured Notes due 2022
INDENTURE
Dated as of [●]
and
[●]
as Trustee and Collateral Agent
43
Page | ||||||
ARTICLE I | ||||||
DEFINITIONS AND INCORPORATION BY REFERENCE | ||||||
SECTION 1.01 |
Definitions | 49 | ||||
SECTION 1.02 |
Other Definitions | 83 | ||||
SECTION 1.03 |
Rules of Construction | 84 | ||||
SECTION 1.04 |
Incorporation by Reference of TIA | 85 | ||||
ARTICLE II | ||||||
THE NOTES | ||||||
SECTION 2.01 |
Amount of Notes | 85 | ||||
SECTION 2.02 |
Form and Dating | 86 | ||||
SECTION 2.03 |
Execution and Authentication | 86 | ||||
SECTION 2.04 |
Registrar and Paying Agent | 87 | ||||
SECTION 2.05 |
Paying Agent to Hold Money in Trust | 87 | ||||
SECTION 2.06 |
Holder Lists | 88 | ||||
SECTION 2.07 |
Transfer and Exchange | 88 | ||||
SECTION 2.08 |
Replacement Notes | 89 | ||||
SECTION 2.09 |
Outstanding Notes | 89 | ||||
SECTION 2.10 |
Cancellation | 89 | ||||
SECTION 2.11 |
Defaulted Interest | 89 | ||||
SECTION 2.12 |
CUSIP Numbers, ISINs, Etc. | 90 | ||||
SECTION 2.13 |
Calculation of Principal Amount of Notes | 90 | ||||
ARTICLE III | ||||||
REDEMPTION | ||||||
SECTION 3.01 |
Redemption | 90 | ||||
SECTION 3.02 |
Applicability of Article | 90 | ||||
SECTION 3.03 |
Notices to Trustee | 90 | ||||
SECTION 3.04 |
Selection of Notes to Be Redeemed | 91 | ||||
SECTION 3.05 |
Notice of Optional Redemption | 91 | ||||
SECTION 3.06 |
Effect of Notice of Redemption | 92 | ||||
SECTION 3.07 |
Deposit of Redemption Price | 92 | ||||
SECTION 3.08 |
Notes Redeemed in Part | 92 | ||||
ARTICLE IV | ||||||
COVENANTS | ||||||
SECTION 4.01 |
Payment of Notes | 92 | ||||
SECTION 4.02 |
Reports and Other Information | 93 | ||||
SECTION 4.03 |
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 94 | ||||
SECTION 4.04 |
Limitation on Restricted Payments | 100 | ||||
SECTION 4.05 |
Dividend and Other Payment Restrictions Affecting Subsidiaries | 106 | ||||
SECTION 4.06 |
Asset Sales | 108 | ||||
SECTION 4.07 |
Transactions with Affiliates | 110 | ||||
SECTION 4.08 |
Change of Control | 112 | ||||
SECTION 4.09 |
Compliance Certificate | 114 |
44
Page | ||||||
SECTION 4.10 |
[Reserved] | 114 | ||||
SECTION 4.11 |
Future Guarantors | 114 | ||||
SECTION 4.12 |
Liens | 114 | ||||
SECTION 4.13 |
[Intentionally Omitted] | 115 | ||||
SECTION 4.14 |
Maintenance of Office or Agency | 115 | ||||
SECTION 4.15 |
Covenant Suspension Event | 115 | ||||
SECTION 4.16 |
After-Acquired Property | 116 | ||||
ARTICLE V | ||||||
SUCCESSOR COMPANY | ||||||
SECTION 5.01 |
When Holdings May Merge or Transfer Assets | 117 | ||||
ARTICLE VI | ||||||
DEFAULTS AND REMEDIES | ||||||
SECTION 6.01 |
Events of Default | 119 | ||||
SECTION 6.02 |
Acceleration | 120 | ||||
SECTION 6.03 |
Other Remedies | 122 | ||||
SECTION 6.04 |
Waiver of Past Defaults | 122 | ||||
SECTION 6.05 |
Control by Majority | 122 | ||||
SECTION 6.06 |
Limitation on Suits | 122 | ||||
SECTION 6.07 |
Contractual Rights of the Holders to Receive Payment | 123 | ||||
SECTION 6.08 |
Collection Suit by Trustee | 123 | ||||
SECTION 6.09 |
Trustee May File Proofs of Claim | 123 | ||||
SECTION 6.10 |
Application of Funds | 123 | ||||
SECTION 6.11 |
Undertaking for Costs | 123 | ||||
SECTION 6.12 |
Waiver of Stay or Extension Laws | 123 | ||||
ARTICLE VII | ||||||
TRUSTEE | ||||||
SECTION 7.01 |
Duties of Trustee | 124 | ||||
SECTION 7.02 |
Rights of Trustee | 125 | ||||
SECTION 7.03 |
Individual Rights of Trustee | 126 | ||||
SECTION 7.04 |
Trustees Disclaimer | 126 | ||||
SECTION 7.05 |
Notice of Defaults | 126 | ||||
SECTION 7.06 |
Reports by Trustee to the Holders | 127 | ||||
SECTION 7.07 |
Compensation and Indemnity | 127 | ||||
SECTION 7.08 |
Replacement of Trustee | 128 | ||||
SECTION 7.09 |
Successor Trustee by Merger | 128 | ||||
SECTION 7.10 |
Eligibility; Disqualification | 129 | ||||
SECTION 7.11 |
Preferential Collection of Claims Against the Issuers | 129 | ||||
SECTION 7.12 |
Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification | 129 | ||||
ARTICLE VIII | ||||||
DISCHARGE OF INDENTURE; DEFEASANCE | ||||||
SECTION 8.01 |
Discharge of Liability on Notes; Defeasance | 130 |
45
Page | ||||||
SECTION 8.02 |
Conditions to Defeasance | 131 | ||||
SECTION 8.03 |
Application of Trust Money | 132 | ||||
SECTION 8.04 |
Repayment to Issuer | 132 | ||||
SECTION 8.05 |
Indemnity for U.S. Government Obligations | 132 | ||||
SECTION 8.06 |
Reinstatement | 132 | ||||
ARTICLE IX | ||||||
AMENDMENTS AND WAIVERS | ||||||
SECTION 9.01 |
Without Consent of the Holders | 132 | ||||
SECTION 9.02 |
With Consent of the Holders | 133 | ||||
SECTION 9.03 |
Revocation and Effect of Consents and Waivers | 134 | ||||
SECTION 9.04 |
Notation on or Exchange of Notes | 135 | ||||
SECTION 9.05 |
Trustee to Sign Amendments | 135 | ||||
SECTION 9.06 |
Additional Voting Terms; Calculation of Principal Amount | 135 | ||||
SECTION 9.07 |
Compliance with Trust Indenture Act | 135 | ||||
ARTICLE X | ||||||
RANKING OF NOTE LIENS | ||||||
SECTION 10.01 |
Relative Rights | 135 | ||||
ARTICLE XI | ||||||
COLLATERAL | ||||||
SECTION 11.01 |
Security Documents | 135 | ||||
SECTION 11.02 |
Collateral Agent | 136 | ||||
SECTION 11.03 |
Authorizations of Actions to Be Taken | 137 | ||||
SECTION 11.04 |
Release of Liens | 138 | ||||
SECTION 11.05 |
Powers Exercisable by Receiver or Trustee | 139 | ||||
SECTION 11.06 |
Release Upon Termination of the Issuers Obligations | 139 | ||||
SECTION 11.07 |
Designations | 139 | ||||
SECTION 11.08 |
Certificates and Opinions | 140 | ||||
ARTICLE XII | ||||||
GUARANTEE | ||||||
SECTION 12.01 |
Subsidiary Guarantee | 140 | ||||
SECTION 12.02 |
Limitation on Liability | 142 | ||||
SECTION 12.03 |
[Reserved] | 143 | ||||
SECTION 12.04 |
Successors and Assigns | 143 | ||||
SECTION 12.05 |
No Waiver | 143 | ||||
SECTION 12.06 |
Modification | 143 | ||||
SECTION 12.07 |
Execution of Supplemental Indenture for Future Subsidiary Guarantors | 143 | ||||
SECTION 12.08 |
Non-Impairment | 143 | ||||
ARTICLE XIII | ||||||
MISCELLANEOUS | ||||||
SECTION 13.01 |
Trust Indenture Act Controls | 143 |
46
Page | ||||||
SECTION 13.02 |
Notices | 144 | ||||
SECTION 13.03 |
Communications by Holders with Other Holders | 144 | ||||
SECTION 13.04 |
Certificate and Opinion as to Conditions Precedent | 145 | ||||
SECTION 13.05 |
Statements Required in Certificate or Opinion | 145 | ||||
SECTION 13.06 |
When Notes Disregarded | 145 | ||||
SECTION 13.07 |
Rules by Trustee, Paying Agent and Registrar | 145 | ||||
SECTION 13.08 |
Legal Holidays | 145 | ||||
SECTION 13.09 |
GOVERNING LAW | 146 | ||||
SECTION 13.10 |
No Recourse Against Others | 146 | ||||
SECTION 13.11 |
Successors | 146 | ||||
SECTION 13.12 |
Multiple Originals | 146 | ||||
SECTION 13.13 |
Table of Contents; Headings | 146 | ||||
SECTION 13.14 |
Indenture Controls | 146 | ||||
SECTION 13.15 |
Severability | 146 | ||||
SECTION 13.16 |
Intercreditor Agreement | 146 | ||||
SECTION 13.17 |
Waiver of Jury Trial | 146 | ||||
SECTION 13.18 |
U.S.A. Patriot Act | 146 |
Appendix A |
|
Provisions Relating to Initial Notes and Additional Notes |
EXHIBIT INDEX
Exhibit A |
|
Form of Initial Note |
||
Exhibit B |
|
Form of Transferee Letter of Representation |
||
Exhibit C |
|
Form of Supplemental Indenture |
47
CROSS-REFERENCE TABLE
TIA Section |
Indenture
Section |
|||
310 | (a)(1) | 7.10 | ||
(a)(2) | 7.10 | |||
(a)(3) | 7.10 | |||
(a)(4) | 7.10 | |||
(b) | 7.08; 7.10 | |||
(c) | N.A. | |||
311 | (a) | 7.11 | ||
(b) | 7.11 | |||
(c) | N.A. | |||
312 | (a) | 2.06 | ||
(b) | 13.03 | |||
(c) | 13.03 | |||
313 | (a) | 7.06 | ||
(b)(1) | 7.06 | |||
(b)(2) | 7.06 | |||
(c) | 7.06 | |||
(d) | 7.06 | |||
314 | (a) | 4.02; 4.09 | ||
(b) | 4.09 | |||
(c)(1) | 13.04 | |||
(c)(2) | 13.04 | |||
(c)(3) | N.A. | |||
(d) | 11.08 | |||
(e) | 13.05 | |||
(f) | 4.10 | |||
315 | (a) | 7.01 | ||
(b) | 7.05 | |||
(c) | 7.01 | |||
(d) | 7.01 | |||
(e) | 6.11 | |||
316 | (a) (last sentence) | 13.06 | ||
(a)(1)(A) | 6.05 | |||
(a)(1)(B) | 6.04 | |||
(a)(2) | N.A. | |||
(b) | 6.07 | |||
317 | (a)(1) | 6.08 | ||
(a)(2) | 6.09 | |||
(b) | 2.05 | |||
318 | (a) | 13.01 |
N.A. Means Not Applicable.
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.
48
INDENTURE, dated as of [●], among TALOS PRODUCTION LLC, a Delaware limited liability company (together with its successors and assigns, Holdings ), TALOS PRODUCTION FINANCE INC., a Delaware corporation (together with its successors and assigns, the Co-Issuer and, together with Holdings, the Issuers ), the Subsidiary Guarantors party hereto from time to time (as defined below) and [●], as trustee (the Trustee ) and as collateral agent.
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $[●] aggregate principal amount of the Issuers 11.00% Second-Priority Senior Secured Notes due 2022 issued on the date hereof (the Initial Notes ), (ii) Exchange Notes issued in exchange for the Initial Notes and (iii) Additional Notes issued from time to time (together with the Initial Notes and the Exchange Notes, the Notes ):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Acquired Indebtedness means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
Additional Assets means:
(1) any properties or assets used or useful in the Oil and Gas Business;
(2) capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;
(3) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or
(4) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;
provided , however , that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.
Additional Notes means the Notes issued under the terms of this Indenture subsequent to the Issue Date.
Additional Refinancing Amount means, in connection with the Incurrence of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease any existing Indebtedness, Disqualified Stock or Preferred Stock, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith.
49
Adjusted Consolidated Net Tangible Assets means (without duplication), as of the date of determination, the remainder of:
(a) the sum of:
(i) estimated discounted future net revenues from proved oil and gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and gas reserves included therein that are subsequently removed from the proved oil and gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided , that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and gas reserves shall be determined in their entirety using oil, gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of future net revenues of proved oil and gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of Borrowing Base and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each of cases (A), (B), (C) and (D) as estimated by Holdings petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;
(ii) the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on Holdings books and records as of a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements;
(iii) the Net Working Capital on a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements;
50
(iv) assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business; and
(v) the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings latest annual or quarterly consolidated financial statements, and (B) the appraised value, as estimated by independent appraisers within the immediately preceding 12 months, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus
(b) the sum of:
(i) any amount included in clauses (a)(i) through (a)(v) above that is attributable to minority interests;
(ii) any net gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings latest audited consolidated financial statements;
(iii) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in clause (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and
(iv) to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in clause (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in clause (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).
If Holdings 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 Holdings were still using the full cost method of accounting.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Aggregate Special Cap means an amount equivalent to 20% of EBITDA for the applicable four quarter period, prior to giving effect to the exclusions, add-backs and operating expense reductions and other operating improvements or synergies that are subject to the Aggregate Special Cap.
All-in Yield means the yield payable to all lenders providing the applicable Indebtedness in the primary syndication thereof, whether in the form of interest rate, premiums, margin, original issue discount,
51
up-front fees, rate floors or otherwise; provided , that original issue discount and up-front fees shall be equated to interest rate assuming a 4-year life to maturity (or, if less, the remaining life of such loans); and, provided, further, that All-in Yield shall not include arrangement, commitment, underwriting, structuring or similar fees paid to arrangers for such loans (not to exceed 2.00%) or customary consent fees for an amendment paid generally to consenting lenders, default rate of 2.00%, customary administrative agency and collateral agency fees, changes in the underlying LIBOR rate (or similar rate) or base rate not caused by any amendment, supplement, modification, or replacement to such Indebtedness, and customary letter of credit issuance fees.
Applicable Premium means the excess of (A) the present value of all remaining required interest payments through the first anniversary of the Issue Date (excluding accrued and unpaid interest), plus the present value of the redemption price of the Notes being redeemed set forth in Paragraph 5 of the Note, assuming a redemption date of the first anniversary of the Issue Date, in each case computed using a discount rate equal to the Treasury Rate plus 50 basis points over the then outstanding principal amount of the Notes being redeemed. For purposes of this definition, Treasury Rate means the rate per annum equal to the yield to maturity at the time of computation of the United States Treasury securities with a constant maturity as compiled and published in the most recent Federal Reserve Statistical Release H-15 (519) that has become publicly available at least two (2) Business Days prior to such time (or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from such date of prepayment to the first anniversary of the Issue Date; provided , however , that if the period from such date of prepayment to the first anniversary of the Issue Date is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given.
Approved Petroleum Engineers shall mean (a) Netherland, Sewell & Associates, Inc., (b) Ryder Scott Company, L.P., (c) W. D. Van Gonten & Co. Petroleum Engineering, (d) DeGolyer and MacNaughton, (e) Cawley, Gillespie & Associates, Inc., (f) Miller and Lents, Ltd. and (g) at the Issuers option, any other independent petroleum engineers selected by the Issuers and reasonably acceptable to the administrative agent under the Credit Agreement governing Indebtedness incurred under Section 4.03(b)(i).
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) (each referred to in this definition as a disposition ); or
(2) the issuance or sale of Equity Interests (other than directors qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),
in each case other than:
(a) a disposition of cash, Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;
(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;
(d) any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or
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issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $15.0 million, provided that dispositions pursuant to this clause (d) shall not exceed $20.0 million in any 12 month consecutive period;
(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;
(f) [reserved];
(g) foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;
(h) [reserved];
(i) the lease, assignment or sublease of, or any transfer related to a reverse build to suit or similar transaction in respect of, any real or personal property in the ordinary course of business;
(j) the disposition of (i) inventory and other goods held for sale, including Hydrocarbons and other mineral products in the ordinary course of business, (ii) obsolete, worn out, used or surplus equipment, vehicles and other assets (other than accounts receivable) in the ordinary course of business (including any asset (other than Oil and Gas Properties) that is no longer necessary, used or useful for the business of Holdings or its Restricted Subsidiaries or is replaced by equipment of at least comparable value and use), and (iii) dispositions to landlords of improvements made to leased real property pursuant to customary terms of leases entered into in the ordinary course of business;
(k) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l) in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;
(m) [reserved];
(n) any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;
(o) dispositions in connection with Permitted Liens;
(p) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q) the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;
(r) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(s) any surrender, expiration or waiver of contract rights or oil and gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(t) [reserved];
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(u) any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to an Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;
(v) the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by an Issuer or any Restricted Subsidiary in the ordinary course of business and which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and
(w) a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved or probable reserves are attributable at the time of such disposition;
provided that, notwithstanding anything above to the contrary, no Production Payment and Reserve Sale shall be deemed to not constitute an Asset Sale pursuant to clauses (a) through (w) above, other than pursuant to clauses (d) and (u) above.
Authorized Officer means as to any Person, the Chairman of the Board of Directors, the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Assistant or Vice Treasurer, the Vice President-Finance, the General Counsel, the Secretary, the Assistant Secretary and any manager, managing member or general partner, in each case, of such Person, and any other senior officer designated as such in writing to the Trustee by such Person. Any document delivered hereunder that is signed by an Authorized Officer shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of an Issuer or any Subsidiary Guarantor and such Authorized Officer shall be conclusively presumed to have acted on behalf of such Person.
Bank Indebtedness means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including any agreement extending the maturity thereof, refinancing or replacing all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements or increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Holdings whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by Holdings to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
Board of Directors means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. In the case of Holdings, the Board of Directors of Holdings shall be deemed to include the Board of Directors of Holdings or any direct or indirect parent of Holdings, as appropriate.
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Borrowing Base means, at any date of determination, an amount equal to the amount of (a) 65% of the net present value discounted at 9% of proved developed producing (PDP) reserves, plus (b) 35% of the net present value discounted at 9% of proved developed non-producing (PDNP) reserves, plus (c) 25% of the net present value discounted at 9% of proven undeveloped (PUD) reserves, plus or minus (d) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus or minus (e) 65% of the net present value discounted at 9% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 1.5% per annum.
Business Day means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.
Calculation Date shall have the meaning set forth in the definition of Fixed Charge Coverage Ratio.
Capital Stock means:
(1) in the case of a corporation, corporate stock or shares;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations of Holdings or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Holdings and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancings thereof) (i) that were not included on the consolidated balance sheet of Holdings as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Holdings and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.
Capitalized Software Expenditures shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.
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Cash Equivalents means:
(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated A or the equivalent thereof by Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5) commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least A-1 or the equivalent thereof by Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moodys or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(7) Indebtedness issued by Persons (other than the Significant Issue Date Equityholders or any of their Affiliates) with a rating of A or higher from S&P or A-2 or higher from Moodys (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and
(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.
CFC means a controlled foreign corporation within the meaning of Section 957 of the Code.
Change of Control means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2) Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.
Code means the Internal Revenue Code of 1986, as amended.
Co-Investors shall mean the Significant Issue Date Equityholders, excluding in each case any of their respective operating portfolio companies.
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Collateral means all property subject or purported to be subject, from time to time, to a Lien under any Security Documents.
Collateral Agent means [●], acting in its capacity as Collateral Agent under this Indenture and under the Security Documents and any successor thereto in such capacity.
Collateral Agreement means the Collateral Agreement (Second Lien) among the Issuers, each Subsidiary Guarantor and the Collateral Agent, entered into on the Issue Date, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms and in accordance with this Indenture.
Collateral Coverage Minimum means that the Mortgaged Properties shall represent at least 90% of the PV-10 of the Issuers and the Subsidiary Guarantors total Proved Reserves and at least 90% of the PV-10 of the Issuers and the Subsidiary Guarantors total Proved Developed Producing Reserves, in each case, included in the most recent Reserve Report prepared as of each June 30th and December 31st of each fiscal year.
Consolidated Depreciation, Depletion and Amortization Expense means, with respect to any Person for any period, the total amount of depreciation, depletion and amortization expense, including accretion on asset retirement obligations in accordance with ASC 410 Asset Retirement and Environmental Obligations, the amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
Consolidated Interest Expense means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus
(3) [reserved]; minus
(4) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Consolidated Leverage Ratio means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness as of the last day of the then applicable Test Period to (b) EBITDA for such Test Period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but prior to the event for which the calculation of the Consolidated Leverage Ratio is made (the Leverage Ratio Calculation Date ), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment,
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repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Leverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event on or prior to the date that is 12 months after such applicable event; provided that the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to this paragraph or the third paragraph of the definition of Fixed Charge Coverage Ratio, plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Leverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.
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For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. 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 EBITDA for the applicable period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided , however , that, without duplication:
(1) any (a) net after-tax extraordinary or nonrecurring gains or losses (less all fees and expenses relating thereto) or expenses or charges, (b) any severance expenses, acquisition integration costs, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful) and (c) hurricane costs and charges, shall be excluded; provided that the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to this clause (1), plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, plus the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to the third paragraph of the definition of Fixed Charge Coverage Ratio or the third paragraph of the definition of Consolidated Leverage Ratio, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap;
(2) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss (less all fees and expenses or charges relating thereto) from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets or attributable to business dispositions or other asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;
(5) [reserved];
(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the
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payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (xii) of Section 4.04(b) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;
(11) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12) [reserved];
(13) [reserved];
(14) [reserved];
(15) [reserved];
(16) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded; and
(17) (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period less a deduction for any amounts so added back to the extent not so received within 365 days).
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or Restricted Subsidiaries to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Section 4.04 pursuant to clauses (4) and (5) of the definition of Cumulative Credit.
Consolidated Non-Cash Charges means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation, Depletion and Amortization Expense) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
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Consolidated Taxes means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.
Consolidated Total Indebtedness means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ( primary obligations ) of any other Person (the primary obligor ) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Contractual Requirement means any term, covenant, condition or provision of any indenture, loan agreement, lease agreement, mortgage, deed of trust, agreement or other instrument to which Holdings or any of the Restricted Subsidiaries is a party or by which it or any of its property or assets is bound.
Corporate Trust Office means the designated office of the Trustee in the United States of America at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the holders and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Issuers).
Credit Agreement means (i) the Credit Agreement entered into on [] among [], as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), repaid, refunded, refinanced or otherwise modified from time to time, including any agreement extending the maturity thereof, refinancing or replacing all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements or increasing the amount loaned or issued thereunder or altering the maturity thereof; provided , that in no event shall any lenders under the Credit Agreement include (i) any affiliates of each of Apollo Global Management, LLC or Riverstone Holdings LLC or (ii) any funds managed, advised or sub-advised by the persons described in the foregoing clause (i).
Credit Agreement Documents means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended,
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supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.
Cumulative Credit means the sum of (without duplication):
(1) 50% of the Consolidated Net Income of Holdings for the period from the Issue Date to the end of Holdings most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the Reference Period ) (or, in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus
(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.03(b)(xiii)) from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus
(3) 100% of the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to Section 4.03(b)(xiii)), plus
(4) 100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus
(5) 100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash received by Holdings or any Restricted Subsidiary from:
(A) the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and its Restricted Subsidiaries by any Person (other than Holdings or any of its Restricted Subsidiaries) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments,
(B) the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C) a distribution or dividend from an Unrestricted Subsidiary, plus
(6) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or its Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the Fair Market Value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment).
Customary Intercreditor Agreement means (a) in connection with the incurrence of Pari Passu Indebtedness that is to be secured by Liens on the Collateral securing such Pari Passu Indebtedness that shall
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rank equal in priority to the Liens on the Collateral securing the Notes Obligations, the Senior Lien Intercreditor Agreement (and a joinder to such Senior Lien Intercreditor Agreement shall be executed with respect to such Pari Passu Indebtedness) and (b) to the extent executed in connection with the incurrence of Indebtedness secured by junior Liens, an intercreditor agreement substantially in the form of the Senior Lien Intercreditor Agreement where the Notes Obligations shall be the senior obligations thereunder (with such modifications as may be necessary or appropriate in light of prevailing market conditions and are not materially adverse to the holders of Notes, taken as a whole).
Debt Exchange Agreement means that certain exchange agreement, dated as of [], 2017, among the Issuers, Stone Energy Corporation, the lenders listed on the signature pages thereto, the noteholders listed on the signature pages thereto, providing for the exchange of the Notes for the Issuers 11.00% Second Lien Bridge Loans and for the Stone Notes.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default.
Designated Non-cash Consideration means the Fair Market Value (as determined in good faith by Holdings) of non-cash consideration received by Holdings or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of Holdings or any direct or indirect parent of Holdings (other than Disqualified Stock), that is issued for cash (other than to Holdings or any of its Subsidiaries or an employee stock ownership plan or trust established by Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate, on the issuance date thereof.
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or
(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),
in each case prior to 91 days after the earlier of the maturity date applicable to any Notes or the date the Notes are no longer outstanding; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employees termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
Dollar-Denominated Production Payments means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.
Domestic Subsidiary means a Restricted Subsidiary that is not a Foreign Subsidiary.
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EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus , without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Fixed Charges; plus
(3) Consolidated Depreciation, Depletion and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) hurricane costs and charges (for the avoidance of doubt, without duplication of amounts excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income); plus
(6) business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); provided that the aggregate amount of cash items added back to EBITDA pursuant to this clause (6), plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to the third paragraph of the definition of Fixed Charge Coverage Ratio or the third paragraph of the definition of Consolidated Leverage Ratio, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap; plus
(7) [reserved]; plus
(8) any costs or expense Incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus
(9) the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Significant Issue Date Equityholders (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by Section 4.07, including, if applicable the amount of termination fees paid pursuant to clause (xx) thereof, in an aggregate amount not to exceed $500,000 in any calendar year pursuant to this clause (9); plus
(10) [reserved]; plus
(11) [reserved]; plus
(12) exploration expenses or costs (to the extent Holdings adopts the successful efforts method); and
less , without duplication, to the extent the same increased Consolidated Net Income,
(13) the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments; and
(14) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).
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Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
Equity Offering means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of Holdings or any direct or indirect parent of Holdings, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to Holdings or such direct or indirect parents common stock registered on Form S-4 or Form S-8; and
(2) issuances to any Subsidiary of Holdings.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes means the Notes of the Issuers issued pursuant to this Indenture in exchange for, and in an aggregate principal amount equal to or not in excess of, the Initial Notes or any Additional Notes, if applicable, in compliance with the terms of the Registration Rights Agreement.
Exchange Offer Registration Statement means the registration statement filed with the SEC in connection with the Registered Exchange Offer.
Excluded Property has the meaning set forth in the Collateral Agreement.
E xcluded Subsidiary means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a Wholly Owned Subsidiary (for so long as such Subsidiary remains a non-Wholly Owned Subsidiary), (c) any Foreign Subsidiary, (d) any FSHCO, (e) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary and (f) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of Holdings most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date.
Fair Market Value means, with respect to any asset or property, the price which could be negotiated in an arms-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
Farm-In Agreement means an agreement whereby a Person agrees to pay all or a share of the drilling, completion or other expenses of one or more exploratory or development wells (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interests therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.
Farm-Out Agreement means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.
First-Priority After-Acquired Property means any property of Holdings or any Subsidiary Guarantor that secures any Secured Bank Indebtedness that is not already subject to the Lien under the Security Documents.
First-Priority Lien Obligations means (i) all Secured Bank Indebtedness that is secured by the Collateral on a senior basis to the Liens securing the Notes Obligations and (ii) all other obligations of Holdings
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or any of its Restricted Subsidiaries in respect of Hedging Obligations or obligations in respect of cash management services in each case owing to a Person that is a holder of Secured Bank Indebtedness or an Affiliate of such holder at the time of entry into such Hedging Obligations or obligations in respect of cash management services.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date ), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event on or prior to the date that is 12 months after such applicable event; provided that the aggregate amount of operating expense reductions and other operating improvements or synergies added to EBITDA pursuant to this paragraph or the third paragraph of the definition of Consolidated Leverage Ratio, plus the aggregate amount of cash items excluded and resulting in an increase to Consolidated Net Income pursuant to clause (1) in the definition of Consolidated Net Income, plus the aggregate amount of cash items added back to EBITDA pursuant to clause (6) in the definition of EBITDA, shall not exceed, in any applicable four quarter period, the Aggregate Special Cap.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate
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for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. 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 EBITDA for the applicable period.
Fixed Charges means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.
Foreign Subsidiary means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
FSHCO shall mean any Domestic Subsidiary that owns (directly or through its Subsidiaries) no material assets other than the Equity Interests of one or more Foreign Subsidiaries that are CFCs.
GAAP means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term consolidated with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Hedging Obligations means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.
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holder or noteholder means the Person in whose name a Note is registered on the Registrars books.
Holdings means Talos Production LLC, together with its successors or assigns.
Hydrocarbons means oil, natural gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.
Incur means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
Indebtedness means, with respect to any Person:
(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided , however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;
provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) [reserved]; (5) [reserved]; (6) Production Payments and Reserve Sales; (7) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property; (8) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the Board of Directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of
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business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of this Indenture; (9) obligations in respect of surety and bonding requirements of Holdings and its Restricted Subsidiaries; and (10) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.
Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.
Indenture means this Indenture, as amended or supplemented from time to time.
Independent Financial Advisor means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of Holdings, qualified to perform the task for which it has been engaged.
Interest Payment Date has the meaning set forth in Exhibit A hereto.
Investment Grade Rating means a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.
Investment Grade Securities means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moodys and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 4.04:
(1) Investments shall include the portion (proportionate to Holdings equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of a Subsidiary of Holdings at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided ,
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however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary equal to an amount (if positive) equal to:
(a) Holdings Investment in such Subsidiary at the time of such redesignation less
(b) the portion (proportionate to Holdings equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.
Issue Date means [●].
Junior Lien Obligations means the Obligations with respect to other Indebtedness permitted to be Incurred under this Indenture, which is by its terms intended to be secured by the Collateral on a basis junior to the Notes; provided such Lien is permitted to be Incurred under this Indenture.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.
Management Group means the group consisting of the directors, managers, executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as the case may be, on the Issue Date together with (1) any new directors or managers whose election by such boards of directors or managers or whose nomination for election by the shareholders of Holdings or any direct or indirect parent of Holdings, as applicable, was approved by a vote of a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors or managers on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors or managers on the Issue Date together with the directors or managers so approved constituted a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business thereof.
Mortgaged Properties means each parcel of real estate and improvements thereto with respect to which a Mortgage is required to be granted on the Issue Date pursuant to the Debt Exchange Agreement or thereafter pursuant to Section 4.16.
Mortgages means, collectively, the mortgages, trust deeds, deeds of trust, deeds to secure debt, assignment of as-extracted collateral, fixture filing and other security documents delivered with respect to Mortgaged Properties substantially in the form of Exhibit D hereto (with such changes thereto as may be necessary to account for local law matters).
Net Income means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
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Net Proceeds means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, amounts paid in connection with the termination of Hedging Obligations related to Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
Net Working Capital means (a) all current assets of Holdings and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business less (b) all current liabilities of Holdings and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of Holdings prepared in accordance with GAAP.
Notes Documents means this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and the Senior Lien Intercreditor Agreement.
Notes Early Maturity Test Date means the date that is 91 days prior to April 3, 2022 (or, if such date is not a Business Day, the Business Day immediately preceding such date).
Notes Maturity Date means April 3, 2022; provided that if, on the Notes Early Maturity Test Date, the aggregate principal amount of Stone Notes outstanding exceeds $25.0 million, the Notes Maturity Date shall be the Notes Early Maturity Test Date.
Notes Obligations means Obligations in respect of the Notes, this Indenture, the Subsidiary Guarantees and the Security Documents, including, for the avoidance of doubt, Obligations in respect of Exchange Notes and guarantees thereof.
NYMEX means the New York Mercantile Exchange.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided , that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the Notes.
Officers Certificate means a certificate signed on behalf of Holdings by two Authorized Officers of Holdings, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holdings, which meets the requirements set forth in this Indenture.
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Oil and Gas Business means:
(1) the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;
(2) the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;
(3) any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;
(4) any business relating to oil field sales and service; and
(5) any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.
Oil and Gas Properties means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and gas reserves or other reserves of Hydrocarbons.
Opinion of Counsel means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.
Other Second-Lien Obligations means other Indebtedness of Holdings and its Restricted Subsidiaries that is equally and ratably secured with the Notes as permitted by this Indenture and is designated by Holdings as an Other Second-Lien Obligation.
Pari Passu Indebtedness means: (a) with respect to an Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and (b) with respect to any Subsidiary Guarantor, its Subsidiary Guarantee and any Indebtedness which ranks pari passu in right of payment to such Subsidiary Guarantors Subsidiary Guarantee.
Permitted Business Investment means any Investment and/or expenditure made in the ordinary course of business and which are of a nature that is or shall have become customary in the Oil and Gas Business generally or in the geographic region in which such activities occur, including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, distributing, storing, or transporting oil, natural gas or other Hydrocarbons and minerals (including with respect to plugging and abandonment) through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including:
(1) Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;
(2) Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and
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(3) Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.
Permitted Holders means, at any time, each of (i) the Co-Investors, (ii) the Management Group, (iii) any direct or indirect parent entity of Holdings as of the Issue Date, (iv) any Person that has no material assets other than the Capital Stock of Holdings and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof and (v) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings (a Permitted Holder Group ), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other group (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in Holdings or any Restricted Subsidiary; provided however , that the primary business of such Restricted Subsidiary is the Oil and Gas Business;
(2) any Investment in Cash Equivalents or Investment Grade Securities;
(3) any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(6) advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $2.0 million at any one time outstanding;
(7) any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8) Hedging Obligations permitted under clause (x) of Section 4.03(b);
(9) [reserved];
(10) additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $37.5 million (with the Fair Market Value of
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each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , however , that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;
(11) loans and advances to officers, directors, managers or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such persons purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;
(12) Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of Cumulative Credit;
(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.07(b) (except transactions described in clauses (ii), (iv), (vi), (ix)(B) and (xvi) of such Section);
(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15) (x) guarantees issued in accordance with Section 4.03 and Section 4.11 including, without limitation, any guarantee or other obligation issued or Incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;
(16) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(17) [reserved];
(18) [reserved];
(19) [reserved];
(20) Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01(a) after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(21) any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(22) Permitted Business Investments.
Permitted Liens means, with respect to any Person:
(1) pledges or deposits by such Person under workmens compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and
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abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as landlords, carriers, warehousemens, mechanics, materialmens, repairmens, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;
(4) Liens (A) in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business and (B) securing other obligations in respect of surety and bonding requirements in connection with the Transactions;
(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) (A) Liens on assets of a Restricted Subsidiary that is not a Subsidiary Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.03;
(B) Liens securing Indebtedness Incurred under the Credit Agreement, including any letter of credit facility relating thereto, that was permitted to be Incurred pursuant to clause (i) of Section 4.03(b);
(C) Liens securing Indebtedness permitted to be Incurred pursuant to clause (xvi) of Section 4.03(b); provided that in the case of clause (xvi), such Lien extends only to the assets acquired and, after giving effect to such acquisition, on a pro forma basis, the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.25 to 1.00;
(D) Liens securing the Notes Obligations issued on the Issue Date; and
(E) Liens securing Other Second-Lien Obligations permitted to be Incurred pursuant to clause (iv) of Section 4.03(b);
(7) Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement and Liens securing the Notes Obligations) 1 ;
(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , however , that such Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary;
(9) Liens on assets or property at the time Holdings or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into
1 | Note to Draft : Stone Notes that remain outstanding following the Issue Date may remain secured under this basket (if the collateral is not stripped). |
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Holdings or any Restricted Subsidiary; provided , however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further , however , that the Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(10) Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03;
(11) Liens securing Hedging Obligations not Incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;
(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;
(15) Liens in favor of Holdings or any Subsidiary Guarantor;
(16) [reserved];
(17) deposits made in the ordinary course of business to secure liability to insurance carriers;
(18) Liens on the Equity Interests of Unrestricted Subsidiaries;
(19) grants of software and other technology licenses in the ordinary course of business;
(20) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided , however , that (w) such new Lien shall be limited to all or part of the same property that secured the original Lien ( plus improvements on such property), (x) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any interest, premiums or defeasance costs required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise) and fees and expenses Incurred in connection therewith, (y) if the Indebtedness being refinanced, refunded, extended, renewed or replaced is secured by a Lien that is junior to the Liens securing the Notes, such new Lien shall be junior to the Liens securing the Notes and (z) if the Indebtedness being refinanced, refunded, extended, renewed or replaced is secured by a lien that is pari passu to the Liens securing the Notes, such new Lien shall be either pari passu or junior to the Liens securing the Notes;
(21) Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings or such Restricted Subsidiarys client at which such equipment is located;
(22) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
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(24) Liens (A) Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business and (B) on cash and Cash Equivalents and letters of credit securing any surety and bonding requirements;
(25) other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens Incurred under this clause (25) that are at that time outstanding, exceed $50.0 million; provided that First-Priority Lien Obligations and Other Second-Lien Obligations secured under this clause (25) shall be subject to the Senior Lien Intercreditor Agreement and any Junior Lien Obligations secured under this clause (25) shall be subject to a Customary Intercreditor Agreement; provided, further , that unsecured Indebtedness and Junior Lien Obligations shall not be exchanged for Other Second-Lien Obligations or Indebtedness that is secured on a senior basis to the Notes pursuant to this clause (25);
(26) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(27) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions;
(28) Liens arising by virtue of any statutory or common law provisions relating to bankers Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;
(29) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;
(30) Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(31) Liens in respect of Production Payments and Reserve Sales;
(32) Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided , however , in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract; provided further such Liens shall not secure Indebtedness for borrowed money;
(33) Liens on pipelines or pipeline facilities that arise by operation of law;
(34) any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics liens, tax liens and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b); and
(35) Liens securing Junior Lien Obligations, provided that the Notes are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien;
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provided further that Junior Lien Obligations secured under this clause (35) shall be subject to a Customary Intercreditor Agreement.
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Petroleum Industry Standards shall mean 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.
Preferred Stock means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
Prior Notes Exchange means the exchange on April 3, 2017 of the Issuers 9.75% Senior Notes due 2018 for the Issuers 11.00% Second Lien Bridge Loans.
Production Payments and Reserve Sales means the grant or transfer by Holdings or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar-denominated), partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers.
Proved Developed Reserves shall mean 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 or (b) Developed Non-Producing Reserves.
Proved Reserves shall mean 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.
Public Parent Company means any direct or indirect parent company of Holdings that has any class of its Capital Stock listed for trading on a United States national securities exchange.
PV-10 shall mean, with respect to any Proved Reserves expected to be produced from any Oil and Gas Properties, the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to the Issuers and the Subsidiary Guarantors collective interests in such reserves during the remaining expected economic lives of such reserves, calculated in accordance with the most recent Bank Price Deck (as defined in the Credit Agreement) provided to Holdings by the administrative agent under the Credit Agreement governing Indebtedness incurred under Section 4.03(b)(i) pursuant to [Section 2.14(i)] of such Credit Agreement (or any analogous provision).
Rating Agency means (1) each of Moodys and S&P and (2) if Moodys or S&P ceases to rate the Notes for reasons outside of Holdings control, a nationally recognized statistical rating organization within the meaning of Rule 17g-1 under the Exchange Act selected by Holdings or any direct or indirect parent of Holdings as a replacement agency for Moodys or S&P, as the case may be.
RBL Agent means the agent for secured parties holding First-Priority Lien Obligations, as appointed pursuant to the Senior Lien Intercreditor Agreement. The RBL Agent is initially the administrative agent under the Credit Agreement.
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Record Date has the meaning specified in Exhibit A hereto.
Registration Rights Agreement means, with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among the Issuers, the Subsidiary Guarantors party thereto and certain holders of the Notes.
Reserve Report shall mean a reserve engineers report, internally prepared by Holdings and audited by an Approved Petroleum Engineer, with respect to the Oil and Gas Properties of the Issuers and the Subsidiary Guarantors, or any other reserve report in form and substance reasonably equivalent (as determined in good faith by Holdings), setting forth, as of each June 30th or December 31st the Proved Reserves and the Proved Developed Reserves attributable to the Oil and Gas Properties of the Issuers and the Subsidiary Guarantors, together with a projection of the rate of production and future net revenues, operating expenses (including production taxes and ad valorem expenses) and capital expenditures with respect thereto as of such date, based upon the most recent Bank Price Deck (as defined in the Credit Agreement) provided to Holdings by the administrative agent under the Credit Agreement pursuant to [Section 2.14(i)] thereof (or any analogous provision).
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Payments shall have the meaning set forth in Section 4.04(a) .
Restricted Subsidiary means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.
S&P means S&P Global Ratings or any successor to the rating agency business thereof.
Sale/Leaseback Transaction means an arrangement relating to property now owned or hereafter acquired by Holdings or a Restricted Subsidiary whereby Holdings or such Restricted Subsidiary transfers such property to a Person and Holdings or such Restricted Subsidiary leases it from such Person, other than leases between Holdings and a Restricted Subsidiary or between Restricted Subsidiaries.
SEC means the Securities and Exchange Commission.
Second Priority Lien Obligations means (a) the Notes Obligations and (b) all Other Second-Lien Obligations.
Secured Bank Indebtedness means any Bank Indebtedness that is secured by a Permitted Lien Incurred or deemed Incurred pursuant to clause (6)(B) or clause (25) of the definition of Permitted Liens.
Secured Indebtedness means any Consolidated Total Indebtedness secured by a Lien.
Secured Parties means, collectively, the Trustee, the Collateral Agent and the holders of the Notes.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the security agreements, pledge agreements, collateral assignments, mortgages and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the Collateral Agent and the holders of the Notes as contemplated by this Indenture.
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Senior Lien Intercreditor Agreement means (i) the intercreditor agreement among the RBL Agent, the Collateral Agent, and the other parties from time to time party thereto, entered into on the Issue Date, as it may be amended, restated, supplemented or otherwise modified from time to time or (ii) any replacement thereof that contains terms not materially less favorable to the holders of the Notes than the intercreditor agreement referred to in clause (i).
Significant Subsidiary means any Restricted Subsidiary that would be a Significant Subsidiary of Holdings within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
Similar Business means a business, the majority of whose revenues are derived from the activities of Holdings and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.
Significant Issue Date Equityholders means (i) each of Apollo Global Management, LLC, Riverstone Holdings LLC, Franklin Advisers, Inc., MacKay Shields LLC and any of their respective Affiliates other than any portfolio companies (collectively, the Equity Investor ) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.
Stated Maturity means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
Stone Notes means the 7.500% Senior Secured Notes due 2022 issued by Stone Energy Corporation pursuant to that certain indenture, dated as of February 28, 2017, by and among Stone Energy Corporation, as issuer thereunder, Stone Energy Offshore, L.L.C., as subsidiary guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee.
Subordinated Indebtedness means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.
Subsidiary means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary Guarantee means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary Guarantor in accordance with the provisions of this Indenture.
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Subsidiary Guarantor means any Subsidiary that Incurs a Subsidiary Guarantee; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with this Indenture, such Subsidiary ceases to be a Subsidiary Guarantor.
Talos 2018 Notes means the notes issued pursuant to that certain Indenture, dated as of February 6, 2013, by and among the Issuers, the subsidiary guarantors party thereto from time to time and Wilmington Trust, National Association, as trustee, as amended, restated, amended and restated, supplemented or otherwise modified from time to time for the Issuers 9.75% Senior Notes due 2018 outstanding from and after the Issue Date.
Tax Distributions means any distributions described in Section 4.04(b)(xii).
Test Period means on any date of determination, four consecutive fiscal quarters of Holdings then last ended (taken as one accounting period) for which financial statements have been delivered pursuant to Section 4.02(a); provided that prior to the first date financial statements have been delivered pursuant to Section 4.02(a), the Test Period in effect shall be the four fiscal quarter period ended [●].
TIA means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
Total Assets means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any amortization of the amount of intangible assets since September 30, 2012, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.
Transaction Expenses means any fees or expenses incurred or paid by Holdings or any of its Subsidiaries in connection with the Transactions, this Indenture and the other Notes Documents and the transactions contemplated hereby and thereby.
Transactions means, collectively, (i) the Prior Notes Exchange, (ii) the combination of Talos Energy LLC and its subsidiaries with Stone Energy Corporation pursuant to the Transaction Agreement, dated as of [●], 2017 and (iii) the execution and delivery of this Indenture, the payment of Transaction Expenses and the other transactions contemplated by the Transaction Agreement, the Debt Exchange Agreement, this Indenture and the Notes Documents.
Trust Officer means:
(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, trust officer, assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject and who will shall have direct responsibility for the administration of this Indenture, and
(2) who shall have direct responsibility for the administration of this Indenture.
Trustee means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code or UCC means the New York Uniform Commercial Code as in effect from time to time.
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Unrestricted Subsidiary means:
(1) any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary;
Holdings may designate any Subsidiary of Holdings (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Holdings or any other Subsidiary of Holdings that is not a Subsidiary of the Subsidiary to be so designated; provided , however , that
(i) the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings or any of the Restricted Subsidiaries (other than pursuant to customary Liens or related arrangements under any oil and gas royalty trust or master limited partnership); and
(ii) (a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.
Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , however , that immediately after giving effect to such designation:
(x) (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under Section 4.03(a), or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be no less than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
U.S. Government Obligations means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.
Volumetric Production Payments means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.
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Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
Wholly Owned Restricted Subsidiary is any Wholly Owned Subsidiary that is a Restricted Subsidiary.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02 Other Definitions .
Term |
Section |
|
$ |
1.03(j) | |
Additional Interest |
Appendix A | |
Affiliate Transaction |
4.07(a) | |
Agent Members |
Appendix A | |
Asset Sale Offer |
4.06(b)(iii) | |
Bankruptcy Law |
6.01 | |
Change of Control Offer |
4.08(b) | |
Co-Issuer |
Preamble | |
covenant defeasance option |
8.01(b) | |
Covenant Suspension Event |
4.15 | |
Custodian |
6.01 | |
Definitive Note |
Appendix A | |
Depository |
Appendix A | |
Event of Default |
6.01 | |
Excess Proceeds |
4.06(b)(iii) | |
Global Notes |
Appendix A | |
Global Notes Legend |
Appendix A | |
Holdings |
Preamble | |
IAI |
Appendix A | |
incorporated provision |
13.01 | |
Increased Amount |
4.12(d) | |
Initial Notes |
Preamble | |
Initial Purchasers |
Appendix A | |
Issuers |
Preamble | |
legal defeasance option |
8.01(b) | |
Notes |
Preamble | |
Notes Custodian |
Appendix A | |
Notice of Default |
6.01 | |
Offer Period |
4.06(f) | |
Paying Agent |
2.04(a) | |
protected purchaser |
2.08 | |
QIB |
Appendix A |
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Term |
Section |
|
Refinancing Indebtedness |
4.03(b)(xv) | |
Refunding Capital Stock |
4.04(b)(ii) | |
Registrar |
2.04(a) | |
Regulation S |
Appendix A | |
Regulation S Global Notes |
Appendix A | |
Regulation S Notes |
Appendix A | |
Reporting Entity |
4.02(b) | |
Restricted Notes Legend |
Appendix A | |
Restricted Payments |
4.04(a) | |
Restricted Period |
Appendix A | |
Retired Capital Stock |
4.04(b)(ii) | |
Reversion Date |
4.15 | |
Rule 144A |
Appendix A | |
Rule 144A Global Notes |
Appendix A | |
Rule 144A Notes |
Appendix A | |
Rule 501 |
Appendix A | |
Subsidiary Guaranteed Obligations |
12.01(a) | |
Successor Holdco |
5.01(a)(i) | |
Successor Subsidiary Guarantor |
5.01(b)(i) | |
Suspended Covenants |
4.15 | |
Transfer Restricted Definitive Notes |
Appendix A | |
Transfer Restricted Global Notes |
Appendix A | |
Transfer Restricted Notes |
Appendix A | |
U.S. dollars |
1.03(j) | |
Unrestricted Definitive Notes |
Appendix A | |
Unrestricted Global Notes |
Appendix A |
SECTION 1.03 Rules of Construction . Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) or is not exclusive;
(d) including means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness and Secured Indebtedness shall not be deemed subordinate or junior to other Secured Indebtedness merely because it has a junior priority with respect to the same collateral;
(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;
(h) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;
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(i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;
(j) $ and U.S. dollars each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts; and
(k) whenever in this Indenture or the Notes there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Notes, such mention shall be deemed to include mention of the payment of Additional Interest, to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof.
SECTION 1.04 Incorporation by Reference of TIA . Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have the following meanings:
indenture securities means the Notes;
indenture security holder means a holder of a Note;
indenture to be qualified means this Indenture;
indenture trustee or institutional trustee means the Trustee; and
obligor on the Notes and the Guarantees means the Issuers and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.
All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.
ARTICLE II
THE NOTES
SECTION 2.01 Amount of Notes . The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $[●] 2 .
The Issuers may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and the Liens with respect thereto are permitted by Section 4.12 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09, 3.08, 4.06(g), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of
2 |
Note to Draft : The amount of Notes on the Issue Date will equal (1) full amount of Talos second lien bridge loans, (2) amount of Stone Notes exchanging into Notes and (3) any Talos 2018 Notes exchanging into Notes. |
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Directors of each Issuer and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;
(2) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue;
(3) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof; and
(4) if applicable, that such Additional Notes that are not Transfer Restricted Notes shall not be issued in the form of Initial Notes as set forth in Exhibit A hereto.
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors of each Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of each Issuer and delivered to the Trustee at or prior to the delivery of the Officers Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.
The Initial Notes and any Additional Notes may, at the Issuers option, be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.
SECTION 2.02 Form and Dating . Provisions relating to the Initial Notes and the Exchange Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustees certificate of authentication, (ii) any Additional Notes and the Trustees certificate of authentication and (iii) the Exchange Notes and the Trustees certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuers or any Subsidiary Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by the Depository in denominations of less than $2,000.
SECTION 2.03 Execution and Authentication . The Trustee shall authenticate and make available for delivery upon a written order of the Issuers signed by one Officer of each Issuer (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $[●], (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein and (c) the Exchange Notes for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes exchanged pursuant thereto or otherwise pursuant to an effective registration statement under the Securities Act. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, the registered holder of each of the Notes and delivery instructions. For the avoidance of doubt, the Issuers will not be required to deliver an Opinion of Counsel with respect to the authentication of the Initial
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Notes. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.
One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee may appoint one or more authenticating agents reasonably acceptable to Holdings to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to Holdings. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.04 Registrar and Paying Agent .
(a) The Issuers shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar ) and (ii) an office or agency where Notes may be presented for payment (the Paying Agent ). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrars. The term Paying Agent includes the Paying Agent and any additional paying agents. The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.
(b) The Issuers may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. Holdings shall notify the Trustee in writing of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Holdings or any of its domestically organized Subsidiaries may act as Paying Agent or Registrar.
(c) The Issuers may remove any Registrar or Paying Agent upon five Business Days prior written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor Registrar or Paying Agent, as the case may be, as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuers and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05 Paying Agent to Hold Money in Trust . Prior to or on each due date of the principal of and interest on any Note, the Issuers shall deposit with each Paying Agent (or if Holdings or a Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of holders or the Trustee all
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money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee in writing of any default by the Issuers in making any such payment. If Holdings or a Subsidiary of Holdings acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06 Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders. If the Trustee is not the Registrar, Holdings shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders.
SECTION 2.07 Transfer and Exchange . The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A . When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrars request. The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. The Issuers shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed.
Prior to the due presentation for registration of transfer of any Note, the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the holder of such Global Note (or its agent) or (b) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depository.
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SECTION 2.08 Replacement Notes . If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies any requirement of the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a protected purchaser ) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee. If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee, with respect to the Trustee, and the Issuers, with respect to the Issuers, to protect the Issuers, the Trustee, the Paying Agent and the Registrar, as applicable, from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment. The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including, without limitation, attorneys fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Issuers.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
SECTION 2.09 Outstanding Notes . Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 13.06, a Note does not cease to be outstanding because one of the Issuers or an Affiliate of one of the Issuers holds the Note.
If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10 Cancellation . The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures. The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.11 Defaulted Interest . If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest then borne by the Notes ( plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Issuers may pay the defaulted interest to the Persons who are holders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly deliver or cause to be delivered to
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each affected holder (with a copy to the Trustee) a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12 CUSIP Numbers, ISINs, Etc . The Issuers in issuing the Notes may use CUSIP numbers, ISINs and Common Code numbers (if then generally in use), and the Trustee shall use any such CUSIP numbers, ISINs and Common Code numbers in notices of redemption as a convenience to holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of redemption, that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee in writing of any change in any such CUSIP numbers, ISINs and Common Code numbers.
SECTION 2.13 Calculation of Principal Amount of Notes . The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture. Any calculation of the Applicable Premium made pursuant to this Indenture or the Notes shall be made by Holdings and delivered to the Trustee pursuant to an Officers Certificate. The Trustee shall have no liability or responsibility for any calculation made hereunder or in connection herewith or for any information used in any such calculation.
ARTICLE III
REDEMPTION
SECTION 3.01 Redemption . The Notes may be redeemed, in whole or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the form of Note set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
SECTION 3.02 Applicability of Article . Redemption of Notes at the election of the Issuers or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article III.
SECTION 3.03 Notices to Trustee . If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the Note, Holdings shall deliver to the Trustee in an Officers Certificate that states (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. Holdings shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is a redemption pursuant to Paragraph 5 of the Note. Holdings may also include a request in such Officers Certificate that the Trustee give the notice of redemption in the Issuers name and at their expense (and select the Notes to be redeemed in the case of a partial redemption) and setting forth the information to be stated in such notice as provided in Section 3.05. Any such notice may be canceled if written notice from the Issuer of such cancellation is actually received by the Trustee prior to notice of such redemption being mailed to any holder or otherwise delivered in accordance with the applicable procedures of the Depository and shall thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.04.
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SECTION 3.04 Selection of Notes to Be Redeemed . In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed (and the Issuers shall notify the Trustee in writing of any such listing), or if the Notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in each case, in such manner that complies with the requirements of the Depository, if applicable); provided that no Notes of $2,000 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000. Notes and portions of them the Trustee selects shall be in amounts of $2,000 or integral multiples of $1,000 in excess thereof. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Upon selection, the Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.05 Notice of Optional Redemption .
(a) At least 30 but not more than 60 days before a redemption date pursuant to Paragraph 5 of the Note, the Issuers shall mail or cause to be mailed by first-class mail at its registered address, or otherwise deliver in accordance with the procedures of the Depository, a notice of redemption to each holder whose Notes are to be redeemed (with a copy to the Trustee), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article VIII.
Any such notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest (including Additional Interest, if any) to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the Trustee or Paying Agent to collect the redemption price, plus accrued and unpaid interest and Additional Interest, if any;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;
(vi) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, ISIN and/or Common Code number, if any, printed on the Notes being redeemed;
(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or Common Code number, if any, listed in such notice or printed on the Notes;
(ix) if the redemption is subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed; and
(x) at the Issuers option, that the payment of the redemption price and performance of the Issuers obligations with respect to such redemption may be performed by another Person.
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Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
(b) At Holdings request, the Trustee shall deliver the notice of redemption in the Issuers name and at the Issuers expense subject to the terms of Section 3.03 hereof. In such event, Holdings shall notify the Trustee of such request at least three (3) Business Days (or such shorter period as is acceptable to the Trustee) prior to the date such notice is to be provided to holders.
SECTION 3.06 Effect of Notice of Redemption . Once notice of redemption is mailed or otherwise delivered in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice, except as provided in the final paragraph of Paragraph 5 of the Notes or Section 3.05(a). Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date; provided , however , that if the redemption date is after a regular Record Date and on or prior to the next Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed Notes registered on the relevant Record Date. Failure to give notice or any defect in the notice to any holder shall not affect the validity of the notice to any other holder.
SECTION 3.07 Deposit of Redemption Price . With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if Holdings or a Subsidiary of Holdings is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest and Additional Interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest, if any, on, the Notes or portions thereof to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.
SECTION 3.08 Notes Redeemed in Part . If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. Upon surrender and cancellation of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the holder (at the Issuers expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered and cancelled.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Notes . The Issuers shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds as of 11:00 a.m. New York City time money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful.
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SECTION 4.02 Reports and Other Information .
(a) Notwithstanding that Holdings may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, Holdings will file with the SEC (and provide the Trustee and holders with copies thereof, without cost to each holder, within 15 days after it files them with the SEC):
(i) within the time period specified in the SECs rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information that would have been required to be contained therein (or required in such successor or comparable form) if Holdings were subject to Section 13 or 15(d) of the Exchange Act, except to the extent permitted to be excluded by the SEC;
(ii) within the time period specified in the SECs rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information that would have been required to be contained therein (or required in such successor or comparable form) if Holdings were subject to Section 13 or 15(d) of the Exchange Act, except to the extent permitted to be excluded by the SEC;
(iii) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SECs rules and regulations), such other reports on Form 8-K (or any successor or comparable form) that would have been required if Holdings were subject to Section 13 or 15(d) of the Exchange Act; and
(iv) subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;
provided , however , that Holdings shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event Holdings will make available such information to prospective purchasers of Notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act. In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) and (iii), by posting such information to its website or on IntraLinks or any comparable online data system or website.
If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary, then the annual and quarterly information required pursuant to clauses (i) and (ii) of this Section 4.02(a) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.
(b) Notwithstanding the foregoing, Holdings will not be required to furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, as applicable.
(c) In the event that:
(i) the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entitys level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or
(ii) any direct or indirect parent of Holdings is or becomes a Guarantor of the Notes,
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consolidated reporting at such parent entitys level in a manner consistent with that described in this Section 4.02 for Holdings will satisfy this Section 4.02, and Holdings is permitted to satisfy its obligations in this Section 4.02 with respect to financial information relating Holdings by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than Holdings and its Subsidiaries, on the one hand, and the information relating to Holdings, the Subsidiary Guarantors and the other Subsidiaries of Holdings on a standalone basis, on the other hand. In addition, Holdings will make such information available to prospective investors upon request.
(d) Holdings will make such information available to prospective investors upon request. Holdings shall, for so long as any Notes remain outstanding during any period when neither it nor another Reporting Entity is subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) Notwithstanding the foregoing, Holdings will be deemed to have furnished the reports and information referred to in this Section 4.02 to the Trustee and the holders if Holdings has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied (1) prior to the commencement of the exchange offer contemplated by the Registration Rights Agreement relating to the Notes or the effectiveness of the Shelf Registration Statement, by the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration Statement in accordance with the provisions of such Registration Rights Agreement, and any amendments thereto, if such registration statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in Section 4.02(a) or (2) the posting of reports and information that would be required to be provided to the holders on Holdings website (or that of any of Holdings parent companies).
(f) Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Issue Date, for all holders of the Notes, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts to discuss such financial information no later than ten Business Days after the distribution of such information required by clauses (i) or (ii) of Section 4.02(a) and, prior to the date of each such conference call, will announce the time and date of such conference call and either include all information necessary to access the call or inform holders of the Notes, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts how they can obtain such information, including, without limitation, the applicable password or login information (if applicable).
(g) Delivery of such reports, information and documents to the Trustee pursuant to this Section 4.02 is for informational purposes only, and the Trustees receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers compliance with any of their covenants under this Indenture (as to which the Trustee is entitled to rely exclusively on Officers Certificates).
SECTION 4.03 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and Holdings shall not permit any of its Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided , however , that Holdings and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary of Holdings that is not a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed
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Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.25 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred (together with any other Indebtedness incurred pursuant to clause (b) below), or the Disqualified Stock or Preferred Stock had been issued (together with any other Disqualified Stock or Preferred Stock issued pursuant to clause (b) below), as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that any Restricted Subsidiary that is not a Subsidiary Guarantor may not Incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of an amount together with any Refinancing Indebtedness thereof pursuant to clause (b)(xv) below, equal to, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), $25.0 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement (or any permitted refinancing) not to exceed the greater of (x) $600.0 million and (y) the borrowing base (as defined in and determined from time to time pursuant to the Credit Agreement (or any permitted refinancing thereof)); provided, however, that the maximum principal amount of the borrowing base under the Credit Agreement (or any permitted refinancing thereof) shall not exceed either (1) the maximum amount of the borrowing base under the Credit Agreement (or any permitted refinancing thereof) at the time of Incurrence equal to the aggregate lending value to be ascribed to Oil and Gas Properties of the Issuers and the Subsidiary Guarantors against which the lenders thereunder are prepared to provide loans and letters of credit based on customary practices and standards at the time for reserve based loans and which are generally applied at the time by commercial lenders to borrowers in the Oil and Gas Business or (2) the Borrowing Base at the time of Incurrence; provided , further, that the Credit Agreement (or any permitted refinancing thereof) has a lender group that includes one or more commercial financial institutions which engage in oil and gas reserved based lending in the ordinary course of their respective businesses (an RBL Lending Financial Institution ); provided , further, that the All-In Yield of such Credit Agreement (or any permitted refinancing thereof) shall not exceed Adjusted LIBOR (as calculated under the Credit Agreement as of the Issue Date) plus 6.00%; provided , further that if the lender group does not include at least one RBL Lending Financial Institution, then the maximum principal amount available under this Section 4.03(b)(i) shall not exceed $600.0 million;
(ii) the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes (including any guarantee thereof (including the Subsidiary Guarantees)) (including Exchange Notes and related guarantees thereof) (not including any Additional Notes);
(iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i), (ii) and (iv) of this Section 4.03(b));
(iv) Indebtedness in respect of the Stone Notes, together with any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease the Stone Notes, in an aggregate principal amount not exceed $[●] million 3 (plus, in the case of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease the Stone Notes, the Additional Refinancing Amount); provided , that any such Indebtedness, Disqualified Stock or Preferred Stock refunding, refinancing or defeasing the Stone Notes constitutes unsecured Indebtedness, Junior Lien Obligations or Other Second-Lien Obligations; provided, further, that to the extent any Indebtedness, Disqualified Stock or Preferred Stock refunding or refinancing the Stone Notes pursuant to this clause (iv) is secured, such Indebtedness, Disqualified Stock or Preferred Stock constituting Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and any such Indebtedness, Disqualified Stock or Preferred Stock constituting Junior Lien
3 |
Note to Draft : To equal the amount of Stone Notes outstanding on the Issue Date. |
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Obligations shall be subject to a Customary Intercreditor Agreement; provided, further, that any such Indebtedness, Disqualified Stock or Preferred Stock refunding, refinancing or defeasing the Stone Notes shall (1) have a maturity date no earlier than the scheduled maturity of the Notes, (2) not have any scheduled amortization of principal prior to the scheduled maturity of the Notes (other than scheduled amortization of principal in an amount not to exceed 1.0% per annum), (3) not include covenants and events of default that are materially more restrictive than those contained in the Notes and (4) have an All-in-Yield no greater than the All-in-Yield of the Notes;
(v) Indebtedness Incurred by Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims;
(vi) Indebtedness arising from agreements of Holdings or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are not Incurred for speculative purposes but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any
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currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Indebtedness, Disqualified Stock or Preferred Stock Incurred to refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, does not exceed $50.0 million (plus, in the case of any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided that to the extent Indebtedness Incurred pursuant to this clause (xii) is secured, such Indebtedness constituting First-Priority Lien Obligations and Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and any Junior Lien Obligations shall be subject to a Customary Intercreditor Agreement; provided , further , that unsecured Indebtedness and Junior Lien Obligations shall not be exchanged for Other Second-Lien Obligations or Indebtedness that is secured on a senior basis to the Notes pursuant to this clause (xii);
(xiii) Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to clause (b) of Section 4.04 or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xiv) any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (i) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Subsidiary Guarantee, as applicable and (ii) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent such covenant is applicable;
(xv) the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any
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Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiii), (xv) and (xvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xiii), (xv) and (xvi) of this Section 4.03(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund, refinance or defease such Indebtedness, Disqualified Stock or Preferred Stock, in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise) and fees and expenses Incurred in connection therewith) (subject to the following proviso, Refinancing Indebtedness ) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date ( provided that this clause (1) will not apply to any refunding or refinancing of any First-Priority Lien Obligations);
(2) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Subsidiary Guarantee, as applicable, (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock or (c) unsecured Indebtedness, such Refinancing Indebtedness is unsecured Indebtedness; and
(3) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
provided, further, that to the extent Refinancing Indebtedness Incurred pursuant to this clause (xv) is secured, such Indebtedness constituting First-Priority Lien Obligations and Other Second-Lien Obligations shall be subject to the Senior Lien Intercreditor Agreement and any such Indebtedness constituting Junior Lien Obligations shall be subject to a Customary Intercreditor Agreement;
(xvi) Indebtedness, Disqualified Stock or Preferred Stock of (A) Holdings or any Restricted Subsidiary Incurred to finance an acquisition or (B) Persons that are acquired by Holdings or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either:
(1) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio of Holdings would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
(xvii) [reserved];
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(xviii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided , that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xix) Indebtedness of Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xx) Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings and any Restricted Subsidiary; provided , however , that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed $25.0 million (it being understood that any Indebtedness Incurred pursuant to this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for the purposes of Section 4.03(a) from and after the first date on which such Restricted Subsidiary could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx));
(xxi) Indebtedness of Holdings or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in clause (iv) of Section 4.04(b).
For purposes of determining compliance with this Section 4.03:
(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) of Section 4.03(b) above or is entitled to be Incurred pursuant to Section 4.03(a), then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03; provided that Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed Incurred under Section 4.03(b)(i) and may not be reclassified;
(2) [reserved];
(3) if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and
(4) if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.
Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue
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discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness other than as provided in clauses (3) and (4) above, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt.
Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Subsidiaries that are not Subsidiary Guarantors may Incur pursuant to this Section 4.03 shall not exceed an aggregate principal amount or liquidation preference at any time outstanding of $50.0 million.
Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.
SECTION 4.04 Limitation on Restricted Payments .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of any of Holdings or any of its Restricted Subsidiaries Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(ii) purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings held by Persons other than Holdings or a Restricted Subsidiary;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of Holdings or any Subsidiary Guarantor, any Other Second-Lien Obligations or Notes owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, any Junior Lien Obligations of Holdings or any Subsidiary Guarantor and any unsecured Indebtedness representing Indebtedness for borrowed money of Holdings or any Subsidiary Guarantor, (collectively, the Restricted Indebtedness) (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) (i) in the case of Indebtedness not owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, Subordinated Indebtedness, any Junior Lien Obligations and unsecured Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement, (ii) in the case of Indebtedness owned by Holdings or any Restricted Subsidiary thereof or any of their respective Affiliates, Subordinated Indebtedness, any Junior Lien Obligations and unsecured Indebtedness
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in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within 90 days of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement, (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b), and (C) the Talos 2018 Notes; or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as Restricted Payments ), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under Section 4.03(a);
(3) immediately after giving effect to such transaction on a pro forma basis, the Consolidated Leverage Ratio is not greater than 3.00 to 1.00; and
(4) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i), (ii) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (C) thereof), (vi)(C), (viii) and (xiii)(B) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the amount equal to the Cumulative Credit.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of this Indenture;
(ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity Interests ( Retired Capital Stock ) or Restricted Indebtedness of Holdings, any direct or indirect parent of Holdings or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of Holdings or any direct or indirect parent of Holdings or contributions to the equity capital of Holdings (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of Holdings) (collectively, including any such contributions, Refunding Capital Stock ),
(B) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and
(C) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this Section 4.04(b) and not made pursuant to clause (ii)(B), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;
(iii) (A) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
(w) such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal
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amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith),
(x) such Indebtedness is subordinated to the Notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(y) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and
(z) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;
(B) the redemption, repurchase, defeasance or other acquisition or retirement of Other Second-Lien Obligations or Notes of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
(x) | such Indebtedness constitutes Other Second-Lien Obligations, Notes, Junior Lien Obligations, Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date; |
(C) the redemption, repurchase, defeasance or other acquisition or retirement of Junior Lien Obligations of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as
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(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
(x) | such Indebtedness constitutes Junior Lien Obligations, Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date; |
(D) the redemption, repurchase, defeasance or other acquisition or retirement of unsecured Indebtedness representing Indebtedness for borrowed money of Holdings or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Holdings or a Subsidiary Guarantor which is Incurred in accordance with Section 6.03 so long as
(w) | such new Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus, without duplication, any additional Indebtedness Incurred to pay interest, premiums or defeasance costs, in each case in an amount equal to the amount required by the instruments governing such existing Indebtedness (whether such existing Indebtedness is redeemed pursuant to a tender offer, optional redemption or otherwise), and fees and expenses Incurred in connection therewith), |
(x) | such Indebtedness constitutes Subordinated Indebtedness or unsecured Indebtedness, |
(y) | such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (i) the final scheduled maturity date of the Indebtedness being so redeemed, repurchased, acquired or retired and (ii) 91 days following the last maturity date of any Notes then outstanding, and |
(z) | such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (i) the remaining Weighted Average Life to Maturity of the Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (ii) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date, |
(iv) a Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of Holdings or any direct or indirect parent of Holdings held by any future, present or former employee, director, manager or consultant of Holdings or any direct or indirect parent of Holdings or any Subsidiary of Holdings pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided , however , that the aggregate Restricted Payments made under this clause (iv) do not exceed $5.0 million in any calendar year,
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with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $10.0 million in any calendar year; provided , further , however , that such amount in any calendar year may be increased by an amount not to exceed:
(A) the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors, managers or consultants of Holdings and its Restricted Subsidiaries or any direct or indirect parent of Holdings ( provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (iii) of the definition of Cumulative Credit, plus
(B) the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Issue Date;
provided , that Holdings may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year and provided , further , that cancellation of Indebtedness owing to Holdings or any of its Restricted Subsidiaries from any present or former employees, directors, officers or consultants of Holdings, any Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;
(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Holdings or any of its Restricted Subsidiaries issued or Incurred in accordance with Section 4.03;
(vi) (A) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;
(B) a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (B) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and
(C) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this Section 4.04(b);
provided , however , in the case of each of clauses (A) and (C) above of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Holdings would have had a Fixed Charge Coverage Ratio of at least 2.25 to 1.00;
(vii) [reserved];
(viii) [reserved];
(ix) [reserved];
(x) other Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (x) that are at that time outstanding, not to exceed $10.0 million;
(xi) [reserved];
(xii) (A) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or
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applicable state or local income tax purposes of which a direct or indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; and (B) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (A)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);
(xiii) any Restricted Payment, if applicable:
(A) in amounts required for any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) and general corporate operating and overhead expenses of any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;
(B) in amounts required for any direct or indirect parent of Holdings, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with Section 4.03; and
(C) in amounts required for any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) to pay fees and expenses related to any unsuccessful equity or debt offering of such parent;
(xiv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(xv) [reserved];
(xvi) Restricted Payments by Holdings or any Restricted Subsidiary of Holdings to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
(xvii) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to provisions similar to those described in Section 4.06 and Section 4.08; provided that all Notes tendered by holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value; and
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(xviii) payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and its Restricted Subsidiaries, taken as a whole, that complies with Section 5.01; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by this Indenture) and that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value;
provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi)(B), (x) and (xiii)(B) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof; provided , further , that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by Holdings) of such property.
(c) As of the Issue Date, all of the Subsidiaries of Holdings shall be Restricted Subsidiaries. Holdings shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Holdings and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
SECTION 4.05 Dividend and Other Payment Restrictions Affecting Subsidiaries . Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to Holdings or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to Holdings or any of its Restricted Subsidiaries;
(b) make loans or advances to Holdings or any of its Restricted Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to Holdings or any of its Restricted Subsidiaries;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) (A) contractual encumbrances or restrictions in effect on the Issue Date and (B) contractual encumbrances or restrictions pursuant to the Credit Agreement and the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
(2) this Indenture, the Notes (and any Exchange Notes) or the Subsidiary Guarantees;
(3) applicable law or any applicable rule, regulation or order;
(4) any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5) contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
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(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;
(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
(11) in the case of clause (c) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including without limitations, licenses of intellectual property) or other contracts;
(12) [reserved];
(13) other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers ability to make anticipated principal or interest payments on the Notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.03;
(14) an Investment otherwise permitted by this Indenture;
(15) any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of Permitted Business Investment; or
(16) any encumbrances or restrictions of the type referred to in clauses (a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Holdings or a Restricted Subsidiary to other Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
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(a) Holdings shall not, and shall not permit any Restricted Subsidiary to, cause or make an Asset Sale, unless (x) Holdings or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (if the consideration for such Asset Sale is less than or equal to $25.0 million, as determined in good faith by Holdings or if the consideration for such Asset Sale exceeds $25.0 million, as determined by an Independent Financial Advisor) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:
(i) any liabilities (as shown on Holdings or a Restricted Subsidiarys most recent balance sheet or in the notes thereto) of Holdings or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,
(ii) any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),
(iii) with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof),
(iv) [reserved],
(v) [reserved], and
(vi) any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this clause (vi) that is at that time outstanding, not to exceed $25.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be Cash Equivalents for the purposes of this Section 4.06.
(b) Within 365 days of an Issuers or any Restricted Subsidiarys receipt of the Net Proceeds of any Asset Sale, the Issuers or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:
(i) to repay (v) Indebtedness constituting First-Priority Lien Obligations (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (w) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor ( provided that the assets disposed of in such Asset Sale were not assets of an Issuer or a Subsidiary Guarantor), (x) Obligations under the Notes, (D) other Pari Passu Indebtedness so long as the Net Proceeds from such Asset Sale are with respect to (A) assets that secure such other Pari Passu Indebtedness on a senior basis to the Notes Obligations or (B) assets not constituting Collateral) or (z) Other Second-Lien Obligations ( provided that if an Issuer or any Subsidiary Guarantor shall so reduce Other Second-Lien Obligations under this clause (z) (which for the avoidance of doubt will not constitute Indebtedness under clauses (v), (w), (x) or (y), the Issuers will equally and ratably reduce Obligations under the Notes pursuant to Section 3.01, through open-market purchases ( provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof (or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes, in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings;
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(ii) to make an Investment in any one or more businesses ( provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Holdings), assets, or property or capital expenditures, in each case (x) used or useful in a Similar Business or (y) that replace the properties and assets that are the subject of such Asset Sale; provided that if the assets that were disposed of in the Asset Sale constituted Collateral, the assets acquired must also be Collateral; or
(iii) to invest in Additional Assets; provided that if the assets that were disposed of in the Asset Sale constituted Collateral, the Additional Assets must also be Collateral.
(c) Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (i) of this Section 4.06(b), shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute Excess Proceeds . When the aggregate amount of Excess Proceeds exceeds $20,000,000, the Issuers shall make an offer to all holders of Notes (and, at the option of the Issuers, to holders of any Other Second-Lien Obligations) (an Asset Sale Offer ) to purchase the maximum principal amount of Notes (and such Other Second-Lien Obligations), that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event the Notes or such Other Second-Lien Obligations was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Other Second-Lien Obligations, such lesser price, if any, as may be provided for by the terms of such Other Second-Lien Obligations), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $20,000,000 million by mailing the notice required pursuant to the terms of Sections 3.05 and 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Other Second Lien Obligations) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuers may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Other Second Lien-Obligations) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) Pending the final application of any such Net Proceeds pursuant to this Section 4.06, Holdings or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(e) The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.
(f) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, Holdings shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On such date, the Issuers shall also irrevocably deposit with the Trustee or with a paying agent (or, if an Issuer or a Wholly Owned Restricted Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by Holdings and to be held for payment in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the Offer Period ), the Issuers shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuers. The Trustee (or the
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Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering holder in the amount of the purchase price. In the event that the Excess Proceeds delivered by the Issuers to the Trustee are greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuers immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.
(g) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or an Issuer receives not later than one Business Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such Notes for purchase shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed, or if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Pari Passu Indebtedness.
(h) Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each holder of Notes at such holders registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.
SECTION 4.07 Transactions with Affiliates .
(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an Affiliate Transaction ) involving aggregate consideration in excess of $2.0 million, unless:
(i) such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person;
(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (i) above; and
(iii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, Holdings delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view.
(b) The provisions of Section 4.07(a) shall not apply to the following:
(i) transactions between or among Holdings and/or any of its Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;
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(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;
(iii) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, managers, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company);
(iv) transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);
(v) payments or loans (or cancellation of loans) to officers, directors, managers, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings (but not including any direct or indirect parent of a Public Parent Company) which are approved by a majority of the Board of Directors of Holdings in good faith;
(vi) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;
(vii) [reserved];
(viii) the execution of the Transactions, and the payment of all fees and expenses related to the Transactions (but not including fees and expenses paid to the Co-Investors, other than reimbursement of certain expenses to Franklin Advisers, Inc., MacKay Shields LLC and any of their respective Affiliates);
(ix) (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to Holdings and its Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(x) [reserved];
(xi) the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;
(xii) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;
(xiii) the entering into of any tax sharing agreement or arrangement that complies with clause (xii) of Section 4.04(b);
(xiv) any contribution to the capital of Holdings;
(xv) transactions permitted by, and complying with, Section 5.01;
(xvi) transactions between Holdings or any of its Restricted Subsidiaries and any Person, a director or manager of which is also a director or manager of Holdings or any direct or indirect parent of Holdings; provided , however , that such director or manager abstains from voting as a director or manager of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person; provided, further , that such transaction is not with an Unrestricted Subsidiary;
(xvii) pledges of Equity Interests of Unrestricted Subsidiaries;
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(xviii) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(xix) any employment agreements entered into by Holdings or any of its Restricted Subsidiaries in the ordinary course of business;
(xx) [reserved];
(xxi) [reserved];
(xxii) transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;
(xxiii) [reserved]; and
(xxiv) customary agreements and arrangements with oil and gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.
SECTION 4.08 Change of Control .
(a) Upon the occurrence of a Change of Control, each holder shall have the right to require the Issuers to repurchase all or any part of such holders Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Notes in accordance with Article III of this Indenture. In the event that at the time of such Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the mailing of the notice to the holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Issuers shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).
(b) Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the Notes in accordance with Article III of this Indenture, the Issuers shall mail a notice (a Change of Control Offer ) to each holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holders Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase;
(ii) the circumstances and relevant facts and financial information regarding such Change of Control;
(iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed);
(iv) that unless the Issuers default in making the payment, all Notes accepted for repurchase pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Offer Payment Date;
(v) that holders of Notes electing to have any Notes repurchased pursuant to a Change of Control Offer will be required to notify the Trustee prior to the close of business on the third Business Day preceding the Change of Control Offer Payment Date; and
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(vi) the other instructions determined by the Issuers or as reasonably requested by the Trustee, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased.
(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. The holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered for purchase by the holder and a statement that such holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
(d) On the purchase date, all Notes purchased by the Issuers under this Section 4.08 shall be delivered to the Trustee for cancellation, and the Issuers shall pay the purchase price, plus accrued and unpaid interest and Additional Interest, if any, to the holders entitled thereto.
(e) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(f) Notwithstanding the foregoing provisions of this Section 4.08, the Issuers shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(g) [reserved].
(h) Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuers. Notes purchased by a third party pursuant to clauses (f) and (g) will have the status of Notes issued and outstanding.
(i) At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, Holdings shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering holder.
(j) The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section by virtue thereof.
(k) If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuers, or any third party making a Change of Control Offer in lieu of the Issuers as described above, purchases all of the Notes validly tendered and not withdrawn by such holders, the Issuers or such third party will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the date of redemption. Any such redemption shall be effected pursuant to Article III.
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SECTION 4.09 Compliance Certificate . Holdings shall deliver to the Trustee within 120 days after the end of each fiscal year of Holdings, beginning with the fiscal year ending on December 31, 2018, an Officers Certificate stating that in the course of the performance by the signers of their duties as Authorized Officers of Holdings they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action Holdings is taking or proposes to take with respect thereto. The Issuers also shall comply with Sections 314(a)(4) and 314(b) of the TIA. In addition, Holdings shall deliver to the Trustee, within five Business Days after the occurrence thereof, written notice of any Default or Event of Default, its status and what action Holdings is taking or proposes to take in respect thereof.
SECTION 4.11 Future Guarantors . Holdings shall cause (i) each Wholly Owned Restricted Subsidiary (other than any Excluded Subsidiary), (ii) any Subsidiary that ceases to be an Excluded Subsidiary and is a Wholly Owned Restricted Subsidiary and (iii) any other Subsidiary that guarantees any Indebtedness of either of the Issuers or any of the Subsidiary Guarantors to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C hereto pursuant to which such Subsidiary will guarantee the Issuers Obligations under the Notes and this Indenture on the terms and conditions set forth in this Indenture, a joinder to the Collateral Agreement, and, to the extent required pursuant to Section 4.16, a joinder agreement to each applicable Security Document or new Security Documents, and, if required by the Senior Lien Intercreditor Agreement, a joinder to the Senior Lien Intercreditor Agreement. Each Subsidiary Guarantee shall be released in accordance with Section 12.02 .
(a) Holdings shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or any of its Restricted Subsidiaries.
(b) [Reserved].
(c) For purposes of determining compliance with this Section 4.12, (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in the definition of Permitted Liens or pursuant to Section 4.12(a) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in the definition of Permitted Liens, Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.12 and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of Permitted Liens and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses.
(d) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The Increased Amount of any Indebtedness means any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness.
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SECTION 4.13 [Intentionally Omitted] .
SECTION 4.14 Maintenance of Office or Agency .
(a) The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee as set forth in Section 13.02.
(b) The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission shall in any manner relieve an Issuer of its obligation to maintain an office or agency for such purposes. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
(c) The Issuers hereby designates the Corporate Trust Office of the Trustee or its agent as such office or agency of the Issuers in accordance with Section 2.04.
SECTION 4.15 Covenant Suspension Event . If on any date following the Issue Date, (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing, then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a Covenant Suspension Event ), the following provisions of this Indenture will no longer be applicable (collectively, the Suspended Covenants ):
(1) Section 4.03 (Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock);
(2) Section 4.04 (Limitation on Restricted Payments);
(3) Section 4.05 (Dividend and Other Payment Restrictions Affecting Subsidiaries);
(4) Section 4.06 (Asset Sales);
(5) Section 4.07 (Transactions with Affiliates);
(6) Section 4.11 (Future Guarantors);
(7) Section 4.16 (After-Acquired Property); and
(8) Section 5.01(a)(iv) (Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets).
In the event that Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the Reversion Date ) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then Holdings and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events. The period of time between the Covenant Suspension Event and the Reversion Date is referred to as the Suspension Period.
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On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to Sections 4.03(a) or one of the clauses set forth in Section 4.03(b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Sections 4.03(a) or (b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (iii) of Section 4.03(b). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 4.04(a). No Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, Holdings must comply with the terms of Section 4.11.
For purposes of Section 4.06, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.
The Issuers shall provide the Trustee with written notice of each Covenant Suspension Event or Reversion Date within five Business Days of the occurrence thereof. The Trustee shall have no duty to monitor or provide notice to the holders of Notes of any such Covenant Suspension Event or Reversion Date.
SECTION 4.16 After-Acquired Property .
(a) Upon the acquisition by Holdings or any Subsidiary Guarantor of any First-Priority After-Acquired Property, or upon any additional Restricted Subsidiary becoming a Subsidiary Guarantor that has First-Priority After-Acquired Property, Holdings or such Subsidiary Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and other Security Documents as shall be reasonably necessary to vest in the Collateral Agent a perfected second-priority security interest, subject only to Permitted Liens, in such First-Priority After-Acquired Property and to have such First-Priority After-Acquired Property (but subject to the limitations described in the Security Documents, the Senior Lien Intercreditor Agreement and limitations under applicable local law) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such First-Priority After-Acquired Property to the same extent and with the same force and effect.
(b) Notwithstanding the foregoing, if granting a security interest in any property pursuant to the foregoing clause (a) requires the consent of a third party, Holdings will use commercially reasonable efforts to obtain such consent with respect to such security interest for the benefit of the Collateral Agent on behalf of the Secured Parties. If such third party does not consent to the granting of such security interest after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such security interest.
(c) Holdings shall review each Reserve Report prepared as of each June 30th and December 31st (which shall be prepared by no later than September 30th of the same year for Reserve Reports as of June 30th and March 31st of the following year for Reserve Reports as of December 31st) and the list of current Mortgaged Properties, to ascertain whether the PV-10 of the Mortgaged Properties (calculated at the time of redetermination) meets the Collateral Coverage Minimum after giving effect to exploration and production activities, acquisitions, dispositions and production. In the event that the PV-10 of the Mortgaged Properties (calculated at the time of review) does not meet the Collateral Coverage Minimum, then the Issuers shall use best efforts, and shall cause the Subsidiary Guarantors to use best efforts to, grant, no later than (i) with respect to the Reserve Report prepared as of December 31st, April 30th of the following fiscal year and (ii) with respect to the Reserve Report prepared as of June 30th, October 31st of the same fiscal year, to the Collateral Agent as security
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for the Obligations a first-priority Lien interest (subject to Liens permitted by this Indenture) on additional Oil and Gas Properties not already subject to a Lien of the Security Documents such that, after giving effect thereto, the PV-10 of the Mortgaged Properties (calculated at the time of review) meets the Collateral Coverage Minimum. All such Liens will be created and perfected by and in accordance with the provisions of the Security Documents, including, if applicable, any additional Mortgages. In order to comply with the foregoing, if any Restricted Subsidiary places a Lien on its property and such Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with the provisions of Section 4.16(a) and (b).
Notwithstanding anything herein to the contrary, (i) if the Issuers or any Subsidiary Guarantor grants a lien on any assets to secure any Secured Bank Indebtedness, the Issuers or the applicable Subsidiary Guarantor shall be required to provide a perfected second-priority security interest in such assets, subject to only Permitted Liens, to secure the Notes Obligations and (ii) if the Issuers or any Subsidiary Guarantor grants a lien on any assets to secure any Other Second-Lien Obligations, the Issuers or the applicable Subsidiary Guarantor shall be required to provide a perfected second-priority security interest in such assets, pari passu with such Other Second-Lien Obligations, subject to only Permitted Liens, to secure the Notes Obligations.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01 When Holdings May Merge or Transfer Assets .
(a) Holdings may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Holdings is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:
(i) Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the Successor Company );
(ii) the Successor Company (if other than Holdings) expressly assumes all the obligations of Holdings under this Indenture, the Security Documents and the Registration Rights Agreement pursuant to supplemental indentures;
(iii) immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;
(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company, or such Restricted Subsidiary at the time of such transaction), either
(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be no less than such ratio for Holdings and its Restricted Subsidiaries immediately prior to such transaction;
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(v) if Holdings is not the Successor Company, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Persons obligations under this Indenture and the Notes; and
(vi) the Successor Company shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with this Indenture.
The Successor Company (if other than Holdings) will succeed to, and be substituted for, Holdings under this Indenture and the Notes, and in such event Holdings shall be automatically released and discharged from its obligations under this Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (a) Holdings or any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to Holdings or to a Restricted Subsidiary, and (b) Holdings may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating Holdings in another state of the United States, the District of Columbia or any territory of the United States or may convert into a corporation, partnership or limited liability company, so long as the amount of Indebtedness of Holdings and its Restricted Subsidiaries is not increased thereby. This Article V will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Holdings and the Restricted Subsidiaries.
For purposes of this Section 5.01(a) only, the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of Holdings, which properties and assets, if held by Holdings instead of such Subsidiaries, would constitute all or substantially all the properties and assets of Holdings on a consolidated basis, shall be deemed to be the transfer of all or substantially all the properties and assets of Holdings.
(b) Subject to the provisions of Section 12.02(b)(i), no Subsidiary Guarantor shall, and Holdings shall not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) either (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Subsidiary Guarantor ) and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and
(ii) the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.
Except as otherwise provided in this Indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under this Indenture and its Subsidiary Guarantee. Notwithstanding
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the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Issuer or another Subsidiary Guarantor.
In addition, notwithstanding the foregoing, a Subsidiary Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to an Issuer or any Subsidiary Guarantor.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default . An Event of Default with respect to Notes occurs if:
(a) there is a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,
(b) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,
(c) there is a failure by Holdings for 60 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements in Section 4.02,
(d) there is a failure by Holdings or any of the Restricted Subsidiaries for 30 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (a), (b) or (c) above or (k) below) contained in the Notes, this Indenture or the Security Documents,
(e) there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million or its foreign currency equivalent,
(f) Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,
(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against Holdings or any Significant Subsidiary in an involuntary case;
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(ii) appoints a Custodian of Holdings or any Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of Holdings or any Significant Subsidiary or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,
(h) there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $25.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days,
(i) the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the Notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Subsidiary Guarantee with respect to the Notes and such Default continues for 10 days,
(j) unless such Liens have been released in accordance with the provisions of this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement, Liens in favor of the Lenders with respect to Collateral with a Fair Market Value in excess of $100.0 million cease to be valid or enforceable and such Default continues for 30 days, or an Issuer shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of any Subsidiary Guarantor, Holdings fails to cause such Subsidiary Guarantor to rescind such assertions within 30 days after Holdings has actual knowledge of such assertions; or
(k) there is a failure by Holdings to comply for 15 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee) with any of its obligations, covenants or agreements under Section 5.01(a).
The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
However, a default under clause (c), (d) or (k) above shall not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding Notes (with a copy to the Trustee) notify the Issuers of the Default and the Issuers do not cure such Default within the time specified in clause (c), (d) or (k) as applicable, after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default .
The term Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
SECTION 6.02 Acceleration . If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to Holdings) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes (with a copy to the Trustee) by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon the Trustees or the holders of at least 30% in principal amount of outstanding Notes notification to the Issuers of such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Issuers occurs, the principal of, premium, if any, and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or
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other act on the part of the Trustee or any holders. The holders of a majority in principal amount of outstanding Notes by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the Notes, if within 20 days after such Event of Default arose the Issuers deliver an Officers Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.
If the Notes are accelerated or otherwise become due prior to their maturity date, in each case, as a result of an Event of Default (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)) on or after the first anniversary of the Issue Date, the amount of principal of, accrued and unpaid interest and premium on the Notes that becomes due and payable shall equal the optional redemption price, plus accrued and unpaid interest to such date, applicable with respect to an optional redemption of the Notes, in effect on the date of such acceleration as if such acceleration were an optional redemption of the Notes accelerated. If the Notes are accelerated or otherwise become due prior to their maturity date, in each case, as a result of an Event of Default (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)) prior to the first anniversary of the Issue Date, the amount of principal of, accrued and unpaid interest and premium on the Notes that becomes due and payable shall equal 100% of the principal amount of the Notes prepaid plus the Applicable Premium in effect on the date of such acceleration, plus accrued and unpaid interest to such date, as if such acceleration were an optional redemption of the Notes accelerated.
In any such case, the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall constitute part of the Notes, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the Issuers and the Subsidiary Guarantors, on the one hand, and the holders of the Notes, on the other hand, as to a reasonable calculation of each holders lost profits as a result thereof. Any amounts payable pursuant to the above shall be presumed to be the liquidated damages sustained by each holder of Notes, and each of the Issuers and the Subsidiary Guarantors agrees that it is reasonable under the circumstances currently existing. The optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall also be payable in the event the Notes are satisfied or released by foreclosure (whether by power of judicial proceeding, deed in lieu of foreclosure or by any other means). EACH OF THE ISSUERS AND THE SUBSIDIARY GUARANTORS EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING AMOUNTS IN CONNECTION WITH ANY SUCH ACCELERATION. Each of the Issuers and the Subsidiary Guarantors expressly agrees (to the fullest extent it may lawfully do so) that: (A) each of the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, is reasonable and is the product of an arms length transaction between sophisticated business people, ably represented by counsel; (B) the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the holders of the Notes, the Issuers and the Subsidiary Guarantors giving specific consideration in this transaction for such agreement to pay the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable; and (D) the Issuers and the Subsidiary Guarantors shall be estopped hereafter from claiming differently than as agreed to in
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this paragraph. Each of the Issuers and the Subsidiary Guarantors expressly acknowledges that its agreement to pay the optional redemption price or the principal amount of the Notes plus the Applicable Premium, as applicable, to the holders of the Notes as herein described is a material inducement to the holders of the Notes to receive the Notes.
SECTION 6.03 Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. To the extent required by law, all available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults . Provided the Notes are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes then outstanding by written notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each holder affected. When a Default is waived, it is deemed cured and the Issuers, the Trustee and the holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05 Control by Majority . The holders of a majority in principal amount of then outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Article VII, that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability or expenses for which it is not adequately indemnified; provided, however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.
SECTION 6.06 Limitation on Suits .
(a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to this Indenture, the Notes or the Security Documents unless:
(i) such holder has previously given the Trustee written notice that an Event of Default is continuing,
(ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy,
(iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
(b) A holder may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder.
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SECTION 6.07 Contractual Rights of the Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the contractual right of any holder to receive payment of principal of and interest on the Note held by such holder, on or after the respective due dates thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder.
SECTION 6.08 Collection Suit by Trustee . If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and any amount due hereunder.
SECTION 6.09 Trustee May File Proofs of Claim . The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the holders allowed in any judicial proceedings relative to the Issuer, the Subsidiary Guarantors, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee hereunder. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.
SECTION 6.10 Application of Funds . After the exercise of remedies (or after all Notes have automatically become immediately due and payable), any amounts received by the Trustee on account of the Obligations shall, subject to the Senior Lien Intercreditor Agreement, be applied by the Trustee in accordance with Section 4.02 of the Collateral Agreement.
SECTION 6.11 Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Article VI does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the Notes.
SECTION 6.12 Waiver of Stay or Extension Laws . Neither the Issuers nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuers and the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
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ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee .
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and
(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the form of certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good faith unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and the TIA.
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SECTION 7.02 Rights of Trustee .
(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be responsible or liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided , however , that the Trustees conduct does not constitute willful misconduct or gross negligence as determined by a court of competent jurisdiction in a final non-appealable order.
(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney, at the expense of the Issuers and shall Incur no liability of any kind by reason of such inquiry or investigation.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or the Security Documents at the written request or direction of any of the holders pursuant to this Indenture, unless, subject to the terms hereof, such holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be Incurred by it in compliance with such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder, including the Collateral Agent.
(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.
(j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding upon future holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.
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(k) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes and this Indenture.
(l) The Trustee may request that the Issuers deliver an Officers Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers Certificate may be signed by any Person authorized to sign an Officers Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.
(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.
(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.
SECTION 7.03 Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10 and 7.11.
SECTION 7.04 Trustee s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Subsidiary Guarantees or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers or any Subsidiary Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustees certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j) or (k), or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 13.02 hereof from the Issuers, any Subsidiary Guarantor or any holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of Notes and the Issuers having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.
SECTION 7.05 Notice of Defaults . If a Default occurs and is continuing and is actually known to a Trust Officer, the Trustee shall mail, or deliver electronically if held by the Depository, to each holder of the Notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee at the Corporate Trust Office. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold notice if and so long it in good faith determines that withholding notice is in the interests of the noteholders. Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year and whether such Default is continuing and, if so, proposed steps to cure such Default. Holdings also is required to deliver to the Trustee, within 30 days after the occurrence
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thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.
SECTION 7.06 Reports by Trustee to the Holders . As promptly as practicable after each November 1 beginning with the November 1 following the date of this Indenture, and in any event prior to December 1 in each year, the Trustee shall mail to each holder a brief report dated as of such November 1 that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA.
Pursuant to Section 313(d) of the TIA, a copy of each report at the time of its mailing to the holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed if the Notes are listed. Holdings agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. All reports pursuant to this Section 7.06 shall be provided in accordance with Section 313(c) of the TIA.
SECTION 7.07 Compensation and Indemnity . The Issuers shall pay to the Trustee (acting in any capacity hereunder) and the Collateral Agent from time to time compensation for their acceptance of this Indenture and their services hereunder. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee and the Collateral Agent upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees and the Collateral Agents agents, counsel, accountants and experts. The Issuers and the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee (acting in any capacity hereunder) and the Collateral Agent or any predecessor Trustee or Collateral Agent and their directors, officers, employees and agents against any and all loss, liability, claim, damage or expense (including reasonable attorneys fees and expenses and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) Incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or any Subsidiary Guarantee against any Issuer or any Subsidiary Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by any Issuer, any Subsidiary Guarantor, any holder or any other Person). The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee and/or the Collateral Agent. The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided , however , that any failure so to notify the Issuers shall not relieve any Issuer or any Subsidiary Guarantor of its indemnity obligations hereunder. The Issuers shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers expense in the defense. Such indemnified parties may have separate counsel and the Issuers and such Subsidiary Guarantors, as applicable, shall pay the fees and expenses of such counsel; provided , however , that the Issuers shall not be required to pay such fees and expenses if it assumes such indemnified parties defense and, in such indemnified parties reasonable judgment, there is no actual or potential conflict of interest between the Issuers and the Subsidiary Guarantor, as applicable, and such parties in connection with such defense. The Issuers need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such partys own willful misconduct or gross negligence.
To secure the Issuers and the Subsidiary Guarantors payment obligations hereunder, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Issuers and the Subsidiary Guarantors payment obligations pursuant to this Indenture shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee and/or the Collateral Agent. Without prejudice to any other rights available to the Trustee or the Collateral Agent under applicable law, when the Trustee or the
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Collateral Agent Incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
No provision of this Indenture shall require the Trustee or the Collateral Agent to expend or risk its own funds or otherwise Incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.
SECTION 7.08 Replacement of Trustee .
(a) The Trustee may resign at any time by so notifying the Issuer. The holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuers may upon five Business Days notice remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuers or by the holders of a majority in principal amount of the Notes and such holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail, or otherwise deliver in accordance with the procedures of the Depository, a notice of its succession to the holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07. The retiring (or removed) Trustee shall have no liability or responsibility for the actions or inaction of any successor Trustee.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the holders of 10% in principal amount of the Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the Trustees duty to resign is stayed as provided in Section 310(b) of the TIA, any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers obligations under Article VII shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not
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delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification . The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided , however , that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.
SECTION 7.11 Preferential Collection of Claims Against the Issuers . The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
SECTION 7.12 Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification .
(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee and the Collateral Agent in good faith.
(b) The Trustee and the Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Issuers to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 7.01 of this Indenture, the Trustee and the Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Senior Lien Intercreditor Agreement, the Collateral Agreement or any other Security Document by the Issuers, the Subsidiary Guarantors or the Collateral Agent (in the case of the Trustee). The Trustee and the Collateral Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Issuers or by the Trustee or the Collateral Agent, in relation to any matter arising in the administration of this Indenture or the Security Documents.
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ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Discharge of Liability on Notes; Defeasance .
(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights, indemnities and immunities of the Trustee and rights of registration or transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when:
(i) either (A) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (B) all of the Notes (1) have become due and payable, (2) will become due and payable at their Stated Maturity within one year or (3) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in U.S. dollars in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption;
(ii) the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under this Indenture; and
(iii) the Issuers have delivered to the Trustee an Officers Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time may terminate (i) all of their obligations under the Notes and this Indenture with respect to the holders of the Notes ( legal defeasance option ), and (ii) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.15, 4.16 and the operation of Section 5.01 for the benefit of the holders of the Notes, and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and 6.01(g) with respect to Significant Subsidiaries only), 6.01(h), 6.01(i) 6.01(j) and 6.01(k) ( covenant defeasance option ). The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. In the event that the Issuers terminate all of their obligations under the Notes and this Indenture (with respect to such Notes) by exercising their legal defeasance option or their covenant defeasance option, the obligations of each Subsidiary Guarantor with respect to its Subsidiary Guarantee and the Security Documents shall be terminated simultaneously with the termination of such obligation.
If the Issuers exercises their legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuers exercise their covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and (g), with respect to Significant Subsidiaries only), 6.01(h), 6.01(i), 6.01(j) or 6.01(k) or because of the failure of Holdings to comply with Section 5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.
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(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09 and Article VII, including, without limitation, Sections 7.07 and 7.08, and in this Article VIII and the rights, indemnities and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full. Thereafter, the Issuers obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights, indemnities and immunities of the Trustee under this Indenture shall survive such satisfaction and discharge.
SECTION 8.02 Conditions to Defeasance .
(a) The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee cash in U.S. dollars, U.S. Government Obligations or a combination thereof sufficient to pay the principal of and premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be;
(ii) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;
(iii) no Default specified in Section 6.01(f) or (g) with respect to the Issuers shall have occurred or is continuing on the date of such deposit;
(iv) the deposit does not constitute a default under any other material agreement or instrument binding on the Issuers;
(v) in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;
(vi) such exercise does not impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates thereof or to institute suit for the enforcement of any payment on or with respect to such holders Notes;
(vii) in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(viii) the Issuers deliver to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with.
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(b) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III.
SECTION 8.03 Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. The Trustee shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.
SECTION 8.04 Repayment to Issuer . Each of the Trustee and each Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it as provided in this Article VIII that, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article VIII.
Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
SECTION 8.05 Indemnity for U.S. Government Obligations . The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06 Reinstatement . If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Issuers have made any payment of principal of, or interest on, any such Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.
ARTICLE IX
AMENDMENTS AND WAIVERS
SECTION 9.01 Without Consent of the Holders .
(a) The Issuers, the Trustee and the Collateral Agent may amend this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and/or any Customary Intercreditor Agreements without notice to or consent of any holder:
(i) to cure any ambiguity, omission, mistake, defect or inconsistency;
(ii) to provide for the assumption by a Successor Company (with respect to an Issuer) of the obligations of an Issuer under this Indenture, the Notes, the Security Documents and the Senior Lien Intercreditor Agreement;
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(iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under this Indenture, its Subsidiary Guarantee, the Security Documents and the Senior Lien Intercreditor Agreement;
(iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;
(v) [reserved];
(vi) to add a Subsidiary Guarantee or collateral with respect to the Notes,
(vii) [intentionally omitted];
(viii) to release Collateral or a Subsidiary Guarantee as permitted by this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement;
(ix) [intentionally omitted];
(x) to add to the covenants of the Issuers or any Subsidiaries for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers or any Subsidiary;
(xi) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of, this Indenture under the TIA;
(xii) to make any change that does not adversely affect the rights of any holder;
(xiii) to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities; or
(xiv) to effect any provision of this Indenture.
(b) The Senior Lien Intercreditor Agreement may be amended without the consent of any holder of Notes, the Trustee or the Collateral Agent in connection with the permitted entry into the Senior Lien Intercreditor Agreement of any class of additional secured creditors holding Other Second-Lien Obligations, First-Priority Lien Obligations or Junior Lien Obligations to effectuate such entry into the Senior Lien Intercreditor Agreement and to make the lien of such class equal and ratable with, as applicable, the lien of the First-Priority Lien Obligations, the Other Second-Lien Obligations or the Junior Lien Obligations, in each case, to the extent such First-Priority Lien Obligations, Other Second-Lien Obligations or Junior Lien Obligations are expressly permitted to be incurred pursuant to this Indenture.
(c) After an amendment under this Section 9.01 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.
SECTION 9.02 With Consent of the Holders . The Issuers, the Trustee and the Collateral Agent may amend this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the Senior Lien Intercreditor Agreement and/or any Customary Intercreditor Agreements with the consent of the Issuers and the holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each holder of an outstanding Note affected, an amendment may not:
(1) reduce the amount of Notes whose holders must consent to an amendment,
(2) reduce the rate of or extend the time for payment of interest on any Note,
(3) reduce the principal of or extend the Stated Maturity of any Note,
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(4) reduce the premium payable (if any) upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article III,
(5) make any Note payable in money other than that stated in such Note,
(6) expressly subordinate the Notes or any Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor,
(7) impair the contractual right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holders Notes,
(8) make any change in the amendment provisions which require each holders consent or in the waiver provisions, or
(9) make any change in the provisions dealing with the application of proceeds of Collateral in the Senior Lien Intercreditor Agreement, the Security Documents or this Indenture that would adversely affect the holders of Notes.
Except as expressly provided by this Indenture or the Security Documents, without the consent of the holders of at least 66.67% in aggregate principal amount of the Notes then outstanding, no amendment may modify or release the Subsidiary Guarantee of any Significant Subsidiary in any manner adverse to the holders of Notes. Without the consent of the holders of at least 66.67% in aggregate principal amount of the Notes then outstanding, no amendment or waiver may release all or substantially all of the Collateral from the Lien of the Security Documents with respect to the Notes.
It shall not be necessary for the consent of the holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment. The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03 Revocation and Effect of Consents and Waivers .
(a) A consent to an amendment or a waiver by a holder of a Note shall bind the holder and every subsequent holder of that Note or portion of the Note that evidences the same debt as the consenting holders Note, even if notation of the consent or waiver is not made on the Note. However, any such holder or subsequent holder may revoke the consent or waiver as to such holders Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers Certificate from Holdings certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuers or the Trustee of consents by the holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuers, the Subsidiary Guarantors and the Trustee.
(b) The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
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SECTION 9.04 Notation on or Exchange of Notes . If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the holder. Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.05 Trustee to Sign Amendments . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, (i) an Officers Certificate, (ii) an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof, (iii) a copy of the resolution of the Board of Directors, certified by the Secretary or Assistant Secretary of Holdings, authorizing the execution of such amendment, supplement or waiver and (iv) if such amendment, supplement or waiver is executed pursuant to Section 9.02, evidence reasonably satisfactory to the Trustee of the consent of the holders required to consent thereto.
SECTION 9.06 Additional Voting Terms; Calculation of Principal Amount . All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.
SECTION 9.07 Compliance with Trust Indenture Act . From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.
ARTICLE X
RANKING OF NOTE LIENS
SECTION 10.01 Relative Rights . The Senior Intercreditor Agreement governs the relative rights and remedies, as lienholders, among holders of Liens securing First-Priority Lien Obligations and holders of Liens securing Second Priority Lien Obligations.
ARTICLE XI
COLLATERAL
SECTION 11.01 Security Documents . The payment of the principal of and interest and premium, if any, on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Issuers pursuant to the Notes or by the Subsidiary Guarantors pursuant to the Subsidiary Guarantees, the payment of all other Notes Obligations and the performance of all other obligations of the Issuers and the Subsidiary Guarantors under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents shall be secured as provided in the Security Documents, which the Issuers and the applicable Subsidiary Guarantors entered into on the Issue Date and will be secured by Security
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Documents hereafter delivered as required or permitted by this Indenture. Holdings shall, and shall cause each Restricted Subsidiary to, and each Restricted Subsidiary shall, make all filings (including filings of continuation statements and amendments to UCC financing statements that may be necessary to continue the effectiveness of such UCC financing statements) and all other actions as are necessary or required by the Security Documents to maintain (at the sole cost and expense of Holdings and the Restricted Subsidiaries) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a continuing perfected security interest subject only to Permitted Liens and Liens permitted by Section 4.12.
SECTION 11.02 Collateral Agent .
(a) The Collateral Agent is authorized and empowered to appoint one or more co-Collateral Agents or sub-agents as it deems necessary or appropriate.
(b) Subject to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency, continuation, maintenance or protection of any Lien securing Second Priority Lien Obligations or otherwise granted in connection with the Transactions, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens securing Second Priority Lien Obligations or the Security Documents or any delay in doing so.
(c) The Collateral Agent will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture); provided that in the event of conflict between directions received pursuant to the Security Documents and the Senior Lien Intercreditor Agreement and directions received hereunder, the Collateral Agent will be subject to directions received pursuant to the Security Documents and the Senior Lien Intercreditor Agreement. Except as directed by the Trustee as required or permitted by this Indenture and any other representatives or pursuant to the Security Documents or the Senior Lien Intercreditor Agreement, the Collateral Agent will not be obligated:
(1) to act upon directions purported to be delivered to it by any other Person;
(2) to foreclose upon or otherwise enforce any Lien securing Second Priority Lien Obligations; or
(3) to take any other action whatsoever with regard to any or all of the Liens securing Second Priority Lien Obligations (or any Lien), Security Documents or Collateral.
(d) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing Second Priority Lien Obligations or the Security Documents.
(e) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each co-Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits of the Trustee under Article VII hereof.
(f) The holders of Notes agree that the Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by this Indenture and the Security Documents. Furthermore, each holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the Collateral Agent to enter into and perform each of the Senior Lien Intercreditor Agreement and Security Documents in each of its capacities thereunder.
(g) If the Issuers (i) Incur First-Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First-Priority Lien Obligations entitled to the benefit of
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the Senior Lien Intercreditor Agreement is concurrently retired, and (ii) deliver to the Collateral Agent an Officers Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Senior Lien Intercreditor Agreement) in favor of a designated agent or representative for the holders of the First-Priority Lien Obligations so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
(h) At all times when the Trustee is not itself the Collateral Agent, the Issuers will deliver to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all documents delivered to the Collateral Agent pursuant to this Indenture and the Security Documents.
(i) If the Issuers Incur any Other Second-Lien Obligations or any Junior Lien Obligations and deliver to the Collateral Agent and/or the Trustee, as applicable, an Officers Certificate requesting the Collateral Agent and/or the Trustee, as applicable, to enter into a Customary Intercreditor Agreement with a designated agent or representative for the holders of the Other Second-Lien Obligations or the Junior Lien Obligations, as applicable, so Incurred, the Collateral Agent and/or the Trustee, as applicable, shall (and each is hereby authorized to) enter into such Customary Intercreditor Agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
SECTION 11.03 Authorizations of Actions to Be Taken . (a) Each holder of Notes, by its acceptance thereof, consents and agrees to the terms hereof and of each Security Document and the Senior Lien Intercreditor Agreement as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee and/or the Collateral Agent to enter into the Senior Lien Intercreditor Agreement and the Security Documents to which it is a party, authorizes and empowers the Trustee to direct the Collateral Agent to enter into, and the Collateral Agent to execute and deliver, the Security Documents and the Senior Lien Intercreditor Agreement and authorizes and empowers the Trustee and the Collateral Agent to bind the holders of Notes and other holders of Obligations as set forth in the Security Documents to which it is a party and the Senior Lien Intercreditor Agreement and to perform its obligations and exercise its rights and powers thereunder.
(b) Subject to the provisions of the Senior Lien Intercreditor Agreement and the Security Documents, the Trustee and the Collateral Agent are authorized and empowered to receive for their benefit and for the benefit of the holders of Notes any funds collected or distributed under the Security Documents to which the Collateral Agent or Trustee is a party and to make further distributions of such funds to the holders of Notes according to the provisions of this Indenture.
(c) Subject to the provisions of Article VI, Section 7.01 and Section 7.02 hereof, the Senior Lien Intercreditor Agreement and the Security Documents, upon the occurrence and continuance of an Event of Default, the Trustee may, in its sole discretion and without the consent of the holders, direct, on behalf of the holders, the Collateral Agent to take all actions necessary or appropriate in order to:
(1) foreclose upon or otherwise enforce any or all of the Liens securing the Second Priority Lien Obligations;
(2) enforce any of the terms of the Security Documents to which the Collateral Agent or Trustee is a party; or
(3) collect and receive payment of any and all Notes Obligations.
Subject to the Senior Lien Intercreditor Agreement, the Trustee is authorized and empowered to institute and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings as are necessary to protect or enforce the Liens securing the Second Priority Lien Obligations or the Security Documents to which the Collateral Agent or the Trustee is a party or to prevent any impairment of Collateral by
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any acts that may be unlawful or in violation of the Security Documents to which the Collateral Agent or the Trustee is a party or this Indenture, and such suits and proceedings as are necessary to preserve or protect its interests and the interests of the holders of Notes in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of holders, the Trustee or the Collateral Agent.
SECTION 11.04 Release of Liens . (a) Notwithstanding anything to the contrary in the Security Documents, Collateral may be released from the Lien and security interest created by the Security Documents to secure the Notes and Obligations under this Indenture at any time or from time to time in accordance with the provisions of the Senior Lien Intercreditor Agreement or the Security Documents or as provided hereby. The applicable assets included in the Collateral shall be automatically released from the Liens securing the Notes, and the applicable Subsidiary Guarantor shall be automatically released from its obligations under this Indenture and the Security Documents, under any one or more of the following circumstances or any applicable circumstance as provided in the Senior Lien Intercreditor Agreement or the Security Documents:
(1) to enable the Issuers and its Subsidiaries to consummate the disposition of such property or assets to a Person that is not an Issuer or a Subsidiary Guarantor to the extent permitted under Section 4.06 or not otherwise constituting an Asset Sale;
(2) in respect of the property and assets of a Subsidiary Guarantor, (i) upon the designation of such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.04 and the definition of Unrestricted Subsidiary, and such Subsidiary Guarantor shall be automatically released from its obligations hereunder and under the Security Documents or (ii) upon the release or discharge of the Subsidiary Guarantee of such Subsidiary Guarantor in accordance with Section 12.02(b);
(3) in respect of the property and assets of the Issuers, upon the release or discharge of the Issuers Notes Obligations in accordance with this Indenture;
(4) [reserved];
(5) [reserved];
(6) pursuant to an amendment or waiver in accordance with Article IX; and
(7) if the Notes have been discharged or defeased pursuant to Section 8.01.
In addition, the security interests granted pursuant to the Security Documents securing the Obligations shall automatically terminate and/or be released all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the applicable Pledgors (as defined in the Collateral Agreement), as of the date when all the Obligations under this Indenture, the Notes and the Security Documents (other than contingent or unliquidated obligations or liabilities not then due) have been paid in full in cash or immediately available funds.
In connection with any termination or release pursuant to this Section 11.04(a), the Collateral Agent shall execute and deliver to any Pledgor (as defined in the Collateral Agreement), at such Pledgors expense, all documents that such Pledgor shall reasonably request to evidence such termination or release (including, without limitation, UCC termination statements), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral (as defined in the Collateral Agreement) that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to this Indenture or the Security Documents. Any execution and delivery of documents pursuant to this Section 11.04(a) shall be without recourse to or warranty by the Collateral Agent. In connection with any release pursuant to this Section 11.04(a), the Pledgors shall be permitted to take any action in connection therewith consistent with such release including, without limitation, the filing of UCC termination statements.
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Upon the receipt of an Officers Certificate and Opinion of Counsel from the Issuers, as described in Section 11.04(b) below, if applicable, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuers, the Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture, the Security Documents or the Senior Lien Intercreditor Agreement.
(b) Notwithstanding anything herein to the contrary, in connection with (x) any release of Collateral pursuant to Section 11.04(a)(2) or (3), such Collateral may not be released from the Lien and security interest created by the Security Documents and (y) any release of Collateral pursuant to Section 11.04(a)(1) and (7), the Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release unless, in each case, an Officers Certificate and Opinion of Counsel certifying that all conditions precedent, including, without limitation, this Section 11.04, have been met and stating under which of the circumstances set forth in Section 11.04(a) above the Collateral is being released have been delivered to the Collateral Agent on or prior to the date of such release or, in the case of clause (y) above, the date on which the Collateral Agent executes any such instrument.
(c) Notwithstanding anything herein to the contrary, at any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the holders, except as otherwise provided in the Senior Lien Intercreditor Agreement.
SECTION 11.05 Powers Exercisable by Receiver or Trustee . In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI upon the Issuers or the Subsidiary Guarantors with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuers or the Subsidiary Guarantors or of any officer or officers thereof required by the provisions of this Article XI; and if the Trustee, the Collateral Agent or a nominee of the Trustee or the Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, the Collateral Agent or a nominee of the Trustee or the Collateral Agent.
SECTION 11.06 Release Upon Termination of the Issuers Obligations . In the event (i) that the Issuers deliver to the Trustee an Officers Certificate and Opinion of Counsel certifying that all the obligations under this Indenture, the Notes and the Security Documents have been satisfied and discharged by the payment in full of the Issuers obligations under the Notes, this Indenture and the Security Documents, and all such obligations have been so satisfied, or (ii) a discharge, legal defeasance or covenant defeasance of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuers and the Collateral Agent a notice stating that the Trustee, on behalf of the holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary at the request and expense of the Issuer to release such Lien as soon as is reasonably practicable.
SECTION 11.07 Designations . Except as provided in the next sentence, for purposes of the provisions hereof and the Senior Lien Intercreditor Agreement and any Customary Intercreditor Agreement requiring the Issuer to designate Indebtedness for the purposes of the terms First-Priority Lien Obligations, Other Second-Lien Obligations, Junior Lien Obligations or any other such designations hereunder or under the Senior Lien Intercreditor Agreement, any such designation shall be sufficient if the relevant designation provides in writing that such First-Priority Lien Obligations, Other Second-Lien Obligations, Junior Lien Obligations or such other designations are permitted under this Indenture and is signed on behalf of the Issuers by an Officer and delivered to the Trustee and the Collateral Agent. For all purposes hereof and the Senior Lien Intercreditor Agreement, the
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Issuers hereby designate the Obligations pursuant to the Credit Agreement as in effect on the Issue Date as First-Priority Lien Obligations.
SECTION 11.08 Certificates and Opinions . (a) Any release of Collateral permitted by Section 11.04 hereof will be deemed not to impair the Liens under this Indenture and the Security Documents in contravention thereof and any Person that is required to deliver an officers certificate or Opinion of Counsel pursuant to TIA Section 314(d) shall be entitled to rely upon the foregoing as a basis for delivery of such certificate or opinion. The Trustee may, to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing provisions the appropriate statements contained in such documents and Opinion of Counsel.
(b) If any Collateral is released in accordance with this Indenture, the Senior Lien Intercreditor Agreement or any Security Document and if the Issuers have delivered the certificates and documents required by the Security Documents and Section 11.04, the Trustee will determine whether it has received all documentation required by TIA Section 314(d) in connection with such release and, based on such determination, will, upon request, deliver a certificate to the collateral agent for the First-Priority Obligations setting forth such determination.
(c) Any certificate or opinion required pursuant to TIA Section 314(d) may be made by an Authorized Officer of the Issuers, except in cases where Section 314(d) requires that such certificate or opinion be made by an independent engineer, appraiser or other expert.
(d) Notwithstanding anything to the contrary herein, Holdings and its Subsidiaries will not be required to comply with all or any portion of TIA Section 314(d) if they determine, in good faith based on advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including no action letters or exemptive orders, all or any portion of TIA Section 314(d) is inapplicable to the released Collateral.
Without limiting the generality of the foregoing, certain no action letters issued by the SEC have permitted an indenture qualified under the TIA to contain provisions permitting the release of collateral from Liens under such indenture in the ordinary course of business without requiring the issuer to provide certificates and other documents under TIA Section 314(d).
ARTICLE XII
GUARANTEE
SECTION 12.01 Subsidiary Guarantee .
(a) Each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior basis, as a primary obligor and not merely as a surety, to each holder, to the Trustee and to the Collateral Agent and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest (or Additional Interest, if any) on the Notes and all other monetary obligations of the Issuers under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations ). The Guaranteed Obligations of all Subsidiary Guarantors shall be secured by security interests (subject to Permitted Liens and Liens permitted by Section 4.12) in the Collateral owned by such Subsidiary Guarantor pursuant to the terms of the Security Documents (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement) Each Subsidiary
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Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Subsidiary Guarantor, and that each Subsidiary Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any holder, the Collateral Agent or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any holder, the Collateral Agent or the Trustee for the Guaranteed Obligations or each Subsidiary Guarantor; (v) the failure of any holder, the Collateral Agent or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of each Subsidiary Guarantor, except as provided in Section 12.02(b). Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Subsidiary Guarantors, such that such Subsidiary Guarantors obligations would be less than the full amount claimed.
(c) Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers or such Subsidiary Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Subsidiary Guarantor hereunder. Each Subsidiary Guarantor hereby waives any right to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Subsidiary Guarantor.
(d) Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder or the Trustee to any security held for payment of the Guaranteed Obligations.
(e) The Subsidiary Guarantee of each Subsidiary Guarantor is, to the extent and in the manner set forth in Article XII, equal in right of payment to all existing and future Pari Passu Indebtedness (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement), senior in right of payment to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor.
(f) Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder, the Collateral Agent or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of any Subsidiary Guarantor as a matter of law or equity.
(g) Each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must
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otherwise be restored by any holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.
(h) In furtherance of the foregoing and not in limitation of any other right which any holder, the Collateral Agent or the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee or Collateral Agent, forthwith pay, or cause to be paid, in cash, to the holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to the holders, the Collateral Agent and the Trustee.
(i) Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, as between it, on the one hand, and the holders, the Collateral Agent and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purposes of this Section 12.01.
(j) Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys fees and expenses) Incurred by the Trustee, the Collateral Agent or any holder in enforcing any rights under this Section 12.01.
(k) Upon request of the Trustee, each Subsidiary Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 12.02 Limitation on Liability .
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Subsidiary Guarantor without rendering the Subsidiary Guarantee or this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.
(b) A Subsidiary Guarantee as to any Restricted Subsidiary that is (or becomes) a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.11 hereof and provides a guarantee shall terminate and be of no further force or effect and such Subsidiary Guarantee shall be deemed to be automatically released from all obligations under this Article XII upon any of the following:
(i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made to a person that is not an Issuer or a Restricted Subsidiary of Holdings in a transaction that is permitted by this Indenture;
(ii) the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the provisions of Section 4.04 and the definition of Unrestricted Subsidiary;
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(iii) [reserved];
(iv) the Issuers exercise of their legal defeasance option or covenant defeasance option under Article VIII or if the Issuers obligations under this Indenture are discharged in accordance with the terms of this Indenture;
(v) such Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First-Priority Lien Obligations or other exercise of remedies in respect thereof, subject to, in each case, the application of the proceeds of such foreclosure or exercise of remedies in the manner described in the Senior Lien Intercreditor Agreement; and
(vi) as provided in Article IX.
SECTION 12.04 Successors and Assigns . This Article XII shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the holders and, in the event of any transfer or assignment of rights by any holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 12.05 No Waiver . Neither a failure nor a delay on the part of either the Trustee or the holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise.
SECTION 12.06 Modification . No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Subsidiary Guarantor in any case shall entitle any Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 12.07 Execution of Supplemental Indenture for Future Subsidiary Guarantors . Each Subsidiary which is required to become a Subsidiary Guarantor of the Notes pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article XII and shall guarantee the Notes.
SECTION 12.08 Non-Impairment . The failure to endorse a Subsidiary Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls . If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an incorporated provision ) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.
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(a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:
if to the Issuers or a Subsidiary Guarantor:
c/o Talos Production LLC
1600 Smith Street, Suite 5000
Houston, TX 77002
Attention: Chief Financial Officer
Fax: 713-351-4100
with copies to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Gregory Ezring
Tracey Zaccone
Fax: 212-757-3990
if to the Trustee:
[●]
The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a holder shall be mailed, first class mail, to the holder at the holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
(c) Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.
The Trustee may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Indenture sent by e-mail, facsimile transmission or other similar electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustees understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustees reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the holders may be made electronically in accordance with procedures of the Depository.
SECTION 13.03 Communications by Holders with Other Holders . The holders may communicate pursuant to Section 312(b) of the TIA with other holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA.
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SECTION 13.04 Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee at the request of the Trustee:
(a) an Officers Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
(c) no Opinion of Counsel shall be required to furnished by the Issuers to the Trustee for the execution and delivery to the Trustee of a supplemental indenture in the form of Exhibit C hereto pursuant to which a Subsidiary becomes a Subsidiary Guarantor in accordance with Article XII.
SECTION 13.05 Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:
(a) a statement that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officers Certificate or certificates of public officials.
SECTION 13.06 When Notes Disregarded . In determining whether the Holders of the requisite principal amount of the Notes have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other Act hereunder as of any date, Notes owned by the Issuers or any other obligor upon the Notes or any Affiliate of either Issuer or such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which a Trust Officer of the Trustee actually knows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgees right so to act with respect to such Notes and that the pledgee is not an Issuer or any other obligor upon the Notes or any Affiliate of an Issuer or of such other obligor. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or a meeting of the holders. The Registrar and a Paying Agent may make reasonable rules for their functions.
SECTION 13.08 Legal Holidays . If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular Record Date is not a Business Day, the Record Date shall not be affected.
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SECTION 13.09 GOVERNING LAW . THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13.10 No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests in Holdings or of any Subsidiary Guarantor or any direct or indirect parent companies, as such, shall have any liability for any obligations of the Issuers or any Subsidiary Guarantor under the Notes, the Subsidiary Guarantees or this Indenture, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
SECTION 13.11 Successors . All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Notes shall bind such persons successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12 Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original (which may be delivered in original form or facsimile or an electronic file thereof), but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 13.13 Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 13.14 Indenture Controls . If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.
SECTION 13.15 Severability . In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
SECTION 13.16 Intercreditor Agreement . The terms of this Indenture are subject to the terms of the Senior Lien Intercreditor Agreement.
SECTION 13.17 Waiver of Jury Trial . EACH OF THE ISSUERS, THE SUBSIDIARY GUARANTORS, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 13.18 U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
[ Remainder of page intentionally left blank. ]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
TALOS PRODUCTION LLC | ||
By: |
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Name: | ||
Title: | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
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Name: | ||
Title: | ||
[Guarantors] |
[Signature Page to Senior Notes Indenture]
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[ ● ] , not in its individual capacity, but solely as Trustee | ||
By: |
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Name: | ||
Title: | ||
[ ● ] , not in its individual capacity, but solely as Collateral Agent | ||
By: |
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Name: | ||
Title: |
[Signature Page to Senior Secured Notes Indenture]
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APPENDIX A
PROVISIONS RELATING TO INITIAL NOTES, ADDITIONAL NOTES AND EXCHANGE NOTES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix A the following terms shall have the meanings indicated below:
Additional Interest has the meaning set forth in the Registration Rights Agreement.
Definitive Note means a certificated Initial Note or Additional Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.
Depository means The Depository Trust Company, its nominees and their respective successors.
Global Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
IAI means an institutional accredited investor as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
Notes Custodian means the custodian with respect to a Global Note (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.
QIB means a qualified institutional buyer as defined in Rule 144A.
Registered Exchange Offer means the offer by the Issuers, pursuant to the Registration Rights Agreement, to certain holders of Initial Notes, to issue and deliver to such holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.
Regulation S means Regulation S under the Securities Act.
Regulation S Notes means all Initial Notes offered and sold outside the United States in reliance on Regulation S.
Restricted Notes Legend means the legend set forth in Section 2.2(f)(i) herein.
Restricted Period , with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuers to the Trustee, and (b) the Issue Date, and with respect to any Additional Notes that are Transfer Restricted Notes, it means the comparable period of 40 consecutive days.
Rule 501 means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
Rule 144A means Rule 144A under the Securities Act.
Rule 144A Notes means all Initial Notes initially offered and sold to QIBs in reliance on Rule 144A.
Shelf Registration Statement means the registration statement filed by the Issuers in connection with the offer and sale of Initial Notes pursuant to the Registration Rights Agreement.
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Transfer Restricted Definitive Notes means Definitive Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
Transfer Restricted Global Notes means Global Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
Transfer Restricted Notes means the Transfer Restricted Definitive Notes and Transfer Restricted Global Notes.
Unrestricted Definitive Notes means Definitive Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
Unrestricted Global Notes means Global Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
1.2 Other Definitions .
Term: | Defined in Section: | |
Agent Members | 2.1(b) | |
Global Notes | 2.1(b) | |
Regulation S Global Notes | 2.1(b) | |
Regulation S Permanent Notes | 2.1(b) | |
Regulation S Temporary Global Notes | 2.1(b) | |
Rule 144A Global Notes | 2.1(b) |
2. The Notes.
2.1 Form and Dating; Global Notes.
(a) The Initial Notes issued on the date hereof will be (i) privately placed by the Issuers pursuant to the Offering Memorandum and (ii) sold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more agreements in accordance with applicable law.
(b) Global Notes . (i) Except as provided in clause (d) of Section 2.2 below, Rule 144A Notes initially shall be represented by one or more Notes in definitive, fully registered, global form without interest coupons (collectively, the Rule 144A Global Notes ).
Regulation S Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the Regulation S Temporary Global Note and, together with the Regulation S Permanent Global Note (defined below), the Regulation S Global Notes ), which shall be registered in the name of the Depository or the nominee of the Depository for the accounts of designated agents holding on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear system ( Euroclear ) or Clearstream Banking, Société Anonyme ( Clearstream ).
Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a permanent Global Note (the Regulation S Permanent Global Note ) pursuant to the applicable procedures of the Depository. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
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The provisions of the Operating Procedures of the Euroclear System and Terms and Conditions Governing Use of Euroclear and the General Terms and Conditions of Clearstream Banking and Customer Handbook of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by participants through Euroclear or Clearstream.
The term Global Notes means the Rule 144A Global Notes and the Regulation S Global Notes. The Global Notes shall bear the Global Note Legend. The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear the Restricted Notes Legend.
Members of, or direct or indirect participants in, the Depository (collectively, the Agent Members ) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes. The Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository, or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.
(ii) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depository and the provisions of Section 2.2. In addition, a Global Note shall be exchangeable for Definitive Notes if (x) the Depository (1) notifies the Issuers that it is unwilling or unable to continue as depository for such Global Note and the Issuers thereupon fail to appoint a successor depository or (2) has ceased to be a clearing agency registered under the Exchange Act or (y) there shall have occurred and be continuing an Event of Default with respect to such Global Note and a request has been made for such exchange; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository in accordance with its customary procedures.
(iii) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.
(iv) Any Transfer Restricted Note delivered in exchange for an interest in a Global Note pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Notes Legend.
(v) Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in a Regulation S Global Note may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.
(vi) The holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes.
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2.2 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred as a whole except as set forth in Section 2.1(b). Global Notes will not be exchanged by the Issuers for Definitive Notes except under the circumstances described in Section 2.1(b)(ii). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.08 of this Indenture. Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b).
(b) Transfer and Exchange of Beneficial Interests in Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Transfer Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Transfer Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. A beneficial interest in an Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository directing the Depository to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(g).
(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Note if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note; and
(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note.
(iv) Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in a Transfer Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the
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exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
(A) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate in accordance with Section 2.01 of this Indenture, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Transfer Restricted Global Note . Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
(c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes . A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.1(b)(ii). A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii). In any case, beneficial interests in Global Notes shall be transferred or exchanged only for Definitive Notes.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes . Transfers and exchanges of Definitive Notes for beneficial interests in the Global Notes also shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:
(i) Transfer Restricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . If any holder of a Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in a Transfer Restricted Global Note or to transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Transfer Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Note for a beneficial interest in a Transfer Restricted Global Note, a certificate from such holder in the form attached to the applicable Note;
(B) if such Transfer Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(C) if such Transfer Restricted Definitive Note is being transferred to a Non U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
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(D) if such Transfer Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(E) if such Transfer Restricted Definitive Note is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such holder in the form attached to the applicable Note, including the certifications, certificates and Opinion of Counsel, if applicable; or
(F) if such Transfer Restricted Definitive Note is being transferred to Holdings or a Subsidiary thereof, a certificate from such holder in the form attached to the applicable Note;
the Trustee shall cancel the Transfer Restricted Definitive Note, and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Note.
(ii) Transfer Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of a Transfer Restricted Definitive Note may exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Transfer Restricted Definitive Note to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Note transferred or exchanged pursuant to this subparagraph (ii).
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A holder of an Unrestricted Definitive Note may exchange such Unrestricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of a written order of Holdings in the form of an Officers Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of the Unrestricted Definitive Note transferred or exchanged pursuant to this subparagraph (iii).
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(iv) Unrestricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a holder of Definitive Notes and such holders compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by its attorney, duly authorized in writing. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).
(i) Transfer Restricted Definitive Notes to Transfer Restricted Definitive Notes . A Transfer Restricted Note may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(C) if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Note;
(D) if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Note; and
(E) if such transfer will be made to Holdings or a Subsidiary thereof, a certificate in the form attached to the applicable Note.
(ii) Transfer Restricted Definitive Notes to Unrestricted Definitive Notes . Any Transfer Restricted Definitive Note may be exchanged by the holder thereof for an Unrestricted Definitive Note or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A holder of an Unrestricted Definitive Note may transfer such Unrestricted Definitive Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the holder thereof.
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(iv) Unrestricted Definitive Notes to Transfer Restricted Definitive Notes . An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Note.
At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.
(f) Legend.
(i) Except as permitted by the following paragraph (iii), (iv) or (v), each Note certificate evidencing the Global Notes and any Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS OFFSHORE TRANSACTION, UNITED STATES AND U.S. PERSON HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AMONG [●], NATIONAL ASSOCIATION, AS
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FIRST LIEN FACILITY AGENT AND APPLICABLE FIRST LIEN AGENT, [●], AS SECOND LIEN FACILITY AGENT AND APPLICABLE SECOND LIEN AGENT, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, ENTERED INTO ON THE ISSUE DATE, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.
Each Regulation S Note shall bear the following additional legend:
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
Each Definitive Note shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Definitive Note, the Registrar shall permit the holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Note if the holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).
(iii) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note acquired pursuant to Regulation S, all requirements that such Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.
(iv) After a transfer of any Initial Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to the Restricted Notes Legend on any such Initial Note will cease to apply, the requirements requiring any such Initial Note issued to certain holders be issued in global form will continue to apply, and an Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the holder of such Initial Notes upon exchange of such transferring holders certificated Initial Note or directions to transfer such holders interest in the Global Note, as applicable.
(v) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes pursuant to which holders of such Initial Notes are offered Exchange Notes in exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain holders be issued in global form will still apply with respect to holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the Restricted Notes Legend, will be available to holders that exchange such Initial Notes in such Registered Exchange Offer.
(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend (other than the portion thereof relating to the Senior Lien Intercreditor Agreement).
(g) Cancellation or Adjustment of Global Note . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes
157
represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.
(h) Obligations with Respect to Transfers and Exchanges of Notes .
(i) To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrars request.
(ii) No service charge shall be made for any registration of transfer or exchange of Notes, but the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
(i) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the holders and all payments to be made to the holders under the Notes shall be given or made only to the registered holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
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EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
[Restricted Notes Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
159
UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS OFFSHORE TRANSACTION, UNITED STATES AND U.S. PERSON HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AMONG [●], AS FIRST LIEN FACILITY AGENT AND APPLICABLE FIRST LIEN AGENT, [●], AS SECOND LIEN FACILITY AGENT AND APPLICABLE SECOND LIEN AGENT, AND THE OTHER PARTIES FROM TIME TO TIME PARTY THERETO, ENTERED INTO ON THE ISSUE DATE, AS IT MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.
[Definitive Notes Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
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[FORM OF INITIAL NOTE]
TALOS PRODUCTION LLC
TALOS PRODUCTION FINANCE INC.
No. [ ] | 144A CUSIP No. [●] | |
144A ISIN No. [●] | ||
REG S CUSIP No. [●] | ||
REG S ISIN No. [●] | ||
$[ ] |
11.00% Second-Priority Senior Secured Note due 2022
TALOS PRODUCTION LLC, a Delaware limited liability company, and TALOS PRODUCTION FINANCE INC., a Delaware corporation, jointly and severally, promise to pay to Cede & Co., or registered assigns, the principal sum set forth on the Schedule of Increases or Decreases in Global Note attached hereto on the Notes Maturity Date.
Interest Payment Dates: [●] and [●], commencing [●], 2018
Record Dates: [●] and [●]
Additional provisions of this Note are set forth on the other side of this Note.
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IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
TALOS PRODUCTION LLC | ||
By: |
|
|
Name: | ||
Title: | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
|
|
Name: | ||
Title: |
Dated:
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TRUSTEES CERTIFICATE OF AUTHENTICATION |
||
[●] |
as Trustee, certifies that this is one of the Notes referred to in the Indenture. |
|
By: |
|
|
Authorized Signatory | ||
Dated: |
*/ | If the Note is to be issued in global form, add the Global Notes Legend and the attachment from Exhibit A captioned TO BE ATTACHED TO GLOBAL NOTES SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE. |
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[FORM OF REVERSE SIDE OF INITIAL NOTE]
11.00% Second-Priority Senior Secured Note Due 2022
1. Interest
TALOS PRODUCTION LLC, a Delaware limited liability company (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called Holdings ), and TALOS PRODUCTION FINANCE INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Co-Issuer and, together with Holdings, the Issuer ), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above; provided , however , that if a Registration Default (as defined in the Registration Rights Agreement) occurs, Additional Interest will accrue on this Note at a rate of 0.25% per annum from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Issuers shall pay interest semiannually on [●] and [●] of each year (each an Interest Payment Date ), commencing [●], 2018. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from [●] 4 , until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on [●] or [●] (each a Record Date ) immediately preceding the Interest Payment Date even if Notes are canceled after the Record Date and on or before the Interest Payment Date (whether or not a Business Day). Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary. The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided , however , that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, [●], as trustee under the Indenture (the Trustee ), will act as Paying Agent and Registrar. The Issuers may appoint and change any Paying Agent or Registrar without notice. The Issuers or any of their domestically incorporated Subsidiaries may act as Paying Agent or Registrar.
4. Indenture
The Issuers issued the Notes under an Indenture dated as of [●] (the Indenture ), among the Issuers, the Subsidiary Guarantors party thereto and [●], as trustee and collateral agent. Capitalized terms used herein are used as defined in the Indenture, unless otherwise indicated. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§
4 |
To be the Issue Date. |
164
77aaa-77bbbb) as in effect on the date of the Indenture (the TIA ). The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.
The Notes are senior secured obligations of the Issuers. [This Note is one of the Initial Notes referred to in the Indenture.] The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell certain Capital Stock of Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales. The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.
To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed the Guaranteed Obligations pursuant to the terms of the Indenture and any Subsidiary Guarantor that executes a Subsidiary Guarantee will unconditionally guarantee the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture.
5. Redemption
On or after [●] 5 the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to each holders registered address, or delivered electronically if held by DTC, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period commencing on [●] of the years set forth below:
Period |
Redemption Price | |||
20[●] 6 |
105.500 | % | ||
20[●] 6 |
102.750 | % | ||
20[●] 7 and thereafter |
100.000 | % |
In addition, prior to [●], the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by the Issuers by first-class mail to each holders registered address, or delivered electronically if held by DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
Notwithstanding the foregoing, at any time and from time to time on or prior to [●], the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to
5 | To be one year after the Issue Date. |
6 | To be two years after the Issue Date. |
7 |
To be three years after the Issue Date. |
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the common equity capital of Holdings or are used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 111.000%, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date; provided , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days notice mailed by the Issuer to each holder of Notes being redeemed, or delivered electronically if held by DTC, and otherwise in accordance with the procedures set forth in the Indenture.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
6. Mandatory Redemption
The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.
7. Notice of Redemption
Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date, to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of The Depository Trust Company ( DTC ), except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
8. Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales
Upon the occurrence of a Change of Control, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holders Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.
9. Ranking and Collateral .
From the Issue Date, the Notes and the Subsidiary Guarantees will be secured by security interests (subject to Permitted Liens and Liens permitted by Section 4.12 of the Indenture) in the Collateral pursuant to the Security Documents (but subject to the terms and conditions of the Security Documents and the Senior Lien Intercreditor Agreement). The Liens upon any and all Collateral are, to the extent and in the manner provided in the Senior Lien Intercreditor Agreement, junior in ranking with all present and future Liens securing First-Priority Lien Obligations, are equal in ranking to all present and future Liens securing Other Second-Lien Obligations and will be senior in ranking to all present and future Liens securing Junior Lien Obligations.
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10. Denominations; Transfer; Exchange
The Notes are in registered form, without coupons, in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed.
11. Persons Deemed Owners
The registered holder of this Note shall be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuers at their written request unless an abandoned property law designates another Person. After any such payment, the holders entitled to the money must look to the Issuers for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.
13. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
14. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and the Senior Lien Intercreditor Agreement may be amended with the written consent of the holders of at least a majority in aggregate principal amount of the Notes then outstanding and (ii) any past default or compliance with any provisions may be waived with the written consent of the holders of at least a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuers, the Collateral Agent and the Trustee may amend the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and/or the Senior Lien Intercreditor Agreement (i) to cure any ambiguity, omission, mistake, defect or inconsistency; (ii) to provide for the assumption by a Successor Company (with respect to an Issuer) of the obligations of an Issuer under the Indenture, the Notes, the Security Documents and the Senior Lien Intercreditor Agreement; (iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the Indenture, its Subsidiary Guarantee, the Security Documents and the Senior Lien Intercreditor Agreement; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (v) [reserved]; (vi) to add a Subsidiary Guarantee or collateral with respect to the Notes; (vii) to release collateral as permitted by the Indenture, the Security Documents and the Senior Lien Intercreditor Agreement; (viii) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA, (ix) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (x) to make any change that does not adversely affect the rights of any holder in any material
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respect; or (xi) to make changes to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities; or (xii) to effect any provision of the Indenture.
In addition, the Senior Lien Intercreditor Agreement may be amended without notice to or the consent of any holder, the Trustee or the Collateral Agent in connection with the permitted entry into the Senior Lien Intercreditor Agreement of any class of additional secured creditors holding First-Priority Lien Obligations or Other Second-Lien Obligations.
15. Defaults and Remedies
If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of Holdings) occurs and is continuing, the Trustee by notice to the Issuer or the holders of at least 30% in principal amount of outstanding Notes by notice to the Issuer with a copy to the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuers occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture or the Security Documents at the written request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given the Trustee written notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested in writing that the Trustee pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.
16. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any Subsidiary Guarantor or any direct or indirect parent companies, as such, will have any liability for any obligations of an Issuer or any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees,
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as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
19. Abbreviations
Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
21. CUSIP Numbers; ISINs
The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuers. The agent may substitute another to act for him.
Date: |
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Your Signature: |
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Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date: | ||
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee |
Signature of Signature Guarantee |
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
☐ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depository a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above); |
☐ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate occurring while this Note is still a Transfer Restricted Definitive Note or a Transfer Restricted Global Note, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ☐ | to the Issuers; or | ||
(2) | ☐ | to the Registrar for registration in the name of the holder, without transfer; or | ||
(3) | ☐ | pursuant to an effective registration statement under the Securities Act of 1933; or | ||
(4) | ☐ | inside the United States to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||
(5) | ☐ | outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or | ||
(6) | ☐ | to an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or | ||
(7) | ☐ | pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933. |
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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers or the Trustee have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Date: |
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Your Signature: |
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Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
Date: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee | Signature of Signature Guarantee |
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TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: |
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NOTICE: To be executed by an executive officer |
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $ . The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in
|
Amount of increase in
|
Principal amount of
increase |
Signature of
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:
Asset Sale ☐ Change of Control ☐
If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):
$
Date: |
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Your Signature: |
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(Sign exactly as your name appears on the other side of this Note) |
Signature Guarantee: |
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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee |
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EXHIBIT B
[FORM OF TRANSFEREE LETTER OF REPRESENTATION]
TRANSFEREE LETTER OF REPRESENTATION
TALOS PRODUCTION LLC
TALOS PRODUCTION FINANCE INC.
c/o [●]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the 11.00% Second-Priority Senior Secured Notes due 2022 (the Notes ) of TALOS PRODUCTION LLC and TALOS PRODUCTION FINANCE INC. (collectively with their successors and assigns, the Issuers ).
Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the Securities Act )), purchasing for our own account or for the account of such an institutional accredited investor at least $100,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which either of the Issuers or any affiliate of such Issuers was the owner of such Notes (or any predecessor thereto) (the Resale Restriction Termination Date ) only (a) in the United States to a person whom we reasonably believe is a qualified institutional buyer (as defined in rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (b) outside the United States in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if applicable) or (d) pursuant to an effective registration statement under the Securities Act, in each of cases (a) through (d) in accordance with any applicable securities laws of any state of the United States. In addition, we will, and each subsequent holder is required to, notify any purchaser of the Note evidenced hereby of the resale restrictions set forth above. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made to an institutional accredited investor prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuers and the Trustee, which shall provide, among other things, that the transferee is an institutional accredited investor
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within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuers and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause 1(b), 1(c) or 1(d) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuers and the Trustee.
Dated:
TRANSFEREE: ,
By:
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EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this Supplemental Indenture ) dated as of [DATE], among [SUBSIDIARY GUARANTOR] (the New Subsidiary Guarantor ), a subsidiary of TALOS PRODUCTION LLC (or its successor), a Delaware limited liability company ( Holdings ), and [●], as trustee under the indenture referred to below (the Trustee ).
W I T N E S S E T H :
WHEREAS Holdings, Talos Production Finance Inc. (or its successor), a Delaware corporation (the Co-Issuer and, together with Holdings, the Issuers ), certain Subsidiary Guarantors and the Trustee have heretofore executed an indenture, dated as of [●] (as amended, supplemented or otherwise modified, the Indenture ), providing for the issuance of the Issuers 11.00% Second-Priority Senior Secured Notes due 2022 ( the Notes ), initially in the aggregate principal amount of $[●];
WHEREAS Sections 4.11 and 12.07 of the Indenture provide that under certain circumstances Holdings is required to cause the New Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee all the Issuers Obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:
1. Defined Terms . As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term holders in this Supplemental Indenture shall refer to the term holders as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words herein , hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2. Agreement to Guarantee . The New Subsidiary Guarantor hereby agrees, jointly and severally with all existing Subsidiary Guarantors (if any), to unconditionally guarantee the Issuers Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.
3. Notices . All notices or other communications to the New Subsidiary Guarantor shall be given as provided in Section 13.02 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
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5. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
7. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.
[ Remainder of page intentionally left blank. ]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
TALOS PRODUCTION LLC | ||
By: |
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Name: | ||
Title: | ||
TALOS PRODUCTION FINANCE INC. | ||
By: |
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Name: | ||
Title: | ||
[ NEW SUBSIDIARY GUARANTOR ] , as a Subsidiary Guarantor | ||
By: |
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Name: | ||
Title: | ||
[ ● ] , not in its individual capacity, but solely as Trustee | ||
By: |
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Name: | ||
Title: |
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EXHIBIT B Registration Rights
Registration Rights |
The Issuers will enter into a registration rights agreement with certain of the holders of the New Second Lien Notes for the benefit of all holders of such Second Lien Notes pursuant to which the Issuers will file with the SEC and use commercially reasonable efforts to make effective a registration statement relating to an offer to exchange the New Second Lien Notes for an issue of SEC-registered notes with terms identical to the New Second Lien Notes (except that the New Second Lien Notes will not be subject to any restrictions on transfer or to any increase in annual interest rate as described below). The registration rights agreement will contain customary terms for a Rule 144A high-yield offering.
If the Issuers do not complete the exchange offer by the 180 th day following the Closing Date, then additional interest will accrue on the principal amount of the New Second Lien Notes at a rate of 0.25% per annum until the exchange offer is completed or until a shelf registration statement covering the resale of the New Second Lien Notes has been declared effective. |
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EXHIBIT C Form of Joinder Agreement
[FORM OF]
JOINDER AGREEMENT
This Joinder Agreement ( Joinder Agreement ) is a joinder to the Exchange Agreement, dated as of [●], 2017 (the Agreement ), by and among Talos Production LLC, a Delaware limited liability company (the Company ), Talos Production Finance Inc., a Delaware corporation (the Co-Issuer and, together with the Company, the Issuers ), Stone Energy Corporation, a Delaware corporation ( Stone ), [New Stone], a Delaware Corporation ( New Stone ), the lenders listed on Schedule A to the Agreement (collectively, the Institutional Bridge Loan Lenders ), the lenders listed on Schedule B to the Agreement (collectively, the Sponsor Bridge Loan Lenders and together with the Institutional Bridge Loan Lenders, the Bridge Loan Lenders ), the noteholders listed on Schedule C to the Agreement (collectively, the Sponsor Noteholders ) and the noteholders listed on Schedule D to the Agreement (the Stone Noteholders ). Capitalized terms used but not defined in this Joinder Agreement shall have the meanings given to them in the Agreement. This Joinder Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.
The undersigned hereby joins and enters into the Agreement having acquired Bridge Loans, Stone Notes or Sponsor Notes, as applicable. By signing and returning this Joinder Agreement to the other parties to the Agreement, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Bridge Loan Lender, Stone Noteholder or Sponsor Noteholder, as applicable, in the Agreement, with all attendant rights, duties and obligations of a Bridge Loan Lender, Stone Noteholder or Sponsor Noteholder thereunder and (ii) makes, as of the date hereof, each of the representations and warranties of a Bridge Loan Lender in Article II of the Agreement, a Stone Noteholder in Article III in the Agreement or a Sponsor Noteholder in Article IV of the Agreement, as applicable, as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Joinder Agreement to be executed and delivered by the undersigned or by its duly authorized attorney.
By: |
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Name: | ||
Title: |
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EXHIBIT D Opinions
1. | The Company and the Co-Issuer are each duly incorporated or formed, validly existing and in good standing under the laws of the State of Delaware. Each of the Subsidiary Guarantors that is incorporated in or formed in Delaware is validly existing and in good standing under the laws of the State of Delaware. |
2. | Each of the Company and the Co-Issuer, and each of the Subsidiary Guarantors that is incorporated in or formed in Delaware, has all necessary limited liability company or corporate, as applicable, power to execute, deliver and perform its obligations under each of the New Second Lien Notes Indenture, the New Second Lien Notes and the Collateral Agreement to which it is a party. The execution, delivery and performance by each of the Company and the Co-Issuer, and each of the Subsidiary Guarantors that is incorporated in or formed in Delaware, of each of the New Second Lien Notes Indenture, the New Second Lien Notes and the Collateral Agreement to which it is a party have been duly authorized by all necessary limited liability company or corporate action on the part of such party and do not violate its organizational documents. |
3. | The New Second Lien Notes have been duly authorized and executed by the Issuers. The New Second Lien Notes, when duly issued and delivered by the Issuers, will constitute the legal, valid and binding obligations of the Issuers entitled to the benefits of the New Second Lien Notes Indenture and enforceable against the Issuers in accordance with their terms. |
4. | Each of the New Second Lien Notes Indenture and the Collateral Agreement has been duly executed and delivered by each of the Company and the Co-Issuer, and each of the Subsidiary Guarantors that is incorporated in or formed in Delaware, which is a party to it and constitutes the legal, valid and binding obligation of each of the Company, the Co-Issuer and the Subsidiary Guarantors which is a party to it, enforceable against that party in accordance with its terms. |
5. | It is not necessary in connection with the offer, sale and delivery of the New Second Lien Notes to register the New Second Lien Notes under the Securities Act of 1933. |
6. | No consent, approval, authorization or order of, or filing, registration or qualification with, any Governmental Authority, which has not been obtained, taken or made, is required by the Issuers under any applicable law for the issuance and sale of the New Second Lien Notes by the Issuers, the execution and delivery by the Issuers of the Indenture and the performance by the Issuers of their obligations thereunder, except as may be required in connection with the registration of the New Second Lien Notes. For purposes of this opinion, the term Governmental Authority means any executive, legislative, judicial, administrative or regulatory body of the State of Delaware, the State of New York or the United States of America. |
7. | The Issuers and the Subsidiary Guarantors are not, and after giving effect to the issuance of the New Second Lien Notes will not be, required to be registered as an investment company under the Investment Company Act of 1940, as amended. |
8. | The Collateral Agreement is effective to create a valid security interest in favor of the New Second Lien Notes Trustee, for the benefit of the holders of the New Second Lien Notes, to secure the obligations with respect to the New Second Lien Notes in which Company, the Co-Issuer and the Subsidiary Guarantors party to the Collateral Agreement have an interest to the extent that a security interest in that collateral may be created under Article 9 of the Uniform Commercial Code of the State of New York. For each of the Company and the Co-Issuer and each Subsidiary Guarantor that is incorporated or formed in Delaware, the Secretary of State of the State of Delaware is the office in the State of Delaware in which filings are required to perfect the security interest to the extent that it can be perfected by filing under the Uniform Commercial Code of the State of Delaware. Upon the proper filing of the financing statements (to be attached to opinion) the security interest granted by each of the Company and the Co-Issuer and each Subsidiary Guarantor that is incorporated or formed in Delaware will be perfected to the extent that a security interest in collateral may be perfected by filing under the Uniform Commercial Code of the State of Delaware. |
184
9. | The execution and delivery by each of the Company and the Co-Issuer and each of the Subsidiary Guarantors of the New Second Lien Notes Indenture, the New Second Lien Notes and the Collateral Agreement and the performance of each of their obligations thereunder do not (i) violate any Covered Law 1 or (ii) breach or result in a default under, or require the creation of any lien (other than liens created pursuant to the New Second Lien Notes Indenture and the Collateral Agreement or liens permitted thereunder) upon any of the assets of the Issuers or the Subsidiary Guarantors pursuant to the Covered Agreements 2 . |
1 | To include laws of the State of New York, General Corporation Law of the State of Delaware, the Limited Liability Company Act of the State of Delaware, the Delaware Uniform Commercial Code and the federal laws of the United States of America. |
2 | To include the New Credit Agreement and, if applicable, the Stone Indenture and the Talos 2018 Notes indenture. |
185
Exhibit 10.2
CREDIT AGREEMENT
Dated as of May 10, 2018
among
TALOS ENERGY, INC.,
as Holdings,
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., NATIXIS, NEW YORK BRANCH
and THE TORONTO-DOMINION BANK, NEW YORK BRANCH,
as Issuing Banks
and
JPMORGAN CHASE BANK, N.A., NATIXIS, NEW YORK BRANCH
TD SECURITIES (USA) LLC, CITIBANK, N.A., CAPITAL ONE, NATIONAL
ASSOCIATION, SG AMERICAS SECURITIES, LLC, ING CAPITAL LLC,
DEUTSCHE BANK SECURITIES INC., and ABN AMRO CAPITAL USA LLC,
as Lead Arrangers
NATIXIS, NEW YORK BRANCH, TD SECURITIES (USA) LLC, CITIBANK, N.A.,
CAPITAL ONE, NATIONAL ASSOCIATION, SG AMERICAS SECURITIES, LLC, ING
CAPITAL LLC, DEUTSCHE BANK SECURITIES INC, and ABN AMRO CAPITAL USA LLC,
as Co-Syndication Agents
UBS SECURITIES LLC and REGIONS BANK
as Co-Documentation Agents
JPMORGAN CHASE BANK, N.A., NATIXIS, NEW YORK BRANCH and
TD SECURITIES (USA) LLC,
as Joint Bookrunners
Table of Contents
Page | ||||||
SECTION 1. |
Definitions |
3 | ||||
1.1 |
Defined Terms |
3 | ||||
1.2 |
Other Interpretive Provisions |
59 | ||||
1.3 |
Accounting Terms |
60 | ||||
1.4 |
Rounding |
60 | ||||
1.5 |
References to Agreements, Laws, Etc. |
61 | ||||
1.6 |
Times of Day |
61 | ||||
1.7 |
Timing of Payment or Performance |
61 | ||||
1.8 |
Currency Equivalents Generally |
61 | ||||
1.9 |
Classification of Loans and Borrowings |
62 | ||||
SECTION 2. |
Amount and Terms of Credit |
62 | ||||
2.1 |
Commitments |
62 | ||||
2.2 |
Minimum Amount of Each Borrowing; Maximum Number of Borrowings |
63 | ||||
2.3 |
Notice of Borrowing |
64 | ||||
2.4 |
Disbursement of Funds |
65 | ||||
2.5 |
Repayment of Loans; Evidence of Debt |
66 | ||||
2.6 |
Conversions and Continuations |
66 | ||||
2.7 |
Pro Rata Borrowings |
67 | ||||
2.8 |
Interest |
68 | ||||
2.9 |
Interest Periods |
69 | ||||
2.10 |
Increased Costs, Illegality, Etc. |
69 | ||||
2.11 |
Compensation |
72 | ||||
2.12 |
Change of Lending Office |
72 | ||||
2.13 |
Notice of Certain Costs |
72 | ||||
2.14 |
Borrowing Base |
73 | ||||
2.15 |
Defaulting Lenders |
77 | ||||
2.16 |
Increase of Total Commitment |
80 | ||||
2.17 |
Extension Offers |
80 | ||||
SECTION 3. |
Letters of Credit |
83 | ||||
3.1 |
Letters of Credit |
83 |
i
Table of Contents
(continued)
Page | ||||||
3.2 |
Letter of Credit Applications |
85 | ||||
3.3 |
Letter of Credit Participations |
86 | ||||
3.4 |
Agreement to Repay Letter of Credit Drawings |
88 | ||||
3.5 |
Increased Costs |
90 | ||||
3.6 |
New or Successor Issuing Bank |
90 | ||||
3.7 |
Role of Issuing Bank |
91 | ||||
3.8 |
Cash Collateral |
92 | ||||
3.9 |
Existing Letters of Credit |
93 | ||||
3.10 |
Applicability of ISP and UCP |
93 | ||||
3.11 |
Conflict with Issuer Documents |
93 | ||||
3.12 |
Letters of Credit Issued for Restricted Subsidiaries |
93 | ||||
3.13 |
Alternate Currency |
93 | ||||
SECTION 4. |
Fees; Commitments |
93 | ||||
4.1 |
Fees |
93 | ||||
4.2 |
Voluntary Reduction of Commitments |
94 | ||||
4.3 |
Mandatory Termination of Commitments |
95 | ||||
SECTION 5. |
Payments |
95 | ||||
5.1 |
Voluntary Prepayments |
95 | ||||
5.2 |
Mandatory Prepayments |
96 | ||||
5.3 |
Method and Place of Payment |
98 | ||||
5.4 |
Net Payments |
99 | ||||
5.5 |
Computations of Interest and Fees |
103 | ||||
5.6 |
Limit on Rate of Interest |
103 | ||||
SECTION 6. |
Conditions Precedent to Initial Borrowing |
104 | ||||
SECTION 7. |
Conditions Precedent to All Subsequent Credit Events |
109 | ||||
SECTION 8. |
Representations, Warranties and Agreements |
109 | ||||
8.1 |
Corporate Status |
109 | ||||
8.2 |
Corporate Power and Authority; Enforceability |
110 | ||||
8.3 |
No Violation |
110 | ||||
8.4 |
Litigation |
110 |
ii
Table of Contents
(continued)
Page | ||||||
8.5 |
Margin Regulations |
110 | ||||
8.6 |
Governmental Approvals |
110 | ||||
8.7 |
Investment Company Act |
111 | ||||
8.8 |
True and Complete Disclosure |
111 | ||||
8.9 |
Financial Condition; Financial Statements |
111 | ||||
8.10 |
Tax Matters |
112 | ||||
8.11 |
Compliance with ERISA |
112 | ||||
8.12 |
Subsidiaries |
113 | ||||
8.13 |
Intellectual Property |
113 | ||||
8.14 |
Environmental Laws |
113 | ||||
8.15 |
Properties |
114 | ||||
8.16 |
Solvency |
114 | ||||
8.17 |
Insurance |
114 | ||||
8.18 |
Deposit Accounts; Securities Accounts; Commodities Accounts |
114 | ||||
8.19 |
Creation of Liens |
115 | ||||
8.20 |
Hedge Transactions |
115 | ||||
8.21 |
Patriot Act; Sanctions |
115 | ||||
8.22 |
No Material Adverse Effect |
115 | ||||
8.23 |
Foreign Corrupt Practices Act |
116 | ||||
8.24 |
Direct Benefit |
116 | ||||
8.25 |
Plan Assets; Prohibited Transactions |
116 | ||||
SECTION 9. |
Affirmative Covenants |
116 | ||||
9.1 |
Information Covenants |
116 | ||||
9.2 |
Books, Records and Inspections |
121 | ||||
9.3 |
Maintenance of Insurance |
122 | ||||
9.4 |
Payment of Taxes |
122 | ||||
9.5 |
Consolidated Corporate Franchises |
123 | ||||
9.6 |
Compliance with Statutes, Regulations, Etc. |
123 | ||||
9.7 |
ERISA |
123 | ||||
9.8 |
Maintenance of Properties |
124 |
iii
Table of Contents
(continued)
Page | ||||||
9.9 |
Transactions with Affiliates |
124 | ||||
9.10 |
End of Fiscal Years; Fiscal Quarters |
126 | ||||
9.11 |
Additional Guarantors, Grantors and Collateral |
127 | ||||
9.12 |
Use of Proceeds |
128 | ||||
9.13 |
Further Assurances |
128 | ||||
9.14 |
Reserve Reports |
129 | ||||
9.15 |
Title Information |
131 | ||||
9.16 |
Change in Business |
131 | ||||
9.17 |
Holdings and Legacy Blocker Entity Covenant |
131 | ||||
9.18 |
Keepwell |
132 | ||||
SECTION 10. |
Negative Covenants |
132 | ||||
10.1 |
Limitation on Indebtedness |
132 | ||||
10.2 |
Limitation on Liens |
137 | ||||
10.3 |
Limitation on Fundamental Changes |
140 | ||||
10.4 |
Limitation on Sale of Assets |
142 | ||||
10.5 |
Limitation on Investments |
145 | ||||
10.6 |
Limitation on Restricted Payments |
148 | ||||
10.7 |
Limitations on Debt Payments and Amendments |
152 | ||||
10.8 |
Negative Pledge Agreements |
154 | ||||
10.9 |
Limitation on Subsidiary Distributions |
156 | ||||
10.10 |
Hedge Transactions |
157 | ||||
10.11 |
Financial Performance Ratios |
159 | ||||
10.12 |
Accounts |
159 | ||||
10.13 |
Sanctions |
159 | ||||
10.14 |
Amendments to Organizational Documents |
160 | ||||
SECTION 11. |
Events of Default |
160 | ||||
11.1 |
Payments |
160 | ||||
11.2 |
Representations, Etc. |
160 | ||||
11.3 |
Covenants |
160 | ||||
11.4 |
Default Under Other Agreements |
160 |
iv
Table of Contents
(continued)
Page | ||||||
11.5 |
Bankruptcy, Etc. |
161 | ||||
11.6 |
ERISA |
161 | ||||
11.7 |
Guarantee |
162 | ||||
11.8 |
Security Documents |
162 | ||||
11.9 |
Judgments |
162 | ||||
11.10 |
Change of Control |
162 | ||||
11.11 |
Application of Proceeds |
163 | ||||
11.12 |
Equity Cure |
164 | ||||
SECTION 12. |
The Agents |
166 | ||||
12.1 |
Appointment |
166 | ||||
12.2 |
Delegation of Duties |
166 | ||||
12.3 |
Exculpatory Provisions |
167 | ||||
12.4 |
Reliance by Agents |
167 | ||||
12.5 |
Notice of Default |
168 | ||||
12.6 |
Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders |
168 | ||||
12.7 |
Indemnification |
169 | ||||
12.8 |
Agents in Its Individual Capacities |
170 | ||||
12.9 |
Successor Agents |
170 | ||||
12.10 |
Withholding Tax |
171 | ||||
12.11 |
Security Documents and Collateral Agent under Security Documents and Guarantee |
171 | ||||
12.12 |
Right to Realize on Collateral and Enforce Guarantee |
172 | ||||
12.13 |
Administrative Agent May File Proofs of Claim |
173 | ||||
12.14 |
Certain ERISA Matters |
174 | ||||
SECTION 13. |
Miscellaneous |
176 | ||||
13.1 |
Amendments, Waivers and Releases |
176 | ||||
13.2 |
Notices |
179 | ||||
13.3 |
No Waiver; Cumulative Remedies |
179 | ||||
13.4 |
Survival of Representations and Warranties |
179 | ||||
13.5 |
Payment of Expenses; Indemnification |
180 |
v
Table of Contents
(continued)
Page | ||||||
13.6 |
Successors and Assigns; Participations and Assignments |
181 | ||||
13.7 |
Replacements of Lenders under Certain Circumstances |
188 | ||||
13.8 |
Adjustments; Set-off |
189 | ||||
13.9 |
Counterparts |
190 | ||||
13.10 |
Severability |
190 | ||||
13.11 |
Integration |
190 | ||||
13.12 |
GOVERNING LAW |
190 | ||||
13.13 |
Submission to Jurisdiction; Waivers |
190 | ||||
13.14 |
Acknowledgments |
191 | ||||
13.15 |
WAIVERS OF JURY TRIAL |
192 | ||||
13.16 |
Confidentiality |
192 | ||||
13.17 |
Release of Collateral and Guarantee Obligations |
193 | ||||
13.18 |
USA PATRIOT Act |
195 | ||||
13.19 |
Payments Set Aside |
195 | ||||
13.20 |
Reinstatement |
195 | ||||
13.21 |
Disposition of Proceeds |
195 | ||||
13.22 |
Collateral Matters; Hedge Agreements |
195 | ||||
13.23 |
Agency of the Borrower for the Other Credit Parties |
196 | ||||
13.24 |
Acknowledgment and Consent to Bail-In of EEA Financial Institutions |
196 |
vi
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 |
SCHEDULE 1.1(a)
COMMITMENTS
Lender |
Commitment |
Commitment
Percentage |
||||||
JPMorgan Chase Bank, N.A. |
$ | 60,000,000.00 | 10.00000000 | % | ||||
The Toronto-Dominion Bank, New York Branch |
$ | 57,000,000.00 | 9.50000000 | % | ||||
Natixis, New York Branch |
$ | 57,000,000.00 | 9.50000000 | % | ||||
Citibank, N.A. |
$ | 53,000,000.00 | 8.83333333 | % | ||||
ABN AMRO Capital USA LLC |
$ | 53,000,000.00 | 8.83333333 | % | ||||
Capital One, National Association |
$ | 53,000,000.00 | 8.83333333 | % | ||||
Société Générale |
$ | 53,000,000.00 | 8.83333333 | % | ||||
Deutsche Bank AG New York Branch |
$ | 53,000,000.00 | 8.83333333 | % | ||||
ING Capital LLC |
$ | 53,000,000.00 | 8.83333333 | % | ||||
UBS AG, Stamford Branch |
$ | 41,500,000.00 | 6.91666667 | % | ||||
Regions Bank |
$ | 41,500,000.00 | 6.91666667 | % | ||||
Whitney Bank |
25,000,000.00 | 4.16666667 | % | |||||
|
|
|
|
|||||
Total |
$ | 600,000,000.00 | 100.00000000 | % |
SCHEDULE 1.1(b)
EXCLUDED EQUITY INTERESTS
None.
Schedule 1.1(b)
SCHEDULE 1.1(c)
EXCLUDED SUBSIDIARIES
None.
Schedule 1.1(c) - 1
SCHEDULE 1.1(d)
EXISTING LETTERS OF CREDIT
Outstanding Letters of Credit
Issuing Bank |
Borrower |
Current
Amount |
Beneficiary |
Effective
Date |
Actual
Expiry |
|||||||||||
TD | TALOS PRODUCTION | 382,860.00 | Nautilus Pipeline Company | 4-Feb-14 | 4-Feb-19 | |||||||||||
TD | TALOS PRODUCTION | 795,000.00 | Stingray Pipeline Company | 4-Feb-14 | 4-Feb-19 | |||||||||||
TD | TALOS PRODUCTION | 45,000.00 | Transcontinental Gas Pipe Line | 6-Feb-13 | 30-Jan-19 | |||||||||||
TD | TALOS PRODUCTION | 1,800,000.00 | Chevron USA | 31-Jul-14 | 31-Jul-19 | |||||||||||
TD | TALOS PRODUCTION | 700,000.00 | Chevron USA | 31-Jul-14 | 31-Jul-19 | |||||||||||
TD | TALOS PRODUCTION | 192,000.00 | Nautilus Pipeline Company | 1-Aug-14 | 1-Aug-18 | |||||||||||
TD | TALOS PRODUCTION | 1,000,000.00 | Three Allen Center Co LLC | 22-Dec-17 | 22-Dec-18 |
Schedule 1.1(d) - 1
SCHEDULE 1.1(e)
CLOSING DATE SUBSIDIARY GUARANTORS
| Talos Production Finance Inc. |
| Talos Energy Operating GP LLC |
| Talos Energy Operating Company LLC |
| Talos Energy Offshore LLC |
| Talos Gulf Coast LLC |
| Talos ERT LLC |
| CKB Petroleum, LLC |
| Talos Management Intermediary LLC |
| Talos Management Holdings LLC |
| Talos Gulf Coast Onshore LLC |
| Talos Gulf Coast Offshore LLC |
| Talos Energy LLC |
| Talos Energy Holdings LLC |
| Talos Energy Phoenix LLC |
| Talos Argo Inc. |
| Talos Petroleum LLC |
| Talos Resources LLC |
| Stone Energy Holding, L.L.C. |
| Talos Energy International LLC |
Schedule 1.1(e) - 1
SCHEDULE 1.1(f)
CLOSING DATE HEDGE BANKS
None.
Schedule 1.1(f) - 1
SCHEDULE 1.1(h )
MAXIMUM LC COMMITMENTS
Lender |
Commitment | |||
JPMorgan Chase Bank, N.A. |
$ | 75,000,000.00 | ||
The Toronto-Dominion Bank, New York Branch |
$ | 75,000,000.00 | ||
Natixis, New York Branch |
$ | 75,000,000.00 |
SCHEDULE 1.1(i)
EXCLUDED ACCOUNTS
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY PHOENIX LLC | USD | Closed in 90 days | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY LLC | USD | Closed in 90 days | ||||
Union Bank of California | DDAOPERATING ACCOUNT | GULF COAST ENERGY RESOURCES, LLC | USD | Closed in 90 days | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS PRODUCTION LLC | USD | Closed in 90 days | ||||
Union Bank of California | ZBAZERO BALANCE ACCOUNT | ENERGY RESOURCE TECHNOLOGY GOM, LLC | USD | Closed in 90 days | ||||
Union Bank of California | ZBAZERO BALANCE ACCOUNT | TALOS ENERGY OFFSHORE LLC | USD | Closed in 90 days | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY INTERNATIONAL LLC | USD | Closed in 90 days | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS ENERGY LLC | USD | Closed in 90 days | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | GULF COAST ENERGY RESOURCES, LLC | USD | Closed in 90 days | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS PRODUCTION LLC | USD | Closed in 90 days | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS ENERGY PHOENIX LLC | USD | Closed in 90 days | ||||
Whitney Hancock Bank | IOD INTEREST ACCOUNT | TALOS GULF COAST LLC | USD | Escrow Account for Royalty Owners Funds do not belong to entity | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX HOLDING COOPERATIEF U.A. | EUR | Foreign Account |
Schedule 1.1(i) - 1
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX HOLDING COOPERATIEF U.A. | USD | Foreign Account | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX BV | EUR | Foreign Account | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX BV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY MEXICO 2 S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY MEXICO 7 S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 2 S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 2 S DE RL DE CV | MXN | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 7 S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 7 S DE RL DE CV | MXN | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | RIO NORTE OFFSHORE COMPANY S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | RIO NORTE OFFSHORE COMPANY S DE RL DE CV | MXN | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | PHOENIX DURANGO OFFSHORE COMPANY S DE RL DE CV | USD | Foreign Account | ||||
Scotia Bank | OPERATING ACCOUNT | PHOENIX DURANGO OFFSHORE COMPANY S DE RL DE CV | MXN | Foreign Account | ||||
Regions | Revenue | STONE ENERGY | USD | Closed in 90 days | ||||
Iberia Bank | Revenue | STONE ENERGY | USD | Closed in 90 days | ||||
Texas Capital Bank | Surety Collateral-Escrow Account | STONE ENERGY | USD | Escrow Account Managed by Surety Company |
Schedule 1.1(i) - 2
SCHEDULE 6(b)
LOCAL COUNSELS
Liskow & Lewis
Vinson & Elkins
Schedule 6(b) - 1
SCHEDULE 8.4
LITIGATION
None.
Schedule 8.4 - 1
SCHEDULE 8.12
SUBSIDIARIES
| Talos Production Finance Inc. Guarantor, Material Subsidiary |
| Talos Energy Operating GP LLC Guarantor, Material Subsidiary |
| Talos Energy Operating Company LLC Guarantor, Material Subsidiary |
| Talos Energy Offshore LLC Guarantor, Material Subsidiary |
| Talos Gulf Coast LLC Guarantor, Material Subsidiary |
| Talos ERT LLC Guarantor, Material Subsidiary |
| CKB Petroleum, LLC Guarantor, Material Subsidiary |
| Talos Management Intermediary LLC Guarantor, Material Subsidiary |
| Talos Management Holdings LLC Guarantor, Material Subsidiary |
| Talos Gulf Coast Onshore LLC Guarantor, Material Subsidiary |
| Talos Gulf Coast Offshore LLC Guarantor, Material Subsidiary |
| Talos Energy LLC Guarantor, Material Subsidiary |
| Talos Energy Holdings LLC Guarantor, Material Subsidiary |
| Talos Energy Phoenix LLC Guarantor, Material Subsidiary |
| Talos Argo Inc. Guarantor, Material Subsidiary |
| Talos Petroleum LLC Guarantor, Material Subsidiary |
| Talos Resources LLC Guarantor, Material Subsidiary |
| Stone Energy Holding, L.L.C. Guarantor, Material Subsidiary |
| Talos Energy International LLC Guarantor, Material Subsidiary |
| Talos Mex Holding Cooperatief U.A. Restricted |
| Talos Mex B.V. Restricted |
| Rio Norte Offshore Company, S. DE R.L. DE C.V. Restricted |
| Talos Energy Mexico 2, S. DE R.L. DE C.V. Restricted |
| Talos Energy Mexico 7, S. DE R.L. DE C.V. Restricted |
| Phoenix-Durango Offshore Company, S. DE R.L. DE C.V. Restricted |
| Talos Energy Offshore Mexico 2, S. DE R.L. DE C.V. Restricted |
| Talos Energy Offshore Mexico 7, S. DE R.L. DE C.V. Restricted |
Schedule 8.12 - 1
SCHEDULE 8.18
DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS; COMMODITIES ACCOUNTS
Deposit Accounts
Treasury Bank |
Type |
Account Name |
Currency |
|||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY PHOENIX LLC | USD | 0021418108 | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY LLC | USD | 4170003921 | ||||
Union Bank of California | DDAOPERATING ACCOUNT | GULF COAST ENERGY RESOURCES, LLC | USD | 4170004197 | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS PRODUCTION LLC | USD | 4170004219 | ||||
Union Bank of California | ZBAZERO BALANCE ACCOUNT | ENERGY RESOURCE TECHNOLOGY GOM, LLC | USD | 4170004227 | ||||
Union Bank of California | ZBAZERO BALANCE ACCOUNT | TALOS ENERGY OFFSHORE LLC | USD | 4170004235 | ||||
Union Bank of California | DDAOPERATING ACCOUNT | TALOS ENERGY INTERNATIONAL LLC | USD | 4171000443 | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS ENERGY LLC | USD | 9080000860 | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | GULF COAST ENERGY RESOURCES, LLC | USD | 9080000909 | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS PRODUCTION LLC | USD | 9080015280 | ||||
Union Bank of California | CDADISBURSEMENT ACCOUNT | TALOS ENERGY PHOENIX LLC | USD | 9081002348 | ||||
Whitney Hancock Bank | IOD INTEREST ACCOUNT | TALOS GULF COAST LLC | USD | 716213451 | ||||
Whitney Hancock Bank | CHARITY TRUST ACCOUNT | TALOS BRONZE FUND | USD | 46732186 | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX HOLDING COOPERATIEF U.A. | EUR | NL06ABNA0451298675 | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX HOLDING COOPERATIEF U.A. | USD | NL39ABNA0451305744 |
Schedule 8.18 - 1
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX BV | EUR | NL80ABNA0450916715 | ||||
ABN-AMRO | OPERATING ACCOUNT | TALOS MEX BV | USD | NL97ABNA0450929213 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY MEXICO 2 S DE RL DE CV | USD | 00107289766 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY MEXICO 7 S DE RL DE CV | USD | 00107289715 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 2 S DE RL DE CV | USD | 00107289723 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 2 S DE RL DE CV | MXN | 00107793169 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 7 S DE RL DE CV | USD | 00107290845 | ||||
Scotia Bank | OPERATING ACCOUNT | TALOS ENERGY OFFSHORE MEXICO 7 S DE RL DE CV | MXN | 00101421324 | ||||
Scotia Bank | OPERATING ACCOUNT | RIO NORTE OFFSHORE COMPANY S DE RL DE CV | USD | 00107289731 | ||||
Scotia Bank | OPERATING ACCOUNT | RIO NORTE OFFSHORE COMPANY S DE RL DE CV | MXN | 00107793177 | ||||
Scotia Bank | OPERATING ACCOUNT | PHOENIX DURANGO OFFSHORE COMPANY S DE RL DE CV | USD | 00107289758 | ||||
Scotia Bank | OPERATING ACCOUNT | PHOENIX DURANGO OFFSHORE COMPANY S DE RL DE CV | MXN | 00107793185 | ||||
Capital One | DDAOPERATING ACCOUNT | TALOS PRODUCTION LLC | USD | 364747475 | ||||
Capital One | CDADISBURSEMENT ACCOUNT | TALOS PRODUCTION LLC | USD | 4670140577 | ||||
Whitney | DDAOPERATING ACCOUNT | STONE ENERGY | USD | 46716032 | ||||
Regions | Revenue | STONE ENERGY | USD | 0054580404 | ||||
Iberia Bank | Revenue | STONE ENERGY | USD | 20000434167 | ||||
Capital One | Money Market | STONE ENERGY | USD | 3820385038 | ||||
Capital One | DDAOPERATING ACCOUNT | STONE ENERGY | USD | 3822695441 | ||||
Capital One | Rental | STONE ENERGY | USD | 3822695476 | ||||
Capital One | Health Plan | STONE ENERGY | USD | 3822695433 | ||||
Capital One | 401k | STONE ENERGY | USD | 3822695484 |
Schedule 8.18 - 2
Capital One | Revenue | STONE ENERGY | USD | 3822695468 | ||||
Capital One | Payroll | STONE ENERGY | USD | 3822695506 | ||||
Capital One | Oper. Trust-Tolson | STONE ENERGY | USD | 3822695492 | ||||
Capital One | Offshore | STONE ENERGY | USD | 3822695514 | ||||
Texas Capital Bank | Argo Collateral | STONE ENERGY | USD | 201002207 |
See Schedule 1.1(i) for a list of Excluded Accounts.
Schedule 8.18 - 3
SCHEDULE 8.20
HEDGE TRANSACTIONS
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close
|
Trans. ID |
Trans. Date |
Trans.
|
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | TD | 504988 | 1/8/2016 | January | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 5/25/2018 | GAS | PDP | |||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 6/25/2018 | GAS | PDP | |||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 7/25/2018 | GAS | PDP | |||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 8/25/2018 | GAS | PDP | |||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 9/25/2018 | GAS | PDP | |||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 10/25/2018 | GAS | PDP | |||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 11/25/2018 | GAS | PDP | |||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 12/25/2018 | GAS | PDP | |||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Goldman Sachs | Goldman Sachs | QE1D004319043 | 1/22/2016 | January | 1/25/2019 | GAS | PDP | |||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 2/25/2019 | GAS | PDP | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 3/25/2019 | GAS | PDP | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 4/25/2019 | GAS | PDP | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 5/25/2019 | GAS | PDP | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 6/25/2019 | GAS | PDP | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 7/25/2019 | GAS | PDP | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 8/25/2019 | GAS | PDP | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 9/25/2019 | GAS | PDP | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 10/25/2019 | GAS | PDP | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 11/25/2019 | GAS | PDP | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 12/25/2019 | GAS | PDP | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | ING | 87499978 | 8/25/2016 | August | 1/25/2020 | GAS | PDP |
Schedule 8.20 - 1
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil
Swap Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas Swap
Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 104,417.00 | 17.40 | | | 104,417.00 | 0 | 0 | 2.915 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 27,210.00 | 4.54 | | | 27,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 77,210.00 | 12.87 | | | 77,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 77,210.00 | 12.87 | | | 77,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 77,210.00 | 12.87 | | | 77,210.00 | 0 | 0 | 2.885 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 117,106.00 | 19.52 | | | 117,106.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 116,717.00 | 19.45 | | | 116,717.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 108,581.00 | 18.10 | | | 108,581.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 110,160.00 | 18.36 | | | 110,160.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 69,357.00 | 11.56 | | | 69,357.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 62,657.00 | 10.44 | | | 62,657.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 52,725.00 | 8.79 | | | 52,725.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 455,519.00 | 75.92 | | | 455,519.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 591,014.00 | 98.50 | | | 591,014.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 742,401.00 | 123.73 | | | 742,401.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 646,515.00 | 107.75 | | | 646,515.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 690,687.00 | 115.11 | | | 690,687.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 128,947.00 | 21.49 | | | 128,947.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 128,632.00 | 21.44 | | | 128,632.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 112,658.00 | 18.78 | | | 112,658.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 112,014.00 | 18.67 | | | 112,014.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 77,061.00 | 12.84 | | | 77,061.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 71,890.00 | 11.98 | | | 71,890.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 71,894.00 | 11.98 | | | 71,894.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 465,786.00 | 77.63 | | | 465,786.00 | 0 | 0 | 2.99 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | 454,977.00 | 75.83 | | | 454,977.00 | 0 | 0 | 2.99 | 0 | 0 |
Schedule 8.20 - 2
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close
|
Trans. ID |
Trans. Date |
Trans.
|
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3AVKV | 10/18/2016 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B4QR | 10/19/2016 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000F9-3B8GB | 10/19/2016 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | ING | 88500183 | 12/12/2016 | December | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | ING | 88548529 | 12/16/2016 | December | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Regions | 114279 | 12/16/2016 | December | 1/25/2019 | WTI | PDP |
Schedule 8.20 - 3
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas
Swap Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | | 60,000.00 | 60.00 | 60,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | | 62,000.00 | 62.00 | 62,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | | 60,000.00 | 60.00 | 60,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | | 62,000.00 | 62.00 | 62,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | | 62,000.00 | 62.00 | 62,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | | 60,000.00 | 60.00 | 60,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | | 62,000.00 | 62.00 | 62,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | | 60,000.00 | 60.00 | 60,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | | 62,000.00 | 62.00 | 62,000.00 | | 54.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,500.00 | | 16,500.00 | 16.50 | 16,500.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
17,050.00 | | 17,050.00 | 17.05 | 17,050.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,500.00 | | 16,500.00 | 16.50 | 16,500.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
17,050.00 | | 17,050.00 | 17.05 | 17,050.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
17,050.00 | | 17,050.00 | 17.05 | 17,050.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,500.00 | | 16,500.00 | 16.50 | 16,500.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
17,050.00 | | 17,050.00 | 17.05 | 17,050.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,500.00 | | 16,500.00 | 16.50 | 16,500.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
17,050.00 | | 17,050.00 | 17.05 | 17,050.00 | | 55.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
58,500.00 | | 58,500.00 | 58.50 | 58,500.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,450.00 | | 60,450.00 | 60.45 | 60,450.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
58,500.00 | | 58,500.00 | 58.50 | 58,500.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,450.00 | | 60,450.00 | 60.45 | 60,450.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,450.00 | | 60,450.00 | 60.45 | 60,450.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
58,500.00 | | 58,500.00 | 58.50 | 58,500.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,450.00 | | 60,450.00 | 60.45 | 60,450.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
58,500.00 | | 58,500.00 | 58.50 | 58,500.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,450.00 | | 60,450.00 | 60.45 | 60,450.00 | | 55.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
35,546.00 | | 35,546.00 | 35.55 | 35,546.00 | | $ | 55.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | | 30,000.00 | 30.00 | 30,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | | 31,000.00 | 31.00 | 31,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | | 30,000.00 | 30.00 | 30,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | | 31,000.00 | 31.00 | 31,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | | 31,000.00 | 31.00 | 31,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | | 30,000.00 | 30.00 | 30,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | | 31,000.00 | 31.00 | 31,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | | 30,000.00 | 30.00 | 30,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | | 31,000.00 | 31.00 | 31,000.00 | | $ | 54.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | | 42,000.00 | 42.00 | 42,000.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
43,400.00 | | 43,400.00 | 43.40 | 43,400.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | | 42,000.00 | 42.00 | 42,000.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
43,400.00 | | 43,400.00 | 43.40 | 43,400.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
43,400.00 | | 43,400.00 | 43.40 | 43,400.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | | 42,000.00 | 42.00 | 42,000.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
43,400.00 | | 43,400.00 | 43.40 | 43,400.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | | 42,000.00 | 42.00 | 42,000.00 | | $ | 54.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
43,400.00 | | 43,400.00 | 43.40 | 43,400.00 | | $ | 54.60 |
Schedule 8.20 - 4
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close
|
Trans. ID |
Trans. Date |
Trans.
|
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Shell | 10596345 | 12/20/2016 | December | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Shell | 10596343 | 12/20/2016 | December | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Regions | 114415 | 1/4/2017 | January | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | ING | 89479528 | 4/5/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | ING | 89493101 | 4/7/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 6/25/2018 | GAS | PDP |
Schedule 8.20 - 5
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas Swap
Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | | 42,000.00 | 42.00 | 42,000.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | | 45,000.00 | 45.00 | 45,000.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | | 46,500.00 | 46.50 | 46,500.00 | | $ | 54.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,500.00 | | 13,500.00 | 13.50 | 13,500.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,950.00 | | 13,950.00 | 13.95 | 13,950.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,500.00 | | 13,500.00 | 13.50 | 13,500.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,950.00 | | 13,950.00 | 13.95 | 13,950.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,950.00 | | 13,950.00 | 13.95 | 13,950.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,500.00 | | 13,500.00 | 13.50 | 13,500.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,950.00 | | 13,950.00 | 13.95 | 13,950.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,500.00 | | 13,500.00 | 13.50 | 13,500.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
13,950.00 | | 13,950.00 | 13.95 | 13,950.00 | | $ | 56.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,800.00 | 16,800.00 | 16.80 | 16,800.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
16,800.00 | 16,800.00 | 16.80 | 16,800.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,000.00 | 18,000.00 | 18.00 | 18,000.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
18,600.00 | 18,600.00 | 18.60 | 18,600.00 | | $ | 52.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,000.00 | 3.00 | | | 18,000.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,600.00 | 3.10 | | | 18,600.00 | $ | 3.01 |
Schedule 8.20 - 6
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close
|
Trans. ID |
Trans. Date |
Trans.
|
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Shell | 10980652 | 4/10/2017 | April | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Natixis | 200873187 | 4/10/2017 | April | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Natixis | 200872631 | 4/10/2017 | April | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 850000YV-73FQ | 4/10/2017 | April | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000YV-73AD | 4/10/2017 | April | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Shell | 10984122 | 4/11/2017 | April | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 11/25/2019 | WTI | PDP |
Schedule 8.20 - 7
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas Swap
Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,000.00 | 3.00 | | | 18,000.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,600.00 | 3.10 | | | 18,600.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,600.00 | 3.10 | | | 18,600.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,000.00 | 3.00 | | | 18,000.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,600.00 | 3.10 | | | 18,600.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,000.00 | 3.00 | | | 18,000.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 18,600.00 | 3.10 | | | 18,600.00 | $ | 3.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 45,000.00 | 7.50 | | | 45,000.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | 46,500.00 | 7.75 | | | 46,500.00 | $ | 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,250.00 | 5,250.00 | 5.25 | 5,250.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,425.00 | 5,425.00 | 5.43 | 5,425.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,250.00 | 5,250.00 | 5.25 | 5,250.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,425.00 | 5,425.00 | 5.43 | 5,425.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,425.00 | 5,425.00 | 5.43 | 5,425.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,250.00 | 5,250.00 | 5.25 | 5,250.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,425.00 | 5,425.00 | 5.43 | 5,425.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,250.00 | 5,250.00 | 5.25 | 5,250.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,425.00 | 5,425.00 | 5.43 | 5,425.00 | | $ | 53.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,360.00 | 3,360.00 | 3.36 | 3,360.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,600.00 | 3,600.00 | 3.60 | 3,600.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,600.00 | 3,600.00 | 3.60 | 3,600.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,600.00 | 3,600.00 | 3.60 | 3,600.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 |
Schedule 8.20 - 8
Contract Date |
Term Date | Month |
Contract
Year |
Days | Type | Counterparty |
Post-Close
Counterparty |
Trans. ID | Trans. Date |
Trans.
Month |
Cash
Payment Date |
Commodity | ResCat | |||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | Shell | 10984123 | 4/11/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 10988695 | 4/13/2017 | April | 1/25/2019 | GAS | PDP | ||||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 10989626 | 4/13/2017 | April | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
7/1/2019 |
7/31/2019 | July | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
8/1/2019 |
8/31/2019 | August | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
9/1/2019 |
9/30/2019 | September | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
10/1/2019 |
10/31/2019 | October | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | Shell | 10989628 | 4/13/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 10987455 | 4/13/2017 | April | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
7/1/2019 |
7/31/2019 | July | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
8/1/2019 |
8/31/2019 | August | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
9/1/2019 |
9/30/2019 | September | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
10/1/2019 |
10/31/2019 | October | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | Shell | 10987462 | 4/13/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
7/1/2019 |
7/31/2019 | July | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
8/1/2019 |
8/31/2019 | August | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
9/1/2019 |
9/30/2019 | September | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
10/1/2019 |
10/31/2019 | October | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | ING | 89549160 | 4/13/2017 | April | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 5/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 6/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 7/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 8/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 9/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 10/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 11/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 12/25/2018 | GAS | PDP | ||||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 8500012F-3ITI | 4/26/2017 | April | 1/25/2019 | GAS | PDP |
Schedule 8.20 - 9
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas Swap
Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,600.00 | 3,600.00 | 3.60 | 3,600.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,720.00 | 3,720.00 | 3.72 | 3,720.00 | | $ | 52.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,000.00 | 2.50 | | | 15,000.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,500.00 | 2.58 | | | 15,500.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,000.00 | 2.50 | | | 15,000.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,500.00 | 2.58 | | | 15,500.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,500.00 | 2.58 | | | 15,500.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,000.00 | 2.50 | | | 15,000.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,500.00 | 2.58 | | | 15,500.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,000.00 | 2.50 | | | 15,000.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 15,500.00 | 2.58 | | | 15,500.00 | $ | | $ | | $ | 3.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,500.00 | | 10,500.00 | | 10.50 | 10,500.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,850.00 | | 10,850.00 | | 10.85 | 10,850.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,500.00 | | 10,500.00 | | 10.50 | 10,500.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,850.00 | | 10,850.00 | | 10.85 | 10,850.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,850.00 | | 10,850.00 | | 10.85 | 10,850.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,500.00 | | 10,500.00 | | 10.50 | 10,500.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,850.00 | | 10,850.00 | | 10.85 | 10,850.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,500.00 | | 10,500.00 | | 10.50 | 10,500.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,850.00 | | 10,850.00 | | 10.85 | 10,850.00 | | | $ | | $ | 53.30 | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,000.00 | 7,000.00 | 7.00 | 7,000.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | $ | 52.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
5,600.00 | 5,600.00 | 5.60 | 5,600.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | $ | 53.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
42,000.00 | 42,000.00 | 42.00 | 42,000.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 195,000.00 | 32.50 | | | 195,000.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 201,500.00 | 33.58 | | | 201,500.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 195,000.00 | 32.50 | | | 195,000.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 201,500.00 | 33.58 | | | 201,500.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 201,500.00 | 33.58 | | | 201,500.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 195,000.00 | 32.50 | | | 195,000.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 201,500.00 | 33.58 | | | 201,500.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 195,000.00 | 32.50 | | | 195,000.00 | $ | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| 201,500.00 | 33.58 | | | 201,500.00 | $ | 3.11 |
Schedule 8.20 - 10
Contract Date |
Term Date | Month |
Contract
Year |
Days | Type | Counterparty |
Post-Close
Counterparty |
Trans. ID | Trans. Date |
Trans.
Month |
Cash
Payment Date |
Commodity | ResCat | |||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | ING | 90494176 | 8/8/2017 | August | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 11366985 | 9/6/2017 | September | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2019 |
7/31/2019 | July | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2019 |
8/31/2019 | August | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2019 |
9/30/2019 | September | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2019 |
10/31/2019 | October | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | Natixis | 208617115 | 9/14/2017 | September | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 11385418 | 9/14/2017 | September | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Shell | 11385442 | 9/14/2017 | September | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 2/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 3/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 4/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 5/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 6/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 7/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2019 |
7/31/2019 | July | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 8/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2019 |
8/31/2019 | August | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 9/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2019 |
9/30/2019 | September | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 10/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2019 |
10/31/2019 | October | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 11/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2019 |
11/30/2019 | November | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 12/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2019 |
12/31/2019 | December | 2019 | 365 | Swap | Shell | 11385574 | 9/14/2017 | September | 1/25/2020 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7OB | 10/30/2017 | October | 1/25/2019 | WTI | PDP |
Schedule 8.20 - 11
Entity |
OIL Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas Swap
Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,500.00 | 10,500.00 | 10.50 | 10,500.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,850.00 | 10,850.00 | 10.85 | 10,850.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,500.00 | 10,500.00 | 10.50 | 10,500.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,850.00 | 10,850.00 | 10.85 | 10,850.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,850.00 | 10,850.00 | 10.85 | 10,850.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,500.00 | 10,500.00 | 10.50 | 10,500.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,850.00 | 10,850.00 | 10.85 | 10,850.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,500.00 | 10,500.00 | 10.50 | 10,500.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
10,850.00 | 10,850.00 | 10.85 | 10,850.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 50.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
142,285.00 | 142,285.00 | 142.29 | 142,285.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
121,366.00 | 121,366.00 | 121.37 | 121,366.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
127,781.00 | 127,781.00 | 127.78 | 127,781.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
117,690.00 | 117,690.00 | 117.69 | 117,690.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
115,876.00 | 115,876.00 | 115.88 | 115,876.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
106,177.00 | 106,177.00 | 106.18 | 106,177.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
104,573.00 | 104,573.00 | 104.57 | 104,573.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,839.00 | 45,839.00 | 45.84 | 45,839.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
40,983.00 | 40,983.00 | 40.98 | 40,983.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
39,034.00 | 39,034.00 | 39.03 | 39,034.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
82,974.00 | 82,974.00 | 82.97 | 82,974.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
81,598.00 | 81,598.00 | 81.60 | 81,598.00 | | $ | 50.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 46,382.00 | 7.73 | | | 46,382.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 47,196.00 | 7.87 | | | 47,196.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 44,986.00 | 7.50 | | | 44,986.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 45,795.00 | 7.63 | | | 45,795.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 14,621.00 | 2.44 | | | 14,621.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 13,560.00 | 2.26 | | | 13,560.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 12,051.00 | 2.01 | | | 12,051.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 26,510.00 | 4.42 | | | 26,510.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
| 25,306.00 | 4.22 | | | 25,306.00 | $ | 3.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
19,271.00 | 19,271.00 | 19.27 | 19,271.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
19,681.00 | 19,681.00 | 19.68 | 19,681.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
18,826.00 | 18,826.00 | 18.83 | 18,826.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
19,232.00 | 19,232.00 | 19.23 | 19,232.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
7,352.00 | 7,352.00 | 7.35 | 7,352.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,911.00 | 6,911.00 | 6.91 | 6,911.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,413.00 | 6,413.00 | 6.41 | 6,413.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
11,513.00 | 11,513.00 | 11.51 | 11,513.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
11,071.00 | 11,071.00 | 11.07 | 11,071.00 | | $ | 50.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
11,756.00 | 11,756.00 | 11.76 | 11,756.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,046.00 | 10,046.00 | 10.05 | 10,046.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
10,520.00 | 10,520.00 | 10.52 | 10,520.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,606.00 | 9,606.00 | 9.61 | 9,606.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
9,361.00 | 9,361.00 | 9.36 | 9,361.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
8,538.00 | 8,538.00 | 8.54 | 8,538.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
8,310.00 | 8,310.00 | 8.31 | 8,310.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,926.00 | 3,926.00 | 3.93 | 3,926.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,474.00 | 3,474.00 | 3.47 | 3,474.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
3,271.00 | 3,271.00 | 3.27 | 3,271.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,277.00 | 6,277.00 | 6.28 | 6,277.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Energy Phoenix LLC |
6,085.00 | 6,085.00 | 6.09 | 6,085.00 | | $ | 50.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.62 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.62 |
Schedule 8.20 - 12
Contract Date |
Term Date | Month |
Contract
Year |
Days | Type | Counterparty |
Post-Close
Counterparty |
Trans. ID | Trans. Date |
Trans.
Month |
Cash
Payment Date |
Commodity | ResCat | |||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | ING | 91163012 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Natixis | 210836452 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Natixis | 210836493 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | J.P. Morgan | 85000F9-4T7VI | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Regions | 117442 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | TD | 589023 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
4/1/2018 |
4/30/2018 | April | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 5/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
5/1/2018 |
5/31/2018 | May | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 6/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
6/1/2018 |
6/30/2018 | June | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 7/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
7/1/2018 |
7/31/2018 | July | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 8/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
8/1/2018 |
8/31/2018 | August | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 9/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
9/1/2018 |
9/30/2018 | September | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 10/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
10/1/2018 |
10/31/2018 | October | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 11/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
11/1/2018 |
11/30/2018 | November | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 12/25/2018 | WTI | PDP | ||||||||||||||||||||||||||||
12/1/2018 |
12/31/2018 | December | 2018 | 365 | Swap | Goldman Sachs | QE1D009192597 | 10/30/2017 | October | 1/25/2019 | WTI | PDP | ||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 2/25/2019 | WTI | |||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 3/25/2019 | WTI | |||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 4/25/2019 | WTI | |||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 5/25/2019 | WTI | |||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 6/25/2019 | WTI | |||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V7N0 | 11/10/2017 | November | 7/25/2019 | WTI | |||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 2/25/2019 | WTI | |||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 3/25/2019 | WTI | |||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 4/25/2019 | WTI | |||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 5/25/2019 | WTI | |||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 6/25/2019 | WTI | |||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4VBN2 | 11/10/2017 | November | 7/25/2019 | WTI | |||||||||||||||||||||||||||||
1/1/2019 |
1/31/2019 | January | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 2/25/2019 | WTI | |||||||||||||||||||||||||||||
2/1/2019 |
2/28/2019 | February | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 3/25/2019 | WTI | |||||||||||||||||||||||||||||
3/1/2019 |
3/31/2019 | March | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 4/25/2019 | WTI | |||||||||||||||||||||||||||||
4/1/2019 |
4/30/2019 | April | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 5/25/2019 | WTI | |||||||||||||||||||||||||||||
5/1/2019 |
5/31/2019 | May | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 6/25/2019 | WTI | |||||||||||||||||||||||||||||
6/1/2019 |
6/30/2019 | June | 2019 | 365 | Swap | J.P. Morgan | 85000F9-4V81R | 11/10/2017 | November | 7/25/2019 | WTI |
Schedule 8.20 - 13
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas
Swap Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | $ | 53.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | $ | 53.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | $ | 53.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | $ | 53.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
28,000.00 | 28,000.00 | 28.00 | 28,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
65,100.00 | 65,100.00 | 65.10 | 65,100.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
58,800.00 | 58,800.00 | 58.80 | 58,800.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
65,100.00 | 65,100.00 | 65.10 | 65,100.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
63,000.00 | 63,000.00 | 63.00 | 63,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
65,100.00 | 65,100.00 | 65.10 | 65,100.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
63,000.00 | 63,000.00 | 63.00 | 63,000.00 | | | $ | 53.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 53.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
56,000.00 | 56,000.00 | 56.00 | 56,000.00 | | | $ | 53.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 53.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 53.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 53.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 53.54 |
Schedule 8.20 - 14
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close Counterparty |
Trans. ID |
Trans. Date |
Trans. Month |
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 1/25/2019 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | ING | 91441615 | 12/4/2017 | December | 7/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 1/25/2019 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | ING | 91428692 | 12/4/2017 | December | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Citi | 40098463 | 1/9/2018 | January | 1/25/2020 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Citi | 40110082 | 1/9/2018 | January | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | 213452741 | 12/21/2017 | December | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | 213639956 | 12/26/2017 | December | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | 213859926 | 12/29/2017 | December | 1/25/2020 | WTI | |||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Put (Premium Paid Upfront) | Natixis | Natixis | 191505760 | 1/9/2017 | January | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Put (Premium Paid Upfront) | Bank of Nova Scotia | JPM | 1928670 | 3/28/2017 | March | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Bank of Nova Scotia | JPM | 1912092 | 2/17/2017 | February | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 5/25/2018 | WTI | |||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 6/25/2018 | WTI | |||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 7/25/2018 | WTI | |||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 8/25/2018 | WTI | |||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 9/25/2018 | WTI | |||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 10/25/2018 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Goldman Sachs | QE1D008694159,0S1 1 1 | 9/26/2017 | September | 1/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 5/25/2018 | WTI | |||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 6/25/2018 | WTI | |||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 7/25/2018 | WTI | |||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 8/25/2018 | WTI | |||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 9/25/2018 | WTI | |||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 10/25/2018 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Goldman Sachs | QE1D008690929,0S1 1 1 | 9/26/2017 | September | 1/25/2019 | WTI |
Schedule 8.20 - 15
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas
Swap Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
28,000.00 | 28,000.00 | 28.00 | 28,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 54.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
77,500.00 | 77,500.00 | 77.50 | 77,500.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
75,000.00 | 75,000.00 | 75.00 | 75,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
77,500.00 | 77,500.00 | 77.50 | 77,500.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
77,500.00 | 77,500.00 | 77.50 | 77,500.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
70,000.00 | 70,000.00 | 70.00 | 70,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
77,500.00 | 77,500.00 | 77.50 | 77,500.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
75,000.00 | 75,000.00 | 75.00 | 75,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
77,500.00 | 77,500.00 | 77.50 | 77,500.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
75,000.00 | 75,000.00 | 75.00 | 75,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
56,000.00 | 56,000.00 | 56.00 | 56,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 54.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
56,000.00 | 56,000.00 | 56.00 | 56,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
62,000.00 | 62,000.00 | 62.00 | 62,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
60,000.00 | 60,000.00 | 60.00 | 60,000.00 | | | $ | 55.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 55.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 54.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 52.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 51.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 51.95 |
Schedule 8.20 - 16
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close Counterparty |
Trans. ID |
Trans. Date |
Trans. Month |
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Natixis | Natixis | 209171288 | 9/26/2017 | September | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Natixis | Natixis | 209172394 | 9/26/2017 | September | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Natixis | Natixis | 210833520 | 10/30/2017 | October | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 5/25/2018 | WTI | |||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 6/25/2018 | WTI | |||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 7/25/2018 | WTI | |||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 8/25/2018 | WTI | |||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 9/25/2018 | WTI | |||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 10/25/2018 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Goldman Sachs | QE1D009190252,0S1-1-1 | 10/30/2017 | October | 1/25/2019 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Goldman Sachs | QE1D008688863,0S1 1 1 | 9/26/2017 | September | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Goldman Sachs | QE1D008694160,0S1 1 1 | 9/26/2017 | September | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Goldman Sachs | QE1D009190271,0S1-1-1 | 10/30/2017 | October | 1/25/2020 | WTI |
Schedule 8.20 - 17
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil
Collar Volume |
Oil Put
Volume |
Gas
Swap Volume |
Gas
Collar Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,000.00 | 6,000.00 | 6.00 | 6,000.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
6,200.00 | 6,200.00 | 6.20 | 6,200.00 | | | $ | 51.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,000.00 | 9,000.00 | 9.00 | 9,000.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
9,300.00 | 9,300.00 | 9.30 | 9,300.00 | | | $ | 52.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 53.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,000.00 | 7,000.00 | 7.00 | 7,000.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,500.00 | 7,500.00 | 7.50 | 7,500.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
7,750.00 | 7,750.00 | 7.75 | 7,750.00 | | | $ | 50.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
21,000.00 | 21,000.00 | 21.00 | 21,000.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
22,500.00 | 22,500.00 | 22.50 | 22,500.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
22,500.00 | 22,500.00 | 22.50 | 22,500.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
22,500.00 | 22,500.00 | 22.50 | 22,500.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
22,500.00 | 22,500.00 | 22.50 | 22,500.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
23,250.00 | 23,250.00 | 23.25 | 23,250.00 | | | $ | 51.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
14,000.00 | 14,000.00 | 14.00 | 14,000.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.60 |
Schedule 8.20 - 18
Contract
Date |
Term Date |
Month |
Contract
Year |
Days |
Type |
Counterparty |
Post-Close Counterparty |
Trans. ID |
Trans. Date |
Trans. Month |
Cash
Payment Date |
Commodity |
ResCat |
|||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 5/25/2018 | WTI | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 6/25/2018 | WTI | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 7/25/2018 | WTI | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 8/25/2018 | WTI | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 9/25/2018 | WTI | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 10/25/2018 | WTI | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 11/25/2018 | WTI | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 12/25/2018 | WTI | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 32327225/32327224 | 5/19/2017 | May | 1/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2018 | 4/30/2018 | April | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 5/25/2018 | GAS | ||||||||||||||||||||||||
5/1/2018 | 5/31/2018 | May | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 6/25/2018 | GAS | ||||||||||||||||||||||||
6/1/2018 | 6/30/2018 | June | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 7/25/2018 | GAS | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 8/25/2018 | GAS | ||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 9/25/2018 | GAS | ||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 10/25/2018 | GAS | ||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 11/25/2018 | GAS | ||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 12/25/2018 | GAS | ||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Collar (Buy Put/Sell Call) | BAML | JPM | 3276578/32726579 | 6/21/2017 | June | 1/25/2019 | GAS | ||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 8/25/2018 | WTI | |||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 9/25/2018 | WTI | |||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 10/25/2018 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 1/25/2019 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 1/25/2020 | WTI | |||||||||||||||||||||||||
7/1/2018 | 7/31/2018 | July | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 8/25/2018 | WTI | |||||||||||||||||||||||||
8/1/2018 | 8/31/2018 | August | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 9/25/2018 | WTI | |||||||||||||||||||||||||
9/1/2018 | 9/30/2018 | September | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 10/25/2018 | WTI | |||||||||||||||||||||||||
10/1/2018 | 10/31/2018 | October | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 11/25/2018 | WTI | |||||||||||||||||||||||||
11/1/2018 | 11/30/2018 | November | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 12/25/2018 | WTI | |||||||||||||||||||||||||
12/1/2018 | 12/31/2018 | December | 2018 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 1/25/2019 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Citi | Ram Powell | 4/13/2018 | April | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 2/25/2019 | WTI | |||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 3/25/2019 | WTI | |||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 4/25/2019 | WTI | |||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 5/25/2019 | WTI | |||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 6/25/2019 | WTI | |||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 7/25/2019 | WTI | |||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 8/25/2019 | WTI | |||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 9/25/2019 | WTI | |||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 10/25/2019 | WTI | |||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 11/25/2019 | WTI | |||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 12/25/2019 | WTI | |||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | 224419403 | 4/24/2018 | April | 1/25/2020 | WTI | |||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 2/25/2019 | WTI | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 3/25/2019 | WTI | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 4/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 5/25/2019 | WTI | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 6/25/2019 | WTI | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 7/25/2019 | WTI | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 8/25/2019 | WTI | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 9/25/2019 | WTI | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 10/25/2019 | WTI | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 11/25/2019 | WTI | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 12/25/2019 | WTI | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | Natixis | 210833522 | 10/30/2017 | October | 1/25/2020 | WTI | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 2/25/2019 | WTI | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 3/25/2019 | WTI | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 4/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 5/25/2019 | WTI | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 6/25/2019 | WTI | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 7/25/2019 | WTI | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 8/25/2019 | WTI | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 9/25/2019 | WTI | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 10/25/2019 | WTI | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 11/25/2019 | WTI | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 12/25/2019 | WTI | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | Natixis | 214187862 | 1/3/2018 | January | 1/25/2020 | WTI | ||||||||||||||||||||||||
1/1/2019 | 1/31/2019 | January | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 2/25/2019 | WTI | ||||||||||||||||||||||||
2/1/2019 | 2/28/2019 | February | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 3/25/2019 | WTI | ||||||||||||||||||||||||
3/1/2019 | 3/31/2019 | March | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 4/25/2019 | WTI | ||||||||||||||||||||||||
4/1/2019 | 4/30/2019 | April | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 5/25/2019 | WTI | ||||||||||||||||||||||||
5/1/2019 | 5/31/2019 | May | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 6/25/2019 | WTI | ||||||||||||||||||||||||
6/1/2019 | 6/30/2019 | June | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 7/25/2019 | WTI | ||||||||||||||||||||||||
7/1/2019 | 7/31/2019 | July | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 8/25/2019 | WTI | ||||||||||||||||||||||||
8/1/2019 | 8/31/2019 | August | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 9/25/2019 | WTI | ||||||||||||||||||||||||
9/1/2019 | 9/30/2019 | September | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 10/25/2019 | WTI | ||||||||||||||||||||||||
10/1/2019 | 10/31/2019 | October | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 11/25/2019 | WTI | ||||||||||||||||||||||||
11/1/2019 | 11/30/2019 | November | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 12/25/2019 | WTI | ||||||||||||||||||||||||
12/1/2019 | 12/31/2019 | December | 2019 | 365 | Swap | Natixis | Natixis | 214201231 | 1/3/2018 | January | 1/25/2020 | WTI |
Schedule 8.20 - 19
Entity |
OIL
Volume |
LLS
Notional Volume |
WTI
Notional Volume |
GAS
Notional Volume |
TOTAL
Notional MBOE |
Oil Swap
Volume |
Oil Collar
Volume |
Oil Put
Volume |
Gas
Swap Volume |
Gas Collar
Volume |
LLS
Swap Price |
WTI
Swap Price |
GAS
Swap Price |
WTI
Put Price |
WTI
Call Price |
NG
Put Price |
NG
Call Price |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | | 30,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | | 31,000.00 | $ | 45.00 | $ | 55.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 180,000.00 | 30.00 | | | | 180,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 186,000.00 | 31.00 | | | | 186,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 180,000.00 | 30.00 | | | | 180,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 186,000.00 | 31.00 | | | | 186,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 186,000.00 | 31.00 | | | | 186,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 180,000.00 | 30.00 | | | | 180,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 186,000.00 | 31.00 | | | | 186,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 180,000.00 | 30.00 | | | | 180,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
| 186,000.00 | 31.00 | | | | 186,000.00 | $ | 2.75 | $ | 3.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
28,000.00 | 28,000.00 | 28.00 | 28,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
14,000.00 | 14,000.00 | 14.00 | 14,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 61.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
| | | | | | $ | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
45,000.00 | 45,000.00 | 45.00 | 45,000.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Talos Production LLC |
46,500.00 | 46,500.00 | 46.50 | 46,500.00 | | | $ | 60.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
14,000.00 | 14,000.00 | 14.00 | 14,000.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,000.00 | 15,000.00 | 15.00 | 15,000.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
15,500.00 | 15,500.00 | 15.50 | 15,500.00 | | | $ | 51.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
28,000.00 | 28,000.00 | 28.00 | 28,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
28,000.00 | 28,000.00 | 28.00 | 28,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
30,000.00 | 30,000.00 | 30.00 | 30,000.00 | | | $ | 56.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stone Energy |
31,000.00 | 31,000.00 | 31.00 | 31,000.00 | | | $ | 56.10 |
Schedule 8.20 - 20
SCHEDULE 9.9
CLOSING DATE AFFILIATE TRANSACTIONS
None.
Schedule 9.9 - 1
SCHEDULE 9.13(b)
FURTHER ASSURANCES
1. | Deposit account control agreements to be entered into 10 Business Days following the Closing Date. |
2. | The Borrower will deliver any insurance certificates with respect to Stone Energy Holding, L.L.C., Talos Petroleum LLC, and Talos Resources LLC not delivered on the Closing Date within five (5) Business Days of the effectiveness of the merger (which will occur on the Closing Date. |
Schedule 9.13(b) - 1
SCHEDULE 10.1
CLOSING DATE INDEBTEDNESS
None.
Schedule 10.1 - 1
SCHEDULE 10.2(d)
CLOSING DATE LIENS
Cash Collateral in an amount not to exceed $1,192,550 1 securing the following letters of credit:
BAML-TD |
STONE ENERGY |
300,000.00 |
Zurich American Insurance |
13-Jun-13 | 11-May-18 | |||||||
BAML-TBD |
STONE ENERGY |
737,000.00 |
Berkley Oil & Gas Specialty |
27-Jun-13 | 11-May-18 |
1 | NTD: This number is 115% of the outstanding amount of the LCs being cash collateralized |
Schedule 10.2(d) - 1
SCHEDULE 10.4(i)
SCHEDULED DISPOSITIONS
None.
Schedule 10.4(i) - 1
SCHEDULE 10.5(d)
CLOSING DATE INVESTMENTS
None.
Schedule 10.5(d) - 1
SCHEDULE 10.8
CLOSING DATE NEGATIVE PLEDGE AGREEMENTS
None.
Schedule 10.8 - 1
SCHEDULE 13.2
NOTICE ADDRESSES
Talos Production LLC |
500 Dallas Street, Suite 2000 |
Houston, TX 77002 |
ATTN: Michael L. Harding, EVP & CFO |
JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender |
712 Main Street, 5th Floor |
Houston, TX 77002 |
ATTN: Jo Linda Papadakis |
JPMorgan Chase Bank, N.A., as Issuing Bank |
10 South Dearborn |
Chicago, Illinois 60603-2003 |
ATTN: PJ Balaji |
Chicago.LC.Agency.Activity.Team@JPMChase.com |
Fax No. 214-307-6874 |
Schedule 13.2 - 1
SCHEDULE 13.22
LEGACY STONE HEDGE TRANSACTION
All Hedge Transactions in effect on the Closing Date between J. Aron & Company LLC and the Borrower or any of its Subsidiaries (including, for the avoidance of doubt, Stone Energy and its Subsidiaries)
Schedule 13.22 - 1
EXHIBIT A TO
CREDIT AGREEMENT
[FORM OF] RESERVE REPORT CERTIFICATE
This Reserve Report Certificate (this Certificate ), dated as of , 201[ ], relates to the Reserve Report dated as of [December 31][June 30] [other date in case of Interim Redetermination], 201[ ] delivered pursuant to Section 9.14 [(a)] [(b)] of that certain Credit Agreement dated as of May 10, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), by and among Talos Energy Inc., a Delaware corporation ( Holdings ), Talos Production LLC, a Delaware limited liability company (the Borrower ), the lenders from time to time party thereto (the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch and The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. Each capitalized term used herein having the same meaning given to it in the Credit Agreement unless otherwise specified. The undersigned certifies he/she is an Authorized Officer and, on behalf of the Borrower, certifies that in all material respects:
(a) in the case of Reserve Reports prepared by or under the supervision of the engineers of the Borrower or a Restricted Subsidiary (other than December 31 Reserve Reports) such Reserve Report has been prepared, except as set forth in an exhibit to such Reserve Report, in accordance with the procedures used in the immediately preceding December 31 Reserve Report or the Initial Reserve Report, if no December 31 Reserve Report has been delivered;
(b) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct in all material respects;
(c) except as set forth on Annex I hereto, the Borrower or another Credit Party has good and defensible title to the Borrowing Base Properties evaluated in such Reserve Report (other than those (i) Disposed of in compliance with Section 10.4 of the Credit Agreement since delivery of such Reserve Report, (ii) leases that have expired in accordance with their terms and (iii) with title defects disclosed in writing to the Administrative Agent) and such Borrowing Base Properties are free of all Liens except for Liens permitted by Section 10.2 of the Credit Agreement;
(d) Annex II sets forth the amount of the Borrowing Base as determined in accordance with the provisions of the Junior Lien Indenture (or, any comparable defined term or calculation set forth in the Senior Notes Indenture, the Stone Energy Notes Indenture, any indenture or credit agreement in respect of Permitted Additional Indebtedness that constitutes Material Indebtedness, or any indenture or credit agreement in respect of any Permitted Refinancing Indebtedness), together with supporting information and calculations;
(e) except as set forth on Annex III hereto, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 9.1(h) of the Credit Agreement with respect to the Credit Parties Oil and Gas Property evaluated in such Reserve Report that would require the Borrower or any other Credit Party to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor;
A-1
(f) none of the Borrowing Base Properties have been Disposed of since the date of the last Borrowing Base determination except those Borrowing Base Properties set forth on Annex IV hereto; and
(g) Annex IV sets forth a list of all Borrowing Base Properties evaluated by such Reserve Report that are Collateral and demonstrating that the PV-10 of the Collateral (calculated at the time of delivery of such Reserve Report) meets the Collateral Coverage Minimum.
(Remainder of page intentionally left blank; signature page follows)
A-2
EXECUTED AND DELIVERED as of the date first set forth above.
TALOS PRODUCTION LLC | ||
By: | ||
Name: | ||
Title: |
A-3
EXHIBIT B TO
CREDIT AGREEMENT
FORM OF
NOTICE OF BORROWING
JPMORGAN CHASE BANK, N.A.
712 Main Street
Houston, Texas 77002
Attention: Jo Linda Papadakis
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 10, 2018, among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower), the Lenders from time to time party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMORGAN CHASE BANK, N.A., NATIXIS, NEW YORK BRANCH, THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as Issuing Banks, and the other Persons from time to time party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.3 of the Credit Agreement that it requests a Borrowing under the Credit Agreement, and in that connection sets forth below the terms on which such Borrowing is requested to be made:
(A) | The aggregate principal amount of Borrowing: |
(B) | The date of Borrowing 1 (which is a Business Day): |
(C) | The type of Borrowing: 2 |
(D) | Interest Period (if LIBOR Borrowing): 3 |
(E) | The location and number of the Account to which funds are to be disbursed: |
1 | Date of Notice of Borrowing: To be submitted (A) prior to 1:00 p.m. (New York City time) at least three (3) Business Days prior to each Borrowing of Loans if such Loans are to be initially LIBOR Loans; (B) prior to 11:00 a.m. (New York City time) on the date of each Borrowing of Loans that are to be ABR Loans; or (C) prior to 1:00 p.m. (New York City time) on the date of each Borrowing of Loans that are to be Swingline Loans. |
2 | Specify a LIBOR Borrowing, an ABR Borrowing or Swingline Borrowing. |
3 | The Interest Period applicable to a LIBOR Borrowing shall be subject to the definition of Interest Period in the Credit Agreement. If no Interest Period is selected, the Borrower shall be deemed to have selected an Interest Period of one months duration. |
B-1
TALOS PRODUCTION LLC | ||
By: | ||
Name: | ||
Title: |
B-2
EXHIBIT C TO
CREDIT AGREEMENT
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this Guarantee ), dated as of May 10, 2018, by and among TALOS ENERGY INC., a Delaware corporation ( Holdings ), TALOS PRODUCTION LLC, a Delaware limited liability company (the Borrower), each Legacy Blocker Entity, the Domestic Subsidiaries of the Borrower listed on the signature page hereof (together with Holdings, the Borrower and each Legacy Blocker Entity, each a Guarantor and collectively, the Guarantors ), and JPMORGAN CHASE BANK, N.A., as collateral agent for the Secured Parties referred to below (in such capacity, together with any successor thereto, the Collateral Agent ).
WITNESSETH:
WHEREAS, Holdings, the Borrower, the Lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis New York Branch and The Toronto-Dominion Bank, New York Branch, each as an Issuing Bank and the other Persons from time to time party thereto, have entered into a Credit Agreement, dated as of May 10, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), providing for the making of Loans, the issuance of Letters of Credit for the account of the Borrower and the extension of credit in the form of Swingline Loans to the Borrower;
WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the account of, and the extension of credit in the form of Swingline Loans to, the Borrower under the Credit Agreement that each Guarantor shall have executed and delivered this Guarantee; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by, the issuance of Letters of Credit for the account of, and the extension of credit in the form of Swingline Loans to, the Borrower, and accordingly desires to execute this Guarantee in order to satisfy the conditions described in the preceding paragraph and to induce the Lenders to make Loans to, each Issuing Bank to issue Letters of Credit for the account of, and the Swingline Lender to extend credit in the form of Swingline Loans to, the Borrower.
WHEREAS, the Borrower hereby joins this Guarantee to guarantee unconditionally the due and punctual payment and performance of the Obligations comprising Hedging Obligations under any Secured Hedge Transactions (but excluding, for the avoidance of doubt, any Excluded Hedge Obligation) between a Hedge Bank and any other Guarantor or any Restricted Subsidiary of the Borrower or Cash Management Obligations under any Secured Cash Management Agreements between a Cash Management Bank and any other Guarantor or any Restricted Subsidiary of the Borrower (including, in each case, any extensions, modifications, substitutions, amendments and renewals of any or all of such Obligations).
1. | DEFINITIONS |
Capitalized terms used herein shall have the meanings assigned to them in the Credit Agreement, unless otherwise defined herein. References to this Guarantee shall mean this Guarantee, including all amendments, modifications and supplements and any annexes, exhibits and schedules to any of the foregoing, and shall refer to this Guarantee as the same may be in effect at the time such reference becomes operative. The rules of construction specified in Section 1.2 of the Credit Agreement also apply to this Guarantee.
2. | THE GUARANTY |
(a) Guaranty of Guaranteed Obligations . (i) Each Guarantor other than the Borrower unconditionally guarantees to the Collateral Agent, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations other than the Excluded Hedge Obligations and (ii) the Borrower joins this Guarantee to guarantee unconditionally to the Collateral Agent, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations comprising Hedging Obligations under any Secured Hedge Transactions (but excluding, for the avoidance of doubt, any Excluded Hedge Obligation) between a Hedge Bank and any other Guarantor or any Restricted Subsidiary of the Borrower or Cash Management Obligations under any Secured Cash Management Agreements between a Cash Management Bank and any other Guarantor or any Restricted Subsidiary of the Borrower (collectively, the Guaranteed Obligations ) for the ratable benefit of the Secured Parties (which, for the avoidance of doubt, are each of the following: the Administrative Agent, the Collateral Agent, each Issuing Bank, each Lender, each Hedge Bank that is party to any Secured Hedge Transaction, each Cash Management Bank that is a party to any Secured Cash Management Agreement and each sub-agent appointed pursuant to Section 12.2 of the Credit Agreement by the Administrative Agent with respect to matters relating to the Credit Documents or by the Collateral Agent with respect to matters relating to any Security Document). Anything herein or any other Credit Document or other agreement evidencing the Guaranteed Obligations to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under any other Credit Document or other agreement evidencing the Guaranteed Obligations shall in no event exceed the amount that can be guaranteed by such Guarantor under the Bankruptcy Code or any applicable federal and state Requirements of Law relating to fraudulent conveyances, fraudulent transfers or the insolvency of debtors. Each Guarantor further agrees that the Guaranteed Obligations may be extended, modified, amended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension, modification, amendment or renewal of any Guaranteed Obligation. Each Guarantor waives presentment to, demand of payment from and protest to the Borrower or any other Credit Party of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.
(b) Guaranty of Payment . Each Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of the Guaranteed Obligations or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other person.
-2-
(c) No Limitations . Except for termination or release of a Guarantors obligations hereunder as expressly provided for in Section 5(g) , the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise (other than defense of payment or performance). Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by: (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to exercise or enforce any right or remedy under the provisions of any Credit Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Credit Document or any other agreement, including with respect to any other Guarantor under this Guarantee; (iii) the release of, or the failure to perfect any security interest in, or the exchange, substitution, release or any impairment of, any security held by the Collateral Agent or any other Secured Party for the Guaranteed Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations; (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the payment in full in cash or immediately available funds of all the Guaranteed Obligations); (vi) any illegality, lack of validity or enforceability of any Guaranteed Obligation; (vii) any change in the corporate existence, structure or ownership of the Borrower, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower or its assets or any resulting release or discharge of any Guaranteed Obligation (other than the payment in full in cash or immediately available funds of all the Guaranteed Obligations); (viii) the existence of any claim, setoff or other rights that the Guarantor may have at any time against the Borrower, the Collateral Agent, the Administrative Agent or any other corporation or person, whether in connection herewith or any unrelated transactions, provided that nothing herein will prevent the assertion of any such claim by separate suit or compulsory counterclaim; and (ix) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent that might otherwise constitute a defense to, or a legal or equitable discharge of, the Borrower or any other Credit Party or any other guarantor or surety. Each Guarantor expressly authorizes the Collateral Agent, on behalf of the Secured Parties to take and hold security for the payment and performance of the Guaranteed Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Guaranteed Obligations, all without affecting the obligations of any Guarantor hereunder. To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any other Guarantor or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other Guarantor, other than the payment in full in cash or immediately available funds of all the Guaranteed Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment
-3-
of any such security in lieu of foreclosure, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with the Borrower or any other Credit Party or exercise any other right or remedy available to them against the Borrower or any other Credit Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash or immediately available funds. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against any other Guarantor, as the case may be, or any security.
(d) Reinstatement . Notwithstanding the provisions of Section 5(g)(i) , each Guarantor agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation is rescinded or must otherwise be restored or returned by the Collateral Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any other Credit Party, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any other Credit Party or any substantial part of its property, or otherwise, all as though such payment had not been made.
(e) Agreement To Pay; Subrogation . In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Credit Party to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent the amount of such unpaid Guaranteed Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against the Borrower or any other Credit Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be fully subordinated to the indefeasible payment in full in cash of the Guaranteed Obligations (except for contingent indemnities and cost and expense reimbursement obligations to the extent no claim has been made).
(f) Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers and each other Credit Partys financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Collateral Agent nor any other Secured Party will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.
(g) Holdings and Legacy Blocker Entities . The Obligations of Holdings and each Legacy Blocker Entity under this Guarantee are limited recourse obligations payable solely from the Collateral pledged by Holdings or any Legacy Blocker Entity pursuant to the Collateral Agreement and, following realization of the Collateral pledged by Holdings or any Legacy Blocker Entity (whether through sale, foreclosure or otherwise) and the application thereof in accordance with this Guarantee and the Collateral Agreement, such Obligations of Holdings or of such Legacy Blocker Entity hereunder shall be extinguished and shall not revive.
-4-
3. | FURTHER ASSURANCES |
Each Guarantor agrees, upon the written request of the Collateral Agent, to execute and deliver to the Collateral Agent, from time to time, any additional instruments or documents reasonably considered necessary by the Collateral Agent to cause this Guarantee to be, become or remain valid and effective in accordance with its terms.
4. | PAYMENTS FREE AND CLEAR OF TAXES |
Each Guarantor agrees that such Guarantor will perform or observe all of the terms, covenants and agreements that Section 5.4 of the Credit Agreement requires such Guarantor to perform or observe, subject to the qualifications set forth therein.
5. | OTHER TERMS |
(a) Entire Agreement . This Guarantee, together with the other Credit Documents, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements relating to a guaranty of the loans and advances under the Credit Documents.
(b) Headings . The headings in this Guarantee are for convenience of reference only and are not part of the substance of this Guarantee.
(c) Severability . Whenever possible, each provision of this Guarantee shall be interpreted in such a manner to be effective and valid under applicable law, but if any provision of this Guarantee shall be prohibited by or invalid under applicable law in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guarantee and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
(d) Notices . All communications and notices hereunder shall (except as otherwise expressly permitted herein) be given as provided in Section 13.2 of the Credit Agreement.
(e) Successors and Assigns . Whenever in this Guarantee any Guarantor is referred to, such reference shall be deemed to include the permitted successors and assigns of such party (in accordance with the terms of the Credit Agreement); and all covenants, promises and agreements by any Guarantor that are contained in this Guarantee shall bind and inure to the benefit of its respective permitted successors and assigns.
(f) No Waiver; Cumulative Remedies; Amendments . No failure or delay by the Collateral Agent in exercising any right, power or remedy hereunder shall operate as a waiver hereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the Collateral Agent hereunder are cumulative and are not exclusive of
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any rights, powers or remedies that it would otherwise have. No waiver of any provision of this Guarantee or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by this Section 5(f) , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of any Loan, the issuance of any Letter of Credit or any extension of credit in the form of Swingline Loans shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Collateral Agent or any other Secured Party may have had notice or knowledge of such Default or Event of Default at the time. No notice or demand on any Guarantor in any case shall entitle any Guarantor to any other or further notice or demand in similar or other circumstances. When making any demand hereunder against any of the Guarantors, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on the Borrower or any other Guarantor or guarantor, and any failure by the Collateral Agent or any other Secured Party to make any such demand or to collect any payments from the Borrower or any such other Guarantor or guarantor or any release of the Borrower or such other Guarantor or guarantor shall not relieve any of the Guarantors in respect of which a demand or collection is not made or any of the Guarantors not so released of their several obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Collateral Agent or any other Secured Party against any of the Guarantors. For the purposes hereof demand shall include the commencement and continuance of any legal proceedings. Neither this Guarantee nor any provision hereof may be waived, amended or modified (other than termination of this Guarantee pursuant to Section 5(g) ) except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Guarantor or Guarantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 13.1 of the Credit Agreement.
(g) Termination and Release .
(i) This Guarantee shall terminate, when all the Guaranteed Obligations (other than (i) Hedging Obligations in respect of any Secured Hedge Transactions, (ii) Cash Management Obligations in respect of any Secured Cash Management Agreements and (iii) any contingent or indemnification obligations not then due) have been paid in full in cash or immediately available funds, all Commitments have terminated or expired and no Letter of Credit shall be outstanding that is not Cash Collateralized or back-stopped ( Payment in Full ).
(ii) A Guarantor shall automatically be released from its obligations hereunder upon the consummation of any transaction permitted by the Credit Agreement resulting in such Guarantor ceasing to constitute a Restricted Subsidiary or otherwise becoming an Excluded Subsidiary.
(iii) In connection with any release pursuant to this Section 5(g) , the Collateral Agent shall execute and deliver to the Borrower, at the Borrowers expense, all documents that the Borrower shall reasonably request to evidence such release. Any execution and delivery of documents pursuant to this Section 5(g) shall be without recourse to or warranty by the Collateral Agent.
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(h) Counterparts . This Guarantee may be executed in any number of counterparts (including by facsimile or other electronic transmission, i.e. a pdf or a tif), each of which shall collectively and separately constitute one and the same agreement.
6. | INDEMNITY. SUBROGATION AND SUBORDINATION |
(a) Indemnity and Subrogation . In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 6(c) ), the Borrower agrees that (i) in the event a payment shall be made by any Guarantor under this Guarantee in respect of any Obligation of the Borrower, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment and (ii) in the event any assets of any Guarantor shall be sold pursuant to this Guarantee or any other Security Document to satisfy in whole or in part an Obligation of the Borrower, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.
(b) Contribution and Subrogation . Each Guarantor (a Contributing Guarantor ) agrees (subject to Section 6(c) ) that, in the event a payment shall be made by any other Guarantor hereunder in respect of any Obligation or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy any Obligation owed to any Secured Party and such other Guarantor (the Claiming Guarantor ) shall not have been fully indemnified by the Borrower as provided in Section 6(a) , the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as applicable, in each case multiplied by a fraction of which the numerator shall be the net worth of such Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 9.11 of the Credit Agreement, the date of the supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 6(b) shall be subrogated to the rights of such Claiming Guarantor under Section 6(a) to the extent of such payment. The provisions of this Section 6(b) shall in no respect limit the obligations and liabilities of any Guarantor to the Collateral Agent and the other Secured Parties, and each Guarantor shall remain liable to the Collateral Agent and the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.
(c) Subordination . Notwithstanding any provision of this Guarantee to the contrary, all rights of the Guarantors under Sections 6(a) and 6(b) and all other rights of indemnity, contribution or subrogation of any Guarantor under applicable law or otherwise shall be fully subordinated to Payment in Full of the Guaranteed Obligations (other than contingent or unliquidated obligations or liabilities to the extent no claim therefor has been made). Notwithstanding any payment or payments made by any of the Guarantors hereunder or any setoff or appropriation or application of funds of any of the Guarantors by any Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any other Secured Party against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by any Secured Party for the payment of the Obligations until Payment in Full of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to
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seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder until Payment in Full of the Guaranteed Obligations. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to Payment in Full of the Guaranteed Obligations, such amount shall be held by such Guarantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be paid to the Collateral Agent to be credited and applied against the Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 6(a) and 6(b) (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.
7. | GOVERNING LAW; JURISDICTION; VENUE; WAIVER OF JURY TRIAL; CONSENT TO SERVICE OF PROCESS |
(a) The terms of Sections 13.12, 13.13 and 13.15 of the Credit Agreement with respect to governing law, submission of jurisdiction, venue and waiver of trial by jury are incorporated herein by reference, mutatis mutandis , and the parties hereto agree to such terms (and, for the avoidance of doubt, as incorporated into this Guarantee, Section 13.15 of the Credit Agreement shall apply to each party hereto).
(b) Each party to this Guarantee irrevocably consents to service of process in the manner provided for notices in Section 5(d) . Nothing in this Guarantee will affect the right of any party to this Guarantee to serve process in any other manner permitted by law.
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8. | RIGHT OF SETOFF |
If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender to or for the credit or the account of any Guarantor against any of and all the obligations of such Guarantor now or hereafter existing under this Guarantee owed to such Lender, irrespective of whether or not such Lender shall have made any demand under this Guarantee and although such obligations may be unmatured. Notwithstanding anything to the contrary contained herein, no Lender or any of its respective Affiliates shall have a right to setoff and apply any deposits held by, or other Indebtedness owing by, such Lender or any of its Affiliates to or for the credit or the account of any Subsidiary of a Credit Party that (i) is not a United States person within the meaning of Section 7701(a)(30) of the Code or (ii) is a Subsidiary of a Person described in clause (i), unless (in either case) such Subsidiary is not a direct or indirect subsidiary of Holdings. Each Lender agrees promptly to notify the Borrower, the Collateral Agent and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section 8 are in addition to other rights and remedies (including other rights of setoff) that such Lender may have.
9. | ADDITIONAL SUBSIDIARIES |
Upon execution and delivery by the Collateral Agent and any Subsidiary of the Borrower that is required to become a party hereto by Section 9.11 of the Credit Agreement of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any such instrument shall not require the consent of any other party to this Guarantee. The rights and obligations of each party to this Guarantee shall remain in full force and effect notwithstanding the addition of any new party to this Guarantee. Each reference to Guarantor in this Guarantee shall be deemed to include such Subsidiary.
(Signatures begin on following page)
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be executed and delivered as of the date first above written.
TALOS ENERGY INC., as Holdings,
TALOS PRODUCTION LLC, as the Borrower,
AIF VII (TALOS DC), LLC, as a Legacy Blocker Entity,
ANRP (TALOS DC), LLC, as a Legacy Blocker Entity,
AP OVERSEAS TALOS HOLDINGS (DC I), LLC, as a Legacy Blocker Entity,
AP OVERSEAS TALOS HOLDINGS (DC II), LLC, as a Legacy Blocker Entity,
AP OVERSEAS TALOS HOLDINGS (DC III), LLC, as a Legacy Blocker Entity,
AP OVERSEAS TALOS HOLDINGS (DC IV), LLC, as a Legacy Blocker Entity,
NEW TALOS SUB INC., as a Legacy Blocker Entity,
RIVERSTONE V NON-U.S. TALOS CORP, as a Legacy Blocker Entity,
TALOS ENERGY OFFSHORE LLC, as Subsidiary Guarantor,
TALOS ENERGY OPERATING GP LLC, as Subsidiary Guarantor,
TALOS ENERGY OPERATING COMPANY LLC, as Subsidiary Guarantor,
TALOS PRODUCTION FINANCE INC., as Subsidiary Guarantor,
TALOS ERT LLC, as Subsidiary Guarantor,
CKB PETROLEUM, LLC, as Subsidiary Guarantor,
TALOS ENERGY INTERNATIONAL LLC, as Subsidiary Guarantor,
TALOS GULF COAST LLC, as Subsidiary Guarantor,
TALOS GULF COAST ONSHORE LLC, as Subsidiary Guarantor,
TALOS GULF COAST OFFSHORE LLC, as Subsidiary Guarantor,
TALOS MANAGEMENT INTERMEDIARY LLC, as Subsidiary Guarantor,
TALOS MANAGEMENT HOLDINGS LLC, as Subsidiary Guarantor,
TALOS ENERGY LLC, as Subsidiary Guarantor,
TALOS ENERGY PHOENIX LLC, as Subsidiary Guarantor,
TALOS ENERGY HOLDINGS LLC, as Subsidiary Guarantor,
TALOS ARGO INC., as Subsidiary Guarantor,
TALOS PETROLEUM LLC, as Subsidiary Guarantor,
STONE ENERGY HOLDING, L.L.C., as Subsidiary Guarantor, and
TALOS RESOURCES LLC, as Subsidiary Guarantor
By: | ||
Name: Michael L. Harding II | ||
Title: Executive Vice President, Chief Financial Officer and Treasurer |
S-1 | -Signature Page to Guarantee- |
Accepted and Agreed to: | ||
JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent | ||
By: | ||
Name: Jo Linda Papadakis | ||
Title: Authorized Officer |
S-2 | -Signature Page to Guarantee- |
Exhibit I
to Guarantee
SUPPLEMENT NO. _______ dated as of _______ (this Supplement ), to the Guarantee Agreement dated as of May 10, 2018 (the Guarantee ), among TALOS ENERGY INC., a Delaware corporation ( Holdings ), the Borrower, each Domestic Subsidiary of the Borrower (defined below) party thereto (the Existing Guarantors ) and JPMORGAN CHASE BANK, N.A., as collateral agent (in such capacity, the Collateral Agent ) for the Lenders (as defined therein).
A. Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among Holdings, Talos Production LLC, a Delaware limited liability company (the Borrower ), the Lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and the Swingline Lender, and JPMorgan Chase Bank, N.A., Natixis, New York Branch and The Toronto-Dominion Bank, New York Branch, each as an Issuing Bank, and each other Issuing Bank from time to time party thereto.
B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guarantee, as applicable.
C. The Existing Guarantors have entered into the Guarantee in order to induce the Lenders to make Loans, each Issuing Bank to issue Letters of Credit and the Swingline Lender to extend credit in the form of Swingline Loans. Section 9 of the Guarantee provides that additional Subsidiaries may become Guarantors under the Guarantee by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary of the Borrower (the New Subsidiary ) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guarantee in order to induce the Lenders to make additional Loans, each Issuing Bank to issue additional Letters of Credit and the Swingline Lender to extend additional credit in the form of Swingline Loans, and as consideration for Loans previously made, Letters of Credit previously issued and credit previously extended in the form of Swingline Loans.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 9 of the Guarantee, the New Subsidiary by its signature below becomes a Guarantor under the Guarantee with the same force and effect as if originally named therein as a Guarantor and the New Subsidiary hereby agrees to all the terms and provisions of the Guarantee applicable to it as a Guarantor thereunder. In furtherance of the foregoing, the New Subsidiary does hereby guarantee to the Collateral Agent the due and punctual payment of the Guaranteed Obligations as set forth in the Guarantee. Each reference to a Guarantor in the Guarantee and in this Supplement shall be deemed to include the New Subsidiary. The Guarantee is hereby incorporated herein by reference.
Ex I - 1
SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other similar laws affecting creditors rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.
SECTION 3. This Supplement may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary. Delivery of an executed signature page to this Supplement by facsimile or other electronic transmission, i.e. a pdf or a tif shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In the event any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guarantee shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 5(d) of the Guarantee.
SECTION 8. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable and documented fees, disbursements and other charges of counsel to the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary has duly executed this Supplement to the Guarantee as of the day and year first above written.
(Remainder of page left intentionally blank.)
Ex I - 2
[Name of New Subsidiary] | ||||
By: | ||||
Name: | ||||
Title: |
Ex I - 3
EXHIBIT D-1
TO CREDIT AGREEMENT
WHEN RECORDED OR FILED,
PLEASE RETURN TO:
Mayer Brown LLP
700 Louisiana Street, Ste 3400
Houston, TX 77002
Attn: Karl Brandt
Phone: 713-238-2735
Space above for County Recorders Use |
DEED OF TRUST, ASSIGNMENT OF PRODUCTION,
SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT
FROM
TALOS ERT LLC
(Organizational ID: 4098427)
TO
RONALD L. DIERKER, TRUSTEE
FOR THE BENEFIT OF
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent for the benefit of itself
and the Other Secured Persons
A CARBON, PHOTOGRAPHIC, OR OTHER REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.
A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT. IN CERTAIN STATES, A POWER OF SALE MAY ALLOW THE TRUSTEE OR THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS INSTRUMENT .
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.
THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.
THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.
THIS INSTRUMENT COVERS MINERALS, AS EXTRACTED COLLATERAL AND OTHER SUBSTANCES OF VALUE THAT MAY BE EXTRACTED FROM THE EARTH (INCLUDING WITHOUT LIMITATION OIL AND GAS) AND THE ACCOUNTS RELATED THERETO, WHICH WILL BE FINANCED AT THE WELLHEADS OF THE WELL OR WELLS LOCATED ON THE PROPERTIES DESCRIBED IN EXHIBIT A HERETO. THIS FINANCING STATEMENT MAY BE FILED OR FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS, UNIFORM COMMERCIAL CODE RECORDS OR SIMILAR RECORDS OF THE RECORDERS OF THE COUNTIES LISTED ON THE EXHIBITS HERETO. THE MORTGAGOR HAS AN INTEREST OF RECORD IN THE REAL ESTATE AND IMMOVABLE PROPERTY CONCERNED, WHICH INTEREST IS DESCRIBED IN THE EXHIBITS ATTACHED HERETO.
PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS THAT ARE OR ARE TO BECOME AFFIXED TO OR FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN THE EXHIBIT HERETO. THIS FINANCING STATEMENT MAY BE FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS, UNIFORM COMMERCIAL CODE RECORDS OR SIMILAR RECORDS OF EACH COUNTY IN WHICH SAID LAND OR ANY PORTION THEREOF IS LOCATED OR WHICH LIES SHOREWARD OF ANY MORTGAGED PROPERTY (I.E., TO THE EXTENT A MORTGAGED PROPERTY LIES OFFSHORE WITHIN THE PROJECTED SEAWARD EXTENSION OF THE RELEVANT PARISH BOUNDARIES). THE MORTGAGOR IS THE OWNER OF RECORD INTEREST IN THE REAL ESTATE CONCERNED. THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS OR THE UNIFORM COMMERCIAL CODE RECORDS.
TABLE OF CONTENTS
Page | ||||||
SECTION 1 | ||||||
Definitions | ||||||
1.1. | Terms Defined Above | 2 | ||||
1.2. | UCC and Other Defined Terms | 2 | ||||
1.3. | Definitions | 2 | ||||
SECTION 2 | ||||||
Grant of Lien and Obligations | ||||||
2.1. | Grant of Liens | 4 | ||||
2.2. | Grant of Security Interest | 6 | ||||
2.3. | Obligations | 6 | ||||
2.4. | Fixture Filing, Etc. | 6 | ||||
2.5. | Pro Rata Benefit | 7 | ||||
2.6. | Excluded Properties | 7 | ||||
SECTION 3 | ||||||
Assignment of PRODUCTION | ||||||
3.1. | Assignment of Production | 8 | ||||
3.2. | Event of Default | 8 | ||||
3.3. | No Liability of the Mortgagee in Collecting | 9 | ||||
3.4. | No Modification of Payment Obligations | 9 | ||||
3.5. | Status of Assignment | 9 | ||||
SECTION 4 | ||||||
Representations, Warranties and Covenants | ||||||
4.1. | Title | 10 | ||||
4.2. | Defend Title | 10 | ||||
4.3. | Not a Foreign Person | 10 | ||||
4.4. | Revenue and Cost Bearing Interest | 10 | ||||
SECTION 5 | ||||||
Rights and Remedies | ||||||
5.1. | Event of Default | 11 | ||||
5.2. | Foreclosure and Sale | 11 | ||||
5.3. | Substitute Trustees and Agents | 12 | ||||
5.4. | Judicial Foreclosure; Receivership | 12 | ||||
5.5. | Foreclosure for Installments | 13 | ||||
5.6. | Separate Sales | 13 |
i
5.7. | Possession of Mortgaged Property | 13 | ||||
5.8. | Occupancy After Foreclosure | 13 | ||||
5.9. | Remedies Cumulative, Concurrent and Nonexclusive | 14 | ||||
5.10. |
Discontinuance of Proceedings |
14 | ||||
5.11. |
No Release of Obligations |
14 | ||||
5.12. |
Release of and Resort to Collateral |
14 | ||||
5.13. |
Waiver of Redemption, Notice and Marshalling of Assets, Etc . |
15 | ||||
5.14. |
Application of Proceeds |
15 | ||||
5.15. |
Resignation of Operator |
15 | ||||
5.16. |
Indemnity |
15 | ||||
5.17. |
Failure to Perform |
16 | ||||
SECTION 6 | ||||||
The Trustee. | ||||||
6.1. | Duties, Rights, and Powers of Trustee | 16 | ||||
6.2. | Successor Trustee | 16 | ||||
6.3. | Retention of Moneys | 17 | ||||
SECTION 7 | ||||||
Miscellaneous | ||||||
7.1. | Releases | 17 | ||||
7.2. | Severability | 18 | ||||
7.3. | Successors and Assigns | 18 | ||||
7.4. | Satisfaction of Prior Encumbrance | 18 | ||||
7.5. | Application of Payments to Certain Obligations | 18 | ||||
7.6. | Nature of Covenants | 18 | ||||
7.7. | Notices | 18 | ||||
7.8. | Expenses | 18 | ||||
7.9. | Counterparts | 18 | ||||
7.10. |
Governing Law |
19 | ||||
7.11. |
Financing Statement; Fixture Filing |
19 | ||||
7.12. |
Filing of Financing Statements |
19 | ||||
7.13. |
Limit on Obligations and Collateral |
20 | ||||
7.14. |
References |
20 |
Exhibit A Hydrocarbon Interests
ii
THIS DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (this Mortgage ) is entered into as of May 10, 2018 (the Effective Date ) by TALOS ERT LLC , a Delaware limited liability company (the Mortgagor ), in favor of Ronald L. Dierker, as Trustee for the benefit of JPMORGAN CHASE BANK, N.A. , in its capacity as Collateral Agent (as defined in the Credit Agreement (as hereinafter defined), together with its successors and assigns in such capacity, the Mortgagee ), for its benefit and the benefit of the Other Secured Persons (as hereinafter defined) with respect to all Mortgaged Properties (as hereinafter defined) and with respect to all UCC Collateral (as hereinafter defined).
R E C I T A L S
A. Talos Energy Inc., a Delaware corporation ( Holdings ), Talos Production LLC, a Delaware limited liability company and a wholly-owned subsidiary of Holdings (the Borrower ), the lenders from time to time party thereto (the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, an Issuing Bank and Swingline Lender (as each such term is defined in the Credit Agreement) and the other persons from time to time party thereto executed a Credit Agreement dated as of even date herewith (such agreement, as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement ) pursuant to which, upon the terms and conditions stated therein, the Lenders agreed to make loans and other extensions of credit to the Borrower.
B. The Borrower and its Restricted Subsidiaries and certain Hedge Banks have or may enter into Secured Hedge Transactions (as defined in the Credit Agreement).
C. The Borrower and its Restricted Subsidiaries and certain Cash Management Banks have or may enter into Secured Cash Management Agreements (as defined in the Credit Agreement).
D. The Credit Agreement, the Secured Hedge Transactions and the Secured Cash Management Agreements are collectively referred to herein as the Secured Transaction Documents .
E. The Mortgagor, each of the other signatories thereto, and Mortgagee, executed a Guarantee dated as of even date herewith (such agreement, as may from time to time be amended, restated, supplemented or otherwise modified, the Guarantee ) pursuant to which, upon terms and conditions stated therein, the Mortgagor has agreed to guarantee the Obligations under the Secured Transaction Documents.
F. The Mortgagee and the Other Secured Persons have conditioned their obligations under the Secured Transaction Documents upon the execution and delivery by the Mortgagor of this Mortgage, and the Mortgagor has agreed to enter into this Mortgage to secure all obligations owing to the Mortgagee and the Other Secured Persons under the Secured Transaction Documents and the other Credit Documents.
G. The Mortgagor is a Subsidiary of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and the other Credit Documents and is willing to execute and deliver this Mortgage in order to induce the Lenders to make the Loans and to extend other credit and to induce the Other Secured Persons Lenders to make their respective extensions of credit thereunder.
1
H. Therefore, in order to comply with the terms and conditions of the Secured Transaction Documents and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Mortgagor hereby agrees as follows:
SECTION 1
DEFINITIONS
1.1. Terms Defined Above . As used in this Mortgage, each term defined above has the meaning indicated above.
1.2. UCC and Other Defined Terms . Each capitalized term used in this Mortgage and not defined in this Mortgage shall have the meaning ascribed to such term in the Credit Agreement. Any capitalized term not defined in either this Mortgage or the Credit Agreement shall have the meaning ascribed to such term in the Applicable UCC. The rules of construction and other interpretive provisions specified in Sections 1.2, 1.5, 1.6 and 1.7 of the Credit Agreement shall apply to this Mortgage, including terms defined in the preamble and recitals to this Mortgage.
1.3. Defi nitions .
Applicable UCC means the provisions of the Uniform Commercial Code presently in effect in the jurisdiction in which the relevant UCC Collateral is situated (or is offshore of) or that otherwise is applicable to the creation or perfection of the Liens described herein or the rights and remedies of Mortgagee under this Mortgage.
Collateral means collectively all the Mortgaged Property and all the UCC Collateral.
Event of Default has the meaning ascribed to such term in Section 5.1 .
Future Advances means future obligations and future advances that the Mortgagee or any Other Secured Person may make pursuant to any Secured Transaction Document.
Hydrocarbon Interests means all rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to the oil and gas leases, oil, gas and mineral leases, wellbore interests, and/or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, and other interests and estates and the lands and premises covered or affected thereby, including any reserved or residual interests of whatever nature, in each case, that are described on Exhibit A .
Hydrocarbons means all oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom and all other minerals that may be produced and saved from or attributable to the Oil and Gas Properties, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests or other properties constituting Oil and Gas Properties.
2
Indemnified Parties means the Trustee, the Mortgagee, each Other Secured Person and their Related Parties.
Mortgaged Property means the Oil and Gas Properties and other properties and assets described in Section 2.1(a) through Section 2.1(f) .
Obligations has the meaning assigned to such term in Section 2.3 .
Oil and Gas Properties means (a) the Hydrocarbon Interests; (b) the properties now or hereafter pooled or unitized with the Hydrocarbon Interests; (c) all presently existing or future unitization, communitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules or other official acts of any Governmental Authority and units created solely among working interest owners pursuant to operating agreements or otherwise) that may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including, without limitation, production sharing contracts and agreements, production sales contracts, farmout agreements, farm-in agreements, area of mutual interest agreements, and equipment leases, described or referred to in this Mortgage or that relate to any of the Hydrocarbon Interests or interests in the Hydrocarbon Interests or the production, sale, purchase, exchange, processing, handling, storage, transporting or marketing of the Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and that may be produced and saved or attributable to the Hydrocarbon Interests, the lands pooled or unitized therewith and the Mortgagors interests therein, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests, the lands pooled or unitized therewith and the Mortgagors interests therein; and (f) all tenements, hereditaments, appurtenances and properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests, the rights, titles, interests and estates described or referred to above, that are now owned or that are hereafter acquired by the Mortgagor, including, without limitation, any and all property, real or personal, immoveable or moveable, 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 or the lands pooled or unitized therewith, 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, gas processing plants, pipeline 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, servitudes, licenses and other surface and subsurface rights, together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
Other Secured Persons means each Lender, each Agent under the Credit Agreement, each Issuing Bank under the Credit Agreement, each Hedge Bank, each Cash Management Bank and each sub-agent pursuant to Section 12 of the Credit Agreement.
Permitted Encumbrances means all Liens permitted under Section 10.2 of the Credit Agreement.
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Termination Date shall mean the date on which all Obligations are paid in full (other than Hedging Obligations under any Secured Hedge Transactions, Cash Management Obligations under any Secured Cash Management Agreements or contingent indemnification obligations not then due) and the Total Commitment and all Letters of Credit are terminated (other than Letters of Credit that have been cash collateralized on terms reasonably satisfactory to each Issuing Bank in respect thereof or back-stopped following the termination of the Commitments).
Trustee means Ronald L. Dierker of Harris County, Texas, 77002 whose address for notice hereunder is c/o JPMorgan Chase Bank, N.A., 712 Main Street, 5th Floor, Houston, Texas 77002, and any successors and substitutes in trust hereunder.
UCC Collateral means the property and other assets described in Section 2.2 .
SECTION 2
GRANT OF LIEN AND OBLIGATIONS
2.1. Grant of Liens . To secure payment of the Obligations when due, the Mortgagor does by these presents hereby:
GRANT, BARGAIN, SELL, WARRANT, MORTGAGE, ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE and CONVEY to the Trustee, for the use and benefit of the Mortgagee and the Other Secured Persons, all of the following properties, rights and interests that are located in the State of Texas or within the offshore area over which the United States of America asserts jurisdiction and to which the laws of the State of Texas are made applicable as a matter of federal law with respect to this Mortgage and/or lien or security interests created hereby, TO HAVE AND TO HOLD unto the Trustee forever to secure the Obligations:
(a) All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to the Oil and Gas Properties.
(b) All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to all geological, geophysical, engineering, accounting, title and other technical or business data concerning the Oil and Gas Properties or the Hydrocarbons, and all books, files, records, magnetic media, computer records and other forms of recording or obtaining access to such data.
(c) All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to all Hydrocarbons.
(d) Any property that may from time to time hereafter, by delivery or by writing of any kind, be subjected to the Liens hereof by the Mortgagor or by anyone on the Mortgagors behalf; and the Trustee and/or the Mortgagee are hereby authorized to receive the same at any time as additional security hereunder.
(e) All of the rights, titles and interests of every nature whatsoever now owned or hereafter acquired by the Mortgagor in and to the Oil and Gas Properties and all other rights, titles, interests and estates and every part and parcel thereof, including, without limitation, any
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rights, titles, interests and estates as the same may be enlarged by the discharge of any payments out of production or by the removal of any charges or Permitted Encumbrances or other Liens to which any of such Oil and Gas Properties or other rights, titles, interests or estates are subject or otherwise; all rights of the Mortgagor to Liens securing payment of proceeds from the sale of production from any of such Oil and Gas Properties, together with any and all renewals and extensions of any of such related rights, titles, interests or estates; all contracts and agreements supplemental to or amendatory of or in substitution for the contracts and agreements described or mentioned above; and any and all additional interests of any kind hereafter acquired by the Mortgagor in and to such related rights, titles, interests or estates.
(f) All of the Mortgagors rights, titles and interests in and to all surface fees and fee estates described in Exhibit A , if any, compressor sites, settling ponds, equipment or pipe yards, office sites and all property and fixtures located thereon, whether such surface fees, fee estates, compressor sites, settling ponds, equipment or pipe yards, office sites, property and fixtures are fee simple estates, leasehold estates or otherwise, together with all present and future rights, titles, easements and estates now owned or hereafter acquired by the Mortgagor under or in connection with such interest.
It is the intention of the Mortgagor and the Mortgagee herein to cover and affect hereby all interests that the Mortgagor may now own or may hereafter acquire in and to the interests and Property described on Exhibit A , even though the Mortgagors interests or the property be incorrectly described on Exhibit A or a description of a part or all of the interests or property described on Exhibit A or the Mortgagors interests therein be omitted, and notwithstanding that the interests as specified on Exhibit A may be limited to particular lands, specified depths or particular types of property interests.
Notwithstanding any provision in this Mortgage to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition of Mortgaged Property and no Building or Manufactured (Mobile) Home is hereby encumbered by this Mortgage. As used herein, Flood Insurance Regulations shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, (iv) the Flood Insurance Reform Act of 2004 as now hereafter in effect or any successor statute thereto and (v) the Biggert Waters Flood Reform Act of 2012 as now or hereafter in effect or any successor statute thereto, and any regulations promulgated thereunder.
Any fractions or percentages specified in Exhibit A in referring to the Mortgagors interests are solely for purposes of the warranties made by the Mortgagor pursuant to Section 4.1 and Section 4.4 and shall in no manner limit the quantum of interest affected by this Section 2.1 with respect to any Oil and Gas Property or with respect to any unit or well identified on Exhibit A .
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2.2. Grant of Security Interest . To further secure payment of the Obligations when due, the Mortgagor hereby grants to the Mortgagee, for its benefit and the benefit of the Other Secured Persons, a security interest in and to all of the following (whether now or hereafter acquired by operation of law or otherwise):
(a) all As-Extracted Collateral from or attributable to the Mortgaged Property (including, without limitation, the Oil and Gas Properties described on Exhibit A );
(b) all Fixtures on the Mortgaged Property (including the Mortgaged Property described or to which reference is made herein or on Exhibit A ); and
(c) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security, guarantees and other Supporting Obligations given with respect to any of the foregoing.
2.3. Obliga tions . This Mortgage is executed and delivered by the Mortgagor to secure the payment and performance when due of the following (the Obligations ): all advances to, and debts, liabilities, obligations, covenants and duties of, any Credit Party (and any Restricted Subsidiary of the Borrower in the case of any Secured Transaction Document) arising under any Credit Document or arising otherwise with respect to any Loan or Letter of Credit or under any Secured Cash Management Agreement or under any Hedge Agreement with respect to any Secured Hedge Transaction, 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 and including interest and fees that accrue after the commencement by or against any Credit Party, Restricted Subsidiary of the Borrower or any Affiliate thereof of any proceeding under any bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the generality of the foregoing, the Obligations of the Credit Parties under the Credit Documents and the other Secured Transaction Documents (and any of their Restricted Subsidiaries to the extent they have obligations under the Credit Documents or the other Secured Transaction Documents) include the obligation (including Guarantee Obligations) to pay principal, interest, charges, expenses, fees, attorney costs, indemnities and other amounts (including reimbursement obligations for amounts drawn under Letters of Credit) payable by any Credit Party (or any Restricted Subsidiary, as the case may be) under any Credit Document or any other Secured Transaction Document (including amounts payable in respect of an early termination under Secured Hedge Transactions and any unpaid amounts owing in respect thereof). Notwithstanding the foregoing, (a) the obligations of the Borrower or any Restricted Subsidiary under any Secured Hedge Transaction and under any Secured Cash Management Agreement shall be secured and guaranteed pursuant to the Security Documents and the Guarantee only to the extent that, and for so long as, the other Obligations are so secured and guaranteed, (b) any release of Collateral or Guarantors effected in the manner permitted by this Mortgage and the other Credit Documents shall not require the consent of the holders of Hedge Obligations under Secured Hedge Transactions or of the holders of Cash Management Obligations under Secured Cash Management Agreements, and (c) in no event shall Excluded Hedge Obligations (as defined in the Guarantee) be included as Obligations hereunder.
2.4. Fixt ure Filing, Etc . Without in any manner limiting the generality of any of the other provisions of this Mortgage: (i) some portions of the goods described or to which reference is made herein are or are to become Fixtures on the land described or to which reference is made
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herein or on Exhibit A ; (ii) the security interests created hereby under applicable provisions of the Applicable UCC will attach to all As-Extracted Collateral and all other Hydrocarbons; (iii) this Mortgage may be filed of record in the real estate records, Uniform Commercial Code records or other appropriate records as a financing statement; and (iv) the Mortgagor is the record owner of the real estate or interests in the real estate or immoveable property comprised of the Mortgaged Property.
2.5. Pro Rata Benefit . This Mortgage is executed and granted for the pro rata benefit and security of the Mortgagee and the Other Secured Persons to secure the Obligations for so long as same remains unpaid and thereafter until the Termination Date.
2.6. Excl uded Properties . Notwithstanding anything herein to the contrary, in no event shall the Mortgaged Property include, and the Mortgagor shall not be deemed to have granted a Lien under this Mortgage in, any of the Mortgagors right, title or interest in any of the following property:
(a) (i) any property to the extent that such grant of a Lien on such property is prohibited by any Requirement of Law or requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law, (ii) any property to the extent that such grant of a Lien on such property is (x) prohibited by, or constitutes a breach or default under, or results in (or would result in) the termination of (or would give any other party a right of termination of), or requires any consent not obtained under, any Contractual Requirement or equity holder or similar agreement or (y) otherwise constitutes or results (or would result) in the abandonment, invalidation or unenforceability of (or would give any other party a right of abandonment, invalidation or unenforceability of) any right, title or interest of the Mortgagor under any Contractual Requirement or equity holder or similar agreement, except, in each case, to the extent that such Requirement of Law or the term in such Contractual Requirement or equity holder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable Requirements of Law or purports to prohibit the granting of a Lien over all assets of the Mortgagor or (iii) any property to the extent that such grant of a Lien on such property would result in the forfeiture of the Mortgagors rights in the property; provided , however , that the foregoing exclusions shall not apply to the extent that any such prohibition, default or other term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the Applicable UCC of any relevant jurisdiction or any other applicable Requirement of Law; and provided, further, that the Mortgagor shall be deemed to have granted a Lien in all its rights, title and interests in any portion of such property that does not result in any of the consequences specified above including any Proceeds of such property; and provided, further, that, immediately upon the ineffectiveness, lapse or termination of any such Requirement of Law, prohibition or other limitation giving rise to the consequences specified above, the Mortgaged Property shall include, and Mortgagor shall be deemed to have granted a security interest in, all such rights and interests as if such Requirement of Law, prohibition or other limitation had never been in effect; or
(b) any property constituting Excluded Assets as such term is defined in the Collateral Agreement.
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For the avoidance of doubt, nothing in this Section 2.6 shall be deemed to negate the requirement in the Credit Agreement that the Collateral Coverage Minimum be satisfied.
SECTION 3
ASSIGNMENT OF PRODUCTION
3.1. Assignment of Production . As further security for the payment of the Obligations and performance of the Mortgagors obligations under the Credit Agreement, the other Credit Documents and the Secured Transaction Documents, the Mortgagor hereby transfers, assigns, warrants and conveys to the Mortgagee for the pro rata and pari passu use and benefit of the Other Secured Persons, effective as of the date hereof, at 7:00 A.M., local time, all Hydrocarbons that are thereafter produced from and that accrue to the Mortgaged Property, and all proceeds therefrom until the Termination Date and the release or cancellation of the Mortgage. All parties producing, purchasing or receiving any such Hydrocarbons, or having such, or proceeds therefrom, in their possession for which they or others are accountable to the Mortgagee by virtue of the provisions of this Section, are authorized and directed to treat and regard the Mortgagee as the assignee and transferee of the Mortgagor and entitled in the Mortgagors place and stead to receive such Hydrocarbons and all proceeds therefrom; and said parties and each of them shall be fully protected in so treating and regarding the Mortgagee and shall be under no obligation to see to the application by the Mortgagee of any such proceeds or payments received by it.
3.2. Event of Default . (a) If an Event of Default shall occur and only for so long as such event shall be continuing, after written notice is provided to the Mortgagor by the Mortgagee, and to the extent permitted by applicable Requirement of Law:
(i) All Hydrocarbons and products thereof shall be delivered into pipelines connected with the Mortgaged Property, or to the purchaser thereof, to the credit of the Mortgagee, for its benefit and the benefit of the Other Secured Persons and all such revenues and proceeds thereof shall be paid directly to the Mortgagee, at its offices in New York, New York, with no duty or obligation of any party paying the same to inquire into the rights of the Mortgagee to receive the same, what application is made thereof, or as to any other matter;
(ii) The Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and division orders and other instruments as may be reasonably required or desired by the Mortgagee, after receipt of a written request from the Mortgagee, in order to have said proceeds and revenues so paid to the Mortgagee and, in addition to any and all rights of a secured party under Sections 9-607 and 9-609 of the Applicable UCC, the Mortgagee is fully authorized to receive and receipt for said revenues and proceeds, to endorse and cash any and all checks and drafts payable to the order of the Mortgagor or the Mortgagee for the account of the Mortgagor received from or in connection with said revenues or proceeds and to hold the proceeds thereof in a deposit account that is subject to a Control Agreement with the Mortgagee, a Lender or other acceptable commercial bank as additional collateral securing the Obligations, and to execute transfer and division orders in the name of the Mortgagor, or otherwise, with warranties binding the Mortgagor; provided that all proceeds received by the Mortgagee pursuant to this grant and assignment shall be applied as provided in Section 5.14 ;
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(iii) The Mortgagee shall not be liable for any delay, neglect or failure to effect collection of any proceeds or to take any other action in connection therewith or hereunder, but the Mortgagee shall have the right, at its election after written notice is provided to the Mortgagor, in the name of the Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Mortgagee in order to collect such funds and to protect the interests of the Mortgagee and/or the Mortgagor, with all costs, expenses and attorneys fees incurred in connection therewith being paid by the Mortgagor; and
(iv) The Mortgagor hereby appoints the Mortgagee as its attorney-in-fact to pursue any and all rights of the Mortgagor to Liens in the Hydrocarbons securing payment of proceeds of runs attributable to the Hydrocarbons, which power of attorney shall be coupled with an interest and shall be irrevocable until the Termination Date.
(b) The Mortgagor does hereby specifically agree that third-parties shall be entitled to rely, and shall be fully protected in relying, upon any written notice by the Mortgagee that an Event of Default has occurred and is continuing for the purposes of Section 3.2 above.
3.3. No Liability of the Mortga gee in Col lecting . The Mortgagee is hereby absolved from all liability for failure to enforce collection of any proceeds so assigned (and no such failure shall be deemed to be a waiver of any right of the Mortgagee or the Other Secured Persons under this Section 3) and from all other responsibility in connection therewith, except the responsibility to account to the Mortgagor for funds actually received.
3.4. No Modification of Payment Obligations . Nothing herein contained shall modify, detract from, limit or otherwise alter the absolute obligation of the Mortgagor to make prompt payment of all amounts constituting Obligations when and as the same become due regardless of whether the proceeds of the As-Extracted Collateral and Hydrocarbons are sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Obligations. Nothing in this Section 3 is intended to be an acceptance of collateral in satisfaction of the Obligations.
3.5. Sta tus of Assignment . Notwithstanding the other provisions of this Section 3, the Mortgagee has agreed not to exercise its right to receive direct delivery of Hydrocarbons and payment of proceeds immediately. Rather, each party producing, purchasing or receiving Hydrocarbons may continue to make such deliveries or payments to the Mortgagor until such time as such party has received notice from the Mortgagee that an Event of Default has occurred and is continuing and that such party is directed to make delivery or payment directly to the Mortgagee. The Mortgagee or any receiver appointed in judicial proceedings for the enforcement of this Mortgage shall have the right to receive all of the Hydrocarbons herein assigned and the proceeds therefrom after any Obligations has been declared due and payable in accordance with the provisions of the Credit Agreement and the other Credit Documents and to apply all of said proceeds as provided in Section 5.14 hereof. Upon any sale of the Mortgaged
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Property or any part thereof, whether pursuant to Section 5 or as permitted by the Credit Agreement, the Hydrocarbons thereafter produced from the property so sold, and the proceeds therefrom, shall be included in such sale and shall pass to the purchaser free and clear of the assignment contained in this Section.
SECTION 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Mortgagor hereby represents, warrants and covenants as follows:
4.1. Title . The Mortgagor has good and defensible title to and is possessed of the Hydrocarbon Interests and has good title to the UCC Collateral. The Collateral is free of all Liens except Permitted Encumbrances.
4.2. Defend Title . This Mortgage is, and always will be kept as, a first priority Lien upon the Collateral, subject to any Permitted Encumbrances (provided that Liens permitted by Section 10.2 of the Credit Agreement may exist and attach to the Mortgaged Properties and may have whatever priority such Liens have under applicable law, provided that for the avoidance of doubt, no intent to subordinate priority of the Liens created hereby is intended or to be inferred by the existence thereof). The Mortgagor will not create or suffer to be created or permit to exist any Lien, security interest or charge prior or junior to or on parity with the Lien of this Mortgage upon the Collateral or any part thereof other than such Permitted Encumbrances. The Mortgagor will warrant and defend the title to the Collateral against the claims and demands of all other Persons whomsoever and will maintain and preserve the Lien created hereby (and its priority) until the Termination Date. If (i) an adverse claim be made against or a cloud develop upon the title to any part of the Collateral other than a Permitted Encumbrance or (ii) any Person shall challenge the priority or validity of the Liens created by this Mortgage, then the Mortgagor agrees to defend immediately against such adverse claim or take appropriate action to remove such cloud, in each case, at the Mortgagors sole cost and expense. The Mortgagor further agrees that the Trustee and/or the Mortgagee may take such other action as they deem advisable to protect and preserve their interests in the Collateral, and in such event the Mortgagor will indemnify the Trustee and/or the Mortgagee against any and all cost, attorneys fees and other expenses that they may incur in defending against any such adverse claim or taking action to remove any such cloud. For the avoidance of doubt, Section 4.1 and Section 4.2 shall not restrict, and are subject to, any disposition permitted by Section 10.4 of the Credit Agreement.
4.3. N ot a Foreign Person . The Mortgagor is not a foreign person within the meaning of the Code, Sections 1445 and 7701 (i.e., the Mortgagor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).
4.4. Revenue and Cost Bearing Interest . The Mortgagors ownership of the Hydrocarbon Interests and the undivided interests therein as specified on Exhibit A will, after giving full effect to all Permitted Encumbrances, afford the Mortgagor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or that is allocated to such Hydrocarbon Interest specified as net revenue interest (as specified on Exhibit A ) on attached Exhibit A and will cause the Mortgagor to bear not more than that portion
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(expressed as a fraction, percentage or decimal), specified as working interest on attached Exhibit A , of the costs of drilling, developing and operating the wells identified on attached Exhibit A except to the extent of any proportionate corresponding increase in the net revenue interest.
SECTION 5
RIGHTS AND REMEDIES
5.1. Event of Default . An Event of Default under the Credit Agreement shall be an Event of Default under this Mortgage.
5.2. For eclosure and Sale .
(a) If an Event of Default shall occur and be continuing, to the extent provided by applicable Requirements of Law, the Mortgagee shall have the right and option to proceed with foreclosure by directing the Trustee to proceed with foreclosure and to sell all or any portion of such Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places in otherwise such manner and upon such notice as may be required by law, or, in the absence of any such requirement, as the Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers. Where the Mortgaged Property is situated in (or offshore of) more than one jurisdiction, notice as above provided shall be posted and filed in all such jurisdictions (if such notices are required by law), and all such Mortgaged Property may be sold in any such jurisdiction and any such notice shall designate the jurisdiction where such Mortgaged Property is to be sold. Nothing contained in this Section 5.2 shall be construed so as to limit in any way any rights to sell the Mortgaged Property or any portion thereof by private sale if and to the extent that such private sale is permitted under the Requirements of Law of the applicable jurisdiction or by public or private sale after entry of a judgment by any court of competent jurisdiction so ordering. The Mortgagor hereby irrevocably appoints, effective upon the occurrence and during the continuance of an Event of Default, the Trustee and the Mortgagee, with full power of substitution, to be the attorney-in-fact of the Mortgagor and in the name and on behalf of the Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices that the Mortgagor ought to execute and deliver and do and perform any and all such acts and things that the Mortgagor ought to do and perform under the covenants herein contained and generally, to use the name of the Mortgagor in the exercise of all or any of the powers hereby conferred on the Trustee and/or the Mortgagee. At any such sale: (i) whether made under the power herein contained or any other legal enactment, or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for the Trustee or the Mortgagee, as appropriate, to have physically present, or to have constructive possession of, the Mortgaged Property (the Mortgagor hereby covenanting and agreeing to deliver any portion of the Mortgaged Property not actually or constructively possessed by the Trustee or the Mortgagee immediately upon the Mortgagees demand) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by the Trustee or the Mortgagee shall contain a general warranty of title, binding upon the Mortgagor and its successors and assigns, (iii) each and every recital contained in any instrument of conveyance made by the Trustee or the Mortgagee shall conclusively establish the truth and accuracy of the matters recited therein, including, without limitation,
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nonpayment of the Obligations, advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor trustee hereunder, (iv) any and all prerequisites to the validity thereof shall be conclusively presumed to have been performed, (v) the receipt of the Trustee, Mortgagee or of such other party or officer making the sale shall be a sufficient discharge to the purchaser or purchasers for its purchase money and no such purchaser or purchasers, or its assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof, (vi) to the fullest extent permitted by law, the Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against the Mortgagor, and against any and all other persons claiming or to claim the property sold or any part thereof, by, through or under the Mortgagor, and (vii) to the extent and under such circumstances as are permitted by law, the Mortgagee may be a purchaser at any such sale, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Obligations (in the order of priority set forth in Section 5.14 ) in lieu of cash payment.
(b) If an Event of Default shall occur and be continuing, then (i) the Mortgagee shall be entitled to all of the rights, powers and remedies afforded a secured party by the Applicable UCC with reference to the UCC Collateral and/or (ii) the Trustee or the Mortgagee may proceed as to any Collateral in accordance with the rights and remedies granted under this Mortgage or applicable law in respect of the Collateral. Such rights, powers and remedies shall be cumulative and in addition to those granted to the Trustee or the Mortgagee under any other provision of this Mortgage or under any other Credit Document. Written notice mailed to the Mortgagor as provided herein at least ten (10) days prior to the date of public sale of any part of the Collateral that is personal property subject to the provisions of the Applicable UCC, or prior to the date after which private sale of any such part of the Collateral will be made, shall constitute reasonable notice.
5.3. Substitute Truste es and Ag ents . The Trustee or Mortgagee may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by the Trustee or Mortgagee, including the posting of notices and the conduct of sale, but in the name and on behalf of the Trustee or Mortgagee. If the Trustee or Mortgagee shall have given notice of sale hereunder, any successor or substitute trustee or mortgagee agent thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor or substitute trustee or mortgagee agent conducting the sale.
5.4. Judicial Foreclosure; Receivership . Upon the occurrence of and during the continuance of an Event of Default, the Mortgagee shall have the right and power to proceed by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Collateral under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Collateral under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy.
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5.5. Foreclosure for Installments . Upon the occurrence of and during the continuance of an Event of Default, the Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Obligations that have not been paid when due either through the courts or by directing the Trustee to proceed with foreclosure in satisfaction of the matured but unpaid portion of the Obligations as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest and other Obligations then due; such sale may be made subject to the unmatured portion of the Obligations, and any such sale shall not in any manner affect the unmatured portion of the Obligations, but as to such unmatured portion of the Obligations this Mortgage shall remain in full force and effect just as though no sale had been made hereunder. It is further agreed that upon the occurrence of and during the continuance of an Event of Default, several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Obligations, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Obligations without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Obligations.
5.6. Sep arate Sales . Upon the occurrence of and during the continuance of an Event of Default, the Collateral may be sold in one or more parcels and to the extent permitted by applicable Requirement of Law in such manner and order as the Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.
5.7. Possession of Mortga ged Property . If an Event of Default shall have occurred and be continuing, then, to the extent permitted by applicable law, the Trustee or the Mortgagee shall have the right and power, but not the obligation, to enter into and upon and take possession of all or any part of the Collateral in the possession of the Mortgagor, its successors or assigns, or its or their agents or servants, and may exclude the Mortgagor, its successors or assigns, and all persons claiming under the Mortgagor, and its or their agents or servants wholly or partly therefrom; and, holding the same, the Mortgagee may use, administer, manage, operate and control the Collateral and conduct the business thereof to the same extent as the Mortgagor, its successors or assigns, might at the time do and may exercise all rights and powers of the Mortgagor, in the name, place and stead of the Mortgagor, or otherwise as the Mortgagee shall deem best, in its sole discretion.
5.8. Occupancy After Foreclosure . In the event there is a foreclosure sale hereunder and at the time of such sale the Mortgagor or the Mortgagors heirs, devisees, representatives, successors or assigns or any other person claiming any interest in the Collateral by, through or under the Mortgagor, are occupying or using the Mortgaged Property or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either the landlord or tenant, or at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; to the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will. In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the Mortgaged Property (such as an action for forcible entry and detainer) in any court having jurisdiction.
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5.9. Remedies Cumulative, Concurrent and Nonexclusive . Every right, power, privilege and remedy herein given to the Trustee or the Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the Applicable UCC in effect and applicable to the Collateral or any portion thereof). Each and every right, power, privilege and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by the Trustee or the Mortgagee, and the exercise, or the beginning of the exercise, or the abandonment, of any such right, power, privilege or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter any other right, power, privilege or remedy. No delay or omission by the Trustee or the Mortgagee or any Other Secured Person in the exercise of any right, power or remedy shall impair any such right, power, privilege or remedy or operate as a waiver thereof or of any other right, power, privilege or remedy then or thereafter existing.
5.10. Discontinuance of Proceedings . If the Trustee or the Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under any Credit Document or available at law and shall thereafter elect to discontinue or abandon same for any reason, then it shall have the unqualified right so to do and, in such an event, the parties shall be restored to their former positions with respect to the Obligations, this Mortgage, the Credit Agreement, the Collateral and otherwise, and the rights, remedies, recourses and powers of the Trustee and the Mortgagee, as applicable, shall continue as if same had never been invoked.
5.11. No Release of Obligations . Neither the Mortgagor, any Guarantor nor any other person hereafter obligated for payment of all or any part of the Obligations shall be relieved of such obligation, to the extent the Obligations remain due and owing, by reason of: (a) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (b) any agreement or stipulation between any subsequent owner of the Mortgaged Property and the Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Mortgage without first having obtained the consent of, given notice to or paid any consideration to the Mortgagor, any Guarantor or such other Person, and in such event the Mortgagor, Guarantor and all such other Persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by the Mortgagee; or (c) by any other act or occurrence save and except upon the Termination Date.
5.12. Rele ase of and Resort to Collateral . The Mortgagee may release, regardless of consideration, any part of the Collateral without, as to the remainder, in any way impairing, affecting, subordinating or releasing the Lien created in or evidenced by this Mortgage or its stature as a first and prior Lien, in and to the Collateral, provided that Permitted Encumbrances may exist, and without in any way releasing or diminishing the liability of any Person liable for the repayment of the Obligations. For payment of the Obligations, the Mortgagee may resort to any other security therefor held by the Mortgagee in such order and manner as the Mortgagee may elect.
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5.13. Waiver of Redemption, Notice and Marshalling of Assets, Etc . To the fullest extent permitted by law, the Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to the Mortgagor by virtue of any present or future moratorium law or other law exempting the Collateral from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment and (b) any right to a marshalling of assets or a sale in inverse order of alienation. If any law referred to in this Mortgage and now in force, of which the Mortgagor or its successor or successors might take advantage despite the provisions hereof, shall hereafter be repealed or cease to be in force, such law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof. If the laws of any state that provides for a redemption period do not permit the redemption period to be waived, the redemption period shall be specifically reduced to the minimum amount of time allowable by statute.
5.14. Application of Proceeds . The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received in any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:
(a) First, to the payment of all reasonable expenses incurred by the Trustee or the Mortgagee incident to the enforcement of this Mortgage, the Credit Agreement or any other Credit Document to collect any portion of the Obligations, including expenses of any entry or taking of possession, of any sale, of advertisement thereof, and of conveyances, and court costs, compensation of agents and employees, a reasonable commission to the Trustee acting and reasonable legal fees, and to the payment of all other reasonable charges, expenses, liabilities and advances incurred or made by the Trustee or the Mortgagee under this Mortgage or in executing any trust or power hereunder; and
(b) Second, as set forth in Section 11.11 of the Credit Agreement.
5.15. Resi gnation of Operator . In addition to all rights and remedies under this Mortgage, at law and in equity, if any Event of Default shall occur and be continuing and the Trustee or the Mortgagee shall exercise any remedies under this Mortgage with respect to any portion of the Mortgaged Property (or the Mortgagor shall transfer any Mortgaged Property in lieu of foreclosure) whereupon the Mortgagor is divested of its title to any of the Collateral, the Mortgagee shall have the right to request that any operator of any Mortgaged Property that is either the Mortgagor or any Affiliate of the Mortgagor to resign as operator under the joint operating agreement applicable thereto, and no later than 60 days after receipt by the Mortgagor of any such request, the Mortgagor shall resign (or, to the extent it is able to do so, cause such other Person to resign) as operator of such Collateral.
5.16. Inde mnity . THE INDEMNIFIED PARTIES SHALL NOT BE LIABLE, IN CONNECTION WITH ANY ACTION TAKEN, FOR ANY LOSS SUSTAINED BY THE MORTGAGOR RESULTING FROM AN ASSERTION THAT THE MORTGAGEE HAS RECEIVED FUNDS FROM THE PRODUCTION OF HYDROCARBONS CLAIMED BY THIRD PERSONS OR ANY ACT OR OMISSION OF ANY INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE MORTGAGED PROPERTY INCLUDING SUCH LOSS THAT MAY RESULT FROM THE ORDINARY NEGLIGENCE OF AN INDEMNIFIED PARTY UNLESS SUCH LOSS IS CAUSED BY THE WILLFUL MISCONDUCT, BAD FAITH OR GROSS NEGLIGENCE OF THE
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INDEMNIFIED PARTY SEEKING INDEMNITY OR ANY OF ITS RELATED PARTIES. NO INDEMNIFIED PARTY SHALL BE OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF THE MORTGAGOR. THE MORTGAGOR AGREES TO PAY, AND TO SAVE THE INDEMNIFIED PARTIES HARMLESS FROM, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE AND ADMINISTRATION OF THIS MORTGAGE TO THE EXTENT THE BORROWER WOULD BE REQUIRED TO DO SO PURSUANT TO SECTION 13.5 OF THE CREDIT AGREEMENT. THE LIABILITIES OF THE MORTGAGOR AS SET FORTH IN THIS SECTION 5.16 SHALL SURVIVE THE TERMINATION OF THIS MORTGAGE.
5.17. Fail ure to Perform . The Mortgagor agrees that if it fails to perform any act or to take any action that it is required to perform or take hereunder or pay any money that the Mortgagor is required to pay hereunder, the Mortgagee, in the Mortgagors name or its or their own name or names, may, but shall not be obligated to, perform or cause to perform such act or take such action or pay such money.
SECTION 6
THE TRUSTEE.
6.1. Duti es, Rights, and Powers of Truste e . The Trustee shall have no duty to see to any recording, filing or registration of this Mortgage or any other instrument in addition or supplemental thereto, or to give any notice thereof, or to see to the payment of or be under any duty in respect of any tax or assessment or other governmental charge that may be levied or assessed on the Mortgaged Property, or any part thereof, or against the Mortgagor, or to see to the performance or observance by the Mortgagor of any of the covenants and agreements contained herein. The Trustee shall not be responsible for the execution, acknowledgment or validity of this Mortgage or of any instrument in addition or supplemental hereto or for the sufficiency of the security purported to be created hereby, and makes no representation in respect thereof or in respect of the rights of the Mortgagee. The Trustee shall have the right to consult with counsel upon any matters arising hereunder and shall be fully protected in relying as to legal matters on the advice of counsel. The Trustee shall not incur any personal liability hereunder except for the Trustees own willful misconduct; and the Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.
6.2. Successor Truste e . The Trustee may resign by written notice addressed to the Mortgagee or be removed at any time with or without cause by an instrument in writing duly executed on behalf of the Mortgagee. In case of the death, resignation or removal of the Trustee, a successor may be appointed by the Mortgagee by instrument of substitution complying with any applicable Governmental Requirements, or, in the absence of any such requirement, without formality other than appointment and designation in writing. Written notice of such appointment and designation shall be given by the Mortgagee to the Mortgagor, but the validity of any such appointment shall not be impaired or affected by failure to give such notice or by any defect therein. Such appointment and designation shall be full evidence of the right and authority to
16
make the same and of all the facts therein recited. Upon the making of any such appointment and designation, this Mortgage shall vest in the successor all the estate and title in and to all of the Mortgaged Property, and the successor shall thereupon succeed to all of the rights, powers, privileges, immunities and duties hereby conferred upon the Trustee named herein, and one such appointment and designation shall not exhaust the right to appoint and designate an additional successor but such right may be exercised repeatedly until the Termination Date has occurred. To facilitate the administration of the duties hereunder, the Mortgagee may appoint multiple trustees to serve in such capacity or in such jurisdictions as the Mortgagee may designate.
6.3. Retention of Moneys . All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law) and the Trustee shall be under no liability for interest on any moneys received by him hereunder.
SECTION 7
MISCELLANEOUS
7.1. Releases .
(a) Full Release . On the Termination Date, the Mortgagee shall forthwith cause a full release and termination of this Mortgage to be entered upon the record at the expense of the Mortgagor and shall execute and deliver or cause to be executed and delivered such instruments of satisfaction and reassignment as may be reasonably necessary or desirable for the release of the Liens created hereby on the Mortgaged Property. Other than as set forth in the foregoing sentence, this Mortgage shall remain and continue in full force and effect and be binding in accordance with and to the extent of its terms upon the Mortgagor and the successors and assigns thereof and shall inure to the benefit of the Mortgagee and the Other Secured Persons and their respective successors, indorsees, transferees and assigns; notwithstanding that from time to time prior to the Termination Date, the Mortgagor may be free from any Obligations.
(b) Partial Release . The Mortgagee, at the request and sole expense of the Mortgagor, shall promptly execute and deliver to the Mortgagor all releases, re-conveyances or other documents reasonably necessary or desirable for the release of the Liens created hereby on the Mortgaged Property, which shall include, without limitation, the agreement of the Mortgagee (on behalf of itself and on behalf of the Other Secured Persons) to release the security interests in, and the Liens on, the Collateral granted herein and created hereby, (i) upon any Disposition by the Mortgagor of any Mortgaged Property that is permitted under the Credit Agreement (other than to a Guarantor) and (ii) to the extent that the first sentence of Section 13.17(a) of the Credit Agreement provides for such release with respect to the Mortgaged Property.
(c) Possession of Notes . The Mortgagor acknowledges and agrees that possession of any Note (or any replacements of any said Note or other instrument evidencing any part of the Obligations) at any time by the Mortgagor or any other Credit Party shall not in any manner extinguish the Obligations or this Mortgage, and the Mortgagor shall have the right to issue and reissue any of the Notes from time to time as its interest or as convenience may require, without in any manner extinguishing or affecting the Obligations or the Lien of this Mortgage.
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7.2. Seve rability . If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction and the remaining provisions hereof shall be liberally construed in favor of the Mortgagee and the Other Secured Persons in order to effectuate the provisions hereof. The invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction.
7.3. Successors and Assigns . The terms used to designate any party or group of persons shall be deemed to include the respective heirs, legal representatives, successors and assigns of such Persons.
7.4. Satisfaction of Prior Encumbrance . To the extent that proceeds of the Credit Agreement are used to pay indebtedness secured by any outstanding Lien against the Mortgaged Property then the parties agree that: (a) such proceeds have been advanced at the Mortgagors request, and (b) the Mortgagee and the Lenders shall be subrogated to any and all rights and Liens owned by any owner or holder of such outstanding Liens, irrespective of whether said Liens are or have been released. It is expressly understood that, in consideration of the payment of such other indebtedness, the Mortgagor hereby waives and releases all demands and causes of action for offsets and payments to, upon and in connection with the said indebtedness. This Mortgage is made with full substitution and subrogation of the Trustee and the Mortgagee and their successors and assigns in and to all covenants and warranties by others heretofore given or made in respect of the Mortgaged Property or any part thereof.
7.5. Application of Payments to Certain Obligations . If any part of the Obligations cannot be lawfully secured by this Mortgage or if any part of the Collateral cannot be lawfully subject to the Lien hereof to the full extent of the Obligations, then all payments made shall be applied on said Obligations first in discharge of that portion thereof that is not secured by this Mortgage.
7.6. Natu re of Covenants . The covenants and agreements herein contained shall constitute covenants running with the land and interests covered or affected hereby and shall be binding upon the heirs, legal representatives, successors and assigns of the parties hereto.
7.7. Notices . All notices, requests and demands pursuant hereto shall be made in accordance with Section 13.2 of the Credit Agreement (and notice to the Mortgagor shall be made in the manner for providing notice to and in care of the Borrower).
7.8. Exp enses . The Mortgagor agrees to pay any and all reasonable and documented out of pocket expenses (including all reasonable fees and disbursements of counsel) that may be paid or incurred by the Mortgagee in administering, enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, the Mortgagor under this Mortgage to the extent the Borrower would be required to do so pursuant to Section 13.5 of the Credit Agreement.
7.9. Coun terparts . This Mortgage is being executed in several counterparts, all of which are identical, except that to facilitate recordation, if the Mortgaged Property is situated in (or offshore of) more than one county, descriptions of only those portions of the Mortgaged Property located in (or offshore of) the county in which a particular counterpart is recorded shall be
18
attached as Exhibit A to such counterpart. Each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument. Complete copies of this Mortgage containing the entire Exhibit A have been retained by the Mortgagee.
7.10. Gove rning Law . Insofar as permitted by otherwise applicable law, this Mortgage shall be construed under and governed by the laws of the State of Texas.
7.11. Fin ancing Statement; Fixture Filing . This Mortgage shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures included within the Mortgaged Property may be filed or filed for record in the real estate records, mortgage records or other appropriate records of each jurisdiction where any part of the Mortgaged Property (including said fixtures) is situated (or is offshore of). This Mortgage shall also be effective as a financing statement covering As-Extracted Collateral (including oil and gas and all other substances of value that may be extracted from the ground) and accounts financed at the wellhead or minehead of wells or mines located on the properties subject to the Applicable UCC and is to be filed for record in the real estate records, UCC records or other appropriate records of each jurisdiction where any part of the Mortgaged Property is situated (or is offshore of).
7.12. Filing of Financing Statements . Pursuant to the Applicable UCC, the Mortgagor authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record financing statements, continuation statements, amendments thereto and other filing or recording documents or instruments with respect to the Mortgaged Property without the signature of the Mortgagor in such form and in such offices as the Mortgagee reasonably determines appropriate to perfect the security interests of the Mortgagee under this Mortgage. The Mortgagor also authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record such financing statements that describe the collateral covered thereby as all assets of the Mortgagor, all personal property of the Mortgagor or words of similar effect. The Mortgagor shall pay all costs associated with the filing of such instruments.
In that regard, the following information is provided:
Name of Debtor: |
TALOS ERT LLC |
|||
Address of Debtor: |
c/o Talos Production LLC |
|||
500 Dallas Street, Suite 2000 |
||||
Houston, TX 77002-4727 |
||||
Attention: Michael Harding |
||||
Fax: (713) 351-4100 |
||||
State of Formation/Location: |
Delaware |
|||
With a copy of any notice to: |
c/o Apollo Management, L.P. |
|||
9 West 57 th Street, 43 rd Floor |
||||
New York, NY 10019 |
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Name of Secured Party: |
JPMORGAN CHASE BANK, N.A. |
|||
as Collateral Agent |
||||
Address of Secured Party: |
712 Main Street |
|||
Houston, Texas 77002 |
||||
Attention: Jo Linda Papadakis |
||||
Facsimile: |
713-216-7770 |
|||
Owner of Record of Real Property: |
Mortgagor |
7.13. Limi t on Obliga tions and Co llat eral . It is the intention of the Mortgagor, the Mortgagee and the Other Secured Persons that this Mortgage not constitute a fraudulent transfer or fraudulent conveyance under any state or federal law that may be applied hereto. The Mortgagor and, by the Mortgagees acceptance hereof, the Mortgagee and the Other Secured Persons hereby acknowledge and agree that, notwithstanding any other provision of this Mortgage, the indebtedness secured hereby shall be limited to the maximum amount of indebtedness that can be incurred or secured by the Mortgagor without rendering this Mortgage voidable under applicable law relating to fraudulent conveyances or fraudulent transfers.
7.14. References . The words herein, hereof, hereunder and other words of similar import when used in this Mortgage refer to this Mortgage as a whole, and not to any particular article, section or subsection. Any reference herein to a Section shall be deemed to refer to the applicable Section of this Mortgage unless otherwise stated herein. Any reference herein to an exhibit or schedule shall be deemed to refer to the applicable exhibit or schedule attached hereto unless otherwise stated herein
[SIGNATURES BEGIN NEXT PAGE]
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EXECUTED this 10th day of May, 2018, to be effective as of the date first written above.
TALOS ERT LLC, as Mortgagor | ||
By: | ||
Name: | Michael L. Harding II | |
Title: Executive Vice President, Chief Financial Officer and Treasurer |
STATE OF TEXAS | § | |||
§ | ||||
COUNTY OF HARRIS | § |
On this 10th day of May, 2018, before me, a notary public personally appeared Michael L. Harding II, known to me (or satisfactorily proven) to be the Executive Vice President, Chief Financial Officer and Treasurer of TALOS ERT LLC, a Delaware limited liability company, and who acknowledged that such person, being authorized to do so, executed the foregoing instrument as such officer on behalf of such limited liability company for the purposes therein provided.
Witness my hand and Official Seal.
|
Printed Name: |
Notarial No.: |
My commission expires: |
Seal: |
Texas Deed of Trust
Signature Page
EXHIBIT A
to
DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING AND FINANCING STATEMENT
Introduction
All references contained in this Exhibit A to the wells are intended to include references to Mortgagors well identification number and well name for any existing well, including any replacement well drilled in lieu thereof from which crude oil, natural gas or other Hydrocarbons are now or hereafter produced. All references contained in this Exhibit A to the Oil and Gas Properties are intended to include: (i) the volume or book and page, file, entry or instrument number of the appropriate records of the particular county or parish in the state where each such lease or other such lease or other instrument is recorded and (ii) all valid and existing amendments to such lease or other instrument of record in such county or parish record, as applicable, regardless of whether such amendments are expressly described herein. A special reference is herein made to each such lease or other instrument and the record thereof for a more particular description of the property and the interest sought to be affected by this Mortgage and for all other purposes.
Exhibit A Page 1
EXHIBIT D-2 TO
CREDIT AGREEMENT
WHEN RECORDED OR FILED,
PLEASE RETURN TO:
Mayer Brown LLP
700 Louisiana Street, Ste 3400
Houston, TX 77002
Attn: Karl Brandt
Phone: 713-238-2735
|
||||
Space above for Parish Recorders Use |
MORTGAGE, ASSIGNMENT OF PRODUCTION,
SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT
FROM
TALOS ERT LLC,
(Organizational ID: 4098427)
TALOS ENERGY OFFSHORE LLC,
(Organizational ID: 5137912)
TALOS ENERGY PHOENIX LLC,
(Organizational ID: 6198093)
TALOS GULF COAST OFFSHORE LLC,
(Organizational ID: 4932768)
TALOS GULF COAST ONSHORE LLC,
(Organizational ID: 4901051)
and
TALOS RESOURCES LLC
(Organizational ID: 4537731)
TO
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent for the benefit of itself and the Other Secured Persons
A CARBON, PHOTOGRAPHIC, OR OTHER REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.
THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.
THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.
THIS INSTRUMENT COVERS MINERALS, AS EXTRACTED COLLATERAL AND OTHER SUBSTANCES OF VALUE THAT MAY BE EXTRACTED FROM THE EARTH (INCLUDING, WITHOUT LIMITATION, OIL AND GAS) AND THE ACCOUNTS RELATED THERETO, WHICH WILL BE FINANCED AT THE WELLHEADS OF THE WELL OR WELLS LOCATED ON THE PROPERTIES DESCRIBED IN EXHIBIT A HERETO. THIS FINANCING STATEMENT MAY BE FILED OR FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS, UNIFORM COMMERCIAL CODE RECORDS OR SIMILAR RECORDS OF THE CLERKS OF COURT OF THE PARISHES LISTED ON THE EXHIBITS HERETO. ONE OR MORE OF THE MORTGAGORS HAS AN INTEREST OF RECORD IN THE REAL ESTATE AND IMMOVABLE PROPERTY CONCERNED, WHICH INTEREST IS DESCRIBED IN THE EXHIBITS ATTACHED HERETO.
PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS THAT ARE OR ARE TO BECOME AFFIXED TO OR FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN THE EXHIBIT HERETO. THIS FINANCING STATEMENT MAY BE FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS, UNIFORM COMMERCIAL CODE RECORDS OR SIMILAR RECORDS OF EACH PARISH IN WHICH SAID LAND OR ANY PORTION THEREOF IS LOCATED OR WHICH LIES SHOREWARD OF ANY MORTGAGED PROPERTY (I.E., TO THE EXTENT A MORTGAGED PROPERTY LIES OFFSHORE WITHIN THE PROJECTED SEAWARD EXTENSION OF THE RELEVANT PARISH BOUNDARIES). ONE OR MORE OF THE MORTGAGORS IS THE OWNER OF RECORD INTEREST IN THE REAL ESTATE CONCERNED. THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS OR THE UNIFORM COMMERCIAL CODE RECORDS.
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TABLE OF CONTENTS
Page | ||||||
SECTION 1 |
Definitions | 2 | ||||
1.1 |
Terms Defined Above | 2 | ||||
1.2 |
UCC and Other Defined Terms | 2 | ||||
1.3 |
Definitions | 3 | ||||
SECTION 2 |
Grant of Lien and Obligations | 5 | ||||
2.1 |
Grant of Liens | 5 | ||||
2.2 |
Grant of Security Interest | 6 | ||||
2.3 |
Obligations | 6 | ||||
2.4 |
Fixture Filing, Etc. | 7 | ||||
2.5 |
Pro Rata Benefit | 7 | ||||
2.6 |
Excluded Properties | 7 | ||||
SECTION 3 |
Assignment of Production | 8 | ||||
3.1 |
Assignment of Production | 8 | ||||
3.2 |
Event of Default | 9 | ||||
3.3 |
No Liability of the Mortgagee in Collecting | 10 | ||||
3.4 |
No Modification of Payment Obligations | 10 | ||||
3.5 |
Status of Assignment | 10 | ||||
SECTION 4 |
Representations, Warranties and Covenants | 10 | ||||
4.1 |
Title | 10 | ||||
4.2 |
Defend Title | 10 | ||||
4.3 |
Not a Foreign Person | 11 | ||||
SECTION 5 |
Rights and Remedies | 11 | ||||
5.1 |
Event of Default | 11 | ||||
5.2 |
Foreclosure and Sale | 12 | ||||
5.3 |
Substitute Agents | 13 | ||||
5.4 |
Judicial Foreclosure; Receivership | 13 | ||||
5.5 |
Foreclosure for Installments | 13 | ||||
5.6 |
Separate Sales | 14 | ||||
5.7 |
Possession of Mortgaged Property | 14 | ||||
5.8 |
Occupancy After Foreclosure | 14 |
5.9 |
Remedies Cumulative, Concurrent and Nonexclusive | 14 | ||||
5.10 |
Discontinuance of Proceedings | 15 | ||||
5.11 |
No Release of Obligations | 15 | ||||
5.12 |
Release of and Resort to Collateral | 15 | ||||
5.13 |
Waiver of Redemption, Notice and Marshalling of Assets, Etc. | 15 | ||||
5.14 |
Application of Proceeds | 16 | ||||
5.15 |
Resignation of Operator | 16 | ||||
5.16 |
Indemnity | 16 | ||||
5.17 |
Failure to Perform | 17 | ||||
SECTION 6 |
[Reserved] | 17 | ||||
SECTION 7 |
Miscellaneous | 17 | ||||
7.1 |
Releases | 17 | ||||
7.2 |
Severability | 18 | ||||
7.3 |
Successors and Assigns | 18 | ||||
7.4 |
Satisfaction of Prior Encumbrance | 18 | ||||
7.5 |
Application of Payments to Certain Obligations | 18 | ||||
7.6 |
Nature of Covenants | 18 | ||||
7.7 |
Notices | 18 | ||||
7.8 |
Expenses | 18 | ||||
7.9 |
Counterparts | 19 | ||||
7.10 |
Governing Law | 19 | ||||
7.11 |
Financing Statement; Fixture Filing | 19 | ||||
7.12 |
Filing of Financing Statements | 19 | ||||
7.13 |
Limit on Obligations and Collateral | 20 | ||||
7.14 |
References | 20 | ||||
SECTION 8 |
Louisiana Provisions | 20 | ||||
8.1 |
Principles of Construction | 20 | ||||
8.2 |
Future Advances | 21 | ||||
8.3 |
Maximum Amount Secured | 21 | ||||
8.4 |
Alienation | 21 | ||||
8.5 |
Confession of Judgment | 21 | ||||
8.6 |
Additional Louisiana Remedies | 21 | ||||
8.7 |
Keeper | 22 |
8.8 |
Waivers |
22 | ||
8.9 |
Authentic Evidence |
22 | ||
8.10 |
Louisiana Defined Terms |
22 | ||
8.11 |
Waiver and Release |
24 | ||
8.12 |
No Paraph |
24 | ||
8.13 |
Acceptance |
24 | ||
8.14 |
Reliance |
24 |
Exhibit A Hydrocarbon Interests
STATE OF TEXAS
COUNTY OF HARRIS
MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT
BE IT KNOWN, that on the date set forth on the signature page hereof (the Effective Date ), before me, the undersigned Notary Public, duly commissioned and qualified in and for the State of Texas, and in the presence of the undersigned competent witnesses, personally came and appeared:
TALOS ERT LLC, a Delaware limited liability company ( ERT ), TALOS ENERGY OFFSHORE LLC, a Delaware limited liability company ( Offshore ), TALOS ENERGY PHOENIX LLC, a Delaware limited liability company ( Phoenix ), TALOS GULF COAST OFFSHORE LLC, a Delaware limited liability company ( Gulf Coast ), TALOS GULF COAST ONSHORE LLC, a Delaware limited liability company ( Onshore ), TALOS RESOURCES LLC, a Delaware limited liability company ( Resources collectively with ERT, Offshore, Phoenix, Gulf Coast and Onshore, the Mortgagors and each a Mortgagor ), whose respective employer identification numbers end in 8947, 6175, 7461, 3866, 5735 and 5413, and whose addresses are c/o Talos Production LLC, 500 Dallas Street, Suite 2000, Houston, TX 77002, herein represented by their undersigned duly authorized officer, pursuant to resolutions of each Mortgagor, a certified copy of which is attached hereto and made a part hereof;
who, being duly sworn, declared and acknowledged to the undersigned Notary Public, that:
It executes this MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (this Mortgage ) in favor of JPMORGAN CHASE BANK, N.A. , in its capacity as Collateral Agent (as defined in the Credit Agreement (as hereinafter defined), together with its successors and assigns in such capacity, the Mortgagee ), for its benefit and the benefit of the Other Secured Persons (as hereinafter defined) with respect to all Mortgaged Properties (as hereinafter defined) and with respect to all UCC Collateral (as hereinafter defined).
R E C I T A L S
A. Talos Energy, Inc., a Delaware corporation ( Holdings ), Talos Production LLC, a Delaware limited liability company and a wholly-owned subsidiary of Holdings (the Borrower ), the lenders from time to time party thereto (the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, an Issuing Bank and Swingline Lender (as each such term is defined in the Credit Agreement) and the other persons from time to time party thereto executed a Credit Agreement dated as of even date herewith (such agreement, as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement ) pursuant to which, upon the terms and conditions stated therein, the Lenders agreed to make loans and other extensions of credit to the Borrower.
B. The Borrower and its Restricted Subsidiaries and certain Hedge Banks have or may enter into Secured Hedge Transactions (as defined in the Credit Agreement).
C. The Borrower and its Restricted Subsidiaries and certain Cash Management Banks have or may enter into Secured Cash Management Agreements (as defined in the Credit Agreement).
D. The Credit Agreement, the Secured Hedge Transactions and the Secured Cash Management Agreements are collectively referred to herein as the Secured Transaction Documents .
E. Each Mortgagor, each of the other signatories thereto, and Mortgagee, executed a Guarantee dated as of even date herewith (such agreement, as may from time to time be amended, restated, supplemented or otherwise modified, the Guarantee ) pursuant to which, upon terms and conditions stated therein, each such Mortgagor has agreed to guarantee the Obligations under the Secured Transaction Documents.
F. The Mortgagee and the Other Secured Persons have conditioned their obligations under the Secured Transaction Documents upon the execution and delivery by each Mortgagor of this Mortgage, and each such Mortgagor has agreed to enter into this Mortgage to secure all obligations owing to the Mortgagee and the Other Secured Persons under the Secured Transaction Documents and the other Credit Documents.
G. Each Mortgagor is a Subsidiary of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and the other Credit Documents and is willing to execute and deliver this Mortgage in order to induce the Lenders to make the Loans and to extend other credit and to induce the Other Secured Persons Lenders to make their respective extensions of credit thereunder.
H. Therefore, in order to comply with the terms and conditions of the Secured Transaction Documents and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Mortgagor hereby agrees as follows:
SECTION 1
DEFINITIONS
1.1 Terms Defined Above . As used in this Mortgage, each term defined above has the meaning indicated above.
1.2 UCC and Other Defined Terms . Each capitalized term used in this Mortgage and not defined in this Mortgage shall have the meaning ascribed to such term in the Credit Agreement. Any capitalized term not defined in either this Mortgage or the Credit Agreement shall have the meaning ascribed to such term in the Applicable UCC. The rules of construction and other interpretive provisions specified in Sections 1.2, 1.5, 1.6 and 1.7 of the Credit Agreement shall apply to this Mortgage, including terms defined in the preamble and recitals to this Mortgage.
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1.3 Definitions .
Applicable UCC means the provisions of the Uniform Commercial Code presently in effect in the jurisdiction in which the relevant UCC Collateral is situated (or is offshore of) or that otherwise is applicable to the creation or perfection of the Liens described herein or the rights and remedies of Mortgagee under this Mortgage.
Collateral means collectively all the Mortgaged Property and all the UCC Collateral.
Event of Default has the meaning ascribed to such term in Section 5.1 .
Future Advances means future obligations and future advances that the Mortgagee or any Other Secured Person may make pursuant to any Secured Transaction Document.
Hydrocarbon Interests means all rights, titles, interests and estates now owned or hereafter acquired by any Mortgagor in and to the oil and gas leases, oil, gas and mineral leases, wellbore interests, and/or other liquid or gaseous hydrocarbon leases, mineral fee interests, mineral servitude interests, overriding royalty and royalty interests, net profit interests and production payment interests, and other interests and estates and the lands and premises covered or affected thereby, including any reserved or residual interests of whatever nature, in each case, that are described on Exhibit A .
Hydrocarbons means all oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom and all other minerals that may be produced and saved from or attributable to the Oil and Gas Properties, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests or other properties constituting Oil and Gas Properties.
Indemnified Parties means the Mortgagee, each Other Secured Person and their Related Parties.
Mortgaged Property means the Oil and Gas Properties and other properties and assets described in Section 2.1(a ) through Section 2.1(f) .
Obligations has the meaning assigned to such term in Section 2.3 .
Oil and Gas Properties means (a) the Hydrocarbon Interests; (b) the properties now or hereafter pooled or unitized with the Hydrocarbon Interests; (c) all presently existing or future unitization, communitization, pooling agreements and declarations of pooled units and the units created thereby (including, without limitation, all units created under orders, regulations and rules or other official acts of any Governmental Authority and units created solely among working interest owners pursuant to operating agreements or otherwise) that may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including, without limitation, production sharing contracts and agreements,
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production sales contracts, farmout agreements, farm-in agreements, area of mutual interest agreements, and equipment leases, described or referred to in this Mortgage or that relate to any of the Hydrocarbon Interests or interests in the Hydrocarbon Interests or the production, sale, purchase, exchange, processing, handling, storage, transporting or marketing of the Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and that may be produced and saved or attributable to the Hydrocarbon Interests, the lands pooled or unitized therewith and any Mortgagors interests therein, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests, the lands pooled or unitized therewith and any such Mortgagors interests therein; and (f) all tenements, hereditaments, appurtenances and properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests, the rights, titles, interests and estates described or referred to above, that are now owned or that are hereafter acquired by any Mortgagor, including, without limitation, any and all property, real or personal, immoveable or moveable, 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 or the lands pooled or unitized therewith, 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, gas processing plants, pipeline 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, servitudes, licenses and other surface and subsurface rights, together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
Other Secured Persons means each Lender, each Agent under the Credit Agreement, each Issuing Bank under the Credit Agreement, each Hedge Bank, each Cash Management Bank and each sub-agent pursuant to Section 12 of the Credit Agreement.
Permitted Encumbrances means all Liens permitted under Section 10.2 of the Credit Agreement.
Termination Date shall mean the date on which all Obligations are paid in full (other than Hedging Obligations under any Secured Hedge Transactions, Cash Management Obligations under any Secured Cash Management Agreements or contingent indemnification obligations not then due) and the Total Commitment and all Letters of Credit are terminated (other than Letters of Credit that have been cash collateralized on terms reasonably satisfactory to each Issuing Bank in respect thereof or back-stopped following the termination of the Commitments).
UCC Collateral means the property and other assets described in Section 2.2 .
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SECTION 2
GRANT OF LIEN AND OBLIGATIONS
2.1 Grant of Liens . To secure payment of the Obligations when due, each Mortgagor does by these presents hereby:
MORTGAGE, ASSIGN, PLEDGE, and HYPOTHECATE to the Mortgagee, for the use and benefit of itself and the Other Secured Persons, all of the following properties, rights and interests that are located in the State of Louisiana or within the offshore area over which the United States of America asserts jurisdiction and to which the laws of the State of Louisiana are made applicable as a matter of federal law with respect to this Mortgage and/or lien or security interests created hereby, TO HAVE AND TO HOLD unto the Mortgagee, for the benefit of itself and the Other Secured Persons, to secure the Obligations:
(a) All rights, titles, interests and estates now owned or hereafter acquired by such Mortgagor in and to the Oil and Gas Properties.
(b) All rights, titles, interests and estates now owned or hereafter acquired by such Mortgagor in and to all geological, geophysical, engineering, accounting, title and other technical or business data concerning the Oil and Gas Properties, or the Hydrocarbons, and all books, files, records, magnetic media, computer records and other forms of recording or obtaining access to such data.
(c) All rights, titles, interests and estates now owned or hereafter acquired by such Mortgagor in and to all Hydrocarbons.
(d) Any property that may from time to time hereafter, by delivery or by writing of any kind, be subjected to the Liens hereof by such Mortgagor or by anyone on such Mortgagors behalf; and the Mortgagee is hereby authorized to receive the same at any time as additional security hereunder.
(e) All of the rights, titles and interests of every nature whatsoever now owned or hereafter acquired by such Mortgagor in and to the Oil and Gas Properties and all other rights, titles, interests and estates and every part and parcel thereof, including, without limitation, any rights, titles, interests and estates as the same may be enlarged by the discharge of any payments out of production or by the removal of any charges or Permitted Encumbrances or other Liens to which any of such Oil and Gas Properties or other rights, titles, interests or estates are subject or otherwise; all rights of such Mortgagor to Liens securing payment of proceeds from the sale of production from any of such Oil and Gas Properties, together with any and all renewals and extensions of any of such related rights, titles, interests or estates; all contracts and agreements supplemental to or amendatory of or in substitution for the contracts and agreements described or mentioned above; and any and all additional interests of any kind hereafter acquired by such Mortgagor in and to such related rights, titles, interests or estates.
(f) All of such Mortgagors rights, titles and interests in and to all surface fees and fee estates described in Exhibit A , if any, compressor sites, settling ponds, equipment or pipe yards, office sites and all property and fixtures located thereon, whether such surface fees, fee estates, compressor sites, settling ponds, equipment or pipe yards, office sites, property and fixtures are fee simple estates, leasehold estates or otherwise, together with all present and future rights, titles, easements and estates now owned or hereafter acquired by such Mortgagor under or in connection with such interest.
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It is the intention of each Mortgagor and the Mortgagee herein to cover and affect hereby all interests that each Mortgagor may now own or may hereafter acquire in and to the interests and Property described on Exhibit A , even though such Mortgagors interests or the property be incorrectly described on Exhibit A or a description of a part or all of the interests or property described on Exhibit A or such Mortgagors interests therein be omitted, and notwithstanding that the interests as specified on Exhibit A may be limited to particular lands, specified depths or particular types of property interests.
Notwithstanding any provision in this Mortgage to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition of Mortgaged Property and no Building or Manufactured (Mobile) Home is hereby encumbered by this Mortgage. As used herein, Flood Insurance Regulations shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, (iv) the Flood Insurance Reform Act of 2004 as now hereafter in effect or any successor statute thereto and (v) the Biggert Waters Flood Reform Act of 2012 as now or hereafter in effect or any successor statute thereto, and any regulations promulgated thereunder.
Any fractions or percentages specified in Exhibit A in referring to a Mortgagors interests are solely for purposes of the warranties made by such Mortgagor pursuant to Section 4.1 and Section 4.4 and shall in no manner limit the quantum of interest affected by this Section 2.1 with respect to any Oil and Gas Property or with respect to any unit or well identified on Exhibit A .
2.2 Grant of Security Interest . To further secure payment of the Obligations when due, each Mortgagor hereby grants to the Mortgagee, for its benefit and the benefit of the Other Secured Persons, a security interest in and to all of the following (whether now or hereafter acquired by operation of law or otherwise):
(a) all As-Extracted Collateral from or attributable to the Mortgaged Property (including, without limitation, the Oil and Gas Properties described on Exhibit A );
(b) all Fixtures on the Mortgaged Property (including the Mortgaged Property described or to which reference is made herein or on Exhibit A) ; and
(c) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security, guarantees and other Supporting Obligations given with respect to any of the foregoing.
2.3 Obligations . This Mortgage is executed and delivered by each Mortgagor to secure the payment and performance when due of the following (the Obligations ): all advances to, and debts, liabilities, obligations, covenants and duties of, any Credit Party (and any Restricted Subsidiary of the Borrower in the case of any Secured Transaction Document) arising under any Credit Document or arising otherwise with respect to any Loan or Letter of Credit or under any Secured Cash Management Agreement or under any Hedge Agreement with respect to
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any Secured Hedge Transaction, 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 and including interest and fees that accrue after the commencement by or against any Credit Party, Restricted Subsidiary of the Borrower or any Affiliate thereof of any proceeding under any bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the generality of the foregoing, the Obligations of the Credit Parties under the Credit Documents and the other Secured Transaction Documents (and any of their Restricted Subsidiaries to the extent they have obligations under the Credit Documents or the other Secured Transaction Documents) include the obligation (including Guarantee Obligations) to pay principal, interest, charges, expenses, fees, attorney costs, indemnities and other amounts (including reimbursement obligations for amounts drawn under Letters of Credit) payable by any Credit Party (or any Restricted Subsidiary, as the case may be) under any Credit Document or any other Secured Transaction Document (including amounts payable in respect of an early termination under Secured Hedge Transactions and any unpaid amounts owing in respect thereof). Notwithstanding the foregoing, (a) the obligations of the Borrower or any Restricted Subsidiary under any Secured Hedge Transaction and under any Secured Cash Management Agreement shall be secured and guaranteed pursuant to the Security Documents and the Guarantee only to the extent that, and for so long as, the other Obligations are so secured and guaranteed, (b) any release of Collateral or Guarantors effected in the manner permitted by this Mortgage and the other Credit Documents shall not require the consent of the holders of Hedge Obligations under Secured Hedge Transactions or of the holders of Cash Management Obligations under Secured Cash Management Agreements , and (c) in no event shall Excluded Hedge Obligations (as defined in the Guarantee) be included as Obligations hereunder.
2.4 Fixture Filing, Etc . Without in any manner limiting the generality of any of the other provisions of this Mortgage: (i) some portions of the goods described or to which reference is made herein are or are to become Fixtures on the land described or to which reference is made herein or on Exhibit A ; (ii) the security interests created hereby under applicable provisions of the Applicable UCC will attach to all As-Extracted Collateral and all other Hydrocarbons; (iii) this Mortgage may be filed of record in the real estate records, Uniform Commercial Code records or other appropriate records as a financing statement; and (iv) one or more of the Mortgagors is the record owner of the real estate or interests in the real estate or immoveable property comprised of the Mortgaged Property.
2.5 Pro Rata Benefit . This Mortgage is executed and granted for the pro rata benefit and security of the Mortgagee and the Other Secured Persons to secure the Obligations for so long as same remains unpaid and thereafter until the Termination Date.
2.6 Excluded Properties . Notwithstanding anything herein to the contrary, in no event shall the Mortgaged Property include, and no Mortgagor shall be deemed to have granted a Lien under this Mortgage in, any of such Mortgagors right, title or interest in any of the following property:
(a) (i) any property to the extent that such grant of a Lien on such property is prohibited by any Requirement of Law or requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law, (ii) any property to the
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extent that such grant of a Lien on such property is (x) prohibited by, or constitutes a breach or default under, or results in (or would result in) the termination of (or would give any other party a right of termination of), or requires any consent not obtained under, any Contractual Requirement or equity holder or similar agreement or (y) otherwise constitutes or results (or would result) in the abandonment, invalidation or unenforceability of (or would give any other party a right of abandonment, invalidation or unenforceability of) any right, title or interest of such Mortgagor under any Contractual Requirement or equity holder or similar agreement, except, in each case, to the extent that such Requirement of Law or the term in such Contractual Requirement or equity holder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable Requirements of Law or purports to prohibit the granting of a Lien over all assets of such Mortgagor or (iii) any property to the extent that such grant of a Lien on such property would result in the forfeiture of such Mortgagors rights in the property; provided , however , that the foregoing exclusions shall not apply to the extent that any such prohibition, default or other term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the Applicable UCC of any relevant jurisdiction or any other applicable Requirement of Law; and provided , further , that each Mortgagor shall be deemed to have granted a Lien in all its rights, title and interests in any portion of such property that does not result in any of the consequences specified above including any Proceeds of such property; and provided , further , that, immediately upon the ineffectiveness, lapse or termination of any such Requirement of Law, prohibition or other limitation giving rise to the consequences specified above, the Mortgaged Property shall include, and each Mortgagor shall be deemed to have granted a security interest in, all such rights and interests as if such Requirement of Law, prohibition or other limitation had never been in effect; or
(b) Any property constituting Excluded Assets as such term is defined in the Collateral Agreement.
For the avoidance of doubt, nothing in this Section 2.6 shall be deemed to negate the requirement in the Credit Agreement that the Collateral Coverage Minimum be satisfied.
SECTION 3
ASSIGNMENT OF PRODUCTION
3.1 Assignment of Production . As further security for the payment of the Obligations and performance of each Mortgagors obligations under the Credit Agreement, the other Credit Documents and the Secured Transaction Documents, each Mortgagor hereby transfers, assigns, warrants and conveys to the Mortgagee for the pro rata and pari passu use and benefit of the Other Secured Persons, effective as of the date hereof, at 7:00 A.M., local time, all Hydrocarbons that are thereafter produced from and that accrue to the Mortgaged Property, and all proceeds therefrom until the Termination Date and the release or cancellation of the Mortgage. All parties producing, purchasing or receiving any such Hydrocarbons, or having such, or proceeds therefrom, in their possession for which they or others are accountable to the Mortgagee by virtue of the provisions of this Section, are authorized and directed to treat and regard the Mortgagee as the assignee and transferee of such Mortgagor and entitled in such Mortgagors place and stead to receive such Hydrocarbons and all proceeds therefrom; and said parties and each of them shall be fully protected in so treating and regarding the Mortgagee and shall be under no obligation to see to the application by the Mortgagee of any such proceeds or payments received by it.
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3.2 Event of Default . If an Event of Default shall occur and only for so long as such event shall be continuing, after written notice is provided to a Mortgagor by the Mortgagee, and to the extent permitted by applicable Requirement of Law:
(a) All of such Mortgagors Hydrocarbons and products thereof shall be delivered into pipelines connected with the Mortgaged Property, or to the purchaser thereof, to the credit of the Mortgagee, for its benefit and the benefit of the Other Secured Persons and all such revenues and proceeds thereof shall be paid directly to the Mortgagee, at its offices in New York, New York, with no duty or obligation of any party paying the same to inquire into the rights of the Mortgagee to receive the same, what application is made thereof, or as to any other matter;
(b) Such Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and division orders and other instruments as may be reasonably required or desired by the Mortgagee, after receipt of a written request from the Mortgagee, in order to have said proceeds and revenues so paid to the Mortgagee and, in addition to any and all rights of a secured party under Sections 9-607 and 9-609 of the Applicable UCC, the Mortgagee is fully authorized to receive and receipt for said revenues and proceeds, to endorse and cash any and all checks and drafts payable to the order of such Mortgagor or the Mortgagee for the account of such Mortgagor received from or in connection with said revenues or proceeds and to hold the proceeds thereof in a deposit account that is subject to a Control Agreement with the Mortgagee, a Lender or other acceptable commercial bank as additional collateral securing the Obligations, and to execute transfer and division orders in the name of such Mortgagor, or otherwise, with warranties binding such Mortgagor; provided that all proceeds received by the Mortgagee pursuant to this grant and assignment shall be applied as provided in Section 5.14 ;
(c) The Mortgagee shall not be liable for any delay, neglect or failure to effect collection of any proceeds or to take any other action in connection therewith or hereunder, but the Mortgagee shall have the right, at its election after written notice is provided to such Mortgagor, in the name of such Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Mortgagee in order to collect such funds and to protect the interests of the Mortgagee and/or such Mortgagor, with all costs, expenses and attorneys fees incurred in connection therewith being paid by such Mortgagor; and
(d) Such Mortgagor hereby appoints the Mortgagee as its attorney-in-fact to pursue any and all rights of such Mortgagor to Liens in the Hydrocarbons securing payment of proceeds of runs attributable to the Hydrocarbons, which power of attorney shall be coupled with an interest and shall be irrevocable until the Termination Date.
(e) Such Mortgagor does hereby specifically agree that third-parties shall be entitled to rely, and shall be fully protected in relying, upon any written notice by the Mortgagee that an Event of Default has occurred and is continuing for the purposes of Section 3.2 above.
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3.3 No Liability of the Mortgagee in Collecting . The Mortgagee is hereby absolved from all liability for failure to enforce collection of any proceeds so assigned (and no such failure shall be deemed to be a waiver of any right of the Mortgagee or the Other Secured Persons under this Section 3) and from all other responsibility in connection therewith, except the responsibility to account to any applicable Mortgagor for funds actually received.
3.4 No Modification of Payment Obligations . Nothing herein contained shall modify, detract from, limit or otherwise alter the absolute obligation of any Mortgagor to make prompt payment of all amounts constituting Obligations when and as the same become due regardless of whether the proceeds of the As-Extracted Collateral and Hydrocarbons are sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Obligations. Nothing in this Section 3 is intended to be an acceptance of collateral in satisfaction of the Obligations.
3.5 Status of Assignment . Notwithstanding the other provisions of this Section 3, the Mortgagee has agreed not to exercise its right to receive direct delivery of Hydrocarbons and payment of proceeds immediately. Rather, each party producing, purchasing or receiving Hydrocarbons may continue to make such deliveries or payments to the applicable Mortgagor until such time as such party has received notice from the Mortgagee that an Event of Default has occurred and is continuing and that such party is directed to make delivery or payment directly to the Mortgagee. The Mortgagee or any receiver appointed in judicial proceedings for the enforcement of this Mortgage shall have the right to receive all of the Hydrocarbons herein assigned and the proceeds therefrom after any Obligations has been declared due and payable in accordance with the provisions of the Credit Agreement and the other Credit Documents and to apply all of said proceeds as provided in Section 5.14 hereof. Upon any sale of the Mortgaged Property or any part thereof, whether pursuant to Section 5 or as permitted by the Credit Agreement, the Hydrocarbons thereafter produced from the property so sold, and the proceeds therefrom, shall be included in such sale and shall pass to the purchaser free and clear of the assignment contained in this Section.
SECTION 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Mortgagor hereby represents, warrants and covenants as follows:
4.1 Title . Mortgagor has good and defensible title to and is possessed of the Hydrocarbon Interests and has good title to the UCC Collateral. The Collateral is free of all Liens except Permitted Encumbrances.
4.2 Defend Title . This Mortgage is, and always will be kept as, a first priority Lien upon the Collateral, subject to any Permitted Encumbrances (provided that Liens permitted by Section 10.2 of the Credit Agreement may exist and attach to the Mortgaged Properties and may have whatever priority such Liens have under applicable law, provided that for the avoidance of
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doubt, no intent to subordinate priority of the Liens created hereby is intended or to be inferred by the existence thereof). Mortgagor further agrees that the Collateral shall remain affected and hypothecated unto and in favor of the Mortgagee until the full and final payment of the Obligations and Mortgagor consents and agrees not to sell, alienate, encumber or deteriorate the Collateral to the prejudice of this act, in each case, except as may be permitted by the Credit Agreement or any other Credit Document. Mortgagor will not create or suffer to be created or permit to exist any Lien, security interest or charge prior or junior to or on parity with the Lien of this Mortgage upon the Collateral or any part thereof other than such Permitted Encumbrances. Mortgagor will warrant and defend the title to the Collateral against the claims and demands of all other Persons whomsoever and will maintain and preserve the Lien created hereby (and its priority) until the Termination Date. If (i) an adverse claim be made against or a cloud develop upon the title to any part of the Collateral other than a Permitted Encumbrance or (ii) any Person shall challenge the priority or validity of the Liens created by this Mortgage, then Mortgagor agrees to defend immediately against such adverse claim or take appropriate action to remove such cloud, in each case, at Mortgagors sole cost and expense. Mortgagor further agrees that the Mortgagee may take such other action as it deems advisable to protect and preserve its interests in the Collateral, and in such event Mortgagor will indemnify the Mortgagee against any and all cost, attorneys fees and other expenses that it may incur in defending against any such adverse claim or taking action to remove any such cloud. For the avoidance of doubt, Section 4.1 and Section 4.2 shall not restrict, and are subject to, any disposition permitted by Section 10.4 of the Credit Agreement.
4.3 Not a Foreign Person . Mortgagor is not a foreign person within the meaning of the Code, Sections 1445 and 7701 (i.e., Mortgagor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).
4.4 Revenue and Cost Bearing Interest . Mortgagors ownership of the Hydrocarbon Interests and the undivided interests therein as specified on Exhibit A will, after giving full effect to all Permitted Encumbrances, afford Mortgagor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or that is allocated to such Hydrocarbon Interest specified as net revenue interest (as specified on Exhibit A ) on attached Exhibit A and will cause Mortgagor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest on attached Exhibit A , of the costs of drilling, developing and operating the wells identified on attached Exhibit A except to the extent of any proportionate corresponding increase in the net revenue interest.
SECTION 5
RIGHTS AND REMEDIES
5.1 Event of Default . An Event of Default under the Credit Agreement shall be an Event of Default under this Mortgage.
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5.2 Foreclosure and Sale .
(a) If an Event of Default shall occur and be continuing, to the extent provided by applicable Requirements of Law, the Mortgagee shall have the right and option to proceed with foreclosure and to sell all or any portion of such Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places in otherwise such manner and upon such notice as may be required by law, or, in the absence of any such requirement, as the Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers. Where the Mortgaged Property is situated in (or offshore of) more than one jurisdiction, notice as above provided shall be posted and filed in all such jurisdictions (if such notices are required by law), and all such Mortgaged Property may be sold in any such jurisdiction and any such notice shall designate the jurisdiction where such Mortgaged Property is to be sold. Nothing contained in this Section 5.2 shall be construed so as to limit in any way any rights to sell the Mortgaged Property or any portion thereof by private sale if and to the extent that such private sale is permitted under the Requirements of Law of the applicable jurisdiction or by public or private sale after entry of a judgment by any court of competent jurisdiction so ordering. Each Mortgagor hereby irrevocably appoints, effective upon the occurrence and during the continuance of an Event of Default, the Mortgagee, with full power of substitution, to be the attorney-in-fact of such Mortgagor and in the name and on behalf of such Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices that such Mortgagor ought to execute and deliver and do and perform any and all such acts and things that such Mortgagor ought to do and perform under the covenants herein contained, and generally to use the name of such Mortgagor in the exercise of all or any of the powers hereby conferred on the Mortgagee. At any such sale: (i) whether made under the power herein contained or any other legal enactment, or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for the Mortgagee to be physically present at, or to have constructive possession of, the Mortgaged Property (each Mortgagor hereby covenanting and agreeing to deliver any portion of the Mortgaged Property not actually or constructively possessed by the Mortgagee immediately upon the Mortgagees demand) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by the Mortgagee shall contain a general warranty of title, binding upon the applicable Mortgagor and its successors and assigns, (iii) each and every recital contained in any instrument of conveyance made by the Mortgagee shall conclusively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Obligations, advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor agent hereunder, (iv) any and all prerequisites to the validity thereof shall be conclusively presumed to have been performed, (v) the receipt of the Mortgagee or of such other party or officer making the sale shall be a sufficient discharge to the purchaser or purchasers for its purchase money and no such purchaser or purchasers, or its assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof, (vi) to the fullest extent permitted by law, each Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against each Mortgagor, and against any and all other persons claiming or to claim the property sold or
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any part thereof, by, through or under each such Mortgagor, and (vii) to the extent and under such circumstances as are permitted by law, the Mortgagee may be a purchaser at any such sale, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Obligations (in the order of priority set forth in Section 5.14 ) in lieu of cash payment.
(b) If an Event of Default shall occur and be continuing, then (i) the Mortgagee shall be entitled to all of the rights, powers and remedies afforded a secured party by the Applicable UCC with reference to the UCC Collateral and/or (ii) the Mortgagee may proceed as to any Collateral in accordance with the rights and remedies granted under this Mortgage or applicable law in respect of the Collateral. Such rights, powers and remedies shall be cumulative and in addition to those granted to the Mortgagee under any other provision of this Mortgage or under any other Credit Document. Written notice mailed to a Mortgagor as provided herein at least ten (10) days prior to the date of public sale of any part of the Collateral owned by such Mortgagor that is personal property subject to the provisions of the Applicable UCC, or prior to the date after which private sale of any such part of the Collateral will be made, shall constitute reasonable notice.
5.3 Substitute Agents . The Mortgagee may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by the Mortgagee, including the posting of notices and the conduct of sale, but in the name and on behalf of the Mortgagee. If the Mortgagee shall have given notice of sale hereunder, any successor, substitute mortgagee or agent thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor, substitute mortgagee or agent conducting the sale.
5.4 Judicial Foreclosure; Receivership . Upon the occurrence of and during the continuance of an Event of Default, the Mortgagee shall have the right and power, but not the obligation, to proceed by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Collateral under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Collateral under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy.
5.5 Foreclosure for Installments . Upon the occurrence of and during the continuance of an Event of Default, the Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Obligations that have not been paid when due either through the courts or by proceeding with foreclosure in satisfaction of the matured but unpaid portion of the Obligations as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest and other Obligations then due; such sale may be made subject to the unmatured portion of the Obligations, and any such sale shall not in any manner affect the unmatured portion of the Obligations, but as to such unmatured portion of the Obligations this Mortgage shall remain in full force and effect just as though no sale had been made hereunder. It is further agreed that upon the occurrence of and
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during the continuance of an Event of Default, several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Obligations, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Obligations without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Obligations.
5.6 Separate Sales . Upon the occurrence of and during the continuance of an Event of Default, the Collateral may be sold in one or more parcels and to the extent permitted by applicable Requirement of Law in such manner and order as the Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.
5.7 Possession of Mortgaged Property . If an Event of Default shall have occurred and be continuing, then, to the extent permitted by applicable law, the Mortgagee shall have the right and power, but not the obligation, to enter into and upon and take possession of all or any part of the Collateral in the possession of any Mortgagor, its successors or assigns, or its or their agents or servants, and may exclude each Mortgagor, its successors or assigns, and all persons claiming under any Mortgagor, and its or their agents or servants wholly or partly therefrom; and, holding the same, the Mortgagee may use, administer, manage, operate and control the Collateral and conduct the business thereof to the same extent as the applicable Mortgagor, its successors or assigns, might at the time do and may exercise all rights and powers of such Mortgagor, in the name, place and stead of such Mortgagor, or otherwise as the Mortgagee shall deem best, in its sole discretion.
5.8 Occupancy After Foreclosure . In the event there is a foreclosure sale hereunder and at the time of such sale any Mortgagor or any Mortgagors heirs, devisees, representatives, successors or assigns or any other person claiming any interest in the Collateral by, through or under any Mortgagor, are occupying or using the Mortgaged Property or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either the landlord or tenant, at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; to the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will. In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the Mortgaged Property (such as an action for forcible entry and detainer) in any court having jurisdiction.
5.9 Remedies Cumulative, Concurrent and Nonexclusive . Every right, power, privilege and remedy herein given to the Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the Applicable UCC in effect and applicable to the Collateral or any portion thereof). Each and every right, power, privilege and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by the Mortgagee, and the exercise, or the beginning of the exercise, or the abandonment, of any such right, power, privilege or remedy shall not be deemed a waiver of the right to exercise, at the same time or
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thereafter any other right, power, privilege or remedy. No delay or omission by the Mortgagee or any Other Secured Person in the exercise of any right, power or remedy shall impair any such right, power, privilege or remedy or operate as a waiver thereof or of any other right, power, privilege or remedy then or thereafter existing.
5.10 Discontinuance of Proceedings . If the Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under any Credit Document or available at law and shall thereafter elect to discontinue or abandon same for any reason, then it shall have the unqualified right so to do and, in such an event, the parties shall be restored to their former positions with respect to the Obligations, this Mortgage, the Credit Agreement, the Collateral and otherwise, and the rights, remedies, recourses and powers of the Mortgagee shall continue as if same had never been invoked.
5.11 No Release of Obligations . No Mortgagor, Guarantor or other person hereafter obligated for payment of all or any part of the Obligations shall be relieved of such obligation, to the extent the Obligations remain due and owing, by reason of: (a) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (b) any agreement or stipulation between any subsequent owner of the Mortgaged Property and the Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Mortgage without first having obtained the consent of, given notice to or paid any consideration to any Mortgagor, any Guarantor or such other Person, and in such event each Mortgagor, Guarantor and all such other Persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by the Mortgagee; or (c) by any other act or occurrence save and except upon the Termination Date.
5.12 Release of and Resort to Collateral . The Mortgagee may release, regardless of consideration, any part of the Collateral without, as to the remainder, in any way impairing, affecting, subordinating or releasing the Lien created in or evidenced by this Mortgage or its stature as a first and prior Lien, in and to the Collateral, provided that Permitted Encumbrances may exist, and without in any way releasing or diminishing the liability of any Person liable for the repayment of the Obligations. For payment of the Obligations, the Mortgagee may resort to any other security therefor held by the Mortgagee in such order and manner as the Mortgagee may elect.
5.13 Waiver of Redemption, Notice and Marshalling of Assets, Etc. To the fullest extent permitted by law, each Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to such Mortgagor by virtue of any present or future moratorium law or other law exempting the Collateral from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment and (b) any right to a marshalling of assets or a sale in inverse order of alienation. If any law referred to in this Mortgage and now in force, of which any Mortgagor or its successor or successors might take advantage despite the provisions hereof, shall hereafter be repealed or cease to be in force, such law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof. If the laws of any state that provides for a redemption period do not permit the redemption period to be waived, the redemption period shall be specifically reduced to the minimum amount of time allowable by statute.
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5.14 Application of Proceeds . The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received in any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:
(a) First, to the payment of all reasonable expenses incurred by the Mortgagee incident to the enforcement of this Mortgage, the Credit Agreement or any other Credit Document to collect any portion of the Obligations, including expenses of any entry or taking of possession, of any sale, of advertisement thereof, and of conveyances, and court costs, compensation of agents and employees, a reasonable commission to the keeper, if any, and reasonable legal fees, and to the payment of all other reasonable charges, expenses, liabilities and advances incurred or made by the Mortgagee under this Mortgage or in executing any trust or power hereunder; and
(b) Second, as set forth in Section 11.11 of the Credit Agreement.
5.15 Resignation of Operator . In addition to all rights and remedies under this Mortgage, at law and in equity, if any Event of Default shall occur and be continuing and the Mortgagee shall exercise any remedies under this Mortgage with respect to any portion of the Mortgaged Property (or any Mortgagor shall transfer any Mortgaged Property in lieu of foreclosure) whereupon such Mortgagor is divested of its title to any of the Collateral, the Mortgagee shall have the right to request that any operator of any Mortgaged Property that is either a Mortgagor or any Affiliate of a Mortgagor to resign as operator under the joint operating agreement applicable thereto, and no later than 60 days after receipt by such Mortgagor of any such request, such Mortgagor shall resign (or, to the extent it is able to do so, cause such other Person to resign) as operator of such Collateral.
5.16 Indemnity . THE INDEMNIFIED PARTIES SHALL NOT BE LIABLE, IN CONNECTION WITH ANY ACTION TAKEN, FOR ANY LOSS SUSTAINED BY ANY MORTGAGOR RESULTING FROM AN ASSERTION THAT THE MORTGAGEE HAS RECEIVED FUNDS FROM THE PRODUCTION OF HYDROCARBONS CLAIMED BY THIRD PERSONS OR ANY ACT OR OMISSION OF ANY INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE MORTGAGED PROPERTY INCLUDING SUCH LOSS THAT MAY RESULT FROM THE ORDINARY NEGLIGENCE OF AN INDEMNIFIED PARTY UNLESS SUCH LOSS IS CAUSED BY THE WILLFUL MISCONDUCT, BAD FAITH OR GROSS NEGLIGENCE OF THE INDEMNIFIED PARTY SEEKING INDEMNITY OR ANY OF ITS RELATED PARTIES. NO INDEMNIFIED PARTY SHALL BE OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF ANY MORTGAGOR. EACH MORTGAGOR AGREES TO PAY, AND TO SAVE THE INDEMNIFIED PARTIES HARMLESS FROM, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE AND
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ADMINISTRATION OF THIS MORTGAGE TO THE EXTENT THE BORROWER WOULD BE REQUIRED TO DO SO PURSUANT TO SECTION 13.5 OF THE CREDIT AGREEMENT. THE LIABILITIES OF ANY MORTGAGOR AS SET FORTH IN THIS SECTION 5.16 SHALL SURVIVE THE TERMINATION OF THIS MORTGAGE.
5.17 Failure to Perform . Each Mortgagor agrees that if it fails to perform any act or to take any action that it is required to perform or take hereunder or pay any money that such Mortgagor is required to pay hereunder, the Mortgagee, in such Mortgagors name or its or their own name or names, may, but shall not be obligated to, perform or cause to perform such act or take such action or pay such money.
SECTION 6
[RESERVED].
SECTION 7
MISCELLANEOUS
7.1 Releases .
(a) Full Release . On the Termination Date, the Mortgagee shall forthwith cause a full release and termination of this Mortgage to be entered upon the record at the expense of the applicable Mortgagor and shall execute and deliver or cause to be executed and delivered such instruments of satisfaction and reassignment as may be reasonably necessary or desirable for the release of the Liens created hereby on the Mortgaged Property. Other than as set forth in the foregoing sentence, this Mortgage shall remain and continue in full force and effect and be binding in accordance with and to the extent of its terms upon each Mortgagor and the successors and assigns thereof and shall inure to the benefit of the Mortgagee and the Other Secured Persons and their respective successors, indorsees, transferees and assigns; notwithstanding that from time to time prior to the Termination Date, any Mortgagor may be free from any Obligations.
(b) Partial Release . The Mortgagee, at the request and sole expense of a Mortgagor, shall promptly execute and deliver to such Mortgagor all releases, re-conveyances or other documents reasonably necessary or desirable for the release of the Liens created hereby on the Mortgaged Property, which shall include, without limitation, the agreement of the Mortgagee (on behalf of itself and on behalf of the Other Secured Persons) to release the security interests in, and the Liens on, the Collateral granted herein and created hereby, (i) upon any Disposition by such Mortgagor of any Mortgaged Property that is permitted under the Credit Agreement (other than to a Guarantor) and (ii) to the extent that the first sentence of Section 13.17(a) of the Credit Agreement provides for such release with respect to the Mortgaged Property.
(c) Possession of Notes . Each Mortgagor acknowledges and agrees that possession of any Note (or any replacements of any said Note or other instrument evidencing any part of the Obligations) at any time by such Mortgagor or any other Credit Party shall not in any manner extinguish the Obligations or this Mortgage, and such Mortgagor shall have the right to issue and reissue any of the Notes from time to time as its interest or as convenience may require, without in any manner extinguishing or affecting the Obligations or the Lien of this Mortgage.
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7.2 Severability . If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction and the remaining provisions hereof shall be liberally construed in favor of the Mortgagee and the Other Secured Persons in order to effectuate the provisions hereof. The invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction.
7.3 Successors and Assigns . The terms used to designate any party or group of persons shall be deemed to include the respective heirs, legal representatives, successors and permitted assigns of such Persons.
7.4 Satisfaction of Prior Encumbrance . To the extent that proceeds of the Credit Agreement are used to pay indebtedness secured by any outstanding Lien against the Mortgaged Property then the parties agree that: (a) such proceeds have been advanced at such Mortgagors request, and (b) the Mortgagee and the Lenders shall be subrogated to any and all rights and Liens owned by any owner or holder of such outstanding Liens, irrespective of whether said Liens are or have been released. It is expressly understood that, in consideration of the payment of such other indebtedness, each Mortgagor hereby waives and releases all demands and causes of action for offsets and payments to, upon and in connection with the said indebtedness. This Mortgage is made with full substitution and subrogation of the Mortgagee and its successors and assigns in and to all covenants and warranties by others heretofore given or made in respect of the Mortgaged Property or any part thereof.
7.5 Application of Payments to Certain Obligations . If any part of the Obligations cannot be lawfully secured by this Mortgage or if any part of the Collateral cannot be lawfully subject to the Lien hereof to the full extent of the Obligations, then all payments made shall be applied on said Obligations first in discharge of that portion thereof that is not secured by this Mortgage.
7.6 Nature of Covenants . The covenants and agreements herein contained shall constitute covenants running with the land and interests covered or affected hereby and shall be binding upon the heirs, legal representatives, successors and assigns of the parties hereto.
7.7 Notices . All notices, requests and demands pursuant hereto shall be made in accordance with Section 13.2 of the Credit Agreement (and notice to any Mortgagor shall be made in the manner for providing notice to and in care of the Borrower).
7.8 Expenses . Each Mortgagor agrees to pay any and all reasonable and documented out of pocket expenses (including all reasonable fees and disbursements of counsel) that may be paid or incurred by the Mortgagee in administering, enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, any Mortgagor under this Mortgage to the extent the Borrower would be required to do so pursuant to Section 13.5 of the Credit Agreement.
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7.9 Counterparts . This Mortgage is being executed in several counterparts, all of which are identical, except that to facilitate recordation, if the Mortgaged Property is situated in (or offshore of) more than one parish, descriptions of only those portions of the Mortgaged Property located in (or offshore of) the parish in which a particular counterpart is recorded shall be attached as Exhibit A to such counterpart. Each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.
7.10 Governing Law . Insofar as permitted by otherwise applicable law, this Mortgage shall be construed under and governed by the laws of the State of Louisiana.
7.11 Financing Statement; Fixture Filing . This Mortgage shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures included within the Mortgaged Property may be filed or filed for record in the real estate records, mortgage records or other appropriate records of each jurisdiction where any part of the Mortgaged Property (including said fixtures) is situated (or is offshore of). This Mortgage shall also be effective as a financing statement covering As-Extracted Collateral (including oil and gas and all other substances of value that may be extracted from the ground) and accounts financed at the wellhead or minehead of wells or mines located on the properties subject to the Applicable UCC and is to be filed for record in the real estate records, UCC records or other appropriate records of each jurisdiction where any part of the Mortgaged Property is situated (or is offshore of).
7.12 Filing of Financing Statements . Pursuant to the Applicable UCC, each Mortgagor authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record financing statements, continuation statements, amendments thereto and other filing or recording documents or instruments with respect to the Mortgaged Property without the signature of such Mortgagor in such form and in such offices as the Mortgagee reasonably determines appropriate to perfect the security interests of the Mortgagee under this Mortgage. Each Mortgagor also authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record such financing statements that describe the collateral covered thereby as all assets of the Mortgagor, all personal property of the Mortgagor or words of similar effect. Each Mortgagor shall pay all costs associated with the filing of such instruments.
In that regard, the following information is provided:
Name of Mortgagor: |
TALOS ERT LLC TALOS ENERGY OFFSHORE LLC TALOS ENERGY PHOENIX LLC TALOS GULF COAST OFFSHORE LLC TALOS GULF COAST ONSHORE LLC TALOS RESOURCES LLC |
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Address of Mortgagor: |
c/o Talos Production LLC 500 Dallas Street, Suite 2000 Houston, TX 77002-4727 Attention: Michael Harding Fax: (713) 351-4100 |
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7.13 Limit on Obligations and Collateral . It is the intention of each Mortgagor, the Mortgagee and the Other Secured Persons that this Mortgage not constitute a fraudulent transfer or fraudulent conveyance under any state or federal law that may be applied hereto. Each Mortgagor and, by the Mortgagees acceptance hereof, the Mortgagee and the Other Secured Persons hereby acknowledge and agree that, notwithstanding any other provision of this Mortgage, the indebtedness of each Mortgagor secured hereby shall be limited to the maximum amount of indebtedness that can be incurred or secured by such Mortgagor without rendering this Mortgage voidable under applicable law relating to fraudulent conveyances or fraudulent transfers.
7.14 References . The words herein, hereof, hereunder and other words of similar import when used in this Mortgage refer to this Mortgage as a whole, and not to any particular article, section or subsection. Any reference herein to a Section shall be deemed to refer to the applicable Section of this Mortgage unless otherwise stated herein. Any reference herein to an exhibit or schedule shall be deemed to refer to the applicable exhibit or schedule attached hereto unless otherwise stated herein.
SECTION 8
LOUISIANA PROVISIONS
8.1 Principles of Construction . In the event of any inconsistencies between the terms and conditions of this Section 8 and the other terms and conditions of this Mortgage, the terms and conditions of this Section 8 shall control and be binding. In the event of any conflict between this Section 8 and the Credit Agreement, the provisions hereof shall be controlling as necessary to create, preserve, perfect and maintain a valid mortgage lien and security interest upon the Collateral, otherwise the provision of the Credit Agreement shall be controlling.
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8.2 Future Advances . This Mortgage may secure future advances, and in accordance with Article 3298 of the Louisiana Civil Code, and as to all Obligations, present and future, secured by this Mortgage, notwithstanding the nature of such obligations or the date they arise, this Mortgage has effect between the parties from the time this Mortgage is executed, and as to third persons from the time this Mortgage is filed for registry.
8.3 Maximum Amount Secured . The maximum amount of Obligations that may be outstanding at any time and from time to time that this Mortgage secures shall be $1,500,000,000 (the Maximum Amount).
8.4 Alienation . The Mortgaged Property is to remain so specially mortgaged, affected and hypothecated unto and in favor of Mortgagee for the benefit of itself and the Other Secured Persons subject to the terms and conditions of Section 7.1 , and each Mortgagor is herein and hereby bound and obligated not to sell, alienate, mortgage or encumber the Mortgaged Property, or any part thereof, to the prejudice of this act, and not to permit or suffer the same to be so sold, alienated, deteriorated or encumbered, subject in each case to Permitted Encumbrances and any disposition permitted by Section 10.4 of the Credit Agreement.
8.5 Confession of Judgment . For purposes of foreclosure under Louisiana executory process procedures, each Mortgagor hereby acknowledges and confesses judgment in favor of the Mortgagee and the Other Secured Persons for the full amount of the Obligations.
8.6 Additional Louisiana Remedies . Upon the occurrence of an Event of Default, the Mortgagee may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against any Mortgagor and in and to the Mortgaged Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as the Mortgagee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of the Mortgagee: (i) institute proceedings for the complete foreclosure of this Mortgage in which case the Mortgaged Property may be sold for cash or upon credit in one or more parcels under ordinary or executory process, at the Mortgagees sole option, and with or without appraisement, appraisement being expressly waived; or (ii) to the extent permitted and pursuant to the procedures provided by applicable law, institute proceedings for the partial foreclosure of this Mortgage for the portion of the Obligations then due and payable, subject to the continuing lien of this Mortgage for the balance of the Obligations not then due; or (iii) institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained in this Mortgage, the Credit Agreement or the other Credit Documents; or (iv) recover judgment on the Obligations either before, during or after any proceedings for the enforcement of this Mortgage; or (v) apply for the appointment of a trustee, receiver, liquidator or conservator of the Mortgaged Property, without regard for the adequacy of the security for the Obligations and without regard for the solvency of any Mortgagor or of any person, firm or other entity liable for the payment of the Obligations; or (vi) sell the UCC Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, at such price or prices as the Mortgagee may deem satisfactory, and in connection with any such sale, each Mortgagor hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law
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now existing or hereafter adopted and agrees that 10 days prior written notice of the time and place of any such sale or other intended disposition of any of the UCC Collateral constitutes reasonable notification within the meaning of the Uniform Commercial Code, except that shorter or no notice shall be reasonable as to any UCC Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market; or (vii) pursue such other remedies as the Mortgagee may have under applicable law, including, without limitation, as a secured party under the Uniform Commercial Code.
8.7 Keeper . In the event the Mortgaged Property, or any part thereof, is seized as an incident to an action for the recognition or enforcement of this Mortgage by executory process, ordinary process, sequestration, writ of fieri facias or otherwise, each Mortgagor and the Mortgagee agree that the court issuing any such order shall, if petitioned for by Mortgagee, direct the applicable sheriff to appoint as a keeper of the Mortgaged Property, Mortgagee or any agent designated by Mortgagee or any person named by the Mortgagee at the time such seizure is effected. This designation is pursuant to Louisiana Revised Statutes 9:5131, et seq., and 9:5136, et seq., as the same may be amended, and Mortgagee shall be entitled to all the rights and benefits afforded thereunder. It is hereby agreed that the keeper shall be entitled to receive as compensation the reasonable costs and expenses incurred in the administration or preservation of the Mortgaged Property. The designation of keeper made herein shall not be deemed to require Mortgagee to provoke the appointment of such a keeper.
8.8 Waivers . Each Mortgagor waives in favor of the Mortgagee and the Other Secured Persons any and all homestead exemptions and other exemptions of seizure or otherwise to which such Mortgagor is or may be entitled under the constitution and statutes of the State of Louisiana insofar as the Mortgaged Property is concerned. Each Mortgagor further waives: (a) the benefit of appraisement as provided in Louisiana Code of Civil Procedure Articles 2332, 2336, 2723 and 2724, and all other laws conferring the same; (b) the notice of seizure required by Louisiana Code of Civil Procedure Articles 2293 and 2721; (c) the three days delay provided by Louisiana Code of Civil Procedure Articles 2331 and 2722; and (d) the benefit of the other provisions of Louisiana Code of Civil Procedure Articles 2331, 2722 and 2723, not specifically mentioned above.
8.9 Authentic Evidence . Any and all declarations of fact made by authentic act before a notary public in the presence of two competent witnesses by a person declaring that such facts lie within his knowledge, shall constitute authentic evidence of such facts for the purpose of executory process. Each Mortgagor specifically agrees that such an affidavit by a representative of Mortgagee as to the existence, amount, terms, and maturity of the Obligations and of a default thereunder shall, to the extent not prohibited by applicable law, constitute authentic evidence of such facts for the purpose of executory process.
8.10 Louisiana Defined Terms .
All references to the Uniform Commercial Code (and words of similar import) shall also refer to and include the Uniform Commercial Code, Louisiana Revised Statutes 10:1-101, et seq., and any and all provisions thereof corresponding to the Uniform Commercial Code.
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All references to a receiver or any person, entity or officer appointed for the purpose of administering and preserving the Mortgaged Property shall also mean, refer to and include a keeper under Louisiana Revised Statutes 9:5136, et seq.
All references to real property shall include immovable property as that term is used in the Louisiana Civil Code, and any and all references to personal property shall also include movable property.
All references to tangible property shall include corporeal property and any and all references to intangible property shall include incorporeal property.
The terms fee estate, fee simple or fee title with respect to property shall mean ownership as provided in Louisiana Civil Code Art. 477 unburdened by real rights in favor of others.
The term condemnation will include expropriation as that term is used in Louisiana law.
The term easement will include servitude and advantages as used in the Louisiana Civil Code.
The term building will include other constructions as that term is used in the Louisiana Civil Code.
References to county shall mean parish, if the reference is to a political subdivision of Louisiana.
The term Lien or lien shall include privilege, mortgage, security interest, assignment or other encumbrance.
All references to joint and several liability in relation to an obligation governed by Louisiana law shall include joint, several and solidary liability.
The phrase covenant running with the land and other words of similar import shall be deemed to include a real right in, or a recorded lease of, immovable property.
The term environmental laws shall include the Louisiana Environmental Quality Act, Louisiana Revised Statutes. 30:2001, et seq., as amended, and the rules and regulations promulgated thereunder, and the term hazardous materials shall include hazardous materials as defined in such laws.
The terms deed in lieu of foreclosure, conveyance in lieu of foreclosure and words of similar import shall include a giving in payment within the meaning of Louisiana Civil Code 2655-59, provided that such transaction shall be construed a transfer in partial payment of the Obligations unless otherwise expressly provided.
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Mortgaged Property shall include the right to receive proceeds attributable to the insurance loss of the Mortgaged Property, as provided in Louisiana Revised Statutes 9:5386.
8.11 Waiver and Release . Each Mortgagor and Mortgagee hereby waive the production of mortgage, conveyance, tax, paving, assignment of accounts receivable and other certificates and relieve and release the Notary Public before whom this Mortgage was passed from all responsibilities and liabilities in connection therewith.
8.12 No Paraph . Each Mortgagor acknowledges that no note or other evidence of Obligations has been paraphed for identification with this Mortgage.
8.13 Acceptance . The acceptance of this Mortgage by Mortgagee and the consent by Mortgagee to the terms and conditions of this Mortgage are presumed and, under the provisions of Louisiana Civil Code article 3289, Mortgagee has not been required to sign this Mortgage.
8.14 Reliance . Notwithstanding any reference herein to the Credit Agreement or any Secured Transaction Documents or other Credit Documents, no third party shall be obligated to inquire as to whether any term or condition set forth therein has occurred but shall be entitled to rely upon the certificate of the Mortgagee as to all events, including but not limited to the occurrence of an Event of Default and the right of the Mortgagee to enforce this Mortgage.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURES BEGIN NEXT PAGE]
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THUS DONE AND PASSED, on this 10th day of May, 2018, in multiple originals before me, the undersigned Notary Public in and for the County of Harris, State of Texas, and in the presence of the undersigned competent witnesses, who hereunto signed their names with the undersigned Mortgagor and me, Notary Public, after due reading of the whole.
Printed Name: | ||
NOTARY PUBLIC, in and for State of Texas |
My commission expires: | ||
Notarial No. | ||
[SEAL] |
Signature Page
EXHIBIT A
to
MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE
FILING AND FINANCING STATEMENT
Introduction
All references contained in this Exhibit A to the wells are intended to include references to the applicable Mortgagors well identification number and well name for any existing well, including any replacement well drilled in lieu thereof from which crude oil, natural gas or other Hydrocarbons are now or hereafter produced. All references contained in this Exhibit A to the Oil and Gas Properties are intended to include: (i) the volume or book and page, file, entry or instrument number of the appropriate records of the particular county or parish in the state where each such lease or other such lease or other instrument is recorded and (ii) all valid and existing amendments to such lease or other instrument of record in such county or parish record, as applicable, regardless of whether such amendments are expressly described herein. A special reference is herein made to each such lease or other instrument and the record thereof for a more particular description of the property and the interest sought to be affected by this Mortgage and for all other purposes.
Exhibit A
CERTIFIED COPY OF RESOLUTIONS OF MORTGAGORS
[SEE ATTACHED]
CERTIFIED RESOLUTIONS
Resolutions of
TALOS ERT LLC,
TALOS ENERGY OFFSHORE LLC,
TALOS ENERGY PHOENIX LLC,
TALOS GULF COAST OFFSHORE LLC,
TALOS GULF COAST ONSHORE LLC, and
TALOS RESOURCES LLC
May 10, 2018
The undersigned, the Executive Vice President, Chief Financial Officer and Treasurer of TALOS ERT LLC, a Delaware limited liability company, TALOS ENERGY OFFSHORE LLC, a Delaware limited liability company, TALOS ENERGY PHOENIX LLC, a Delaware limited liability company, TALOS GULF COAST OFFSHORE LLC, a Delaware limited liability company, TALOS GULF COAST ONSHORE LLC, a Delaware limited liability company, and TALOS RESOURCES LLC, a Delaware limited liability company (each a Mortgagor), does hereby certify in his/her official capacity, stated above, of each Mortgagor, and not in his/her individual capacity, as of the date hereof that the resolutions attached hereto as Exhibit A were adopted by each Mortgagor, by written consent in lieu of a meeting.
TALOS ERT LLC, TALOS ENERGY OFFSHORE LLC, TALOS ENERGY PHOENIX LLC, TALOS GULF COAST OFFSHORE LLC, TALOS GULF COAST ONSHORE LLC, and TALOS RESOURCES LLC |
||
By: | ||
Name: Michael L. Harding II | ||
Title: Executive Vice President, Chief Financial Officer and Treasurer |
EXHIBIT E
TO CREDIT AGREEMENT
COLLATERAL AGREEMENT
dated and effective as of
May 10, 2018,
among
TALOS ENERGY INC.,
TALOS PRODUCTION LLC,
each Pledgor identified herein,
and
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
TABLE OF CONTENTS
Page | ||||||
ARTICLE I. | ||||||
DEFINITIONS | ||||||
SECTION 1.01. |
Credit Agreement | 1 | ||||
SECTION 1.02. |
Other Defined Terms | 2 | ||||
ARTICLE II. | ||||||
PLEDGE OF EQUITY INTERESTS AND SECURITIES | ||||||
SECTION 2.01. |
Pledge | 6 | ||||
SECTION 2.02. |
Delivery of the Pledged Collateral | 6 | ||||
SECTION 2.03. |
Representations, Warranties and Covenants | 7 | ||||
SECTION 2.04. |
Certification of Limited Liability Company and Limited Partnership Interests | 8 | ||||
SECTION 2.05. |
Registration in Nominee Name; Denominations | 9 | ||||
SECTION 2.06. |
Voting Rights; Dividends and Interest, etc. | 9 | ||||
ARTICLE III. | ||||||
SECURITY INTERESTS IN PERSONAL PROPERTY | ||||||
SECTION 3.01. |
Security Interest | 11 | ||||
SECTION 3.02. |
Representations and Warranties | 14 | ||||
SECTION 3.03. |
Covenants | 15 | ||||
SECTION 3.04. |
Other Actions | 18 | ||||
SECTION 3.05. |
Covenants Regarding Patent, Trademark and Copyright Collateral | 19 | ||||
ARTICLE IV. | ||||||
REMEDIES | ||||||
SECTION 4.01. |
Remedies upon Default | 20 | ||||
SECTION 4.02. |
Application of Proceeds | 22 | ||||
SECTION 4.03. |
Grant of License to Use Intellectual Property | 22 | ||||
SECTION 4.04. |
Securities Act, etc. | 23 |
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ARTICLE V. | ||||||
MISCELLANEOUS | ||||||
SECTION 5.01. |
Notices | 23 | ||||
SECTION 5.02. |
Security Interest Absolute | 23 | ||||
SECTION 5.03. |
Limitation by Law | 24 | ||||
SECTION 5.04. |
Binding Effect; Several Agreement | 24 | ||||
SECTION 5.05. |
Successors and Assigns | 24 | ||||
SECTION 5.06. |
Agents Fees and Expenses; Indemnification | 24 | ||||
SECTION 5.07. |
Agent Appointed Attorney-in-Fact | 25 | ||||
SECTION 5.08. |
GOVERNING LAW; JURISDICTION; VENUE; WAIVER OF JURY TRIAL; CONSENT TO SERVICE OF PROCESS | 26 | ||||
SECTION 5.09. |
Waivers; Amendment | 26 | ||||
SECTION 5.10. |
Severability | 27 | ||||
SECTION 5.11. |
Counterparts | 27 | ||||
SECTION 5.12. |
Headings | 27 | ||||
SECTION 5.13. |
Termination or Release | 27 | ||||
SECTION 5.14. |
Additional Subsidiaries | 28 | ||||
SECTION 5.15. |
Right of Set-off | 29 | ||||
SECTION 5.16. |
No Recourse | 29 | ||||
SECTION 5.17. |
Corporate Formalities Representations | 29 | ||||
SECTION 5.18. |
Collateral in the Possession or Control of the Agent | 30 |
Schedules | ||
Schedule I | Subsidiary Parties | |
Schedule II | Pledged Stock; Debt Securities | |
Schedule III | Intellectual Property | |
Exhibits | ||
Exhibit I | Form of Supplement to the Collateral Agreement | |
Exhibit II | Form of Perfection Certificate |
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This COLLATERAL AGREEMENT dated and effective as of May 10, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this Agreement ), is among TALOS ENERGY INC. , a Delaware corporation ( Holdings ), TALOS PRODUCTION LLC , a Delaware limited liability company and a direct Subsidiary of Holdings (the Borrower ), each Legacy Blocker Entity (as defined below), each Subsidiary of the Borrower listed on Schedule I hereto and each Subsidiary of the Borrower that becomes a party hereto after the date hereof (each, a Subsidiary Party ) and JPMORGAN CHASE BANK, N.A. , as Collateral Agent (in such capacity, the Agent or the Collateral Agent ) for the Secured Parties.
WHEREAS, pursuant to the Credit Agreement, dated as of May 10, 2018 (as amended, restated, supplemented, waived or otherwise modified from time to time, the Credit Agreement ), among Holdings, the Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, Issuing Bank and Swingline Lender, the lenders from time to time parties thereto and the other Persons from time to time party thereto, the Borrower will from time to time incur loans and letter of credit obligations;
WHEREAS, each Pledgor is executing and delivering this Agreement pursuant to the terms of the Credit Agreement to induce the Lenders to extend credit;
WHEREAS, the Subsidiary Parties are Subsidiaries of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend credit thereunder.
Accordingly, the parties hereto agree as follows:
ARTICLE I.
Definitions
SECTION 1.01. Credit Agreement .
(a) Capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings assigned thereto in the Credit Agreement. All capitalized terms referred to in Article III hereof that are defined in Article 9 of the New York UCC and not defined in this Agreement have the meanings specified in Article 9 of the New York UCC. The term instrument shall have the meaning specified in Article 9 of the New York UCC.
(b) The rules of construction specified in Section 1.2 of the Credit Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
Account Debtor means any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.
Agent means the party named as such in this Agreement until a successor (including successors under the Credit Agreement) replaces it and, thereafter, means such successor.
Agreement has the meaning assigned to such term in the recitals hereto.
Article 9 Collateral has the meaning assigned to such term in Section 3.01 .
Borrower has the meaning assigned to such term in the recitals of this Agreement.
Collateral means Article 9 Collateral and Pledged Collateral.
Collateral Agent means the party named as such in this Agreement until a successor (including successors under the Credit Agreement) replaces it and, thereafter, means such successor.
Copyright License means any written agreement, now or hereafter in effect, granting any right to any Grantor under any Copyright now or hereafter owned by any third party, and all rights of any Grantor under any such agreement (including any such rights that such Grantor has the right to license).
Copyrights means all of the following now owned or hereafter acquired by any Grantor (or, as required in the context of the definition of Copyright License, any third party licensor): (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise; and (b) all registrations and applications for registration of any such Copyright in the United States or any other country, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule III .
Credit Agreement has the meaning assigned to such term in the recitals hereto.
Excluded Accounts shall have the meaning assigned to such term in the Credit Agreement.
Excluded Assets has the meaning assigned to such term in Section 3.01(a) .
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Excluded Securities means:
(a) any Equity Interests or debt with respect to which, in the reasonable judgment of the Agent and the Borrower evidenced in writing, the cost or other consequences of pledging such Equity Interests or debt in favor of the Secured Parties under the Security Documents shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom;
(b) solely in the case of any pledge of Equity Interests of any Foreign Subsidiary or FSHCO (in each case, that is owned directly by the Borrower or a Subsidiary Party) to secure the Obligations, any Equity Interest that is Voting Stock of such Foreign Subsidiary or FSHCO in excess of 99.99% of the outstanding Equity Interests of such class (except with respect to Talos Mex Holding Coöperatief U.A. (Netherlands), of which 100% of the outstanding Equity Interests shall be pledged);
(c) any Equity Interests or debt to the extent the pledge thereof would be prohibited by any Requirement of Law;
(d) any Equity Interests of any Subsidiary that is not a Wholly-Owned Subsidiary to the extent (A) that a pledge thereof to secure the Obligations is prohibited by any applicable organizational documents, joint venture agreement or shareholder agreement (other than customary non-assignment provisions that are ineffective under the Uniform Commercial Code or other applicable Requirements of Law), (B) any organizational documents, joint venture agreement or shareholder agreement prohibits such a pledge without the consent of any other party; provided that this clause (B) shall not apply if (1) such other party is a Credit Party or a Wholly-Owned Subsidiary or (2) consent has been obtained to consummate such pledge (it being understood that the foregoing shall not be deemed to obligate the Borrower or any Subsidiary to obtain any such consent) and for so long as such organizational documents, joint venture agreement or shareholder agreement or replacement or renewal thereof is in effect, or (C) a pledge thereof to secure the Obligations would give any other party (other than a Credit Party or a Wholly-Owned Subsidiary) to any organizational documents, joint venture agreement or shareholder agreement governing such Equity Interests the right to terminate its obligations thereunder (other than customary non-assignment provisions that are ineffective under the Uniform Commercial Code or other applicable Requirement of Law);
(e) any Equity Interests of any Immaterial Subsidiary and any Unrestricted Subsidiary;
(f) any Equity Interests of any Subsidiary of a Foreign Subsidiary;
(g) any Equity Interests set forth on Schedule 1.1(b) of the Credit Agreement that have been identified on or prior to the Closing Date in writing to the Agent by an Authorized Officer of the Borrower and agreed to by the Agent; and
(h) any Margin Stock as defined in Regulation U of the Board of Governors of the Federal Reserve System of the United States of America.
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Federal Securities Laws has the meaning assigned to such term in Section 4.04 .
General Intangibles means all general intangibles as defined in the New York UCC, including all choses in action and causes of action and all other intangible personal property of any Grantor of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, any Hedge Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises and tax refund claims.
Grantor means the Borrower and each Subsidiary Party.
Holdings has the meaning assigned to such term in the recitals of this Agreement.
Indemnitee has the meaning assigned to such term in Section 5.06 .
Intellectual Property means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names, confidential or proprietary technical and business information, know-how, show-how or other data or information and all related documentation.
Legacy Blocker Entity shall mean each of (i) AIF VII (Talos DC), LLC, a Delaware limited liability company, (ii) ANRP (Talos DC), LLC, a Delaware limited liability company, (iii) AP Overseas Talos Holdings (DC I), LLC, a Delaware limited liability company, (iv) AP Overseas Talos Holdings (DC II), LLC, a Delaware limited liability company, (v) AP Overseas Talos Holdings (DC III), LLC, a Delaware limited liability company, (vi) AP Overseas Talos Holdings (DC IV), LLC, a Delaware limited liability company, (vii) New Talos Sub Inc., a Delaware corporation, and (viii) Riverstone V Non-U.S. Talos Corp, a Delaware corporation (collectively, the Legacy Blocker Entities ).
New York UCC means the Uniform Commercial Code as from time to time in effect in the State of New York.
Obligations means Obligations as defined in the Credit Agreement other than Excluded Hedge Obligations as defined in the Credit Agreement.
Patent License means any written agreement, now or hereafter in effect, granting to any Grantor any right to make, use or sell any invention covered by a Patent, now or hereafter owned by any third party (including any such rights that such Grantor has the right to license).
Patents means all of the following now owned or hereafter acquired by any Grantor (or, as required in the context of the definition of Patent License, any third party licensor): (a) all patents of the United States or the equivalent thereof in any other country,
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and all applications for patents of the United States or the equivalent thereof in any other country, including those listed on Schedule III , and (b) all reissues, continuations, divisions, continuations-in-part or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.
Perfection Certificate means a certificate substantially in the form of Exhibit II or another form reasonably acceptable to the Agent, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by an officer of the Borrower.
Permitted Liens means Liens that are not prohibited by the Credit Agreement.
Pledged Collateral has the meaning assigned to such term in Section 2.01 .
Pledged Debt Securities has the meaning assigned to such term in Section 2.01 .
Pledged Securities means any promissory notes, stock certificates or other certificated securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.
Pledged Stock has the meaning assigned to such term in Section 2.01 .
Pledgor shall mean Holdings, the Borrower, each Subsidiary Party, and each Legacy Blocker Entity.
Security Interest has the meaning assigned to such term in Section 3.01 .
Subsidiary Party has the meaning assigned to such term in the preliminary statement of this Agreement.
Trademark License means any written agreement, now or hereafter in effect, granting to any Grantor any right to use any Trademark now or hereafter owned by any third party (including any such rights that such Grantor has the right to license).
Trademarks means all of the following now owned or hereafter acquired by any Grantor (or, as required in the context of the definition of Trademark License, any third party licensor): (a) all trademarks, service marks, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations thereof (if any), and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all renewals thereof, including those listed on Schedule III and (b) all goodwill associated therewith or symbolized thereby.
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ARTICLE II.
Pledge of Equity Interests and Securities
SECTION 2.01. Pledge . As security for the payment or performance, as the case may be, in full of the Obligations, each Pledgor hereby assigns and pledges to the Agent, its successors and permitted assigns, for the benefit of the Secured Parties, and hereby grants to the Agent, its successors and permitted assigns, for the benefit of the Secured Parties, a security interest in all of such Pledgors right, title and interest in, to and under (a) the Equity Interests in each Material Subsidiary directly owned by it (which such Equity Interests constituting Pledged Stock as of the date hereof shall be listed on Schedule II ) and any other Equity Interests in a Material Subsidiary obtained in the future by such Pledgor and any certificates representing all such Equity Interests (collectively, the Pledged Stock ); provided that (i) the Pledged Stock shall not include any Excluded Securities and (ii) in the case of Holdings and each Legacy Blocker Entity, such pledge shall be limited to the Equity Interests of the Borrower or any Legacy Blocker Entity directly owned by it; (b)(i) the debt securities currently issued to any Grantor (which such debt securities constituting Pledged Debt Securities as of the date hereof shall be listed on Schedule II ), (ii) any debt securities in the future issued to such Grantor and (iii) the promissory notes and any other instruments, if any, evidencing such debt securities (collectively, the Pledged Debt Securities ); provided that the Pledged Debt Securities shall not include any Excluded Securities; (c) subject to Section 2.06 , all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other proceeds received in respect of, the securities referred to in clauses (a) and (b) above; (d) subject to Section 2.06 , all rights and privileges of such Pledgor with respect to the securities and other property referred to in clauses (a) , (b) and (c) above; and (e) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the Pledged Collateral ).
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Agent, its successors and permitted assigns, for the benefit of the Secured Parties, forever; subject , however , to the terms, covenants and conditions hereinafter set forth.
SECTION 2.02. Delivery of the Pledged Collateral .
(a) Except as otherwise required in accordance with Section 6 of the Credit Agreement with respect to the delivery of Pledge Collateral required on the Closing Date, each Pledgor agrees promptly (and in any event within 45 days after the acquisition (or such longer time as the Agent shall permit in its reasonable discretion)) to deliver or cause to be delivered to the Agent, for the benefit of the Secured Parties, any and all Pledged Securities to the extent such Pledged Securities are either (i) Equity Interests in Subsidiaries of such Pledgor or (ii) in the case of promissory notes or other instruments evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 2.02 .
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(b) Each Pledgor will cause any Indebtedness (other than Excluded Securities) (i) having an aggregate principal amount in excess of $10,000,000 or (ii) payable by the Borrower or any Subsidiary (other than intercompany Indebtedness having a term not exceeding 364 days and made in the ordinary course of business) to be evidenced by a duly executed promissory note that is pledged and delivered to the Agent, for the benefit of the Secured Parties, pursuant to the terms hereof. To the extent any such promissory note is a demand note, each Pledgor party thereto agrees, if requested by the Agent, to immediately demand payment thereunder upon an Event of Default specified under Section 11.1 or 11.5 of the Credit Agreement.
(c) Upon delivery to the Agent, (i) any Pledged Securities required to be delivered pursuant to the foregoing paragraphs (a) and (b) of this Section 2.02 shall be accompanied by stock powers or note powers, as applicable, duly executed in blank or other instruments of transfer reasonably satisfactory to the Agent and by such other instruments and documents as the Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral delivered pursuant to the terms of this Agreement shall be accompanied to the extent necessary to perfect the security interest in or allow realization on the Pledged Collateral by proper instruments of assignment duly executed by the applicable Pledgor and such other instruments or documents as the Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be attached hereto as Schedule II (or a supplement to Schedule II , as applicable) and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.
SECTION 2.03. Representations, Warranties and Covenants . Each Grantor (and Holdings and each Legacy Blocker Entity solely with respect to its Pledged Stock consisting of the Borrowers Equity Interests) represents and warrants to, and covenants with, the Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock and includes all Equity Interests, debt securities and promissory notes or instruments evidencing Indebtedness required to be (i) pledged in order to satisfy Section 6(e) or Section 9.11 of the Credit Agreement or (ii) delivered pursuant to Section 2.02(b) ;
(b) the Pledged Stock, to the best of each Pledgors knowledge, have been duly and validly authorized and issued by the issuers thereof and are fully paid and nonassessable;
(c) except for the security interests granted hereunder, each Pledgor (i) is and, subject to any transfers made in compliance with the Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Pledgor, (ii) holds the same free and clear of all Liens, other than Permitted Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than pursuant to a transaction not prohibited by the Credit Agreement and other than Permitted Liens, and (iv) subject
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to the rights of such Pledgor under the Credit Documents to dispose of Pledged Collateral, will use commercially reasonable efforts to defend its title or interest thereto or therein against any and all Liens (other than Permitted Liens), however arising, of all persons;
(d) other than as set forth in the Credit Agreement or the schedules thereto and except for restrictions and limitations imposed by the Credit Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter, by-law, memorandum of association or articles of association provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Agent of rights and remedies hereunder other than under applicable Requirements of Law;
(e) each Pledgor has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated;
(f) other than as set forth in the Credit Agreement or the schedules thereto, no consent or approval of any Governmental Authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of this Agreement, when any Pledged Securities are delivered to the Agent, for the benefit of the Secured Parties, in accordance with this Agreement, and a financing statement in respect of the Pledged Securities is filed in the appropriate filing office, the Agent will obtain, for the benefit of the Secured Parties, a legal, valid and perfected (except for any Equity Interests with respect to which, in the reasonable judgment of the Agent and the Borrower evidenced in writing delivered to the Agent, the costs or other consequences of perfecting such a security interest are excessive in view of the benefits to be obtained by the Secured Parties therefrom) lien upon and security interest in such Pledged Securities, subject only to Permitted Liens, as security for the payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Agent, for the benefit of the Secured Parties, the rights of the Agent in the Pledged Collateral as set forth herein.
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership Interests .
(a) Each interest in any limited liability company or limited partnership controlled by any Pledgor, pledged hereunder and represented by a certificate, shall be a security within the meaning of Article 8 of the New York UCC and shall be governed by Article 8 of the New York UCC, and each such interest shall at all times hereafter be represented by a certificate unless and until such interest is no longer such a security and the Pledgor complies with Section 2.04(b) .
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(b) Each interest in any limited liability company or limited partnership controlled by a Pledgor, pledged hereunder and not represented by a certificate shall not be a security within the meaning of Article 8 of the New York UCC and shall not be governed by Article 8 of the New York UCC (or other applicable Uniform Commercial Code in effect in another jurisdiction), and the Pledgors shall at no time elect to treat any such interest as a security within the meaning of Article 8 of the New York UCC or issue any certificate representing such interest, unless promptly thereafter (and in any event within 30 days (or such longer period as the Agent may agree to)) the applicable Pledgor provides notification to the Agent of such election and delivers, as applicable, any such certificate to the Agent pursuant to the terms hereof.
SECTION 2.05. Registration in Nominee Name; Denominations . If an Event of Default shall have occurred and be continuing, (a) the Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee or the name of its nominee (as pledgee or as sub-agent), or the name of the applicable Pledgor, endorsed or assigned in blank in favor of the Agent, and (b) each Pledgor will promptly give to the Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Pledgor. If an Event of Default shall have occurred and be continuing, the Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. Each Pledgor shall use its commercially reasonable efforts to cause any Subsidiary that is not a party to this Agreement to comply with a request by the Agent, pursuant to this Section 2.05 , to exchange certificates representing Pledged Securities of such Subsidiary for certificates of smaller or larger denominations.
SECTION 2.06. Voting Rights; Dividends and Interest, etc.
(a) Unless and until an Event of Default shall have occurred and be continuing and the Agent shall have given notice to the relevant Pledgors of the Agents intention to exercise its rights hereunder:
(i) Each Pledgor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Credit Documents; provided that such rights and powers shall not be exercised in any manner that could be reasonably likely to materially and adversely affect the rights and remedies of any of the Agent or the other Secured Parties under this Agreement, the Credit Agreement or any other Credit Document or the ability of the Secured Parties to exercise the same.
(ii) The Agent shall promptly execute and deliver to each Pledgor, or cause to be executed and delivered to such Pledgor, all such proxies, powers of attorney and other instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.
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(iii) Each Pledgor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are not prohibited by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Credit Documents, and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Pledgor, shall be promptly (and in any event within 45 days of their receipt (or such longer time as the Agent shall permit in its reasonable discretion)) delivered to the Agent, for the benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the Agent).
(b) After the occurrence and during the continuance of an Event of Default and upon notice by the Agent to the relevant Pledgors of the Agents intention to exercise its rights hereunder, all rights of any Pledgor to dividends, interest, principal or other distributions that such Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested, for the benefit of the Secured Parties, in the Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions; provided that the Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Pledgors to receive and retain such amounts. All dividends, interest, principal or other distributions received by any Pledgor contrary to the provisions of this Section 2.06 shall not be commingled by such Pledgor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Agent, for the benefit of the Secured Parties, and shall be forthwith delivered to the Agent, for the benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the Agent). Any and all money and other property paid over to or received by the Agent pursuant to the provisions of this paragraph (b) shall be retained by the Agent in an account to be established by the Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02 . After all Events of Default have been cured or waived and the Borrower has delivered to the Agent a certificate to that effect, the Agent shall promptly repay to each Pledgor (without interest) all dividends, interest, principal or other distributions that such Pledgor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.
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(c) Upon the occurrence and during the continuance of an Event of Default and after notice by the Agent to the relevant Pledgors of the Agents intention to exercise its rights hereunder, subject to applicable Requirements of Law, all rights of any Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06 , and the obligations of the Agent under paragraph (a)(ii) of this Section 2.06 , shall cease, and all such rights shall thereupon become vested in the Agent, for the benefit of the Secured Parties, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that the Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Pledgors to exercise such rights. After all Events of Default have been cured or waived and the Borrower has delivered to the Agent a certificate to that effect, all rights of any Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06 , and the obligations of the Agent under paragraph (a)(ii) of this Section 2.06 , shall in each case be reinstated.
(d) Any notice given by the Agent to the Pledgors suspending their rights under paragraph (a) of this Section 2.06 (i) shall be in writing, (ii) may be given to one or more of the Pledgors at the same or different times and (iii) may suspend the rights of the Pledgors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Agents rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
ARTICLE III.
Security Interests in Personal Property
SECTION 3.01. Security Interest .
(a) As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the Security Interest ) in all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the Article 9 Collateral ):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash;
(iv) all Deposit Accounts, all Commodity Accounts and all Securities Accounts;
(v) all Documents;
(vi) all Equipment;
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(vii) all Fixtures;
(viii) all General Intangibles;
(ix) Goods;
(x) all Instruments;
(xi) all Intellectual Property;
(xii) all Inventory;
(xiii) all Investment Property other than the Pledged Collateral;
(xiv) all Letters of Credit and Letter of Credit Rights;
(xv) all minerals, oil, gas and As-Extracted Collateral;
(xvi) all books and records pertaining to the Article 9 Collateral; and
(xvii) substitutions, replacements, accessions, products and proceeds (including insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) and to the extent not otherwise included, all proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing.
Notwithstanding anything to the contrary in the Credit Documents, this Agreement shall not constitute a grant of a security interest in (and the Article 9 Collateral shall not include) and the other provisions of the Credit Documents with respect to Collateral need not be satisfied with respect to (a) motor vehicles or other assets subject to certificates of title and commercial tort claims, (b) any assets over which the granting of security interests in such assets would be prohibited by an enforceable contractual obligation binding on the assets that existed at the time of the acquisition thereof and was not created or made binding on the assets in contemplation or in connection with the acquisition of such assets (except in the case of assets owned on the Closing Date or acquired after the Closing Date with Indebtedness of the type permitted pursuant to Section 10.1(h) of the Credit Agreement) including, for the avoidance of doubt any assets subject to a Lien, on the Closing Date, pursuant to the Whitney Term Loan Documents (as defined in the Credit Agreement), applicable law or regulation (in each case, except to the extent such prohibition is unenforceable after giving effect to applicable provisions of the Uniform Commercial Code, other than proceeds thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibitions) or to the extent that such security interests would require obtaining the consent of any governmental authority or would result in materially adverse tax consequences as reasonably determined by the Borrower in consultation with the Collateral Agent, (c) those assets with respect to which, in the reasonable judgment of the Agent and the Borrower, evidenced in writing delivered by the Agent, the costs or other consequences of obtaining or perfecting such a security interest are excessive in view of the benefits to be obtained by the Secured Parties therefrom, (d) any Letter of Credit Rights (other than to the extent a Lien thereon can be
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perfected by filing a customary financing statement), (e) any Excluded Securities, (f) any Grantors right, title or interest in any license, contract or agreement to which such Grantor is a party or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would violate the terms of applicable law or of such license, contract or agreement, or result in a breach of the terms of, or constitute a default under, any such license, contract or agreement to which such Grantor is a party (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or regulation (including Title 11 of the United States Code) or principles of equity); provided that, immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (g) any equipment or other asset owned by any Grantor that is subject to a purchase money lien or a Capitalized Lease Obligation, in each case, as not prohibited by the Credit Agreement, if the contract or other agreement in which such Lien is granted (or the documentation providing for such Capitalized Lease Obligation) prohibits or requires the consent of any person other than the Grantors as a condition to the creation of any other security interest on such equipment or asset and, in each case, such prohibition or requirement is not prohibited by the Credit Agreement, (h) any foreign collateral or credit support with respect to such foreign collateral (other than any Pledged Stock of a Foreign Subsidiary directly owned by a Grantor and pledged pursuant to Article III hereof), (i) any real property (owned or leased) or oil and gas properties (owned or leased) other than the Mortgaged Properties or (j) the Excluded Accounts (the foregoing clauses (a) through (j) , the Excluded Assets ).
(b) Each Pledgor hereby irrevocably authorizes the Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor, (ii) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates and (iii) a description of collateral that describes such property in any other manner as the Agent may reasonably determine is necessary or advisable to ensure the perfection of the security interest in the Article 9 Collateral granted under this Agreement, including describing such property as all assets or all property or words of similar effect. Each Grantor agrees to provide such information to the Agent promptly upon request.
The Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Agent as secured party.
(c) The Security Interest is granted as security only and shall not subject the Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.
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SECTION 3.02. Representations and Warranties . The Grantors jointly and severally represent and warrant to the Agent and the Secured Parties that:
(a) Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained and is in full force and effect or has otherwise been disclosed herein or in the Credit Agreement and the Schedules thereto.
(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, including the exact legal name of each Grantor, is correct and complete, in all material respects, as of the Closing Date. Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral have been prepared by the Agent based upon the information provided to the Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in the Perfection Certificate (or specified by notice from the Borrower to the Agent after the Closing Date in the case of filings, recordings or registrations required by Section 9.13 of the Credit Agreement), and constitute all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of United States Patents, United States registered Trademarks and United States registered Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements or amendments. Each Grantor represents and warrants that a fully executed agreement in the form hereof (or a short form hereof that shall be reasonably acceptable to the Agent) containing a description of all Article 9 Collateral consisting of Intellectual Property with respect to registered United States Patents (and Patents for which registration applications are pending), registered United States Trademarks (and Trademarks for which registration applications are pending) and registered United States Copyrights (and Copyrights for which registration applications are pending) has been delivered to the Agent for recording with the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Agent, for the benefit of the Secured Parties, in respect of all Article 9 Collateral consisting of such Intellectual Property in which a security interest may be perfected by recording with the United States Patent and Trademark Office and the
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United States Copyright Office, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or developed after the Closing Date).
(c) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 3.02(b) , a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) subject to Section 3.02(b) , a security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement (or a short form hereof) with the United States Patent and Trademark Office and the United States Copyright Office, as applicable. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral other than Permitted Liens.
(d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, other than Permitted Liens. None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens.
(e) Except as set forth in the Perfection Certificate, as of the Closing Date, all Accounts owned by the Grantors have been originated by the Grantors and all Inventory owned by the Grantors has been acquired by the Grantors in the ordinary course of business.
SECTION 3.03. Covenants .
(a) Each Grantor agrees promptly (and in any event within 10 days thereof, or such longer period of time as may be agreed by the Agent) to notify the Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure, (iii) in its Federal Taxpayer Identification Number or organizational identification number or (iv) in its jurisdiction of organization. Each Grantor agrees promptly to provide the Agent with certified organizational documents reflecting any of the changes described in the immediately preceding sentence. Each Grantor agrees that if it effects or permits any change referred to in the first sentence of this paragraph (a) it will ensure that all filings have been made, or will have
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been made within any applicable statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Agent at all times following such change to have a valid, legal and perfected first priority security interest (subject to Permitted Liens) in all the Article 9 Collateral, for the benefit of the Secured Parties. Each Grantor agrees promptly to notify the Agent if any material portion of the Article 9 Collateral owned or held by such Grantor is damaged or destroyed.
(b) Subject to the rights of such Grantor under the Credit Documents to dispose of Collateral, each Grantor shall, at its own expense, use commercially reasonable efforts to defend title to the Article 9 Collateral against all persons and to defend the Security Interest of the Agent, for the benefit of the Secured Parties, in the Article 9 Collateral and the priority thereof against any Lien that is not a Permitted Lien.
(c) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement and the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith.
Without limiting the generality of the foregoing, each Grantor hereby authorizes the Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III or adding additional schedules hereto to specifically identify any asset or item that may constitute Copyrights, Patents, Trademarks, Copyright Licenses, Patent Licenses or Trademark Licenses; provided that any Grantor shall have the right, exercisable within 90 days after it has been notified by the Agent of the specific identification of such Collateral, to advise the Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Article 9 Collateral. Each Grantor agrees that it will use its commercially reasonable efforts to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Article 9 Collateral within 90 days after the date it has been notified by the Agent of the specific identification of such Article 9 Collateral.
(d) (i) After the occurrence of an Event of Default and during the continuance thereof, the Agent shall have the right to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification and each Grantor shall furnish all such assistance and information as Agent may reasonably request in connection with any such verification. The Agent shall have the right to share any information it gains from such inspection or verification with any Secured Party.
(ii) The Agent hereby authorizes each Grantor to collect such Grantors Accounts and the Agent may curtail or terminate said authority at any time after written notice is provided by the Agent to such Grantor after the occurrence and during the continuance of an Event of Default.
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(iii) At the Agents written request at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall deliver to the Agent all original and other documents evidencing, and relating to, the agreements and transactions that gave rise to the Accounts, including all original orders, invoices and shipping receipts.
(e) At its option, the Agent may discharge any past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and that is not a Permitted Lien, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement or this Agreement, and each Grantor jointly and severally agrees to reimburse the Agent on demand for any reasonable payment made or any reasonable expense incurred by the Agent pursuant to the foregoing authorization; provided , however , that nothing in this Section 3.03(e) shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Credit Documents.
(f) Each Grantor (rather than the Agent or any Secured Party) shall remain liable for the observance and performance of all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral and each Grantor jointly and severally agrees to indemnify and hold harmless the Agent and the Secured Parties from and against any and all liability for such performance.
(g) None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as not prohibited by the Credit Agreement. None of the Grantors shall make or permit to be made any transfer of the Article 9 Collateral except as not prohibited by the Credit Agreement. Notwithstanding the foregoing, if the Agent shall have notified the Grantors that an Event of Default under Section 11.1 or 11.5 of the Credit Agreement shall have occurred and be continuing, and during the continuance thereof, the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Article 9 Collateral to the extent requested by the Agent (which notice may be given by telephone if promptly confirmed in writing).
(h) None of the Grantors will, without the Agents prior written consent (which consent shall not be unreasonably withheld), grant any extension of the time of payment of any Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with prudent business practices, except as not prohibited by the Credit Agreement.
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(i) Each Grantor irrevocably makes, constitutes and appoints the Agent (and all officers, employees or agents designated by the Agent) as such Grantors true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required by the Credit Documents or to pay any premium in whole or part relating thereto, the Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Agent reasonably deems advisable. All sums disbursed by the Agent in connection with this Section 3.03(i) , including reasonable attorneys fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Agent and shall be additional Obligations secured hereby.
(j) (i) With respect to any Deposit Account, Securities Account or Commodities Account (other than any Excluded Account, but only for so long as it is an Excluded Account) of a Grantor established, held or maintained on or after the Closing Date, such Grantor will promptly, but in any event on or before the earlier of (x) 30 days after the establishment of such Deposit Account, Securities Account or Commodities Account (or by such later date as the Agent shall reasonably agree) or (y) the first date on which the funds in such Deposit Account, Securities Account or Commodities Account would exceed $1,000,000, enter into a Control Agreement with the Agent and the depositary bank, securities intermediary or commodities intermediary for such Deposit Account, Securities Account or Commodities Account, respectively, on terms reasonably satisfactory to the Administrative Agent.
(ii) Until the proceeds of any Loans are transferred to a third party in accordance with the Credit Documents, each Grantor will hold the proceeds of any Loans made under the Credit Agreement in a Deposit Account and/or a Securities Account that is a Controlled Account.
SECTION 3.04. Other Actions . In order to further ensure the attachment, perfection and priority of, and the ability of the Agent to enforce, for the benefit of the Secured Parties, the Agents security interest in the Article 9 Collateral, each Grantor agrees, in each case at such Grantors own expense, to take the following actions with respect to the following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper . If any Grantor shall at any time own or acquire any Instruments or Tangible Chattel Paper evidencing an amount in excess of $10,000,000, such Grantor shall promptly (and in any event within 30 days of its acquisition (or such longer period as the Agent may agree to)) notify the Agent and promptly endorse, assign and deliver the same to the Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Agent may from time to time reasonably request.
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SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral . Except as not prohibited by the Credit Agreement:
(a) Each Grantor agrees that it will not knowingly do any act or omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees from doing any act or omitting to do any act) whereby any Patent material to the normal conduct of such Grantors business may become prematurely invalidated or dedicated to the public, and agrees that it shall take commercially reasonable steps with respect to any material products covered by any such Patent as necessary and sufficient to establish and preserve its rights under applicable patent laws.
(b) Each Grantor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each Trademark material to the normal conduct of such Grantors business, (i) maintain such Trademark in full force free from any adjudication of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of federal or foreign registration or claim of trademark or service mark as required under applicable law and (iv) not knowingly use or knowingly permit its licensees use of such Trademark in violation of any third-party rights.
(c) Each Grantor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each work covered by a material Copyright necessary to the normal conduct of such Grantors business that it publishes, displays and distributes, use copyright notice as required under applicable copyright laws.
(d) Each Grantor shall notify the Agent promptly if it knows that any Patent, Trademark or Copyright material to the normal conduct of such Grantors business may imminently become prematurely abandoned, lost or dedicated to the public, or of any materially adverse determination or development, excluding office actions and similar determinations or developments, in the United States Patent and Trademark Office, United States Copyright Office, any court or any similar office of any country, regarding such Grantors ownership of any such material Patent, Trademark or Copyright or its right to register or to maintain the same.
(e) Each Grantor, either itself or through any agent, employee, licensee or designee, shall (i) inform the Agent on an annual basis on or about the time of delivery of financial statements for such year (commencing with the financial statements for the fiscal year ended December 31, 2018) of each application by itself, or through any agent, employee, licensee or designee, for any Patent with the United States Patent and Trademark Office and each registration of any Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any comparable office or agency in any other country filed during the preceding twelve-month period, and (ii) upon the reasonable request of the Agent, execute and deliver any and all agreements, instruments, documents and papers as the Agent may reasonably request to evidence the Agents security interest in such Patent, Trademark or Copyright.
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(f) Each Grantor shall exercise its reasonable business judgment consistent with the practice in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any comparable office or agency in any other country with respect to maintaining and pursuing each material application relating to any Patent, Trademark and/or Copyright (and obtaining the relevant grant or registration) material to the normal conduct of such Grantors business and to maintain (i) each issued Patent and (ii) the registrations of each Trademark and each Copyright that is material to the normal conduct of such Grantors business, including, when applicable and necessary in such Grantors reasonable business judgment, timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if any Grantor believes necessary in its reasonable business judgment, to initiate opposition, interference and cancellation proceedings against third parties.
(g) In the event that any Grantor knows or has reason to know that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the normal conduct of its business has been materially infringed, misappropriated or diluted by a third party, such Grantor shall promptly notify the Agent and shall, if such Grantor deems it necessary in its reasonable business judgment, promptly sue and recover any and all damages, and take such other actions as are reasonably appropriate under the circumstances.
(h) Upon and during the continuance of an Event of Default, at the request of the Agent, each Grantor shall use commercially reasonable efforts to obtain all requisite consents or approvals from the licensor under each Copyright License, Patent License or Trademark License to effect the assignment of all such Grantors right, title and interest thereunder to (in the Agents sole discretion) the designee of the Agent or the Agent.
ARTICLE IV.
Remedies
SECTION 4.01. Remedies upon Default . Upon the occurrence and during the continuance of an Event of Default, subject to applicable Requirements of Law, each Pledgor agrees to deliver each item of Collateral to the Agent on demand, and it is agreed that the Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Pledgors to the Agent or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or a nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers thereunder cannot be obtained) and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to the applicable Pledgor to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party
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under the applicable Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Pledgor agrees that the Agent shall have the right, subject to the requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any brokers board or on any securities exchange, for cash, upon credit or for future delivery as the Agent shall deem appropriate. The Agent shall be authorized in connection with any sale of a security (if it deems it advisable to do so) pursuant to the foregoing to restrict the prospective bidders or purchasers to persons who represent and agree that they are purchasing such security for their own account, for investment, and not with a view to the distribution or sale thereof. Upon consummation of any such sale of Collateral pursuant to this Section 4.01 , the Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by law) all rights of redemption, stay, valuation and appraisal that such Pledgor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
The Agent shall give the applicable Pledgors 10 days written notice (which each Pledgor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Agents intention to make any sale of Collateral. At any such sale, the Collateral, or the portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Agent may (in its sole and absolute discretion) determine. The Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In the case of any sale of all or any part of the Collateral made on credit or for future delivery, the Collateral so sold may be retained by the Agent until the sale price is paid by the purchaser or purchasers thereof, but the Agent shall not incur any liability in the event that any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may be sold again upon notice given in accordance with provisions above. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section 4.01 , any Secured Party may bid for or purchase for cash, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Pledgor (all such rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Pledgor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Agent shall be free to carry out such sale pursuant to such agreement and no Pledgor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. To the extent provided in this Section 4.01 , any sale that complies with such provisions shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
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SECTION 4.02. Application of Proceeds . Upon the occurrence and during the continuance of an Event of Default, the Agent shall promptly apply the proceeds, moneys or balances of any collection or sale of Collateral, as well as any Collateral consisting of cash, in accordance with Section 11 of the Credit Agreement.
The Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Agent or such officer or be answerable in any way for the misapplication thereof.
SECTION 4.03. Grant of License to Use Intellectual Property . For the purpose of enabling the Agent to exercise rights and remedies under this Agreement at such time as the Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor grants (such grant effective solely after the occurrence and during the continuance of an Event of Default) to (in the Agents sole discretion) a designee of the Agent or the Agent, for the benefit of the Secured Parties, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to any Pledgor) to use, license or sublicense any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Pledgor, wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, the right to prosecute and maintain all Intellectual Property and the right to sue for past infringement of the Intellectual Property; provided , however , that nothing in this Section 4.03 shall require Grantors to grant any license that is prohibited by any rule of law, statute or regulation, or is prohibited by, or constitutes a breach or default under or results in the termination of, any contract, license, instrument or other agreement with an unaffiliated third party, to the extent not prohibited by the Credit Agreement, with respect to such Intellectual Property that is part of the Collateral now owned or hereafter acquired by such Grantor; and provided , further , that such licenses to be granted hereunder with respect to Trademarks shall be subject to the maintenance of quality standards with respect to the goods and services on which such Trademarks are used sufficient to preserve the validity of such Trademarks. For the avoidance of doubt, the use of such license by the Agent may be exercised, at the option of the Agent, only during the continuation of an Event of Default. Furthermore, each Grantor hereby grants to the Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document that may be required by the United States Copyright Office or the United States Patent and Trademark Office or any state office in order to effect an absolute assignment of all right, title and interest in each Patent, Trademark or Copyright, and to record the same.
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SECTION 4.04. Securities Act, etc. In view of the position of the Pledgors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar federal statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the Federal Securities Laws ) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Pledgor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Agent if the Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Pledgor acknowledges and agrees that in light of such restrictions and limitations, the Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws or, to the extent applicable, Blue Sky or other state securities laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Pledgor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 4.04 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Agent sells.
ARTICLE V.
Miscellaneous
SECTION 5.01. Notices . All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 13.2 of the Credit Agreement (whether or not then in effect), as such address may be changed by written notice to the Agent and the Borrower. All communications and notices hereunder to any Pledgor shall be given to it in care of the Borrower, with such notice to be given as provided in Section 13.2 of the Credit Agreement (whether or not then in effect).
SECTION 5.02. Security Interest Absolute . All rights of the Agent hereunder, the Security Interest, the security interest in the Pledged Collateral and all obligations of each Pledgor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Credit Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Credit Document, or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Obligations or this Agreement (other than a defense of payment or performance).
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SECTION 5.03. Limitation by Law . All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable Requirements of Law, and all the provisions of this Agreement are intended to be subject to all applicable Requirements of Law that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law or regulation.
SECTION 5.04. Binding Effect; Several Agreement . This Agreement shall become effective as to any party to this Agreement when a counterpart hereof executed on behalf of such party shall have been delivered to the Agent and a counterpart hereof shall have been executed on behalf of the Agent, and thereafter shall be binding upon such party and the Agent and their respective permitted successors and assigns, and shall inure to the benefit of such party, the Agent and the other Secured Parties and their respective permitted successors and assigns, except that no party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as not prohibited by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each party and may be amended, modified, supplemented, waived or released in accordance with Section 5.09 .
SECTION 5.05. Successors and Assigns . Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Pledgor or the Agent that are contained in this Agreement shall bind and inure to the benefit of their respective permitted successors and assigns. The Agent hereunder shall at all times be the same person that is the Collateral Agent under the Credit Agreement. Written notice of resignation by the Collateral Agent pursuant to the Credit Agreement shall also constitute notice of resignation as the Agent under this Agreement. Upon the acceptance of any appointment as the Collateral Agent under the Credit Agreement by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent pursuant hereto.
SECTION 5.06. Agent s Fees and Expenses; Indemnification .
(a) The parties hereto agree that the Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 13.5 of the Credit Agreement.
(b) Without limitation of its indemnification obligations under the other Credit Documents, each Pledgor jointly and severally agrees to indemnify the Agent and the other Persons entitled to indemnification under Section 13.5 of the Credit Agreement (each, an Indemnitee ) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements (limited to one counsel (unless there is an actual or perceived conflict of interest
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in which case each such Person may retain its own counsel or financial advisor), plus, if necessary, one local counsel per local jurisdiction, and one financial advisor, to the Administrative Agent) (except the allocated costs of in-house counsels), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of, (i) the execution or delivery of this Agreement or any other Credit Document or any agreement or instrument contemplated hereby or thereby the performance by the parties hereto and thereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby (including in connection with the appointment of any successor Agent in accordance with the applicable Credit Documents and in connection with any filings, registrations or any other actions to be taken to reflect the security interest of such successor Agent), (ii) the use of proceeds of the Loans or the use of any Letter of Credit or (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, or to the Collateral, whether or not any Indemnitee is a party thereto and regardless of whether such matter is initiated by a third party or any Pledgor; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from (i) the gross negligence or willful misconduct of the party to be indemnified or any of its Related Parties as determined by a final non-appealable judgment of a court of competent jurisdiction, (ii) any material breach (or, in the case of a proceeding brought by the Borrower, any breach) of any Credit Document by the Indemnitee or (iii) disputes, claims, demands, actions, judgments or suits not arising from any act or omission by the Borrower or its Affiliates, brought by an indemnified Person against any other indemnified Person (other than disputes, claims, demands, actions, judgments or suits involving claims against the Agent in its capacity as such).
(c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 5.06 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Credit Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Credit Document, or any investigation made by or on behalf of the Agent or any other Secured Party. All amounts due under this Section 5.06 shall be payable within fifteen days of written demand therefor.
SECTION 5.07. Agent Appointed Attorney-in-Fact . Each Pledgor hereby appoints the Agent the attorney-in-fact of such Pledgor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, subject to applicable Requirements of Law, the Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Agents name or in the name of such Pledgor, (a) to receive, endorse, assign or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due under and by virtue of any Collateral; (d) to sign the name of any Pledgor on any invoice or bill of lading relating to any of the Collateral; (e) to send verifications of Accounts to any Account Debtor; (f) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any
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court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (g) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (h) to notify, or to require any Pledgor to notify, Account Debtors to make payment directly to the Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Pledgor for any act or failure to act hereunder, except for their own or their Related Parties gross negligence or willful misconduct.
SECTION 5.08. GOVERNING LAW; JURISDICTION; VENUE; WAIVER OF JURY TRIAL; CONSENT TO SERVICE OF PROCESS .
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) THE TERMS OF SECTIONS 13.13 AND 13.15 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS , AND THE PARTIES HERETO AGREE TO SUCH TERMS.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED IN SECTION 5.01 . NOTHING IN THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVICE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 5.09. Waivers; Amendment .
(a) No failure or delay by the Agent, any Issuing Bank, any Lender or any other Secured Party in exercising any right, power or remedy hereunder or under any other Credit Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy, or any abandonment or discontinuance of steps to enforce such a right, power or remedy, preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the Agent, any Issuing Bank, the Lenders or any other Secured Party hereunder and under the other Credit Documents are cumulative and are not exclusive of any rights, powers or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Credit Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 5.09 , and then such waiver or consent shall be effective only in the
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specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or the issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Agent, any Lender, any Issuing Bank or any other Secured Party may have had notice or knowledge of such Default or Event of Default at the time. No notice or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof or of any other Security Document may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Agent and the Credit Party or Credit Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 13.1 of the Credit Agreement. The Agent may conclusively rely on a certificate of an officer of the Borrower as to whether any amendment contemplated by this Section 5.09(b) is permitted.
SECTION 5.10. Severability . In the event any one or more of the provisions contained in this Agreement or in any other Credit Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 5.11. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective as provided in Section 5.04 . Delivery of an executed counterpart to this Agreement by facsimile or electronic transmission ( i.e. a pdf or a tif) shall be as effective as delivery of a manually signed original.
SECTION 5.12. Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 5.13. Termination or Release .
(a) This Agreement, the pledges made herein, the Security Interest and all other security interests granted hereby, and all other Security Documents securing the Obligations, shall automatically terminate and/or be released all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the applicable Pledgors, as of the date when all the Obligations (other than (i) Hedging Obligations in respect of any Secured Hedge Transactions, (ii) Cash Management Obligations in respect of any Secured Cash Management Agreements and (iii) any contingent or indemnification obligations not then due) have been paid in full in cash or immediately available funds and the Lenders and any other Secured Parties have no further commitment to lend under the Credit Agreement, the aggregate Total Exposure has been reduced to zero and each Issuing Bank has no further obligations to issue Letters of Credit under the Credit Agreement.
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(b) A Subsidiary Party shall automatically be released from its obligations hereunder and the security interests in the Collateral of such Subsidiary Party shall be automatically released upon the consummation of any transaction not prohibited by the Credit Agreement as a result of which such Subsidiary Party ceases to be a Restricted Subsidiary or such Subsidiary is released from the Guarantee and from any other guarantee of the Credit Documents or otherwise ceases to be a Subsidiary Guarantor, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to such Subsidiary Party.
(c) (i) Upon any sale or other transfer by any Pledgor of any Collateral that is not prohibited by the Credit Agreement to any person that is not a Pledgor (including in connection with a Casualty Event), or (ii) upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 13.1 of the Credit Agreement, the security interest in such Collateral shall be automatically released, all without delivery of any instrument or performance of any act by any party.
(d) A Subsidiary Party shall automatically be released from its obligations hereunder and/or the security interests in any Collateral shall in each case be automatically released upon the occurrence of any of the circumstances set forth in Section 13.17 of the Credit Agreement, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to any applicable Subsidiary Party.
(e) In connection with any termination or release pursuant to paragraph (a) , (b) , (c) or (d) of this Section 5.13 , the Agent shall execute and deliver to any Pledgor, at such Pledgors expense, all documents that such Pledgor shall reasonably request to evidence such termination or release (including, without limitation, UCC termination statements), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral that may be in the possession of the Agent and has not theretofore been sold or otherwise applied or released pursuant to this Agreement. Any execution and delivery of documents pursuant to this Section 5.13 shall be without recourse to or warranty by the Agent. In connection with any release pursuant to paragraph (a) , (b) , (c) or (d) above, the Pledgors shall be permitted to take any action in connection therewith consistent with such release including, without limitation, the filing of UCC termination statements. Upon the receipt of any necessary or proper instruments of termination, satisfaction or release prepared by the Borrower, the Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Agreement or the Security Documents.
SECTION 5.14. Additional Subsidiaries . Upon execution and delivery by the Agent and any Subsidiary that is required to become a party hereto by Section 9.11 of the Credit Agreement of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a Subsidiary Party hereunder with the same force and effect as if originally named as a Subsidiary Party herein. The execution and delivery of any such instrument shall not require the consent of any other party to this Agreement. The rights and obligations of each party to this Agreement shall remain in full force and effect notwithstanding the addition of any new party to this Agreement.
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SECTION 5.15. Right of Set-off . If an Event of Default shall have occurred and be continuing, each Lender, the Agent and each Issuing Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender, the Agent or such Issuing Bank to or for the credit or the account of any party to this Agreement against any of and all the obligations of such party now or hereafter existing under this Agreement owed to such Lender, the Agent or such Issuing Bank, irrespective of whether or not such Lender, the Agent or such Issuing Bank shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender, the Agent and Issuing Bank under this Section 5.15 are in addition to other rights and remedies (including other rights of set-off) that such Lender, the Agent and such Issuing Bank may have. Notwithstanding anything to the contrary contained herein, no Secured Party or any of its respective Affiliates shall have a right to set off and apply any deposits held by, or other Indebtedness owing by, such Secured Party or any of its Affiliates to or for the credit or the account of any Subsidiary of a Credit Party that (i) is not a United States person within the meaning of Section 7701(a)(30) of the Code or (ii) is a Subsidiary of a Person described in clause (i) , unless (in either case) such Subsidiary is not a direct or indirect subsidiary of Holdings. Each Secured Party agrees promptly to notify the Borrower and the Agent after any such set-off and application made by such Secured Party; provided that the failure to give such notice shall not affect the validity of such set-off and application.
SECTION 5.16. No Recourse . Notwithstanding anything to the contrary in this Agreement, no recourse shall be had, whether by levy or execution, or under any law, or by the enforcement of any assessment or penalty or otherwise, for the payment of any of the Obligations, against Holdings or any of the assets of Holdings, other than the Pledged Collateral consisting of the Equity Interests in the Borrower directly owned by Holdings, it being expressly understood that the sole remedies available to the Agent and the Secured Parties pursuant to this Agreement with respect to the Obligations of Holdings shall be against such Pledged Collateral.
SECTION 5.17. Corporate Formalities Representations .
(a) Corporate Status . Each Grantor represents and warrants to the Agent, for the benefit of the Secured Parties, that it (a) is a duly organized and validly existing corporation or other entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact its business as now conducted and (b) has duly qualified and is authorized to do business and is in good standing (if applicable) in all jurisdictions where it is required to be so qualified, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.
(b) Corporate Power and Authority; Enforceability . Each Grantor represents and warrants to the Agent, for the benefit of the Secured Parties, that it has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Agreement, any Guarantee to which such Grantor is a party and any supplement to this Agreement or any Guarantee to which such Grantor is a party (collectively, for purposes of this Section 5.17 , the Collateral Documents ) and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of each Collateral
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Document to which it is a party. Each Grantor represents and warrants that it has duly executed and delivered each Collateral Document to which it is a party and each such Collateral Document to which it is a party constitutes the legal, valid and binding obligation of such Grantor enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors rights generally and general principles of equity (whether considered in a proceeding in equity or law).
SECTION 5.18. Collateral in the Possession or Control of the Agent . Beyond the exercise of reasonable care in the custody thereof, the Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Agent in good faith. The Agent shall have no duty to act outside of the United States of America in respect of Collateral.
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
TALOS ENERGY INC., as Holdings, |
TALOS PRODUCTION LLC, as the Borrower, |
AIF VII (TALOS DC), LLC, as a Legacy Blocker Entity, |
ANRP (TALOS DC), LLC, as a Legacy Blocker Entity, |
AP OVERSEAS TALOS HOLDINGS (DC I), LLC, as a Legacy Blocker Entity, |
AP OVERSEAS TALOS HOLDINGS (DC II), LLC, as a Legacy Blocker Entity, |
AP OVERSEAS TALOS HOLDINGS (DC III), LLC, as a Legacy Blocker Entity, |
AP OVERSEAS TALOS HOLDINGS (DC IV), LLC, as a Legacy Blocker Entity, |
NEW TALOS SUB INC., as a Legacy Blocker Entity, |
RIVERSTONE V NON-U.S. TALOS CORP, as a Legacy Blocker Entity, |
TALOS ENERGY OFFSHORE LLC, as Subsidiary Guarantor, |
TALOS ENERGY OPERATING GP LLC, as Subsidiary Guarantor, |
TALOS ENERGY OPERATING COMPANY LLC, as Subsidiary Guarantor, |
TALOS PRODUCTION FINANCE INC., as Subsidiary Guarantor, |
TALOS ERT LLC, as Subsidiary Guarantor, |
CKB PETROLEUM, LLC, as Subsidiary Guarantor, |
TALOS ENERGY INTERNATIONAL LLC, as Subsidiary Guarantor, |
TALOS GULF COAST LLC, as Subsidiary Guarantor, |
TALOS GULF COAST ONSHORE LLC, as Subsidiary Guarantor, |
TALOS GULF COAST OFFSHORE LLC, as Subsidiary Guarantor, |
TALOS MANAGEMENT INTERMEDIARY LLC, as Subsidiary Guarantor, |
TALOS MANAGEMENT HOLDINGS LLC, as Subsidiary Guarantor, |
TALOS ENERGY LLC, as Subsidiary Guarantor, |
TALOS ENERGY PHOENIX LLC, as Subsidiary Guarantor, |
TALOS ENERGY HOLDINGS LLC, as Subsidiary Guarantor, |
TALOS ARGO INC., as Subsidiary Guarantor, |
TALOS PETROLEUM LLC, as Subsidiary Guarantor, |
STONE ENERGY HOLDING, L.L.C., as Subsidiary Guarantor, and |
TALOS RESOURCES LLC, as Subsidiary Guarantor |
By: | ||||
Name: | Michael L. Harding II | |||
Title: | Executive Vice President, Chief | |||
Financial Officer and Treasurer |
S-1 | -Collateral Agreement- |
JPMORGAN CHASE BANK, N.A., as Collateral Agent |
||||
By: | ||||
Name: | Jo Linda Papadakis | |||
Title: | Authorized Officer |
S-2 | -Collateral Agreement- |
Schedule I
to the Collateral Agreement
Subsidiary Parties
Name |
Jurisdiction of Organization |
|
Talos Production Finance Inc. | Delaware | |
Talos Energy Operating GP LLC | Delaware | |
Talos Energy Operating Company LLC | Delaware | |
Talos Energy Offshore LLC | Delaware | |
Talos Gulf Coast LLC | Delaware | |
Talos ERT LLC | Delaware | |
CKB Petroleum, LLC | Delaware | |
Talos Management Intermediary LLC | Delaware | |
Talos Management Holdings LLC | Delaware | |
Talos Gulf Coast Onshore LLC | Delaware | |
Talos Gulf Coast Offshore LLC | Delaware | |
Talos Energy LLC | Delaware | |
Talos Energy Holdings LLC | Delaware | |
Talos Energy Phoenix LLC | Delaware | |
Talos Argo Inc. | Delaware | |
Talos Energy International LLC | Delaware | |
Talos Petroleum LLC | Delaware | |
Talos Resources LLC | Delaware | |
Stone Energy Holding, L.L.C. | Delaware |
Schedule II
to the Collateral Agreement
Pledged Stock; Debt Securities
1) Pledged Stock
Registered Owner |
Name of Issuer |
Number and Class of Equity Interests |
Percentage of Equity
Interests Pledged |
Number of Issuer Certificate |
||||
Talos Energy Inc. |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
New Talos Sub Inc. |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
Riverstone V Non-U.S. Talos Corp |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
AIF VII (Talos DC), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
ANRP (Talos DC), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
AP Overseas Talos Holdings (DC I), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
AP Overseas Talos Holdings (DC II), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
AP Overseas Talos Holdings (DC III), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
AP Overseas Talos Holdings (DC IV), LLC |
Talos Production LLC | Limited liability company interests | [__] | N/A | ||||
Talos Energy LLC |
Talos Energy Holdings LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos ERT LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Gulf Coast LLC | Limited liability company interests | 100% | N/A | ||||
Talos Gulf Coast LLC |
Talos Gulf Coast Onshore LLC | Limited liability company interests | 100% | N/A | ||||
Talos Gulf Coast LLC |
Talos Gulf Coast Offshore LLC | Limited liability company interests | 100% | N/A | ||||
Talos Energy LLC |
Talos Energy Phoenix LLC | Limited liability company interests | 100% | N/A | ||||
Talos Energy LLC |
Talos Argo Inc. | 1,000 shares of common stock | 100% | N/A | ||||
Talos Production LLC |
Talos Energy LLC | Limited liability company interests | 100% | N/A | ||||
Talos Gulf Coast LLC |
Talos Management Intermediary LLC | Limited liability company interests | 100% | N/A | ||||
Talos Gulf Coast LLC |
Talos Management Holdings LLC | Limited liability company interests | 99% | N/A | ||||
Talos Management Intermediary LLC |
Talos Management Holdings LLC | Limited liability company interests | 1% | N/A | ||||
Talos Production LLC |
Talos Energy Offshore LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Energy Operating GP LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Energy Operating Company LLC | Limited liability company interests | 99.99% | N/A | ||||
Talos Energy Operating GP LLC |
Talos Energy Operating Company LLC | Limited liability company interests | .01% | N/A | ||||
Talos ERT LLC |
CKB Petroleum, LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Production Finance Inc. | 100 shares of Common Stock | 100% | N/A | ||||
Talos Energy LLC |
Talos Petroleum LLC | Limited liability company interests | 100% | N/A | ||||
Talos Petroleum LLC |
Talos Resources LLC | Limited liability company interests | 100% | N/A | ||||
Talos Petroleum LLC |
Stone Energy Holding, L.L.C. | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Energy International LLC | Limited liability company interests | 100% | N/A | ||||
Talos Production LLC |
Talos Mex Holding Coöperatief U.A. | Limited liability company interests | 99% | N/A | ||||
Talos Energy International LLC |
Talos Mex Holding Coöperatief U.A. | Limited liability company interests | 1% | N/A |
2) Pledged Debt Securities
[None]
Schedule III
to the Collateral Agreement
Intellectual Property
Trademark of Talos Energy; Registration No. 4,854,099; Registered November 17, 2015
Exhibit I
to the Collateral Agreement
SUPPLEMENT NO. ______ dated as of _____________ (this Supplement ), to the Collateral Agreement dated as of May 10, 2018 (as heretofore amended and/or supplemented, the Collateral Agreement ), among TALOS ENERGY INC., a Delaware corporation ( Holdings ), TALOS PRODUCTION LLC, a Delaware limited liability company (the Borrower ), each Legacy Blocker Entity, each Subsidiary Party party thereto and JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, the Agent ) for the Secured Parties.
A. Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time, the Credit Agreement), among Holdings, the Borrower, the Lenders party thereto from time to time, the Agent and the other parties named therein.
B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Collateral Agreement referred to therein.
C. The Pledgors have entered into the Collateral Agreement in order to induce the Lenders to make Loans and each Issuing Bank to issue Letters of Credit. Section 5.14 of the Collateral Agreement provides that additional Subsidiaries may become Subsidiary Parties under the Collateral Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the New Subsidiary ) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Subsidiary Party under the Collateral Agreement in order to induce the Lenders to make additional Loans and each Issuing Bank to issue additional Letters of Credit and as consideration for Loans previously made and Letters of Credit previously issued.
Accordingly, the Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 5.14 of the Collateral Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party and Pledgor, Grantor or both, as applicable, under the Collateral Agreement with the same force and effect as if originally named therein as a Subsidiary Party and Pledgor, Grantor or both, as applicable, and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Collateral Agreement applicable to it as a Subsidiary Party and Pledgor, Grantor or both, as applicable thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor or Grantor, as applicable, thereunder are true and correct in all material respects on and as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations, does hereby create and grant to the Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and Lien on all the New Subsidiarys right, title and interest in and to the Collateral of the New Subsidiary. Each reference to a Subsidiary Party, a Pledgor or a Grantor in the Collateral Agreement shall be deemed to include the New Subsidiary. The Collateral Agreement is hereby incorporated herein by reference.
Ex. I-1
SECTION 2. The New Subsidiary represents and warrants to the Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other similar laws affecting creditors rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. This Supplement shall become effective when the Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary. Delivery of an executed signature page to this Supplement by facsimile or electronic transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of all the Pledged Stock and Pledged Debt Securities of the New Subsidiary as of the date hereof, (b) set forth on Schedule II attached hereto is a true and correct schedule of all Intellectual Property constituting United States registered Trademarks, Patents and Copyrights as of the date hereof and (c) set forth under its signature hereto, is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and organizational ID number as of the date hereof.
SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In the event any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Collateral Agreement shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, disbursements and other charges of counsel for the Agent.
Ex. I-2
IN WITNESS WHEREOF, the New Subsidiary has duly executed this Supplement to the Collateral Agreement as of the day and year first above written.
[Name of New Subsidiary] | ||||
By: | ||||
Name: | ||||
Title: |
Ex. I-3
Schedule I
to Supplement No. __ to the
Collateral Agreement
Pledged Collateral of the New Subsidiary
EQUITY INTERESTS
Number of Issuer Certificate |
Registered Owner |
Number and Class of
Equity Interests |
Percentage of Equity
Interests |
|||||||||
DEBT SECURITIES
Issuer |
Principal Amount | Date of Note | Maturity Date | |||||||||
Ex. I-4
Schedule II
to Supplement No. __ to the
Collateral Agreement
Intellectual Property of the New Subsidiary
Ex. I-5
Exhibit II
to the Collateral Agreement
Form of Perfection Certificate
See attached.
Ex. II-1
EXHIBIT F TO
CREDIT AGREEMENT
INTERCREDITOR AGREEMENT
dated as of
May 10, 2018
between
JPMORGAN CHASE BANK, N.A.,
as First Lien Agent
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Second Lien Agent
relating to
TALOS PRODUCTION LLC
TABLE OF CONTENTS
SECTION 1. Definitions |
1 | |||||
1.1 |
Defined Terms |
1 | ||||
1.2 |
Terms Generally |
10 | ||||
SECTION 2. Lien Priorities |
10 | |||||
2.1 |
Subordination of Liens |
10 | ||||
2.2 |
Prohibition on Contesting Liens |
11 | ||||
2.3 |
No New Liens |
11 | ||||
2.4 |
Confirmation of Subordination in Second Lien Collateral Documents |
11 | ||||
2.5 |
Perfection of Liens |
12 | ||||
2.6 |
Waiver of Marshalling |
12 | ||||
SECTION 3. Enforcement |
12 | |||||
3.1 |
Exercise of Remedies |
12 | ||||
3.2 |
Cooperation |
16 | ||||
3.3 |
Actions Upon Breach |
16 | ||||
SECTION 4. Payments |
16 | |||||
4.1 |
Nature of Claims |
16 | ||||
4.2 |
Application of Proceeds |
17 | ||||
4.3 |
Payments Over |
17 | ||||
SECTION 5. Other Agreements |
17 | |||||
5.1 |
Releases |
17 | ||||
5.2 |
Insurance |
19 | ||||
5.3 |
Amendments to Second Lien Collateral Documents |
19 | ||||
5.4 |
Rights As Unsecured Creditors |
20 | ||||
5.5 |
First Lien Agent as Gratuitous Bailee/Gratuitous Agent for Perfection |
20 | ||||
5.6 |
[Reserved] |
22 | ||||
5.7 |
Reinstatement |
22 | ||||
5.8 |
Refinancings |
22 | ||||
SECTION 6. Insolvency or Liquidation Proceedings |
22 | |||||
6.1 |
Financing Issues |
22 | ||||
6.2 |
Relief from the Automatic Stay |
24 | ||||
6.3 |
Adequate Protection |
24 | ||||
6.4 |
Avoidance Issues |
25 |
i
6.5 | Application | 25 | ||||
6.6 | Waivers | 25 | ||||
6.7 | Post-Petition Interest | 26 | ||||
6.8 | Separate Grants of Security and Separate Classification | 26 | ||||
6.9 | Reorganization Securities | 27 | ||||
6.10 | Voting | 27 | ||||
SECTION 7. Reliance; Waivers; etc. |
27 | |||||
7.1 | Reliance | 27 | ||||
7.2 | No Warranties or Liability | 27 | ||||
7.3 | Obligations Unconditional | 28 | ||||
SECTION 8. Miscellaneous |
28 | |||||
8.1 | Conflicts | 28 | ||||
8.2 | Continuing Nature of this Agreement; Severability | 28 | ||||
8.3 | Amendments; Waivers | 29 | ||||
8.4 | Information Concerning Financial Condition of the Company and its Subsidiaries | 29 | ||||
8.5 | Subrogation | 30 | ||||
8.6 | Application of Payments | 30 | ||||
8.7 | Governing Law; Jurisdiction; Consent to Service of Process; Waivers | 30 | ||||
8.8 | WAIVER OF JURY TRIAL | 31 | ||||
8.9 | Notices | 31 | ||||
8.10 | Further Assurances | 32 | ||||
8.11 | Governing Law | 32 | ||||
8.12 | Binding on Successors and Assigns | 32 | ||||
8.13 | Specific Performance | 32 | ||||
8.14 | Section Titles | 32 | ||||
8.15 | Counterparts | 33 | ||||
8.16 | Authorization | 33 | ||||
8.17 | No Third Party Beneficiaries; Successors and Assigns | 33 | ||||
8.18 | Effectiveness of Agreement | 33 | ||||
8.19 | Agent Capacities | 33 | ||||
8.20 | Relative Rights | 34 | ||||
8.21 | References | 34 | ||||
8.22 | Additional First Lien Facility or Second Lien Facility | 34 | ||||
8.23 | Intercreditor Agreements | 36 |
ii
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is dated as of May 10, 2018 (as amended, renewed, extended, supplemented, restated, replaced or otherwise modified from time to time, this Agreement ), between JPMORGAN CHASE BANK, N.A. ( JPMorgan ), in its capacity as the First Lien Agent, and WILMINGTON TRUST, NATIONAL ASSOCIATION ( WT ), in its capacity as the Second Lien Agent; and acknowledged and consented to by TALOS PRODUCTION LLC, a Delaware limited liability company (together with its successors in such capacity and as provided in Section 8.18 (Effectiveness of Agreement), the Company ), and the other Pledgors. Capitalized terms used but not defined in the preamble or the recitals to this Agreement have the meanings set forth in Section 1.1 below.
BACKGROUND
A. WHEREAS, the Company is a party to that certain Credit Agreement dated as of May 10, 2018 among Talos Energy Inc., a Delaware corporation ( Holdings ), the Company, the lenders and issuing banks party thereto from time to time, and JPMorgan, as administrative agent, collateral agent and swingline lender;
B. WHEREAS, the Company is a party to that certain Indenture, dated as of May 10, 2018 among the Company and Talos Production Finance Inc., a Delaware corporation ( Production Finance ), the subsidiary guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee and collateral agent;
C. WHEREAS, this Agreement governs the relationship between the First Lien Secured Parties as a group, on the one hand, and the Second Lien Secured Parties as a group, on the other, with respect to the Common Collateral; and
D. WHEREAS, it is understood and agreed that, after the date hereof, not all First Lien Secured Parties or the Second Lien Secured Parties, as the case may be, may have security interests in all of the Collateral and nothing in this Agreement is intended to give rights to any person in any Collateral in which such person (or its Representative or collateral agent) does not otherwise have a security interest.
Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. DEFINITIONS.
1.1 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
Agreement has the meaning assigned to such term in the preamble hereof.
Bankruptcy Code means Title 11 of the United States Code.
1
Bankruptcy Law means the Bankruptcy Code and any similar federal, state or foreign bankruptcy, insolvency or receivership law for the relief of debtors.
Business Day means any day excluding Saturday, Sunday and any other day on which banking institutions in New York City or Houston, Texas are authorized by law or other governmental actions to close.
Cash Management Agreement means any agreement to provide cash management services, including treasury, depository, overdraft, credit, purchasing or debit card, electronic funds transfer and other cash management arrangements to any Pledgor or any of its subsidiaries.
Cash Management Bank has the meaning assigned to such term in the RBL Credit Agreement (or equivalent term in any other First Lien Credit Document).
Collateral means all assets and properties subject to Liens in favor of any First Lien Secured Parties or Second Lien Secured Parties created by any of the First Lien Collateral Documents or the Second Lien Collateral Documents, as applicable, including any assets in which the First Lien Agent is automatically deemed to have a Lien pursuant to the provisions of Section 2.3 and including any asset subject to Liens granted pursuant to Section 6 (Insolvency or Liquidation Proceedings) to secure both the First Lien Obligations and the Second Lien Obligations.
Common Collateral means the portion of the Collateral granted to secure both one or more series of the First Lien Obligations and one or more series of the Second Lien Obligations.
Company has the meaning assigned to such term in the preamble hereof.
Comparable Second Lien Collateral Document means, in relation to any Common Collateral subject to any Lien created under any First Lien Collateral Document, those Second Lien Collateral Documents that create a Lien on the same portion of Common Collateral, granted by the same Pledgor or Pledgors.
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 ownership of voting securities, by contract or otherwise, and Controlling and Controlled shall have meanings correlative thereto.
DIP Financing has the meaning assigned to such term in Section 6.1.
Discharge means, with respect to any Secured Obligations, except to the extent otherwise provided in Section 5.7 (Reinstatement) and Section 6.4 (Avoidance Issues) below, (a) payment in full in immediately available funds of the principal of, and interest (including interest accruing on or after the commencement of an Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in the proceeding) accrued on, all outstanding Indebtedness included in such Secured Obligations after or concurrently with the termination of all commitments to extend credit thereunder (other than, if applicable, pursuant to any Secured
2
Cash Management Agreements or Secured Hedge Agreements, in each case as provided under the relevant Documents or as to which reasonably satisfactory arrangements have been made with the relevant Cash Management Banks or Hedge Banks), (b) with respect to any letters of credit or letters of credit guaranties that may be outstanding in respect of any Secured Obligations, termination or delivery of cash collateral, backstop letters of credit or other credit support in respect thereof in an amount and manner in compliance with the applicable Documents, and (c) payment in full in immediately available funds of any other Secured Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than in respect of contingent indemnification and expense reimbursement claims not then due); provided , that (i) the Discharge of the First Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of a facility designated by the Company as a First Lien Facility or a Refinancing of the First Lien Obligations and (ii) the Discharge of the Second Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of a facility designated by the Company as a Second Lien Facility or a Refinancing of the Second Lien Obligations. In the event that any Secured Obligations are modified and such Secured Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code, such Secured Obligations shall be deemed to be Discharged when the final payment is made, in cash or in the form of consideration otherwise provided for in the applicable Plan of Reorganization, in respect of such Indebtedness and any obligations pursuant to such new Indebtedness shall have been satisfied. The term Discharged has a correlative meaning to the foregoing.
Dispose or Disposed of means to convey, sell, lease, assign, farm-out, transfer or otherwise dispose of any property, business or assets. The term Disposition has a correlative meaning to the foregoing.
Documents means, collectively, the First Lien Documents and the Second Lien Documents, or any of the foregoing.
First Lien Agent means the collateral agent for the First Lien Secured Parties, together with its successors or co-agents in substantially the same capacity as may from time to time be appointed pursuant to the First Lien Facility. As of the date hereof, JPMorgan shall be the First Lien Agent.
First Lien Collateral Agreement means (a) the Collateral Agreement dated as of May 10, 2018, among the Company, each other Pledgor party thereto and the First Lien Agent, as amended, restated, supplemented or otherwise modified from time to time, and (b) any other collateral agreement entered into from time to time in respect of any First Lien Facility described in clause (ii) of the definition thereof and designated by the Company as a First Lien Collateral Agreement, as amended, restated, supplemented or other modified from time to time.
First Lien Collateral Documents means, collectively, the First Lien Collateral Agreement, any of the other Security Documents (or comparable terms) as defined in the RBL Credit Agreement or any other First Lien Credit Document, and any other documents now existing or entered into after the date hereof that grant or perfect Liens on any assets or properties of any Pledgor to secure any First Lien Obligations.
3
First Lien Credit Documents means (i) the RBL Credit Agreement and (ii) the instrument, agreement or other document evidencing or governing any First Lien Facility described in clause (ii) of the definition thereof.
First Lien Documents means, collectively, (i) the documentation in respect of the First Lien Facility, including the RBL Credit Agreement, any other First Lien Credit Document, the First Lien Collateral Documents and any other Credit Documents or comparable terms as defined in the applicable First Lien Facility, and (ii) each agreement, document or instrument providing for or evidencing obligations in respect of Secured Hedge Agreements or Secured Cash Management Agreements.
First Lien Facility means (i) the RBL Credit Agreement, and (ii) whether or not the facility referred to in clause (i) remains outstanding, if designated by the Company to be included in the definition of First Lien Facility and subject to the satisfaction of the applicable requirements set forth in Section 8.22 (Additional First Lien Facility or Second Lien Facility), one or more (A) debt facilities or commercial paper facilities providing for reserved-based credit loans, revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances) or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of First Lien Facility).
First Lien Obligations means all Obligations (as such term is defined in the First Lien Collateral Agreement) of the Company and other obligors outstanding under, and all other obligations in respect of, any First Lien Documents, to pay principal, premium (if any), interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, regardless of whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to any letters of credit and bankers acceptance), damages and other liabilities payable under or in connection with the First Lien Documents.
First Lien Secured Parties means the persons holding any First Lien Obligations, including the First Lien Agent.
Hedge Bank has the meaning assigned to such term in the RBL Credit Agreement (or equivalent term in any other First Lien Credit Document).
Hedging Agreement means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, future contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
4
rate swap transactions, currency options, total return swap, credit spread transaction, repurchase transaction, reserve repurchase transaction, securities lending transaction, weather index transaction, spot contracts, fixed-price physical delivery contracts, whether or not exchange traded, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, that are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement ), including any such obligations or liabilities under any Master Agreement.
Holdings has the meaning assigned to such term in the recitals.
Indebtedness means and includes all obligations that constitute Indebtedness, Debt or other comparable terms as defined in the RBL Credit Agreement, any First Lien Credit Document, the Second Lien Agreement or any Second Lien Credit Document, as applicable.
Insolvency or Liquidation Proceeding means (a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Pledgor, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Pledgor or with respect to any of its assets, (c) any liquidation, dissolution, reorganization or winding up of any Pledgor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy (except to the extent permitted by the applicable Documents) or (d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Pledgor.
JPMorgan has the meaning assigned to such term in the preamble hereof.
Legacy Blocker Entity shall mean each of (i) AIF VII (Talos DC), LLC, a Delaware limited liability company, (ii) ANRP (Talos DC), LLC, a Delaware limited liability company, (iii) AP Overseas Talos Holdings (DC I), LLC, a Delaware limited liability company, (iv) AP Overseas Talos Holdings (DC II), LLC, a Delaware limited liability company, (v) AP Overseas Talos Holdings (DC III), LLC, a Delaware limited liability company, (vi) AP Overseas Talos Holdings (DC IV), LLC, a Delaware limited liability company, (vii) New Talos Sub Inc., a Delaware corporation, and (viii) Riverstone V Non-U.S. Talos Corp, a Delaware corporation.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, charge, security interest or similar monetary encumbrance in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset; provided , that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
New York Courts has the meaning assigned to such term in Section 8.7(b).
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obligations means any principal, interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements (including, if applicable, reimbursement obligations with respect to any letters of credit and bankers acceptance), damages and other liabilities payable under the documentation governing any Indebtedness.
Permitted Remedies means, with respect to any Second Lien Obligations:
(a) filing a claim, proof of claim or statement of interest with respect to such Second Lien Obligations; provided , that an Insolvency or Liquidation Proceeding has been commenced by or against any Pledgor;
(b) taking any action (not adverse to the Liens securing any First Lien Obligations, the priority status thereof, or the rights of the First Lien Agent or any of the First Lien Secured Parties to exercise rights, powers and/or remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce) its Lien on any of the Collateral;
(c) filing any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims or Liens of the Second Lien Secured Parties, including any claims secured by the Second Lien Collateral Documents, in each case in accordance with the terms of this Agreement;
(d) filing any pleadings, objections, motions or agreements that assert rights or interests available to unsecured creditors of the Pledgors arising under either any Insolvency or Liquidation Proceeding or applicable non-Bankruptcy Law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction);
(e) voting on any Plan of Reorganization, making other filings and any arguments, obligations, and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement; and
(f) the exercise of any rights or remedies with respect to the Collateral after termination of the Standstill Period subject to Section 3.1(e) of this Agreement.
Plan of Reorganization means any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency or Liquidation Proceeding.
Pledged Collateral means the Common Collateral in the possession or control of any Representative (or its agents or bailees), to the extent that possession or control thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction.
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Pledgors means Holdings, each Legacy Blocker Entity, the Company and each of its subsidiaries that shall have granted any Lien in favor of any Representative on any of its assets or properties to secure any of the Secured Obligations.
Post-Petition Claims means, collectively, interest, fees, costs, expenses and other charges that pursuant to any First Lien Document or any Second Lien Document continue to accrue after the commencement of an Insolvency or Liquidation Proceeding.
Production Finance has the meaning assigned to such term in the preamble hereof.
RBL Credit Agreement means that certain Credit Agreement dated as of May 10, 2018, among the Company, Holdings, the lenders and issuing banks party thereto from time to time and the First Lien Agent, as amended, restated, supplemented, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, refinanced, extended or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of RBL Credit Agreement).
Recovery has the meaning assigned to such term in Section 6.4.
Refinance means, in respect of any Indebtedness, to amend, restate, supplement, waive, replace (whether or not upon termination, and whether with the original parties or otherwise), restructure, repay, refund, refinance or otherwise modify from time to time (including by means of any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the obligations under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof). Refinanced and Refinancing have correlative meanings.
Representative (a) in respect of the First Lien Obligations or the First Lien Secured Parties, the First Lien Agent, and (b) in respect of the Second Lien Obligations or the Second Lien Secured Parties, the Second Lien Agent.
Required Lenders means, with respect to the First Lien Documents, the First Lien Secured Parties in respect thereof the approval of which is required to approve an amendment or modification of, termination or waiver of any provision of, or consent to any departure from such First Lien Documents (or would be required to effect such consent under this Agreement if such consent were treated as an amendment of such First Lien Documents).
Revolving Outstandings has the meaning assigned to such term in Section 6.1(a).
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Second Lien Agent means the collateral agent for the Second Lien Secured Parties, together with its successors or co-agents in substantially the same capacity as may from time to time be appointed pursuant to the Second Lien Facility. As of the date hereof, Wilmington Trust, National Association shall be the Second Lien Agent.
Second Lien Agreement means that certain Indenture, dated as of May 10, 2018 among the Company and Production Finance, the subsidiary guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee and collateral agent, as amended, restated, supplemented, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, refinanced, extended or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of Second Lien Agreement).
Second Lien Collateral Agreement means (a) the Collateral Agreement (Second Lien) dated as of May 10, 2018, among the Company, each other Pledgor party thereto and the Second Lien Agent as amended, restated, supplemented or otherwise modified from time to time, and (b) any other collateral agreement entered into from time to time in respect of any Second Lien Facility described in clause (ii) of the definition thereof and designated by the Company as a Second Lien Collateral Agreement, as amended, restated, supplemented or other modified from time to time.
Second Lien Collateral Documents means, collectively, the Second Lien Collateral Agreement, any of the other Security Documents (or comparable terms) as defined in the Second Lien Agreement or any other Second Lien Credit Document, and any other documents now existing or entered into after the date hereof that grant or perfect Liens on any assets or properties of any Pledgor to secure any Second Lien Obligations.
Second Lien Credit Documents means (i) the Second Lien Agreement and (ii) the instrument, agreement or other document evidencing or governing any Second Lien Facility described in clause (ii) of the definition thereof.
Second Lien Documents means, collectively, the documentation in respect of the Second Lien Facility, including the Second Lien Agreement, any other Second Lien Credit Document, the Second Lien Collateral Documents and any other Credit Documents (as such term is defined in the Second Lien Collateral Agreement) or comparable terms as defined in the applicable Second Lien Facility.
Second Lien Facility means (i) the Second Lien Agreement, and (ii) whether or not the facility referred to in clause (i) remains outstanding, if designated in writing by the Company to be included in the definition of Second Lien Facility and subject to the satisfaction of the applicable requirements set forth in Section 8.22, one or more (A) debt facilities or commercial paper facilities providing for reserved-based credit loans, revolving
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credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances) or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of Second Lien Facility).
Second Lien Obligations means all Obligations (as such term is defined in the Second Lien Collateral Agreement) of the Company and other obligors outstanding under, and all other obligations in respect of, any Second Lien Documents, to pay principal, premium (if any), interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, regardless of whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under or in connection with the Second Lien Documents.
Second Lien Secured Parties means the persons holding any Second Lien Obligations, including the Second Lien Agent and the Secured Parties (as such term is defined in the Second Lien Collateral Agreement).
Secured Cash Management Agreement means any Cash Management Agreement that is entered into by and between any Pledgor or any of its subsidiaries and any Cash Management Bank.
Secured Hedge Agreement means any Hedging Agreement that is entered into by and between any Pledgor or any of its subsidiaries and any Hedge Bank.
Secured Obligations means, collectively, the First Lien Obligations, the Second Lien Obligations, or any of the foregoing.
Secured Parties means, collectively, the First Lien Secured Parties, the Second Lien Secured Parties, or any of the foregoing.
Standstill Period has the meaning assigned to such term in Section 3.1(e).
subsidiary means, with respect to any person (herein referred to as the parent), any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, directly or indirectly, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Uniform Commercial Code or UCC means the Uniform Commercial Code as from time to time in effect in the State of New York, unless otherwise provided herein.
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1.2 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (b) any reference herein to any person shall be construed to include such persons successors and assigns, but shall not be deemed to include the subsidiaries of such person unless express reference is made to such subsidiaries, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Exhibits shall be construed to refer to Sections and Exhibits of this Agreement, (e) unless otherwise expressly qualified herein, the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (f) the term or is not exclusive.
Section 2. LIEN PRIORITIES .
2.1 Subordination of Liens . Notwithstanding (i) the date, time, method, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to secure any First Lien Obligations on the Common Collateral or of any Liens granted to secure any Second Lien Obligations on the Common Collateral, (ii) any provision of the UCC, any Bankruptcy Law or any other applicable law, (iii) any provision of the First Lien Documents or the Second Lien Documents, (iv) whether any First Lien Secured Party or Second Lien Secured Party, either directly or through agents, holds possession of, or has control over, all or any part of the Common Collateral, (v) the fact that any Liens granted to secure the Second Lien Obligations or any Liens granted to secure any First Lien Obligations may be subordinated, voided, avoided, invalidated or lapsed or (vi) any other circumstance of any kind or nature whatsoever, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby agrees that: whether or not any Liens securing any First Lien Obligations are subordinated to any Liens securing any other obligation of any Pledgor or any other person, (a) any Lien on the Common Collateral securing any First Lien Obligations will at all times, regardless of when granted or perfected or how acquired (whether by grant, statute, operation of law, subrogation or otherwise), have priority over and be senior in all respects and prior to any Lien on the Common Collateral securing any Second Lien Obligations for all purposes, and (b) any Lien on the Common Collateral securing any Second Lien Obligations will at all times, regardless of when granted or perfected or how acquired (whether by grant, statute, operation of law, subrogation or otherwise), be junior and subordinate in all respects to all Liens on the Common Collateral securing any First Lien Obligations for all purposes.
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2.2 Prohibition on Contesting Liens . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, and the First Lien Agent, for itself and on behalf of the First Lien Secured Parties, agrees that, until the Discharge of First Lien Obligations has occurred, it shall not (and hereby waives any right to) take any action to challenge, contest or support any other person in contesting or challenging, directly or indirectly, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of (a) a Lien securing any First Lien Obligations or (b) a Lien securing any Second Lien Obligations; provided , however , that nothing in this Agreement shall be construed to prevent or impair the rights of the First Lien Agent or any First Lien Secured Party to enforce this Agreement (including the priority of the Liens securing the First Lien Obligations or the provisions for exercise of remedies) or any of the First Lien Documents.
2.3 No New Liens . So long as the Discharge of First Lien Obligations has not occurred and subject to Section 6, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Pledgor, it shall not acquire or hold any Lien on any assets of the Company or any other Pledgor securing any Second Lien Obligations that are not also subject to the first-priority Lien in respect of the First Lien Obligations under the First Lien Documents. If the Second Lien Agent or any Second Lien Secured Party shall (nonetheless and whether or not in breach hereof) acquire or hold any Lien on any property that is not also subject to the first-priority Lien in respect of the First Lien Obligations under the First Lien Documents, then the Second Lien Agent or such Second Lien Secured Party, as the case may be, shall, without the need for any further consent of any person and notwithstanding anything to the contrary in any other document, be deemed to also hold and have held such Lien for the benefit of the First Lien Agent and the First Lien Secured Parties as security for the First Lien Obligations (subject to the lien priority and other terms hereof) and shall promptly notify the First Lien Agent in writing of the existence of such Lien (if and to the extent the Second Lien Agent or such Second Lien Secured Party has actual knowledge of the existence of such Lien) and in any event take such actions as may be reasonably requested by the First Lien Agent to assign or release such Liens to the First Lien Agent as security for the applicable First Lien Obligations.
Notwithstanding anything to the contrary set forth in the foregoing paragraph of this Section 2.3 or any other part of this Agreement, the foregoing paragraph shall not apply with respect to any First Lien Obligations that, by their express terms, are not intended to be secured by all of the Common Collateral and, in particular, are not intended to be secured by such assets but only to the extent of such assets (and the First Lien Agent and Second Lien Agent may rely conclusively on a certificate to that effect provided to them by the Company upon either the First Lien Agent or the Second Lien Agents reasonable request without further inquiry).
2.4 Confirmation of Subordination in Second Lien Collateral Documents .
The Second Lien Agent agrees that each Second Lien Collateral Document shall, unless otherwise agreed to by the First Lien Agent, include language substantially the same as the following paragraph (or language to similar effect reasonably approved by the First Lien Agent to reflect the subordination of the Liens):
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Notwithstanding anything herein to the contrary, (i) the Liens and security interests granted to [ ] for the benefit of the Secured Parties pursuant to this Agreement and (ii) the exercise of any right or remedy by [ ] hereunder or the application of proceeds (including insurance proceeds and condemnation proceeds) of any Common Collateral are subject to the provisions of the Intercreditor Agreement dated as of May 10, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the Intercreditor Agreement ), by and between JPMorgan Chase Bank, N.A., in its capacity as the First Lien Agent, and Wilmington Trust, National Association, in its capacity as the Second Lien Agent. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern.
2.5 Perfection of Liens . None of the First Lien Agent or any other First Lien Secured Party shall be responsible for perfecting or maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the Second Lien Agent or any other Second Lien Secured Party. None of the Second Lien Agent or any other Second Lien Secured Party shall be responsible for perfecting or maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the First Lien Agent or any other First Lien Secured Party. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Lien Secured Parties and the Second Lien Secured Parties and shall not impose on the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent, any other Second Lien Secured Party or any agent, or trustee for any of the foregoing persons any obligations in respect of the Disposition of proceeds of any Common Collateral that would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or governmental authority or any applicable law.
2.6 Waiver of Marshalling . Until the Discharge of First Lien Obligations, the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, agrees not to assert, and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Common Collateral or any other similar rights a junior secured creditor may have under applicable law.
Section 3. ENFORCEMENT .
3.1 Exercise of Remedies .
(a) So long as the Discharge of First Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Pledgor:
(i) except as otherwise provided herein, the First Lien Agent shall have the exclusive right, in each case with respect to Common Collateral, to (x) enforce rights, exercise remedies (including any action of foreclosure, any setoff and the right to credit bid their debt) and enforce any right under any
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account control agreement, landlord waiver, bailees letter, assignment of production, or any similar agreement or arrangement to which the First Lien Agent or any other First Lien Secured Party is a party, (y) make determinations regarding the release, Disposition or restrictions with respect to any Common Collateral without any consultation with or the consent of the Second Lien Agent or any Second Lien Secured Party, and (z) otherwise enforce the rights and remedies of a secured creditor under the UCC and the Bankruptcy Law of any applicable jurisdiction, and any other applicable law, so long as any proceeds of any Common Collateral received by the First Lien Agent and other First Lien Secured Parties in the aggregate in excess of those necessary to achieve the Discharge of First Lien Obligations are distributed in accordance with Section 4.2 (Application of Proceeds), except as otherwise required pursuant to the UCC and applicable law, subject to the relative priorities set forth in Section 2.1 (Subordination of Liens); and
(ii) none of the Second Lien Agent or any other Second Lien Secured Party will:
(x) subject to Section 3.1(e), exercise or seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Common Collateral or any other Lien, collateral or security in respect of any applicable Second Lien Obligations, or exercise any right under any lockbox agreement, control agreement, landlord waiver or bailees letter, assignment of production, or similar agreement or arrangement, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure),
(y) contest, protest or object to any foreclosure proceeding or action brought with respect to the Common Collateral or any other Lien, collateral or security by the First Lien Agent or any other First Lien Secured Party in respect of the First Lien Obligations, the exercise of any right by the First Lien Agent or any other First Lien Secured Parties (or any agent or sub-agent on their behalf) in respect of the First Lien Obligations under any lockbox agreement, control agreement, landlord waiver, bailees letter, assignment of production or similar agreement or arrangement to which the Second Lien Agent or any other Second Lien Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party, of any rights and remedies relating to the Common Collateral or any other Lien, collateral or security under the First Lien Documents or otherwise in respect of the First Lien Obligations, or
(z) object to the forbearance by the First Lien Agent or any other First Lien Secured Party from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Common Collateral or any other Lien, collateral or security under the First Lien Documents or otherwise in respect of the First Lien Obligations;
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provided , however , that the Second Lien Agent and the other Second Lien Secured Parties may take any Permitted Remedies.
(b) So long as the Discharge of First Lien Obligations has not occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it will not take or receive any Common Collateral or other collateral or any proceeds of Common Collateral or other collateral in connection with the exercise of any right or remedy (including setoff or recoupment) with respect to any Common Collateral or other collateral in respect of the Second Lien Obligations. Without limiting the generality of the foregoing, unless and until the Discharge of First Lien Obligations has occurred, except as expressly provided in the proviso to clause (ii) of Section 3.1(a) and in Section 3.1(e), the sole right of the Second Lien Agent and the other Second Lien Secured Parties with respect to the Common Collateral or any other collateral securing any Second Lien Obligations is to hold a Lien on the Common Collateral or such other collateral in respect of the applicable Second Lien Obligations pursuant to the Second Lien Documents, as applicable, for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of First Lien Obligations has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a) above and Section 3.1(e) below, (i) each of the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that neither it nor any other Second Lien Secured Party will take any action that would hinder any exercise of remedies undertaken by the First Lien Agent or any other First Lien Secured Party with respect to the Common Collateral or any other collateral securing the First Lien Obligations, including any Disposition of the Common Collateral or such other collateral, whether by foreclosure or otherwise; (ii) the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges that any First Lien Secured Party may enforce rights or exercise remedies (v) in any manner in its sole discretion in compliance with applicable law, (w) without consultation with or the consent of any Second Lien Secured Parties, (x) regardless of whether or not an Insolvency or Liquidation Proceeding has commenced, (y) regardless of any provision of any Second Lien Documents (other than this Agreement) and (z) regardless of whether or not such exercise is adverse to the interest of any Second Lien Secured Parties; and (iii) the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby waives any and all rights it or any such Second Lien Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the First Lien Agent seeks to enforce or collect the First Lien Obligations or the Liens granted to secure any First Lien Obligations, regardless of whether any action or failure to act by or on behalf of the First Lien Agent or any First Lien Secured Party is adverse to the interests of any of the Second Lien Secured Parties.
(d) The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby acknowledges and agrees that no covenant, agreement or restriction contained in any applicable Second Lien Document shall be deemed to restrict in any way the rights and remedies of the First Lien Agent or any other First Lien Secured Party with respect to the Common Collateral or other collateral securing the First Lien Obligations as set forth in this Agreement and any First Lien Documents.
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(e) Notwithstanding Section 3.1(a) (but subject to clauses (i), (ii) and (iii) of this Section 3.1(e)), each party hereto agrees that, after a period of 180 days has elapsed since the date on which the Second Lien Agent has delivered to the First Lien Agent a written notice of the acceleration of the relevant Second Lien Obligations (the Standstill Period ), the Second Lien Agent may, subject to Section 4 below, (A) enforce or exercise, or seek to enforce or exercise, any rights or remedies (including any right of setoff) with respect to any Common Collateral (including the enforcement of any right under any account control agreement, landlord waiver or bailees letter or any similar agreement or arrangement to which the Second Lien Agent or any other Second Lien Secured Party is a party) or (B) commence or join with any person (other than the First Lien Agent) in commencing, or petition for or vote in favor of any resolution for, any action or proceeding with respect to such rights or remedies (including any foreclosure action), if:
(i) no First Lien Secured Party shall have commenced or is diligently pursuing the enforcement or exercise of any rights or remedies with respect to all or a material portion of the Common Collateral, or shall have sought or requested relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit of such enforcement actions,
(ii) any acceleration of the relevant Second Lien Obligations has not been rescinded, and
(iii) no Pledgor is then a debtor in an Insolvency and Liquidation Proceeding.
Notwithstanding anything to the contrary contained in this Section 3.1, (A) in no event shall the Second Lien Agent or any other Second Lien Secured Party enforce or exercise any rights or remedies with respect to any Common Collateral, or commence, join with any person in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding if the First Lien Agent or any other First Lien Secured Party shall have commenced, and shall be diligently pursuing (or shall have sought or requested relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit thereof), the enforcement or exercise of any rights or remedies with respect to any Common Collateral or any such action or proceeding (prompt written notice thereof to be given to the Second Lien Agent by the First Lien Agent) and (B) after the expiration of the Standstill Period, so long as none of the First Lien Agent or any other First Lien Secured Party has commenced any action to enforce their Lien on any material portion of the Common Collateral, in the event that and for so long as the Second Lien Secured Parties (or the Second Lien Agent) have commenced any actions to enforce their Lien with respect to all or any material portion of the Common Collateral to the extent permitted hereunder and are diligently pursuing such actions, none of the First Lien Agent or any other First Lien Secured Party shall take any action of a similar nature with respect to such Common Collateral; provided , that all other provisions of this Agreement (including the turnover provisions of Section 4) are complied with.
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3.2 Cooperation . Subject to the proviso to clause (ii) of Section 3.1(a) and Section 3.1(e), the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that, unless and until the Discharge of First Lien Obligations has occurred, it will not commence, or join with any person (other than the First Lien Agent and the other First Lien Secured Parties, upon the request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Common Collateral or any other collateral under any of the applicable Second Lien Documents or otherwise in respect of the applicable Second Lien Obligations secured by the Common Collateral.
3.3 Actions Upon Breach . If any Second Lien Secured Party, in contravention of the terms of this Agreement, in any way takes, attempts to or threatens to take any action with respect to the Common Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), this Agreement shall create an irrebuttable presumption and admission by such Second Lien Secured Party that relief against such Second Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the First Lien Secured Parties, it being understood and agreed by the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, that (i) the First Lien Secured Parties damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Second Lien Secured Party waives any defense that the Pledgors and/or the First Lien Secured Parties cannot demonstrate damage and/or can be made whole by the awarding of damages.
Section 4. PAYMENTS .
4.1 Nature of Claims . The Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, acknowledges and agrees that (i) with respect to any commitments under any First Lien Facility that constitute revolving credit commitments, in the ordinary course of business, the applicable First Lien Agent and lenders thereunder will apply payments and make advances to the Company or other Pledgors thereunder and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed; (ii) no release of any Lien by the First Lien Agent upon any portion of the Common Collateral or other collateral securing any First Lien Obligations in connection with a Disposition not prohibited under the First Lien Documents shall constitute the exercise of remedies prohibited under this Agreement; and (iii) the amount of the First Lien Obligations that may be outstanding at any time or from time to time may be increased (including by way of incremental commitments or as a result of fluctuations in commodity prices or interest rates) or reduced and, with respect to any First Lien Obligations that comprise revolving facilities, including letter of credit facilities, subsequently reborrowed. The Lien priority set forth in this Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the First Lien Obligations or any portion thereof.
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4.2 Application of Proceeds . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges and agrees that, so long as the Discharge of First Lien Obligations has not occurred, the Common Collateral and any other collateral securing the First Lien Obligations or proceeds thereof received in connection with the Disposition of, or collection on, such Common Collateral or such other collateral upon the exercise of remedies as a secured party shall be applied by the First Lien Agent to the applicable First Lien Obligations in a manner as specified in the relevant First Lien Documents in accordance with applicable law until the Discharge of First Lien Obligations has occurred. After the Discharge of First Lien Obligations, subject to Section 5.7 hereof, the First Lien Agent shall deliver promptly to the Second Lien Agent (and/or its designees), for the benefit of the Second Lien Secured Parties, any Common Collateral or proceeds thereof held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Second Lien Agent to the Second Lien Obligations in a manner as specified in the Second Lien Documents. Any Common Collateral or proceeds thereof remaining after the Discharge of Second Lien Obligations shall be promptly delivered to the Pledgors or as a court of competent jurisdiction may otherwise direct to be applied.
4.3 Payments Over . Any Common Collateral or other collateral securing any First Lien Obligations or proceeds thereof received by the Second Lien Agent or any other Second Lien Secured Party in connection with the exercise of any right or remedy (including setoff or recoupment) relating to the Common Collateral or such other collateral prior to the Discharge of First Lien Obligations shall be segregated and held in trust for the benefit of, and forthwith paid over to, the First Lien Agent (and/or its designees), for the benefit of the First Lien Secured Parties, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Agent is hereby authorized to make any such endorsements as agent for the Second Lien Agent or any other Second Lien Secured Parties. This authorization is coupled with an interest and is irrevocable.
Section 5. OTHER AGREEMENTS .
5.1 Releases .
(a) If, at any time any Pledgor or any First Lien Secured Party delivers notice to the Second Lien Agent that any specified Common Collateral (including all or substantially all of the equity interests of a Pledgor or any of its subsidiaries, which shall include for such purpose, in the case of the sale of equity interests in any such subsidiary, any Common Collateral held by such subsidiary or any direct or indirect subsidiary thereof) is Disposed of (other than to another Pledgor),
(A) by the owner of such Common Collateral in a transaction not prohibited under the RBL Credit Agreement, any applicable First Lien Documents, the Second Lien Agreement and any applicable Second Lien Documents; or
(B) during the existence of any Event of Default under (and as defined in) the RBL Credit Agreement or any applicable First Lien Documents in connection with any enforcement action, exercise of rights or remedies or to the extent that the First Lien Agent has consented to such Disposition;
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then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens securing the Second Lien Obligations upon such Common Collateral will automatically be released and discharged as and upon, but only to the extent, such Liens on such Common Collateral securing the First Lien Obligations are released and discharged.
Upon delivery to the Second Lien Agent of a notice from the First Lien Agent or the Company, which notice states that any release of Liens securing or supporting any First Lien Obligations has become effective (or shall become effective upon the release by the Second Lien Agent or other relevant Second Lien Secured Parties), whether in connection with a sale of such assets by the relevant Pledgor pursuant to the preceding clauses or otherwise, the Second Lien Agent or such other Second Lien Secured Parties, as the case may be, shall promptly execute and deliver such instruments, releases, termination statements or other documents or instruments confirming such release on customary terms or otherwise reasonably satisfactory to the First Lien Agent and the Company, it being understood that all documented out-of-pocket expenses incurred by any Second Lien Secured Parties (and their respective representatives) in connection with the execution and delivery of such release documents or instruments shall be borne by the Pledgors. In the case of the Disposition of all or substantially all of the capital stock of a Pledgor or any of its subsidiaries, the guarantee in favor of the Second Lien Secured Parties, if any, made by such Pledgor or such subsidiary will automatically be released and discharged as and upon, but only to the extent, the guarantee by such Pledgor or such subsidiary of the First Lien Obligations is released and discharged if (A) such Disposition is not prohibited by the terms of the First Lien Documents and the Second Lien Documents or (B) such Disposition is made during the existence of any Event of Default under (and as defined in) the RBL Credit Agreement or any applicable First Lien Documents in connection with any enforcement action or exercise of rights or remedies, or to the extent that the First Lien Agent has consented to such Disposition.
(b) The Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, hereby irrevocably constitutes and appoints (which appointment is coupled with an interest) the First Lien Agent and any officer or agent of the First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Second Lien Agent, or in the First Lien Agents own name, from time to time in the First Lien Agents discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Section 5.1, including any termination statements, endorsements or other instruments of transfer or release.
(c) Unless and until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, hereby consents to the application, whether prior to or after a default, of proceeds of Common Collateral or other collateral to the repayment of First Lien Obligations pursuant to the applicable First Lien Documents; provided , that nothing in this Section 5.1(c) shall be construed to prevent or impair the rights of the Second Lien Agent or the other Second Lien Secured Parties to receive proceeds in connection with the Second Lien Obligations not otherwise in contravention of this Agreement.
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5.2 Insurance . Pursuant to the applicable Documents, the First Lien Agent and the Second Lien Agent may be named as additional insureds and/or loss payees, as applicable, under any insurance policies maintained by any Pledgor. Proceeds of the Common Collateral include insurance proceeds and, therefore, the Lien priority set forth in this Agreement shall govern the ultimate Disposition of such insurance proceeds. Unless and until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby agrees that, subject to the rights of the Pledgors under the First Lien Documents:
(a) the First Lien Agent shall have the sole and exclusive right to (i) adjust settlement for any losses covered by an insurance policy covering the Common Collateral or any other collateral securing the First Lien Obligations and (ii) approve any award granted in any condemnation or similar proceeding (or a deed in lieu of condemnation) affecting the Common Collateral or such other collateral; and
(b) all proceeds of any such policy and any such award or deed, if in respect of the Common Collateral or such other collateral, shall be paid (i) first, prior to the occurrence of the Discharge of First Lien Obligations, to the First Lien Agent for the benefit of the First Lien Secured Parties pursuant to the terms of the applicable First Lien Documents, (b) second, after the occurrence of the Discharge of First Lien Obligations, to the Second Lien Agent for the benefit of the Second Lien Secured Parties pursuant to the terms of the applicable Second Lien Documents, and (c) third, if no Second Lien Obligations are outstanding, to the owner of the subject property, such other person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If the Second Lien Agent or any other Second Lien Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the First Lien Agent in accordance with the terms of this Section 5.2.
5.3 Amendments to Second Lien Collateral Documents .
(a) So long as the Discharge of First Lien Obligations has not occurred, without the prior written consent of the First Lien Agent, no Second Lien Collateral Document may be amended, supplemented or otherwise modified or entered into to the extent that any provisions therein as so amended, supplemented or modified, or the terms of any new Second Lien Collateral Document, would be prohibited by, or would require any Pledgor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(b) In the event that the First Lien Agent or other First Lien Secured Parties enter into any amendment, waiver or consent in respect of or replace any First Lien Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Collateral Document or changing in any manner the rights of the First Lien Agent, such First Lien Secured Parties, the Company or any other Pledgor thereunder, then such amendment, waiver, consent or replacement shall apply automatically to any comparable provision of each Comparable Second Lien Collateral
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Document in which the Pledgors grant a Lien on the same collateral, without the consent of the Second Lien Agent or any other Second Lien Secured Party and without any action by any such person; provided , that such amendment, waiver, consent or replacement does not (i) materially adversely affect the rights of the Second Lien Secured Parties or their interests in the Common Collateral to a greater extent than the First Lien Secured Parties in a like or similar manner (other than by virtue of their relative priorities and rights and obligations hereunder), or (ii) adversely affect the rights, duties, protections, privileges, indemnities or immunities of the Second Lien Agent. The First Lien Agent shall promptly, and in any event within five (5) Business Days thereof, give written notice of such amendment, waiver or consent to the Second Lien Agent; provided , that the failure to give such notice shall not affect the effectiveness of such amendment, waiver, consent or replacement with respect to the provisions of any Second Lien Collateral Document as set forth in this Section 5.3(b).
5.4 Rights As Unsecured Creditors . Notwithstanding anything to the contrary in this Agreement, the Second Lien Agent may exercise rights and remedies as an unsecured creditor against the Company or any other Pledgor that has guaranteed the Second Lien Obligations in accordance with the terms of the applicable Second Lien Documents and applicable law, in each case to the extent not inconsistent with the provisions of this Agreement. Nothing in this Agreement shall prohibit the receipt by the Second Lien Agent or any other Second Lien Secured Party of the required payments of interest and principal so long as such receipt is not the direct or indirect result of (a) the exercise by the Second Lien Agent of rights or remedies as a secured creditor in respect of any Common Collateral or other collateral securing any Second Lien Obligations or (b) enforcement in contravention of this Agreement of any Lien in respect of any Second Lien Obligations. In the event that the Second Lien Agent becomes a judgment lien creditor or other secured creditor in respect of any Common Collateral or other collateral securing any Second Lien Obligations as a result of its enforcement of its rights as an unsecured creditor in respect of any Second Lien Obligations or otherwise, such judgment or other lien shall be subordinated to the Liens securing the First Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated to such Liens securing the First Lien Obligations under this Agreement. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies that any First Lien Agent or any First Lien Secured Party may have with respect to the collateral securing any First Lien Obligations.
5.5 First Lien Agent as Gratuitous Bailee/Gratuitous Agent for Perfection .
(a) The First Lien Agent agrees to hold the Pledged Collateral that is part of the Common Collateral that is in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee and/or gratuitous agent for the benefit of and on behalf of the Second Lien Agent and any assignee thereof solely for the purpose of perfecting the security interest granted in such Pledged Collateral, if any, pursuant to the Second Lien Collateral Documents, subject to the terms and conditions of this Section 5.5 (such bailment and/or agency being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2), 9-104(a)(2) and 9-313(c) of the UCC). Pending delivery to the First Lien Agent, the Second Lien Agent shall hold any Pledged Collateral that is part of the Common Collateral that is in its possession or control, as gratuitous bailee and/or gratuitous agent for the benefit of and on behalf of each other Secured Party and any assignee thereof solely for the purpose of perfecting the security interest granted in such Pledged Collateral, if any, pursuant to
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the relevant First Lien Collateral Documents and Second Lien Collateral Documents, in each case, subject to the terms and conditions of this Section 5.5 (such bailment and/or agency being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2), 9-104(a)(2) and 9-313(c) of the UCC).
(b) In the event that the First Lien Agent (or its agent or bailees) has Lien filings against Intellectual Property (as defined in the applicable First Lien Collateral Documents) that is part of the Common Collateral that are necessary for the perfection of Liens on such Common Collateral, the First Lien Agent agrees to hold such Liens as gratuitous bailee and/or gratuitous agent for the Second Lien Agent and any assignee solely for the purpose of perfecting the security interest granted in such Common Collateral, if any, pursuant to the Second Lien Collateral Documents, subject to the terms and conditions of this Section 5.5.
(c) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until the Discharge of First Lien Obligations has occurred, the First Lien Agent shall be entitled to deal with any Pledged Collateral in accordance with the terms of the relevant First Lien Collateral Documents as if the Liens under the Second Lien Collateral Documents did not exist. The rights of the Second Lien Agent and the other Second Lien Secured Parties with respect to such Pledged Collateral shall at all times be subject to the terms of this Agreement.
(d) The First Lien Agent shall not have any obligation whatsoever to the Second Lien Agent or any other Second Lien Secured Party to assure that the Pledged Collateral is genuine or owned by the Pledgors or to protect or preserve rights or benefits of any person or any rights pertaining to the Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities of the First Lien Agent under this Section 5.5 shall be limited solely to holding the Pledged Collateral as gratuitous bailee and/or gratuitous agent for the Second Lien Agent for purposes of perfecting the Liens securing any Second Lien Obligations.
(e) The First Lien Agent shall not have, by reason of any Second Lien Collateral Documents or this Agreement or any other document, a fiduciary relationship in respect of the Second Lien Agent or any other Second Lien Secured Party. The Second Lien Agent and each other Second Lien Secured Party hereby waives and releases the First Lien Agent from all claims and liabilities arising pursuant to the First Lien Agents role as agent and gratuitous bailee and/or gratuitous agent with respect to any Common Collateral, under this Section 5.5. The Second Lien Agent shall not have, by reason of any First Lien Collateral Documents or this Agreement or any other document, a fiduciary relationship in respect of the First Lien Agent or any other First Lien Secured Party. The First Lien Agent and each other First Lien Secured Party hereby waives and releases the Second Lien Agent from all claims and liabilities arising pursuant to the Second Lien Agents role as agent and gratuitous bailee and/or gratuitous agent with respect to any Common Collateral, under this Section 5.5.
(f) After the Discharge of the First Lien Obligations, the First Lien Agent shall promptly deliver to the Second Lien Agent, to the extent that it is legally permitted to do so, the remaining Pledged Collateral (if any) and to the extent that such Pledged Collateral is in the possession or control of the First Lien Agent (or its agents or bailees), together with any necessary endorsements (or otherwise allow the Second Lien Agent to obtain control of such Pledged Collateral), or as a court of competent jurisdiction may otherwise direct.
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(g) None of the First Lien Agent or any First Lien Secured Party shall be required to marshal any present or future collateral security for the Companys or its subsidiaries obligations to the First Lien Agent or such First Lien Secured Parties under any First Lien Documents or any assurance of payment in respect thereof or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.
5.6 [Reserved].
5.7 Reinstatement . If, at any time after the Discharge of First Lien Obligations has occurred, the Company incurs or designates any First Lien Obligations, then such Discharge of First Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such incurrence or designation as a result of the occurrence of such first Discharge of First Lien Obligations), and the applicable agreement governing such First Lien Obligations shall automatically be treated as a First Lien Credit Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of the Common Collateral set forth herein. Upon receipt of written notice of such designation (including the identity of any new First Lien Agent), the Second Lien Agent shall promptly (i) enter into such documents and agreements (it being understood that the Company will pay all documented out-of-pocket expenses incurred by any such person (and their respective representatives) in connection with the execution and delivery of such documents and agreements), including amendments or supplements to this Agreement, as the Company or such new First Lien Agent shall reasonably request in writing in order to provide to the new First Lien Agent the rights of a First Lien Agent contemplated hereby and (ii) to the extent then held by the Second Lien Agent, deliver to such new First Lien Agent any Pledged Collateral that is Common Collateral, together with any necessary endorsements (or otherwise allow such new First Lien Agent to obtain possession or control of such Pledged Collateral).
5.8 Refinancings . Any Secured Obligations may be Refinanced without notice to or the consent of any Secured Party (to the extent not prohibited by the terms of the Documents), all without affecting the priorities provided for herein or the other provisions hereof; provided , however , that the requirements set forth in Section 8.22 shall have been satisfied to the extent applicable.
Section 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS .
6.1 Financing Issues . Until the Discharge of First Lien Obligations has occurred, if the Company or any other Pledgor shall be subject to any Insolvency or Liquidation Proceeding and the First Lien Agent shall desire to permit the use, sale or lease of cash collateral (as defined in Section 363(a)) or to permit the Company or any other Pledgor to obtain financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision in any
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Bankruptcy Law ( DIP Financing ), then the Second Lien Agent for itself and on behalf of the applicable Second Lien Secured Parties agrees that:
(a) (i) it will raise no objection to, will not support any objection to or otherwise contest, and shall be deemed to have consented to, such use, sale or lease of such cash collateral and DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted by Section 6.3) and (ii) it will, to the extent the Liens securing the First Lien Obligations under the First Lien Documents are subordinated or pari passu with such DIP Financing, subordinate its Liens on the Common Collateral and any other collateral securing any Second Lien Obligations to the Liens securing such DIP Financing (and all Obligations relating thereto, including any carve-out from the Common Collateral granting administrative priority status or Lien priority to secure the payment of fees and expenses of the United States trustee or professionals retained by any debtor or creditors committee agreed to by the First Lien Agent or the other First Lien Secured Parties) and to all adequate protection Liens granted to the First Lien Agent on the same basis as the Liens securing the First Lien Obligations are subordinated to the Liens securing the DIP Financing or to confirm the priorities with respect to Liens securing the First Lien Obligations under this Agreement, as applicable; provided , that the aggregate principal amount of the DIP Financing does not exceed the sum of (1) the aggregate Revolving Outstandings (as defined below) outstanding under the Companys then existing revolving credit facilities (including the RBL Credit Agreement) and (2) an amount equal to 50% of the aggregate commitments (whether drawn or undrawn) under such then-existing revolving credit facilities (including the RBL Credit Agreement), in each case determined immediately prior to the commencement of such Insolvency or Liquidation Proceeding and without regard to whether the revolving commitments thereunder are otherwise then available to be drawn as a result of a failure to satisfy a condition precedent to borrowing such revolving commitments. As used herein, Revolving Outstanding s means, in respect of any revolving credit facility (including the RBL Credit Agreement), the sum of (x) the aggregate principal amount of all outstanding revolving loans, (y) the aggregate stated amount of all letters of credit (together with the amount of any unreimbursed drawings thereunder) and (z) the aggregate principal amount of all outstanding swingline loans;
(b) it will raise no objection to, and will not support any objection to or otherwise contest, any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of any First Lien Obligations made by the First Lien Agent or any First Lien Secured Party;
(c) it will raise no objection to, will not support any objection to or otherwise contest, any lawful exercise by any First Lien Secured Party of the right to credit bid the First Lien Obligations under section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Bankruptcy Law) or at any sale in foreclosure of any Common Collateral or other collateral securing any First Lien Obligations;
(d) it will raise no objection to, will not support any objection to or otherwise contest, any other request for judicial relief made in any court by any First Lien Secured Party relating to the lawful enforcement of any Lien on any Common Collateral or other collateral securing any First Lien Obligations; or
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(e) except as set forth below, it will raise no objection to, will not support any objection to or otherwise contest, any order relating to a sale of any Common Collateral of any Pledgor for which any First Lien Agent has consented that provides, to the extent that the sale is to be free and clear of Liens, that the Liens securing the First Lien Obligations and the Second Lien Obligations will attach to the proceeds of the sale on the same basis of priority as the Liens securing the First Lien Obligations do to the Liens securing the Second Lien Obligations in accordance with this Agreement, provided that the applicable Second Lien Secured Parties may assert any objection to a sale or disposition that could be asserted by an unsecured creditor in any Insolvency or Liquidation Proceeding; without limiting the foregoing, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it may not raise any objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or any comparable provisions of any other Bankruptcy Law) with respect to the Liens granted to such person in respect of such assets. In addition, the Second Lien Secured Parties are not deemed to have waived any rights to credit bid on the Common Collateral in any such sale or disposition in accordance with Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Bankruptcy Law), so long as any such credit bid provides for the payment in full in cash of the First Lien Obligations.
6.2 Relief from the Automatic Stay . Until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it shall not seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Common Collateral or any other collateral securing any First Lien Obligations, or seek to oppose the First Lien Agent or any other First Lien Secured Party from seeking relief from the automatic stay or any other stay, without the prior written consent of the First Lien Agent or the Required Lenders in respect of the First Lien Obligations.
6.3 Adequate Protection . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it shall not contest, or support any other person contesting, (a) any request by the First Lien Agent or any other First Lien Secured Party for adequate protection in any form or (b) any objection by the First Lien Agent or any other First Lien Secured Party to any motion, relief, action or proceeding based on the First Lien Agent or such First Lien Secured Partys claiming a lack of adequate protection. Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding, (i) if the First Lien Secured Parties (or any subset thereof) are granted adequate protection in the form of a Lien on additional or replacement collateral and/or a superpriority administrative claim in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any Bankruptcy Law, then the Second Lien Agent, for itself or on behalf of any Second Lien Secured Party, (A) may seek or request adequate protection in the form of a Lien on such additional or replacement collateral and/or a superpriority administrative claim (as applicable), which Lien or superpriority claim is junior and subordinated to the Liens securing, and claims with respect to, the First Lien Obligations and such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Second Lien Obligations are so junior and subordinated to the Liens securing, and the claims with respect to, the First Lien Obligations under this Agreement and (B) agrees that it will not seek or request, without the consent of the First Lien Agent or as otherwise set forth in this Section 6.3, adequate protection in any other form, and (ii) in the event that the Second Lien Agent, for itself or on
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behalf of any Second Lien Secured Party, is granted adequate protection in the form of a Lien on additional or replacement collateral and/or a superpriority administrative claim, then the Second Lien Agent, for itself or on behalf of such Second Lien Secured Party, agrees that the First Lien Agent shall also be granted a senior Lien on such additional or replacement collateral as security for the First Lien Obligations and any such DIP Financing and/or a superpriority administrative claim (as applicable), and that any Lien on such additional or replacement collateral securing the Second Lien Obligations and/or superpriority claim shall be junior and subordinated to the Liens on such collateral securing, and the claims with respect to, the First Lien Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the First Lien Secured Parties as adequate protection on the same basis as the other Liens securing, and claims with respect to, the Second Lien Obligations are so junior and subordinated to such Liens securing and claims with respect to the First Lien Obligations under this Agreement. Without limiting the generality of the foregoing, to the extent that the First Lien Secured Parties are granted adequate protection in the form of payments in the amount of current post-petition fees and expenses, and/or other cash payments, then the Second Lien Agent and the Second Lien Secured Parties shall not be prohibited from seeking and accepting adequate protection in the form of payments in the amount of current post-petition incurred fees and expenses, and/or other cash payments (as applicable), subject to the right of the First Lien Secured Parties to object to the reasonableness of the amounts of fees and expenses or other cash payments so sought by the Second Lien Secured Parties.
6.4 Avoidance Issues . If any First Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or any other Pledgor (or any trustee, receiver or similar person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a Recovery ), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then as among the parties hereto, the First Lien Obligations shall be deemed to be reinstated to the extent of such Recovery and to be outstanding as if such payment had not occurred and the First Lien Secured Parties shall be entitled to a Discharge of First Lien Obligations with respect to all such Recovery and shall have all rights hereunder until such time. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto.
6.5 Application . The parties hereto expressly acknowledge that this Agreement is a subordination agreement under Section 510(a) of the Bankruptcy Code and shall be applicable and effective prior to and after the commencement of any Insolvency or Liquidation Proceeding. All references herein to any Pledgor shall apply to any trustee for such person and such person as debtor in possession. The relative rights as to the Common Collateral and other collateral and proceeds thereof shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, any Pledgor.
6.6 Waivers . Until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf the Second Lien Secured Parties, (a) will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code senior to or pari passu with the Liens securing the First Lien Obligations for costs or expenses of preserving or Disposing of any Common Collateral or other collateral, and (b) waives any claim it may now or hereafter have arising out of the election by any First Lien Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code.
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6.7 Post-Petition Interest .
(a) None of the Second Lien Agent or any other Second Lien Secured Party shall oppose or seek to challenge any claim by the First Lien Agent or any other First Lien Secured Party for allowance in any Insolvency or Liquidation Proceeding of First Lien Obligations consisting of Post-Petition Claims, under Section 506(b) of the Bankruptcy Code or otherwise.
(b) None of the First Lien Agent or any other First Lien Secured Party shall oppose or seek to challenge any claim by the Second Lien Agent or any other Second Lien Secured Party for allowance in any Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of Post-Petition Claims, under Section 506(b) of the Bankruptcy Code or otherwise, to the extent of the value of the Lien securing the Second Lien Obligations on the Common Collateral (after taking into account the First Lien Obligations).
6.8 Separate Grants of Security and Separate Classification . Each of the Company and the other Pledgors; the First Lien Agent and all other First Lien Secured Parties; and the Second Lien Agent and all other Second Lien Secured Parties acknowledges and agrees that (i) the grants of Liens pursuant to the First Lien Collateral Documents and the Second Lien Collateral Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Common Collateral, the Second Lien Obligations are fundamentally different from the First Lien Obligations and must be separately classified in any Plan of Reorganization proposed or confirmed in an Insolvency or Liquidation Proceeding. In addition, the parties hereto agree that regardless of whether any Post-Petition Claim is allowed or allowable, and without limiting the generality of the other provisions of this Agreement, this Agreement is expressly intended to include and does include the rule of explicitness in that this Agreement expressly entitles the First Lien Agent and each other First Lien Secured Party, and is intended to provide the First Lien Agent and such other First Lien Secured Party, with the right to receive, in respect of their First Lien Obligations, payment from the Common Collateral of all Post-Petition Claims through distributions made therefrom pursuant to the provisions of this Agreement even though any such Post-Petition Claims are not allowed or allowable against the bankruptcy estate of the Company or any other Pledgor under Section 502(b)(2) or Section 506(b) of the Bankruptcy Code or under any other provision of the Bankruptcy Code or any other Bankruptcy Law. To further effectuate the intent of the parties as provided in the immediately preceding sentences, if it is held that the claims of the First Lien Secured Parties and the Second Lien Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the First Lien Secured Parties shall be entitled to receive, in addition to amounts distributed to them from, or in respect of, the Common Collateral in respect of principal, prepetition interest and other claims, all amounts owing in respect of Post-Petition Claims, irrespective of whether such claim for such amount is allowed or allowable in such Insolvency or Liquidation Proceeding, before any distribution from, or in respect of, any Common Collateral is made in respect of the claims held by the Second Lien Secured Parties, with the Second Lien Secured Parties hereby
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acknowledging and agreeing to turn over to the First Lien Agent amounts otherwise received or receivable by them from the Common Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Secured Parties.
6.9 Reorganization Securities . If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a Plan of Reorganization or similar dispositive restructuring plan, both on account of First Lien Obligations and on account of Second Lien Obligations, then, to the extent the debt obligations distributed on account of the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
6.10 Voting . No Second Lien Secured Party may support or vote in favor of any Plan of Reorganization (and each shall be deemed to have voted to reject any Plan of Reorganization) unless such plan (a) pays off, in cash in full, all First Lien Obligations, (b) is accepted by the class of holders of First Lien Obligations voting thereon in accordance with Section 1126 of the Bankruptcy Code, or (c) otherwise provides the holders of First Lien Obligations with the value of the Common Collateral in cash or otherwise, prior to any payment or distribution on account of the Second Lien Obligations, subject to Section 6.9 hereof.
Section 7. RELIANCE; WAIVERS; ETC.
7.1 Reliance . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges that neither it nor any such Second Lien Secured Party is entitled to rely on any credit decision or other decisions made by any First Lien Agent or any First Lien Secured Party in taking or not taking any action under the applicable Second Lien Document or this Agreement.
7.2 No Warranties or Liability . No First Lien Secured Party has made, nor shall have been deemed to have made, any express or implied representation or warranty upon which the Second Lien Agent or the other Second Lien Secured Parties may rely or otherwise, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the First Lien Documents, the ownership of any Common Collateral or the perfection or priority of any Liens thereon. The First Lien Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the First Lien Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and they may manage their loans and extensions of credit without regard to any rights or interests that any Second Lien Agent or any other Second Lien Secured Parties may have in the Common Collateral or otherwise, except as otherwise provided in this Agreement. No First Lien Secured Party shall have any duty to the Second Lien Agent or any other Second Lien Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Company or any subsidiary thereof (including the Second Lien Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent, or
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any other Second Lien Secured Party has not otherwise made to each other, nor does any of them hereby make to each other, any warranties, express or implied, nor does any of them assume any liability to each other, in each case with respect to (a) the enforceability, validity, value or collectibility of any of the Second Lien Obligations, the First Lien Obligations, or any guarantee or security that may have been granted to any of them in connection with the First Lien Obligations or the Second Lien Obligations, (b) the Companys title to or right to transfer any of the Common Collateral or (c) any other matter except as expressly set forth in this Agreement.
7.3 Obligations Unconditional . All rights, interests, agreements and obligations of the First Lien Agent and the First Lien Secured Parties, and the Second Lien Agent and the Second Lien Secured Parties, respectively, hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First Lien Documents or any Second Lien Documents;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the First Lien Obligations or the Second Lien Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of the First Lien Documents or of the terms of the Second Lien Documents;
(c) any exchange of any security interest in any Common Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the First Lien Obligations or the Second Lien Obligations or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or any other Pledgor; or
(e) any other circumstances that otherwise might constitute a defense available to, or a discharge of, the Company or any other Pledgor in respect of the First Lien Obligations, or of the Second Lien Agent or any Second Lien Secured Party in respect of this Agreement.
Section 8. MISCELLANEOUS.
8.1 Conflicts . Subject to Section 8.20 (Relative Rights), in the event of any conflict between the provisions of this Agreement and the provisions of any First Lien Document or any Second Lien Document, the provisions of this Agreement shall govern.
8.2 Continuing Nature of this Agreement; Severability . Subject to Section 6.4 (Avoidance Issues), this Agreement shall continue to be effective until the Discharge of First Lien Obligations shall have occurred or such later time as the Discharge of Second Lien Obligations shall have occurred. This is a continuing agreement of lien subordination and the First Lien Secured Parties may continue, at any time and without notice to the Second Lien Agent or any other Second Lien Secured Party, to extend credit and other financial
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accommodations and lend monies to or for the benefit of the Company or any other Pledgor or any of its or their subsidiaries constituting First Lien Obligations in reliance hereon. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
8.3 Amendments; Waivers . Subject to Section 8.22 (Additional First Lien Facility or Second Lien Facility) hereof, no amendment, modification or waiver of any of the provisions of this Agreement by the First Lien Agent or the Second Lien Agent shall be deemed to be made unless the same shall be in writing signed on behalf of the party making the same or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. The Company and the other Pledgors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except in respect of the provisions of this Agreement set forth in Section 8.17 below or otherwise to the extent their rights are affected, in which case the Company shall have the right to consent to or approve any such amendment, modification or waiver.
8.4 Information Concerning Financial Condition of the Company and its Subsidiaries . No First Lien Secured Party shall have any obligation to the Second Lien Agent or any other Second Lien Secured Party to keep the Second Lien Agent or such Second Lien Secured Party informed of, and the Second Lien Agent and the other Second Lien Secured Parties shall not be entitled to rely on the First Lien Agent or any other First Lien Secured Party with respect to, (a) the financial condition of the Company and its subsidiaries and all endorsers, pledgors and/or guarantors of the Second Lien Obligations or the First Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Second Lien Obligations or the First Lien Obligations. No Second Lien Secured Party shall have any obligation to the First Lien Agent or any other First Lien Secured Party to keep the First Lien Agent or such First Lien Secured Party informed of, and the First Lien Agent and the other First Lien Secured Parties shall not be entitled to rely on the Second Lien Agent or any other Second Lien Secured Party with respect to, (a) the financial condition of the Company and its subsidiaries and all endorsers, pledgors and/or guarantors of the First Lien Obligations or the Second Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the First Lien Obligations or the Second Lien Obligations. The First Lien Agent, or any other First Lien Secured Party, or the Second Lien Agent or any other Second Lien Secured Party shall not have any duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it or they shall be under no obligation (w) to make, and none of the First Lien Agent, the other First Lien Secured Parties, the Second Lien Agent or the other Second Lien Secured Parties shall make, any express or implied representation or warranty,
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including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
8.5 Subrogation . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder or under any First Lien Documents until the Discharge of First Lien Obligations has occurred and hereby agrees that no payment to the First Lien Agent or any other First Lien Secured Party pursuant to the provisions of this Agreement or any First Lien Document shall entitle the Second Lien Agent or any other Second Lien Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of First Lien Obligations has occurred.
8.6 Application of Payments . Except as otherwise provided herein, all payments received by any First Lien Secured Party may be applied, reversed and reapplied, in whole or in part, to such part of the First Lien Obligations as the First Lien Agent in its sole discretion deems appropriate, consistent with the terms of the First Lien Documents. Except as otherwise provided herein, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, assents to any such extension or postponement of the time of payment of the First Lien Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the First Lien Obligations and to the addition or release of any other person primarily or secondarily liable therefor.
8.7 Jurisdiction; Consent to Service of Process; Waivers . 1
(a) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof (collectively, New York Courts), in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or
1 |
NTD Governing Law provision is already separately included at Section 8.11. |
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relating to this Agreement in any New York Courts or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(c) Each party hereto hereby irrevocably consents to service of process in the manner provided for notices in Section 8.9. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
(d) Each party hereto hereby irrevocably waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.7 any special, exemplary, punitive or consequential damages.
8.8 WAIVER OF JURY TRIAL .
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
8.9 Notices .
All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, sent by facsimile, or sent to the e-mail address of the applicable recipient specified below (or the email address of a representative of the applicable recipient designated by such recipient from time to time to the parties hereto), as follows:
(a) if to the First Lien Agent, to it at JPMorgan Chase Bank, N.A., 712 Main Street, 8 th Floor, Houston, Texas 77002, Attn: Jo Linda Papadakis, Telephone No. 713-216-7743, Facsimile No. 713 216-7770, Email: jo.l.papadakis@jpmorgan.com ;
(b) if to the Second Lien Agent, to it at Wilmington Trust, National Association, Global Capital Markets, 15950 N. Dallas Parkway, Suite 550, Dallas, TX 75248, Attn: Talos Notes Administrator (Telephone No. (972) 383-3156, Facsimile No. (888) 316-6238, Email: sgoffinet@wilmingtontrust.com);
(c) if to the Company, to it at Talos Energy Inc., 500 Dallas, Suite 2000, Texas 77002, Attn: Bill Moss (Telephone No. 713-328-3005, Facsimile No. 713-351-4100, Email: bmoss@talosenergyllc.com); and
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(d) if to any other Pledgor, to it in care of the Company as provided in clause (c) above.
Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto (and for this purpose a notice to the Company shall be deemed to be a notice to each Pledgor). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by facsimile or e-mail or on the date that is five (5) Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 8.9 or in accordance with the latest unrevoked direction from such party given in accordance with this Section.
8.10 Further Assurances . Each of the Second Lien Agent (for itself and on behalf of the Second Lien Secured Parties) and the First Lien Agent (for itself and on behalf of the First Lien Secured Parties) agrees that each of them shall take such further action and shall execute and deliver to the other persons such additional documents and instruments (in recordable form, if requested) as the First Lien Agent, the Second Lien Agent or the Company, as applicable, may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement, including, entering into an amendment, an amendment and restatement or a supplement of this Agreement to facilitate a designation by the Company of a First Lien Facility or a Second Lien Facility (including in each case of the foregoing in respect of a reinstatement contemplated by Section 5.7 or a Refinancing contemplated by Section 5.8). The Company agrees to pay all documented out-of-pocket expenses incurred by any such Representatives in connection with the execution and delivery of such additional documents and instruments.
8.11 Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
8.12 Binding on Successors and Assigns . This Agreement shall be binding upon the First Lien Agent, each other First Lien Secured Party, the Second Lien Agent, each other Second Lien Secured Party and the respective permitted successors and assigns of any of the foregoing persons.
8.13 Specific Performance . The First Lien Agent may demand specific performance of this Agreement. The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the First Lien Agent.
8.14 Section Titles . The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.
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8.15 Counterparts . This Agreement may be executed in one or more counterparts, including by means of facsimile, each of which shall be an original and all of which shall together constitute one and the same document.
8.16 Authorization . By its signature, each person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The First Lien Agent represents and warrants that this Agreement is binding upon the First Lien Secured Parties for which the First Lien Agent is the Representative. The Second Lien Agent represents and warrants that this Agreement is binding upon the Second Lien Secured Parties for which the Second Lien Agent is the Representative.
8.17 No Third Party Beneficiaries; Successors and Assigns . This Agreement and the rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties hereto and their respective successors and assigns and shall inure to the benefit of each of, and be binding upon, the First Lien Secured Parties and the Second Lien Secured Parties. No other person shall have or be entitled to assert rights or benefits hereunder. Notwithstanding the foregoing, the Company is an intended beneficiary and third party beneficiary hereof with the right and power to enforce with respect to Sections 5.1 (Releases), 5.3 (Amendments to Second Lien Collateral Documents), 5.7 (Reinstatement), 5.8 (Refinancings), 6.1 (Financing Issues), 8.3 (Amendments; Waivers) (solely with respect to the last sentence thereof), 8.17 (No Third Party Beneficiaries) and 8.22 (Additional First Lien Facility or Second Lien Facility) hereof and as otherwise provided herein or otherwise to the extent its rights are affected.
8.18 Effectiveness of Agreement . This Agreement shall become effective when executed and delivered by the parties hereto. All references to the Company or any other Pledgor shall include the Company or any other Pledgor as debtor and debtor-in-possession and any receiver or trustee for such person in any Insolvency or Liquidation Proceeding.
8.19 Agent Capacities . It is understood and agreed that:
(a) JPMorgan (i) is entering into this Agreement solely in its capacity as the First Lien Agent, (ii) the provisions of the RBL Credit Agreement affording rights, privileges, protections, immunities and indemnities to JPMorgan as administrative agent thereunder, including the provisions of the RBL Credit Agreement applicable to JPMorgan as administrative agent thereunder shall also apply to JPMorgan as First Lien Agent hereunder, and (iii) in no event shall JPMorgan incur any liability in connection with this Agreement or be liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the First Lien Agent or any First Lien Secured Party hereunder, all such liability, if any, being expressly waived and released by the parties hereto and any person claiming by, through or under such party; and
(b) WT (i) is entering into this Agreement solely in its capacity as the Second Lien Agent, (ii) the provisions of the Second Lien Agreement affording rights, privileges, protections, immunities and indemnities to WT as trustee and collateral agent thereunder shall also apply to WT as Second Lien Agent hereunder, and (iii) in no event shall WT incur any liability in connection with this Agreement or be personally liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the Second Lien Agent or any Second Lien Secured Party hereunder, all such liability, if any, being expressly waived and released by the parties hereto and any person claiming by, through or under such party.
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8.20 Relative Rights . Notwithstanding anything in this Agreement to the contrary (except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify any provisions of any First Lien Document or any Second Lien Document, or is intended to or will permit Holdings, any Legacy Blocker Entity, the Company or any subsidiary thereof to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, any First Lien Document or any Second Lien Document; (b) change the relative priorities of the First Lien Obligations or the Liens granted under the First Lien Documents on the Common Collateral (or any other assets) as among the First Lien Secured Parties, it being expressly acknowledged and agreed that such relative priorities may be subject to any intercreditor agreements governing such relative priorities; (c) change the relative priorities of the Second Lien Obligations or the Liens granted under the Second Lien Documents on the Common Collateral (or any other assets) as among the Second Lien Secured Parties, it being expressly acknowledged and agreed that such relative priorities may be subject to any intercreditor agreements governing such relative priorities; or (d) obligate Holdings, any Legacy Blocker Entity, the Company or any subsidiary thereof to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, any First Lien Document or any Second Lien Document.
8.21 References . Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph, definition or other provision of the Second Lien Agreement (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided , that any reference to any such Section, clause, paragraph or other provision shall refer to such Section, clause, paragraph or other provision of the Second Lien Agreement, as applicable (including any definition contained therein), as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Second Lien Agreement, and (2) either made in accordance with the RBL Credit Agreement and the other First Lien Documents or is approved in writing by, or on behalf of, the requisite First Lien Secured Parties as are needed under the terms of the RBL Credit Agreement and the other First Lien Documents, as applicable, to approve such amendment or modification.
8.22 Additional First Lien Facility or Second Lien Facility .
(a) The Company may designate hereunder in writing additional obligations as a First Lien Facility or a Second Lien Facility, and may specify that any such additional obligations constitute a Refinancing of any existing First Lien Obligations or any Second Lien Obligations, as the case may be, without the consent of any other First Lien Secured Party or any other Second Lien Secured Party, as applicable, if the incurrence of such obligations and related Liens is not prohibited under the First Lien Documents and the Second Lien Documents then in effect. For the avoidance of doubt, the designation of an additional First Lien Facility pursuant to the terms hereof is not intended to and shall not have the effect, either directly or indirectly, of granting, creating or perfecting a lien on Borrowing Base Properties (as
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defined in the RBL Credit Agreement) that is equal in right or prior in right to the priority of the lien of the Security Documents (as that term is defined in the RBL Credit Agreement) in favor of the Secured Parties (as such term is defined in the RBL Credit Agreement), even if such obligations and Liens are otherwise permitted pursuant to the terms of the RBL Credit Agreement, it being the intention that this Agreement sets forth the relative priority of First Lien Obligations on the one hand and Second Lien Obligations on the other hand, and that the relative priority of First Lien Obligations shall be a matter of applicable law or as otherwise agreed among the First Lien Secured Parties (it being further understood and agreed that this sentence may be amended or modified solely with the consent of the First Lien Secured Parties and the Company and without otherwise affecting the rights and obligations of any party hereto).
(b) If not so prohibited and if the Company wishes to so designate, the Company shall notify each Representative in writing of such designation.
(c) Notwithstanding anything to the contrary set forth in this Section 8.22 or in Section 8.3 (Amendments; Waivers) hereof, the First Lien Agent and the Second Lien Agent shall (i) to the extent applicable, provide written notice that the applicable agent for any such additional obligations that are designated as a First Lien Facility or Second Lien Facility, as applicable, has become the First Lien Agent or Second Lien Agent, as applicable, and (ii) at the request of the Company, without the consent of any First Lien Secured Party or any Second Lien Secured Party, enter into an amendment, a restatement or a supplement of this Agreement to facilitate the designation of a First Lien Facility or a Second Lien Facility. Any such amendment may, among other things:
(i) add other parties holding First Lien Obligations or Second Lien Obligations (or any agent or trustee therefor), as the case may be, to the extent such Indebtedness is not prohibited by the applicable Document; and
(ii) in the case of additional Second Lien Obligations, (A) establish that the Liens on the Common Collateral securing such Second Lien Obligations shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any present or future First Lien Obligations, and (B) provide to holders of such Second Lien Obligations (or any agent or trustee thereof) the comparable rights and benefits (including any improved rights and benefits that have been consented to by the First Lien Agent) as are provided to the Second Lien Secured Parties under this Agreement.
(d) Any such additional party as described in clause (c) above, the First Lien Agent and the Second Lien Agent shall be entitled to rely on the determination of officers of the Company that such modifications do not violate any applicable Documents then in effect, if such determination is set forth in an officers certificate delivered by the Company at the request of such party, the First Lien Agent or the Second Lien Agent; provided , however , that such determination will not affect whether or not the Company has complied with its undertakings in such Documents.
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(e) At the request of the Company, without the consent of any First Lien Secured Party or any other Second Lien Secured Party, the First Lien Agent and the Second Lien Agent shall enter into an amendment, a restatement or a supplement of this Agreement to facilitate the designation of a First Lien Facility or a Second Lien Facility. For the avoidance of doubt, such actions shall not be required for the effectiveness of any such designation of a First Lien Facility or a Second Lien Facility.
8.23 Intercreditor Agreements .
(a) Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the First Lien Secured Parties (as among themselves) and the Second Lien Secured Parties (as among themselves) may each enter into intercreditor agreements (or similar arrangements) with the First Lien Agent or Second Lien Agent, respectively, governing the rights, benefits and privileges as among the First Lien Secured Parties themselves or among the Second Lien Secured Parties themselves, as the case may be, in respect of any or all of the Common Collateral, this Agreement and the other First Lien Collateral Documents or the other Second Lien Collateral Documents, as the case may be, including as to the application of proceeds of any Common Collateral, voting rights, control of any Common Collateral and waivers with respect to any Common Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.
(b) In addition, in the event that the Company or any subsidiary thereof incurs any obligations secured by a Lien on any Common Collateral that is junior to Liens thereon securing any First Lien Obligations or Second Lien Obligations, as the case may be, and such obligations are not designated by the Company as a Second Lien Facility, then the First Lien Agent and Second Lien Agent may enter into an intercreditor agreement with the agent or trustee for the creditors with respect to such secured obligation to reflect the relative Lien priorities of such parties with respect to the relevant portion of the Common Collateral and governing the relative rights, benefits and privileges as among such parties in respect of such Common Collateral, including as to application of the proceeds of such Common Collateral, voting rights, control of such Common Collateral and waivers with respect to such Common Collateral, in each case so long as such secured obligations are not prohibited under, and the terms of such intercreditor agreement do not violate or conflict with, the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
JPMORGAN CHASE BANK, N.A. , in its capacity as First Lien Agent | ||
By: | ||
Name: Jo Linda Papadakis | ||
Title: Authorized Officer |
WILMINGTON TRUST, NATIONAL ASSOCIATION , in its capacity as Second Lien Agent |
By: | ||
Name: | ||
Title: |
Signature Page to Intercreditor Agreement
ACKNOWLEDGEMENT OF AND CONSENT TO
INTERCREDITOR AGREEMENT
(Company and the other Pledgors)
Each of the Company and the other Pledgors has read the Intercreditor Agreement, dated as of May 10, 2018, between JPMorgan Chase Bank, N.A. ( JPMorgan ), in its capacity as First Lien Agent and Wilmington Trust, National Association ( WT ), in its capacity as Second Lien Agent (as amended, renewed, extended, supplemented, restated, replaced or otherwise modified from time to time, the Intercreditor Agreement ). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
1. Each of the Company and the other Pledgors executes and delivers this instrument to evidence its acknowledgment of and consent to the Intercreditor Agreement (such instrument, the Company Consent ). Each of the Company and the other Pledgors agrees not to take any action that would be contrary to the express provisions of the Intercreditor Agreement and agrees that, except as otherwise provided therein, including with respect to those provisions of which the Company is an intended third party beneficiary, no Secured Party shall have any liability to the Pledgors for acting in accordance with the provisions of the Intercreditor Agreement and the other Documents referred to therein. Each of the Company and the other Pledgors understands that no Pledgor is an intended beneficiary or third party beneficiary of the Intercreditor Agreement except that it is an intended beneficiary and third party beneficiary thereof with the right and power to enforce with respect to the applicable provisions set forth in Section 8.17 (No Third Party Beneficiaries) and as otherwise provided in the Intercreditor Agreement or otherwise to the extent its rights are affected.
2. Notwithstanding anything to the contrary in the Intercreditor Agreement or provided herein, each of the undersigned acknowledges the Pledgors shall not have any right to consent to or approve any amendment, renewal, extension, supplement, modification or waiver of any provision of the Intercreditor Agreement except to the extent set forth in Section 8.3 (Amendments and Waivers), in which case the Company shall have the right to consent to or approve any such amendment, amendment, renewal, extension, supplement.
3. Each of the undersigned further agrees that it will not will bring any action or proceeding arising out of or relating to the Intercreditor Agreement in any court other than New York Courts (it being acknowledged and agreed by the parties to the Intercreditor Agreement that any other forum would be inconvenient and inappropriate in view of the fact that more of the parties hereto who would be affected by any such action or proceeding have contacts with the State of New York than any other jurisdiction).
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Acknowledgement of and Consent to Intercreditor Agreement
Acknowledgement of and Consent to Intercreditor Agreement
EXHIBIT G TO
CREDIT AGREEMENT
[FORM OF]
ASSIGNMENT AND ACCEPTANCE 1
This Assignment and Acceptance (this Assignment and Acceptance ) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the Assignor ) and [ Insert name of Assignee ] (the Assignee ). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all of the Assignors rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any participations in L/C Obligations or Swingline Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender under the Credit Agreement) against any person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the Assigned Interest ). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.
1. | Assignor: ____________________________ |
2. | Assignee: ____________________________ |
3. | Is Assignee a Lender/an Affiliate of a Lender/an Approved Fund/Is this an assignment of the entire remaining amount of the assigning Lenders Commitment or Loans? |
Yes: No:
Specify if Yes: ____________________________
1 | To be used in the case of any sale, assignment or transfer by a Lender to an assignee other than Holdings, the Borrower or the Borrowers Subsidiaries. |
G-1
4. | Is Assignee an Affiliated Lender? Yes: No: |
Specify if Yes: ____________________________
5. | Is Assignee an Affiliated Institutional Lender? Yes: No: |
Specify if Yes: ____________________________
6. | Borrower: Talos Production LLC, a Delaware limited liability company (the Borrower ). |
7. | Administrative Agent: JPMorgan Chase Bank, N.A., as the Administrative Agent, under the Credit Agreement. |
8. | Credit Agreement: Credit Agreement, dated as of May 10, 2018 among Talos Energy Inc., the Borrower, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. |
9. | Assigned Interest: |
Commitments / Loan |
Aggregate
Amount of Commitments of all Lenders |
Amount of
Commitments / Loans Assigned |
Percentage
Assigned of Commitments of all Lenders 2 |
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Commitments / Loans |
$ | $ | % | |||||
[ ] 3 |
$ | $ | % |
Effective Date: ______________, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR].
2 | Set forth, to at least 9 decimals, as a percentage of the Loans of all Lenders thereunder. |
3 | [In the event any new Class of Commitments / Loans is established under Section 2.17 of the Credit Agreement, refer to the Class of Commitments / Loans assigned.] |
G-2
10. | Notice and Wire Instructions: |
G-3
The terms set forth in this Assignment and Acceptance are hereby agreed to:
ASSIGNOR | ||
[NAME OF ASSIGNOR] | ||
By: | ||
Name: | ||
Title: |
ASSIGNEE | ||
[NAME OF ASSIGNEE] | ||
By: | ||
Name: | ||
Title: |
G-4
Accepted and Consented to:
[JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank and Swingline Lender] |
||
By: | ||
Name: | ||
Title: |
[THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as an Issuing Bank] | ||
By: | ||
Name: | ||
Title: |
[NATIXIS, NEW YORK BRANCH, as an Issuing Bank] | ||
By: | ||
Name: | ||
Title: |
[INSERT NAME], as Issuing Bank | ||
By: | ||
Name: | ||
Title: |
[TALOS PRODUCTION LLC, as Borrower] 4 | ||
By: | ||
Name: | ||
Title: |
4 | Borrowers consent shall not be required if an Event of Default under Section 11.1 or Section 11.5 of the Credit Agreement has occurred and is continuing. |
G-5
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1. Assignor . The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, other than as to the matters set forth in this Section 1, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or other Affiliates or any other person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or other Affiliates or any other person of any of their respective obligations under any Credit Document.
2. Assignee . The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement [(subject to the limitations set forth in Section 13.6(h) of the Credit Agreement)], 5 (ii) it is not Holdings, the Borrower, a Subsidiary of the Borrower, a natural person, an Ineligible Institution or a Defaulting Lender and otherwise satisfies all other requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 9.1(a)-(b) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender and (vi) if it is a Non-U.S. Lender, attached to this Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender and, based on such documents and information as it shall deem appropriate at that time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.
5 | Insert if Assignee is an Affiliated Lender. |
G-6
3. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
4. General Provisions . This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by fax or other electronic delivery shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of New York.
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G-7
EXHIBIT H-1 TO
CREDIT AGREEMENT
FORM OF NOTE
_______________, _____
FOR VALUE RECEIVED, the undersigned, a Delaware limited liability company (the Borrower ), hereby promises to pay to ________________ or registered assigns (the Lender ), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan (other than Swingline Loans) from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of May 10, 2018 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the Agreement , the terms defined therein being used herein as therein defined), among the Borrower, Talos Energy Inc., a Delaware corporation, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, and The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto.
The Borrower promises to pay interest on the unpaid principal amount of each Loan (other than Swingline Loans) from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the ratable account of the Lender in Dollars in immediately available funds at the Administrative Agents Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in Section 2.8(c) of the Agreement. This Note is subject to mandatory prepayments and to voluntary prepayments and to all other terms and conditions as provided in the Agreement.
This Note is one of the promissory notes referred to in the Agreement and is entitled to the benefits thereof. This Note is also entitled to the benefits of the other Credit Documents and is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans (other than Swingline Loans) made by the Lender shall be evidenced by an account or accounts maintained by the Lender and by the Register and subaccounts maintained by the Administrative Agent in accordance with the Agreement. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans (other than Swingline Loans) and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
H-1-1
No failure to exercise and no delay in exercising, on the part of the Administrative Agent, any right, remedy, power or privilege hereunder or under the Credit Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. A waiver by the Administrative Agent of any right, remedy, power or privilege hereunder or under any Credit Document on any one occasion shall not be construed as a bar to any right or remedy that the Administrative Agent would otherwise have on any future occasion. The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights, remedies, powers and privileges provided by law.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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H-1-2
IN WITNESS WHEREOF , this Note is executed as of the date set forth above.
TALOS PRODUCTION LLC | ||
By: | ||
Name: | ||
Title: |
H-1-3
LOANS (OTHER THAN SWINGLINE LOANS) AND
PAYMENTS WITH RESPECT THERETO
Date |
Type of Loan Made |
Amount of Loan Made |
End of Interest Period |
Amount of
or Interest Paid This Date |
Outstanding
This Date |
Notation Made By |
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H-1-4
EXHIBIT H-2 TO
CREDIT AGREEMENT
FORM OF SWINGLINE NOTE
_____________, ____
FOR VALUE RECEIVED, the undersigned, a Delaware limited liability company (the Borrower), hereby promises to pay to JPMorgan Chase Bank, N.A., as Swingline Lender (in such capacity, the Swingline Lender) or its registered assigns, in accordance with the provisions of the Agreement (as hereinafter defined), the lesser of (a) TEN MILLION DOLLARS ($10 , 000 , 000) and (b) the aggregate unpaid principal amount of all advances made by the Swingline Lender to the Borrower as Swingline Loans under that certain Credit Agreement, dated as of May 10, 2018 (as amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the Agreement, the terms defined therein being used herein as therein defined), among the Borrower, Talos Energy Inc., a Delaware corporation, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto.
The Borrower promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the ratable account of the Swingline Lender in Dollars in immediately available funds at the Administrative Agents Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in Section 2.8(c) of the Agreement. This Swingline Note is subject to mandatory prepayments and to voluntary prepayments and to all other terms and conditions as provided in the Agreement.
This Swingline Note is one of the promissory notes referred to in the Agreement and is entitled to the benefits thereof. This Swingline Note is also entitled to the benefits of the other Credit Documents and is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Swingline Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Swingline Loans made by the Swingline Lender shall be evidenced by an account or accounts maintained by the Swingline Lender and by the Register and subaccounts maintained by the Administrative Agent in accordance with the Agreement. The Swingline Lender may also attach schedules to this Swingline Note and endorse thereon the date, amount and maturity of its Swingline Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Swingline Note.
H-2-1
No failure to exercise and no delay in exercising, on the part of the Swingline Lender, any right, remedy, power or privilege hereunder or under the Credit Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. A waiver by the Swingline Lender of any right, remedy, power or privilege hereunder or under any Credit Document on any one occasion shall not be construed as a bar to any right or remedy that the Swingline Lender would otherwise have on any future occasion. The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights, remedies, powers and privileges provided by law.
THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF , this Swingline Note is executed as of the date set forth above.
TALOS PRODUCTION LLC | ||
By: | ||
Name: | ||
Title: |
H-2-2
SWINGLINE LOANS AND PAYMENTS WITH RESPECT THERETO
Date |
Amount of Loan Made |
Amount of Principal or Interest Paid This Date |
Outstanding Principal Balance This Date |
Notation Made By |
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H-2-3
EXHIBIT I TO
CREDIT AGREEMENT
GLOBAL INTERCOMPANY NOTE
[ ]
FOR VALUE RECEIVED, each of the undersigned, to the extent a borrower from time to time from any other entity listed on the signature pages hereto (each, in such capacity, an Issuer ), hereby promises to pay on demand to the order of such other entity listed below (each, in such capacity as lender to the applicable Issuer, a Holder and, together with each Issuer, a Note Party ), in immediately available funds in the currencies as shall be agreed upon from time to time, at such location as the applicable Holder shall from time to time designate, the unpaid principal amount of all loans and advances or other credit extensions made by such Holder to such Issuer. Each Issuer promises also to pay interest on the unpaid principal amount of all such loans and advances or other credit extensions in like money at said location from the date of such loans and advances until paid at such rate per annum as shall be agreed upon from time to time by the applicable Issuer and the applicable Holder.
With respect to any Issuer and any Holder between whom loans, advances or other credit extensions exist as of the date of this Note (such loans, advances or other credit extensions, Existing Obligations ), (a) if any Existing Obligation is evidenced by a promissory note or other instrument or agreement in existence as of the date hereof (an Existing Note ), it is agreed to between such Issuer and such Holder that the obligations under such Existing Note are hereafter to be evidenced by this Note and (b) it is agreed to between such Issuer and such Holder that the agreements in existence as of the date hereof with respect to any Existing Obligation (including agreements contained in any Existing Note) as to principal, amortization, currency, payment location and interest rate (if any) will continue to have effect under this Note until modified by agreement between such Issuer and such Holder.
Reference is hereby made to the Credit Agreement dated as of May 10, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ) among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), the Lenders party thereto from time to time (collectively, the Lenders and individually, a Lender ), JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the Agent ) and the other parties party thereto. Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned thereto in the Credit Agreement.
Upon the earlier to occur of (x) the commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar proceeding of any jurisdiction relating to the applicable Issuer or (y) any exercise of remedies (including the termination of the Commitments) pursuant to Section 11 of the Credit Agreement, the unpaid principal amount of all loans and advances evidenced by this note (the Note ) shall become immediately due and payable without presentment, demand, protest or notice of any kind in connection with this Note. This Note is subject to the terms of the Credit Agreement, and shall be pledged by each applicable Holder that is Credit Party pursuant to the Collateral Agreement. The applicable Issuer hereby acknowledges and agrees that the Secured Parties may, pursuant to the Collateral Agreement as in effect from time to time, exercise all rights provided therein with respect to this Note.
I-1
The indebtedness evidenced by this Note owed by any Issuer shall rank pari passu in right of payment with any other obligation of such Issuer, except as provided in the immediately succeeding sentence. The indebtedness evidenced by this Note owed by any Issuer that is a Credit Party to any Holder that is not a Credit Party shall be subordinate and junior in right of payment, to the extent and in the manner hereinafter set forth, to (i) all Obligations of the Borrower or such Issuer under the Credit Agreement and (ii) all other Indebtedness of the Borrower or such Issuer or any guaranty thereof (including, without limitation, the Senior Unsecured Notes) other than Indebtedness that by its terms expressly provides that it shall not be Senior Indebtedness hereunder (such Obligations and such Indebtedness and other indebtedness and obligations in connection with any renewal, refunding, restructuring or refinancing thereof, including interest thereon accruing after the commencement of any proceedings referred to in clause (i) below, whether or not such interest is an allowed claim in such proceeding, being hereinafter collectively referred to as Senior Indebtedness ):
(i) In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to any Issuer or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, dissolution or other winding up of such Issuer, whether or not involving insolvency or bankruptcy, then (x) the holders of Senior Indebtedness shall be paid in full in cash in respect of all amounts constituting Senior Indebtedness before any Holder is entitled to receive (whether directly or indirectly), or make any demands for, any payment on account of this Note and (y) until the holders of Senior Indebtedness are paid in full in cash in respect of all amounts constituting Senior Indebtedness, any payment or distribution to which such Holder would otherwise be entitled (other than Indebtedness of such Issuer that is subordinated, to at least the same extent as this Note, to the payment of all Senior Indebtedness then outstanding (such Indebtedness being hereinafter referred to as Restructured Debt )) shall be made to the holders of Senior Indebtedness;
(ii) if any Event of Default occurs and is continuing, then no payment or distribution of any kind or character shall be made by or on behalf of the Issuer or any other Person on its behalf with respect to this Note; and
(iii) if any payment or distribution of any character, whether in cash, securities or other property (other than Restructured Debt), in respect of this Note shall (despite these subordination provisions) be received by any Holder in violation of clause (i) or (ii) before all Senior Indebtedness shall have been paid in full in cash, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness (or their representatives), ratably according to the respective aggregate amounts remaining unpaid thereon, to the extent necessary to pay all Senior Indebtedness in full in cash.
I-2
To the fullest extent permitted by law, no present or future holder of Senior Indebtedness shall be prejudiced in its right to enforce the subordination of this Note by any act or failure to act on the part of any Issuer or by any act or failure to act on the part of such holder or any trustee or agent for such holder. Each Holder and each Issuer hereby agree that the subordination of this Note is for the benefit of the Agent and the Lenders and the Agent and the Lenders are obligees under this Note to the same extent as if their names were written herein as such and the Agent may, on behalf of itself and the Lenders, proceed to enforce the subordination provisions herein.
Notwithstanding the foregoing, nothing contained in the subordination provisions set forth above is intended to or will impair, as between each Issuer and each Holder, the obligations of such Issuer, which are absolute and unconditional, to pay to such Holder the principal of and interest on this Note as and when due and payable in accordance with its terms, or is intended to or will affect the relative rights of such Holder and other creditors of such Issuer other than the holders of Senior Indebtedness.
Each Holder is hereby authorized to record all loans and advances or other credit extensions made by it to any Issuer (all of which shall be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein. For the avoidance of doubt, this Note as between each Issuer and each Holder contains additional terms to any intercompany loan agreement between them and this Note does not in any way replace such intercompany loans between them nor does this Note in any way change the principal amount of any intercompany loans between them.
Upon execution and delivery after the date hereof by the Borrower or any subsidiary of the Borrower of a counterpart signature page hereto, such subsidiary shall become a Note Party hereunder with the same force and effect as if originally named as a Note Party hereunder. The rights and obligations of each Note Party hereunder shall remain in full force and effect notwithstanding the addition of any new Note Party as a party to this Note.
Each Issuer hereby waives presentment, demand, protest or notice of any kind in connection with this Note. All payments under this Note shall be made without offset, counterclaim or deduction of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(SEPARATE SIGNATURE PAGES TO BE ATTACHED)
I-3
EACH AS ISSUER AND HOLDER : | ||
[__] | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Global Intercompany Note]
EXHIBIT J TO
CREDIT AGREEMENT
[FORM OF] SOLVENCY CERTIFICATE
May 10, 2018
This Solvency Certificate (this Certificate ) is delivered pursuant to Section 6(i) of the Credit Agreement, dated as of the date hereof by and among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), JPMorgan Chase Bank, N.A., as the Administrative Agent, Collateral Agent and Swingline Lender, and the Lenders party thereto. Unless otherwise defined herein, capitalized terms used in this Certificate will have the meanings set forth in the Credit Agreement.
I, [_______], solely in my capacity as the Chief Financial Officer of the Borrower, do hereby certify on behalf of the Borrower that as of the date hereof, after giving effect to the consummation of the Transactions contemplated by the Credit Agreement:
1. The sum of the debt (including contingent liabilities) of the Borrower and the Subsidiaries, on a consolidated basis, does not exceed the present fair saleable value of the present assets of the Borrower and the Subsidiaries, on a consolidated basis.
2. The capital of the Borrower and the Subsidiaries, on a consolidated basis, is not unreasonably small in relation to their business as contemplated on the date hereof.
3. The Borrower and the Subsidiaries, on a consolidated basis, have not incurred and do not intend to incur, or believe that they will incur, debts including current obligations, beyond their ability to pay such debts as they become due (whether at maturity or otherwise).
4. The Borrower and the Subsidiaries, on a consolidated basis, are solvent within the meaning given to that term and similar terms under applicable laws relating to fraudulent transfers and conveyances.
5. For purposes of this Certificate, the amount of any contingent liability has been computed as the amount that, in light of all of the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability.
6. In reaching the conclusions set forth in this Certificate, I have made such other investigations and inquiries as I have deemed appropriate, having taken into account the nature of the particular business anticipated to be conducted by the Borrower and the Subsidiaries after the consummation of the Transactions contemplated by the Credit Agreement.
[Remainder of this page intentionally left blank.]
J-1
IN WITNESS WHEREOF , I HAVE EXECUTED THIS Certificate as of the date first written above.
TALOS PRODUCTION LLC | ||
By: | ||
Name: | [_______] | |
Title: | Chief Financial Officer |
J-2
EXHIBIT K-1
TO CREDIT AGREEMENT
[FORM OF] NON-BANK TAX CERTIFICATE (For Foreign Lenders That Are Not
Treated As Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), each lender from time to time party thereto (collectively, the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
Pursuant to the provisions of Section 5.4(e)(i) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c) of the Code, (iii) it is not a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 864(d)(4) of the Code, and (v) no payments in connection with any Credit Document are effectively connected with the undersigneds conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent in writing and (2) the undersigned shall furnish the Borrower and the Administrative Agent a properly completed and currently effective certificate in either the calendar year in which payment is to be made by the Borrower or the Administrative Agent to the undersigned, or in either of the two calendar years preceding each such payment.
(Signature Page Follows)
[Foreign Lender] | ||
By: |
Name: | ||
Title: | ||
[Address] |
Dated: ___________________, 20[ ]
2
EXHIBIT K-2
TO CREDIT AGREEMENT
[FORM OF] NON-BANK TAX CERTIFICATE (For Foreign Lenders That Are Treated
As Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), each lender from time to time party thereto (collectively, the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
Pursuant to the provisions of Section 5.4(e)(i) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners (within the meaning of Treasury Regulations Section 1.1441-1(c)(6)) of payments on such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) neither the undersigned nor any of its direct or indirect partners/members is a bank within the meaning of Section 881(c) of the Code, (iv) none of its direct or indirect partners/members is a 10- percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 864(d)(4) of the Code, and (vi) no payments in connection with any Credit Document are effectively connected with the undersigneds or its direct or indirect partners/members conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent in writing and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.
(Signature Page Follows)
[Foreign Lender] | ||
By: |
Name: | ||
Title: | ||
[Address] |
Dated_______________, 20[__]
EXHIBIT K-3
TO CREDIT AGREEMENT
[FORM OF] NON-BANK TAX CERTIFICATE (For Foreign Participants That Are Not
Treated As Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), each lender from time to time party thereto (collectively, the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
Pursuant to the provisions of Section 5.4(e)(i) and Section 13.6(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c) of the Code, (iii) it is not a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 864(d)(4) of the Code, and (v) no payments in connection with any Credit Document are effectively connected with the undersigneds conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.
(Signature Page Follows)
[Foreign Participant] |
By: |
Name | ||
Title: | ||
[Address] |
Dated: _______________, 20[__]
EXHIBIT K-4 TO
CREDIT AGREEMENT
[FORM OF] NON-BANK TAX CERTIFICATE
(For Foreign Participants That Are Treated As Partnerships For
U.S. Federal Income Tax Purposes)
Reference is made to the Credit Agreement dated as of May 10, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), each lender from time to time party thereto (collectively, the Lenders ), JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
Pursuant to the provisions of Section 5.4(e)(i) and Section 13.6(c) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners (within the meaning of Treasury Regulations Section 1.1441-1(c)(6)) of payments on such participation, (iii) neither the undersigned nor any of its direct or indirect partners/members is a bank within the meaning of Section 881(c) of the Code, (iv) none of its direct or indirect partners/members is a 10-percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 864(d)(4) of the Code, and (vi) no payments in connection with any Credit Document are effectively connected with the undersigneds or its direct or indirect partners/members conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.
(Signature Page Follows)
K-4-1
[Foreign Participant] |
By: | ||
Name: | ||
Title: |
[Address] |
Dated: _____________, 20[__]
K-4-2
EXHIBIT L TO
CREDIT AGREEMENT
[FORM OF] NOTICE OF CONVERSION OR CONTINUATION
JPMORGAN CHASE BANK, N.A.
712 Main Street
Houston, Texas 77002
Attention: Jo Linda Papadakis
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 10, 2018, among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower), the Lenders from time to time party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.6 of the Credit Agreement of its request for the following: 1
A. | a continuation, on ____________, ____, of LIBOR Loans in an aggregate outstanding principal amount of $__________ as LIBOR Loans having an Interest Period of ___ months 2 ; |
B. | a conversion, on ____________, ____, of ABR Loans in an aggregate outstanding principal amount of $__________ to LIBOR Loans having an Interest Period of ___ months; or |
C. | a conversion, on ____________, ____, of LIBOR Loans in an aggregate outstanding principal amount of $__________ to ABR Loans. |
[signature page follows]
1 | Date of Notice of Conversion or Continuation: prior to 1:00 p.m. (New York City time) at least (1) three Business Days, in the case of a continuation of or conversion to LIBOR Loans or (2) the date of conversion, in the case of a conversion into ABR Loans. |
2 | The Interest Period applicable to a LIBOR Borrowing shall be subject to the definition of Interest Period in the Credit Agreement. If no Interest Period is selected, the Borrower shall be deemed to have selected an Interest Period of one months duration. |
L-1
TALOS PRODUCTION LLC | ||||
By: | ||||
Name: | ||||
Title: |
L-2
EXHIBIT M TO
CREDIT AGREEMENT
[FORM OF] PREPAYMENT NOTICE
JPMORGAN CHASE BANK, N.A.
712 Main Street
Houston, Texas 77002
Attention: Jo Linda Papadakis
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 10, 2018, among Talos Energy Inc., a Delaware corporation, Talos Production LLC, a Delaware limited liability company (the Borrower ), the Lenders from time to time party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent and Swingline Lender, JPMorgan Chase Bank, N.A., Natixis, New York Branch, The Toronto-Dominion Bank, New York Branch, as Issuing Banks, and the other Persons from time to time party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 5.1 of the Agreement, Borrower hereby gives notice of its intent to prepay [Loans] [Swingline Loans] 1 on [ ] 2 as follows:
LIBOR Loans to be prepaid: $__________
ABR Loans to be prepaid: $__________
Swingline Loans to be prepaid: $__________
In case of LIBOR Loans, the Borrowing to be prepaid: __________
[signature page follows]
1 | Select as appropriate. |
2 | Date of Prepayment Notice: 1:00 p.m. (New York City time) (i) in the case of LIBOR Loans, three Business Days prior to and (ii) in the case of ABR Loans on the date of such prepayment. |
M-1
TALOS PRODUCTION LLC | ||||
By: | ||||
Name: | ||||
Title: |
M-2
Exhibit 10.3
INTERCREDITOR AGREEMENT
dated as of
May 10, 2018
between
JPMORGAN CHASE BANK, N.A.,
as First Lien Agent
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Second Lien Agent
relating to
TALOS PRODUCTION LLC
TABLE OF CONTENTS
SECTION 1. Definitions | 1 | |||||
1.1 |
Defined Terms |
1 | ||||
1.2 |
Terms Generally |
10 | ||||
SECTION 2. Lien Priorities | 10 | |||||
2.1 |
Subordination of Liens |
10 | ||||
2.2 |
Prohibition on Contesting Liens |
11 | ||||
2.3 |
No New Liens |
11 | ||||
2.4 |
Confirmation of Subordination in Second Lien Collateral Documents |
11 | ||||
2.5 |
Perfection of Liens |
12 | ||||
2.6 |
Waiver of Marshalling |
12 | ||||
SECTION 3. Enforcement | 12 | |||||
3.1 |
Exercise of Remedies |
12 | ||||
3.2 |
Cooperation |
16 | ||||
3.3 |
Actions Upon Breach |
16 | ||||
SECTION 4. Payments | 16 | |||||
4.1 |
Nature of Claims |
16 | ||||
4.2 |
Application of Proceeds |
17 | ||||
4.3 |
Payments Over |
17 | ||||
SECTION 5. Other Agreements | 17 | |||||
5.1 |
Releases |
17 | ||||
5.2 |
Insurance |
19 | ||||
5.3 |
Amendments to Second Lien Collateral Documents |
19 | ||||
5.4 |
Rights As Unsecured Creditors |
20 | ||||
5.5 |
First Lien Agent as Gratuitous Bailee/Gratuitous Agent for Perfection |
20 | ||||
5.6 |
[Reserved] |
22 | ||||
5.7 |
Reinstatement |
22 | ||||
5.8 |
Refinancings |
22 | ||||
SECTION 6. Insolvency or Liquidation Proceedings | 22 | |||||
6.1 |
Financing Issues |
22 | ||||
6.2 |
Relief from the Automatic Stay |
24 | ||||
6.3 |
Adequate Protection |
24 | ||||
6.4 |
Avoidance Issues |
25 |
i
6.5 |
Application |
25 | ||||
6.6 |
Waivers |
25 | ||||
6.7 |
Post-Petition Interest |
26 | ||||
6.8 |
Separate Grants of Security and Separate Classification |
26 | ||||
6.9 |
Reorganization Securities |
27 | ||||
6.10 |
Voting |
27 | ||||
SECTION 7. Reliance; Waivers; etc. | 27 | |||||
7.1 |
Reliance |
27 | ||||
7.2 |
No Warranties or Liability |
27 | ||||
7.3 |
Obligations Unconditional |
28 | ||||
SECTION 8. Miscellaneous | 28 | |||||
8.1 |
Conflicts |
28 | ||||
8.2 |
Continuing Nature of this Agreement; Severability |
28 | ||||
8.3 |
Amendments; Waivers |
29 | ||||
8.4 |
Information Concerning Financial Condition of the Company and its Subsidiaries |
29 | ||||
8.5 |
Subrogation |
30 | ||||
8.6 |
Application of Payments |
30 | ||||
8.7 |
Governing Law; Jurisdiction; Consent to Service of Process; Waivers |
30 | ||||
8.8 |
WAIVER OF JURY TRIAL |
31 | ||||
8.9 |
Notices |
31 | ||||
8.10 |
Further Assurances |
32 | ||||
8.11 |
Governing Law |
32 | ||||
8.12 |
Binding on Successors and Assigns |
32 | ||||
8.13 |
Specific Performance |
32 | ||||
8.14 |
Section Titles |
32 | ||||
8.15 |
Counterparts |
33 | ||||
8.16 |
Authorization |
33 | ||||
8.17 |
No Third Party Beneficiaries; Successors and Assigns |
33 | ||||
8.18 |
Effectiveness of Agreement |
33 | ||||
8.19 |
Agent Capacities |
33 | ||||
8.20 |
Relative Rights |
34 | ||||
8.21 |
References |
34 | ||||
8.22 |
Additional First Lien Facility or Second Lien Facility |
34 | ||||
8.23 |
Intercreditor Agreements |
36 |
ii
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is dated as of May 10, 2018 (as amended, renewed, extended, supplemented, restated, replaced or otherwise modified from time to time, this Agreement ), between JPMORGAN CHASE BANK, N.A. ( JPMorgan ), in its capacity as the First Lien Agent, and WILMINGTON TRUST, NATIONAL ASSOCIATION ( WT ), in its capacity as the Second Lien Agent; and acknowledged and consented to by TALOS PRODUCTION LLC, a Delaware limited liability company (together with its successors in such capacity and as provided in Section 8.18 (Effectiveness of Agreement), the Company ), and the other Pledgors. Capitalized terms used but not defined in the preamble or the recitals to this Agreement have the meanings set forth in Section 1.1 below.
BACKGROUND
A. WHEREAS, the Company is a party to that certain Credit Agreement dated as of May 10, 2018 among Talos Energy Inc., a Delaware corporation ( Holdings ), the Company, the lenders and issuing banks party thereto from time to time, and JPMorgan, as administrative agent, collateral agent and swingline lender;
B. WHEREAS, the Company is a party to that certain Indenture, dated as of May 10, 2018 among the Company and Talos Production Finance Inc., a Delaware corporation ( Production Finance ), the subsidiary guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee and collateral agent;
C. WHEREAS, this Agreement governs the relationship between the First Lien Secured Parties as a group, on the one hand, and the Second Lien Secured Parties as a group, on the other, with respect to the Common Collateral; and
D. WHEREAS, it is understood and agreed that, after the date hereof, not all First Lien Secured Parties or the Second Lien Secured Parties, as the case may be, may have security interests in all of the Collateral and nothing in this Agreement is intended to give rights to any person in any Collateral in which such person (or its Representative or collateral agent) does not otherwise have a security interest.
Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. DEFINITIONS .
1.1 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
Agreement has the meaning assigned to such term in the preamble hereof.
Bankruptcy Code means Title 11 of the United States Code.
1
Bankruptcy Law means the Bankruptcy Code and any similar federal, state or foreign bankruptcy, insolvency or receivership law for the relief of debtors.
Business Day means any day excluding Saturday, Sunday and any other day on which banking institutions in New York City or Houston, Texas are authorized by law or other governmental actions to close.
Cash Management Agreement means any agreement to provide cash management services, including treasury, depository, overdraft, credit, purchasing or debit card, electronic funds transfer and other cash management arrangements to any Pledgor or any of its subsidiaries.
Cash Management Bank has the meaning assigned to such term in the RBL Credit Agreement (or equivalent term in any other First Lien Credit Document).
Collateral means all assets and properties subject to Liens in favor of any First Lien Secured Parties or Second Lien Secured Parties created by any of the First Lien Collateral Documents or the Second Lien Collateral Documents, as applicable, including any assets in which the First Lien Agent is automatically deemed to have a Lien pursuant to the provisions of Section 2.3 and including any asset subject to Liens granted pursuant to Section 6 (Insolvency or Liquidation Proceedings) to secure both the First Lien Obligations and the Second Lien Obligations.
Common Collateral means the portion of the Collateral granted to secure both one or more series of the First Lien Obligations and one or more series of the Second Lien Obligations.
Company has the meaning assigned to such term in the preamble hereof.
Comparable Second Lien Collateral Document means, in relation to any Common Collateral subject to any Lien created under any First Lien Collateral Document, those Second Lien Collateral Documents that create a Lien on the same portion of Common Collateral, granted by the same Pledgor or Pledgors.
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 ownership of voting securities, by contract or otherwise, and Controlling and Controlled shall have meanings correlative thereto.
DIP Financing has the meaning assigned to such term in Section 6.1.
Discharge means, with respect to any Secured Obligations, except to the extent otherwise provided in Section 5.7 (Reinstatement) and Section 6.4 (Avoidance Issues) below, (a) payment in full in immediately available funds of the principal of, and interest (including interest accruing on or after the commencement of an Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in the proceeding) accrued on, all outstanding Indebtedness included in such Secured Obligations after or concurrently with the termination of all commitments to extend credit thereunder (other than, if applicable, pursuant to any Secured
2
Cash Management Agreements or Secured Hedge Agreements, in each case as provided under the relevant Documents or as to which reasonably satisfactory arrangements have been made with the relevant Cash Management Banks or Hedge Banks), (b) with respect to any letters of credit or letters of credit guaranties that may be outstanding in respect of any Secured Obligations, termination or delivery of cash collateral, backstop letters of credit or other credit support in respect thereof in an amount and manner in compliance with the applicable Documents, and (c) payment in full in immediately available funds of any other Secured Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than in respect of contingent indemnification and expense reimbursement claims not then due); provided , that (i) the Discharge of the First Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of a facility designated by the Company as a First Lien Facility or a Refinancing of the First Lien Obligations and (ii) the Discharge of the Second Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds of a facility designated by the Company as a Second Lien Facility or a Refinancing of the Second Lien Obligations. In the event that any Secured Obligations are modified and such Secured Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code, such Secured Obligations shall be deemed to be Discharged when the final payment is made, in cash or in the form of consideration otherwise provided for in the applicable Plan of Reorganization, in respect of such Indebtedness and any obligations pursuant to such new Indebtedness shall have been satisfied. The term Discharged has a correlative meaning to the foregoing.
Dispose or Disposed of means to convey, sell, lease, assign, farm-out, transfer or otherwise dispose of any property, business or assets. The term Disposition has a correlative meaning to the foregoing.
Documents means, collectively, the First Lien Documents and the Second Lien Documents, or any of the foregoing.
First Lien Agent means the collateral agent for the First Lien Secured Parties, together with its successors or co-agents in substantially the same capacity as may from time to time be appointed pursuant to the First Lien Facility. As of the date hereof, JPMorgan shall be the First Lien Agent.
First Lien Collateral Agreement means (a) the Collateral Agreement dated as of May 10, 2018, among the Company, each other Pledgor party thereto and the First Lien Agent, as amended, restated, supplemented or otherwise modified from time to time, and (b) any other collateral agreement entered into from time to time in respect of any First Lien Facility described in clause (ii) of the definition thereof and designated by the Company as a First Lien Collateral Agreement, as amended, restated, supplemented or other modified from time to time.
First Lien Collateral Documents means, collectively, the First Lien Collateral Agreement, any of the other Security Documents (or comparable terms) as defined in the RBL Credit Agreement or any other First Lien Credit Document, and any other documents now existing or entered into after the date hereof that grant or perfect Liens on any assets or properties of any Pledgor to secure any First Lien Obligations.
3
First Lien Credit Documents means (i) the RBL Credit Agreement and (ii) the instrument, agreement or other document evidencing or governing any First Lien Facility described in clause (ii) of the definition thereof.
First Lien Documents means, collectively, (i) the documentation in respect of the First Lien Facility, including the RBL Credit Agreement, any other First Lien Credit Document, the First Lien Collateral Documents and any other Credit Documents or comparable terms as defined in the applicable First Lien Facility, and (ii) each agreement, document or instrument providing for or evidencing obligations in respect of Secured Hedge Agreements or Secured Cash Management Agreements.
First Lien Facility means (i) the RBL Credit Agreement, and (ii) whether or not the facility referred to in clause (i) remains outstanding, if designated by the Company to be included in the definition of First Lien Facility and subject to the satisfaction of the applicable requirements set forth in Section 8.22 (Additional First Lien Facility or Second Lien Facility), one or more (A) debt facilities or commercial paper facilities providing for reserved-based credit loans, revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances) or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of First Lien Facility).
First Lien Obligations means all Obligations (as such term is defined in the First Lien Collateral Agreement) of the Company and other obligors outstanding under, and all other obligations in respect of, any First Lien Documents, to pay principal, premium (if any), interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, regardless of whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to any letters of credit and bankers acceptance), damages and other liabilities payable under or in connection with the First Lien Documents.
First Lien Secured Parties means the persons holding any First Lien Obligations, including the First Lien Agent.
Hedge Bank has the meaning assigned to such term in the RBL Credit Agreement (or equivalent term in any other First Lien Credit Document).
Hedging Agreement means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, future contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
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rate swap transactions, currency options, total return swap, credit spread transaction, repurchase transaction, reserve repurchase transaction, securities lending transaction, weather index transaction, spot contracts, fixed-price physical delivery contracts, whether or not exchange traded, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, that are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement ), including any such obligations or liabilities under any Master Agreement.
Holdings has the meaning assigned to such term in the recitals.
Indebtedness means and includes all obligations that constitute Indebtedness, Debt or other comparable terms as defined in the RBL Credit Agreement, any First Lien Credit Document, the Second Lien Agreement or any Second Lien Credit Document, as applicable.
Insolvency or Liquidation Proceeding means (a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Pledgor, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Pledgor or with respect to any of its assets, (c) any liquidation, dissolution, reorganization or winding up of any Pledgor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy (except to the extent permitted by the applicable Documents) or (d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Pledgor.
JPMorgan has the meaning assigned to such term in the preamble hereof.
Legacy Blocker Entity shall mean each of (i) AIF VII (Talos DC), LLC, a Delaware limited liability company, (ii) ANRP (Talos DC), LLC, a Delaware limited liability company, (iii) AP Overseas Talos Holdings (DC I), LLC, a Delaware limited liability company, (iv) AP Overseas Talos Holdings (DC II), LLC, a Delaware limited liability company, (v) AP Overseas Talos Holdings (DC III), LLC, a Delaware limited liability company, (vi) AP Overseas Talos Holdings (DC IV), LLC, a Delaware limited liability company, (vii) New Talos Sub Inc., a Delaware corporation, and (viii) Riverstone V Non-U.S. Talos Corp, a Delaware corporation.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, charge, security interest or similar monetary encumbrance in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset; provided , that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
New York Courts has the meaning assigned to such term in Section 8.7(b).
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obligations means any principal, interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements (including, if applicable, reimbursement obligations with respect to any letters of credit and bankers acceptance), damages and other liabilities payable under the documentation governing any Indebtedness.
Permitted Remedies means, with respect to any Second Lien Obligations:
(a) filing a claim, proof of claim or statement of interest with respect to such Second Lien Obligations; provided , that an Insolvency or Liquidation Proceeding has been commenced by or against any Pledgor;
(b) taking any action (not adverse to the Liens securing any First Lien Obligations, the priority status thereof, or the rights of the First Lien Agent or any of the First Lien Secured Parties to exercise rights, powers and/or remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce) its Lien on any of the Collateral;
(c) filing any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims or Liens of the Second Lien Secured Parties, including any claims secured by the Second Lien Collateral Documents, in each case in accordance with the terms of this Agreement;
(d) filing any pleadings, objections, motions or agreements that assert rights or interests available to unsecured creditors of the Pledgors arising under either any Insolvency or Liquidation Proceeding or applicable non-Bankruptcy Law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction);
(e) voting on any Plan of Reorganization, making other filings and any arguments, obligations, and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement; and
(f) the exercise of any rights or remedies with respect to the Collateral after termination of the Standstill Period subject to Section 3.1(e) of this Agreement.
Plan of Reorganization means any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency or Liquidation Proceeding.
Pledged Collateral means the Common Collateral in the possession or control of any Representative (or its agents or bailees), to the extent that possession or control thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction.
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Pledgors means Holdings, each Legacy Blocker Entity, the Company and each of its subsidiaries that shall have granted any Lien in favor of any Representative on any of its assets or properties to secure any of the Secured Obligations.
Post-Petition Claims means, collectively, interest, fees, costs, expenses and other charges that pursuant to any First Lien Document or any Second Lien Document continue to accrue after the commencement of an Insolvency or Liquidation Proceeding.
Production Finance has the meaning assigned to such term in the preamble hereof.
RBL Credit Agreement means that certain Credit Agreement dated as of May 10, 2018, among the Company, Holdings, the lenders and issuing banks party thereto from time to time and the First Lien Agent, as amended, restated, supplemented, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, refinanced, extended or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of RBL Credit Agreement).
Recovery has the meaning assigned to such term in Section 6.4.
Refinance means, in respect of any Indebtedness, to amend, restate, supplement, waive, replace (whether or not upon termination, and whether with the original parties or otherwise), restructure, repay, refund, refinance or otherwise modify from time to time (including by means of any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the obligations under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof). Refinanced and Refinancing have correlative meanings.
Representative (a) in respect of the First Lien Obligations or the First Lien Secured Parties, the First Lien Agent, and (b) in respect of the Second Lien Obligations or the Second Lien Secured Parties, the Second Lien Agent.
Required Lenders means, with respect to the First Lien Documents, the First Lien Secured Parties in respect thereof the approval of which is required to approve an amendment or modification of, termination or waiver of any provision of, or consent to any departure from such First Lien Documents (or would be required to effect such consent under this Agreement if such consent were treated as an amendment of such First Lien Documents).
Revolving Outstandings has the meaning assigned to such term in Section 6.1(a).
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Second Lien Agent means the collateral agent for the Second Lien Secured Parties, together with its successors or co-agents in substantially the same capacity as may from time to time be appointed pursuant to the Second Lien Facility. As of the date hereof, Wilmington Trust, National Association shall be the Second Lien Agent.
Second Lien Agreement means that certain Indenture, dated as of May 10, 2018 among the Company and Production Finance, the subsidiary guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee and collateral agent, as amended, restated, supplemented, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, refinanced, extended or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of Second Lien Agreement).
Second Lien Collateral Agreement means (a) the Collateral Agreement (Second Lien) dated as of May 10, 2018, among the Company, each other Pledgor party thereto and the Second Lien Agent as amended, restated, supplemented or otherwise modified from time to time, and (b) any other collateral agreement entered into from time to time in respect of any Second Lien Facility described in clause (ii) of the definition thereof and designated by the Company as a Second Lien Collateral Agreement, as amended, restated, supplemented or other modified from time to time.
Second Lien Collateral Documents means, collectively, the Second Lien Collateral Agreement, any of the other Security Documents (or comparable terms) as defined in the Second Lien Agreement or any other Second Lien Credit Document, and any other documents now existing or entered into after the date hereof that grant or perfect Liens on any assets or properties of any Pledgor to secure any Second Lien Obligations.
Second Lien Credit Documents means (i) the Second Lien Agreement and (ii) the instrument, agreement or other document evidencing or governing any Second Lien Facility described in clause (ii) of the definition thereof.
Second Lien Documents means, collectively, the documentation in respect of the Second Lien Facility, including the Second Lien Agreement, any other Second Lien Credit Document, the Second Lien Collateral Documents and any other Credit Documents (as such term is defined in the Second Lien Collateral Agreement) or comparable terms as defined in the applicable Second Lien Facility.
Second Lien Facility means (i) the Second Lien Agreement, and (ii) whether or not the facility referred to in clause (i) remains outstanding, if designated in writing by the Company to be included in the definition of Second Lien Facility and subject to the satisfaction of the applicable requirements set forth in Section 8.22, one or more (A) debt facilities or commercial paper facilities providing for reserved-based credit loans, revolving
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credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances) or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time (except to the extent any such refinancing, replacement or restructuring is designated by the Company to not be included in the definition of Second Lien Facility).
Second Lien Obligations means all Obligations (as such term is defined in the Second Lien Collateral Agreement) of the Company and other obligors outstanding under, and all other obligations in respect of, any Second Lien Documents, to pay principal, premium (if any), interest (including interest accruing after the commencement of any Insolvency or Liquidation Proceeding, regardless of whether or not allowed or allowable in such proceeding), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under or in connection with the Second Lien Documents.
Second Lien Secured Parties means the persons holding any Second Lien Obligations, including the Second Lien Agent and the Secured Parties (as such term is defined in the Second Lien Collateral Agreement).
Secured Cash Management Agreement means any Cash Management Agreement that is entered into by and between any Pledgor or any of its subsidiaries and any Cash Management Bank.
Secured Hedge Agreement means any Hedging Agreement that is entered into by and between any Pledgor or any of its subsidiaries and any Hedge Bank.
Secured Obligations means, collectively, the First Lien Obligations, the Second Lien Obligations, or any of the foregoing.
Secured Parties means, collectively, the First Lien Secured Parties, the Second Lien Secured Parties, or any of the foregoing.
Standstill Period has the meaning assigned to such term in Section 3.1(e).
subsidiary means, with respect to any person (herein referred to as the parent), any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, directly or indirectly, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Uniform Commercial Code or UCC means the Uniform Commercial Code as from time to time in effect in the State of New York, unless otherwise provided herein.
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1.2 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (b) any reference herein to any person shall be construed to include such persons successors and assigns, but shall not be deemed to include the subsidiaries of such person unless express reference is made to such subsidiaries, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Exhibits shall be construed to refer to Sections and Exhibits of this Agreement, (e) unless otherwise expressly qualified herein, the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (f) the term or is not exclusive.
Section 2. LIEN PRIORITIES .
2.1 Subordination of Liens . Notwithstanding (i) the date, time, method, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to secure any First Lien Obligations on the Common Collateral or of any Liens granted to secure any Second Lien Obligations on the Common Collateral, (ii) any provision of the UCC, any Bankruptcy Law or any other applicable law, (iii) any provision of the First Lien Documents or the Second Lien Documents, (iv) whether any First Lien Secured Party or Second Lien Secured Party, either directly or through agents, holds possession of, or has control over, all or any part of the Common Collateral, (v) the fact that any Liens granted to secure the Second Lien Obligations or any Liens granted to secure any First Lien Obligations may be subordinated, voided, avoided, invalidated or lapsed or (vi) any other circumstance of any kind or nature whatsoever, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby agrees that: whether or not any Liens securing any First Lien Obligations are subordinated to any Liens securing any other obligation of any Pledgor or any other person, (a) any Lien on the Common Collateral securing any First Lien Obligations will at all times, regardless of when granted or perfected or how acquired (whether by grant, statute, operation of law, subrogation or otherwise), have priority over and be senior in all respects and prior to any Lien on the Common Collateral securing any Second Lien Obligations for all purposes, and (b) any Lien on the Common Collateral securing any Second Lien Obligations will at all times, regardless of when granted or perfected or how acquired (whether by grant, statute, operation of law, subrogation or otherwise), be junior and subordinate in all respects to all Liens on the Common Collateral securing any First Lien Obligations for all purposes.
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2.2 Prohibition on Contesting Liens . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, and the First Lien Agent, for itself and on behalf of the First Lien Secured Parties, agrees that, until the Discharge of First Lien Obligations has occurred, it shall not (and hereby waives any right to) take any action to challenge, contest or support any other person in contesting or challenging, directly or indirectly, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of (a) a Lien securing any First Lien Obligations or (b) a Lien securing any Second Lien Obligations; provided , however , that nothing in this Agreement shall be construed to prevent or impair the rights of the First Lien Agent or any First Lien Secured Party to enforce this Agreement (including the priority of the Liens securing the First Lien Obligations or the provisions for exercise of remedies) or any of the First Lien Documents.
2.3 No New Liens . So long as the Discharge of First Lien Obligations has not occurred and subject to Section 6, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Pledgor, it shall not acquire or hold any Lien on any assets of the Company or any other Pledgor securing any Second Lien Obligations that are not also subject to the first-priority Lien in respect of the First Lien Obligations under the First Lien Documents. If the Second Lien Agent or any Second Lien Secured Party shall (nonetheless and whether or not in breach hereof) acquire or hold any Lien on any property that is not also subject to the first-priority Lien in respect of the First Lien Obligations under the First Lien Documents, then the Second Lien Agent or such Second Lien Secured Party, as the case may be, shall, without the need for any further consent of any person and notwithstanding anything to the contrary in any other document, be deemed to also hold and have held such Lien for the benefit of the First Lien Agent and the First Lien Secured Parties as security for the First Lien Obligations (subject to the lien priority and other terms hereof) and shall promptly notify the First Lien Agent in writing of the existence of such Lien (if and to the extent the Second Lien Agent or such Second Lien Secured Party has actual knowledge of the existence of such Lien) and in any event take such actions as may be reasonably requested by the First Lien Agent to assign or release such Liens to the First Lien Agent as security for the applicable First Lien Obligations.
Notwithstanding anything to the contrary set forth in the foregoing paragraph of this Section 2.3 or any other part of this Agreement, the foregoing paragraph shall not apply with respect to any First Lien Obligations that, by their express terms, are not intended to be secured by all of the Common Collateral and, in particular, are not intended to be secured by such assets but only to the extent of such assets (and the First Lien Agent and Second Lien Agent may rely conclusively on a certificate to that effect provided to them by the Company upon either the First Lien Agent or the Second Lien Agents reasonable request without further inquiry).
2.4 Confirmation of Subordination in Second Lien Collateral Documents . The Second Lien Agent agrees that each Second Lien Collateral Document shall, unless otherwise agreed to by the First Lien Agent, include language substantially the same as the following paragraph (or language to similar effect reasonably approved by the First Lien Agent to reflect the subordination of the Liens):
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Notwithstanding anything herein to the contrary, (i) the Liens and security interests granted to [ ] for the benefit of the Secured Parties pursuant to this Agreement and (ii) the exercise of any right or remedy by [ ] hereunder or the application of proceeds (including insurance proceeds and condemnation proceeds) of any Common Collateral are subject to the provisions of the Intercreditor Agreement dated as of May 10, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the Intercreditor Agreement ), by and between JPMorgan Chase Bank, N.A., in its capacity as the First Lien Agent, and Wilmington Trust, National Association, in its capacity as the Second Lien Agent. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern.
2.5 Perfection of Liens . None of the First Lien Agent or any other First Lien Secured Party shall be responsible for perfecting or maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the Second Lien Agent or any other Second Lien Secured Party. None of the Second Lien Agent or any other Second Lien Secured Party shall be responsible for perfecting or maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the First Lien Agent or any other First Lien Secured Party. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Lien Secured Parties and the Second Lien Secured Parties and shall not impose on the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent, any other Second Lien Secured Party or any agent, or trustee for any of the foregoing persons any obligations in respect of the Disposition of proceeds of any Common Collateral that would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or governmental authority or any applicable law.
2.6 Waiver of Marshalling . Until the Discharge of First Lien Obligations, the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, agrees not to assert, and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Common Collateral or any other similar rights a junior secured creditor may have under applicable law.
Section 3. ENFORCEMENT .
3.1 Exercise of Remedies .
(a) So long as the Discharge of First Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Pledgor:
(i) except as otherwise provided herein, the First Lien Agent shall have the exclusive right, in each case with respect to Common Collateral, to (x) enforce rights, exercise remedies (including any action of foreclosure, any setoff and the right to credit bid their debt) and enforce any right under any
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account control agreement, landlord waiver, bailees letter, assignment of production, or any similar agreement or arrangement to which the First Lien Agent or any other First Lien Secured Party is a party, (y) make determinations regarding the release, Disposition or restrictions with respect to any Common Collateral without any consultation with or the consent of the Second Lien Agent or any Second Lien Secured Party, and (z) otherwise enforce the rights and remedies of a secured creditor under the UCC and the Bankruptcy Law of any applicable jurisdiction, and any other applicable law, so long as any proceeds of any Common Collateral received by the First Lien Agent and other First Lien Secured Parties in the aggregate in excess of those necessary to achieve the Discharge of First Lien Obligations are distributed in accordance with Section 4.2 (Application of Proceeds), except as otherwise required pursuant to the UCC and applicable law, subject to the relative priorities set forth in Section 2.1 (Subordination of Liens); and
(ii) none of the Second Lien Agent or any other Second Lien Secured Party will:
(x) subject to Section 3.1(e), exercise or seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Common Collateral or any other Lien, collateral or security in respect of any applicable Second Lien Obligations, or exercise any right under any lockbox agreement, control agreement, landlord waiver or bailees letter, assignment of production, or similar agreement or arrangement, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure),
(y) contest, protest or object to any foreclosure proceeding or action brought with respect to the Common Collateral or any other Lien, collateral or security by the First Lien Agent or any other First Lien Secured Party in respect of the First Lien Obligations, the exercise of any right by the First Lien Agent or any other First Lien Secured Parties (or any agent or sub-agent on their behalf) in respect of the First Lien Obligations under any lockbox agreement, control agreement, landlord waiver, bailees letter, assignment of production or similar agreement or arrangement to which the Second Lien Agent or any other Second Lien Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party, of any rights and remedies relating to the Common Collateral or any other Lien, collateral or security under the First Lien Documents or otherwise in respect of the First Lien Obligations, or
(z) object to the forbearance by the First Lien Agent or any other First Lien Secured Party from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Common Collateral or any other Lien, collateral or security under the First Lien Documents or otherwise in respect of the First Lien Obligations;
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provided , however , that the Second Lien Agent and the other Second Lien Secured Parties may take any Permitted Remedies.
(b) So long as the Discharge of First Lien Obligations has not occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it will not take or receive any Common Collateral or other collateral or any proceeds of Common Collateral or other collateral in connection with the exercise of any right or remedy (including setoff or recoupment) with respect to any Common Collateral or other collateral in respect of the Second Lien Obligations. Without limiting the generality of the foregoing, unless and until the Discharge of First Lien Obligations has occurred, except as expressly provided in the proviso to clause (ii) of Section 3.1(a) and in Section 3.1(e), the sole right of the Second Lien Agent and the other Second Lien Secured Parties with respect to the Common Collateral or any other collateral securing any Second Lien Obligations is to hold a Lien on the Common Collateral or such other collateral in respect of the applicable Second Lien Obligations pursuant to the Second Lien Documents, as applicable, for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of First Lien Obligations has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a) above and Section 3.1(e) below, (i) each of the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that neither it nor any other Second Lien Secured Party will take any action that would hinder any exercise of remedies undertaken by the First Lien Agent or any other First Lien Secured Party with respect to the Common Collateral or any other collateral securing the First Lien Obligations, including any Disposition of the Common Collateral or such other collateral, whether by foreclosure or otherwise; (ii) the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges that any First Lien Secured Party may enforce rights or exercise remedies (v) in any manner in its sole discretion in compliance with applicable law, (w) without consultation with or the consent of any Second Lien Secured Parties, (x) regardless of whether or not an Insolvency or Liquidation Proceeding has commenced, (y) regardless of any provision of any Second Lien Documents (other than this Agreement) and (z) regardless of whether or not such exercise is adverse to the interest of any Second Lien Secured Parties; and (iii) the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby waives any and all rights it or any such Second Lien Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the First Lien Agent seeks to enforce or collect the First Lien Obligations or the Liens granted to secure any First Lien Obligations, regardless of whether any action or failure to act by or on behalf of the First Lien Agent or any First Lien Secured Party is adverse to the interests of any of the Second Lien Secured Parties.
(d) The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby acknowledges and agrees that no covenant, agreement or restriction contained in any applicable Second Lien Document shall be deemed to restrict in any way the rights and remedies of the First Lien Agent or any other First Lien Secured Party with respect to the Common Collateral or other collateral securing the First Lien Obligations as set forth in this Agreement and any First Lien Documents.
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(e) Notwithstanding Section 3.1(a) (but subject to clauses (i), (ii) and (iii) of this Section 3.1(e)), each party hereto agrees that, after a period of 180 days has elapsed since the date on which the Second Lien Agent has delivered to the First Lien Agent a written notice of the acceleration of the relevant Second Lien Obligations (the Standstill Period ), the Second Lien Agent may, subject to Section 4 below, (A) enforce or exercise, or seek to enforce or exercise, any rights or remedies (including any right of setoff) with respect to any Common Collateral (including the enforcement of any right under any account control agreement, landlord waiver or bailees letter or any similar agreement or arrangement to which the Second Lien Agent or any other Second Lien Secured Party is a party) or (B) commence or join with any person (other than the First Lien Agent) in commencing, or petition for or vote in favor of any resolution for, any action or proceeding with respect to such rights or remedies (including any foreclosure action), if:
(i) no First Lien Secured Party shall have commenced or is diligently pursuing the enforcement or exercise of any rights or remedies with respect to all or a material portion of the Common Collateral, or shall have sought or requested relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit of such enforcement actions,
(ii) any acceleration of the relevant Second Lien Obligations has not been rescinded, and
(iii) no Pledgor is then a debtor in an Insolvency and Liquidation Proceeding.
Notwithstanding anything to the contrary contained in this Section 3.1, (A) in no event shall the Second Lien Agent or any other Second Lien Secured Party enforce or exercise any rights or remedies with respect to any Common Collateral, or commence, join with any person in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding if the First Lien Agent or any other First Lien Secured Party shall have commenced, and shall be diligently pursuing (or shall have sought or requested relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit thereof), the enforcement or exercise of any rights or remedies with respect to any Common Collateral or any such action or proceeding (prompt written notice thereof to be given to the Second Lien Agent by the First Lien Agent) and (B) after the expiration of the Standstill Period, so long as none of the First Lien Agent or any other First Lien Secured Party has commenced any action to enforce their Lien on any material portion of the Common Collateral, in the event that and for so long as the Second Lien Secured Parties (or the Second Lien Agent) have commenced any actions to enforce their Lien with respect to all or any material portion of the Common Collateral to the extent permitted hereunder and are diligently pursuing such actions, none of the First Lien Agent or any other First Lien Secured Party shall take any action of a similar nature with respect to such Common Collateral; provided , that all other provisions of this Agreement (including the turnover provisions of Section 4) are complied with.
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3.2 Cooperation . Subject to the proviso to clause (ii) of Section 3.1(a) and Section 3.1(e), the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that, unless and until the Discharge of First Lien Obligations has occurred, it will not commence, or join with any person (other than the First Lien Agent and the other First Lien Secured Parties, upon the request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Common Collateral or any other collateral under any of the applicable Second Lien Documents or otherwise in respect of the applicable Second Lien Obligations secured by the Common Collateral.
3.3 Actions Upon Breach . If any Second Lien Secured Party, in contravention of the terms of this Agreement, in any way takes, attempts to or threatens to take any action with respect to the Common Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), this Agreement shall create an irrebuttable presumption and admission by such Second Lien Secured Party that relief against such Second Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the First Lien Secured Parties, it being understood and agreed by the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, that (i) the First Lien Secured Parties damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Second Lien Secured Party waives any defense that the Pledgors and/or the First Lien Secured Parties cannot demonstrate damage and/or can be made whole by the awarding of damages.
Section 4. PAYMENTS .
4.1 Nature of Claims . The Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, acknowledges and agrees that (i) with respect to any commitments under any First Lien Facility that constitute revolving credit commitments, in the ordinary course of business, the applicable First Lien Agent and lenders thereunder will apply payments and make advances to the Company or other Pledgors thereunder and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed; (ii) no release of any Lien by the First Lien Agent upon any portion of the Common Collateral or other collateral securing any First Lien Obligations in connection with a Disposition not prohibited under the First Lien Documents shall constitute the exercise of remedies prohibited under this Agreement; and (iii) the amount of the First Lien Obligations that may be outstanding at any time or from time to time may be increased (including by way of incremental commitments or as a result of fluctuations in commodity prices or interest rates) or reduced and, with respect to any First Lien Obligations that comprise revolving facilities, including letter of credit facilities, subsequently reborrowed. The Lien priority set forth in this Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the First Lien Obligations or any portion thereof.
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4.2 Application of Proceeds . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges and agrees that, so long as the Discharge of First Lien Obligations has not occurred, the Common Collateral and any other collateral securing the First Lien Obligations or proceeds thereof received in connection with the Disposition of, or collection on, such Common Collateral or such other collateral upon the exercise of remedies as a secured party shall be applied by the First Lien Agent to the applicable First Lien Obligations in a manner as specified in the relevant First Lien Documents in accordance with applicable law until the Discharge of First Lien Obligations has occurred. After the Discharge of First Lien Obligations, subject to Section 5.7 hereof, the First Lien Agent shall deliver promptly to the Second Lien Agent (and/or its designees), for the benefit of the Second Lien Secured Parties, any Common Collateral or proceeds thereof held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Second Lien Agent to the Second Lien Obligations in a manner as specified in the Second Lien Documents. Any Common Collateral or proceeds thereof remaining after the Discharge of Second Lien Obligations shall be promptly delivered to the Pledgors or as a court of competent jurisdiction may otherwise direct to be applied.
4.3 Payments Over . Any Common Collateral or other collateral securing any First Lien Obligations or proceeds thereof received by the Second Lien Agent or any other Second Lien Secured Party in connection with the exercise of any right or remedy (including setoff or recoupment) relating to the Common Collateral or such other collateral prior to the Discharge of First Lien Obligations shall be segregated and held in trust for the benefit of, and forthwith paid over to, the First Lien Agent (and/or its designees), for the benefit of the First Lien Secured Parties, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Agent is hereby authorized to make any such endorsements as agent for the Second Lien Agent or any other Second Lien Secured Parties. This authorization is coupled with an interest and is irrevocable.
Section 5. OTHER AGREEMENTS .
5.1 Releases .
(a) If, at any time any Pledgor or any First Lien Secured Party delivers notice to the Second Lien Agent that any specified Common Collateral (including all or substantially all of the equity interests of a Pledgor or any of its subsidiaries, which shall include for such purpose, in the case of the sale of equity interests in any such subsidiary, any Common Collateral held by such subsidiary or any direct or indirect subsidiary thereof) is Disposed of (other than to another Pledgor),
(A) by the owner of such Common Collateral in a transaction not prohibited under the RBL Credit Agreement, any applicable First Lien Documents, the Second Lien Agreement and any applicable Second Lien Documents; or
(B) during the existence of any Event of Default under (and as defined in) the RBL Credit Agreement or any applicable First Lien Documents in connection with any enforcement action, exercise of rights or remedies or to the extent that the First Lien Agent has consented to such Disposition;
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then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens securing the Second Lien Obligations upon such Common Collateral will automatically be released and discharged as and upon, but only to the extent, such Liens on such Common Collateral securing the First Lien Obligations are released and discharged.
Upon delivery to the Second Lien Agent of a notice from the First Lien Agent or the Company, which notice states that any release of Liens securing or supporting any First Lien Obligations has become effective (or shall become effective upon the release by the Second Lien Agent or other relevant Second Lien Secured Parties), whether in connection with a sale of such assets by the relevant Pledgor pursuant to the preceding clauses or otherwise, the Second Lien Agent or such other Second Lien Secured Parties, as the case may be, shall promptly execute and deliver such instruments, releases, termination statements or other documents or instruments confirming such release on customary terms or otherwise reasonably satisfactory to the First Lien Agent and the Company, it being understood that all documented out-of-pocket expenses incurred by any Second Lien Secured Parties (and their respective representatives) in connection with the execution and delivery of such release documents or instruments shall be borne by the Pledgors. In the case of the Disposition of all or substantially all of the capital stock of a Pledgor or any of its subsidiaries, the guarantee in favor of the Second Lien Secured Parties, if any, made by such Pledgor or such subsidiary will automatically be released and discharged as and upon, but only to the extent, the guarantee by such Pledgor or such subsidiary of the First Lien Obligations is released and discharged if (A) such Disposition is not prohibited by the terms of the First Lien Documents and the Second Lien Documents or (B) such Disposition is made during the existence of any Event of Default under (and as defined in) the RBL Credit Agreement or any applicable First Lien Documents in connection with any enforcement action or exercise of rights or remedies, or to the extent that the First Lien Agent has consented to such Disposition.
(b) The Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, hereby irrevocably constitutes and appoints (which appointment is coupled with an interest) the First Lien Agent and any officer or agent of the First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Second Lien Agent, or in the First Lien Agents own name, from time to time in the First Lien Agents discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Section 5.1, including any termination statements, endorsements or other instruments of transfer or release.
(c) Unless and until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the applicable Second Lien Secured Parties, hereby consents to the application, whether prior to or after a default, of proceeds of Common Collateral or other collateral to the repayment of First Lien Obligations pursuant to the applicable First Lien Documents; provided , that nothing in this Section 5.1(c) shall be construed to prevent or impair the rights of the Second Lien Agent or the other Second Lien Secured Parties to receive proceeds in connection with the Second Lien Obligations not otherwise in contravention of this Agreement.
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5.2 Insurance . Pursuant to the applicable Documents, the First Lien Agent and the Second Lien Agent may be named as additional insureds and/or loss payees, as applicable, under any insurance policies maintained by any Pledgor. Proceeds of the Common Collateral include insurance proceeds and, therefore, the Lien priority set forth in this Agreement shall govern the ultimate Disposition of such insurance proceeds. Unless and until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby agrees that, subject to the rights of the Pledgors under the First Lien Documents:
(a) the First Lien Agent shall have the sole and exclusive right to (i) adjust settlement for any losses covered by an insurance policy covering the Common Collateral or any other collateral securing the First Lien Obligations and (ii) approve any award granted in any condemnation or similar proceeding (or a deed in lieu of condemnation) affecting the Common Collateral or such other collateral; and
(b) all proceeds of any such policy and any such award or deed, if in respect of the Common Collateral or such other collateral, shall be paid (i) first, prior to the occurrence of the Discharge of First Lien Obligations, to the First Lien Agent for the benefit of the First Lien Secured Parties pursuant to the terms of the applicable First Lien Documents, (b) second, after the occurrence of the Discharge of First Lien Obligations, to the Second Lien Agent for the benefit of the Second Lien Secured Parties pursuant to the terms of the applicable Second Lien Documents, and (c) third, if no Second Lien Obligations are outstanding, to the owner of the subject property, such other person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If the Second Lien Agent or any other Second Lien Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the First Lien Agent in accordance with the terms of this Section 5.2.
5.3 Amendments to Second Lien Collateral Documents .
(a) So long as the Discharge of First Lien Obligations has not occurred, without the prior written consent of the First Lien Agent, no Second Lien Collateral Document may be amended, supplemented or otherwise modified or entered into to the extent that any provisions therein as so amended, supplemented or modified, or the terms of any new Second Lien Collateral Document, would be prohibited by, or would require any Pledgor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(b) In the event that the First Lien Agent or other First Lien Secured Parties enter into any amendment, waiver or consent in respect of or replace any First Lien Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Collateral Document or changing in any manner the rights of the First Lien Agent, such First Lien Secured Parties, the Company or any other Pledgor thereunder, then such amendment, waiver, consent or replacement shall apply automatically to any comparable provision of each Comparable Second Lien Collateral
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Document in which the Pledgors grant a Lien on the same collateral, without the consent of the Second Lien Agent or any other Second Lien Secured Party and without any action by any such person; provided , that such amendment, waiver, consent or replacement does not (i) materially adversely affect the rights of the Second Lien Secured Parties or their interests in the Common Collateral to a greater extent than the First Lien Secured Parties in a like or similar manner (other than by virtue of their relative priorities and rights and obligations hereunder), or (ii) adversely affect the rights, duties, protections, privileges, indemnities or immunities of the Second Lien Agent. The First Lien Agent shall promptly, and in any event within five (5) Business Days thereof, give written notice of such amendment, waiver or consent to the Second Lien Agent; provided , that the failure to give such notice shall not affect the effectiveness of such amendment, waiver, consent or replacement with respect to the provisions of any Second Lien Collateral Document as set forth in this Section 5.3(b).
5.4 Rights As Unsecured Creditors . Notwithstanding anything to the contrary in this Agreement, the Second Lien Agent may exercise rights and remedies as an unsecured creditor against the Company or any other Pledgor that has guaranteed the Second Lien Obligations in accordance with the terms of the applicable Second Lien Documents and applicable law, in each case to the extent not inconsistent with the provisions of this Agreement. Nothing in this Agreement shall prohibit the receipt by the Second Lien Agent or any other Second Lien Secured Party of the required payments of interest and principal so long as such receipt is not the direct or indirect result of (a) the exercise by the Second Lien Agent of rights or remedies as a secured creditor in respect of any Common Collateral or other collateral securing any Second Lien Obligations or (b) enforcement in contravention of this Agreement of any Lien in respect of any Second Lien Obligations. In the event that the Second Lien Agent becomes a judgment lien creditor or other secured creditor in respect of any Common Collateral or other collateral securing any Second Lien Obligations as a result of its enforcement of its rights as an unsecured creditor in respect of any Second Lien Obligations or otherwise, such judgment or other lien shall be subordinated to the Liens securing the First Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated to such Liens securing the First Lien Obligations under this Agreement. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies that any First Lien Agent or any First Lien Secured Party may have with respect to the collateral securing any First Lien Obligations.
5.5 First Lien Agent as Gratuitous Bailee/Gratuitous Agent for Perfection .
(a) The First Lien Agent agrees to hold the Pledged Collateral that is part of the Common Collateral that is in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee and/or gratuitous agent for the benefit of and on behalf of the Second Lien Agent and any assignee thereof solely for the purpose of perfecting the security interest granted in such Pledged Collateral, if any, pursuant to the Second Lien Collateral Documents, subject to the terms and conditions of this Section 5.5 (such bailment and/or agency being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2), 9-104(a)(2) and 9-313(c) of the UCC). Pending delivery to the First Lien Agent, the Second Lien Agent shall hold any Pledged Collateral that is part of the Common Collateral that is in its possession or control, as gratuitous bailee and/or gratuitous agent for the benefit of and on behalf of each other Secured Party and any assignee thereof solely for the purpose of perfecting the security interest granted in such Pledged Collateral, if any, pursuant to
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the relevant First Lien Collateral Documents and Second Lien Collateral Documents, in each case, subject to the terms and conditions of this Section 5.5 (such bailment and/or agency being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2), 9-104(a)(2) and 9-313(c) of the UCC).
(b) In the event that the First Lien Agent (or its agent or bailees) has Lien filings against Intellectual Property (as defined in the applicable First Lien Collateral Documents) that is part of the Common Collateral that are necessary for the perfection of Liens on such Common Collateral, the First Lien Agent agrees to hold such Liens as gratuitous bailee and/or gratuitous agent for the Second Lien Agent and any assignee solely for the purpose of perfecting the security interest granted in such Common Collateral, if any, pursuant to the Second Lien Collateral Documents, subject to the terms and conditions of this Section 5.5.
(c) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until the Discharge of First Lien Obligations has occurred, the First Lien Agent shall be entitled to deal with any Pledged Collateral in accordance with the terms of the relevant First Lien Collateral Documents as if the Liens under the Second Lien Collateral Documents did not exist. The rights of the Second Lien Agent and the other Second Lien Secured Parties with respect to such Pledged Collateral shall at all times be subject to the terms of this Agreement.
(d) The First Lien Agent shall not have any obligation whatsoever to the Second Lien Agent or any other Second Lien Secured Party to assure that the Pledged Collateral is genuine or owned by the Pledgors or to protect or preserve rights or benefits of any person or any rights pertaining to the Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities of the First Lien Agent under this Section 5.5 shall be limited solely to holding the Pledged Collateral as gratuitous bailee and/or gratuitous agent for the Second Lien Agent for purposes of perfecting the Liens securing any Second Lien Obligations.
(e) The First Lien Agent shall not have, by reason of any Second Lien Collateral Documents or this Agreement or any other document, a fiduciary relationship in respect of the Second Lien Agent or any other Second Lien Secured Party. The Second Lien Agent and each other Second Lien Secured Party hereby waives and releases the First Lien Agent from all claims and liabilities arising pursuant to the First Lien Agents role as agent and gratuitous bailee and/or gratuitous agent with respect to any Common Collateral, under this Section 5.5. The Second Lien Agent shall not have, by reason of any First Lien Collateral Documents or this Agreement or any other document, a fiduciary relationship in respect of the First Lien Agent or any other First Lien Secured Party. The First Lien Agent and each other First Lien Secured Party hereby waives and releases the Second Lien Agent from all claims and liabilities arising pursuant to the Second Lien Agents role as agent and gratuitous bailee and/or gratuitous agent with respect to any Common Collateral, under this Section 5.5.
(f) After the Discharge of the First Lien Obligations, the First Lien Agent shall promptly deliver to the Second Lien Agent, to the extent that it is legally permitted to do so, the remaining Pledged Collateral (if any) and to the extent that such Pledged Collateral is in the possession or control of the First Lien Agent (or its agents or bailees), together with any necessary endorsements (or otherwise allow the Second Lien Agent to obtain control of such Pledged Collateral), or as a court of competent jurisdiction may otherwise direct.
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(g) None of the First Lien Agent or any First Lien Secured Party shall be required to marshal any present or future collateral security for the Companys or its subsidiaries obligations to the First Lien Agent or such First Lien Secured Parties under any First Lien Documents or any assurance of payment in respect thereof or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.
5.6 [Reserved].
5.7 Reinstatement . If, at any time after the Discharge of First Lien Obligations has occurred, the Company incurs or designates any First Lien Obligations, then such Discharge of First Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such incurrence or designation as a result of the occurrence of such first Discharge of First Lien Obligations), and the applicable agreement governing such First Lien Obligations shall automatically be treated as a First Lien Credit Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of the Common Collateral set forth herein. Upon receipt of written notice of such designation (including the identity of any new First Lien Agent), the Second Lien Agent shall promptly (i) enter into such documents and agreements (it being understood that the Company will pay all documented out-of-pocket expenses incurred by any such person (and their respective representatives) in connection with the execution and delivery of such documents and agreements), including amendments or supplements to this Agreement, as the Company or such new First Lien Agent shall reasonably request in writing in order to provide to the new First Lien Agent the rights of a First Lien Agent contemplated hereby and (ii) to the extent then held by the Second Lien Agent, deliver to such new First Lien Agent any Pledged Collateral that is Common Collateral, together with any necessary endorsements (or otherwise allow such new First Lien Agent to obtain possession or control of such Pledged Collateral).
5.8 Refinancings . Any Secured Obligations may be Refinanced without notice to or the consent of any Secured Party (to the extent not prohibited by the terms of the Documents), all without affecting the priorities provided for herein or the other provisions hereof; provided , however , that the requirements set forth in Section 8.22 shall have been satisfied to the extent applicable.
Section 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS .
6.1 Financing Issues . Until the Discharge of First Lien Obligations has occurred, if the Company or any other Pledgor shall be subject to any Insolvency or Liquidation Proceeding and the First Lien Agent shall desire to permit the use, sale or lease of cash collateral (as defined in Section 363(a)) or to permit the Company or any other Pledgor to obtain financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision in any Bankruptcy Law ( DIP Financing ), then the Second Lien Agent for itself and on behalf of the applicable Second Lien Secured Parties agrees that:
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(a) (i) it will raise no objection to, will not support any objection to or otherwise contest, and shall be deemed to have consented to, such use, sale or lease of such cash collateral and DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted by Section 6.3) and (ii) it will, to the extent the Liens securing the First Lien Obligations under the First Lien Documents are subordinated or pari passu with such DIP Financing, subordinate its Liens on the Common Collateral and any other collateral securing any Second Lien Obligations to the Liens securing such DIP Financing (and all Obligations relating thereto, including any carve-out from the Common Collateral granting administrative priority status or Lien priority to secure the payment of fees and expenses of the United States trustee or professionals retained by any debtor or creditors committee agreed to by the First Lien Agent or the other First Lien Secured Parties) and to all adequate protection Liens granted to the First Lien Agent on the same basis as the Liens securing the First Lien Obligations are subordinated to the Liens securing the DIP Financing or to confirm the priorities with respect to Liens securing the First Lien Obligations under this Agreement, as applicable; provided , that the aggregate principal amount of the DIP Financing does not exceed the sum of (1) the aggregate Revolving Outstandings (as defined below) outstanding under the Companys then existing revolving credit facilities (including the RBL Credit Agreement) and (2) an amount equal to 50% of the aggregate commitments (whether drawn or undrawn) under such then-existing revolving credit facilities (including the RBL Credit Agreement), in each case determined immediately prior to the commencement of such Insolvency or Liquidation Proceeding and without regard to whether the revolving commitments thereunder are otherwise then available to be drawn as a result of a failure to satisfy a condition precedent to borrowing such revolving commitments. As used herein, Revolving Outstanding s means, in respect of any revolving credit facility (including the RBL Credit Agreement), the sum of (x) the aggregate principal amount of all outstanding revolving loans, (y) the aggregate stated amount of all letters of credit (together with the amount of any unreimbursed drawings thereunder) and (z) the aggregate principal amount of all outstanding swingline loans;
(b) it will raise no objection to, and will not support any objection to or otherwise contest, any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of any First Lien Obligations made by the First Lien Agent or any First Lien Secured Party;
(c) it will raise no objection to, will not support any objection to or otherwise contest, any lawful exercise by any First Lien Secured Party of the right to credit bid the First Lien Obligations under section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Bankruptcy Law) or at any sale in foreclosure of any Common Collateral or other collateral securing any First Lien Obligations;
(d) it will raise no objection to, will not support any objection to or otherwise contest, any other request for judicial relief made in any court by any First Lien Secured Party relating to the lawful enforcement of any Lien on any Common Collateral or other collateral securing any First Lien Obligations; or
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(e) except as set forth below, it will raise no objection to, will not support any objection to or otherwise contest, any order relating to a sale of any Common Collateral of any Pledgor for which any First Lien Agent has consented that provides, to the extent that the sale is to be free and clear of Liens, that the Liens securing the First Lien Obligations and the Second Lien Obligations will attach to the proceeds of the sale on the same basis of priority as the Liens securing the First Lien Obligations do to the Liens securing the Second Lien Obligations in accordance with this Agreement, provided that the applicable Second Lien Secured Parties may assert any objection to a sale or disposition that could be asserted by an unsecured creditor in any Insolvency or Liquidation Proceeding; without limiting the foregoing, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it may not raise any objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or any comparable provisions of any other Bankruptcy Law) with respect to the Liens granted to such person in respect of such assets. In addition, the Second Lien Secured Parties are not deemed to have waived any rights to credit bid on the Common Collateral in any such sale or disposition in accordance with Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Bankruptcy Law), so long as any such credit bid provides for the payment in full in cash of the First Lien Obligations.
6.2 Relief from the Automatic Stay . Until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it shall not seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Common Collateral or any other collateral securing any First Lien Obligations, or seek to oppose the First Lien Agent or any other First Lien Secured Party from seeking relief from the automatic stay or any other stay, without the prior written consent of the First Lien Agent or the Required Lenders in respect of the First Lien Obligations.
6.3 Adequate Protection . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, agrees that it shall not contest, or support any other person contesting, (a) any request by the First Lien Agent or any other First Lien Secured Party for adequate protection in any form or (b) any objection by the First Lien Agent or any other First Lien Secured Party to any motion, relief, action or proceeding based on the First Lien Agent or such First Lien Secured Partys claiming a lack of adequate protection. Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding, (i) if the First Lien Secured Parties (or any subset thereof) are granted adequate protection in the form of a Lien on additional or replacement collateral and/or a superpriority administrative claim in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any Bankruptcy Law, then the Second Lien Agent, for itself or on behalf of any Second Lien Secured Party, (A) may seek or request adequate protection in the form of a Lien on such additional or replacement collateral and/or a superpriority administrative claim (as applicable), which Lien or superpriority claim is junior and subordinated to the Liens securing, and claims with respect to, the First Lien Obligations and such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Second Lien Obligations are so junior and subordinated to the Liens securing, and the claims with respect to, the First Lien Obligations under this Agreement and (B) agrees that it will not seek or request, without the consent of the First Lien Agent or as otherwise set forth in this Section 6.3, adequate protection in any other form, and (ii) in the event that the Second Lien Agent, for itself or on
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behalf of any Second Lien Secured Party, is granted adequate protection in the form of a Lien on additional or replacement collateral and/or a superpriority administrative claim, then the Second Lien Agent, for itself or on behalf of such Second Lien Secured Party, agrees that the First Lien Agent shall also be granted a senior Lien on such additional or replacement collateral as security for the First Lien Obligations and any such DIP Financing and/or a superpriority administrative claim (as applicable), and that any Lien on such additional or replacement collateral securing the Second Lien Obligations and/or superpriority claim shall be junior and subordinated to the Liens on such collateral securing, and the claims with respect to, the First Lien Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the First Lien Secured Parties as adequate protection on the same basis as the other Liens securing, and claims with respect to, the Second Lien Obligations are so junior and subordinated to such Liens securing and claims with respect to the First Lien Obligations under this Agreement. Without limiting the generality of the foregoing, to the extent that the First Lien Secured Parties are granted adequate protection in the form of payments in the amount of current post-petition fees and expenses, and/or other cash payments, then the Second Lien Agent and the Second Lien Secured Parties shall not be prohibited from seeking and accepting adequate protection in the form of payments in the amount of current post-petition incurred fees and expenses, and/or other cash payments (as applicable), subject to the right of the First Lien Secured Parties to object to the reasonableness of the amounts of fees and expenses or other cash payments so sought by the Second Lien Secured Parties.
6.4 Avoidance Issues . If any First Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or any other Pledgor (or any trustee, receiver or similar person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a Recovery ), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then as among the parties hereto, the First Lien Obligations shall be deemed to be reinstated to the extent of such Recovery and to be outstanding as if such payment had not occurred and the First Lien Secured Parties shall be entitled to a Discharge of First Lien Obligations with respect to all such Recovery and shall have all rights hereunder until such time. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto.
6.5 Application . The parties hereto expressly acknowledge that this Agreement is a subordination agreement under Section 510(a) of the Bankruptcy Code and shall be applicable and effective prior to and after the commencement of any Insolvency or Liquidation Proceeding. All references herein to any Pledgor shall apply to any trustee for such person and such person as debtor in possession. The relative rights as to the Common Collateral and other collateral and proceeds thereof shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, any Pledgor.
6.6 Waivers . Until the Discharge of First Lien Obligations has occurred, the Second Lien Agent, for itself and on behalf the Second Lien Secured Parties, (a) will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code senior to or pari passu with the Liens securing the First Lien Obligations for costs or expenses of preserving or Disposing of any Common Collateral or other collateral, and (b) waives any claim it may now or hereafter have arising out of the election by any First Lien Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code.
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6.7 Post-Petition Interest .
(a) None of the Second Lien Agent or any other Second Lien Secured Party shall oppose or seek to challenge any claim by the First Lien Agent or any other First Lien Secured Party for allowance in any Insolvency or Liquidation Proceeding of First Lien Obligations consisting of Post-Petition Claims, under Section 506(b) of the Bankruptcy Code or otherwise.
(b) None of the First Lien Agent or any other First Lien Secured Party shall oppose or seek to challenge any claim by the Second Lien Agent or any other Second Lien Secured Party for allowance in any Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of Post-Petition Claims, under Section 506(b) of the Bankruptcy Code or otherwise, to the extent of the value of the Lien securing the Second Lien Obligations on the Common Collateral (after taking into account the First Lien Obligations).
6.8 Separate Grants of Security and Separate Classification . Each of the Company and the other Pledgors; the First Lien Agent and all other First Lien Secured Parties; and the Second Lien Agent and all other Second Lien Secured Parties acknowledges and agrees that (i) the grants of Liens pursuant to the First Lien Collateral Documents and the Second Lien Collateral Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Common Collateral, the Second Lien Obligations are fundamentally different from the First Lien Obligations and must be separately classified in any Plan of Reorganization proposed or confirmed in an Insolvency or Liquidation Proceeding. In addition, the parties hereto agree that regardless of whether any Post-Petition Claim is allowed or allowable, and without limiting the generality of the other provisions of this Agreement, this Agreement is expressly intended to include and does include the rule of explicitness in that this Agreement expressly entitles the First Lien Agent and each other First Lien Secured Party, and is intended to provide the First Lien Agent and such other First Lien Secured Party, with the right to receive, in respect of their First Lien Obligations, payment from the Common Collateral of all Post-Petition Claims through distributions made therefrom pursuant to the provisions of this Agreement even though any such Post-Petition Claims are not allowed or allowable against the bankruptcy estate of the Company or any other Pledgor under Section 502(b)(2) or Section 506(b) of the Bankruptcy Code or under any other provision of the Bankruptcy Code or any other Bankruptcy Law. To further effectuate the intent of the parties as provided in the immediately preceding sentences, if it is held that the claims of the First Lien Secured Parties and the Second Lien Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the First Lien Secured Parties shall be entitled to receive, in addition to amounts distributed to them from, or in respect of, the Common Collateral in respect of principal, prepetition interest and other claims, all amounts owing in respect of Post-Petition Claims, irrespective of whether such claim for such amount is allowed or allowable in such Insolvency or Liquidation Proceeding, before any distribution from, or in respect of, any Common Collateral is made in respect of the claims held by the Second Lien Secured Parties, with the Second Lien Secured Parties hereby
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acknowledging and agreeing to turn over to the First Lien Agent amounts otherwise received or receivable by them from the Common Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Secured Parties.
6.9 Reorganization Securities . If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a Plan of Reorganization or similar dispositive restructuring plan, both on account of First Lien Obligations and on account of Second Lien Obligations, then, to the extent the debt obligations distributed on account of the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
6.10 Voting . No Second Lien Secured Party may support or vote in favor of any Plan of Reorganization (and each shall be deemed to have voted to reject any Plan of Reorganization) unless such plan (a) pays off, in cash in full, all First Lien Obligations, (b) is accepted by the class of holders of First Lien Obligations voting thereon in accordance with Section 1126 of the Bankruptcy Code, or (c) otherwise provides the holders of First Lien Obligations with the value of the Common Collateral in cash or otherwise, prior to any payment or distribution on account of the Second Lien Obligations, subject to Section 6.9 hereof.
Section 7. RELIANCE; WAIVERS; ETC .
7.1 Reliance . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, acknowledges that neither it nor any such Second Lien Secured Party is entitled to rely on any credit decision or other decisions made by any First Lien Agent or any First Lien Secured Party in taking or not taking any action under the applicable Second Lien Document or this Agreement.
7.2 No Warranties or Liability . No First Lien Secured Party has made, nor shall have been deemed to have made, any express or implied representation or warranty upon which the Second Lien Agent or the other Second Lien Secured Parties may rely or otherwise, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the First Lien Documents, the ownership of any Common Collateral or the perfection or priority of any Liens thereon. The First Lien Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the First Lien Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and they may manage their loans and extensions of credit without regard to any rights or interests that any Second Lien Agent or any other Second Lien Secured Parties may have in the Common Collateral or otherwise, except as otherwise provided in this Agreement. No First Lien Secured Party shall have any duty to the Second Lien Agent or any other Second Lien Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Company or any subsidiary thereof (including the Second Lien Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent, or
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any other Second Lien Secured Party has not otherwise made to each other, nor does any of them hereby make to each other, any warranties, express or implied, nor does any of them assume any liability to each other, in each case with respect to (a) the enforceability, validity, value or collectibility of any of the Second Lien Obligations, the First Lien Obligations, or any guarantee or security that may have been granted to any of them in connection with the First Lien Obligations or the Second Lien Obligations, (b) the Companys title to or right to transfer any of the Common Collateral or (c) any other matter except as expressly set forth in this Agreement.
7.3 Obligations Unconditional . All rights, interests, agreements and obligations of the First Lien Agent and the First Lien Secured Parties, and the Second Lien Agent and the Second Lien Secured Parties, respectively, hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First Lien Documents or any Second Lien Documents;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the First Lien Obligations or the Second Lien Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of the First Lien Documents or of the terms of the Second Lien Documents;
(c) any exchange of any security interest in any Common Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the First Lien Obligations or the Second Lien Obligations or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or any other Pledgor; or
(e) any other circumstances that otherwise might constitute a defense available to, or a discharge of, the Company or any other Pledgor in respect of the First Lien Obligations, or of the Second Lien Agent or any Second Lien Secured Party in respect of this Agreement.
Section 8. MISCELLANEOUS.
8.1 Conflicts . Subject to Section 8.20 (Relative Rights), in the event of any conflict between the provisions of this Agreement and the provisions of any First Lien Document or any Second Lien Document, the provisions of this Agreement shall govern.
8.2 Continuing Nature of this Agreement; Severability . Subject to Section 6.4 (Avoidance Issues), this Agreement shall continue to be effective until the Discharge of First Lien Obligations shall have occurred or such later time as the Discharge of Second Lien Obligations shall have occurred. This is a continuing agreement of lien subordination and the First Lien Secured Parties may continue, at any time and without notice to the Second Lien Agent or any other Second Lien Secured Party, to extend credit and other financial
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accommodations and lend monies to or for the benefit of the Company or any other Pledgor or any of its or their subsidiaries constituting First Lien Obligations in reliance hereon. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
8.3 Amendments; Waivers . Subject to Section 8.22 (Additional First Lien Facility or Second Lien Facility) hereof, no amendment, modification or waiver of any of the provisions of this Agreement by the First Lien Agent or the Second Lien Agent shall be deemed to be made unless the same shall be in writing signed on behalf of the party making the same or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. The Company and the other Pledgors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except in respect of the provisions of this Agreement set forth in Section 8.17 below or otherwise to the extent their rights are affected, in which case the Company shall have the right to consent to or approve any such amendment, modification or waiver.
8.4 Information Concerning Financial Condition of the Company and its Subsidiaries . No First Lien Secured Party shall have any obligation to the Second Lien Agent or any other Second Lien Secured Party to keep the Second Lien Agent or such Second Lien Secured Party informed of, and the Second Lien Agent and the other Second Lien Secured Parties shall not be entitled to rely on the First Lien Agent or any other First Lien Secured Party with respect to, (a) the financial condition of the Company and its subsidiaries and all endorsers, pledgors and/or guarantors of the Second Lien Obligations or the First Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Second Lien Obligations or the First Lien Obligations. No Second Lien Secured Party shall have any obligation to the First Lien Agent or any other First Lien Secured Party to keep the First Lien Agent or such First Lien Secured Party informed of, and the First Lien Agent and the other First Lien Secured Parties shall not be entitled to rely on the Second Lien Agent or any other Second Lien Secured Party with respect to, (a) the financial condition of the Company and its subsidiaries and all endorsers, pledgors and/or guarantors of the First Lien Obligations or the Second Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the First Lien Obligations or the Second Lien Obligations. The First Lien Agent, or any other First Lien Secured Party, or the Second Lien Agent or any other Second Lien Secured Party shall not have any duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the First Lien Agent, any other First Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it or they shall be under no obligation (w) to make, and none of the First Lien Agent, the other First Lien Secured Parties, the Second Lien Agent or the other Second Lien Secured Parties shall make, any express or implied representation or warranty,
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including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
8.5 Subrogation . The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder or under any First Lien Documents until the Discharge of First Lien Obligations has occurred and hereby agrees that no payment to the First Lien Agent or any other First Lien Secured Party pursuant to the provisions of this Agreement or any First Lien Document shall entitle the Second Lien Agent or any other Second Lien Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of First Lien Obligations has occurred.
8.6 Application of Payments . Except as otherwise provided herein, all payments received by any First Lien Secured Party may be applied, reversed and reapplied, in whole or in part, to such part of the First Lien Obligations as the First Lien Agent in its sole discretion deems appropriate, consistent with the terms of the First Lien Documents. Except as otherwise provided herein, the Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, assents to any such extension or postponement of the time of payment of the First Lien Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the First Lien Obligations and to the addition or release of any other person primarily or secondarily liable therefor.
8.7 Jurisdiction; Consent to Service of Process; Waivers .
(a) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof (collectively, New York Courts), in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York Courts or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
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(c) Each party hereto hereby irrevocably consents to service of process in the manner provided for notices in Section 8.9. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
(d) Each party hereto hereby irrevocably waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.7 any special, exemplary, punitive or consequential damages.
8.8 WAIVER OF JURY TRIAL .
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
8.9 Notices .
All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, sent by facsimile, or sent to the e-mail address of the applicable recipient specified below (or the email address of a representative of the applicable recipient designated by such recipient from time to time to the parties hereto), as follows:
(a) if to the First Lien Agent, to it at JPMorgan Chase Bank, N.A., 712 Main Street, 8 th Floor, Houston, Texas 77002, Attn: Jo Linda Papadakis, Telephone No. 713-216-7743, Facsimile No. 713 216-7770, Email: jo.l.papadakis@jpmorgan.com ;
(b) if to the Second Lien Agent, to it at Wilmington Trust, National Association, Global Capital Markets, 15950 N. Dallas Parkway, Suite 550, Dallas, TX 75248, Attn: Talos Notes Administrator (Telephone No. (972) 383-3156, Facsimile No. (888) 316-6238, Email: sgoffinet@wilmingtontrust.com);
(c) if to the Company, to it at Talos Energy Inc., 500 Dallas, Suite 2000, Texas 77002, Attn: Bill Moss (Telephone No. 713-328-3005, Facsimile No. 713-351-4100, Email: bmoss@talosenergyllc.com); and
(d) if to any other Pledgor, to it in care of the Company as provided in clause (c) above.
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Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto (and for this purpose a notice to the Company shall be deemed to be a notice to each Pledgor). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by facsimile or e-mail or on the date that is five (5) Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 8.9 or in accordance with the latest unrevoked direction from such party given in accordance with this Section.
8.10 Further Assurances . Each of the Second Lien Agent (for itself and on behalf of the Second Lien Secured Parties) and the First Lien Agent (for itself and on behalf of the First Lien Secured Parties) agrees that each of them shall take such further action and shall execute and deliver to the other persons such additional documents and instruments (in recordable form, if requested) as the First Lien Agent, the Second Lien Agent or the Company, as applicable, may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement, including, entering into an amendment, an amendment and restatement or a supplement of this Agreement to facilitate a designation by the Company of a First Lien Facility or a Second Lien Facility (including in each case of the foregoing in respect of a reinstatement contemplated by Section 5.7 or a Refinancing contemplated by Section 5.8). The Company agrees to pay all documented out-of-pocket expenses incurred by any such Representatives in connection with the execution and delivery of such additional documents and instruments.
8.11 Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
8.12 Binding on Successors and Assigns . This Agreement shall be binding upon the First Lien Agent, each other First Lien Secured Party, the Second Lien Agent, each other Second Lien Secured Party and the respective permitted successors and assigns of any of the foregoing persons.
8.13 Specific Performance . The First Lien Agent may demand specific performance of this Agreement. The Second Lien Agent, for itself and on behalf of the Second Lien Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the First Lien Agent.
8.14 Section Titles . The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.
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8.15 Counterparts . This Agreement may be executed in one or more counterparts, including by means of facsimile, each of which shall be an original and all of which shall together constitute one and the same document.
8.16 Authorization . By its signature, each person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The First Lien Agent represents and warrants that this Agreement is binding upon the First Lien Secured Parties for which the First Lien Agent is the Representative. The Second Lien Agent represents and warrants that this Agreement is binding upon the Second Lien Secured Parties for which the Second Lien Agent is the Representative.
8.17 No Third Party Beneficiaries; Successors and Assigns . This Agreement and the rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties hereto and their respective successors and assigns and shall inure to the benefit of each of, and be binding upon, the First Lien Secured Parties and the Second Lien Secured Parties. No other person shall have or be entitled to assert rights or benefits hereunder. Notwithstanding the foregoing, the Company is an intended beneficiary and third party beneficiary hereof with the right and power to enforce with respect to Sections 5.1 (Releases), 5.3 (Amendments to Second Lien Collateral Documents), 5.7 (Reinstatement), 5.8 (Refinancings), 6.1 (Financing Issues), 8.3 (Amendments; Waivers) (solely with respect to the last sentence thereof), 8.17 (No Third Party Beneficiaries) and 8.22 (Additional First Lien Facility or Second Lien Facility) hereof and as otherwise provided herein or otherwise to the extent its rights are affected.
8.18 Effectiveness of Agreement . This Agreement shall become effective when executed and delivered by the parties hereto. All references to the Company or any other Pledgor shall include the Company or any other Pledgor as debtor and debtor-in-possession and any receiver or trustee for such person in any Insolvency or Liquidation Proceeding.
8.19 Agent Capacities . It is understood and agreed that:
(a) JPMorgan (i) is entering into this Agreement solely in its capacity as the First Lien Agent, (ii) the provisions of the RBL Credit Agreement affording rights, privileges, protections, immunities and indemnities to JPMorgan as administrative agent thereunder, including the provisions of the RBL Credit Agreement applicable to JPMorgan as administrative agent thereunder shall also apply to JPMorgan as First Lien Agent hereunder, and (iii) in no event shall JPMorgan incur any liability in connection with this Agreement or be liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the First Lien Agent or any First Lien Secured Party hereunder, all such liability, if any, being expressly waived and released by the parties hereto and any person claiming by, through or under such party; and
(b) WT (i) is entering into this Agreement solely in its capacity as the Second Lien Agent, (ii) the provisions of the Second Lien Agreement affording rights, privileges, protections, immunities and indemnities to WT as trustee and collateral agent thereunder shall also apply to WT as Second Lien Agent hereunder, and (iii) in no event shall WT incur any liability in connection with this Agreement or be personally liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the Second Lien Agent or any Second Lien Secured Party hereunder, all such liability, if any, being expressly waived and released by the parties hereto and any person claiming by, through or under such party.
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8.20 Relative Rights . Notwithstanding anything in this Agreement to the contrary (except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify any provisions of any First Lien Document or any Second Lien Document, or is intended to or will permit Holdings, any Legacy Blocker Entity, the Company or any subsidiary thereof to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, any First Lien Document or any Second Lien Document; (b) change the relative priorities of the First Lien Obligations or the Liens granted under the First Lien Documents on the Common Collateral (or any other assets) as among the First Lien Secured Parties, it being expressly acknowledged and agreed that such relative priorities may be subject to any intercreditor agreements governing such relative priorities; (c) change the relative priorities of the Second Lien Obligations or the Liens granted under the Second Lien Documents on the Common Collateral (or any other assets) as among the Second Lien Secured Parties, it being expressly acknowledged and agreed that such relative priorities may be subject to any intercreditor agreements governing such relative priorities; or (d) obligate Holdings, any Legacy Blocker Entity, the Company or any subsidiary thereof to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, any First Lien Document or any Second Lien Document.
8.21 References . Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph, definition or other provision of the Second Lien Agreement (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided , that any reference to any such Section, clause, paragraph or other provision shall refer to such Section, clause, paragraph or other provision of the Second Lien Agreement, as applicable (including any definition contained therein), as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Second Lien Agreement, and (2) either made in accordance with the RBL Credit Agreement and the other First Lien Documents or is approved in writing by, or on behalf of, the requisite First Lien Secured Parties as are needed under the terms of the RBL Credit Agreement and the other First Lien Documents, as applicable, to approve such amendment or modification.
8.22 Additional First Lien Facility or Second Lien Facility .
(a) The Company may designate hereunder in writing additional obligations as a First Lien Facility or a Second Lien Facility, and may specify that any such additional obligations constitute a Refinancing of any existing First Lien Obligations or any Second Lien Obligations, as the case may be, without the consent of any other First Lien Secured Party or any other Second Lien Secured Party, as applicable, if the incurrence of such obligations and related Liens is not prohibited under the First Lien Documents and the Second Lien Documents then in effect. For the avoidance of doubt, the designation of an additional First Lien Facility pursuant to the terms hereof is not intended to and shall not have the effect, either directly or indirectly, of granting, creating or perfecting a lien on Borrowing Base Properties (as
34
defined in the RBL Credit Agreement) that is equal in right or prior in right to the priority of the lien of the Security Documents (as that term is defined in the RBL Credit Agreement) in favor of the Secured Parties (as such term is defined in the RBL Credit Agreement), even if such obligations and Liens are otherwise permitted pursuant to the terms of the RBL Credit Agreement, it being the intention that this Agreement sets forth the relative priority of First Lien Obligations on the one hand and Second Lien Obligations on the other hand, and that the relative priority of First Lien Obligations shall be a matter of applicable law or as otherwise agreed among the First Lien Secured Parties (it being further understood and agreed that this sentence may be amended or modified solely with the consent of the First Lien Secured Parties and the Company and without otherwise affecting the rights and obligations of any party hereto).
(b) If not so prohibited and if the Company wishes to so designate, the Company shall notify each Representative in writing of such designation.
(c) Notwithstanding anything to the contrary set forth in this Section 8.22 or in Section 8.3 (Amendments; Waivers) hereof, the First Lien Agent and the Second Lien Agent shall (i) to the extent applicable, provide written notice that the applicable agent for any such additional obligations that are designated as a First Lien Facility or Second Lien Facility, as applicable, has become the First Lien Agent or Second Lien Agent, as applicable, and (ii) at the request of the Company, without the consent of any First Lien Secured Party or any Second Lien Secured Party, enter into an amendment, a restatement or a supplement of this Agreement to facilitate the designation of a First Lien Facility or a Second Lien Facility. Any such amendment may, among other things:
(i) add other parties holding First Lien Obligations or Second Lien Obligations (or any agent or trustee therefor), as the case may be, to the extent such Indebtedness is not prohibited by the applicable Document; and
(ii) in the case of additional Second Lien Obligations, (A) establish that the Liens on the Common Collateral securing such Second Lien Obligations shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any present or future First Lien Obligations, and (B) provide to holders of such Second Lien Obligations (or any agent or trustee thereof) the comparable rights and benefits (including any improved rights and benefits that have been consented to by the First Lien Agent) as are provided to the Second Lien Secured Parties under this Agreement.
(d) Any such additional party as described in clause (c) above, the First Lien Agent and the Second Lien Agent shall be entitled to rely on the determination of officers of the Company that such modifications do not violate any applicable Documents then in effect, if such determination is set forth in an officers certificate delivered by the Company at the request of such party, the First Lien Agent or the Second Lien Agent; provided , however , that such determination will not affect whether or not the Company has complied with its undertakings in such Documents.
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(e) At the request of the Company, without the consent of any First Lien Secured Party or any other Second Lien Secured Party, the First Lien Agent and the Second Lien Agent shall enter into an amendment, a restatement or a supplement of this Agreement to facilitate the designation of a First Lien Facility or a Second Lien Facility. For the avoidance of doubt, such actions shall not be required for the effectiveness of any such designation of a First Lien Facility or a Second Lien Facility.
8.23 Intercreditor Agreements .
(a) Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the First Lien Secured Parties (as among themselves) and the Second Lien Secured Parties (as among themselves) may each enter into intercreditor agreements (or similar arrangements) with the First Lien Agent or Second Lien Agent, respectively, governing the rights, benefits and privileges as among the First Lien Secured Parties themselves or among the Second Lien Secured Parties themselves, as the case may be, in respect of any or all of the Common Collateral, this Agreement and the other First Lien Collateral Documents or the other Second Lien Collateral Documents, as the case may be, including as to the application of proceeds of any Common Collateral, voting rights, control of any Common Collateral and waivers with respect to any Common Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.
(b) In addition, in the event that the Company or any subsidiary thereof incurs any obligations secured by a Lien on any Common Collateral that is junior to Liens thereon securing any First Lien Obligations or Second Lien Obligations, as the case may be, and such obligations are not designated by the Company as a Second Lien Facility, then the First Lien Agent and Second Lien Agent may enter into an intercreditor agreement with the agent or trustee for the creditors with respect to such secured obligation to reflect the relative Lien priorities of such parties with respect to the relevant portion of the Common Collateral and governing the relative rights, benefits and privileges as among such parties in respect of such Common Collateral, including as to application of the proceeds of such Common Collateral, voting rights, control of such Common Collateral and waivers with respect to such Common Collateral, in each case so long as such secured obligations are not prohibited under, and the terms of such intercreditor agreement do not violate or conflict with, the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
JPMORGAN CHASE BANK, N.A. , in its capacity as First Lien Agent | ||
By: |
/s/ Jo Linda Papadakis |
|
Name: Jo Linda Papadakis | ||
Title: Authorized Officer | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION , in its capacity as Second Lien Agent | ||
By: |
/s/ Shawn Goffinet |
|
Name: Shawn Goffinet | ||
Title: Assistant Vice President |
Signature Page to Intercreditor Agreement
ACKNOWLEDGEMENT OF AND CONSENT TO
INTERCREDITOR AGREEMENT
(Company and the other Pledgors)
Each of the Company and the other Pledgors has read the Intercreditor Agreement, dated as of May 10, 2018, between JPMorgan Chase Bank, N.A. ( JPMorgan ), in its capacity as First Lien Agent and Wilmington Trust, National Association ( WT ), in its capacity as Second Lien Agent (as amended, renewed, extended, supplemented, restated, replaced or otherwise modified from time to time, the Intercreditor Agreement ). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
1. Each of the Company and the other Pledgors executes and delivers this instrument to evidence its acknowledgment of and consent to the Intercreditor Agreement (such instrument, the Company Consent ). Each of the Company and the other Pledgors agrees not to take any action that would be contrary to the express provisions of the Intercreditor Agreement and agrees that, except as otherwise provided therein, including with respect to those provisions of which the Company is an intended third party beneficiary, no Secured Party shall have any liability to the Pledgors for acting in accordance with the provisions of the Intercreditor Agreement and the other Documents referred to therein. Each of the Company and the other Pledgors understands that no Pledgor is an intended beneficiary or third party beneficiary of the Intercreditor Agreement except that it is an intended beneficiary and third party beneficiary thereof with the right and power to enforce with respect to the applicable provisions set forth in Section 8.17 (No Third Party Beneficiaries) and as otherwise provided in the Intercreditor Agreement or otherwise to the extent its rights are affected.
2. Notwithstanding anything to the contrary in the Intercreditor Agreement or provided herein, each of the undersigned acknowledges the Pledgors shall not have any right to consent to or approve any amendment, renewal, extension, supplement, modification or waiver of any provision of the Intercreditor Agreement except to the extent set forth in Section 8.3 (Amendments and Waivers), in which case the Company shall have the right to consent to or approve any such amendment, amendment, renewal, extension, supplement.
3. Each of the undersigned further agrees that it will not will bring any action or proceeding arising out of or relating to the Intercreditor Agreement in any court other than New York Courts (it being acknowledged and agreed by the parties to the Intercreditor Agreement that any other forum would be inconvenient and inappropriate in view of the fact that more of the parties hereto who would be affected by any such action or proceeding have contacts with the State of New York than any other jurisdiction).
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Acknowledgement of and Consent to Intercreditor Agreement
TALOS ENERGY INC., | ||
TALOS PRODUCTION LLC, | ||
AIF VII (TALOS DC), LLC, | ||
ANRP (TALOS DC), LLC, | ||
AP OVERSEAS TALOS HOLDINGS (DC I), LLC, | ||
AP OVERSEAS TALOS HOLDINGS (DC II), LLC, | ||
AP OVERSEAS TALOS HOLDINGS (DC III), LLC, | ||
AP OVERSEAS TALOS HOLDINGS (DC IV), LLC, | ||
NEW TALOS SUB INC., | ||
RIVERSTONE V NON-U.S. TALOS CORP, | ||
TALOS ENERGY OFFSHORE LLC, | ||
TALOS ENERGY OPERATING GP LLC, | ||
TALOS ENERGY OPERATING COMPANY LLC, | ||
TALOS PRODUCTION FINANCE INC., | ||
TALOS ERT LLC, | ||
CKB PETROLEUM, LLC, | ||
TALOS ENERGY INTERNATIONAL LLC, | ||
TALOS GULF COAST LLC, | ||
TALOS GULF COAST ONSHORE LLC, | ||
TALOS GULF COAST OFFSHORE LLC, | ||
TALOS MANAGEMENT INTERMEDIARY LLC, | ||
TALOS MANAGEMENT HOLDINGS LLC, | ||
TALOS ENERGY LLC, | ||
TALOS ENERGY PHOENIX LLC, | ||
TALOS ENERGY HOLDINGS LLC, | ||
TALOS ARGO INC., | ||
TALOS PETROLEUM LLC, | ||
STONE ENERGY HOLDING, L.L.C., and | ||
TALOS RESOURCES LLC, | ||
By: |
/s/ Michael L. Harding II |
|
Name: Michael L. Harding II | ||
Title: Executive Vice President, Chief Financial Officer and Treasurer |
Acknowledgement of and Consent to Intercreditor Agreement
Exhibit 10.4
TALOS ENERGY INC.
LONG TERM INCENTIVE PLAN
1. Purpose . The purpose of the Talos Energy Inc. Long Term Incentive Plan (as amended from time to time, the Plan ) is to provide a means through which (a) Talos Energy Inc., a Delaware corporation (f/k/a Sailfish Energy Holdings Corporation and, together with any successor thereto, the Company ), and its Affiliates may attract, retain and motivate qualified persons as employees, directors and consultants, thereby enhancing the profitable growth of the Company and its Affiliates and (b) persons upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the Company and its Affiliates are of importance, can acquire and maintain stock ownership or awards the value of which is tied to the performance of the Company, thereby strengthening their concern for the Company and its Affiliates. Accordingly, the Plan provides for the grant of Options, SARs, Restricted Stock, Restricted Stock Units, Stock Awards, Dividend Equivalents, Other Stock-Based Awards, Cash Awards, Substitute Awards, or any combination of the foregoing, as determined by the Committee in its sole discretion.
2. Definitions . For purposes of the Plan, the following terms shall be defined as set forth below:
(a) Affiliate means any Person that, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, control (including, with correlative meanings, the terms controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled Person or (ii) to direct or cause the direction of the management and policies of the controlled Person, whether through the ownership of voting securities, by contract, or otherwise.
(b) ASC Topic 718 means the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation Stock Compensation , as amended or any successor accounting standard.
(c) Award means any Option, SAR, Restricted Stock, Restricted Stock Unit, Stock Award, Dividend Equivalent, Other Stock-Based Award, Cash Award, or Substitute Award, together with any other right or interest, granted under the Plan.
(d) Award Agreement means any written instrument (including any employment, severance or change in control agreement) that sets forth the terms, conditions, restrictions and/or limitations applicable to an Award, in addition to those set forth under the Plan.
(e) Board means the Board of Directors of the Company.
(f) Cash Award means an Award denominated in cash granted under Section 6(i) .
(g) Change in Control means the occurrence of any of the following events after the Effective Date:
(i) The acquisition (whether by purchase, merger, consolidation or other similar transaction) by any Person or group (within the meaning of Section 13(d)(3) of the Exchange Act or Section 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (A) the then-outstanding shares of Stock or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote in the election of directors; provided , however , that, for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (1) any acquisition by the Company or any Affiliate, (2) any acquisition directly from the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, or (4) any Business Combination (as defined below) that does not constitute a Change in Control under subsection (iii) below;
(ii) During any period of twelve (12) consecutive months, individuals who, as of the Effective Date, constitute the Board cease for any reason to constitute at least a majority of the Board; provided , however , that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Board shall be considered as though such individual were a member of the Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person or group (within the meaning of Section 13(d)(3) of the Exchange Act or Section 14(d)(2) of the Exchange Act) other than the Board;
(iii) The consummation of a reorganization (excluding a reorganization under either Chapter 7 or Chapter 11 of Title 11 of the United States Code), recapitalization, merger, consolidation, or other business combination (any of the foregoing, a Business Combination ) of the Company or any direct or indirect subsidiary of the Company with any other entity, in any case, with respect to which the Company voting securities outstanding immediately prior to such Business Combination do not, immediately following such Business Combination, continue to represent (either by remaining outstanding or being converted into voting securities of the Company or any ultimate parent thereof) more than 50% of the then outstanding voting securities entitled to vote generally in the election of directors of the Company (or its successor) or any ultimate parent thereof after the Business Combination;
(iv) The consummation of a sale, transfer or other disposition of all or substantially all of the assets of the Company and its subsidiaries (on a consolidated basis) in one or a series of related transactions to any Person or group (within the meaning of Section 13(d)(3) of the Exchange Act or Section 14(d)(2) of the Exchange Act) that is not the Company or any Affiliate; or
(v) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
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Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules, the transaction or event described in clauses (i), (ii), (iii), (iv) or (v) above with respect to such Award (or portion thereof) must also constitute a change in control event, as defined in Treasury Regulation § 1.409A-3(i)(5) to the extent required by the Nonqualified Deferred Compensation Rules.
(h) Change in Control Price means the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever the Committee determines is applicable, as follows: (i) the price per share offered to holders of Stock in any merger or consolidation, (ii) the per share Fair Market Value of the Stock immediately before the Change in Control without regard to assets sold in the Change in Control and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange offer whereby a Change in Control takes place, or (v) if such Change in Control occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Section 2(h) , the value per share of the Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 2(h) or in Section 8(e) consists of anything other than cash, the Committee shall determine the fair market value of the portion of the consideration offered which is other than cash and such determination by the Committee shall be final, conclusive and binding on all affected Participants to the extent applicable to Awards held by such Participants.
(i) Code means the Internal Revenue Code of 1986, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.
(j) Committee means a committee of the Board of two or more directors designated by the Board to administer the Plan; provided, however, that, unless otherwise determined by the Board, the Committee shall consist solely of two or more Qualified Members.
(k) Dividend Equivalent means a right, granted to an Eligible Person under Section 6(g) , to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.
(l) Effective Date means May 10, 2018.
(m) Eligible Person means any individual who, as of the date of grant of an Award, is an officer or employee of the Company or of any of its Affiliates, and any other person who provides services to the Company or any of its Affiliates, including directors of the Company; provided , however , that, any such individual must be an employee of the Company or any of its parents or subsidiaries within the meaning of General Instruction A.1(a) to Form S-8 if such individual is granted an Award that may result in such individual receiving Stock. An employee on leave of absence may be an Eligible Person.
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(n) Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, including the guidance, rules and regulations promulgated thereunder and successor provisions, guidance, rules and regulations thereto.
(o) Fair Market Value of a share of Stock means, as of any specified date, (i) if the Stock is listed on a national securities exchange, the closing sales price of the Stock, as reported on the stock exchange composite tape on that date (or if no sales occur on such date, on the last preceding date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded over the counter on such date, the average between the reported high and low bid and asked prices of Stock on the most recent date on which Stock was publicly traded on or preceding the specified date; or (iii) in the event Stock is not publicly traded at the time a determination of its value is required to be made under the Plan, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate, including the Nonqualified Deferred Compensation Rules. Notwithstanding this definition of Fair Market Value, with respect to one or more Award types, or for any other purpose for which the Committee must determine the Fair Market Value under the Plan, the Committee may elect to choose a different measurement date or methodology for determining Fair Market Value so long as the determination is consistent with the Nonqualified Deferred Compensation Rules and all other applicable laws and regulations.
(p) ISO means an Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code.
(q) Nonqualified Deferred Compensation Rules means the limitations or requirements of Section 409A of the Code, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.
(r) Nonstatutory Option means an Option that is not an ISO.
(s) Option means a right, granted to an Eligible Person under Section 6(b) , to purchase Stock at a specified price during specified time periods, which may either be an ISO or a Nonstatutory Option.
(t) Other Stock-Based Award means an Award granted to an Eligible Person under Section 6(h) .
(u) Participant means a person who has been granted an Award under the Plan that remains outstanding, including a person who is no longer an Eligible Person.
(v) Person means any natural person, corporation, limited partnership, general partnership, limited liability company, join stock company, joint venture, association, company, estate, trust, bank trust company, land trust, business trust or other organization, whether or not a legal entity, custodian, trustee, executor, administrator, and nominee or entity in a representative capacity.
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(w) Qualified Member means a member of the Board who is (i) a non-employee director within the meaning of Rule 16b-3(b)(3), and (ii) independent under the listing standards or rules of the securities exchange upon which the Stock is traded, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules.
(x) Restricted Stock means Stock granted to an Eligible Person under Section 6(d) that is subject to certain restrictions and to a risk of forfeiture.
(y) Restricted Stock Unit means a right, granted to an Eligible Person under Section 6(e) , to receive Stock, cash or a combination thereof at the end of a specified period or upon the occurrence of an event (which may or may not be coterminous with the vesting schedule of the Award).
(z) Rule 16b-3 means Rule 16b-3, promulgated by the SEC under Section 16 of the Exchange Act.
(aa) SAR means a stock appreciation right granted to an Eligible Person under Section 6(c) .
(bb) SEC means the Securities and Exchange Commission.
(cc) Securities Act means the Securities Act of 1933, as amended from time to time, including the guidance, rules and regulations promulgated thereunder and successor provisions, guidance, rules and regulations thereto.
(dd) Stock means the Companys Common Stock, par value $0.01 per share, and such other securities as may be substituted (or re-substituted) for Stock pursuant to Section 8 .
(ee) Stock Award means unrestricted shares of Stock granted to an Eligible Person under Section 6(f) .
(ff) Substitute Award means an Award granted under Section 6(j) .
3. Administration .
(a) Authority of the Committee . The Plan shall be administered by the Committee except to the extent the Board elects to administer the Plan, in which case references herein to the Committee shall be deemed to include references to the Board. Subject to the express provisions of the Plan, Rule 16b-3 and other applicable laws, the Committee shall have the authority, in its sole and absolute discretion, to:
(i) designate Eligible Persons as Participants;
(ii) determine the type or types of Awards to be granted to an Eligible Person;
(iii) determine the number of shares of Stock or amount of cash to be covered by Awards;
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(iv) determine the terms and conditions of any Award, including whether, to what extent and under what circumstances Awards may be vested, settled, exercised, cancelled or forfeited (including conditions based on continued employment or service requirements or the achievement of one or more performance goals);
(v) modify, waive or adjust any term or condition of an Award that has been granted, which may include the acceleration of vesting, waiver of forfeiture restrictions, modification of the form of settlement of the Award (for example, from cash to Stock or vice versa), early termination of a performance period, or modification of any other condition or limitation regarding an Award;
(vi) determine the treatment of an Award upon a termination of employment or other service relationship;
(vii) impose a holding period with respect to an Award or the shares of Stock received in connection with an Award;
(viii) interpret and administer the Plan and any Award Agreement;
(ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement; and
(x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. Any action of the Committee shall be final, conclusive and binding on all Persons, including the Company, its Affiliates, stockholders, Participants, beneficiaries, and permitted transferees under Section 7(a) or other Persons claiming rights from or through a Participant. Notwithstanding anything to the contrary herein, the Board may, in its sole discretion, at any time and from time to time, exercise any and all rights, duties and responsibilities of the Committee under the Plan, including establishing procedures to be followed by the Committee, but excluding matters that under any applicable law, regulation or rule are required to be determined in the sole discretion of the Committee.
(b) Exercise of Committee Authority . At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to an Eligible Person who is then subject to Section 16 of the Exchange Act in respect of the Company where such action is not taken by the full Board may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided , however , that upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. For the avoidance of doubt, the full Board may take any action relating to an Award granted or to be granted to an Eligible Person who is then subject to Section 16 of the Exchange Act in respect of the Company.
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(c) Delegation of Authority . The Committee may delegate any or all of its powers and duties under the Plan to a subcommittee of directors or to any officer of the Company, including the power to perform administrative functions and grant Awards; provided , however , that such delegation does not (i) violate applicable law, or (ii) result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company. Upon any such delegation, all references in the Plan to the Committee, other than in Section 8 , shall be deemed to include any subcommittee or officer of the Company to whom such powers have been properly delegated by the Committee. Any such delegation shall not limit the right of such subcommittee members or such an officer to receive Awards; provided , however , that such subcommittee members and any such officer may not grant Awards to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate, or take any action with respect to any Award previously granted to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate. Any such delegation may be revoked by the Committee at any time. The Committee may also appoint agents who are not executive officers of the Company or members of the Board to assist in administering the Plan, provided , however , that such individuals may not be delegated the authority to grant or modify any Awards that will, or may, be settled in Stock.
(d) Limitation of Liability . The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Affiliates, the Companys legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or any of its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.
(e) Participants in Non-U.S. Jurisdictions . Notwithstanding any provision of the Plan to the contrary, to comply with applicable laws in countries other than the United States in which the Company or any of its Affiliates operates or has employees, directors or other service providers from time to time, or to ensure that the Company complies with any applicable requirements of foreign securities exchanges, the Committee, in its sole discretion, shall have the power and authority to: (i) determine which of the Companys Affiliates shall be covered by the Plan; (ii) determine which Eligible Persons outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible Persons outside the United States to comply with applicable foreign laws or listing requirements of any foreign exchange; (iv) establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such sub-plans and/or modifications shall be attached to the Plan as appendices), provided , however , that no such sub-plans and/or modifications shall increase the share limitations contained in Section 4(a) ; and (v) take any action, before or after an Award is granted, that it deems advisable to comply with any applicable governmental regulatory exemptions or approval or listing requirements of any such foreign securities exchange. For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.
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4. Stock Subject to Plan .
(a) Number of Shares Available for Delivery . Subject to adjustment in a manner consistent with Section 8 , 5,415,576 shares of Stock are reserved and available for delivery with respect to Awards, and such total number of shares of Stock shall be available for issuance upon the exercise of ISOs.
(b) Application of Limitation to Grants of Awards . Subject to Section 4(c) , no Award may be granted if the number of shares of Stock that may be delivered in connection with such Award exceeds the number of shares of Stock remaining available under the Plan minus the number of shares of Stock issuable in settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or Substitute Awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.
(c) Availability of Shares Not Delivered under Awards . If all or any portion of an Award expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated, the shares of Stock subject to such Award (including shares forfeited with respect to Restricted Stock) shall not be considered delivered shares under the Plan, shall be available for delivery with respect to Awards, and shall no longer be considered issuable or related to outstanding Awards for purposes of Section 4(b) . Notwithstanding the foregoing, (i) the number of shares tendered or withheld in payment of any exercise or purchase price of an Award or taxes relating to an Award, (ii) shares that were subject to an Option or SAR but were not issued or delivered as a result of the net settlement or net exercise of such Option or SAR, and (iii) shares repurchased on the open market with the proceeds of an Options exercise price, will not, in each case, be available for delivery with respect to Awards under the Plan. If an Award may be settled only in cash, such Award need not be counted against any share limit under this Section 4 .
(d) Shares Available Following Certain Transactions . Substitute Awards granted in accordance with applicable stock exchange requirements and in substitution or exchange for awards previously granted by a company acquired by the Company or any subsidiary or with which the Company or any subsidiary combines shall not reduce the shares authorized for issuance under the Plan or the limitations on grants to non-employee members of the Board under Section 5(b) , nor shall shares subject to such Substitute Awards be added to the shares available for issuance under the Plan (whether or not such Substitute Awards are later cancelled, forfeited or otherwise terminated). Additionally, in the event that a company acquired by the Company or any subsidiary or with which the Company or any subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may, if and to the extent determined by the Board and subject to compliance with applicable stock exchange
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requirements, be used for Awards under the Plan and shall not reduce the shares authorized for issuance under the Plan (and shares subject to such Awards shall not be added to the shares available for issuance under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not, prior to such acquisition or combination, employed by (and who were not non-employee directors or consultants of) the Company or any of its subsidiaries immediately prior to such acquisition or combination.
(e) Stock Offered . The shares of Stock to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market.
5. Eligibility; Award Limitations for Non-Employee Members of the Board .
(a) Awards may be granted under the Plan only to Eligible Persons.
(b) In each calendar year during any part of which the Plan is in effect, a non-employee member of the Board may not (i) be granted Awards having a grant date fair value (determined pursuant to ASC Topic 718 or such other applicable financial accounting rules) in excess of $600,000 or (ii) receive total compensation (including Awards, retainers and other fees related to service on the Board or committees of the Board, whether paid currently or on a deferred basis and whether paid in cash, Stock or other property) for such non-employee members service on the Board in excess of $750,000; provided, that, the limits set forth in this Section 5(b) shall be without regard to grants of Awards, if any, made to a non-employee member of the Board during any period in which such individual was an employee of the Company or of any of its Affiliates or was otherwise providing services to the Company or to any of its Affiliates other than in the capacity as a director of the Company.
6. Specific Terms of Awards .
(a) General . Awards may be granted on the terms and conditions set forth in this Section 6 . Awards granted under the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with any other Award. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10 ), such additional terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion. Without limiting the scope of the preceding sentence, the Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance goals applicable to an Award, and any such performance goals may differ among Awards granted to any one Participant or to different Participants. To the extent provided in an Award Agreement, the Committee may exercise its discretion to reduce or increase the amounts payable under any Award.
(b) Options . The Committee is authorized to grant Options, which may be designated as either ISOs or Nonstatutory Options, to Eligible Persons on the following terms and conditions and such additional terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion:
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(i) Exercise Price . Each Award Agreement evidencing an Option shall state the exercise price per share of Stock (the Exercise Price ) established by the Committee; provided , however , that except as provided in Section 6(j) or in Section 8 , the Exercise Price of an Option shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, 110% of the Fair Market Value per share of the Stock on the date of grant).
(ii) Time and Method of Exercise; Other Terms . The Committee shall determine the methods by which the Exercise Price may be paid or deemed to be paid, the form of such payment, including cash or cash equivalents, Stock (including previously owned shares or through a cashless exercise, i.e., net settlement, a broker-assisted exercise, or other reduction of the amount of shares otherwise issuable pursuant to the Option), other Awards or awards granted under other plans of the Company or any Affiliate, other property, or any other legal consideration the Committee deems appropriate (including notes or other contractual obligations of Participants to make payment on a deferred basis), the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants, including the delivery of Restricted Stock subject to Section 6(d) , and any other terms and conditions of any Option. In the case of an exercise whereby the Exercise Price is paid with Stock, such Stock shall be valued based on the Stocks Fair Market Value as of the date of exercise. No Option may be exercisable for a period of more than ten years following the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, for a period of more than five years following the date of grant of the ISO); provided, that if the period to exercise the Option (other than in the case of an ISO) would expire at a time when trading in the shares of Stock is prohibited by the Companys insider trading policy (or any Company-imposed blackout period) or any applicable law, then the period to exercise the Option shall be automatically extended until the 30th day following the expiration of such prohibition.
(iii) ISOs . The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. ISOs may only be granted to Eligible Persons who are employees of the Company or employees of a parent or any subsidiary corporation of the Company (within the meaning of Sections 424(e) and (f) of the Code). Except as otherwise provided in Section 8 , no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under Section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Companys stockholders. Notwithstanding the foregoing, to the extent that the aggregate Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code) subject to any other incentive stock options of the Company or a parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code)
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that are exercisable for the first time by a Participant during any calendar year exceeds $100,000, or such other amount as may be prescribed under Section 422 of the Code, such excess shall be treated as Nonstatutory Options in accordance with the Code. As used in the previous sentence, Fair Market Value shall be determined as of the date the ISO is granted. If a Participant shall make any disposition of shares of Stock issued pursuant to an ISO under the circumstances described in Section 421(b) of the Code (relating to disqualifying dispositions), the Participant shall notify the Company of such disposition within the time provided to do so in the applicable Award Agreement.
(c) SARs . The Committee is authorized to grant SARs to Eligible Persons on the following terms and conditions and such additional terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion:
(i) Right to Payment . An SAR is a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.
(ii) Grant Price . Each Award Agreement evidencing an SAR shall state the grant price per share of Stock established by the Committee; provided , however , that except as provided in Section 6(j) or in Section 8 , the grant price per share of Stock subject to an SAR shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the SAR.
(iii) Method of Exercise and Settlement; Other Terms . The Committee shall determine the form of consideration payable upon settlement, the method by or forms in which Stock (if any) will be delivered or deemed to be delivered to Participants, and any other terms and conditions of any SAR. SARs may be either free-standing or granted in tandem with other Awards. No SAR may be exercisable for a period of more than ten years following the date of grant of the SAR; provided, that if the period to exercise the SAR would expire at a time when trading in the shares of Stock is prohibited by the Companys insider trading policy (or any Company-imposed blackout period) or any applicable law, then the period to exercise the SAR shall be automatically extended until the 30th day following the expiration of such prohibition
(iv) Rights Related to Options . An SAR granted in connection with an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount determined by multiplying (A) the difference obtained by subtracting the Exercise Price with respect to a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of the SAR, by (B) the number of shares as to which that SAR has been exercised. The Option shall then cease to be exercisable to the extent surrendered. SARs granted in connection with an Option shall be subject to the terms and conditions of the Award Agreement governing the Option, which shall provide that the SAR is exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferrable.
(d) Restricted Stock . The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions and such additional terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion:
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(i) Restrictions . Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose. Except as provided in Section 7(a)(iii) and Section 7(a)(iv) , during the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hedged, hypothecated, margined or otherwise encumbered by the Participant.
(ii) Dividends and Splits . As a condition to the grant of an Award of Restricted Stock, the Committee may allow a Participant to elect, or may require, that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of additional Awards or deferred without interest to the date of vesting of the associated Award of Restricted Stock. Unless otherwise determined by the Committee and specified in the applicable Award Agreement, Stock distributed in connection with a Stock split or a Stock dividend, and other property (other than cash) distributed as a dividend, in each case, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.
(e) Restricted Stock Units . The Committee is authorized to grant Restricted Stock Units to Eligible Persons on the following terms and conditions and such additional terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion:
(i) Award and Restrictions . Restricted Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose.
(ii) Settlement . Settlement of vested Restricted Stock Units shall occur upon vesting or upon expiration of the deferral period specified for such Restricted Stock Units by the Committee (or, if permitted by the Committee, as elected by the Participant). Restricted Stock Units shall be settled by delivery of (A) a number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or (B) cash in an amount equal to the Fair Market Value of the specified number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or a combination thereof, as determined by the Committee at the date of grant or thereafter.
(f) Stock Awards . The Committee is authorized to grant Stock Awards to Eligible Persons as a bonus, as additional compensation, or in lieu of cash compensation any such Eligible Person is otherwise entitled to receive, in such amounts and subject to such other terms and conditions, not inconsistent with the provisions of the Plan, as the Committee in its discretion determines to be appropriate.
(g) Dividend Equivalents . The Committee is authorized to grant Dividend Equivalents to Eligible Persons, entitling any such Eligible Person to receive cash, Stock, other Awards, or other property equal in value to dividends or other distributions paid with respect to a specified number of shares of Stock on such terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion. Dividend
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Equivalents may be awarded on a free-standing basis or in connection with another Award (other than an Award of Restricted Stock or a Stock Award). The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or at a later specified date and, if distributed at a later date, may be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles or accrued in a bookkeeping account without interest, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. With respect to Dividend Equivalents granted in connection with another Award, absent a contrary provision in the Award Agreement, such Dividend Equivalents shall be subject to the same restrictions and risk of forfeiture as the Award with respect to which the dividends accrue and shall not be paid unless and until such Award has vested and been earned.
(h) Other Stock-Based Awards . The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of, or the performance of, specified Affiliates of the Company. The Committee shall determine the terms, conditions and restrictions of such Other Stock-Based Awards, not inconsistent with the provisions of the Plan, as the Committee shall determine in its sole discretion. Stock delivered pursuant to an Other-Stock Based Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including cash, Stock, other Awards, or other property, as the Committee shall determine.
(i) Cash Awards . The Committee is authorized to grant Cash Awards, on a free-standing basis or as an element of, a supplement to, or in lieu of any other Award under the Plan to Eligible Persons in such amounts and subject to such other terms, conditions and restrictions, not inconsistent with the provisions of the Plan, as the Committee in its discretion determines to be appropriate.
(j) Substitute Awards . Awards may be granted in substitution or exchange for any other Award granted under the Plan or under another plan of the Company or an Affiliate or any other right of an Eligible Person to receive payment from the Company or an Affiliate. Awards may also be granted under the Plan in substitution for awards held by individuals who become Eligible Persons as a result of a merger, consolidation or acquisition of another entity or the assets of another entity by or with the Company or an Affiliate. Such Substitute Awards referred to in the immediately preceding sentence that are Options or SARs may have an exercise price that is less than the Fair Market Value of a share of Stock on the date of the substitution if such substitution complies with the Nonqualified Deferred Compensation Rules and other applicable laws and exchange rules.
(k) No Repricing . Except as provided in Section 6(j) or in Section 8 , without the approval of the stockholders of the Company, the terms of outstanding Awards may not be amended to (i) reduce the Exercise Price or grant price of an outstanding Option or SAR, (ii) grant a new Option, SAR or other Award in substitution for, or upon the cancellation of, any previously
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granted Option or SAR that has the effect of reducing the Exercise Price or grant price thereof, (iii) exchange any Option or SAR for Stock, cash or other consideration when the Exercise Price or grant price per share of Stock under such Option or SAR equals or exceeds the Fair Market Value of a share of Stock or (iv) take any other action that would be considered a repricing of an Option or SAR under the applicable listing standards of the national securities exchange on which the Stock is listed (if any).
7. Certain Provisions Applicable to Awards .
(a) Limit on Transfer of Awards .
(i) Except as provided in Sections 7(a)(iii) and (iv) , each Option and SAR shall be exercisable only by the Participant during the Participants lifetime, or by the Person to whom the Participants rights shall pass by will or the laws of descent and distribution. Notwithstanding anything to the contrary in this Section 7(a) , an ISO shall not be transferable other than by will or the laws of descent and distribution.
(ii) Except as provided in Sections 7(a)(i) , (iii) and (iv) , no Award, other than a Stock Award, and no right under any such Award, may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
(iii) To the extent specifically provided by the Committee, an Award may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.
(iv) An Award may be transferred pursuant to a domestic relations order entered or approved by a court of competent jurisdiction upon delivery to the Company of a written request for such transfer and a certified copy of such order.
(b) Form and Timing of Payment under Awards; Deferrals . Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any of its Affiliates upon the exercise or settlement of an Award may be made in such forms as the Committee shall determine in its discretion, including cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee); provided , however , that any such deferred or installment payments will be set forth in the Award Agreement. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock.
(c) Evidencing Stock . The Stock or other securities of the Company delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise, and shall be subject to such stop transfer orders and other
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restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Stock or other securities are then listed, and any applicable laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions. Further, if certificates representing Restricted Stock are registered in the name of the Participant, the Company may retain physical possession of the certificates and may require that the Participant deliver a stock power to the Company, endorsed in blank, related to the Restricted Stock.
(d) Consideration for Grants . Awards may be granted for such consideration, including services, as the Committee shall determine, but shall not be granted for less than the minimum lawful consideration.
(e) Additional Agreements . Each Eligible Person to whom an Award is granted under the Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Eligible Persons termination of employment or service to a general release of claims and/or a noncompetition or other restrictive covenant agreement in favor of the Company and its Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.
8. Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization .
(a) Existence of Plans and Awards . The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Company, the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.
(b) Additional Issuances . Except as expressly provided herein, the issuance by the Company of shares of stock of any class, including upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Awards theretofore granted or the purchase price per share of Stock, if applicable.
(c) Subdivision or Consolidation of Shares . The terms of an Award and the share limitations under the Plan shall be subject to adjustment by the Committee from time to time, in accordance with the following provisions:
(i) If at any time, or from time to time, the Company shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock, then, as appropriate (A) the maximum number of shares of Stock available for delivery with respect to Awards and applicable limitations with respect to Awards provided in Section 4(a) and Section 5(b) (other than cash limits) shall be increased proportionately, and the kind of shares
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or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.
(ii) If at any time, or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser number of shares of Stock, then, as appropriate (A) the maximum number of shares of Stock available for delivery with respect to Awards and applicable limitations with respect to Awards provided in Section 4(a) and Section 5(b) (other than cash limits) shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be decreased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.
(d) Recapitalization . In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would be considered an equity restructuring within the meaning of ASC Topic 718 and, in each case, that would result in an additional compensation expense to the Company pursuant to the provisions of ASC Topic 718, if adjustments to Awards with respect to such event were discretionary or otherwise not required (each such an event, an Adjustment Event ), then the Committee shall equitably adjust (i) the aggregate number or kind of shares that thereafter may be delivered under the Plan, (ii) the number or kind of shares or other property (including cash) subject to an Award, (iii) the terms and conditions of Awards, including the purchase price, grant price or Exercise Price of Awards and performance goals, as applicable, and (iv) the applicable limitations with respect to Awards provided in Section 4(a) and Section 5(b) (other than cash limits) to equitably reflect such Adjustment Event ( Equitable Adjustments ). In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would not be considered an Adjustment Event, and is not otherwise addressed in this Section 8 , the Committee shall have complete discretion to make Equitable Adjustments (if any) in such manner as it deems appropriate with respect to such other event.
(e) Change in Control . Except to the extent otherwise provided in any applicable Award Agreement, vesting of any Award shall not occur solely upon the occurrence of a Change in Control and, in the event of a Change in Control, the Committee, acting in its sole discretion without the consent or approval of any holder, may exercise any power enumerated in Section 3 (including the power to accelerate vesting, waive any forfeiture conditions or otherwise modify or adjust any other condition or limitation regarding an Award) and may also effect one or more of the following alternatives, which may vary among individual holders and which may vary among Awards held by any individual holder:
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(i) accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of holders thereunder shall terminate;
(ii) redeem in whole or in part outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable) as of a date, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and pay to each holder an amount of cash or other consideration per Award (other than a Dividend Equivalent or Cash Award, which the Committee may separately require to be surrendered in exchange for cash or other consideration determined by the Committee in its discretion) equal to the Change in Control Price, less the Exercise Price with respect to an Option and less the grant price with respect to a SAR, as applicable to such Awards; provided , however , that to the extent the Exercise Price of an Option or the grant price of an SAR equals or exceeds the Change in Control Price, such Award may be cancelled for no consideration;
(iii) cancel Awards that remain subject to a restricted period as of the date of a Change in Control without payment of any consideration to the Participant for such Awards; or
(iv) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control (including the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof);
provided , however , that so long as the event is not an Adjustment Event, the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding. If an Adjustment Event occurs, this Section 8(e) shall only apply to the extent it is not in conflict with Section 8(d) .
(f) Any adjustment provided under this Section 8 may provide, in the Committees sole discretion, for the elimination of any fractional share of Stock that might otherwise become subject to an Award.
9. General Provisions .
(a) Tax Withholding . The Company and any of its Affiliates are authorized to withhold from any Award granted, or any payment relating to an Award, including from a distribution of Stock, taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and Participants to satisfy the payment of withholding taxes and other tax obligations relating to any Award in such amounts as may be determined by the Committee. The Committee shall determine, in its sole discretion, the form of payment acceptable for such tax withholding obligations, including the delivery of cash or cash equivalents, Stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other
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property, or any other legal consideration the Committee deems appropriate. Any determination made by the Committee to allow a Participant who is subject to Rule 16b-3 to pay taxes with shares of Stock through net settlement or previously owned shares shall be approved by either a committee made up of solely two or more Qualified Members or the full Board. If such tax withholding amounts are satisfied through net settlement or previously owned shares, the maximum number of shares of Stock that may be so withheld or surrendered shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or surrender equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment for the Company with respect to such Award, as determined by the Committee.
(b) Limitation on Rights Conferred under Plan . Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or any of its Affiliates, (ii) interfering in any way with the right of the Company or any of its Affiliates to terminate any Eligible Persons or Participants employment or service relationship at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.
(c) Relationship to Other Benefits . No Award or payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Affiliate except as otherwise specifically provided in such other plan or as required by applicable law.
(d) Governing Law; Submission to Jurisdiction . All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock. With respect to any claim or dispute related to or arising under the Plan, the Company and each Participant who accepts an Award hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Houston, Texas. EACH PARTICIPANT WHO ACCEPTS AN AWARD IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF THE PARTICIPANTS RIGHTS OR OBLIGATIONS HEREUNDER.
(e) Severability and Reformation . If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the
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Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Persons who are subject to Section 16 of the Exchange Act) or Section 422 of the Code (with respect to ISOs), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3) or Section 422 of the Code, in each case, only to the extent Rule 16b-3 and such sections of the Code are applicable. With respect to ISOs, if the Plan does not contain any provision required to be included herein under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided , further, that, to the extent any Option that is intended to qualify as an ISO cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.
(f) Unfunded Status of Awards; No Trust or Fund Created . The Plan is intended to constitute an unfunded plan for certain incentive awards. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or such Affiliate.
(g) Nonexclusivity of the Plan . Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable. Nothing contained in the Plan shall be construed to prevent the Company or any of its Affiliates from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No employee, beneficiary or other Person shall have any claim against the Company or any of its Affiliates as a result of any such action.
(h) Fractional Shares . No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock or whether such fractional shares of Stock or any rights thereto shall be cancelled, terminated, or otherwise eliminated with or without consideration.
(i) Interpretation . Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Words in the masculine gender shall include the feminine gender, and, where appropriate, the plural shall include the singular and the singular shall include the plural. In the event of any conflict between the terms and conditions of an Award Agreement and the Plan, the provisions of the Plan shall control. The use herein of the word including following any general statement, term or matter
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shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as without limitation, but not limited to, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. References herein to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not prohibited by the Plan.
(j) Facility of Payment . Any amounts payable hereunder to any individual under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such individual, or may be applied for the benefit of such individual in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.
(k) Conditions to Delivery of Stock . Nothing herein or in any Award Agreement shall require the Company to issue any shares with respect to any Award if that issuance would, in the opinion of counsel for the Company (if the Company has requested such an opinion), constitute a violation of the Securities Act, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect. In addition, each Participant who receives an Award under the Plan shall not sell or otherwise dispose of Stock that is acquired upon grant, exercise or vesting of an Award in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations or other requirements of the SEC or any stock exchange upon which the Stock is then listed. At the time of any exercise of an Option or SAR, or at the time of any grant of any other Award, the Company may, as a condition precedent to the exercise of such Option or SAR or settlement of any other Award, require from the Participant (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the holders intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company (if the Company has requested such an opinion), may be necessary to ensure that any disposition by that holder (or in the event of the holders death, his or her legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, as then in effect. Stock or other securities shall not be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including any Exercise Price, grant price, or tax withholding) is received by the Company.
(l) Section 409A of the Code . It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Nonqualified Deferred Compensation Rules, and Awards will be operated and construed accordingly. Neither this Section 9(l) nor any other provision of the Plan is or contains a representation to any Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of any Award (or the Stock underlying such Award) granted hereunder, and should not be interpreted as such. In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance
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with the Nonqualified Deferred Compensation Rules. Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a specified employee (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participants receipt of such payment or benefits is not delayed until the earlier of (i) the date of the Participants death, or (ii) the date that is six months after the Participants separation from service, as defined under the Nonqualified Deferred Compensation Rules (such date, the Section 409A Payment Date ), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith.
(m) Clawback . The Plan and all Awards granted hereunder are subject to any written clawback policies that the Company, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date, including any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the SEC and that the Company determines should apply to Awards. Any such policy may subject a Participants Awards and amounts paid or realized with respect to Awards to reduction, cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur, including an accounting restatement due to the Companys material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy.
(n) Status under ERISA . The Plan shall not constitute an employee benefit plan for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
(o) Plan Effective Date and Term . The Plan was adopted by the Board to be effective on the Effective Date. No Awards may be granted under the Plan on and after the tenth anniversary of the Effective Date, which is May 10, 2028. However, any Award granted prior to such termination (or any earlier termination pursuant to Section 10 ), and the authority of the Board or Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award in accordance with the terms of the Plan, shall extend beyond such termination until the final disposition of such Award.
10. Amendments to the Plan and Awards. The Committee may (a) amend, alter, suspend, discontinue or terminate any Award or Award Agreement or (b) amend or alter the Plan without the consent of stockholders or Participants, except that any amendment or alteration to the Plan, including any increase in any share limitation, shall be subject to the approval of the Companys stockholders not later than the annual meeting next following such Committee action if such stockholder approval is required by any applicable law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Committee may otherwise, in its discretion, determine to submit other changes to the Plan to stockholders for approval; provided , that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under any
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previously granted and outstanding Award. The Board may (i) amend, alter, suspend, discontinue or terminate the Committees authority to grant Awards or (ii) amend, alter, suspend, discontinue or terminate the Plan; provided , that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. For purposes of clarity, any adjustments made to Awards pursuant to Section 8 will be deemed not to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.
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Exhibit 10.5
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Timothy S. Duncan ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Timothy S. Duncan |
|||||
Name: | William S. Moss III | Name: | Timothy S. Duncan | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.6
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Stephen E. Heitzman ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
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Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Stephen E. Heitzman |
|||||
Name: | William S. Moss III | Name: | Stephen E. Heitzman | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.7
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and John A. Parker ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
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Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ John A. Parker |
|||||
Name: | William S. Moss III | Name: | John A. Parker | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.8
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Michael L. Harding II ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
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Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
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Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Michael L. Harding II |
|||||
Name: | William S. Moss III | Name: | Michael L. Harding II | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.9
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and William S. Moss III ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
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Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
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Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ Michael L. Harding II |
By: |
/s/ William S. Moss III |
|||||
Name: | Michael L. Harding II | Name: | William S. Moss III | |||||
Title: |
Executive Vice President, Chief Financial Officer and Treasurer |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.10
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Gregory A. Beard ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
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Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Gregory A. Beard |
|||||
Name: | William S. Moss III | Name: | Gregory A. Beard | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.11
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Christine Hommes ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Christine Hommes |
|||||
Name: | William S. Moss III | Name: | Christine Hommes | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.12
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Robert M. Tichio ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Robert M. Tichio |
|||||
Name: | William S. Moss III | Name: | Robert M. Tichio | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.13
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Olivia C. Wassenaar ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Olivia C. Wassenaar |
|||||
Name: | William S. Moss III | Name: | Olivia C. Wassenaar | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.14
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Neal P. Goldman ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) | If to the Company to |
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Neal P. Goldman |
|||||
Name: | William S. Moss III | Name: | Neal P. Goldman | |||||
Title: | Executive Vice President, General Counsel and Secretary | Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.15
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and John Brad Juneau ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ John Brad Juneau |
|||||
Name: | William S. Moss III | Name: | John Brad Juneau | |||||
Title: | Executive Vice President, General Counsel and Secretary | Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.16
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and James M. Trimble ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ James M. Trimble |
|||||
Name: | William S. Moss III | Name: | James M. Trimble | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.17
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Charles M. Sledge ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Charles M. Sledge |
|||||
Name: | William S. Moss III | Name: | Charles M. Sledge | |||||
Title: |
Executive Vice President, General Counsel and Secretary |
Address: |
1611 Scenic Mountain Ct Kingwood, TX 77345 |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.18
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 10, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Donald R. Kendall, Jr. ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect
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to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
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Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
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Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
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legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
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Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held
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within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
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Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
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Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms
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hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
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Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
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Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or
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federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Donald R. Kendall, Jr. |
|||||
Name: | William S. Moss III | Name: | Donald R. Kendall, Jr. | |||||
Title: | Executive Vice President, General Counsel and Secretary | Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]
Exhibit 10.19
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ( Agreement ) is made as of May 16, 2018 by and between Talos Energy Inc., a Delaware corporation (the Company ), and Rajen Mahagaokar ( Indemnitee ). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;
WHEREAS, the Board of Directors of the Company (the Board ) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions;
WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the Certificate of Incorporation ) and the Amended and Restated Bylaws of the Company (the Bylaws ) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the DGCL ). The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company . Indemnitee agrees to serve as a director, officer, employee and/or agent of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Companys Bylaws, and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director, officer, employee and/or agent of the Company, as provided in Section 16 hereof.
Section 2. Definitions . As used in this Agreement:
(a) References to agent shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) A Change in Control shall be deemed to have the meaning set forth, as of the date hereof, in the Talos Energy Inc. Long Term Incentive Plan.
For purposes of this Section 2(b) , the following terms shall have the following meanings:
(A) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
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(B) Person shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(C) Beneficial Owner shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(c) Corporate Status describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.
(d) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) Enterprise shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitees rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) Indemnity Obligations shall mean all obligations of the Company to Indemnitee under this Agreement, including the Companys obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
(h) Independent Counsel means a law firm, or a member of a law firm, in each case, that is a nationally or internationally recognized law firm that is experienced in matters of corporation law, has adequate personnel and other resources to diligently perform its
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duties described herein, and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) The term Proceeding shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting pursuant to his Corporate Status, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; including any Proceeding pending on or before the date of this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.
(j) Losses means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), amounts paid or payable in settlement, including any interest, assessments and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k) Sponsor Entities means AP Talos Energy LLC, AP Talos Energy Debtco LLC, Apollo Management VII, L.P., AIF VII Management, LLC and its affiliates, Apollo Commodities Management, L.P. with respect to Series I, Apollo Commodities Management GP, LLC and its affiliates, Apollo Global Securities, LLC and its affiliates, Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, REP Management Company V, LLC, Riverstone Equity Partners LP and Riverstone Holdings LLC and its affiliates.
(l) Reference to other enterprise shall include employee benefit plans; references to fines shall include any excise tax assessed with respect to any employee benefit plan; references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves
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services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner not opposed to the best interests of the Company as referred to in this Agreement.
Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or reasonably incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 4. Pursuant to this Section 3 , Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Losses actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company . The Company shall indemnify Indemnitee to the fullest extent permitted by applicable law from and against all Losses and Expenses suffered or incurred by Indemnitee or on Indemnitees behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
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Section 7. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional Indemnification .
(a) Notwithstanding any limitation in Sections 3 , 4 , or 5 , the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a) , the meaning of the phrase to the fullest extent permitted by applicable law shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 9. Exclusions . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);
(c) to the extent that a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law; or
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(d) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
Section 10. Advances of Expenses . Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d) ), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Advances and undertaking to repay shall be unsecured and interest free. Advances shall be made without regard to Indemnitees ability to repay the Expenses and without regard to Indemnitees ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d) , advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 9(a) , (b) and (d) .
Section 11. Procedure for Notification and Defense of Claim .
(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, except to the extent, and only to the extent, that the Company was materially and adversely prejudiced by such failure or delay. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may
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assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such matter with respect to which Indemnitee intends to seek indemnification, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with Indemnitees defense of such matter other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own legal counsel in such matter with respect to which Indemnitee intends to seek indemnification, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitees own expense; provided, however, that if (i) Indemnitees employment of its own legal counsel has been authorized by the Company, (ii) Indemnitees legal counsel has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such matter, (iii) after a Change in Control, Indemnitees employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such matter, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such matter) and all Expenses related to such separate counsel shall be borne by the Company subject to the terms and conditions set forth herein.
Section 12. Procedure Upon Application for Indemnification .
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a) , a determination, if required by applicable law, with respect to Indemnitees entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of
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the Independent Counsel so selected. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. The determination made by the Independent Counsel shall be valid, binding and enforceable against both parties subject to the rights to challenge such determination as set forth in Section 14 hereof.
Section 13. Presumptions and Effect of Certain Proceedings .
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 14(e) , if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be
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extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitees action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee .
(a) Subject to Section 14(e) , in the event that (i) a determination is made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made by the Board pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 , 6 or 7 or the last sentence of Section 12(a) of this Agreement within
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ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 3 , 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court as to whether Indemnitee is entitled to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a) ; provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitees right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitees rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors and officers liability insurance policies maintained by the
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Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation .
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) (collectively, the Alternative Indemnitors). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Loss or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification and/or advanced expenses afforded to Indemnitee in respect of any Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any Alternative Indemnitors to indemnify Indemnitee or advance Expenses or Losses to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Losses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any Alternative Indemnitors or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any Alternative Indemnitors from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any Alternative Indemnitors or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity
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Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of contribution and/or subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any Alternative Indemnitor or their insurers affect the obligations of the Company hereunder.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, subject to Section 15(b) above. The Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.
Section 16. Duration of Agreement . This Agreement shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding, Expense, Loss or matter that is the subject of Indemnity Obligations (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant this Agreement) by reason of such Indemnitees position, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be provided under this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit
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of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitees employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.
Section 17. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 18. Enforcement ; Third Party Beneficiaries.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder
(c) The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement .
Section 19. Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state
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law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the SEC ) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Companys right under public policy to indemnify Indemnitee.
Section 20. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver;
Section 21. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.
(b) If to the Company to
Talos Energy Inc.
500 Dallas Street, Suite 2000
Houston, TX 77002
Attn: General Counsel
or to any other address as may have been furnished to Indemnitee by the Company.
Section 23. Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable in whole or part to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
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light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the Delaware Court ), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such partys agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 25. Identical Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TALOS ENERGY INC. | INDEMNITEE | |||||||
By: |
/s/ William S. Moss III |
By: |
/s/ Rajen Mahagaokar |
|||||
Name: | William S. Moss III | Name: | Rajen Mahagaokar | |||||
Title: | Executive Vice President, General Counsel and Secretary | Address: |
[Signature Page to Talos Energy Inc. Indemnification Agreement]