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 15, 2018
NORTHERN OIL AND GAS, INC.
(Exact name of Registrant as specified in its charter)
Delaware | 001-33999 | 95-3848122 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
601 Carlson Parkway, Suite 990 Minnetonka, Minnesota |
55305 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (952) 476-9800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐ | 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 (17CFR 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 (17CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. | Entry into a Material Definitive Agreement. |
As previously disclosed, on January 31, 2018, Northern Oil and Gas, Inc. (the “Company”) entered into an exchange agreement (as amended, the “Exchange Agreement”) with holders (the “Supporting Noteholders”) of approximately $497 million, or 71%, of the aggregate principal amount of the Company’s outstanding 8.000% Senior Notes due 2020 (the “Outstanding Notes”), pursuant to which the Supporting Noteholders agreed to exchange all of the Outstanding Notes held by each such Supporting Noteholder for approximately $155 million of the Company’s common stock, par value $0.001 (the “Common Stock”), and approximately $344 million in aggregate principal amount of new 8.50% Senior Secured Second Lien Notes due 2023 (the “Second Lien Notes”) (such exchange, the “Exchange Transaction”).
On May 15, 2018 (the “Closing Date”), pursuant to the Exchange Agreement, the Company completed the Exchange Transaction and issued 103,249,915 shares of Common Stock and $344.3 million of Second Lien Notes in exchange for the Outstanding Notes. As previously disclosed, and in connection with the Exchange Transaction, the Company and certain investors previously entered into subscription agreements (the “Subscription Agreements”) whereby such investors agreed to purchase up to $52.0 million of Common Stock at $1.50 per share. Pursuant to the Subscription Agreements, on the Closing Date, the Company issued 34,666,668 shares of Common Stock to such investors.
The Common Stock issued pursuant to the Exchange Agreement and the Subscription Agreements was offered and sold pursuant to the exemption provided by Section 4(a)(2) of the Securities Act. This offer was made by the Company to a limited number of persons, each of which is an accredited investor (within the meaning of Rule 501 promulgated under the Securities Act) or a qualified institutional buyer (as defined in Rule 144A under the Securities Act). The Company did not receive any cash proceeds from the issuance of Common Stock pursuant to the Exchange Agreement. The Company received $52.0 million in proceeds from the sale of the Common Stock under the Subscription Agreements.
Second Lien Notes and Indenture
As of the Closing Date, the Company issued Second Lien Notes with an aggregate principal amount of $344.3 million. The terms of the Second Lien Notes include those stated in the Indenture entered into by the Company and Wilmington Trust, National Association, as trustee (the “Indenture”), on the Closing Date.
The Second Lien Notes are the senior secured obligations of the Company and rank equal in right of payment to all existing and future senior indebtedness of the Company and its subsidiaries. The Second Lien Notes are secured by second priority security interests in substantially all assets of the Company, including, without limitation, liens on at least 95% of the present value of the Company’s proven reserves and proved developed producing reserves, subject to the exceptions set forth in the Company’s existing first lien facility and certain customary post-closing delivery periods. The Second Lien Notes will be guaranteed by all of the Company’s direct and indirect subsidiaries that guarantee indebtedness under any other indebtedness for borrowed money of the Company or any of the Company’s subsidiary guarantors.
Interest on the Second Lien Notes will accrue at a rate of 8.50% per annum payable in cash quarterly in arrears on January 1, April 1, July 1, and October 1 of each year. Beginning on July 1, 2018, the interest rate will be increased by 1.00% per annum, which increase shall be payable in kind (the “PIK Component”). Commencing with the fiscal quarter ending June 30, 2018, if the Company’s total debt to EBITDAX ratio is (i) less than 3.00 to 1.00 as of the end of the fiscal quarter, the PIK Component shall cease accruing effective as of the next interest payment date, or (ii) greater than or equal to 3.00 to 1.00 as of the last day of such fiscal quarter or if the Company fails to deliver financial statements, the PIK Component shall continue to accrue (or, if then not accruing, automatically commence accruing as of the next interest payment date) and be payable quarterly. Additionally, if the Company incurs junior lien or unsecured debt with a cash interest rate in excess of 9.50%, the cash rate on the Second Lien Notes will be increased by such excess. Default interest will be payable in cash on demand at the then applicable interest rate plus 3.00% per annum. The Second Lien Notes will mature on May 15, 2023.
The Company may redeem all or a portion of any of the Second Lien Notes at the following redemption prices during the following time periods (plus accrued and unpaid interest on the Second Lien Notes redeemed): (i) from and after May 15, 2018 until May 15, 2021, 104%, (ii) on and after May 15, 2021 until May 15, 2022, 102%, and (iii) on and after May 15, 2022, 100%; provided that any redemption of Second Lien Notes (or the acceleration of Second Lien Notes) prior to May 15, 2020 shall also be accompanied by a make whole premium. Subject to the terms of an intercreditor agreement, the Company is also required to offer to prepay the Second Lien Notes with 100% of the net cash proceeds of asset sales, casualty events and condemnations in excess of $20 million not required to be used to pay down the loans under the Credit Agreement (as defined below), subject to customary exclusions and reinvestment provisions consistent with the Credit Agreement. Mandatory prepayment offers will be subject to payment of the make whole premium and redemption price set forth above, as applicable.
If a change of control occurs, the Company will be required to offer to repurchase the Second Lien Notes at the repurchase price of 101% of the principal amount of repurchased Second Lien Notes (subject to the prepayment provisions of the Credit Agreement).
The Second Lien Notes contain negative covenants that are based upon the negative covenants set forth in the Credit Agreement, taking into account differences to reflect the changed capital structure of the Company and the second lien nature of the Second Lien Notes, which negative covenants limit the Company’s ability, among other things, to pay cash dividends, incur additional indebtedness, sell assets, enter into certain derivatives contracts, change the nature of its business or operations, merge, consolidate, make certain types of investments, amend the Credit Agreement and other debt documents, and incur any additional debt on a subordinated or junior basis to the Credit Agreement and on a senior basis to the Second Lien Notes, and require the outstanding principal amount of the Company’s Outstanding Notes to be no more than $30 million by March 1, 2020. The Second Lien Notes do not include any financial maintenance covenants.
The obligations of the Company under the Second Lien Notes may be accelerated upon the occurrence of an Event of Default (as such term is defined in the Indenture). Events of Default include customary events for a capital markets debt financing of this type, including, without limitation, payment defaults, the inaccuracy of representations and warranties, defaults in the performance of affirmative or negative covenants, defaults on other indebtedness of the Company or its subsidiaries (including an event of default under the Credit Agreement), bankruptcy or related defaults, defaults related to judgments and the occurrence of a Change of Control (as such term is defined in the Indenture).
The summary of the Indenture set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit 4.1 hereto and is incorporated herein by reference.
TRT Governance Agreement
In connection with the Exchange Transaction and on the Closing Date, the Company entered into an amended and restated letter agreement (the “TRT Governance Agreement”) with Robert B. Rowling, Cresta Investments, LLC, Cresta Greenwood, LLC and TRT Holdings, Inc. (collectively, “TRT”), three director nominees to be nominated by TRT and Bahram Akradi, pursuant to which the Company will appoint a director nominee selected by TRT to its Board of Directors (the “Board”) to fill the current vacancy and, subject to the terms and conditions in the TRT Governance Agreement, will take all actions necessary and appropriate to include in the slate of nominees standing for election at each annual meeting of the Company, three independent director nominees designated by TRT. Pursuant to the TRT Governance Agreement, TRT is entitled to nominate: (a) three directors (i) if it owns shares equal to 20.0% or more of the outstanding Common Stock as of the Closing or (ii) if, on or after the third anniversary of the Closing, it owns shares equal to 12.5% or more of the outstanding Common Stock, (b) two directors (i) if it owns shares equal to 10.0% or more but less than 20.0% of the outstanding Common Stock as of the Closing or (ii) if, on or after the third anniversary of the Closing, it owns shares equal to 12.5% or more of the outstanding Common Stock, or (c) one director if it owns shares equal to 5.0% or more but less than 10.0% of the outstanding Common Stock as of the Closing. If TRT owns an amount of shares equal to fewer than 5.0% of the outstanding Common Stock as of the Closing, TRT will not be entitled to any representation on the Board. Until the first date that (x) TRT owns shares equal to fewer than 20.0% of the outstanding Common Stock as of the Closing Date or (y) on or after the third anniversary of the Closing Date, TRT owns shares equal to fewer than 12.5% or more of the outstanding Common Stock, not less than one TRT-nominated director must be appointed to each committee of the Board (subject to the independence requirements of the NYSE American and the SEC).
Pursuant to the TRT Governance Agreement, during the period beginning on the Closing Date and continuing until and including the annual meeting of the Company to be held in calendar year 2020, TRT and Bahram Akradi are each generally prohibited from engaging in certain proxy solicitations (including regarding representation on the Board or any other proposal brought by the Company’s shareholders).
The TRT Governance Agreement also provides that if TRT becomes the beneficial owner of forty percent or more of the Common Stock without approval from a committee of disinterested directors from the Board, then TRT may not, for a period of four years, engage in certain extraordinary transactions with the Company, including a merger, tender or exchange offer and certain purchases of securities and assets.
Registration Rights Agreements
In accordance with the terms of the Exchange Agreement, on the Closing Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Supporting Noteholders pursuant to which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) a registration statement registering for resale the shares of Common Stock and the Second Lien Notes issued in the Exchange Transaction.
Under the terms of the TRT Governance Agreement, on the Closing Date, the Company entered into a registration rights agreement (the “TRT Registration Rights Agreement”) with TRT, pursuant to which the Company agreed to register all of the Common Stock held by TRT on the Closing Date, excluding shares of Common Stock that TRT received pursuant to the Exchange Transaction.
Also on the Closing Date, the Company entered into a registration rights agreement (the “TSSP Registration Rights Agreement” and, together with the Registration Rights Agreement and the TRT Registration Rights Agreement, the “Registration Rights Agreements”) with TPG Specialty Lending, Inc., TOP III Finance 1, LLC and TAO Finance 1, LLC (collectively, “TPG Sixth Street Partners”), pursuant to which the Company agreed to file with the SEC a registration statement registering for resale the shares of Common Stock issued to TPG Sixth Street Partners under the Subscription Agreements.
The foregoing descriptions of the Exchange Agreement, the TRT Governance Agreement and the Registration Rights Agreements do not purport to be complete and are qualified in their entirety by reference to such documents, which are incorporated herein by reference. The Exchange Agreement was filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on February 23, 2018. The TRT Governance Agreement is filed as Exhibit 10.1 hereto. The registration rights agreements are filed as Exhibits 10.2, 10.3 and 10.4 hereto.
Second Amendment to Term Loan Credit Agreement
As previously disclosed, on November 1, 2017, the Company entered into a Term Loan Credit Agreement (as amended, the “Credit Agreement”) with TPG Specialty Lending, Inc., as administrative agent and collateral agent (in such capacities, the “Agent”), and the lenders from time to time party thereto (the “Lenders”). The Credit Agreement provides for the issuance of an aggregate principal amount of up to $500,000,000 in term loans to the Company, consisting of (i) $300,000,000 in initial term loans that were made on November 1, 2017, (ii) $100,000,000 in delayed draw term loans available to the Company, subject to satisfaction of certain conditions precedent described therein, for a period of 18 months after the Effective Date (the “Delayed Draw Loans”), and (iii) up to $100,000,000 in incremental term loans on an uncommitted basis and subject, among other things, to one or more lenders agreeing in the future to make such loans (the “Incremental Loans”) (the Initial Loans, Delayed Draw Loans and the Incremental Loans, collectively, the “Loans”). Amounts borrowed and repaid under the Credit Agreement may not be reborrowed. The term loan facility provided by the Credit Agreement matures on November 1, 2022. The description of the Credit Agreement contained in the Company’s Current Report on Form 8-K filed on November 2, 2017 is incorporated herein by reference.
On May 15, 2018, in connection with the Exchange Transaction the Company, the Agent and the Lenders entered into a Second Amendment to Term Loan Credit Agreement (the “Second Amendment”) pursuant to which the Lenders agreed to revise certain provisions and covenants of the Credit Agreement.
The Second Amendment revised the call protection and yield maintenance provisions to provide that prepayments (including mandatory prepayments), terminations, refinancing, reductions and accelerations under the Credit Agreement are subject to the payment of a yield maintenance amount for any such prepayment, termination, refinancing, reduction or acceleration occurring prior to May 15, 2020 (or, with respect to any Delayed Draw Loan, prior to the two-year anniversary of the funding of such Delayed Draw Loan) that allows the lenders to attain approximately the same yield as if such Loan remained outstanding for the entire two-year period, as applicable, plus a call protection amount equal to the product of the principal amount of Loans so prepaid, terminated, refinanced, reduced or accelerated multiplied by (i) 4.0% for any such prepayment, termination, refinancing, reduction or acceleration occurring, (A) with respect to the initial Loans, on or prior to May 15, 2021, or (B) with respect to Delayed Draw Loans, on or prior to the 36 month anniversary of the funding of such Delayed Draw Loan, or (ii) 2.0% for any such prepayment, termination, refinancing, reduction or acceleration occurring, (A) with respect to the Initial Loans, after May 15, 2021 and on or prior to May 15, 2022, or (B) with respect to Delayed Draw Loans, after the 36 month anniversary but on or prior to the 48 month anniversary of the funding of such Delayed Draw Loan, in each case, as further set forth in the Credit Agreement.
In addition, the Second Amendment revised certain covenants in the Credit Agreement to reflect the covenants in the Indenture.
Additionally, on May 15, 2018, in connection with the Exchange Transaction, the Company borrowed $60,000,000 in the form of a Delayed Draw Term Loan. The description of the Credit Agreement and the Loans contained in the Company’s Current Report on Form 8-K filed on November 2, 2017 is incorporated herein by reference.
The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to such document, which is incorporated by reference herein and filed as Exhibit 10.5 hereto.
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant . |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. | Unregistered Sales of Equity Securities. |
The information set forth under Item 1.01 above is incorporate by reference into this Item 3.02.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 18, 2018 | NORTHERN OIL AND GAS, INC. | |||||
By |
/s/ Erik J. Romslo |
|||||
Erik J. Romslo | ||||||
Executive Vice President, General Counsel and Secretary |
Exhibit 4.1
Execution Version
NORTHERN OIL AND GAS, INC.
8.50% SENIOR SECURED SECOND LIEN NOTES DUE 2023
INDENTURE
Dated as of May 15, 2018
WILMINGTON TRUST, NATIONAL ASSOCIATION,
As Trustee and Collateral Agent
CROSS-REFERENCE TABLE*
Trust Indenture Act Section |
Indenture Section |
|
310 (a)(1) |
7.10 | |
(a)(2) |
7.10 | |
(a)(5) |
7.10 | |
(b) |
7.10 | |
311 (a) |
7.11 | |
(b) |
7.11 | |
312 (b) |
11.03 | |
(c) |
11.03 | |
313 (a) |
7.06 | |
(b) |
10.06 | |
(b)(1) |
7.06 | |
(b)(2) |
7.06, 7.07 | |
(c) |
7.06, 11.02 | |
(d) |
7.06 | |
314 (a)(4) |
11.05 | |
(b) |
10.06 | |
(d) |
10.06 | |
(e) |
11.05 | |
316 (a) |
2.08 | |
318 (c) |
11.01 |
N/A means not applicable.
* | This Cross-Reference Table is not part of the Indenture. |
TABLE OF CONTENTS
Page | ||||||||
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE |
1 | |||||||
Section 1.01 |
Definitions | 1 | ||||||
Section 1.02 |
Other Definitions | 28 | ||||||
Section 1.03 |
Incorporation by Reference of Trust Indenture Act | 29 | ||||||
Section 1.04 |
Rules of Construction | 29 | ||||||
ARTICLE TWO THE NOTES |
30 | |||||||
Section 2.01 |
Form and Dating | 30 | ||||||
Section 2.02 |
Execution and Authentication | 30 | ||||||
Section 2.03 |
Registrar and Paying Agent | 30 | ||||||
Section 2.04 |
Paying Agent to Hold Money in Trust | 31 | ||||||
Section 2.05 |
Noteholder Lists | 31 | ||||||
Section 2.06 |
Transfer and Exchange | 32 | ||||||
Section 2.07 |
Replacement Notes | 32 | ||||||
Section 2.08 |
Outstanding Notes | 32 | ||||||
Section 2.09 |
Treasury Notes | 33 | ||||||
Section 2.10 |
Temporary Notes | 33 | ||||||
Section 2.11 |
Cancellation | 33 | ||||||
Section 2.12 |
Defaulted Interest | 33 | ||||||
Section 2.13 |
PIK Interest and Other Provisions Related to Interest | 33 | ||||||
Section 2.14 |
CUSIP Numbers | 35 | ||||||
Section 2.15 |
Tax Treatment of the Notes | 35 | ||||||
ARTICLE THREE REDEMPTION AND PREPAYMENT |
36 | |||||||
Section 3.01 |
Notices to Trustee | 36 | ||||||
Section 3.02 |
Selection of Notes to Be Redeemed | 36 | ||||||
Section 3.03 |
Notice of Redemption | 36 | ||||||
Section 3.04 |
Effect of Notice of Redemption | 37 | ||||||
Section 3.05 |
Deposit of Redemption Price | 38 | ||||||
Section 3.06 |
Notes Redeemed in Part | 38 | ||||||
Section 3.07 |
Optional Redemption | 38 | ||||||
Section 3.08 |
Mandatory Redemption | 39 | ||||||
Section 3.09 |
Offer to Purchase by Application of Net Cash Proceeds | 39 | ||||||
ARTICLE FOUR COVENANTS |
41 | |||||||
Section 4.01 |
Payment of Notes | 41 | ||||||
Section 4.02 |
Maintenance of Office or Agency | 41 | ||||||
Section 4.03 |
Reports | 42 | ||||||
Section 4.04 |
Notice of Material Events | 46 | ||||||
Section 4.05 |
Existence; Conduct of Business | 47 |
i
Page | ||||||||
Section 4.06 |
Payment of Obligations | 47 | ||||||
Section 4.07 |
Operation and Maintenance of Properties | 47 | ||||||
Section 4.08 |
Insurance | 48 | ||||||
Section 4.09 |
Books and Records; Inspection Rights | 48 | ||||||
Section 4.10 |
Compliance with Laws | 49 | ||||||
Section 4.11 |
Environmental Matters | 49 | ||||||
Section 4.12 |
Further Assurances | 50 | ||||||
Section 4.13 |
Reserve Reports | 50 | ||||||
Section 4.14 |
Title Information | 51 | ||||||
Section 4.15 |
Additional Collateral; Additional Guarantors | 52 | ||||||
Section 4.16 |
ERISA Compliance | 55 | ||||||
Section 4.17 |
Marketing Activities | 55 | ||||||
Section 4.18 |
Deposit Accounts, Securities Accounts and Commodities Accounts | 56 | ||||||
Section 4.19 |
Acquisition of Oil and Gas Properties – Mortgage Coverage | 56 | ||||||
Section 4.20 |
Quarterly Public Earnings Call | 56 | ||||||
Section 4.21 |
Swap Agreements | 56 | ||||||
Section 4.22 |
[Reserved] | 57 | ||||||
Section 4.23 |
Stay, Extension and Usury Laws | 57 | ||||||
Section 4.24 |
Amendments to Debt Documents | 57 | ||||||
Section 4.25 |
Offer to Repurchase Upon Change of Control | 58 | ||||||
Section 4.26 |
No Partial Inducements | 60 | ||||||
Section 4.27 |
Debt | 61 | ||||||
Section 4.28 |
Liens | 62 | ||||||
Section 4.29 |
Dividends, Distributions and Redemptions; Amendments to Certain Debt Documents | 63 | ||||||
Section 4.30 |
Investments, Notes, Advances and Acquisitions | 66 | ||||||
Section 4.31 |
Nature of Business | 67 | ||||||
Section 4.32 |
Limitation on Leases | 67 | ||||||
Section 4.33 |
Proceeds of Notes | 67 | ||||||
Section 4.34 |
ERISA Compliance | 67 | ||||||
Section 4.35 |
Sale or Discount of Receivables | 69 | ||||||
Section 4.36 |
Mergers, Etc. | 69 | ||||||
Section 4.37 |
Sale of Properties | 69 | ||||||
Section 4.38 |
Environmental Matters | 72 | ||||||
Section 4.39 |
Transactions with Affiliates | 72 | ||||||
Section 4.40 |
Subsidiaries | 72 | ||||||
Section 4.41 |
Negative Pledge Agreements; Dividend Restrictions | 73 | ||||||
Section 4.42 |
Gas Imbalances, Take-or-Pay or Other Prepayments or Minimum Volume Contracts | 73 | ||||||
Section 4.43 |
Swap Agreements | 73 | ||||||
Section 4.44 |
Deposit Accounts | 74 | ||||||
Section 4.45 |
Sale and Leaseback | 74 | ||||||
Section 4.46 |
Amendments to Organizational Documents and Fiscal Year | 74 | ||||||
Section 4.47 |
Covenant Regarding Financing Facility | 74 | ||||||
Section 4.48 |
Anti-Layering | 75 |
ii
Page | ||||||||
ARTICLE FIVE [Reserved] |
75 | |||||||
ARTICLE SIX DEFAULTS AND REMEDIES |
75 | |||||||
Section 6.01 | Events of Default | 75 | ||||||
Section 6.02 | Acceleration | 78 | ||||||
Section 6.03 | Other Remedies | 78 | ||||||
Section 6.04 | Waiver of Past Defaults | 79 | ||||||
Section 6.05 | Control by Majority | 79 | ||||||
Section 6.06 | Limitation on Suits | 79 | ||||||
Section 6.07 | Rights of Holders of Notes to Receive Payment | 80 | ||||||
Section 6.08 | Collection Suit by Trustee | 80 | ||||||
Section 6.09 | Trustee is Authorized to File Proofs of Claim | 80 | ||||||
Section 6.10 | Priorities | 81 | ||||||
Section 6.11 | Undertaking for Costs | 81 | ||||||
ARTICLE SEVEN TRUSTEE |
81 | |||||||
Section 7.01 | Duties of Trustee | 81 | ||||||
Section 7.02 | Rights of Trustee | 82 | ||||||
Section 7.03 | Individual Rights of Trustee | 84 | ||||||
Section 7.04 | Trustee’s Disclaimer | 84 | ||||||
Section 7.05 | Notice of Defaults | 84 | ||||||
Section 7.06 | Reports by Trustee to Holders of the Notes | 84 | ||||||
Section 7.07 | Compensation and Indemnity | 85 | ||||||
Section 7.08 | Replacement of Trustee | 86 | ||||||
Section 7.09 | Successor Trustee by Merger, Etc. | 87 | ||||||
Section 7.10 | Eligibility; Disqualification | 87 | ||||||
Section 7.11 | Preferential Collection of Claims Against the Company | 87 | ||||||
ARTICLE EIGHT LEGAL DEFEASANCE AND COVENANT DEFEASANCE |
87 | |||||||
Section 8.01 | Option to Effect Legal Defeasance or Covenant Defeasance | 87 | ||||||
Section 8.02 | Legal Defeasance and Discharge | 87 | ||||||
Section 8.03 | Covenant Defeasance | 88 | ||||||
Section 8.04 | Conditions to Legal or Covenant Defeasance | 89 | ||||||
Section 8.05 | Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions | 90 | ||||||
Section 8.06 | Repayment to the Company | 90 | ||||||
Section 8.07 | Reinstatement | 91 | ||||||
Section 8.08 | Discharge | 91 | ||||||
ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER |
92 | |||||||
Section 9.01 | Without Consent of Holders of Notes | 92 | ||||||
Section 9.02 | With Consent of Holders of Notes | 93 | ||||||
Section 9.03 | Compliance with Trust Indenture Act | 95 |
iii
Page | ||||||||
Section 9.04 | Revocation and Effect of Consents | 95 | ||||||
Section 9.05 | Notation on or Exchange of Notes | 96 | ||||||
Section 9.06 | Trustee to Sign Amendments, Etc. | 96 | ||||||
Section 9.07 | Acts of Holders | 96 | ||||||
ARTICLE TEN GUARANTEES OF NOTES |
97 | |||||||
Section 10.01 | Subsidiary Guarantees | 97 | ||||||
Section 10.02 | Guarantors May Consolidate, etc., on Certain Terms | 98 | ||||||
Section 10.03 | Releases of Subsidiary Guarantee | 99 | ||||||
Section 10.04 | Limitation on Guarantor Liability | 99 | ||||||
Section 10.05 | “Trustee” to Include Paying Agent | 99 | ||||||
ARTICLE ELEVEN MISCELLANEOUS |
100 | |||||||
Section 11.01 | Trust Indenture Act Controls | 100 | ||||||
Section 11.02 | Notices | 100 | ||||||
Section 11.03 | Communication by Holders of Notes with Other Holders of Notes | 101 | ||||||
Section 11.04 | Certificate and Opinion as to Conditions Precedent | 101 | ||||||
Section 11.05 | Statements Required in Certificate or Opinion | 102 | ||||||
Section 11.06 | Rules by Trustee and Agents | 102 | ||||||
Section 11.07 | No Personal Liability of Directors, Officers, Employees and Shareholders | 102 | ||||||
Section 11.08 | Governing Law | 102 | ||||||
Section 11.09 | No Adverse Interpretation of Other Agreements | 103 | ||||||
Section 11.10 | Successors | 103 | ||||||
Section 11.11 | Severability | 103 | ||||||
Section 11.12 | Table of Contents, Headings, Etc | 103 | ||||||
Section 11.13 | Counterparts | 103 | ||||||
Section 11.14 | Benefits of Indenture | 103 | ||||||
Section 11.15 | Language of Notices, Etc | 103 | ||||||
Section 11.16 | Patriot Act | 104 | ||||||
Section 11.17 | Waiver of Jury Trial | 104 | ||||||
Section 11.18 | Submission to Jurisdiction | 104 | ||||||
Section 11.19 | Force Majeure | 104 | ||||||
Section 11.20 | Original Issue Discount Legend | 104 | ||||||
ARTICLE TWELVE COLLATERAL |
105 | |||||||
Section 12.01 | Security Interest | 105 | ||||||
Section 12.02 | Security Documents | 106 | ||||||
Section 12.03 | Release of Collateral | 106 | ||||||
Section 12.04 | Collateral Agent; Intercreditor Agreement | 107 | ||||||
Section 12.05 | Compliance with Trust Indenture Act | 110 |
iv
EXHIBITS
EXHIBIT A Form of Compliance Certificate | Exhibit A | |
APPENDIX AND ANNEX
|
||
APPENDIX | App.-1 | |
EXHIBIT 1 Form of Initial Note | Exhibit 1 to App.-1 | |
ANNEX A Form of Supplemental Indenture | A-1 |
This INDENTURE , dated as of May 15, 2018, is between NORTHERN OIL AND GAS, INC., a Delaware corporation, and WILMINGTON TRUST, NATIONAL ASSOCIATION , a national banking association, as trustee (in such capacity together with its successors in such capacity, the “ Trustee ”) and as collateral agent (in such capacity together with its successors in such capacity, the “ Collateral Agent ”).
WHEREAS, the Company has duly authorized the creation and issue of $344,279,000 aggregate principal amount of 8.50% Senior Secured Second Lien Notes due 2023 (the “ Initial Notes ”) and the PIK Notes (as defined herein); and
WHEREAS, the Company has duly authorized the execution and delivery of this Indenture;
NOW, THEREFORE, the Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions .
“ Account Control Agreement ” means, as to any Deposit Account, Securities Account or Commodities Account of any Note Party, a customary agreement or agreements, in form and substance not adverse to the Holders in any material respect (as determined by the Company and certified to the Trustee in an Officers’ Certificate) and acceptable to the Collateral Agent in its reasonable discretion, among such Note Party owning such Deposit Account, Securities Account or Commodities Account, the Collateral Agent and the financial institution at which such Deposit Account, Securities Account or Commodities Account is located, which agreement establishes the Collateral Agent’s control with respect to such Deposit Account, Securities Account or Commodities Account. For purposes of this definition, the term “control” has the meaning given to such term in the UCC. Any control agreement entered into on the Issue Date by the Company and the Collateral Agent shall be deemed to be in compliance with this definition.
“AFE ” means an authority for expenditure listing the expenses of drilling a well and completing or abandoning the well and received in the ordinary course of business.
“Affiliate ” means, with respect to a specified Person, another Person, that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“ Agent ” means any Registrar or Paying Agent.
“Agent Members ” has the meaning provided in the Appendix.
“ All in Cap ” means an amount not to exceed the sum of (i) the Base Cap, plus (ii) the principal amount of any customary debtor-in-possession financing (which shall not exceed the lesser of (a) $75,000,000 (exclusive of any “roll-up” of any prepetition amounts under the First Lien Credit Agreement or the Credit Facility (other than Excess Priority Lien Obligations (as such term is defined in the Intercreditor Agreement))) and (b) the amount agreed to in the Intercreditor
Agreement as in effect on the date of measurement), plus (iii) any customary protective advances in an amount up to 2.00% of the principal amount outstanding under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility as of such time (without giving effect to any Excess Priority Lien Obligations (as such term is defined in the Intercreditor Agreement) or debtor-in-possession financing) by the lenders under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility in respect of any collateral or for insurance, taxes or maintenance of collateral, plus (iv) any increase in the principal amount of the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility due to interest paid in kind or capitalized (subject, in all respects to the limitations set forth in Section 4.24(a) and Section 4.29(b)(iii)), plus (v) any amounts owing in respect of customary Hedging Obligations (as such term is defined in the Intercreditor Agreement) and Bank Product Obligations (as such term is defined in the Intercreditor Agreement), if any, plus (vi) in the case of Debt constituting Permitted Refinancing Debt of the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility, any interest, fees, premiums, make whole amounts or call protection amounts that become due as a result of such refinancing in an amount so long as, when aggregated with the principal amount of loans outstanding under the First Lien Credit Agreement, if the First Lien Credit Agreement ceases to exist, or the Credit Facility at such time, the aggregate amount shall not exceed the Refinancing Cap.
“ Applicable Law ” except as the context may otherwise require, means all applicable laws, rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or governmental or congressional agency or authority and rules, regulations, orders, licenses and permits of any United States federal, state, municipal, regional, or other governmental body, instrumentality, agency or authority.
“ Applicable Procedures ” of a Depository means, with respect to any matter at any time, the policies and procedures of such Depository, if any, that are applicable to such matter at such time.
“ Approved Counterparty ” means (a) BP Energy Company, (b) Macquarie Bank Limited, (c) Cargill Incorporated, (d) Royal Bank of Canada, (e) Fifth Third Bank, (f) Capital One Bank (USA), N.A., (g) any other Person with a A- or higher rating from Moody’s or A3 or higher rating from S&P (or such counterparty’s obligations under any Swap Agreement have been guaranteed by an entity with such ratings) at the time that such Note Party enters into a Swap Agreement, or (h) any Person acceptable to the Majority Holders.
“ Approved Petroleum Engineers ” means (a) Ryder Scott Company Petroleum Consultants, L.P., (b) Netherland, Sewell & Associates, Inc., (c) Cawley, Gillespie & Associates, Inc. and, in each case, any and all successors thereto, and (d) any Person acceptable to the Majority Holders.
“ Bankruptcy Law ” means Title 11, United States Code, as it may be amended from time to time, or any similar federal or state law for the relief of debtors.
“ Base Cap ” means $400,000,000 as may be reduced from time to time in accordance with Section 4.27(l).
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“ Beneficial Owner ” has the meaning assigned such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “ Beneficially Owns ” and “ Beneficially Owned ” have correlative meanings.
“Board ” means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.
“ Board of Directors ” means, with respect to any Person, the board of directors or other governing body of such Person or any committee thereof duly authorized to act on behalf of such board of directors or such other governing body.
“ Board Resolution ” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the applicable Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“ Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or in New York, New York or another place of payment are authorized or required by law to close.
“ Capital Expenditures ” means, in respect of any Person, for any period, the aggregate (determined without duplication) of all exploration and development expenditures and costs that should be capitalized in accordance with GAAP and any other expenditures that are capitalized on the balance sheet of such Person in accordance with GAAP.
“ Capital Leases ” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder, provided that all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board (“FASB”) on February 25, 2016 of an Accounting Standards Update (the “ ASU ”) shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of this Indenture (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial statements to be delivered pursuant to Section 4.03(a) and 4.03(b).
“ Cash Equivalents ” means (a) direct obligations of the United States or any agency thereof, or obligations guaranteed or insured by the United States or any agency thereof, in each case maturing within one (1) year from the date of acquisition thereof; (b) commercial paper maturing within one (1) year from the date of acquisition thereof rated in the highest grade by S&P or Moody’s; (c) deposit accounts or deposits maturing within one (1) year from the date of acquisition thereof with, including certificates of deposit issued by any bank or trust company which is
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organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the date of such bank or trust company’s most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s, respectively; (d) repurchase obligations with a term of not more than thirty (30) days from the date of acquisition thereof for underlying securities of the type described in the foregoing clauses (a) through (c); and (e) deposits in money market funds investing exclusively in Investments described in the foregoing clauses (a) through (d).
“ Cash Interest ” means any interest on the Notes payable in cash.
“ Cash Interest Rate ” has the meaning provided in Section 1 of the form of Note included as Exhibit 1 to the Appendix.
“ Casualty Event ” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Company or any of its Subsidiaries having a fair market value in excess of $250,000 in the aggregate for any calendar year.
“ Change of Control ” means the occurrence of the following events: (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests so that such Person or group owns 45% or more of the Voting Stock of the Company, (b) the occupation of a majority of the seats (other than vacant seats) on the Board of Directors of the Company by Persons who were neither (i) nominated, appointed or approved for consideration by shareholders for election by the Board of Directors of the Company or (ii) appointed by directors so nominated, appointed or approved or (c) any “change in control” under any documents governing any Material Indebtedness.
“ Clearstream ” means Clearstream Banking, société anonyme, or any successor securities clearing agency.
“ Collateral ” means all assets or property, now owned or hereafter acquired by the Company and the Guarantors (other than Excluded Assets), to the extent such assets or property are mortgaged, pledged or assigned or purported to be mortgaged, pledged or assigned, or are required to be mortgaged, pledged or assigned under this Indenture or the Security Documents to the Collateral Agent, together with the proceeds thereof.
“ Collateral Agent ” has the meaning set forth in the Preamble to this Indenture.
“ Commodities Account ” has the meaning assigned to such term in the UCC.
“ Company ” means Northern Oil and Gas, Inc., a Delaware corporation, and any and all successors thereto.
“ Compliance Certificate Due Date ” means the date a Compliance Certificate is due pursuant to Section 4.03(c).
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“ Consolidated Net Income ” means with respect to the Company and the Consolidated Subsidiaries, for any period, the aggregate of the net income (or loss) of the Company and the Consolidated Subsidiaries after allowances for Taxes for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein) the following: (a) the net income of any Person in which the Company or any Consolidated Subsidiary has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of the Company and its Consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Company or to a Consolidated Subsidiary, as the case may be; (b) the net income (but not loss) during such period of any Consolidated Subsidiary (other than the Guarantors) to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Subsidiary except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Company or to a Consolidated Subsidiary, as the case may be; or is otherwise restricted or prohibited, in each case determined in accordance with GAAP; (c) the net income (or deficit) of any Person accrued prior to the date it becomes a Consolidated Subsidiary or is merged into or consolidated with the Company or any of its Consolidated Subsidiaries; (d) the net income of any Consolidated Subsidiary that is not a Guarantor, except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Company or to a Consolidated Subsidiary, as the case may be; (e) any extraordinary gains or losses during such period; (f) non-cash gains, losses or adjustments under FASB Accounting Standards Codification Topic 815 as a result of changes in the fair market value of derivatives; (g) any gains or losses attributable to writeups or writedowns of assets; and (h) any cancellation of debt income.
“ Consolidated Subsidiary ” means each Subsidiary of the Company (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of the Company in accordance with GAAP.
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. For the purposes of this definition, and without limiting the generality of the foregoing, any Person that owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of the directors or other governing body of a Person (other than as a limited partner of such other Person) will be deemed to “ control ” such other Person. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Corporate Trust Office of the Trustee ” means the office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 50 South Sixth Street, Suite 1290, Minneapolis, MN 55402, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Company).
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“ Custodian ” means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.
“ De Minimis Acquisition ” means any acquisition (whether in an individual transaction or a series of related transactions) by the Company or its Subsidiaries of Property if the consideration therefor is less than $2,500,000.
“ Debt ” means, for any Person, each of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments including, without limitation, all interest, premiums and call protection (if any), yield maintenance amounts (if any), make-whole amounts (if any), fees, indemnities, reimbursement obligations and expenses payable in connection therewith; (b) all reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all (i) accounts payable and (ii) accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services, in each case (other than deferred purchase price obligations in connection with the acquisition of Oil and Gas Properties), which are greater than ninety (90) days past the date of invoice other than those which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) all obligations of such Person under Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Debt is assumed by such Person; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of such Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Debt or Property of others; (i) all obligations of such Person to deliver commodities, goods or services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments, other than gas balancing arrangements, take or pay arrangements for the gathering, processing or transportation of production, or other similar arrangements, in each case in the ordinary course of business; (j) obligations of such Person to pay for goods or services even if such goods or services are not actually received or utilized by such Person; (k) any Debt of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock of such Person; and (m) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP.
“ Dedicated Cash Receipts ” means all cash received by or on behalf of the Company or any Guarantor with respect to the following: (a) any amounts payable under or in connection with any Oil and Gas Properties; (b) cash representing operating revenue earned or to be earned by the Company or any Guarantor; (c) proceeds from the First Lien Credit Agreement, and if the First Lien Credit Agreement ceases to exist, the Credit Facility or the Notes; and (d) any other cash
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received by the Company or any Guarantor from whatever source (including amounts received in respect of the Liquidation of any Swap Agreement) other than (i) liability insurance proceeds required to be paid directly to third parties, (ii) payments made to the Company or any Guarantor for the account of third parties under or in connection with joint operating agreements or similar joint development agreements and (iii) amounts described in the definition of “ Excluded Deposit Accounts ” which are deposited in Excluded Deposit Accounts.
“ Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“ Deposit Account ” has the meaning assigned to such term in the UCC.
“ Depository ” has the meaning provided in the Appendix.
“ Disqualified Capital Stock ” means any Equity Interest that, by its terms (or by the terms of any security into which, mandatorily or at the option of the holder, it is convertible or for which it is exchangeable) or upon the happening of any event, (a) matures or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or (b) is convertible or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, in either case, on or prior to the date that is one (1) year after the earlier of (i) the Stated Maturity of the Notes and (ii) the date on which there are no Notes or other obligations hereunder outstanding.
“ dollars ” or “ $ ” refers to lawful money of the United States of America.
“ DTC ” means The Depository Trust Company, its nominees, successors and assigns.
“ EBITDAX ” means, as of any date of determination, the sum of Consolidated Net Income for the most recently ended four fiscal quarters (including any such quarter ending on such date of determination) plus the following expenses or charges to the extent deducted from Consolidated Net Income in such four fiscal quarter period: (a) Interest Expense, (b) income Taxes, (c) depreciation, (d) depletion, (e) amortization, (f) one-time transaction fees and expenses paid or accrued in connection with debt financings, capital raising transactions, acquisitions and dispositions in an aggregate amount for this clause (f) not to exceed $5,000,000 in any four fiscal quarter period, (g) exploration expenses, (h) other than for purposes of calculating EBITDAX for purposes of the definition of PIK Interest Suspension Certificate and Section 4.29(b), pro forma “run rate” cost savings, operating expense reductions and synergies related to mergers and other business combinations, acquisitions, divestitures, dispositions, discontinuance of activities or operations and other specified transactions, restructurings, cost savings initiatives, operational changes and other initiatives or specified transactions that are reasonably identifiable and factually supportable and projected by the Company in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Company) within 12 months thereafter (including any actions taken on or prior to the Issue Date) in an amount not to exceed 10% of EBITDAX for such four fiscal quarter period calculated before giving effect to this clause (h), but, in any case, only to the extent
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the First Lien Credit Agreement or the Credit Facility are then in effect, in an amount not in excess of the pro forma adjustments permitted thereunder, and (i) other non-cash charges (including non-cash expenses associated with the granting of stock-based compensation to employees and directors of the Company or its Subsidiaries, non-recurring non-cash losses (or minus any gains), non-cash mark to market losses (or minus any gains), and non-cash impairments or accounting adjustments with respect to any disposition of assets permitted hereby), minus all non-cash income added to Consolidated Net Income minus all gains (whether cash or non-cash) from asset dispositions (other than Hydrocarbons produced in the ordinary course of business) and Liquidations of Swap Agreements (in each case to the extent included in Consolidated Net Income during the applicable period); provided that that if the Company or any Consolidated Subsidiary shall make a Material Acquisition or Material Divestiture during such period, then Consolidated Net Income shall be calculated after giving pro forma effect to such Material Acquisition or Material Divestiture, as if such Material Acquisition or Material Divestiture had occurred on the first day of such period to the same extent as under the First Lien Credit Agreement and, if such First Lien Credit Agreement ceases to exist, the Credit Facility (but excluding, for the avoidance of doubt and in all cases, any adjustments on account of pro forma cost savings, synergies or similar items, except as provided in clause (h) above).
“ Environmental Laws ” means any and all Governmental Requirements pertaining in any way to health, safety, the environment or the preservation or reclamation of natural resources, in effect and as applicable in any and all jurisdictions in which the Company or any Subsidiary is conducting or at any time has conducted business, or where any Property of the Company or any Subsidiary is located, including the Oil Pollution Act of 1990, as amended (“ OPA ”), the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980, as amended (“ CERCLA ”), the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976, as amended (“ RCRA ”), the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements. The term “ Oil ” shall have the meaning specified in OPA, the terms “ Hazardous Substance ” and “ Release ” have the meanings specified in CERCLA, the terms “ Solid Waste ” and “ Disposal ” (or “ Disposed ”) have the meanings specified in RCRA and the term “ Oil and Gas Waste ” shall mean those waste that are excluded from the definition of “ hazardous waste ” pursuant to 40 C.F.R. Section 261.4(b)(5) (“ Section 261.4(b)(5) ”); provided , however , that (a) in the event either OPA, CERCLA, RCRA or Section 261.4(b)(5) is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and to the extent the Applicable Laws of the state or other jurisdiction in which any Property of the Company or any Subsidiary is located establish a meaning for “ Oil ,” “ Hazardous Substance ,” “ Release ,” “ Solid Waste ,” “ Disposal ” or “ Oil and Gas Waste ” which is broader than that specified in either OPA, CERCLA, RCRA or Section 261.4(b)(5), such broader meaning shall apply.
“ Environmental Permit ” means any permit, registration, license, notice, approval, consent, exemption, variance, or other authorization required under or issued pursuant to Environmental Laws.
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“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute.
“ ERISA Affiliate ” means each trade or business (whether or not incorporated) which together with the Company or a Subsidiary would be deemed to be a “ single employer ” within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
“ ERISA Event ” means (a) a “ Reportable Event ” described in section 4043 of ERISA and the regulations issued thereunder (other than an event for which the 30-day notice period is waived), (b) the withdrawal of the Company, a Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was a “ substantial employer ” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan in a distress termination under Section 4041(c) of ERISA or the treatment of a Plan amendment as a termination under section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability pursuant to section 4202 of ERISA or (f) any other event or condition which might constitute grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“ Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear System, or any successor securities clearing agency.
“ Excepted Liens ” means: (a) Liens for Taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens, in each case arising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens which arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, royalty agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are
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usual and customary in the oil and gas business and are for claims which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held by the Company or any Subsidiary or materially impair the value of such Property subject thereto; (e) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution; provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by the Company or any of its Subsidiaries to provide collateral to the depository institution for any other purpose; (f) easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the Company or any Subsidiary for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and Liens related to surface leases and surface operations, that do not secure any monetary obligations and which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Company or any Subsidiary or materially impair the value of such Property subject thereto; (g) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; and (h) judgment and attachment Liens not giving rise to an Event of Default; provided that any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and no action to enforce such Lien has been commenced; provided , further that (i) Liens described in clauses (a) through (e) shall remain “ Excepted Liens ” only for so long as no action to enforce such Lien has been commenced, (ii) no intention to subordinate the second priority Lien granted in favor of the Collateral Agent and the Holders is to be hereby implied or expressed by the permitted existence of such Excepted Liens and (iii) the term “Excepted Liens” shall not include any Lien securing Debt for borrowed money.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Exchange Agreement ” has the meaning provided in the Appendix.
“ Excluded Assets ” shall have the meaning ascribed to such term in the Security Agreement.
“ Excluded Deposit Account ” means, as of any date of determination, (a) any Deposit Account, the balance of which consists exclusively of (i) withheld income Taxes and federal, state or local employment Taxes required to be paid to the Internal Revenue Service or state or local government agencies with respect to employees of the Company or any Subsidiary and (ii) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3 102 on behalf of or for the benefit of employees of the Company or any Subsidiary, (b) all segregated Deposit Accounts, constituting (and the balance of which consists solely of funds set aside in connection with) payroll accounts, trust accounts, and accounts dedicated to the payment
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of accrued employee benefits, medical, dental and employee benefits claims to employees of the Company or any Subsidiary, (c) any “zero balance account” or other account that automatically and immediately transfers any amounts deposited in such account to an account subject to an Account Control Agreement and (d) any Deposit Accounts maintained solely for the benefit of issuers of letters of credit containing cash collateral constituting Liens permitted pursuant to Section 4.28(e); provided that the aggregate amount deposited in all accounts described in clauses (a) and (b) shall not exceed $500,000 at any time.
“ Existing Notes ” means the 8.000% Senior Notes due 2020 issued by the Company outstanding on the Issue Date immediately after giving effect to the issuance of the Notes and the transactions contemplated under the Exchange Agreement.
“ Financial Officer ” means, for any Person, the chief financial officer, principal accounting officer, treasurer, manager, or controller of such Person. Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of the Company.
“ First Lien Agent ” means TPG Specialty Lending, Inc., until a successor replaces it in accordance with the applicable provisions of the First Lien Credit Agreement, or if the First Lien Credit Agreement ceases to exist, the collateral agent, or other representative of lenders or holders of the Credit Facility party to the Credit Facility and the Intercreditor Agreement (including by joinder).
“ First Lien Credit Agreement ” means the Term Loan Credit Agreement, dated as of November 1, 2017, among the Company, as borrower, the First Lien Agent, as administrative agent, and the other lenders party thereto, as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced from time to time, in accordance with its terms and in a manner not prohibited by or in violation of the terms of this Indenture or the Intercreditor Agreement.
“ First Lien Credit Documents ” means the First Lien Credit Agreement, the First Lien Security Documents and all promissory notes and guarantees executed in connection therewith, in each case, as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced from time to time, in accordance with its terms and in a manner not prohibited by or in violation of the terms of this Indenture or the Intercreditor Agreement.
“ First Lien Financial Covenants ” means the “Financial Covenants” under Sections 9.01(b) and (c) of the First Lien Credit Agreement as of the Issue Date (and any substantially similar financial maintenance covenants under any Credit Facility).
“ First Lien Security Documents ” means any security agreements, pledge agreements, collateral assignments, mortgages, collateral agency agreements, intercreditor agreements, deeds of trust or other grants or transfers for security executed and delivered by the Company, a Guarantor or any other obligor under the First Lien Credit Agreement or any First Lien Credit Document creating (or purporting to create) a Lien upon Collateral in favor of the First Lien Agent for the benefit of the lenders under the First Lien Credit Agreement, or if the First Lien Credit Agreement ceases to exist, the Credit Facility, in each case, as amended, supplemented, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms, in compliance with this Indenture and the Intercreditor Agreement.
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“ Flood Insurance Regulations ” means (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (c) 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, and (d) the Flood Insurance Reform Act of 2004 and any regulations promulgated thereunder.
“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Trustee or any Holder hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the financial statements contained in the Company’s most recently dated Form 10-K filed with the SEC with respect to the fiscal year ending December 31, 2017, except for changes in which the Company’s independent certified public accountants concur and which are disclosed to the Trustee and Holders on the next date on which financial statements are required to be delivered to the Trustee and Holders pursuant to Section 4.03(a); provided that, unless the Company and the Majority Holders shall otherwise agree in writing, no such change shall modify or affect the manner in which compliance with the covenants contained herein is computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods; provided further , in the event of an accounting change requiring all leases to be capitalized, only those leases (assuming for purposes hereof that such leases were in existence on the Issue Date) that would constitute capital leases in conformity with GAAP on the Issue Date shall be considered capital leases and all calculations and deliverables under this Indenture or any other Note Document shall be made or delivered, as applicable, in accordance therewith.
“ Global Note ” has the meaning provided in the Appendix.
“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government over the Company, any Subsidiary, any of their Properties, or any Holder.
“ Governmental Requirement ” means any applicable law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.
“ Government Securities ” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
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“ 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 by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Debt or entered into for purposes of assuring in any other manner the obligee of such Debt of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part). When used as a verb, “guarantee” has a correlative meaning.
“ Guarantors ” means each Subsidiary of the Company that executes a supplement to this Indenture in accordance with Section 4.15 hereof and the respective successors and assigns of such Subsidiaries in each case until such time as any such Subsidiary shall be released and relieved of its obligations pursuant to Section 10.03 hereof.
“ Hazardous Material ” means any substance regulated or as to which liability might arise under any Environmental Law and including without limitation (a) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning of “ hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant, ” or words of similar meaning or import found in any Environmental Law; (b) petroleum hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (c) radioactive materials, explosives, asbestos or asbestos containing materials, polychlorinated biphenyls, radon, infectious or medical wastes.
“ Holder ” or “ Noteholder ” means a Person in whose name a Note is registered.
“ Hydrocarbon Interests ” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, fee interests, surface interests, mineral fee interests, overriding royalty interests and other royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature. Unless otherwise indicated herein, each reference to the term “ Hydrocarbon Interests ” shall mean Hydrocarbon Interests of the Company and/or the Subsidiaries, as the context requires.
“ Hydrocarbons ” means 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 which may be produced and saved from or attributable to the Oil and Gas Properties of the Note Parties, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests of the Note Parties or other properties constituting Oil and Gas Properties of the Note Parties.
“ Indenture ” means this Indenture, as amended or supplemented from time to time.
“ Initial Notes ” has the meaning provided in the recitals hereto.
“ Initial Reserve Report ” means the report prepared by or under the supervision of the chief engineer of the Company, dated as of December 31, 2017, evaluating the Oil and Gas Properties constituting Proved Reserves of the Company and its Subsidiaries.
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“ Intercreditor Agreement ” means the Issue Date Intercreditor Agreement or, if requested by the Company, any other intercreditor agreement acceptable to the Collateral Agent and the Majority Holders, in each case, as the same may be amended, supplemented, or otherwise modified in accordance with the terms of this Indenture and the terms thereof.
“ Interest Expense ” means, for any period, the sum (determined without duplication) of the aggregate gross interest expense of the Company and the Subsidiaries for such period, including to the extent included in interest expense under GAAP: (a) amortization of debt discount, (b) capitalized interest, (c) the portion of any payments or accruals under Capital Leases allocable to interest expense, plus the portion of any payments or accruals under Synthetic Leases allocable to interest expense, and (d) all cash interest paid in connection with Debt permitted hereunder to the extent that such payments are not accounted for as interest expense pursuant to FASB Accounting Standards Codification Subtopic 470-60 or another applicable codification, in each instance whether or not the same constitutes interest expense under GAAP.
“ Interest Payment Date ” means January 1, April 1, July 1 and October 1 of each year until the Stated Maturity.
“ Interest Period ” means the period commencing on and including an Interest Payment Date and ending on and including the day immediately preceding the next succeeding Interest Payment Date, with the exception that the first interest period shall commence on and include the Issue Date.
“ Investments ” means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person, the contribution of capital to any other Person or any agreement to make any such acquisition (including, without limitation, any “ short sale ” or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale) or capital contribution; (b) the making of any deposit with, or advance, loan or capital contribution to, the assumption of Debt of, the purchase or other acquisition of any other Debt of or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding ninety (90) days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions) of Property of another Person that constitutes a business unit or (d) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.
“ Issue Date ” means May 15, 2018.
“ Lien ” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security
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purposes or (b) production payments and the like payable out of Oil and Gas Properties. The term “ Lien ” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations. For the purposes of this Indenture, the Company and its Subsidiaries shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.
“ Liquidate ” means, with respect to any Swap Agreement, the sale, assignment, novation (other than a novation of Swap Agreements between the Company and/or Guarantors), unwind or termination of all or any part of such Swap Agreement or the creation of an offsetting position against all or any part of such Swap Agreement. The terms “ Liquidated ” and “ Liquidation ” have correlative meanings thereto.
“ Majority Holders ” means the Holders of more than 50% of the aggregate principal amount of outstanding Notes at such time, subject to Section 2.09.
“ Make Whole Premium ” means, as of any date of determination for any payment, Redemption, repurchase, refinancing, substitution or replacement with respect to the Notes (it being agreed that, in the case of an acceleration of any Notes, including in connection with a bankruptcy, insolvency, reorganization or similar proceeding, the principal amount of the Notes accelerated shall be deemed to have been paid on the date of acceleration solely for purposes of calculating the Make Whole Premium) in each case paid or deemed paid prior to May 15, 2020 an amount equal to the difference (which shall not be less than zero) of (A) the aggregate amount of interest (including, without limitation, interest payable in cash, in kind or deferred and assuming for such purposes that PIK Interest would have been due and payable during the entire period of measurement only if (i) PIK Interest is payable on such date of determination and a PIK Interest Suspension Certificate has not been delivered to the Trustee before the Compliance Certificate Due Date immediately preceding such date of determination or (ii) PIK Interest is not payable on such date of determination and a PIK Interest Suspension Certificate has not been delivered to the Trustee before the Compliance Certificate Due Date immediately preceding such date of determination) or (iii) in the event of an acceleration) which would have otherwise been payable on the amount of the principal repayment of the Notes from the date of repayment (or deemed repayment in the case of an acceleration of the Notes) or reduction until May 15, 2020, minus (B) the aggregate amount of interest Holders would earn if the repaid (or deemed repaid in the case of an acceleration of the Notes) or reduced principal amount were reinvested for the period from the date of repayment (or deemed repayment in the case of an acceleration of the Notes) or reduction until May 15, 2020 at the Treasury Rate. To the extent the Notes become due and payable as a result of an Event of Default or the acceleration of the Notes, including in connection with a bankruptcy, insolvency, reorganization or similar proceeding or to the extent the Notes are to be redeemed, repurchased, refinanced, substituted or replaced upon the occurrence and during the continuation of an Event of Default or such other event as provided in Section 2.12 or Section 6.01(d), the rate of interest to be used in determining the Make Whole Premium shall be the Default Rate. The Company shall calculate or cause the calculation of the Make Whole Premium, and the Trustee shall have no duty to verify the Company’s calculations thereof.
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“ Manufactured (Mobile) Home ” has the meaning assigned to such term in the applicable Flood Insurance Regulations.
“ Material Acquisition ” means any acquisition (whether in an individual transaction or a series of related transactions) by the Company or its Subsidiaries of Property (other than any De Minimis Acquisition except for purposes of Section 4.15(d) and Section 4.19 ; provided that, in the event the First Lien Agent (or if the First Lien Credit Agreement ceases to exist, the agent or requisite lenders under the Credit Facility) grants an extension, waiver, amendment, or consent with respect to the collateral requirements applicable under the Credit Agreement or Credit Facility, as applicable, in respect of any De Minimis Acquisition, such extension, waiver, amendment or consent shall also apply to an equal extent with respect to the collateral requirements under Section 4.15(d) or Section 4.19 with respect to such De Minimis Acquisition) if the consideration therefore exceeds (a) $5,000,000 for any individual transaction or series of related transactions or (b) $20,000,000 when aggregated with the consideration paid in connection with all other acquisitions of Property during the trailing twelve (12) month period through and including the month in which such acquisition occurs.
“ Material Adverse Effect ” means a material adverse change in, or material adverse effect on (a) the business, operations, Property, liabilities (actual or contingent) or financial condition of the Company and the Subsidiaries taken as a whole, (b) the ability of the Company, any Subsidiary or any Guarantor to perform any of its obligations under any Note Document to which it is a party, (c) the validity or enforceability of any Note Document or (d) the rights and remedies of or benefits available to the Trustee, the Collateral Agent or any Holder under any Note Document.
“ Material Divestiture ” means any sale, assignment, farm-out, conveyance or other transfer of Oil and Gas Properties if the consideration therefore, when aggregated with the consideration received in connection with all other sales, assignments, farm-outs, conveyances or other transfers of Oil and Gas Properties during the fiscal quarter in which such transaction occurs, exceeds $5,000,000.
“ Material Indebtedness ” means any Debt (other than the Notes), or net obligations in respect of one or more Swap Agreements, of any one or more of the Company and its Subsidiaries, in either case in principal amount exceeding, on any date of determination, $5,000,000. For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Company or any Subsidiary in respect of any Swap Agreement at any time shall be the Swap Termination Value determined under the circumstances and in accordance with the provision of clause (a) of such term “ Swap Termination Value ”.
“ Measurement Fiscal Quarter ” means a fiscal quarter ending on June 30 or December 31 of each year until the Stated Maturity of the Notes (beginning with the fiscal quarter ending June 30, 2018).
“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized rating agency.
“ Mortgaged Property ” means any Property owned by the Company or any Guarantor which is subject to the Liens existing and to exist under the terms of the Security Documents.
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“ Multiemployer Plan ” means any employee pension plan as defined in Section 3(2) of ERISA covered by Title IV of ERISA that is a multiemployer plan as defined in section 3(37) or 4001 (a)(3) of ERISA.
“ Net Cash Proceeds ” means:
(1) with respect to any issuance or sale of Equity Interest or the sale or incurrence of any Debt, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, investment banking fees, listing fees, discounts or commissions and brokerage, consultant and other fees, expenses and charges actually incurred in connection with such issuance or sale and net of Taxes paid or payable as a result of such issuance or sale; and
(2) with respect to any Transfer of assets or Liquidation of any Swap Agreement, the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of such Transfer or Liquidation (including any cash received upon the sale or other disposition of any non-cash consideration received in any Transfer or Liquidation), net of, without duplication:
(a) the direct costs relating to such Transfer or Liquidation, including legal, title, engineering, environmental, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof;
(b) Taxes paid or reasonably estimated to be payable as a result thereof;
(c) amounts required to be applied to the repayment of Debt (other than under this Indenture and the First Lien Credit Agreement, and once the First Lien Credit Agreement ceases to exist, the Credit Facility) secured by a Lien on the asset or assets that were the subject of such Transfer; and
(d) any reserve established in accordance with GAAP against liabilities associated with such Transfer or Liquidation or any amount placed in escrow for adjustment in respect of the purchase price of such Transfer or Liquidation, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Cash Proceeds shall be increased by the amount of the reserve so reversed or the amount returned to the Company or its Subsidiaries from such escrow arrangement, as the case may be.
“ Note Documents ” means this Indenture (including any guarantee by any Guarantor), the Notes, the Intercreditor Agreement, the Security Documents and all other agreements, instruments, documents and certificates now or hereafter executed and delivered by the Company or any Guarantor to, or in favor of, the Holders, the Trustee or the Collateral Agent in connection with this Indenture or the transactions contemplated hereby.
“ Notes ” means the Initial Notes (including an increase in principal of a Global Note as the result of a PIK Note Payment) and any PIK Notes authenticated and delivered under this Indenture. The Initial Notes and any PIK Notes (or any increase in the principal amount of a Global Note) subsequently issued shall be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, all references to the Notes shall include the Initial Notes (and any increase in the principal amount of a Global Note as a result of a PIK Note Payment) and any PIK Notes.
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“ Note Parties ” means, collectively, the Company and the Guarantors (if any), each of which is individually referred to as “ Note Party ”.
“ Notes Custodian ” has the meaning provided in the Appendix.
“ NYMEX ” means the New York Mercantile Exchange (or its successor).
“ Officer ” means, with respect to any Person, the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice President of such Person.
“ Officers’ Certificate ” means a certificate signed on behalf of the Company by two of its Officers, one of whom must be the principal executive officer, the principal financial officer or the principal accounting officer of the Company, that meets the requirements of Section 11.05 hereof.
“ Oil and Gas Properties ” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, pipelines, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. Unless otherwise indicated herein, each reference to the term “ Oil and Gas Properties ” shall mean Oil and Gas Properties of the Company and/or the Subsidiaries, as the context requires.
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“ Operating Cash Flow ” means the excess, if any, of (a) all Operating Revenues as measured from the Issue Date until the date of determination over (b) the sum of (i) all Operating Expenses as measured from the Issue Date until the date of determination and (ii) all amounts of “Operating Revenues” applied under Section 4.29(b)(i) prior to the date of determination.
“ Operating Expenses ” means the sum of (i) operating expenses of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, including operation and maintenance expenses and property and other taxes, but excluding depreciation and amortization, regulatory asset amortization and other non-cash expenses as measured from the Issue Date until the date of determination plus (ii) Capital Expenditures as measured from the Issue Date until the date of determination.
“ Operating Revenues ” means, for any period, the cash operating revenues of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
“ Opinion of Counsel ” means a written opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 11.05 hereof. The counsel may be an employee of or counsel to the Company or any Subsidiary of the Company.
“ Organizational Documents ” means, with respect to any Person, (a) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such Person, (b) in the case of any limited liability company, the certificate of formation and limited liability company agreement (or similar documents) of such Person, (c) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such Person, (d) in the case of any general partnership, the partnership agreement (or similar document) of such Person and (e) in any other case, the functional equivalent of the foregoing.
“ PDP Coverage Ratio ” means, as of any date of determination, the ratio of (a) the sum of (i) Total PDP PV-10 as of such date plus (ii) the aggregate amount of all unrestricted cash and unrestricted Cash Equivalents of the Company and its Subsidiaries, in each case, in accounts subject to an Account Control Agreement on such date to (b) the amount of Senior Secured Debt as of such date.
“ Permitted Acquisition ” means any acquisition after the Issue Date by the Company or any Guarantor of upstream Oil and Gas Properties if each such acquisition meets all of the following requirements:
(1) no less than five (5) Business Days (or such shorter time as the First Lien Agent may agree in its discretion) prior to the proposed closing date of any Material Acquisition, the Company shall have delivered a written notice and description of such Material Acquisition to the Trustee (and, if requested, to any Holder requesting such notice), which notice shall include the proposed closing date of such Material Acquisition, together with all material agreements, documents and instruments in respect of such acquisition, including, without limitation, the purchase, sale or transfer agreements therefor, pro forma financial information necessary to determine the Company’s and its Subsidiaries’ compliance with the terms of this Indenture after giving effect to such Material Acquisition, and all Security Documents required by this Indenture;
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(2) each applicable Note Party shall have complied with the requirements of Section 4.15(b);
(3) both before and after giving effect to any Material Acquisition, no Default or Event of Default shall have occurred and be continuing;
(4) both before and after giving effect to any Material Acquisition (and any incurrence of Debt in connection therewith), the Company is in pro forma compliance with the First Lien Financial Covenants to the extent then in effect under the First Lien Credit Agreement or the Credit Facility and the PDP Coverage Ratio is equal to or greater than 0.95 to 1.00; and
(5) both before and after giving effect to any Material Acquisition, the Note Parties shall be in compliance with Section 4.31.
“ Permitted Junior Lien Debt ” means Debt secured by a Lien junior in priority to the Liens securing the Secured Obligations and satisfies the following conditions: (a) such Debt does not have an interest rate that would cause any non-compliance with Section 4.47; (b) such Debt (or the documents governing such Debt) shall not contain (i) any individual financial maintenance covenant, (ii) an event of default that is more restrictive or onerous with respect to the Company and the Subsidiaries than any event of default in this Indenture, unless this Indenture is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) to include such applicable and more restrictive or onerous events of default, (iii) any covenants (other than financial maintenance covenants, which are addressed in clause (i) above) that, taken as a whole, are more onerous or restrictive with respect to the Company and the Subsidiaries than the covenants in this Indenture, unless this Indenture is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) to include such applicable and more restrictive or onerous covenants, (iv) restrictions on the ability of the Company or any of its Subsidiaries to guarantee the Secured Obligations or to pledge assets as collateral security for the Secured Obligations, or (v) any prohibition on the prior repayment of any Secured Obligations; (c) the Liens securing such Debt are subordinated to the Liens securing the Secured Obligations and such Liens and the terms of such Debt are subject to an Intercreditor Agreement and the security documents creating junior liens securing such Debt shall be in the form required by the Intercreditor Agreement (or if requested by the Company, such other form reasonably acceptable to the Collateral Agent and Majority Holders); (d) at the time of issuing or incurring such Debt (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) (i) no Default has occurred and is then continuing, (ii) no Default would result from the incurrence of such Debt after giving effect to the incurrence of such Debt, and (iii) after giving effect to the issuance or incurrence (or otherwise becoming outstanding) thereof, the Company is in pro forma compliance with the First Lien Financial Covenants to the extent then in effect under the First Lien Credit Agreement or the Credit Facility; (e) the terms of such Debt (or the documents governing such Debt) do not provide for a maturity date or any scheduled principal repayment, mandatory principal redemption or sinking fund obligation in each case prior to the 180 th day after the Stated Maturity of the Notes (other than customary offers to purchase upon a change of control, asset sale, or casualty or condemnation event (so long as any such mandatory prepayment or offer to purchase in respect of any asset sale,
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casualty or condemnation event is made subject to the applicable prepayment provisions set forth in this Indenture) and customary acceleration rights after an event of default); and (f) substantially contemporaneously with the issuance or incurrence (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) of such Debt, the call protection, prepayment premium and yield maintenance provisions contained in this Indenture and any related provisions of this Indenture are validly amended to the extent necessary so that the time periods and percentages contained in the call protection, prepayment premium and yield maintenance provisions applicable to the Notes are no less favorable (from the perspective of the Holders) than the more favorable (from the perspective of the Holders) of the time periods and percentages for the call protection, prepayment premium and yield maintenance provisions of such Debt.
“ Permitted Refinancing Debt ” means Debt (for purposes of this definition, “ new Debt ”) incurred in exchange for, or proceeds of which are used to substantially contemporaneously refinance, all of any other Debt (the “ Refinanced Debt ”); provided that (a) such new Debt is in an aggregate principal amount not in excess of the sum of (i) the aggregate principal amount then outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged or acquired for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount) and (ii) an amount necessary to pay any accrued and unpaid interest thereon and any fees and expenses, including premiums, related to such exchange or refinancing (but, in the case of Permitted Refinancing Debt in respect of the First Lien Credit Agreement or the Credit Facility, subject to the All in Cap in all respects); (b) such new Debt (other than in respect of Permitted Refinancing Debt (other than to the extent constituting Permitted Junior Lien Debt or unsecured Debt) in respect of the First Lien Credit Agreement, or if the First Lien Credit Agreement should cease to exist, the Credit Facility, subject to the All in Cap in all respects) has (i) a stated maturity no earlier than the later of (A) the stated maturity of the Refinanced Debt and (B) the date this is 180 days following the Stated Maturity of the Notes and (ii) an average life no shorter than the average life of the Refinanced Debt; (c) other than in respect of Permitted Refinancing Debt of the First Lien Credit Agreement or the Credit Facility (other than to the extent constituting Permitted Junior Lien Debt or unsecured Debt), such new Debt does not contain (i) any individual financial maintenance covenant or event of default that, in the case of any individual event of default, is more restrictive or onerous with respect to the Company and the Subsidiaries than any individual event of default in the Refinanced Debt or this Indenture, or (ii) any covenants (other than financial maintenance covenants) that, taken as a whole, are more onerous or restrictive with respect to the Company and the Subsidiaries than the covenants in the Refinanced Debt or this Indenture; (d) if the Refinanced Debt is contractually subordinated to the Secured Obligations, such new Debt (and any guarantees thereof) is subordinated in right of payment to the Secured Obligations (or, if applicable, the Subsidiary Guarantee) to at least the same extent as the Refinanced Debt and is otherwise subordinated pursuant to an intercreditor agreement reasonably satisfactory to the Majority Holders; (e) if the Refinanced Debt is unsecured, such new Debt is unsecured; (f) other than in respect of Permitted Refinancing Debt of the First Lien Credit Agreement or the Credit Facility (other than to the extent constituting Permitted Junior Lien Debt or unsecured Debt), the terms of Permitted Refinancing Debt do not provide for any scheduled principal repayment, mandatory principal redemption or sinking fund obligation prior to the 180th day after the Stated Maturity of the Notes (other than customary offers to purchase upon a change of control, asset sale, or casualty or condemnation event (so long as any such mandatory prepayment or offer to purchase in respect of any asset sale, casualty or condemnation
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event is made subject to the applicable prepayment provisions set forth in this Indenture) and customary acceleration rights after an event of default); and (g) if the Refinanced Debt is secured, such new Debt shall be either unsecured or secured; provided that to the extent such new Debt is secured, such new Debt shall be subject at all times to an Intercreditor Agreement and any security documents creating junior liens securing such new Debt shall be in the form required by the Intercreditor Agreement (or, if requested by the Company, such other form reasonably acceptable to the Collateral Agent and the Majority Holders).
“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“ PIK Interest Rate ” has the meaning provided in Section 1 of the form of Note included as Exhibit 1 to the Appendix.
“ PIK Interest Suspension Certificate ” means a certificate of the Chief Executive Officer or a Financial Officer (i) certifying that the ratio of Total Debt as of such date to EBITDAX for the most recently completed Measurement Fiscal Quarter is less than 3.00 to 1.00 as of the last day of such Measurement Fiscal Quarter and (ii) setting forth reasonably detailed calculations of such ratio.
“ Plan ” means any employee pension benefit plan, as defined in section 3(2) of ERISA, that is subject to Title IV of ERISA, other than a Multiemployer Plan, (a) which is currently or hereafter sponsored, maintained or contributed to by the Company, a Subsidiary or an ERISA Affiliate or (b) with respect to which the Company or a Subsidiary or an ERISA Affiliate may have any liability or obligation, whether known or unknown, asserted or unasserted, determined or determinable, absolute or contingent, accrued or unaccrued and whether due or to become due.
“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including cash, securities, accounts and contract rights.
“ Proved Reserves ” means “Proved Reserves” as defined in the Definitions for Oil and Gas Reserves (in this paragraph, the “ Definitions ”) promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question. “ Proved Developed Producing Reserves ” means Proved Reserves which are categorized as both “Developed” and “ Producing ” in the Definitions, “ Proved Developed Nonproducing Reserves ” means Proved Reserves which are categorized as both “ Developed ” and “ Nonproducing ” in the Definitions, “Proved Developed Reserves” means the sum of Proved Developed Producing Reserves and Proved Developed Nonproducing Reserves, and “ Proved Undeveloped Reserves ” means Proved Reserves which are categorized as “ Undeveloped ” in the Definitions.
“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
“ Reasonably Anticipated Projected Production ” means the projected production from total Proved Developed Producing Reserves attributable to Oil and Gas Properties of the Company and its Subsidiaries, determined by reference to either (a) the Reserve Report most recently delivered pursuant to Section 4.13, or (b) solely for purposes of Section 4.43, a Reserve Report with a recent
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“ as of date ” delivered to the Trustee (and, if requested, to any Holder requesting such report) for the purpose of Section 4.43 (together with the certificate referred to in Section 4.13(b)), which shall be prepared by or under the supervision of the chief engineer of the Company who shall certify such Reserve Report to be true and accurate in all material respects and, except as therein disclosed, to have been prepared in accordance with the procedures used in the immediately preceding Reserve Report prepared by an Approved Petroleum Engineer.
“ Redemption ” means, with respect to any Debt, the repurchase, redemption, prepayment, repayment, defeasance or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of such Debt. “ Redeem ” has the correlative meaning thereto.
“ Refinancing Cap ” means $460,000,000.
“ Regulation S ” has the meaning provided in the Appendix.
“ Reserve Report ” means a customary report, setting forth, as of the applicable dates required pursuant to Section 4.13, the Proved Reserves attributable to the Oil and Gas Properties of the Company and the Note Parties that, together with a projection of the rate of production and future net income, Taxes, operating expenses and capital expenditures with respect thereto as of such date based upon the Strip Price on such date of determination, adjusted for historical basis differential, quality and gravity, without giving effect to non-property related expenses such as general and administrative expenses, debt service, future income Tax expense and depreciation, depletion and amortization, and adjusted to give effect to the Swap Agreements with Approved Counterparties then in effect.
“ Restricted Global Note ” has the meaning provided in the Appendix.
“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Company or any of its Subsidiaries, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Company or any of its Subsidiaries or any option, warrant or other right to acquire any such Equity Interests in the Company or any of its Subsidiaries.
“ Restricted Notes Legend ” means the legend set forth in Section 2.3(b)(i) of the Appendix.
“ Rule 144A ” has the meaning provided in the Appendix.
“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto that is a nationally recognized rating agency.
“ Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by OFAC or the U.S. Department of State.
“ SEC ” means the Securities and Exchange Commission.
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“ Securities Account ” shall have the meaning ascribed to such term in the Security Agreement.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Secured Obligations ” means, without duplication, any and all amounts owing or to be owing by the Company or any Guarantor whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising: (a) to the Trustee, the Collateral Agent or any Holder under any Note Document and (b) all renewals, extensions and/or rearrangements of any of the above. Without limitation of the foregoing, the term “ Secured Obligations ” shall include the unpaid principal of and interest on the Notes and PIK Notes (including the Make Whole Premium and the Applicable Premium) interest accruing at the then applicable rate provided in this Indenture after the maturity of the Notes and interest accruing at the then applicable rate provided in this Indenture after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company, any of its Subsidiaries or any Guarantor under any Bankruptcy Law, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, reimbursement obligations (including under the Exchange Agreement) and unpaid amounts, expenses, indemnities (including under the Exchange Agreement), costs, and all other obligations and liabilities of every nature of the Company, any Subsidiary or any Guarantor, whether absolute or contingent, due or to become due, now existing or hereafter arising under this Indenture, the Exchange Agreement or the other Note Documents ( provided that obligations arising under the Exchange Agreement shall be only for the benefit of the Persons described therein).
“ Secured Parties ” means, collectively, the Trustee, the Collateral Agent and the Holders.
“ Security Agreement ” means the Second Lien Guaranty and Collateral Agreement (as amended, restated, supplemented or modified from time to time), dated as of the Issue Date, among the Company, the Guarantors party thereto and the Collateral Agent for the benefit of the Secured Parties.
“ Security Documents ” means the Intercreditor Agreement, the Security Agreement and all other security agreements, pledge agreements, collateral assignments, mortgages, collateral agency agreements, intercreditor agreements, deed of trust or other grants or transfers for security executed and delivered by the Company, a Guarantor or any other obligor under the Notes or any Note Document creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Agent for the benefit of the holders of the Notes, in each case, as amended, supplemented, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and this Indenture.
“ Senior Secured Debt ” means, at any date, the sum of (a) the aggregate principal amount outstanding under the First Lien Credit Agreement and, once the First Lien Credit Agreement ceases to exist, the Credit Facility on such date, (b) the aggregate principal amount of outstanding Notes on such date and (c) the aggregate principal amount of Debt (other than Debt referred to in clauses (a) and (b) of this definition) of the Company and its Subsidiaries on such date that is secured by a Lien on any asset or Property of the Company or any Subsidiary that is not junior to the Lien of the Collateral Agent granted under the Security Documents.
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“ Special Flood Hazard Area ” means an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.
“ Solvent ” means after giving effect to the transactions contemplated hereby, (a) the aggregate assets (after giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the Company and the Guarantors, taken as a whole, will exceed the aggregate Debt of the Company and the Guarantors on a consolidated basis, as the Debt becomes absolute and matures, (b) each of the Company and the Guarantors will not have incurred or intended to incur, and will not believe that it will incur, Debt beyond its ability to pay such Debt (after taking into account the timing and amounts of cash to be received by each of the Company and the Guarantors and the amounts to be payable on or in respect of its liabilities, and giving effect to amounts that could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement) as such Debt becomes absolute and matures and (c) each of the Company and the Guarantors will not have (and will have no reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business.
“ Stated Maturity ” means, with respect to any installment of interest or principal on any series of Debt, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Debt, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
“ Strip Price ” means, as of any date, (a) for the 60-month period commencing with the month in which such date occurs, as quoted on the NYMEX and published in a nationally recognized publication for such pricing as selected by the First Lien Agent, or if the First Lien Credit Agreement ceases to exist, the agent or requisite lenders under the Credit Facility, or if the Credit Facility ceases to exist, the Majority Holders (as such prices may be corrected or revised from time to time by the NYMEX in accordance with its rules and regulations), the corresponding monthly quoted futures contract price for months 0–60 and (b) for periods after such 60-month period, the average corresponding monthly quoted futures contract price for months 49–60; provided , however , in the event that the NYMEX no longer provides futures contract price quotes for 60-month periods, the longest period of quotes of less than sixty (60) months shall be used to determine the strip period and held constant thereafter based on the average of contract prices for the last twelve (12) months of such period, and, if the NYMEX no longer provides such futures contract quotes or has ceased to operate, the First Lien Agent, or if the First Lien Credit Agreement ceases to exist, the agent or requisite lenders under the Credit Facility, or if the Credit Facility ceases to exist, the Majority Holders, shall designate another nationally recognized commodities exchange to replace the NYMEX for purposes of the references to the NYMEX herein which in such Person’s reasonable opinion is the most comparable exchange to the NYMEX at such time.
“ Subsidiary ” means: (a) any Person of which at least a majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, manager or other governing body of such Person (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned
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or controlled by the Company or one or more of its Subsidiaries or by the Company and one or more of its Subsidiaries and (b) any partnership of which the Company or any of its Subsidiaries is a general partner. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Company.
“ Subsidiary Guarantee ” means any guarantee pursuant to Article 10 hereof by a Guarantor of the Company’s Secured Obligations under this Indenture and the Notes.
“ Swap Agreement ” means any agreement (including each confirmation under any master agreements) with respect to any swap, cap, collar, put, call, floor, forward, future or derivative transaction or option or similar agreement, whether exchange traded, “ over-the-counter ” or otherwise, and whether settled physically or financially, involving, or settled by reference to, one or more interest rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Company or the Subsidiaries shall be a Swap Agreement.
“ Synthetic Leases ” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income Taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease.
“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, charges or withholdings (including backup withholding) imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA (except as provided in Sections 9.01(g) and 9.03 hereof).
“ Total Debt ” means, at any date, the sum of all Debt of the Company and its Subsidiaries on such date.
“ Total PDP PV-10 ” means the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to the Company’s and its Subsidiaries’ collective interest in its Oil and Gas Properties constituting Proved Developed Producing Reserves during the remaining expected economic lives of such Oil and Gas Properties, as calculated on any date of determination as set forth in the last sentence of this definition. Each calculation of such expected future net revenues shall be made in accordance with SEC guidelines for reporting proved oil and gas reserves, provided that in any event (a) appropriate deductions shall be made for severance and ad valorem Taxes, capital expenditures and for operating, gathering, transportation and marketing costs required for the production and sale of such Oil and Gas Properties, and plugging
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and abandonment (and other asset retirement obligations) or any other expenses in respect of such Oil and Gas Properties (including expenses incurred after the end of the expected economic lives of such Oil and Gas Properties) in respect of such Oil and Gas Properties, (b) the pricing assumptions used in determining Total PDP PV-10 for any Oil and Gas Properties shall be based upon the Strip Price (as set forth in the last sentence of this definition), adjusted in a manner to reflect the Company’s and the Subsidiaries’ Swap Agreements with Approved Counterparties then in effect, (c) the cash flows derived from the pricing assumptions set forth in clause (b) above shall be further adjusted to account for the historical basis differential and (d) any such calculation and the components thereof shall be in form, substance and detail reasonably satisfactory to the Trustee. The amount of Total PDP PV-10 at any time shall be calculated on a pro forma basis for Material Divestitures and Material Acquisitions of Oil and Gas Properties consummated by the Company and the Subsidiaries following the “as of” date of the Reserve Report most recently delivered hereto ( provided that, in the case of any such Material Acquisition, the Trustee (and, if requested by any Holder, the Holder requesting such report) shall have received reserve engineering data evaluating the Proved Reserves attributable to the Oil and Gas Properties subject thereto) but prior to the date on which the PDP Coverage Ratio is being calculated. Notwithstanding anything to the contrary contained herein, (i) any calculation of Total PDP PV-10 on any date (other than any March 31, June 30, September 30 or December 31) shall be made using the information set forth in the then most recent Reserve Report delivered to the Trustee and, if requested, to the Holders requesting such report in accordance with this Indenture (as supplemented by any reserve engineering data received in connection with any Material Acquisition as provided in the parenthetical of the immediately preceding sentence), (ii) any calculation of Total PDP PV-10 on any March 31, June 30, September 30 or December 31 of any year shall be made using the information set forth in the Reserve Report with an “as of” date that is the same as such date, and (iii) for purposes of calculating Total PDP PV-10, the Strip Price shall be determined as of the date that is five (5) Business Days prior to the date on which the compliance certificate required to be delivered pursuant to Section 4.03(c) or Section 4.03(s), as applicable, is required to be delivered.
“ Transfer Restricted Securities ” has the meaning provided in the Appendix.
“ Treasury Rate ” means a rate per annum (computed on the basis of actual days elapsed over a year of 360 days) equal to the rate determined by the Company on the date three (3) Business Days prior to the date of repayment (or deemed repayment in the event of an acceleration), to be the yield expressed as a rate listed in The Wall Street Journal for United States Treasury securities having a term of no greater than the period for the remaining months until May 15, 2020.
“ Trustee ” means the party named as such in the introductory paragraph hereto until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter means the successor serving hereunder.
“ Trust Officer ” when used with respect to the Trustee, means any officer within the corporate trust administration of the Trustee (or any successor group of the Trustee) and also means, with respect to a particular corporate trust matter relating to this Indenture, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject, who, in each case, shall have direct responsibility for administration of this Indenture.
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“ Uniform Commercial Code ” or “ UCC ” means the New York Uniform Commercial Code as in effect from time to time; provided that , in the event that, by reason of mandatory provisions of applicable law, any of the attachment, perfection or priority of the Collateral Agent’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
“ Voting Stock ” of any Person as of any date means the Equity Interests of such Person that are at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person; provided that with respect to a limited partnership or other entity which does not have a Board of Directors, Voting Stock means the Equity Interests of the general partner of such limited partnership or other business entity with the ultimate authority to manage the business and operation of such Person.
“ Weighted Yield ” means, as to any Debt, the weighted yield to maturity thereof based on interest rate margin, original issue discount or fees (in each case amortized over the life of such Debt), interest rate floors or other similar component of yield, in each case, incurred or payable by the borrower or issuer of such Debt, and excluding, for the avoidance of doubt, any changes in yield due to changes in the underlying reference rate (such as LIBOR or the prime rate) or application of any default rate of no more than 3.00% per annum, call protection amounts, make whole amounts and customary annual agency fees (regardless of whether any of the foregoing amounts are paid to, or shared with, in whole or in part, any lender).
Section 1.02 Other Definitions .
Term |
Defined in Section | |||
“Act” |
9.07 | |||
“Appendix” |
2.01 | |||
“Applicable Premium” |
3.07 | |||
“Asset Sale Offer” |
3.09 | |||
“Change of Control Offer” |
4.25 | |||
“Change of Control Payment” |
4.25 | |||
“Change of Control Settlement Date” |
4.25 | |||
“Compliance Certificate” |
4.03 | |||
“Covenant Defeasance” |
8.03 | |||
“Credit Facility” |
4.27 | |||
“Discharge” |
8.08 | |||
“Default Rate” |
2.13 | |||
“Event of Default” |
6.01 | |||
“Excess” |
4.47 | |||
“Issue Date Intercreditor Agreement” |
12.04 | |||
“Legal Defeasance” |
8.02 | |||
“Offer Amount” |
3.09 | |||
“Offer Period” |
3.09 | |||
“Paying Agent” |
2.03 | |||
“Permitted Liens” |
4.28 | |||
“PIK Interest” |
2.13 | |||
“PIK Notes” |
2.13 | |||
“PIK Note Payment” |
2.13 | |||
“Register” |
2.03 | |||
“Registrar” |
2.03 | |||
“Remedial Work” |
4.11 | |||
“Settlement Date” |
3.09 | |||
“Termination Date” |
3.09 | |||
“Transfer” |
4.37 |
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Section 1.03 Incorporation by Reference of Trust Indenture Act .
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Any terms incorporated 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.
Section 1.04 Rules of Construction . Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) “or” is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) the meanings of the words “will” and “shall” are the same when used to express an obligation;
(6) references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;
(7) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole (as amended or supplemented from time to time) and not to any particular Article, Section or other subdivision of this Indenture; and
(8) “including” means “including, without limitation.”
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ARTICLE TWO
THE NOTES
Section 2.01 Form and Dating .
The Initial Notes are intended to be represented by unrestricted Notes that do not bear the Restricted Notes Legend. If so determined by the Company, Notes may be issued as Transfer Restricted Securities, the provisions of which are set forth in the Appendix attached hereto (the “ Appendix ”). The Initial Notes and the Trustee’s certificate of authentication therefor shall be substantially in the form of Exhibit 1 to the Appendix. The Appendix and Exhibit 1 thereto are 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 Company or any Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its authentication. The terms of the Notes set forth in the Appendix are part of the terms of this Indenture. The Notes shall be in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof. To the extent any provision of the Notes conflicts with any provision of this Indenture, the provisions of this Indenture shall govern and be controlling.
Section 2.02 Execution and Authentication .
An Officer of the Company shall sign the Notes on behalf of the Company by manual or facsimile signature.
If an Officer of the Company 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 Trustee’s signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the Company signed by an Officer, (a) on the Issue Date, authenticate and deliver the Initial Notes and (b) at any time and from time to time thereafter, authenticate and deliver PIK Notes, or increase the principal amount of any Global Note to reflect a PIK Note Payment that may be validly issued under this Indenture. Such order shall specify (x) the aggregate principal amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated (or principal increased) and to whom the Notes shall be registered and delivered and (y) in the case of an issuance of PIK Notes or increase in principal amount to reflect a PIK Note Payment, the applicable PIK Interest and a reasonably detailed calculation thereof. The aggregate principal amount of Notes outstanding at any time may not exceed $344,279,000 plus the amount of any PIK Note Payments under this Indenture in compliance with the foregoing sentence and Section 2.13.
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Notes. 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 2.03 Registrar and Paying Agent .
The Company shall at all times maintain an office or agency in the United States where Notes may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency in the United States 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 “ Register ”). The Company may have one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar, and the term “Paying Agent” includes any additional paying agent.
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The Company shall 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. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails 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. The Company or any Guarantor may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Notes at the Corporate Trust Office of the Trustee.
Section 2.04 Paying Agent to Hold Money in Trust .
Prior to 11:00 a.m., New York City time, on each due date of the principal, premium, if any, and Cash Interest on any Note, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal, premium, if any, and Cash Interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Cash Interest on the Notes and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Guarantor acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund for the benefit of the Trustee and the Noteholders. The Company 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 the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent.
To the extent that the Paying Agent receives any amounts pursuant to this Section 2.04 and such amounts are remitted to the Holders, the Trustee and the Paying Agent shall have no further obligations with respect thereto. Each Holder of a Note or a beneficial interest therein by its acceptance thereof agrees that if any amounts received by it are determined to be in contravention of the provisions of an Intercreditor Agreement it shall hold such funds and pay them to the Collateral Agent as described in the Intercreditor Agreement.
Section 2.05 Noteholder Lists .
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee in writing, at least five (5) 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 Noteholders.
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Section 2.06 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. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other authorized denominations, the Registrar shall make the exchange as requested if the same requirements are met. The Company may require payment of a sum sufficient to cover any Taxes in connection with any exchange or transfer pursuant to this Section (other than any such transfer Taxes payable upon exchange or transfer pursuant to Sections 3.06, 4.25, 4.37(b) or 9.05).
Section 2.07 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 Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other requirements of the Company and the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect itself and in the judgment of the Company to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Note. In the event any such Note shall have matured, instead of issuing a new Note, the Company may direct the Trustee to pay the same without surrender thereof upon the Holder furnishing the Company and the Trustee with an indemnity bond satisfactory to them and complying with such other reasonable regulations as the Trustee may prescribe and paying such reasonable expenses as the Company and the Trustee may incur in connection therewith.
Every replacement Note is an additional obligation of the Company.
Section 2.08 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 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee, any provider of an indemnity bond and the Company receive proof satisfactory to them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m., New York City time, on a redemption date or other maturity date money sufficient to pay all principal, interest, premium, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) shall cease to be outstanding and interest on them shall cease to accrue.
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Section 2.09 Treasury Notes .
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with the Company or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned will be so disregarded. Upon request of the Trustee, the Company will identify any such Notes known by the Company to be so owned in a certificate of an Officer of the Company delivered to the Trustee, upon which the Trustee shall be entitled to conclusively rely.
Section 2.10 Temporary Notes .
Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.
Section 2.11 Cancellation .
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange, replacement or payment. The Trustee and no one else shall cancel (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange, replacement, payment or cancellation. Upon written request, the Trustee will deliver a certificate of such cancellation to the Company. The Company may not issue new Notes to replace Notes they have paid or delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest .
If the Company defaults in a payment of interest on the Notes, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner pursuant to Sections 2.13 and 4.01. The Company may pay the defaulted interest to the Persons who are Noteholders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date may be less than ten (10) days prior to the related payment date for such defaulted interest. At least fifteen (15) days before the special record date, the Company shall promptly mail to each Noteholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
Section 2.13 PIK Interest and Other Provisions Related to Interest .
Except as set forth in this Section 2.13 and in Section 1 of the Notes, interest on the Notes shall be payable entirely in Cash Interest at the Cash Interest Rate. Beginning on July 1, 2018, the Company shall pay the PIK Interest Rate (in addition to the Cash Interest Rate) on the then
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outstanding principal amount of the Notes (a “ PIK Note Payment ”) by increasing the principal amount of the outstanding Notes or by issuing additional Notes (in each case, “ PIK Notes ”) in a principal amount equal to such interest (“ PIK Interest ”) on the applicable Interest Payment Date in accordance with Section 2 of the Notes. Notwithstanding the foregoing, if the Company delivers a PIK Interest Suspension Certificate to the Trustee on or before the Compliance Certificate Due Date for the most recently ended Measurement Fiscal Quarter, the PIK Interest shall not accrue from the Interest Payment Date following the date of delivery of such PIK Interest Suspension Certificate through the Interest Payment Date following the Compliance Certificate Due Date for the immediately succeeding Measurement Fiscal Quarter; provided , however , if a PIK Interest Suspension Certificate is not delivered by such Compliance Certificate Due Date, PIK Interest shall immediately and automatically begin accruing on the then outstanding principal amount of the Notes beginning on the next succeeding Interest Payment Date and shall continue to accrue until the next Interest Payment Date following the date on which a PIK Interest Suspension Certificate is delivered in compliance with this Section 2.13.
The Initial Notes and any PIK Notes shall be substantially identical other than the issuance dates and the date from which interest shall accrue. The Initial Notes and any PIK Notes will be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Any PIK Notes will be dated as of the applicable Interest Payment Date and will bear interest from and after such date. All Notes issued pursuant to a PIK Note Payment will mature on May 15, 2023 and will be governed by, and subject to, the terms, provisions and conditions of this Indenture and shall have the same rights and benefits as the Initial Notes. Following an increase in the principal amount of the outstanding Notes as a result of a PIK Note Payment, the Notes shall accrue interest on such increased principal amount from and after the related Interest Payment Date on which such PIK Notes were issued.
PIK Note Payments shall be effected (i) with respect to Notes in certificated form, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the percentage of PIK Interest to be paid on the principal amount of Notes held by each Holder on the relevant record date, after giving effect to any interest to be paid in Cash Interest (rounded up to the nearest $1.00 or (ii) with respect to Global Notes, by increasing the principal amount of the outstanding Global Notes by an amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest $1.00), and the Trustee will at the written order of the Company signed by an Officer, authenticate and deliver such PIK Notes on the Interest Payment Date in certificated form for original issuance to the Holders of record on the relevant record date or cause such increase in principal amount with respect to Global Notes. Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Note Payment, the Notes will bear interest on such increased principal amount from and after the date of such PIK Note Payment. Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date.
For any Interest Period that the Company is required to accrue PIK Interest, pursuant to this Section 2.13, the Company shall deliver written notice to the Trustee, the Holders and any Paying Agent not less than one (1) Business Day prior to the commencement of the relevant Interest Periods, which notice shall state the PIK Interest payable for each $1.00 principal amount of outstanding Notes on such Interest Payment Date.
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In the event that the Company is required to pay PIK Interest on the Notes, such PIK Interest shall be paid to Holders pro rata (rounded up to the nearest $1.00) in accordance with their interests.
Notwithstanding anything to the contrary, the payment of accrued and unpaid interest through the Stated Maturity or the redemption or repurchase date in connection with any redemption or repurchase of the Notes as described under Sections 3.07, 3.08, 3.09 and 4.25 shall be payable solely in cash at the applicable interest rate (including any PIK Interest which would have otherwise accrued shall be payable in cash) for such Interest Period or portion thereof.
Interest shall be computed on the basis of a 360-day year comprised of twelve (12) 30-day months.
For avoidance of doubt, the PIK Interest shall be in addition to, and not in replacement of, the Cash Interest and shall be reinstated immediately from time to time in accordance with this Section 2.13.
Notwithstanding anything contained herein to the contrary, upon the occurrence and during the continuance of an Event of Default or such other event as provided in Section 2.12 or Section 6.01(d), the rate at which Cash Interest on the Notes accrues shall increase by an additional 3.0% per annum in addition to any PIK Interest (the “ Default Rate ”).
Section 2.14 CUSIP Numbers .
The Company in issuing the Notes may use “CUSIP” numbers and corresponding “ISINs” (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers and corresponding “ISINs” 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 a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.
Section 2.15 Tax Treatment of the Notes .
The Company agrees, and by acceptance of a beneficial ownership interest in the Notes each beneficial owner of a Note will be deemed to have agreed, that (i) the Notes are not (x) an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code (or any successor provision of similar import) or (y) subject to the so-called “AHYDO” rules under Section 163(i) of the Code (or any successor provision of similar import), (ii) the Notes are not “contingent payment debt instruments” subject to Treasury Regulations Section 1.1275-4, and (iii) this Indenture shall be interpreted in accordance therewith unless otherwise required by a final determination of the relevant taxing authority.
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ARTICLE THREE
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee .
If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee, at least five (5) Business Days (unless a shorter period shall be agreeable to the Trustee) before the date of giving notice of the redemption pursuant to Section 3.03, a written notice setting forth (i) the clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the proposed redemption date, (iii) the aggregate principal amount of Notes to be redeemed, and (iv) whether the Company requests that the Trustee give notice of such redemption. Any such notice to the Trustee may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereupon be void and of no effect.
Section 3.02 Selection of Notes to Be Redeemed .
If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes as follows: (1) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or (2) if the Notes are not listed on any national securities exchange, on a pro rata basis by lot, or such other method as acceptable to the Trustee, subject to the authorized denomination for the Notes (or, in the case of Global Notes, the Trustee shall select Notes for redemption based on DTC’s method of selection). In the event of partial redemption other than on a pro rata basis, the particular Notes to be redeemed shall be selected by the Trustee, not less than five (5) Business Days prior to the giving of notice of the redemption pursuant to Section 3.03, from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1.00 or whole multiples of $1.00 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not in amounts of $1.00 or a whole multiple of $1.00, shall be redeemed. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
The provisions of the preceding paragraph of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.
Section 3.03 Notice of Redemption .
At least thirty (30) days but not more than sixty (60) days before a redemption date (except that redemption notices may be mailed more than sixty (60) days prior to a redemption date if the notice is issued in connection with a Legal Defeasance, Covenant Defeasance or Discharge), the Company shall mail or cause to be mailed a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.
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The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price or, if the redemption price is not then determinable, the manner in which it is to be determined;
(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in a principal amount equal to the unredeemed portion shall be issued in the name of the applicable Holder upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment and interest on Notes called for redemption shall cease to accrue on and after the redemption date and the only remaining right of the Holders of such Notes is to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed;
(g) the Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to redemption.
At the Company’s request, the Trustee shall give the notice of optional redemption in the Company’s name and at its expense; provided , however , that the Company shall have delivered to the Trustee, as provided in Section 3.01, written notice requesting that the Trustee give such notice and a form of such notice of optional redemption.
Section 3.04 Effect of Notice of Redemption .
Once notice of redemption is mailed in accordance with Section 3.03 hereof, subject to the following sentence, Notes called for redemption become irrevocably due and payable on the applicable redemption date at the applicable redemption price. Notice of any redemption may, at the Company’s discretion, be subject to one or more conditions precedent. If mailed in the manner provided for in Section 3.03, the notice of redemption shall be conclusively presumed to have been given whether or not a Holder receives such notice.
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Section 3.05 Deposit of Redemption Price .
Prior to 11:00 a.m., New York City time, on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Guarantor thereof is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient in same day funds to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. To the extent PIK Interest has accrued and is payable on the Notes to be redeemed, the Company shall calculate the accrued interest in the precedent sentence by increasing the Cash Interest Rate to 9.50% per annum in lieu of paying such PIK Interest. The Paying Agent shall promptly return to the Company any money deposited with the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of and accrued interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal and premium, if any, from the redemption date until such amount is paid, and to the extent lawful, on any interest, if any, not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part .
Upon surrender of a Note that is redeemed in part, the Company shall issue in the name of the applicable Holder and the Trustee shall authenticate for such Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption .
(a) The Company shall have the option to redeem the Notes pursuant to this Section 3.07(a) in whole or in part at any time, at the following redemption prices (and, following any acceleration of the Notes pursuant to Section 6.02 (including, without limitation, any such automatic acceleration in connection with a voluntary or involuntary insolvency proceeding under any Bankruptcy Law), the Notes shall be accelerated at a price and any Asset Sale Offer pursuant to Section 3.09 shall be at the following redemption prices) (in each case, expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest on the Notes redeemed to, but excluding the applicable redemption date or acceleration date (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the redemption date or acceleration date): (i) from and after the Issue Date until May 15, 2021, 104.000%; (ii) on and after May 15, 2021 until May 15, 2022, 102.000%; and (iii) on and after May 15, 2022, 100.000% (the amount equal to the percentage in excess of 100% of the principal amount in the foregoing clauses (i) and (ii), the “ Applicable Premium ”); provided , that, any redemption of Notes (or acceleration of Notes) prior to May 15, 2020 shall also be accompanied by the Make Whole Premium (in addition to the Applicable Premium).
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(b) [Reserved.]
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.
Section 3.08 Mandatory Redemption .
The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes at the option of the Holders.
Section 3.09 Offer to Purchase by Application of Net Cash Proceeds .
In the event that, pursuant to Section 4.37(b) hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an “ Asset Sale Offer ”), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of twenty (20) Business Days following its commencement and no longer, except to the extent that a longer period is required by Applicable Law (the “ Offer Period ”). No later than five (5) Business Days after the termination of the Offer Period (the “ Settlement Date ”), the Company shall purchase and pay for the principal amount of Notes required to be purchased pursuant to Section 4.37(b) hereof (the “ Offer Amount ”) or, if less than the Offer Amount has been validly tendered (and not validly withdrawn), all Notes validly tendered (and not validly withdrawn) in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the manner prescribed in the Notes.
Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.37(b) hereof and the length of time the Asset Sale Offer shall remain open, including the time and date the Asset Sale Offer will terminate (the “ Termination Date ”);
(b) the Offer Amount and the purchase price, which shall include the Make Whole Premium and/or Applicable Premium, as applicable, in accordance with Section 3.07;
(c) that any Note not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in paying the offer amount, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Settlement Date;
(e) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, together with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed and such customary documents as the Company may reasonably request, to the Company or a Paying Agent at the address specified in the notice, before the Termination Date;
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(f) that Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, prior to the Termination Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase, and a statement that such Holder is withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by Holders surrendered by holders exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes (with such adjustments as may be deemed appropriate by the Company so that only Notes in minimum denominations of $1.00, or integral multiples of $1.00 in excess thereof; and
(h) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1.00 in principal amount or an integral multiple of $1.00 in excess thereof.
If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases.
Promptly after the Termination Date, the Company shall, to the extent lawful, accept for payment Notes or portions thereof validly tendered (and not validly withdrawn) pursuant to the Asset Sale Offer in the aggregate principal amount required by Section 4.37(b) hereof, and prior to the Settlement Date it shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09 and Section 4.37(b).
Prior to 11:00 a.m., New York City time, on the Settlement Date, the Company or the Paying Agent, as the case may be, shall mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, together with accrued and unpaid interest thereon to the Settlement Date, subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Settlement Date, and the Company shall issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on or before the Settlement Date.
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ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Notes .
(a) The Company shall pay or cause to be paid the principal of, interest, premium, if any, on, the Notes, or issue PIK Notes, on the dates and in the manner provided in the Notes. Principal, interest, premium, if any, or any PIK Note, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company or a Guarantor, holds as of 11:00 a.m., New York City time, on the due date money deposited by the Company or a Guarantor in immediately available funds and designated for and sufficient to pay all principal, interest, premium, if any, then due. PIK Interest shall be considered paid on the date due if prior to 11:00 a.m. New York City time on such date the Trustee has received (i) in the case of certificated Notes, PIK Notes duly executed by the company together with a written order pursuant to Section 2.13 from the Company signed by an Officer of the Company requesting authentication of such PIK Notes by the Trustee or (ii) in the case of Global Notes, a written order pursuant to Section 2.13 from the Company signed by an Officer of the Company requesting an increase in the principal amount of such Global Notes by the Trustee.
(b) Notwithstanding anything to the contrary, if at the end of any “accrual period” (as defined in Section 1272(a)(5) of the Code) ending after the fifth anniversary of the Issue Date, the aggregate amount of accrued and unpaid interest (including any accrued interest added to principal pursuant to Section 2.13) and “original issue discount” (as defined in Section 1273(a)(1) of the Code) on the Notes would, but for this Section 4.01(b), exceed an amount equal to the product of the Notes’ “ issue price ” (as defined in Sections 1273(b) and 1274(a) of the Code) multiplied by the “yield to maturity” (as defined in Treasury Regulation Section 1.1272-1(b)(1)(i)) (the “ Maximum Accrual ”), the Company shall be required to make a cash payment on the Notes to the Holders equal to all accrued and unpaid interest and original issue discount on the Notes as of the end of such accrual period in excess of an amount equal to the Maximum Accrual (the “ AHYDO Catch Up Payment ”), and such AHYDO Catch Up Payment shall be treated for purposes of Section 163(i) of the Code as interest paid under the Notes. No partial repayment of the Notes prior to such payment date pursuant to any other provision of this Indenture will alter the Company’s obligations to make the AHYDO Catch Up Payment pursuant to the preceding sentence. If the Company becomes obligated to make an AHYDO Catch Up Payment, it shall provide written notice to the Trustee, any Paying Agent and the Holders five (5) Business Days prior to the applicable date, of the amount of such AHYDO Catch Up Payment, the date on which such payment will be made and, in the case of global notes, such other information as may be required by the depositary.
(c) The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, at the Default Rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency .
(a) The Company shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be presented or surrendered for payment, and they shall maintain an office or agency in the United States (which may be an office of the
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Trustee or an affiliate of the Trustee) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company 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 Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee; provided that the Corporate Trust Officer of the Trustee shall not be an office or agency of the Company for purposes of service of legal process against the Company or any Guarantor.
(b) The Company 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. Further, if at any time there shall be no such office or agency where the Notes may be presented or surrendered for payment, the Company shall forthwith designate and maintain such an office or agency, in order that the Notes shall at all times be payable. The Company 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 Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period), at the same rate to the extent lawful.
Section 4.03 Reports . The Company will furnish to the Trustee and will furnish or cause to be furnished (i) in the case of clauses (a), (b) and (g) below, to the Holders, and (ii) in all other cases, to the websites or data systems described at the end of this Section 4.03 for the benefit of any Holders and Beneficial Owners of the Notes that request or elect to receive such information (for the avoidance of doubt, references in this Article IV to the Holders having the right to request or receive information and other deliverables shall be deemed to be a reference to the Holders and the Beneficial Owners of the Notes):
(a) Annual Financial Statements . As soon as available, but in any event in accordance with then Applicable Laws and not later than ninety (90) days after the end of each fiscal year of the Company commencing with the fiscal year ending December 31, 2018, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Grant Thornton LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.
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(b) Quarterly Financial Statements . As soon as available, but in any event in accordance with then Applicable Laws and not later than forty-five (45) days after the end of each of each of the first three fiscal quarters of each fiscal year of the Company, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Company and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (other than those reasonably required to explain financial data).
(c) Certificate of Financial Officer – Compliance . Concurrently with any delivery of financial statements under Section 4.03(a) or 4.03(b), a certificate of the Chief Executive Officer or a Financial Officer in substantially the form of Exhibit A hereto (the “ Compliance Certificate ”) (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 4.15(a), and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in 4.03(a) that would affect the preparation of the financial statements most-recently required to be delivered in accordance with Section 4.03(a) and Section 4.03(b) and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.
(d) Certificate of Financial Officer – Consolidating Information . If, at any time, all of the Subsidiaries of the Company are not Consolidated Subsidiaries, then concurrently with any delivery of financial statements under Section 4.03(a) or Section 4.03(b), a certificate of a Financial Officer setting forth consolidating spreadsheets that show all Subsidiaries and the eliminating entries, in such form as would be presentable to the independent accountants of the Company. A Financial Officer shall deliver separate financial statements setting forth the balance sheet and related statement of operations, stockholder’s equity and cash flow of each Subsidiary that is not a Guarantor, including the impact on the Company’s consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows.
(e) Certificate of Insurer – Insurance Coverage . Concurrently with any delivery of financial statements under Section 4.03(a), a certificate of insurance coverage from each insurer or one or more insurance agencies with respect to the insurance required by Section 4.08, and, if requested by the Majority Holders, copies of the applicable policies and an Officers’ Certificate certifying the Company’s compliance with Section 4.08.
(f) Other Accounting Reports . If requested by the Trustee or any Holder, a copy of each other report or letter submitted to any Note Party by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any such Subsidiary, and a copy of any response by any Note Party, or the board of directors of any Note Party, to such letter or report.
(g) SEC and Other Filings; Reports to Shareholders . Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Company to its shareholders generally, as the case may be.
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(h) Notices Under Material Instruments . Promptly after the furnishing thereof, copies of any financial statement, report or notice furnished by the Company to any holder of debt securities of the Company or any Subsidiary pursuant to the terms of any preferred stock designation, indenture, loan or credit or other similar agreement, other than this Indenture and not otherwise required to be furnished to the Trustee or any Holder pursuant to any other provision of this Section 4.03.
(i) Lists of Purchasers . Concurrently with the delivery of any Reserve Report to the Trustee pursuant to Section 4.13, a list of all Persons purchasing Hydrocarbons from the Company to the extent that any Note Party controls the marketing and the sale of such Hydrocarbons (which listings shall include, with respect to each such purchaser, the legal name and address thereof, the appropriate contact person thereat, the Oil and Gas Properties from which Hydrocarbons were purchased and the volume of Hydrocarbons purchased).
(j) Notice of Sales of Oil and Gas Properties and Liquidation of Swap Agreements . In the event the Company or any Subsidiary intends to sell, transfer, assign or otherwise dispose of any Oil or Gas Properties or any Equity Interests in any Subsidiary in accordance with Section 4.37 (other than pursuant to Section 4.37(a)(i) or Section 4.37(a)(ix)), prior written notice of such disposition, the price thereof and the anticipated date of closing and any other details thereof reasonably requested by any Holder. If the Company or any Subsidiary receives any notice of early termination of any Swap Agreement to which it is a party from any of its counterparties, or any Swap Agreement to which the Company or any Subsidiary is a party is Liquidated, prompt written notice of the receipt of such early termination notice or such Liquidation, as the case may be, together with a reasonably detailed description or explanation thereof and any other details thereof requested by any Holder.
(k) Notice of Casualty Events . Prompt written notice, and in any event within ten (10) Business Days (or if under the circumstances the Majority Holders determine a longer period is reasonable, such longer period) following the knowledge thereof by, or the services of process on, (as the case may be) an Officer of the Company, of the occurrence of any Casualty Event reasonably expected to result in damages or loss of greater than $10,000,000 or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event reasonably expected to result in damages or loss of greater than $10,000,000.
(l) Information Regarding Company and Guarantors . Prompt written notice (and in any event within fifteen (15) Business Days thereafter) of any change (i) in the Company’s or any Guarantor’s company or corporate name or in any trade name used to identify such Person in the conduct of its business or in the ownership of its Properties, (ii) in the location of the Company’s or any Guarantor’s chief executive office or principal place of business, (iii) in the Company’s or any Guarantor’s identity or company or corporate structure or in the jurisdiction in which such Person is incorporated, organized or formed, (iv) in the Company’s or any Guarantor’s organizational identification number in its jurisdiction of organization, and (v) in the Company’s or any Guarantor’s federal taxpayer identification number.
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(m) Notices of Certain Changes . Promptly deliver to the Trustee, and if requested by any Holder, such Holder, but in any event within five (5) Business Days after the execution thereof, copies of any amendment, modification or supplement to any of the documents governing the Existing Notes (or any Permitted Refinancing Debt incurred in replacement thereof), any documents governing any Permitted Junior Lien Debt or to the Organizational Documents, any preferred stock designation or any other organic document of the Company or any Subsidiary.
(n) Other Requested Information . Promptly following any request therefor, such other information regarding the operations, business affairs, financial condition, Swap Agreements, production and sales information, and lease operating statements of the Company or any Subsidiary (including any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), or compliance with the terms of this Indenture or any other Note Document, as any Holder may reasonably request.
(o) Material Acquisitions . The Company shall provide to the Trustee, and if requested by any Holder, any such Holder, not less than five (5) days’ prior written notice of the consummation of any Material Acquisition along with the material terms thereof.
(p) Non-Consent Election . The Company shall provide to the Trustee, and if requested by any Holder, any such Holder, promptly but in any event within thirty (30) days after the end of each calendar month, notice to withhold consent to participate in any wells located on Oil and Gas Properties delivered by any Note Party to any other Person during such calendar month.
(q) Surface Acreage Reports . As soon as available and in any event within thirty (30) days after the last day of each calendar quarter, a report certified as true and complete in all material respects by an Officer of the Company setting forth as of the last Business Day of such calendar quarter an accounting of all surface acreage sold by the Company or any Guarantor and the gross and net proceeds received therefore.
(r) Tax Returns . As soon as available and in any event within fifteen (15) days after the filing of any tax return of the Company, any Guarantor or any Subsidiary of either thereof with the IRS, the Company shall provide to the Trustee, a copy of such filed tax return, together with all exhibits and attachments thereto.
(s) Pro Forma Compliance Calculations . Concurrently with any transaction conditioned upon pro forma compliance with any financial ratio, including but not limited to the transactions described in Section 4.29(a)(iv), Section 4.29(b)(i)(2), Section 4.30(e), Section 4.37(a)(iv) and Section 4.43, the Company shall deliver to the Trustee, and if requested by any Holder, such Holder, an Officers’ Certificate that shall certify that Note Parties are in pro forma compliance with the applicable financial ratio and shall attach thereto calculations demonstrating such compliance.
Documents required to be delivered pursuant to Section 4.03(a), Section 4.03(b) or Section 4.03(g) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered (i) to the Trustee and the Holders on the date on which the Company posts such documents, or provides a link thereto on the Company’s public website; or (ii) to the Holders on the date on which such documents are posted on the Company’s behalf on an Internet or intranet website, if any, to which each Holder shall have access; provided that the Company shall deliver paper copies of such
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documents to the Trustee upon its request to the Company to deliver such paper copies until a written request to cease delivering paper copies is given by the Trustee. The Trustee shall have no obligation to request the delivery of any of the documents or reports referred to in this Section 4.03 (including where such reports are to be delivered upon request of the Trustee) or to request or maintain paper copies of the documents referred to above and shall have no duty to deliver copies of any documents to any Holder or Beneficial Owner of the Notes.
The Company will make available the information and such reports required to be provided under this Section 4.03 (other than clauses (a), (b) and (g) hereof) and any other provision of this Article IV to any Holder who so elects and, upon request, to any Beneficial Owner of the Notes, in each case by posting such information on its website, on Intralinks, SyndTrak, ClearPar or any comparable password-protected online data system that will require a confidentiality acknowledgment, and will make such information readily available to any electing Holder, any electing Beneficial Owner of Notes, any bona fide prospective investor in the Notes, any bona fide securities analyst (to the extent providing analysis of investment in the Notes to investors and prospective investors therein) or any bona fide market maker in the Notes who agrees to treat such information as confidential or accesses such information on Intralinks, SyndTrak, ClearPar or any comparable password-protected online data system that will require a confidentiality acknowledgment; provided that such Holders, Beneficial Owners, prospective investors, security analysts or market makers will agree to (1) treat all such reports (and the information contained therein) and information as confidential, (2) not use such reports and the information contained therein for any purpose other than their investment or potential investment in the Notes and (3) not publicly disclose or distribute any such reports (and the information contained therein); provided , further , that during the occurrence of any Event of Default, any information that the Company or any of its Subsidiaries is required to furnish pursuant to Sections 8.01(e), (n), (p) and (q) of the First Lien Credit Agreement or, once the First Lien Credit Agreement ceases to exist, any substantively equivalent section under the Credit Facility, shall be made available to the Trustee and the Holders pursuant to the procedures contained above. Any information required to be provided pursuant to this paragraph which the Company is not otherwise obligated to make public under applicable securities laws will be labeled as private side information on any such website pursuant to a typical “click through” acknowledgment procedure.
For as long as the Notes remain outstanding, if at any time the Company is not filing the reports required by this Section 4.03(a) and 4.03(b) with the SEC, the Company shall furnish to the Holders of the Notes, and to securities analysts and prospective investors in the Notes, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04 Notice of Material Events . The Company will furnish to the Trustee and any requesting Holder prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority against or affecting the Company or any Subsidiary not previously disclosed in writing to the Trustee or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not previously disclosed to the Trustee) that, in either case, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
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(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Company and its Subsidiaries in an aggregate amount exceeding $5,000,000; and
(d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 4.04 shall be accompanied by a statement of an Officer of the Company setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 4.05 Existence; Conduct of Business . The Company will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Oil and Gas Properties is located or the ownership of its Properties requires such qualification, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, conversion, consolidation, liquidation or dissolution permitted under Section 4.36.
Section 4.06 Payment of Obligations . The Company will, and will cause each Subsidiary to, pay its obligations, including Tax liabilities of the Company and all of its Subsidiaries before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate actions and the Company or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any material Property of the Company or any Subsidiary.
Section 4.07 Operation and Maintenance of Properties . The Company will, and will cause each Subsidiary to:
(a) conduct its operations on all Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to be operated in a careful and efficient manner in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all applicable Governmental Requirements, including applicable pro ration requirements and Environmental Laws, and all Applicable Laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect.
(b) keep, preserve and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear excepted) all of its material Oil and Gas Properties and other material Properties, including all equipment, machinery and facilities.
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(c) promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary, in accordance with customary industry standards, to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder.
(d) promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties.
(e) operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements; and
(f) to the extent a Note Party is not the operator of any Property, use reasonable efforts to cause the operator to comply with this Section 4.07.
Section 4.08 Insurance . The Company will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurance companies, (a) insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations and (b) flood insurance if and to the extent required under Section 4.15(e). The loss payable clauses or provisions in said insurance policy or policies insuring any of the collateral for the Notes shall be endorsed in favor of and made payable to the Collateral Agent as its interests may appear and such policies shall name the Collateral Agent and the Trustee as “additional insureds” and “lender loss payees”, as applicable, and provide that the insurer will endeavor to give at least ten (10) days prior notice of any cancellation to the Trustee and Collateral Agent.
Section 4.09 Books and Records; Inspection Rights . The Company will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Company will, and will cause each Subsidiary to, permit any representatives designated by the Trustee or any Holder, upon reasonable prior notice and during normal business hours, to visit and inspect its Properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, in each case, subject to applicable safety standards, applicable privilege and confidentiality restrictions, and restrictions of owners of such records or properties who are neither the Company nor any Subsidiary.
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Section 4.10 Compliance with Laws . The Company will, and will cause each Subsidiary to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Company will maintain in effect and enforce policies and procedures reasonably designed to promote compliance by it and its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions.
Section 4.11 Environmental Matters .
(a) The Company shall at its sole expense: (i) comply, and shall cause its Properties and operations and each Subsidiary and each Subsidiary’s Properties and operations to comply, with all Environmental Laws, the breach of which could be reasonably expected to have a Material Adverse Effect; (ii) not Release or threaten to Release, and shall cause each Subsidiary not to Release or threaten to Release, any Hazardous Material on, under, about or from any of such Note Parties’ Properties or any other property offsite the Property to the extent caused by a Note Party’s operations except in compliance with Environmental Laws, the Release or threatened Release of which could reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Subsidiary to timely obtain or file, all Environmental Permits, if any, required under Environmental Laws to be obtained or filed in connection with the operation or use of a Note Parties’ Properties, which failure to obtain or file could reasonably be expected to have a Material Adverse Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each Subsidiary to promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration, remediation or other remedial obligations (collectively, the “ Remedial Work ”) in the event any Remedial Work is required or reasonably necessary under Environmental Laws because of or in connection with the actual or suspected past, present or future Release or threatened Release of any Hazardous Material on, under, about or from any of the Note Parties’ Properties, which failure to commence and diligently prosecute to completion could reasonably be expected to have a Material Adverse Effect; (v) conduct, and cause its Subsidiaries to conduct, their respective operations and businesses in a manner that will not expose any Property or Person to Hazardous Materials that could reasonably be expected to form the basis for a claim for damages or compensation that could reasonably be expected to have a Material Adverse Effect; and (vi) establish and implement, and shall cause each Subsidiary to establish and implement, such procedures as may be necessary to continuously determine and assure that the Note Parties’ obligations under this Section 4.11(a) are timely and fully satisfied, which failure to establish and implement could reasonably be expected to have a Material Adverse Effect.
(b) The Company will promptly, but in no event later than five (5) days of the occurrence of a triggering event, notify the Trustee in writing and any requesting Holder of any threatened action, investigation or inquiry by any Governmental Authority or any threatened demand or lawsuit by any Person against any Note Party or their Properties of which the Company has knowledge in connection with any Environmental Laws if the Company could reasonably anticipate that such action will result in liability (whether individually or in the aggregate) in excess of $100,000, not fully covered by insurance, subject to normal deductibles.
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(c) The Company will, and will cause each Subsidiary to, provide environmental assessments, audits and tests in accordance with the most current version of the American Society of Testing Materials standards upon request by the Trustee or any Holder if any Holder reasonably believes (i) that there has been a Release of Hazardous Materials or (ii) non-compliance with an Environmental Law has occurred, and that such an event could reasonably be expected to cause a Material Adverse Effect (or as otherwise required to be obtained by the Trustee or any Holders by any Governmental Authority), in connection with any Oil and Gas Properties or other Properties.
Section 4.12 Further Assurances .
(a) The Company at its sole expense will, and will cause each Subsidiary to, promptly execute and deliver to the Trustee all such other documents, agreements and instruments required or reasonably requested by the Trustee or any Holder to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Company or any Subsidiary, as the case may be, in the Note Documents, including the Notes, or to further evidence and more fully describe the collateral intended as security for the Secured Obligations, or to correct any defect, error, inaccuracy or omission in this Indenture or the Security Documents, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Indenture or any of the Security Documents or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in connection therewith.
(b) The Company hereby authorizes the Trustee to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Mortgaged Property without the signature of the Company or any other Guarantor where permitted by law. A carbon, photographic or other reproduction of the Security Documents or any financing statement covering the Mortgaged Property or any part thereof shall be sufficient as a financing statement where permitted by law. Notwithstanding the grant of authority herein, the Company agrees to file all financing or continuation statements, and amendments thereto, and any other document or agreement necessary to perfect and maintain the perfection of the Collateral Agent’s lien on the Mortgaged Property. Neither the Trustee nor the Collateral Agent shall have any duty to file or record any financing statement, continuation statement or any other document or agreement to perfect or maintain the perfection of the Collateral Agent’s Lien on the Collateral and Mortgaged Property.
Section 4.13 Reserve Reports.
(a) On or before March 1, May 15, September 1 and November 15 of each year, commencing September 1, 2018, the Company shall furnish to the Trustee and any requesting Holders a Reserve Report evaluating the Oil and Gas Properties of the Company and its Subsidiaries as of the immediately preceding December 31, March 31, June 30 and September 30, respectively. The Reserve Reports as of June 30 and December 31 of each year shall be prepared by one or more Approved Petroleum Engineers, and the other Reserve Reports of each year shall be prepared by or under the supervision of the chief engineer of the Company who shall certify such Reserve Report to be true and accurate in all material respects and to have been prepared in accordance with the procedures used in the immediately preceding June 30 or December 31 Reserve Report, as applicable.
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(b) With the delivery of each Reserve Report, the Company shall provide to the Trustee and any requesting Holder, a certificate of an Officer of the Company certifying that in all material respects: (i) the factual information contained in the Reserve Report and any other information delivered in connection therewith is true and correct, (ii) the Company or its Subsidiaries owns good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens permitted by Section 4.28, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of one-half bcf of gas (on an mcf equivalent basis) in the aggregate with respect to its Oil and Gas Properties evaluated in such Reserve Report which would require the Company or any Subsidiary 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, (iv) none of their Oil and Gas Properties have been sold since the date of the last Reserve Report except as set forth on an exhibit to the certificate, which certificate shall list all of its Oil and Gas Properties sold, (v) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered Reserve Report which the Company could reasonably be expected to have been obligated to list on Schedule 7.19 to the First Lien Credit Agreement as in effect on the date hereof had such agreement been in effect on the date hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve Report that are Mortgaged Properties and demonstrating the percentage of the total value of the Oil and Gas Properties that the value of such Mortgaged Properties represent.
Section 4.14 Title Information .
(a) On or before the delivery to the Trustee of each Reserve Report required by Section 4.13(a), the Company will deliver title information covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Collateral Agent and Trustee shall have received together with title information previously delivered to the Collateral Agent and Trustee, title information on (i) Oil and Gas Properties constituting Proved Developed Producing Reserves evaluated in such Reserve Report representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Developed Producing Reserves evaluated in such Reserve Report and (ii) Oil and Gas Properties constituting Proved Reserves evaluated in such Reserve Report representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in such Reserve Report; provided that, in the event that the First Lien Agent grants an extension to the Company’s obligation to deliver title information required by Section 8.13 of the First Lien Credit Agreement, then the Company’s obligations under this Section 4.14(a) shall be automatically extended for the length of such extension, without the need for further written modification to this Indenture (but in any case, to a date no longer than thirty (30) days after the original required date of delivery).
(b) If the Company has provided title information for additional Properties under Section 4.14(a), the Company shall, within forty-five (45) days of notice from any Holder that title defects or exceptions (other than, of a nature or type that constitutes a Permitted Lien) exist with respect to such additional Properties, either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by Section 4.28 raised by such information, (ii) substitute reasonably acceptable Mortgaged Properties with no title defects
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or exceptions except for Excepted Liens (other than Excepted Liens described in clauses (e), (g) and (h) of such definition and other than, of a nature or type that constitutes a Permitted Lien) having an equivalent reserve classification and an equivalent value (as reasonably determined by the Holders) or (iii) deliver title information so that the Collateral Agent and Trustee shall have received, together with title information previously delivered to the Collateral Agent and Trustee, title information meeting the requirements set forth in Section 4.14(a).
(c) Notwithstanding anything to the contrary herein, the Company shall be deemed to have complied with this Section 4.14 if, after delivery of the title information and other documents required by Section 8.13 of the First Lien Credit Agreement as in effect on the date hereof, the First Lien Agent is satisfied that such title information and other documents provided by the Company comply with the obligations of such Section 8.13 of the First Lien Credit Agreement as in effect on the date hereof and the Company shall provide an Officers’ Certificate certifying the Company’s compliance with this Section 4.14. The Trustee and Collateral Agent’s sole responsibility in connection with this Section 4.14 shall be to receive such certificate. Neither the Trustee nor the Collateral Agent shall have any duty to review such reports, evaluate title defects or otherwise take any actions with respect thereto.
Section 4.15 Additional Collateral; Additional Guarantors .
(a) In connection with the delivery of each Reserve Report, the Company shall review the Reserve Report and the list of current Mortgaged Properties (as described in Section 4.13(b)) to ascertain whether the Mortgaged Properties include (i) (A) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in such Reserve Report) of all Proved Developed Producing Reserves evaluated in such Reserve Report and (B) Oil and Gas Properties constituting Proved Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in such Reserve Report) of all Proved Reserves evaluated in such Reserve Report, (ii) subject to Section 4.15(f)(i), substantially all of the Note Parties’ Oil and Gas Properties not constituting Proved Reserves and (iii) substantially all midstream assets and any infrastructure or related Oil and Gas Property. If the Mortgaged Properties do not include the requisite Properties as set forth in the foregoing clauses (i), (ii) and (iii), then the Company shall, and shall cause its Subsidiaries to, grant (from its available unencumbered Property), within thirty (30) days of delivery of the certificate required under Section 4.13(b), to the Collateral Agent as security for the Secured Obligations, a second-priority Lien interest ( provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on additional Oil and Gas Properties and midstream properties not already subject to a Lien of the Security Documents such that after giving effect thereto, the Mortgaged Properties will include such requisite Properties as set forth in such clauses (i), (ii) and (iii) of the immediately preceding sentence; provided that, in the event that the First Lien Agent grants an extension to the Company’s obligation to grant Liens on Mortgaged Properties required by Section 8.14(a) of the First Lien Credit Agreement as in effect on the date hereof, then the Company’s obligations under this Section 4.13(a) shall be automatically extended for the length of such extension, without the need for further written modification to this Indenture (but, in any case, to a date no later than thirty (30) days after the original required date of delivery). All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing
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statements or other Security Documents, all in form and substance necessary to properly grant and perfect the Collateral Agent’s liens and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. In order to comply with the foregoing, if any Subsidiary places a Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with Section 4.15(b).
(b) In the event that a Note Party forms or acquires any Subsidiary, if such Subsidiary guarantees or is primarily liable for any other Debt for borrowed money of a Note Party, the Company shall promptly (and, in any event, within thirty (30) days after such date) cause such Subsidiary to guarantee the Secured Obligations by executing a supplemental indenture substantially in the form of Annex A hereto and grant to the Collateral Agent a security interest in substantially all of its personal property. In connection with any such guaranty, the Company shall, or shall cause such Subsidiary to, (i) execute and deliver a supplement to the Indenture substantially in the form of Annex A hereto executed by such Subsidiary, (ii) pledge all of the Equity Interests of such new Subsidiary (including delivery (if applicable) of original stock certificates evidencing the Equity Interests of such Subsidiary, together with an appropriate undated stock powers for each certificate duly executed in blank by the registered owner thereof) and (iii) execute and deliver such other additional closing documents, certificates and legal opinions, in each case, equivalent to what the Company provides to the First Lien Agent pursuant to the First Lien Credit Agreement, or, if the First Lien Credit Agreement ceases to exist, the Credit Facility; provided that, in the event that the First Lien Agent grants an extension to the Company’s obligations required by Section 8.14(b) of the First Lien Credit Agreement as in effect on the date hereof, then the Company’s obligations under this Section 4.13(b) shall be automatically extended for the length of such extension, without the need for further written modification to this Indenture (but, in any case, to a date no later than thirty (30) days after the original required date of delivery).
(c) If the Company or any Subsidiary intends to grant any Lien on any Property to secure any Permitted Junior Lien Debt, then the Company will provide at least fifteen (15) days’ prior written notice thereof to the Trustee and the Collateral Agent (or such shorter time as the Trustee and Collateral Agent may agree in their sole discretion), and the Company will, and will cause its Subsidiaries to, first grant to the Collateral Agent to secure the Secured Obligations a prior Lien, on the same Property pursuant to Security Documents in form and substance necessary to properly grant and perfect the Collateral Agent’s lien to the extent a prior Lien has not already been granted to the Collateral Agent on such Property. Notwithstanding anything to the contrary herein or in any Note Document, if any Security Documents are required under this Section 4.15 to be delivered to the Collateral Agent and the Company is also required to provide analogous security documents, certificates or legal opinions to the First Lien Agent or grant or perfect a Lien on the same Property under any First Lien Credit Document that is the subject of such Security Document, then the Company shall, or shall cause its Subsidiaries to, execute and deliver to the Collateral Agent analogous security documents, certificates or legal opinion relating to the matters described above, which opinions shall be substantially in the form of that which is provided to the First Lien Agent. The Company will cause any Subsidiary and any other Person guaranteeing any Existing Notes, any Permitted Junior Lien Debt or any Permitted Refinancing Debt to contemporaneously guarantee the Secured Obligations pursuant to the Subsidiary Guarantee.
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(d) If the Note Parties consummate any Material Acquisition of Oil and Gas Properties or any other acquisition pursuant to Section 4.30(i), the Note Parties shall grant liens on such Oil and Gas Properties in accordance with Section 4.19.
(e) With respect to any real property that will be subject to such additional Security Documents pursuant to this Section 4.15, the Company shall, and shall cause each other Note Party to, in connection with but reasonably prior to its delivery of any such additional Security Documents that would encumber any Building or Manufactured (Mobile) Home, provide (i) a life of loan flood hazard determination with respect to any such Building or Manufactured (Mobile) Home and (ii) if such real property is located in a Special Flood Hazard Area, evidence of flood insurance in such amounts as are required under the First Lien Credit Agreement or the Credit Facility (or, if neither exist, as are reasonably acceptable to the Majority Holders).
(f) Notwithstanding the foregoing provisions of Section 4.15,
(i) during the period commencing on the Issue Date and ending on the date that is ninety (90) days following the Issue Date (or such later date as the Majority Holders may agree in their sole discretion) (such period, the “ Post-Closing Mortgage Period ”), the Mortgaged Properties shall only be required to include (A) (1) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the Initial Reserve Report) of all Proved Developed Producing Reserves evaluated in the Initial Reserve Report and (2) Oil and Gas Properties constituting Proved Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the Initial Reserve Report) of all Proved Reserves evaluated in the Initial Reserve Report, (B) substantially all of the Note Parties’ Oil and Gas Properties not constituting Proved Reserves to the extent that such Oil and Gas Properties are located in counties in which filings have been made, or are required to be made, to satisfy clause (A) herein, and (C) substantially all midstream assets and any infrastructure or related Oil and Gas Property; provided that on or prior to the expiration of the Post-Closing Mortgage Period, the Company shall, and shall cause its Subsidiaries to, deliver supplemental mortgages (including mortgages covering leasehold interests in wellbores owned by the Note Parties as of the Issue Date that were not previously mortgaged on the Issue Date) so that the Mortgaged Property includes (x) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Developed Producing Reserves evaluated in such Reserve Report and (y) Oil and Gas Properties constituting Proved Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in such Reserve Report; and
(ii) during such periods in which the Company maintains a Total Debt to EBITDAX ratio of less than 3.00 to 1.00, measured as of the last day of the four fiscal quarter period most recently ended for which financial statements are available, the Mortgaged Properties shall only be required to include (1) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the Initial Reserve
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Report) of all Proved Developed Producing Reserves evaluated in the Initial Reserve Report, (2) Oil and Gas Properties constituting Proved Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the Initial Reserve Report) of all Proved Reserves evaluated in the Initial Reserve Report, (3) substantially all of the Note Parties’ Oil and Gas Properties not constituting Proved Reserves and (4) substantially all midstream assets and any infrastructure or related Oil and Gas Property.
Section 4.16 ERISA Compliance . The Company will promptly furnish and will cause the Subsidiaries and any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to promptly furnish to any requesting Holder (a) promptly after receipt of a written request by the Trustee, copies of each annual and other report with respect to each Plan or any trust created thereunder, filed with the United States Secretary of Labor, the Internal Revenue Service or the PBGC, (b) immediately upon becoming aware of the occurrence of any ERISA Event or of any “prohibited transaction,” as described in section 406 of ERISA or in section 4975 of the Code, that would reasonably be expected to have a Material Adverse Effect in connection with any Plan or any trust created thereunder, a written notice signed by the Chief Executive Officer or the principal Financial Officer, the Subsidiary or the ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate), as the case may be, specifying the nature thereof, what action the Company, the Subsidiary or the ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (c) immediately upon receipt thereof, copies of any notice of the PBGC’s intention to terminate or to have a trustee appointed to administer any Plan. With respect to each Plan (other than a Multiemployer Plan), the Company will, and will cause each Subsidiary and ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to, (i) satisfy in full and in a timely manner, without incurring any late payment or underpayment charge or penalty and without giving rise to any lien, all of the contribution and funding requirements of section 412 of the Code (determined without regard to subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.
Section 4.17 Marketing Activities . The Company will not, and will not permit any of its Subsidiaries to, engage in marketing activities for any Hydrocarbons or enter into any contracts related thereto other than (a) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from their proved Oil and Gas Properties during the period of such contract, (b) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil and Gas Properties of third parties during the period of such contract associated with the Oil and Gas Properties of the Company and its Subsidiaries that the Company or one of its Subsidiaries has the right to market pursuant to joint operating agreements, unitization agreements or other similar contracts that are usual and customary in the oil and gas business and (c) other contracts for the purchase and/or sale of Hydrocarbons of third parties (i) which have generally offsetting provisions (i.e. corresponding pricing mechanics, delivery dates and points and volumes) such that no “position” is taken and (ii) for which appropriate credit support has been taken to alleviate the material credit risks of the counterparty thereto.
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Section 4.18 Deposit Accounts, Securities Accounts and Commodities Accounts .
(a) The Company shall cause all of its Deposit Accounts, Securities Accounts and Commodities Accounts of the Note Parties, other than Excluded Deposit Accounts, to be subject to Account Control Agreements at all times.
(b) Upon the request of any Holder the Company shall provide to the Trustee and such requesting Holder, within five (5) Business Days of any such request (or such longer period as the Majority Holders may agree), balance statements, in a form reasonably acceptable to the Majority Holders, for each Deposit Accounts, Securities Accounts and Commodities Accounts of the Company and each Subsidiary.
Section 4.19 Acquisition of Oil and Gas Properties – Mortgage Coverage . In connection with any Material Acquisition or any other acquisition pursuant to Section 4.30(i), the Company shall, and shall cause its Subsidiaries to, grant within thirty (30) days of such acquisition of such Oil and Gas Properties by the Company or such Subsidiary, to the Collateral Agent as security for the Secured Obligations, a second-priority Lien junior only to the Liens permitted under Section 4.28(h) ( provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on (a) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 95% of the total present value (using a 10% discount rate) of all Proved Developed Producing Reserves acquired, (b) Oil and Gas Properties constituting Proved Reserves representing at least 95% of the total present value (using a 10% discount rate) of all Proved Reserves acquired, (c) substantially all of the Oil and Gas Properties not constituting Proved Reserves acquired, and (d) substantially all midstream assets and any infrastructure or related Oil and Gas Property acquired. All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Documents, all in form and substance as shall be reasonably necessary to grant and perfect the Collateral Agent’s lien and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. In order to comply with the foregoing, if any Subsidiary places a Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with Section 4.15(b); provided that, in the event that the First Lien Agent grants an extension to the Company’s obligations required by Section 8.18 of the First Lien Credit Agreement as in effect on the date hereof, then the Company’s obligations under this Section 4.19 shall be automatically extended for the length of such extension, without the need for further written modification to this Indenture (but, in any case, to a date no later than thirty (30) days from the original required date of delivery).
Section 4.20 Quarterly Public Earnings Calls . No less frequently than once per fiscal quarter, the Company shall hold a public earnings conference call to go over its result of operations and other customary matters, which shall be open to members of the public including the Holders.
Section 4.21 Swap Agreements - Minimum Hedging . Subject to Section 4.43, the Company shall, not later than five (5) Business Days following the Issue Date, enter into and maintain Swap Agreements with Approved Counterparties, the notional volumes for which (when aggregated and netted with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements), as of the date
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such Swap Agreement is executed, of not less than (a) 75% of the Reasonably Anticipated Projected Production of crude oil from the Note Parties’ Oil and Gas Properties constituting Proved Developed Producing Reserves, as listed on the most recently delivered Reserve Report, for each quarter during the period commencing on the date of determination through the 12th month thereafter, (b) 67% of the Reasonably Anticipated Projected Production of crude oil from the Note Parties’ Oil and Gas Properties constituting Proved Developed Producing Reserves, as listed on the most recently delivered Reserve Report, for each quarter during the period commencing with the 13th month after the date of determination through the 24th month thereafter, and (c) 50% of the Reasonably Anticipated Projected Production of crude oil from the Note Parties’ Oil and Gas Properties constituting Proved Developed Producing Reserves, as listed on the most recently delivered Reserve Report, for each quarter during the period commencing with the 25 th month after the date of determination through the 36th month thereafter. Company’s compliance with the requirements of this Section 4.21 shall be measured as of (i) the fifth Business Day following the Issue Date and (ii) thereafter, the last day of each fiscal quarter, in each case using the most recently delivered Reserve Report (including the Initial Reserve Report); provided that, in the event that the First Lien Agent grants an extension, waiver, amendment, or consent with respect to the Company’s obligations under Section 8.20 of the First Lien Credit Agreement, such waiver, extension, amendment, or consent shall be also applicable to this Section 4.21 (without the need for further written modification to this Indenture).
Section 4.22 [Reserved] .
Section 4.23 Stay, Extension and Usury Laws .
The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, 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 has been enacted.
Section 4.24 Amendments to Debt Documents .
(a) The Company will not, and will not permit any Subsidiary to, enter into, modify or amend, or waive any right or obligation of any such Person under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility if such amendment, modification or waiver would (i) in any way restrict the payment, repayment, redemption, repurchase or other refinancing of or in respect of the Notes that would be permitted under the First Lien Credit Agreement as in effect on the Issue Date, (ii) result in an increase to the Weighted Yield on the loans and obligations under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility as compared to the Weighted Yield on the loans and obligations under the First Lien Credit Agreement as in effect on the Issue Date by more than 250 basis points, (iii) result in any amendment to, modification of, re-set or other adjustment of the call
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protection under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility in any manner that is prejudicial to the Company as compared to the call protection under the First Lien Credit Agreement or, if the First Lien Credit Agreement ceases to exist, the Credit Facility immediately prior to such amendment, modification, re-set or adjustment, unless, substantially contemporaneously therewith, this Indenture and the Notes are amended pursuant to Section 9.01(j) such that the Notes also receive the benefit of such prejudicial amendment, modification, reset and/or adjustment (as examples, if the terms of the newly amended, modified, reset or adjusted Debt include a make-whole for a period of time that extends longer than the make-whole applicable to such Debt immediately prior to such amendment, modification, reset or adjustment (whether on account of such Debt never having contained a make-whole or on account of the make-whole expiring or terminating on an earlier date in accordance with its terms) (a “ make-whole extension ”), then the Notes shall be amended to extend the then-existing make-whole period by (or reintroduce a make-whole period for) the length of the make-whole extension; additionally , in the event the amended, modified, reset or adjusted Debt includes a call premium schedule that increases the call premium percentage applicable at any period of time as compared to the call premium percentage applicable to such period of time under such Debt immediately prior to such amendment, modification, reset or adjustment (a “ call protection increase ”), then the Notes shall be amended such that the then applicable call premium percentage under the Notes (even if the Notes would not otherwise be subject to a call premium at such point in time) is increased by such call protection increases during such periods of time), (iv) add any additional Property as collateral for the First Lien Credit Agreement or Credit Facility unless such Property is added as collateral for the Secured Obligations or the Secured Parties decline to take such collateral, (v) provide for any Person to issue a guarantee or be required to issue a guarantee unless such Person guarantees the Secured Obligations or the Secured Parties decline to take such guarantee, (vi) cause the principal amount of the Priority Lien Obligations to exceed the All in Cap or (vii) contravene the provisions of the Intercreditor Agreement.
(b) The Company will not, and will not permit any Subsidiary to, enter into, modify, supplement or amend, or waive any right or obligation of any such Person under or in respect of the Intercreditor Agreement in a manner adverse to the Holders, as compared to the Intercreditor Agreement as in effect immediately prior to such amendment, supplement or modification.
(c) The Company will not, and will not permit any Subsidiary to, enter into, modify, supplement or amend, or waive any right or obligation of any such Person under or in respect of the Existing Notes or the indentures with respect thereto that could reasonably be expected to adversely affect the Trustee or the Holders.
Section 4.25 Offer to Repurchase Upon Change of Control .
(a) Within thirty (30) days following the occurrence of a Change of Control, the Company shall make an offer (a “ Change of Control Offer ”) to repurchase all or any part (equal to $1.00 or an integral multiple of $1.00 in excess thereof of each Holder’s Notes at a purchase price (the “ Change of Control Payment ”) in cash equal to 101% of the aggregate principal amount of Notes repurchased (subject to the prepayment provisions in the First Lien Credit Agreement as in effect on the Issue Date, to the extent applicable), plus accrued and unpaid interest, if any, thereon to the date of settlement (the “ Change of Control Settlement Date ”), subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Change of Control Settlement Date. Within thirty (30) days following a Change of Control, the Company shall mail a notice of the Change of Control Offer to each Holder and the Trustee describing the transaction or transactions that constitute the Change of Control and stating:
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(b) that the Change of Control Offer is being made pursuant to this Section 4.25 and that all Notes validly tendered and not validly withdrawn pursuant to the Change of Control Offer will be accepted for payment;
(c) the purchase price and the Change of Control Settlement Date, which shall be no earlier than thirty (30) days but no later than sixty (60) days from the date such notice is mailed;
(d) that the Change of Control Offer will expire as of the time and date specified in such notice and that the Company shall pay the Change of Control Payment for all Notes accepted for purchase promptly thereafter on the Change of Control Settlement Date;
(e) that any Note not tendered will continue to accrue interest;
(f) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Settlement Date;
(g) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, properly endorsed for transfer, together with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed and such customary documents as the Company may reasonably request, to the Paying Agent at the address specified in the notice prior to the termination of the Change of Control Offer;
(h) that Holders will be entitled to withdraw their election if the Paying Agent receives, prior to the termination of the Change of Control Offer, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have the Notes purchased; and
(i) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1.00 in principal amount or an integral multiple of $1.00 in excess thereof.
If any of the Notes subject to a Change of Control Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases. Further, the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.25, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions by virtue of such compliance.
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On or before the Change of Control Settlement Date, the Company shall, to the extent lawful, accept for payment all Notes or portions thereof (in minimum denominations of $1.00 and in integral multiples of $1.00 in excess thereof properly tendered (and not validly withdrawn) pursuant to the Change of Control Offer. Promptly after such acceptance, on the Change of Control Settlement Date, the Company shall:
(i) deposit with the Paying Agent by 11:00 a.m., New York City time, an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered (and not validly withdrawn); and
(ii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.
On the Change of Control Settlement Date, the Paying Agent shall mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes are then in global form, make such payment through the facilities of the Depository) and the Trustee shall authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided , however , that each such new Note will be in a minimum principal amount of $1.00 or an integral multiple of $1.00 in excess thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Settlement Date.
The Change of Control provisions of this Section 4.25 shall be applicable whether or not any other provisions of this Indenture are applicable.
The Company shall not be required to make a Change of Control Offer following a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the time and otherwise in compliance with the requirements set forth in this Section 4.25 applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not validly withdrawn under such Change of Control Offer or (2) a notice of redemption of all Notes has been given pursuant to Section 3.07, unless there is a default in payment of the applicable redemption price.
A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon the occurrence of such Change of Control, if a definitive agreement is in place for such Change of Control at the time of making the Change of Control Offer.
Section 4.26 No Partial Inducements . The Company shall not, and the Company shall not permit any of its Subsidiaries, either directly or indirectly, to pay (or cause to be paid) any consideration, whether by way of interest, fee or otherwise, to any Beneficial Owner or Holder of the Notes for or as an inducement to any consent to any waiver, supplement or amendment of any terms or provisions of this Indenture, the Notes or the Note Documents, unless such consideration is offered to be paid (or agreed to be paid) to all Beneficial Owners and Holders of the Notes in the time frame set forth in the solicitation documents relating to such consent.
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Section 4.27 Debt . The Company will not, and will not permit any Subsidiary to, incur, create, assume or suffer to exist any Debt, except:
(a) The Secured Obligations or any guarantee of or suretyship arrangement for the Secured Obligations (including any guarantee of the Notes by any Guarantor required by Section 4.15);
(b) Debt (i) evidencing the deferred purchase price of newly acquired property or incurred to finance the acquisition of equipment of any Note Party (pursuant to purchase money mortgages or otherwise, whether owed to the seller or a third party) used in the ordinary course of business of such Note Party ( provided that such Debt is incurred within sixty (60) days of the acquisition of such property) and (ii) in respect of Capital Leases, provided that the principal amount of all Debt outstanding pursuant to this clause shall not exceed $2,000,000 in the aggregate at any one time;
(c) Debt associated with bonds or surety obligations required by Governmental Requirements in connection with the operation of, or provision for the abandonment and remediation of, the Oil and Gas Properties;
(d) intercompany Debt between Note Parties to the extent permitted by Section 4.30(d); provided that (i) such Debt is not held, assigned, transferred, negotiated or pledged to any Person other than one of the Note Parties, (ii) any such Debt owed by either the Company or a Guarantor shall be subordinated to the Secured Obligations on terms set forth in the Subsidiary Guarantee and (iii) any such Debt shall not have any scheduled amortization prior to ninety (90) days after the Stated Maturity of the Notes;
(e) Endorsements of negotiable instruments for collection in the ordinary course of business;
(f) the Existing Notes and any Permitted Refinancing Debt (subject to Section 4.29(b) hereof) in respect of such Existing Notes; provided that (i) the remaining outstanding principal balance of the Existing Notes shall be less than or equal to $30,000,000 at all times on or after March 1, 2020 and (ii) the Company shall have furnished to the Trustee and to any requesting Holders prior written notice of its intent to incur any such Permitted Refinancing Debt in accordance with Section 4.29(b), the amount thereof, and the anticipated closing date, together with copies of drafts of the material definitive documents therefor promptly after such drafts are available and, when completed, copies of the final versions of such material definitive documents;
(g) Permitted Junior Lien Debt the principal amount of which does not exceed $150,000,000 and any Permitted Refinancing Debt in respect thereof; provided that the Company shall have furnished to the Trustee and any requesting Holders prior written notice of its intent to incur such Permitted Junior Lien Debt, the amount thereof, and the anticipated closing date, together with copies of drafts of the material definitive documents therefor promptly after such drafts are available and, when completed, copies of the final versions of such material definitive documents;
(h) Debt in respect of letters of credit posted on behalf of the Note Parties in an amount not to exceed $2,000,000;
(i) Guarantees of the Company and any Guarantor in respect of Debt otherwise permitted hereunder;
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(j) Other Debt not to exceed $10,000,000 in the aggregate principal amount at any one time outstanding;
(k) (i) all obligations to the extent constituting Debt under all Swap Agreements of the Company and its Subsidiaries entered into with Approved Counterparties and which are otherwise permitted hereunder and (ii) all obligations in respect of Bank Product Obligations (as such term is defined in the Intercreditor Agreement) of any of the lenders or lender affiliates under or in connection with the First Lien Credit Agreement or the Credit Facility; and
(l) Debt issued under the First Lien Credit Agreement and any Permitted Refinancing Debt in respect of all of such Debt (or part of such Debt if the remainder of such Debt is refinanced or replaced as provided in the first proviso of this clause (1)), subject to Section 4.29(b)(iii) (such Permitted Refinancing Debt in respect of the First Lien Credit Agreement, the “ Credit Facility ”) not to exceed a principal amount equal to the All in Cap in the aggregate at any time outstanding (with outstanding letters of credit being deemed to have a principal amount equal to the stated amount thereof); provided that, if any such Debt in respect of the First Lien Credit Agreement or Credit Facility is refinanced or replaced pursuant to Section 4.29(b)(iii) with Permitted Junior Lien Debt or unsecured Debt, there shall be a permanent dollar-for-dollar reduction in the Base Cap and the Refinancing Cap; provided, further , that any such secured Debt incurred under this clause (l) must be (a) secured on a basis that is or would be pari passu with the First Lien Credit Agreement as in effect on the date hereof (which, includes, for the avoidance of doubt, that no Debt secured under this clause (l) may be secured by a so called “one and a half” or similar lien structure) and (b) subject to a rank in right of payment that is or would be pari passu with the loans and obligations under the First Lien Credit Agreement as on the date hereof (which, includes, for the avoidance of doubt, that no Debt incurred under this clause (l) may be contractually subordinated to any other Debt incurred under this clause (l) or otherwise, including pursuant to any so called “first-out” or “last-out” tranche or similar tranching structures).
Section 4.28 Liens . The Company will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter acquired), except (the “ Permitted Liens ”):
(a) Liens granted under the Note Documents securing the payment of any Secured Obligations under the Notes and any PIK Notes and Note Documents;
(b) Excepted Liens;
(c) Liens securing Permitted Junior Lien Debt permitted by Section 4.27(g);
(d) Liens securing Debt permitted by Section 4.27(b), but only on the Property that are the subject of the Debt referred to in such clause;
(e) Liens on cash deposits (and Deposit Accounts) securing Debt in respect of letters of credit permitted by Section 4.27(h);
(f) Liens existing on the date hereof and listed in Schedule 9.03 of the First Lien Credit Agreement as in effect on the date hereof and any renewals or extensions thereof;
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(g) Liens in favor of a trustee pursuant to an indenture relating to any Debt permitted by this Indenture to the extent such Liens (i) only secure customary compensation, reimbursement and indemnification obligations owing to such trustee and (ii) are limited to the money or property held by such trustee (except such money or property held in trust for the payment of such Debt);
(h) Liens granted to secure obligations under the First Lien Credit Agreement (including Secured Swap Obligations (as defined in the First Lien Credit Agreement or any substantially similar definition in the Credit Facility) and obligations permitted under Section 4.27(k)(ii)) and, once the First Lien Credit Agreement ceases to exist, the Credit Facility, in each case, to the extent not prohibited under this Indenture, including Section 4.27(l), and subject to an Intercreditor Agreement; provided that Liens under this clause 4.28(h) shall be subject to the All in Cap in all respects;
(i) Liens in favor of the provider of insurance premium financings which encumber cash or letters of credit held by the party, the proceeds of insurance the premiums of which are financed thereby, or prepaid premiums, which are entered into in the ordinary course of business and which secure the Debt incurred from such provider to pay insurance premiums in an aggregate amount not to exceed $250,000 at any time; and
(j) Liens on Property not otherwise permitted by the foregoing clauses of this Section 4.28; provided that (i) such Liens do not secure Debt for borrowed money and (ii) the aggregate amount of all Debt secured by Liens permitted by this Section 4.28(j) shall not exceed $2,000,000 at any time.
Section 4.29 Dividends, Distributions and Redemptions; Amendments to Certain Debt Documents .
(a) Restricted Payments . The Company will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, return any capital to its stockholders or make any distribution of its Property to its Equity Interest holders, except:
(i) the Company may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Capital Stock);
(ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests;
(iii) the Company may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Company and its Subsidiaries;
(iv) the Company may make Restricted Payments in the form of repurchases of Equity Interests issued by the Company in an aggregate amount not to exceed $25,000,000 during the term of this Indenture; provided that (A) the PDP Coverage Ratio shall be equal to or greater than 1.00 to 1.00 after giving pro forma effect to such
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Restricted Payment (and the Company has delivered the certificate required by Section 4.03(s) certifying to such pro forma compliance and attaching calculations demonstrating such pro forma compliance), (B) such Restricted Payment is pursuant to an open market repurchase of such Equity Interests and the seller of such Equity Interest is not an Affiliate or “insider” of the Company, (C) no Default or Event of Default shall exist at the time of such Restricted Payment or result therefrom and (D) concurrently with any such Restricted Payment, the Company shall deliver a certificate executed by its Chief Financial Officer certifying that, after giving effect to such Restricted Payment, the Company is Solvent as of such date.
(b) Redemption or Amendment of Terms of Certain Debt . The Company will not, and will not permit any Subsidiary to:
(i) call, make or offer to make any Redemption of or otherwise Redeem (whether in whole or in part) the Existing Notes (or any Permitted Refinancing Debt in respect thereof) or any Permitted Junior Lien Debt (or any Permitted Refinancing Debt in respect thereof); provided that the Company may prepay, repay or Redeem the Existing Notes or any Permitted Refinancing Debt in respect thereof so long as such prepayment, repayment or Redemption (1)(x) is made in exchange for or with the net cash proceeds of the substantially concurrent issuance of Equity Interests of the Company (other than Disqualified Capital Stock and Equity Interests issued on or before the Issue Date) or (y) is made in exchange for or with the net cash proceeds of a substantially concurrent incurrence of Permitted Junior Lien Debt or unsecured Debt, in each case, constituting Permitted Refinancing Debt of the Company maturing at least ninety-one (91) days outside the Stated Maturity of the Notes or (2) is made with aggregate Operating Cash Flow, measured since the Issue Date; provided , however , prepayments, repayments and Redemptions shall only be permitted under this clause (2) if (x) the Total Debt to EBITDAX ratio measured as of the most recently ended fiscal quarter for which financial statements are available shall be less than 3.00 to 1.00 as measured immediately prior to and after giving pro forma effect to such repayment, prepayment or Redemption and to the other transactions to occur on such date; (y) no Defaults or Event of Default exist or shall occur after giving effect thereto; and (z) concurrently with any such prepayment, repayment or Redemption, the Company shall deliver an Officers’ Certificate to the Trustee certifying that, after giving effect to such prepayment, repayment or Redemption, the Company has complied with this Section 4.29(b)(i)(2) and is Solvent as of such date. For the avoidance of doubt, the Existing Notes and any Permitted Refinancing Debt in respect thereof cannot be refinanced, repaid, prepaid or redeemed with any Debt secured by a Lien that is pari passu or senior to the Liens securing the Secured Obligations (including, without limitation, any so called “first”, “one and a half” or similar Lien structures); or
(ii) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of or documents governing the Existing Notes, any Permitted Junior Lien Debt or any Permitted Refinancing Debt in respect of either of the foregoing if:
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(A) the effect thereof would be to (t) shorten its maturity or average life, (u) increase the amount of any payment of principal thereof or premium or fee (other than a consent, amendment or similar fee in an aggregate amount for all such fees during the term of this Indenture not to exceed 1.00% of the outstanding principal amount of the Existing Notes, any Permitted Junior Lien Debt or any Permitted Refinancing Debt being amended, modified or otherwise changed or any fee owed to the Existing Notes Trustee) with respect thereto, (v) increase the rate or shorten any period or payment of interest thereon or (w) cause such Permitted Junior Lien Debt or Permitted Refinancing Debt in respect thereof to no longer satisfy the requirements of the definitions of Permitted Junior Lien Debt or Permitted Refinancing Debt, as applicable;
(B) such amendment, modification, waiver, change or consent would adversely affect the Holders in any material respect; or
(C) in the case of Permitted Junior Lien Debt or any Permitted Refinancing Debt in respect thereof, such amendment, modification, waiver, change or consent is prohibited under the terms of the applicable intercreditor agreement;
(iii) refinance or replace (whether in whole or in part) the loans and obligations outstanding under the First Lien Credit Agreement or any Credit Facility so long as (1) such new Debt is in an aggregate principal amount not in excess of the principal amount being refinanced and an amount necessary to pay any accrued and unpaid interest on the Debt being refinanced and any fees and expenses, including call protection amounts, yield maintenance amounts and any other premiums, on the Debt being refinanced that is related to or that becomes due as a result of such refinancing; provided , that the principal amount of the new Debt shall at all times be subject to the All in Cap (subject to reduction to the Base Cap and Refinancing Cap as provided in Section 4.27(l)), (2) the terms of the new Debt do not shorten the final maturity or increase the Weighted Yield on the loans and obligations under the Credit Facility as compared to the Weighted Yield on the loans and obligations under the First Lien Credit Agreement as in effect on the Issue Date by more than 250 basis points; (3) the call protection under the new Debt does not change (and is not modified) in any manner that is prejudicial to the Company as compared to the call protection under the refinanced Debt immediately prior to such refinancing, unless, substantially contemporaneously therewith, this Indenture is amended pursuant to Section 9.01(j) such that the Notes also receive the benefit of such prejudicial change or modification to the call protection (as examples, if the terms of the new Debt include a make-whole for a period of time that extends longer than the make-whole then-applicable to the refinanced debt (whether on account of the refinanced Debt never having contained a make-whole or on account of the make-whole expiring or terminating on an earlier date in accordance with its terms) (a “ make-whole extension ”), then the Notes shall be amended to extend the then-existing make-whole period by (or reintroduce a make-whole period for) the length of the make-whole extension; additionally , in the event the new Debt includes a call premium schedule that increases the call premium percentage applicable at any period of time as compared to the call premium percentage applicable to such period of time under the then-applicable refinanced debt (a “ call protection increase ”), then the Notes shall be amended such that the then applicable call premium percentage under the Notes (even if
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the Notes would not otherwise be subject to a call premium at such point in time) are increased by such call protection increases during such periods of time); (4) such new Debt does not in any way restrict the payment, repayment, redemption, repurchase or other refinancing of or in respect of the Notes that would be permitted under the First Lien Credit Agreement as in effect on the Issue Date, (5) such New Debt does not add any Property as collateral for the Credit Facility unless such Property is added as collateral for the Secured Obligations or the Secured Parties decline to take such collateral, (6) such New Debt does not provide for any Person to issue a guarantee or be required to issue a guarantee unless such Person guarantees the Secured Obligations or the Secured Parties decline to take such guarantee and (7) such new Debt does not contravene the provisions of the Intercreditor Agreement;
provided that the foregoing shall not prohibit the execution of supplemental indentures to add guarantors, provided such Person complies with Section 4.15(b) and Section 4.15(c).
Section 4.30 Investments, Notes, Advances and Acquisitions . The Company will not, and will not permit any Subsidiary to, make or permit to remain outstanding any Investments in or to any Person or make any Material Acquisitions, except that the foregoing restriction shall not apply to:
(a) Investments disclosed on Schedule 9.05 of the First Lien Credit Agreement as in effect on the Issue Date;
(b) Accounts receivable arising in the ordinary course of business;
(c) Cash Equivalents so long as such Cash Equivalents are held in a Deposit Account, Securities Account or Commodities Account subject to an Account Control Agreement;
(d) Investments (i) made by the Company in or to any Subsidiary which is a Guarantor and with respect to which 100% of the issued and outstanding Equity Interests have been pledged to Trustee, and (ii) made by any Guarantor in or to any other Note Party;
(e) Permitted Acquisitions, provided that the Company shall deliver concurrently with the consummation of any Permitted Acquisition the Officers’ Certificate required by Section 4.03(s) certifying to pro forma compliance with the First Lien Financial Covenants to the extent then in effect under the First Lien Credit Agreement or the Credit Facility and a PDP Coverage Ratio that is greater than or equal to 0.95 to 1.00 and attaching calculations demonstrating such compliance;
(f) Investments in stock, obligations or securities received in settlement of debts arising from Investments permitted under this Section 4.30 owing to the Company or any Subsidiary as a result of a bankruptcy or other insolvency proceeding under any Bankruptcy Law of the obligor in respect of such debts or upon the enforcement of any Lien in favor of the Company or any of its Subsidiaries; provided that the Company shall give the Trustee prompt written notice if the aggregate amount of all Investments held at any one time under this Section 4.30(f) exceeds $100,000;
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(g) (i) guarantees permitted by Section 4.27, and (ii) guarantees by the Company or any Subsidiary for the performance or payment obligations of the Company or any Guarantor, which obligations were incurred in the ordinary course of business and do not constitute Secured Obligations;
(h) Investments not to exceed $5,000,000 in the aggregate at any time; and
(i) other acquisitions after the Issue Date by the Company or any Guarantor of Oil and Gas Properties (or all of the Equity Interests in Persons that primarily own Oil and Gas Properties) that have been approved by the requisite lenders under the First Lien Credit Agreement (or if the First Lien Credit Agreement ceases to exist, the agent or requisite lenders under the Credit Facility), provided that any Property acquired in connection with such acquisition becomes Collateral substantially concurrently with the closing of such acquisition to the extent required under Section 4.19 and any Person acquired as part of such acquisition becomes a Guarantor substantially concurrently with the closing of such acquisition in accordance with Section 4.15(b).
Section 4.31 Nature of Business . The Company will not, and will not permit any Subsidiary to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company. From and after the date hereof, the Note Parties and their Subsidiaries will not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties not located within the geographical boundaries of the United States.
Section 4.32 Limitation on Leases . The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and leases of Oil and Gas Properties), under leases or lease agreements which would cause the aggregate amount of all net payments made by the Company and the Subsidiaries pursuant to all such leases or lease agreements, including any residual payments at the end of any lease, to exceed $2,000,000 in any period of twelve (12) consecutive calendar months during the life of such leases.
Section 4.33 Proceeds of Notes . Neither the Company nor any Person acting on behalf of the Company has taken or will take any action which might cause any of the Note Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Exchange Act or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect. If requested by any Holder, the Company will furnish to such requesting Holder a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulation U, Regulation T or Regulation X of the Board, as the case may be.
Section 4.34 ERISA Compliance . The Company will not, and will not permit any Subsidiary to, at any time:
(a) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, engage in, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to engage in, any transaction in connection with which the Company, a Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a Tax imposed by Chapter 43 of Subtitle D of the Code if such penalty or liability could reasonably be expected to result in a Material Adverse Effect;
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(b) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, terminate, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to terminate, any Plan in a manner, or take any other action with respect to any Plan, which could result in any liability of the Company, a Subsidiary or any ERISA Affiliate to the PBGC;
(c) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, fail to make, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or Applicable Law, the Company, a Subsidiary or any ERISA Affiliate is required to pay as contributions thereto, if such failure could reasonably be expected to result in a Material Adverse Effect;
(d) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, permit to exist, or allow any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to permit to exist, any accumulated funding deficiency within the meaning of section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan;
(e) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, permit, or allow any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to permit, the actuarial present value of the benefit liabilities under any Plan maintained by the Company, a Subsidiary or any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA;
(f) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to contribute to or assume an obligation to contribute to, any Multiemployer Plan;
(g) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, acquire, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to the Company or a Subsidiary or with respect to any ERISA Affiliate of the Company or a Subsidiary if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities;
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(h) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, incur, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to incur, a liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; and
(i) except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, amend, or permit any ERISA Affiliate (to the extent that the Company has Control of the ERISA Affiliate) to amend, a Plan resulting in an increase in current liability such that the Company, a Subsidiary or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code.
Section 4.35 Sale or Discount of Receivables . Except for receivables obtained by the Company or any Subsidiary out of the ordinary course of business or the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to settle collection of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business in connection with the compromise or collection thereof and not in connection with any financing transaction, the Company will not, and will not permit any Subsidiary to, discount or sell (with or without recourse) any of its notes receivable or accounts receivable.
Section 4.36 Mergers, Etc . The Company will not, and will not permit any Subsidiary to, merge into or with or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person (whether now owned or hereafter acquired) (any such transaction, a “consolidation”), or liquidate or dissolve; except that (a) any Guarantor may merge with or dissolve into any other Guarantor, (b) the Company may merge with any Subsidiary (or such Subsidiary may be dissolved into the Company) so long as the Company is the survivor, (c) any Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Company or to another Subsidiary, and may thereafter liquidate or dissolve if applicable; provided that if the transferor in such a transaction is a Guarantor, then the transferee must either be the Company or a Guarantor and (d) the Company or any Subsidiary may dispose of all of the Equity Interests of any Subsidiary in accordance with Section 4.37.
Section 4.37 Sale of Properties .
(a) The Company will not, and will not permit any Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any Property (each, a “ Transfer ”) except for:
(i) the sale of Hydrocarbons in the ordinary course of business;
(ii) farmouts, sales or other dispositions of undeveloped acreage and assignments in connection with such farmouts, in each case, with the approval of the First Lien Agent, or, if the First Lien Credit Agreement ceases to exist, the agent or requisite lenders under the Credit Facility, or if the Credit Facility ceases to exist, the Majority Holders, in each case, in its or their sole discretion, as applicable;
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(iii) the sale or transfer of equipment that is no longer useful or necessary for the business of the Company or such Subsidiary or is replaced by equipment of at least comparable value or use;
(iv) the sale or other disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or any Subsidiary owning Oil and Gas Properties; provided that (i) 100% of the consideration received in respect of such sale or other disposition shall be cash, (ii) the consideration received in respect of such sale or other disposition shall be equal to or greater than the fair market value of the Oil and Gas Property, interest therein or Subsidiary subject of such sale or other disposition, as reasonably determined by the management or, with respect to a Material Divestiture, the Board of Directors or other governing body of the Company and the Company shall deliver an Officers’ Certificate certifying to that effect), (iii) if any such sale or other disposition is of a Subsidiary owning Oil and Gas Properties, such sale or other disposition shall include all the Equity Interests of such Subsidiary, and (iv) with respect to any Material Divestiture, the Company shall be in pro forma compliance after giving effect to such Material Divestiture with each of the First Lien Financial Covenants to the extent then in effect under the First Lien Credit Agreement or the Credit Facility and shall have delivered to the Trustee an Officers’ Certificate as required by Section 4.03(s) attaching calculations demonstrating such pro forma compliance;
(v) Transfers of Property to the Company or any Guarantor; and
(vi) Transfers permitted by Section 4.28, Section 4.29(a), Section 4.35 and Section 4.36;
(vii) the trade or exchange of Oil and Gas Properties constituting Proved Undeveloped Reserves or Oil and Gas Properties not constituting Proved Reserves for Oil and Gas Properties of like kind and equivalent value (including any cash or Cash Equivalents necessary to achieve an exchange of equivalent value); provided that (i) the aggregate value of all Oil and Gas Properties traded or exchanged pursuant to this Section 4.37(a)(vii) shall not exceed $10,000,000 and (i) (A) the value for any Oil and Gas Properties constituting Proved Undeveloped Reserves shall be the net present value of such Oil and Gas Property (using a 10% discount rate) as such value is set forth in the most recently delivered Reserve Report and (B) the value for any Oil and Gas Properties not constituting Proved Reserves shall be the fair market value of such Oil and Gas Property;
(viii) any Transfer of assets pursuant to (i) a condemnation, appropriation, seizure or similar taking or proceeding by a Governmental Authority, (ii) the requirement of, or at the direction of, a Governmental Authority or (iii) a Casualty Event;
(ix) the termination, surrender or release of leases and subleases, in each case in the ordinary course of business to the extent the Company determines in good faith that such leases or subleases are not economic or the Company has no right to extend or renew such lease or sublease;
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(x) sales and other Transfers of Properties (other than any Oil and Gas Property constituting Proved Developed Producing Reserves) having a fair market value not to exceed $10,000,000 during any 12-month period; and
(xi) the sale or other disposition of any Oil and Gas Property or any interest therein or any Subsidiary owning Oil and Gas Properties not otherwise permitted under this Section 4.37(a); provided that (i) such sale or disposition has been approved by the requisite lenders under the First Lien Credit Agreement, (ii) at least 75% of the consideration received in respect of such sale or other disposition shall be in cash, (iii) such sale or disposition is not for all or substantially all of the Oil and Gas Properties of the Company and its Subsidiaries, (iv) the consideration received in respect of such sale or other disposition shall be equal to or greater than the fair market value of the Oil and Gas Property (and if the consideration received in connection with such sale or disposition is greater than $50,000,000, fair market value must be supported by a fairness opinion in form and substance acceptable to the Majority Holders from a financial advisor of national standing, (v) the Net Cash Proceeds from such sale or disposition are applied pursuant to the mandatory prepayment requirements of the First Lien Credit Agreement or the Credit Facility and Section 4.37(b) hereof and (vi) any assets received shall become Collateral substantially concurrently with such sale or disposition in accordance with Section 4.19 and any Person acquired as part of such acquisition shall become a Guarantor substantially concurrently with the closing of such acquisition in accordance with Section 4.15(b).
Notwithstanding anything to the contrary in this Section 4.37(a), in no event shall the Company or any Subsidiary enter into any “DrillCo” transaction or similar transaction where the Company or any Subsidiary conveys any Oil and Gas Property to any Person in exchange for the funding of any drilling or development costs.
(b) If the Company or any Guarantor Transfers Oil and Gas Properties (or any Equity Interests in any Guarantor owning such Oil and Gas Properties) or Liquidates any Swap Agreement (in each case, other than Transfers permitted under Section 4.37(a)(i), Section 4.37(a)(iii), Section 4.37(a)(v) or Section 4.37(a)(vi)), then the Company shall, subject to the prepayment provisions in the First Lien Credit Agreement or the Credit Facility and the reinvestment rights set forth in this clause (b), within ten (10) Business Days after such Transfer or Liquidation, make an Asset Sale Offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased from the Net Cash Proceeds received in excess of $20,000,000 in respect of such Transfer or Liquidation. The offer price in any Asset Sale Offer will be equal to 100% of such Net Cash Proceeds in excess of $20,000,000 and be comprised of principal amount plus accrued and unpaid interest thereon to the Settlement Date plus the Make Whole Premium and/or Applicable Premium, as applicable, subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Settlement Date, and will be payable in cash. Notwithstanding the foregoing, the Company may, as long as no Default or Event of Default exists, within ten (10) Business Days after such Transfer or Liquidation, notify the Trustee that it intends to reinvest such Net Cash Proceeds; provided that if no Default or Event of Default exists and the Company notifies the Trustee and the Holders that it plans to reinvest such Net Cash Proceeds in the acquisition or development of Oil and Gas Properties constituting Proved Reserves, then it shall do so within ninety (90) days after the date of such Transfer or Liquidation ( provided that the execution of a binding AFE during such period
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shall be deemed to be a reinvestment so long as the amounts owed under such AFE are funded within 180 days after the date such AFE is executed); provided, further , that (A) if the Company fails to make such reinvestment in such period, it shall make an Asset Sale Offer as provided in this clause (b) in an amount equal to the Net Cash Proceeds that were not so reinvested within ten (10) Business Days after the expiration of such ninety (90) day period (or, as applicable, after the expiration of the 180-day period following the execution of a binding AFE) and (B) in no event shall the aggregate amount of Net Cash Proceeds permitted to be reinvested exceed $50,000,000 during the term of this Indenture. For the avoidance of doubt, the amount of any Net Cash Proceeds required to be applied as set forth in this section shall be reduced on a dollar-for-dollar basis to the extent that such Net Cash Proceeds are applied to satisfy any mandatory prepayment under the First Lien Credit Agreement or the Credit Facility.
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of 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 Section 4.37, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions by virtue of such compliance.
Section 4.38 Environmental Matters . The Company will not, and will not permit any Subsidiary to, cause or permit any of its Property to be in violation of, or perform any action or permit any action which will subject any such Property to any Remedial Work under any Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations could reasonably be expected to have a Material Adverse Effect.
Section 4.39 Transactions with Affiliates . The Company will not, and will not permit any Subsidiary to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate (other than the Note Parties) unless such transactions are otherwise permitted under this Indenture and are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate; provided that (a) any transaction with any Affiliate (other than a transaction solely among Note Parties) with consideration, when aggregated with the consideration involved in all other such affiliated transactions during the term of this Indenture, in excess of $5,000,000 shall require the approval of the Board of Directors of the Company (including a majority of the disinterested directors) and (b) the Company shall deliver a fairness opinion in form and substance acceptable to the Majority Holders from a financial advisor of national standing approving any transaction with any Affiliate (other than a transaction solely among Note Parties) with consideration, when aggregated with the consideration involved in all other such affiliated transactions during the term of this Indenture, in excess of $10,000,000.
Section 4.40 Subsidiaries . The Company will not, and will not permit any Subsidiary to, create or acquire any additional Subsidiary unless the Company gives written notice to the Trustee and Collateral Agent of such creation or acquisition and complies with Section 4.15(b). The Company shall not, and shall not permit any Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in any Subsidiary except in compliance with Section 4.36. Neither the Company nor any Subsidiary shall have any Subsidiaries that are not organized under the laws of the United States of America or any state thereof or the District of Columbia. The Company will not permit any Person other than a Note Party to own any Equity Interests in any Guarantor.
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Section 4.41 Negative Pledge Agreements; Dividend Restrictions . The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any contract, agreement or understanding (other than this Indenture, the Security Documents, the First Lien Credit Documents, Swap Agreements, documents governing Permitted Junior Lien Debt or Capital Leases or purchase money loans creating Liens permitted by Section 4.28 or documents evidencing the Credit Facility) which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property in favor of the Trustee, Collateral Agent and the Holders or restricts any Subsidiary from paying dividends or making distributions to any Note Party, or which requires the consent of or notice to other Persons in connection therewith.
Section 4.42 Gas Imbalances, Take-or-Pay or Other Prepayments or Minimum Volume Contracts . The Company will not, and will not permit any Subsidiary to, (a) allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Company or any Subsidiary that would require the Company or such Subsidiary to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor to exceed one bcf of gas (on an mcf equivalent basis) in the aggregate or (b) enter into minimum volume contracts for gathering, processing or transportation of production that require the payment of a fee in the event such minimum volumes are not met.
Section 4.43 Swap Agreements - Maximum Hedging . The Company will not, and will not permit any Subsidiary to, enter into any Swap Agreements other than (a) non-speculative Swap Agreements in respect of commodities (i) with an Approved Counterparty, (ii) that are either swaps or costless collars (and if costless collars, have terms acceptable to the First Lien Agent or, if the First Lien Credit Agreement ceases to exist, any agent or requisite lenders under the Credit Facility, or, if both cease to exist, the Majority Holders, in each case, in their sole discretion), (iii) the maximum tenor of which is no longer than thirty-six (36) months, (iv) the notional volumes for which (when aggregated with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed and as of the last day of each fiscal quarter, 90% of Reasonably Anticipated Projected Production for each month during the 36-calendar month period following such date of determination, for each of crude oil, liquids and natural gas, calculated separately and (v) in the case of Swap Agreements that are swaps, such Swap Agreements shall have prices for each month during the tenor thereof set at the Strip Price for such month determined at the time such Swap Agreement is entered into; and (b) Swap Agreements in respect of interest rates with an Approved Counterparty, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Swap Agreements of the Company and its Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 50% of the then outstanding principal amount of the Company’s Debt for borrowed money which bears interest at a fixed rate and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Swap Agreements of the Company and its Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed the greater of $20,000,000 and 75% of the then outstanding principal amount of the
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Company’s Debt for borrowed money which bears interest at a floating rate. In no event shall any Swap Agreement contain any requirement, agreement or covenant for the Company or any Subsidiary to post collateral or margin to secure their obligations under such Swap Agreement or to cover market exposures other than collateral provided for in, and upon the terms and conditions set forth in, this Indenture and the relevant Security Documents. No Note Party shall Liquidate any Swap Agreement in respect of commodities if (x) after giving pro forma effect thereto, the Company would not be in compliance with Section 4.21 or the First Lien Financial Covenants to the extent then in effect under the First Lien Credit Agreement or the Credit Facility (and in connection with any such Liquidation, the Company shall deliver an Officers’ Certificate demonstrating such pro forma compliance), or (y) the aggregate proceeds received by the Note Parties in respect of such Liquidations in any 12-month period exceeds $2,000,000. Notwithstanding anything to the contrary contained herein, in the event that the First Lien Agent or lenders under the Credit Facility grant an extension, waiver, amendment, or consent with respect to the Company’s obligations under Section 9.18 of the First Lien Credit Agreement, such waiver, amendment, consent, or extension shall be automatically applicable to this Section 4.43 (without the need for further written modification to this Indenture).
Section 4.44 Deposit Accounts . The Company will not, and will not permit any Guarantor to, open or otherwise establish, or deposit or otherwise transfer Dedicated Cash Receipts into, any Deposit Account other than Deposit Accounts (a) in which the Collateral Agent has been granted a Lien and (b) that are subject to an Account Control Agreement in favor of the Collateral Agent.
Section 4.45 Sale and Leaseback . The Company will not, and will not permit any Subsidiary or Guarantor to, enter into any arrangement, directly or indirectly, with any Person whereby the Company or any Subsidiary or Guarantor shall sell or transfer any of its Property, whether now owned or hereafter acquired, and whereby Company or any Subsidiary or Guarantor shall then or thereafter rent or lease as lessee such Property or any part thereof or other Property which Company or any Subsidiary or Guarantor intends to use for substantially the same purpose or purposes as the Property sold or transferred.
Section 4.46 Amendments to Organizational Documents and Fiscal Year . Without the prior written consent of the Majority Holders, neither Company nor any Guarantor will (a) amend, or permit to be amended, its Organizational Documents or waive any right or obligation of any Person thereunder except to the extent such amendment or waiver could not reasonably be expected to adversely affect the rights and benefits of the Trustee or the Holders in any material respect or (b) change its fiscal year to end on any day other than December 31.
Section 4.47 Covenant Regarding Financing Facility . If the Company or any Note Party incurs any Permitted Junior Lien Debt, unsecured Debt, Permitted Refinancing Debt of any of the foregoing or Permitted Refinancing Debt of all or part of the First Lien Credit Agreement or the Credit Facility or the Notes to the extent such Permitted Refinancing Debt is in the form of Permitted Junior Lien Debt or unsecured Debt or enters into any amendment, modification or supplement to any document evidencing Permitted Junior Lien Debt, the Existing Notes, unsecured Debt or any Permitted Refinancing Debt in respect of any of the foregoing and, in either case, such Debt then incurred or amended, modified or supplemented would have an aggregate cash interest rate in excess of 9.50% per annum (the amount above 9.50% per annum, the
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“ Excess ”), then such Excess shall be permitted hereunder if and only if, substantially contemporaneously therewith, the Company and Trustee amend or supplement the Indenture and Notes pursuant to Section 9.01(j) to provide an increase to the Cash Interest payable on the Notes equal to at least such Excess, which such increase shall be effective no later than the date of the incurrence of the Debt or the amendment, modification or supplement to the Debt giving rise such Excess.
Section 4.48 Anti-Layering . Notwithstanding anything in this Indenture to the contrary, the Company shall not incur, and shall not permit any Subsidiary to incur, any Debt that: (a) is secured on a subordinated or junior basis to the First Lien Credit Agreement or the Credit Facility and on a senior basis to the Note Documents (including, without limitation, any Debt subject to a so called “one and half lien” or similar lien structure but excluding the Lien in favor of the Trustee provided for under Section 7.07) or (b) is contractually subordinated in right of payment to any Debt and not also contractually subordinated in right of payment to the Notes (including, without limitation, pursuant to the creation of any so called “first-out” or “last-out” tranche or similar tranching structures); provided, however, that this provision shall not prohibit any Debt incurred pursuant to any Swap Agreement permitted to be secured under Section 4.28.
ARTICLE FIVE
[Reserved]
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01 Events of Default .
An “ Event of Default ” occurs if one of the following shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be involuntary or be effected by operation of law):
(a) the Company shall fail to pay any principal of any Note when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for redemption or repurchase thereof, by acceleration or otherwise;
(b) the Company shall fail to pay any interest on any Note or any fee or any other amount (other than any amount referred to in Section 6.01(a)) payable under any Note Document, when and as the same shall become due and payable and such failure shall continue unremedied for a period of 20 days;
(c) any representation or warranty made or deemed made by or on behalf of the Company or any Subsidiary in or in connection with the Exchange Agreement and any Note Document or any amendment or modification of any Note Document or waiver under such Note Document, or in any report, certificate, financial statement or other document furnished by or on behalf of the Company or any Subsidiary pursuant to or in connection with any Note Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made ( provided that to the extent that any representation and warranty is qualified by materiality, material adverse effect or a similar qualification, such representation and warranty shall be true in all respects);
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(d) the Company or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in any of Sections 4.03(h), 4.03(l), 4.04, 4.05, 4.13, 4.14, 4.15, 4.18, 4.19, 4.21, 4.24, 4.25 or 4.26 or in any of Sections 4.27 through 4.48 and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof from the Trustee to the Company or from the Holders of at least 25% of the aggregate principal amount of the Notes to the Company and the Trustee or (ii) an Officer of the Company or such Subsidiary otherwise becoming aware of such default; provided , however , the rate at which Cash Interest on the Notes accrues shall increase to the Default Rate effective immediately upon such failure without giving effect to such thirty (30)-day grace period;
(e) the Company or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in this Indenture (other than those specified in Section 6.01(a), Section 6.01(b) or Section 6.01(d)) or any other Note Document and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof from the Trustee to the Company or from the Holders of at least 25% of the aggregate principal amount of the Notes to the Company and the Trustee or (ii) an Officer of the Company or such Subsidiary otherwise becoming aware of such default;
(f) the Company or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace or cure periods);
(g) any event or condition occurs that results in (i) any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require the Company or any Subsidiary to make an offer in respect thereof, (ii) an “Event of Default” under the First Lien Credit Agreement or any equivalent under any Credit Facility shall have occurred; provided that an “Event of Default” or equivalent resulting from a breach of the First Lien Financial Covenants or of Section 9.01(a) of the First Lien Credit Agreement (or any replacement financial covenants under any Credit Facility) to the extent then in effect under the First Lien Credit Agreement or the Credit Facility shall not constitute an Event of Default under this Section 6.01(g)(ii) until (A) the loans or other obligations under the First Lien Credit Agreement or Credit Facility have been accelerated, (B) the First Lien Agent has commenced exercising remedies or (C) such “Event of Default” or equivalent has not been cured or waived under the terms of the First Lien Credit Agreement or Credit Facility, as applicable, within thirty (30) days after notice of the occurrence of such “Event of Default” or equivalent has been delivered by the Company to the lenders under the First Lien Credit Agreement or Credit Facility (or was required to be delivered under the terms of the First Lien Credit Agreement or Credit Facility as in effect at such time);
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any Guarantor or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
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appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Guarantor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) the Company or any Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 6.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) any stockholder of the Company shall make any request or take any action for the purpose of calling a meeting of the stockholders of the Company to consider a resolution to dissolve and wind-up the Company’s affairs or (vii) take any action for the purpose of effecting any of the foregoing;
(j) the Company or any Guarantor shall admit in writing its inability or fail generally to pay its debts as they become due;
(k) (i) one or more judgments for the payment of money in an aggregate amount in excess of $2,000,000 (to the extent not covered by independent third party insurance provided by insurers of the highest claims paying rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding under any Bankruptcy Law) or (ii) any one or more non-monetary judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, shall be rendered against a Note Party or any combination thereof and, in either such case, the same shall remain undischarged for a period of forty-five (45) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of a Note Party to enforce any such judgment;
(l) the Note Documents after delivery thereof shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with their terms against the Company or a Guarantor party thereto (or, in the case of any Intercreditor Agreement, against any party thereto other than the Collateral Agent) or shall be repudiated by any of them, or cease to create a valid and perfected Lien of the priority required thereby on any of the collateral purported to be covered thereby, except to the extent permitted by the terms of this Indenture, or a Note Party or any of their Affiliates shall so state in writing; and
(m) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
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Section 6.02 Acceleration .
If any Event of Default occurs and is continuing, the Trustee, by written notice to the Company, or the Holders of at least 25% in principal amount of outstanding Notes, by written notice to the Company with a copy to the Trustee, may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately, together with all accrued and unpaid interest and premium (including the Applicable Premium and Make Whole Premium), if any, thereon. Notwithstanding the preceding, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company or its Subsidiaries, all outstanding Notes shall become due and payable immediately without further action or notice, together with all accrued and unpaid interest and premium (including the Applicable Premium and Make Whole Premium), if any, thereon. It is understood and agreed that in the event of an acceleration of all or any outstanding Notes pursuant to this Section in respect of any Event of Default for any reason (including, but not limited to, an Event of Default specified in Section 6.01(h) and Section 6.01(i) or any insolvency proceeding under the Bankruptcy Law or otherwise), the Applicable Premium and Make Whole Premium with respect to the Notes shall become automatically and immediately due and payable as if such acceleration was an optional redemption made by the Company pursuant to Section 3.07 of this Indenture, and the Company will pay such premium (including the Applicable Premium and Make Whole Premium), if any, as compensation to the Holders for the loss of their investment opportunity and not as a penalty, whether or not an insolvency proceeding under any Bankruptcy Law has commenced, and (if an insolvency proceeding has commenced) without regard to whether such insolvency proceeding is voluntary or involuntary, or whether payment occurs pursuant to a motion, plan of reorganization, or otherwise, and without regard to whether the Notes and other Secured Obligations are satisfied or released by foreclosure (whether or not by power of judicial proceeding), deed in lieu of foreclosure or by any other means. The Holders of a majority in principal amount of the then outstanding Notes (subject to Section 2.09) by notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except with respect to nonpayment of principal, interest, premium (including the Applicable Premium and Make Whole Premium), if any, that have become due solely because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies .
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and interest, premium (including the Applicable Premium and Make Whole Premium), if any, on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.
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, Collateral Agent or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.
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Section 6.04 Waiver of Past Defaults .
Holders of a majority in principal amount of the then outstanding Notes (subject to Section 2.09) by notice to the Trustee may on behalf of the Holders of all of the Notes waive (including in connection with a purchase of, or tender offer or exchange offer for, Notes) any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, or interest, premium, if any, on the Notes. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority .
Holders of a majority in principal amount of the then outstanding Notes (subject to Section 2.09) may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. Notwithstanding any provision to the contrary in this Indenture, the Trustee is under no obligation to exercise any of its rights or powers under this Indenture at the direction or request of any Holder, unless such Holder shall offer to the Trustee security and indemnity satisfactory to the Trustee against any fee, loss, liability or expense.
Section 6.06 Limitation on Suits .
A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity or security satisfactory to the Trustee against any fee, loss, liability or expense;
(d) the Trustee does not comply with the request within sixty (60) days after receipt of the request and the offer and, if requested, the provision of indemnity; and
(e) during such 60-day period, the Holders of a majority in principal amount of the then outstanding Notes (subject to Section 2.09) do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.
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Section 6.07 Rights of Holders of Notes to Receive Payment .
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of and interest, premium, if any, on, the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), 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 is authorized to recover judgment in its own name and as trustee of an express trust against the Company and the Guarantors for the whole amount of principal of, interest, premium, if any, remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and each of their agents and counsel.
Section 6.09 Trustee is Authorized to File Proofs of Claim .
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and each of their agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and each of their agents and counsel, and any other amounts due the Trustee or the Collateral Agent under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and each of their agents and counsel, and any other amounts due the Trustee or Collateral Agent under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. 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.
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Section 6.10 Priorities .
If the Trustee collects any money or property pursuant to this Article, it shall pay out the money or property in the following order:
First: to the Trustee, the Collateral Agent and each of their agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee or Collateral Agent and the Trustee’s and Collateral Agent’s costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, interest, premium, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, interest, premium, if any, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
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 a 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, 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 Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee .
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, 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. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities 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 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(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 pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c)and (f) 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 Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(f) No provision of this Indenture or any Note Document will require the Trustee or the Collateral Agent to expend or risk its own funds or incur any liability. Neither the Trustee nor the Collateral Agent will be under any obligation to exercise any of their respective rights and powers under this Indenture or the Note Documents at the request of any Holders, unless such Holder has offered to the Trustee and the Collateral Agent indemnity and/or security satisfactory to each of them against any loss, liability or expense.
Section 7.02 Rights of Trustee .
(a) The Trustee may conclusively rely upon 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, 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 such Officers’ Certificate, Opinion of Counsel or certificate. The Trustee may consult with counsel of its own selection and the advice or opinion of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
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(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed by it with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. The Trustee may, from time to time or at any time, request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers of the Company authorized at such time to deliver, on behalf of the Company, an Officers’ Certificate or order to, or otherwise take specified actions on behalf of the Company with respect to, the Trustee pursuant to this Indenture, which Officers’ Certificate may be signed on behalf of the Company by any individual authorized, on behalf of the Company, to sign an Officers’ Certificate, including any individual specified as so authorized in any such certificate previously delivered by the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holder shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.
(g) The Trustee shall have no duty to inquire as to the performance of the Company’s covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except: (1) any Event of Default occurring pursuant to Section 6.01(a) or 6.01(b) hereof if it is also the Paying Agent hereunder; or (2) any Default or Event of Default of which a Trust Officer shall have received written notification from the Company or Holders.
(h) The permissive right of the Trustee to act hereunder shall not be construed as a duty.
(i) In no event shall the Trustee be responsible or liable for 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 action.
(j) The delivery of documents and information to the Trustee under Article 4 is for informational purposes only, and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from the information contained therein, including the Company’s compliance with any of its covenants hereunder.
(k) 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 Collateral Agent, each Agent and the Trustee in each of its capacities hereunder and, in the case of the Trustee and Collateral Agent, in its capacity as Trustee or Collateral Agent, as applicable, under any other Note Document and any other agreement executed in connection with this Indenture to which the Trustee or Collateral Agent, as applicable, is a party. Whether or not expressly stated in such Note Document, in entering into and performing under any other Note Document, each of the Trustee and Collateral Agent shall be entitled to all of the rights, privileges, immunities and indemnities granted to it, respectively, under this Indenture.
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Section 7.03 I ndividual 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 Company, any Guarantor or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) after a Default has occurred and is continuing, it must eliminate such conflict within ninety (90) days, apply to the SEC for permission to continue as Trustee (if this Indenture is then qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
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 or the Notes, it shall not be accountable for either Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults .
If a Default or Event of Default occurs and is continuing, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within ninety (90) days after it receives written notice detailing such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of, or interest, premium, if any, on, any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes .
Within sixty (60) days after each April 15 beginning with April 15, 2019, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve (12) months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2), to the extent applicable, and § 313(b)(1). The Trustee shall also transmit by mail all reports as required by TIA § 313(c).
A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange (if any) on which the Notes are listed in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on or de-listed from any stock exchange.
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Section 7.07 Compensation and Indemnity .
The Company shall pay to the Trustee and Collateral Agent from time to time such compensation as the Company and the Trustee and the Collateral Agent may agree in writing for the Trustee’s and Collateral Agent’s acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee and Collateral Agent promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services, except to the extent such disbursement, advance or expense may be attributable to its gross negligence or willful misconduct. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s and Collateral Agent’s agents and counsel, except to the extent such expenses may be attributable to its gross negligence or willful misconduct.
The Company and the Guarantors shall indemnify the Trustee and Collateral Agent, jointly and severally, against any and all losses, liabilities, damages, claims or expenses, including Taxes (other than those based upon, measured by or determined by the income of the Trustee) and the reasonable fees and expenses of counsel, incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, any Guarantor or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability, damage, claim or expense is the result of its gross negligence or willful misconduct. The Trustee and the Collateral Agent shall notify the Company and the Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee or Collateral Agent to so notify the Company and the Guarantors shall not relieve the Company or the Guarantors of their obligations hereunder. The Company and the Guarantors shall defend the claim and the Trustee and Collateral Agent, as applicable, shall cooperate in the defense. The Trustee and Collateral Agent may have separate counsel and the Company and the Guarantors shall pay the reasonable fees and expenses of such counsel; provided that the Company and the Guarantors will not be required to pay such fees and expenses if they assume the Trustee’s and Collateral Agent’s defense with counsel acceptable to and approved by the Trustee and Collateral Agent (such approval not to be unreasonably withheld) and there is no conflict of interest between the Company and the Trustee and the Collateral Agent in connection with such defense. The Company and the Guarantors need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture, and any removal or resignation of the Trustee under Section 7.08 or Collateral Agent under Section 12.04. To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium on, if any, interest, if any on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or 6.01(i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
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The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee .
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign in writing upon thirty (30) days’ notice at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor trustee with the consent of the Company. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a receiver, Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one (1) year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within thirty (30) days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of Notes of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction, at the expense of the Company, for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six (6) months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. 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 a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
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successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s and the Guarantors’ obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
Section 7.09 S uccessor Trustee by Merger, Etc .
If the Trustee consolidates with, or merges or converts into, or transfers or sells all or substantially all of its corporate trust business to, another corporation or banking association, the successor corporation or banking association without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification .
There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. No obligor upon the Notes shall serve as a Trustee.
This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).
Section 7.11 Preferential Collection of Claims Against the Company .
The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
ARTICLE EIGHT
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance .
The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, at any time, exercise its rights under either Section 8.02 or 8.03 hereof with respect to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge .
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have discharged its obligations with respect to all outstanding Notes and Secured Obligations, and each Guarantor shall be deemed to have discharged its obligations with respect to its Subsidiary Guarantee, on the date the conditions set forth in Section 8.04 below are satisfied (hereinafter, “ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Debt represented by the
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outstanding Notes and Secured Obligations, and each Guarantor shall be deemed to have paid and discharged its Subsidiary Guarantee (which in each case shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below) and to have satisfied all its other obligations under such Notes or Subsidiary Guarantee and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute such instruments reasonably requested by the Company acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of and interest, premium, if any, on, such Notes when such payments are due, (b) the Company’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.06, 2.07, 2.10, 2.13 and 4.02 hereof and the Appendix, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Guarantors’ obligations in connection therewith and (d) the Legal Defeasance provisions of this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
If the Company exercises its Legal Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee, and any security for the Notes (other than the trust) will be released.
Section 8.03 Covenant Defeasance .
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Article 4 (other than those in Sections 4.01, 4.02 and 4.05) hereof on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, “ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes to the extent permitted by GAAP). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and any Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Section 6.01(g) hereof shall not constitute Events of Default.
If the Company exercises its Covenant Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other than the trust) will be released.
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Section 8.04 Conditions to Legal or Covenant Defeasance .
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment banking firm, appraisal firm or firm of independent public accountants, to pay the principal of, and interest, premium, if any, on, the outstanding Notes and all other Secured Obligations on the date of fixed maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to the date of fixed maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company shall deliver to the Trustee an Opinion of Counsel confirming that:
(i) the Company has received a ruling from, or a ruling has been published by, the Internal Revenue Service; or
(ii) since the Issue Date, there has been a change in the applicable United States 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 outstanding Notes will not recognize income, gain or loss for United States federal income Tax purposes as a result of such Legal Defeasance and will be subject to United States federal income Tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall deliver to the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income Tax purposes as a result of such Covenant Defeasance and will be subject to United States federal income Tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Debt or other borrowing of funds or the grant of Liens securing such Debt or other borrowing, all or a portion of the proceeds of which will be applied to such deposit pursuant to this Section 8.04);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
(f) the Company shall deliver to the Trustee a certificate of an Officer of the Company stating that the deposit was not made by the Company with the intent of preferring the Holders over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and
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(g) the Company shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions .
Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 or 8.08 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or any of its Subsidiaries acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, interest, premium, if any, but such money need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any Tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 or 8.08 hereof or the principal and interest received in respect thereof other than any such Tax which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 or 8.08 hereof which, in the opinion of a nationally recognized investment banking, appraisal firm or firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance, Covenant Defeasance or Discharge, as the case may be.
Section 8.06 Repayment to the Company .
Subject to applicable escheat and abandoned property laws, any money or non-callable Government Securities deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, or interest, premium, if any, on, any Note and remaining unclaimed for two (2) years after such principal, interest, premium, if any, has become due and payable shall be paid to the Company on its written request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money or non-callable Government Securities, and all liability of the Company as trustee thereof, shall thereupon cease; provided , however , that, if any Note then outstanding is not in global form, the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.
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Section 8.07 Reinstatement .
If the Trustee or Paying Agent is unable to apply any money or non-callable Government Securities in accordance with Section 8.05 hereof by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application or requiring the Trustee to turn-over such money or non-callable Government Securities, then the Company’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.05 hereof; provided , however , that, if the Company makes any payment of principal of, interest, premium, if any, on, any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities deposited with or held by the Trustee or Paying Agent.
Section 8.08 Discharge .
This Indenture shall be satisfied and discharged and shall cease to be of further effect as to all Notes issued hereunder (except for (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in clause (1)(B) of this Section 8.08, and as more fully set forth in such clause (1)(B), payments in respect of the principal of and interest, premium, (including the Make Whole Premium and Applicable Premium) if any, on, such Notes and all other Secured Obligations when such payments are due, (b) the Company’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.06, 2.07, 2.10, 2.13 and 4.02 hereof and the Appendix and (c) the rights, privileges and immunities of the Trustee hereunder and the Company’s obligations in connection therewith, including, without limitation, Section 7.07 hereof), and the Trustee, at the expense of the Company, shall execute such instruments reasonably requested by the Company acknowledging satisfaction and discharge of this Indenture with respect to all the Notes, when:
(1) either:
(A) all Notes that have been authenticated, except lost, wrongfully taken or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or
(B) all Notes that have not been delivered to the Trustee for cancellation have become due and payable or will become due and payable within one (1) year by reason of the mailing of a notice of redemption or otherwise, and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, accrued interest, premium, (including, the Make Whole Premium and Applicable Premium) if any, and all other Secured Obligations to the date of fixed maturity or redemption;
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(2) no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit (other than a Default or Event of Default resulting from the incurrence of Debt or other borrowing of funds or the grant of Liens securing such Debt or other borrowing, all or a portion of the proceeds of which will be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
(3) the Company and the Guarantors have paid or caused to be paid all other sums payable by them under this Indenture;
(4) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at fixed maturity or the redemption date, as the case may be; and
(5) the Company has delivered an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge of this Indenture (“ Discharge ”) have been satisfied.
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes .
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or any other Note Document without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of certificated Notes ( provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);
(c) [reserved];
(d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder in any material respect;
(e) to secure the Notes or the Subsidiary Guarantees pursuant to the requirements of Section 4.15;
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(f) to add any additional Guarantor with respect to the Notes or to evidence the release of any Guarantor from its Subsidiary Guarantee in accordance with Article 10 hereof;
(g) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;
(h) to evidence or provide for the acceptance of appointment under this Indenture of a successor Trustee or Collateral Agent;
(i) to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the Security Documents or any discharge or release of any Collateral that is permitted by this Indenture or any of the Note Documents;
(j) to implement any amendment contemplated by Section 4.24(a)(iii), Section 4.29(b)(iii)(3) or Section 4.47; or
(k) with respect to the Security Documents, as provided in the Intercreditor Agreement.
In addition, without the consent of any Holder, the Intercreditor Agreement may be amended in accordance with its terms, including to add additional Debt as Priority Lien Debt (as defined in the Intercreditor Agreement) or Junior Lien Debt (as defined in the Intercreditor Agreement) and add other parties (or any authorized agent thereof or trustee therefor) holding such Debt thereto and to establish that the Liens on any Collateral securing such Debt shall rank equally with the Liens on such Collateral securing the other Priority Lien Debt (as defined in the Intercreditor Agreement) or Junior Lien Debt (as defined in the Intercreditor Agreement), as applicable, then outstanding.
Upon the request of the Company, and upon receipt by the Trustee and Collateral Agent, if applicable, of the documents described in Section 9.06 hereof, the Trustee and Collateral Agent, if applicable, shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture and amendment or supplement to any Note Documents authorized or permitted by the terms of this Section 9.01, but neither the Trustee nor the Collateral Agent, as applicable, shall be obligated to enter into such amended or supplemental indenture or amendment or supplement to any Note Document that affects its own rights, duties or immunities under this Indenture, any Note Document or otherwise.
Section 9.02 With Consent of Holders of Notes .
Except as provided above in Section 9.01 and below in this Section 9.02, the Company, the Guarantors and the Trustee and Collateral Agent, as applicable, may amend or supplement this Indenture, the Notes and any other Note Document with the consent of the Majority Holders (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Majority Holders (including consents obtained in connection with a purchase of, tender offer or exchange offer for, Notes). However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):
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(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption or repurchase of the Notes (other than the provisions relating to the covenants in Sections 3.09, 4.25 and 4.37(b) hereof);
(c) reduce the rate of or change the time for payment of interest, including the Default Rate of interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of, or interest, premium, if any, on, the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or Events of Default or the rights of Holders of Notes to receive payments of principal of, or interest, premium, if any, on, the Notes (except as permitted in clause (g) below);
(g) waive a redemption or repurchase payment with respect to any Note (other than a payment required by Sections 3.09, 4.25 and 4.37(b) hereof);
(h) release any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture; or
(i) make any change in the preceding amendment, supplement and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of this Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes will require the consent of the Holders of at least 66 2 ⁄ 3 % in aggregate principal amount of the Notes then outstanding. The Trustee and the Collateral Agent shall be fully protected in connection with the release of all or substantially all of the Collateral in relying upon an Officers’ Certificate and Opinion of Counsel to which it is entitled under Section 9.06 in connection with any such amendment.
Upon the request of the Company accompanied by Board Resolutions authorizing their execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee and Collateral Agent, as applicable, of the documents described in Section 9.06 hereof, the Trustee and Collateral Agent, as applicable, shall join with the Company and the Guarantors in the execution of such amended or supplemental indenture or amendment or supplement to any Note Document, unless such amendment or supplement affects the Trustee’s or Collateral Agent’s own rights, duties or immunities under this Indenture, the other Note Documents or otherwise, in which case the Trustee and Collateral Agent, as applicable, may in its discretion, but shall not be obligated to, enter into such amendment or supplement.
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It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
Section 9.03 Compliance with Trust Indenture Act .
Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.
A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a purchase, tender or exchange of such Holder’s Notes shall not be rendered invalid by such purchase, tender or exchange.
Section 9.04 Revocation and Effect of Consents .
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and, except as provided in the second succeeding paragraph, thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the second to last sentence of 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 consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than ninety (90) days after such record date except to the extent that the requisite number of consents to the amendment, supplement or waiver have been obtained within such 90-day period or as set forth in the next paragraph of this Section 9.04.
After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (i) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder’s Note.
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Section 9.05 Notation on or Exchange of Notes .
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company, in exchange for all Notes, may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, Etc .
The Trustee and Collateral Agent, as applicable shall sign any amended or supplemental indenture or amendment or supplement to any Note Document authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee or Collateral Agent. If any such amendment or supplement does adversely affect the rights, duties, liabilities or immunities of the Trustee or Collateral Agent, the Trustee and Collateral Agent, as applicable, may, but need not, sign such amendment or supplement. In executing any amendment or supplement, the Trustee and Collateral Agent, as applicable shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture or such amendment or supplement to any Note Document is authorized or permitted by this Indenture and the Note Documents.
Section 9.07 Acts of Holders .
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
(b) Without limiting the generality of this Section, unless otherwise provided in or pursuant to this Indenture, (i) a Holder, including a Depository or its nominee that is a Holder of a Global Note, may give, make or take, by an agent or agents duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in or pursuant to this Indenture to be given, made or taken by Holders, and a Depository or its nominee that is a Holder of a Global Note may duly appoint in writing as its agent or agents members of, or participants in, such Depository holding interests in such Global Note in the records of such Depository; and (ii) with respect to any Global Note the Depository for which is DTC, any consent or other action given, made or taken by an Agent Member of DTC by electronic means in accordance with the Automated Tender Offer Procedures system or other customary procedures
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of, and pursuant to authorization by, DTC shall be deemed to constitute the Act of the Holder of such Global Note, and such Act shall be deemed to have been delivered to the Company and the Trustee upon the delivery by DTC of an “agent’s message” or other notice of such consent or other action having been so given, made or taken in accordance with the customary procedures of DTC.
(c) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a Person acting in a capacity other than such Person’s individual capacity, such certificate or affidavit shall also constitute sufficient proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
(d) The ownership of Notes shall be proved by the Register.
(e) Without limiting the foregoing, a Holder entitled hereunder to give, make or take any action hereunder with regard to any particular Note may do so, or duly appoint in writing any Person or Persons as its agent or agents to do so, with regard to all or any part of the principal amount of such Note.
ARTICLE TEN
GUARANTEES OF NOTES
Section 10.01 Subsidiary Guarantees .
Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees, on a senior secured basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee, the Collateral Agent and each of their successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes held thereby and the Secured Obligations of the Company hereunder and thereunder, that: (a) the principal of, and interest, premium (including the Make Whole Premium and Applicable Premium), if any, on, the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at Stated Maturity of the Notes, by acceleration, upon repurchase or redemption or otherwise, and interest on the overdue principal of, premium (including the Make Whole Premium and Applicable Premium), if any, and (to the extent permitted by law) interest on, the Notes, all other Secured Obligations and all other payment obligations of the Company to the Holders, the Trustee or Collateral Agent under this Indenture or the Notes will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Secured Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at Stated Maturity of the Notes, by acceleration (including the Make Whole Premium and Applicable Premium), upon repurchase or redemption or otherwise. Failing payment when so due of any amount so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the
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Subsidiary Guarantee, and shall entitle the Holders to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the Secured Obligations of the Company (and, in the event of an Event of Default under clauses (h) or (i) of Section 6.01, the Subsidiary Guarantees shall be immediately and automatically accelerated in the same manner and to the same extent as the Secured Obligations of the Company).
The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder, the Trustee or Collateral Agent with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to the extent permitted by law, hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Secured Obligations contained in the Notes and this Indenture.
If any Holder, the Trustee or Collateral Agent is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, trustee or other similar official acting in relation to any of the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee, Collateral Agent or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to, and hereby waives, any right of subrogation in relation to the Holders in respect of any Secured Obligations guaranteed hereby until payment in full of the Secured Obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders, the Trustee and Collateral Agent, on the other hand, (a) the maturity of the Secured Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Secured Obligations guaranteed thereby, and (b) in the event of any declaration of acceleration of such Secured Obligations as provided in Article 6 hereof, such Secured Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of its Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor after the indefeasible payment in full of the Secured Obligations so long as the exercise of such right does not impair the rights of the Holders, Trustee or Collateral Agent under the Subsidiary Guarantee.
Section 10.02 Guarantors May Consolidate, etc., on Certain Terms .
No Guarantor shall sell or otherwise dispose of, in one or more related transactions, all or substantially all of its properties or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person (other than the Company or another Guarantor), unless such transaction complies with Section 4.36
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Section 10.03 Releases of Subsidiary Guarantee .
A Guarantor shall be released of its Subsidiary Guarantee: (1) in connection with any sale or other disposition of all or substantially all of the properties or assets of such Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary of the Company, if the sale or other disposition complies with Section 4.37; (2) in connection with any sale or other disposition of the Equity Interests of such Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary of the Company, if the sale or other disposition complies with Section 4.37 and that Guarantor no longer qualifies as a Subsidiary of the Company as a result of such disposition; (3) upon Legal Defeasance or Covenant Defeasance or Discharge in accordance with Article 8; (4) upon the liquidation or dissolution of such Guarantor provided no Default or Event of Default has occurred that is continuing; (5) if such Guarantor does not guarantee and is not primarily liable for any other Debt for borrowed money of any Note Party; or (6) upon such Guarantor consolidating with, merging into or transferring all of its properties or assets to the Company or another Guarantor in a transaction complying with the provisions of this Indenture, and as a result of, or in connection with, such transaction such Guarantor dissolving or otherwise ceasing to exist.
Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect that any of the conditions described in the foregoing clauses (1)-(6) has occurred, the Trustee shall execute any documents reasonably requested by the Company in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and interest, premium, (including any Make Whole Premium and Applicable Premium) if any, on, the Notes and for the other obligations of such Guarantor under this Indenture as provided in this Article 10.
Section 10.04 Limitation on Guarantor Liability .
The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.
Section 10.05 “Trustee” to Include Paying Agent .
In case at any time any Paying Agent other than the Trustee shall have been appointed and be then acting hereunder, the term “ Trustee ” as used in this Article 10 shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 10 in place of the Trustee.
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ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls .
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c) in respect of an indenture qualified under the TIA, such TIA-imposed duties shall control, whether or not this Indenture is then qualified under the TIA.
Section 11.02 Notices .
Any notice or communication by the Company, any Guarantor, the Trustee or Collateral Agent to the other parties hereto is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), facsimile or overnight air courier guaranteeing next day delivery, to their respective addresses:
If to the Company or the Guarantors:
Northern Oil and Gas, Inc.
601 Carlson Pkwy, Suite 990
Minnetonka, MN 55305
Attention: Chief Financial Officer
Facsimile No.: (952) 476-9801
with a copy to (which shall not constitute notice):
Jones Day
250 Vesey Street
New York, New York 10281
Attention: Scott J. Greenberg
Facsimile: (212) 755-7306
If to the Trustee or Collateral Agent:
Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, Minnesota 55402
Attention: Northern Oil and Gas, Inc. Administrator
Facsimile No.: (612) 217-5651
The Company, any of the Guarantors, the Trustee or Collateral Agent, by notice to the other parties hereto, may designate additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery, in each case to the address shown above. Notwithstanding the foregoing, notices delivered to the Trustee, Collateral Agent or any Agent shall be received upon actual receipt thereby.
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Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. 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 within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company or a Guarantor mails a notice or communication to Holders, it shall mail a copy to the Trustee, Collateral Agent and each Agent at the same time.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the Depository for such Note (or its designee), pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.
Section 11.03 Communication by Holders of Notes with Other Holders of Notes .
Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar, the Collateral Agent and anyone else shall have the protection of TIA § 312(c).
Section 11.04 Certificate and Opinion as to Conditions Precedent .
Upon any request or application by the Company to the Trustee or Collateral Agent to take any action or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee and Collateral Agent, as applicable:
(a) an Officers’ Certificate (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
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Section 11.05 Statements Required in Certificate or Opinion .
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:
(a) a statement that the person making such certificate or opinion has read such condition or covenant;
(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 person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such condition or covenant has been satisfied; and
(d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 11.06 Rules by Trustee and Agents .
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 11.07 No Personal Liability of Directors, Officers, Employees and Shareholders .
No director, officer, partner, employee, incorporator, manager or shareholder or other owner of Equity Interests of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantee or this Indenture, 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 11.08 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 11.09 No Adverse Interpretation of Other Agreements .
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 11.10 Successors .
All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee and Collateral Agent in this Indenture shall bind their respective successors.
Section 11.11 Severability .
In case any provision in this Indenture or in the Notes 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.
Section 11.12 Table of Contents, Headings, Etc .
The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
Section 11.13 Counterparts .
This Indenture may be signed in counterparts and by the different parties hereto in separate counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 11.14 Benefits of Indenture .
Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 11.15 Language of Notices, Etc .
Any request, demand, authorization, direction, notice, consent, waiver or Act required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.
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Section 11.16 Patriot Act .
The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee and Collateral Agent, 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 or Collateral Agent. The parties to this Indenture agree that they will provide the Trustee and Collateral Agent with such information within their possession or control as it may reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 11.17 Waiver of Jury Trial .
EACH OF THE COMPANY, THE 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 TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.18 Submission to Jurisdiction .
Each of the parties hereto irrevocably agrees that any suit, action or proceeding arising out of, related to, or in connection with this Indenture, the Notes and the Guarantees or the transactions contemplated hereby, and any action arising under U.S. federal or state securities laws, may be instituted in any U.S. federal or state court located in the State and City of New York, Borough of Manhattan; irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding; and irrevocably submits to the jurisdiction of such courts in any such suit, action or proceeding.
Section 11.19 Force Majeure .
In no event shall the Trustee or Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.
Section 11.20 Original Issue Discount Legend . THE NOTES HAVE BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. HOLDERS SHOULD CONTACT NORTHERN OIL AND GAS, INC., 601 CARLSON PKWY, SUITE 990, MINNETONKA, MN 55305.
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ARTICLE TWELVE
COLLATERAL
Section 12.01 Security Interest .
(a) The obligations of the Company under the Notes and all other Secured Obligations will be secured by a second priority Lien on the Collateral, subject to Permitted Liens. The due and punctual payment of the principal of and interest and premium (including the Make Whole Premium and the Applicable Premium), if any, on the Notes when and due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest (to the extent permitted by law), if any, whether by the Company pursuant to the Notes or by any Guarantor pursuant to its Note Guarantee, and the performance of all other obligations of the Company and the Guarantors to the Holders, the Trustee or the Collateral Agent under the Indenture, the Notes and the Subsidiary Guarantees, according to the terms hereunder or thereunder, are secured as provided in the Security Documents. Each Holder, by its acceptance thereof, consents and agrees to the terms of the Security Documents (including, without limitation, the provisions providing for release of Collateral) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs each of the Trustee and the Collateral Agent, as applicable, to enter into the Security Documents and to perform its obligations and exercise its rights thereunder in accordance with the terms hereof and thereof. The Company shall deliver to the Trustee copies of all documents delivered to the Collateral Agent pursuant to the Security Documents, and will do or cause to be done all such acts and things as may be necessary or proper, or as may be required by the provisions of the Security Documents, to assure and confirm to the Trustee and the Collateral Agent the security interest in the Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes and the Subsidiary Guarantees secured hereby, according to the intent and purposes herein expressed.
(b) The Collateral will also secure the Company’s and the Guarantors’ obligations under or in connection with the existing First Lien Credit Agreement, including, without limitation, the Secured Swap Obligations (or, once the First Lien Credit Agreement ceases to exist, the Credit Facility), provided that an authorized representative of the holders of such Debt under the First Lien Credit Agreement or the Credit Facility shall have executed the Intercreditor Agreement or a joinder thereto and shall have executed a joinder to the Swap Intercreditor Agreement (as defined in the First Lien Credit Agreement) (to the extent then in effect). Under the terms of the Intercreditor Agreement, the proceeds of any collection, sale, disposition or other realization of Collateral received in connection with the exercise of remedies (including distributions of cash, securities or other property on account of the value of the Collateral in a bankruptcy, insolvency, reorganization or similar proceedings) will be applied first to repay the First Lien Credit Agreement and, if the First Lien Credit Agreement ceases to exist, the Credit Facility and related Subsidiary Guarantees and other obligations under the Indenture.
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(c) The Company will take, and will cause its Subsidiaries to take any and all actions (including those that may be requested by the Trustee or the Collateral Agent) reasonably required to cause the Security Documents to create and maintain, as security for the obligations of the Company hereunder, a valid and enforceable perfected second priority Lien in and on all the Collateral, in favor of the Collateral Agent for the benefit of the Holders, the Trustee and the Collateral Agent, subject to Permitted Liens.
Section 12.02 Security Documents .
In order to secure the due and punctual payment of the Notes and all other Secured Obligations, the Company, the Guarantors, the Collateral Agent, the Trustee (if applicable) and the other parties thereto have entered into or are contemporaneously entering into the Security Documents. Without limiting any of the rights and protections (including indemnities) of the Trustee or Collateral Agent hereunder, in the event of a conflict or inconsistency between the terms of this Indenture and the Security Documents relating to the Collateral, the Security Documents shall control. The Trustee and the Collateral Agent shall be bound by the terms of the Intercreditor Agreement and each Holder of a Note, by accepting such Note or beneficial interest therein, agrees to all the terms and provisions of the Intercreditor Agreement and the other Security Documents, and authorizes and directs the Collateral Agent to enter into and perform its obligations under the Intercreditor Agreement and other Security Documents, binding the Holders to the terms thereof. Notwithstanding anything to the contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to the Security Documents and all rights and obligations of the Trustee and Collateral Agent hereunder are expressly subject to the Intercreditor Agreement and (ii) the exercise of any right or remedy by the Trustee hereunder is subject to the limitation and provisions of the Intercreditor Agreement. Without limiting any of the rights and protections (including indemnities) of the Trustee or Collateral Agent hereunder, in the event of any conflict or inconsistency between the terms of the Intercreditor Agreement and the terms of this Indenture, the terms of the Intercreditor Agreement shall govern.
Each Holder, by accepting a Note, agrees that the Liens on the Collateral are subject to the terms of the Intercreditor Agreement. The Holders, by accepting a Note, hereby agree that the Holders shall comply with the provisions of the Intercreditor Agreement applicable to them in their capacities as such to the same extent as if the Holders were parties thereto.
Section 12.03 Release of Collateral . (i) The Liens on the Collateral will be released with respect to the Notes and the Subsidiary Guarantees, as applicable:
(i) upon a Legal Defeasance or Covenant Defeasance of the Notes in accordance with Article 8 hereof;
(ii) upon payment in full and discharge of all Notes outstanding under this Indenture and all other Secured Obligations that are outstanding under this Indenture and the other Note Documents at the time the Notes and such Secured Obligations are paid in full and discharged;
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(iii) in part, as to any property constituting Collateral (A) that is sold, transferred or otherwise disposed of by the Company or any of the Guarantors (other than to the Company or another Guarantor) in a transaction permitted by Section 4.37 hereof and by the Security Documents (to the extent of the interest sold or disposed of), (B) that are assets of, or Equity Interests in, any Subsidiary that ceases to be a Guarantor in accordance with the terms of this Indenture and Intercreditor Agreement or (C) becoming an Excluded Asset or that otherwise no longer constitutes Collateral; provided that if required to effect a transaction resulting in any release under clause (A), (B) or (C) such release may occur contemporaneously with or prior to such transaction if the Company delivers an Officers’ Certificate to the Trustee setting forth in reasonable detail such requirement;
(iv) otherwise in accordance with, and as expressly provided for under, this Indenture or the Security Documents;
(v) in whole as to all Collateral that is owned by a Guarantor that is released from its Subsidiary Guarantee in accordance with this Indenture; or
(vi) in whole or in part, with the consent of Holders of the requisite percentage of Notes in accordance with the provisions of Section 9.02 hereof.
(b) Upon release of the Collateral, the Trustee and the Collateral Agent shall promptly, and are hereby authorized to, take such actions as reasonably requested by the Company or the Guarantors in order to reconvey to the Company or the Guarantors, as the case may be, AS IS, WHERE IS, without recourse or warranty of any kind or nature, the released Collateral or release the Lien of the relevant Security Document from the released Collateral and, if necessary, the Collateral Agent shall cooperate with the Company to, and is hereby authorized to, at the Company’s expense, authorize the filing by the Company of such documents or instruments (that are prepared by the Company and provided to the Collateral Agent) as shall be necessary to provide for the reconveyance of the Collateral to the Company or relevant Guarantor or release by the Collateral Agent of the released Collateral; provided that prior to any such release, the Company shall deliver an Officers’ Certificate and Opinion of Counsel stating that all conditions precedent to such release have been complied with.
(c) Any reconveyance or release of Collateral permitted by this Section 12.03 shall be deemed not to impair the remaining Liens under this Indenture and the Security Documents in contravention thereof.
Section 12.04 Collateral Agent; Intercreditor Agreement . The Company, the Guarantors and each Holder of Notes, by their acceptance of any Notes and the Note Guarantees, hereby appoints Wilmington Trust, National Association, as Collateral Agent, and Wilmington Trust, National Association accepts such appointment. The provisions of this Section 12.04 are solely for the benefit of the Collateral Agent and none of the Company, any of the other Guarantors nor any of the Holders shall have any rights as a third party beneficiary of any of the provisions contained herein. Notwithstanding any provision to the contrary contained elsewhere in this Indenture and the Security Documents, the Collateral Agent shall have only those duties or responsibilities expressly provided hereunder or thereunder and the Collateral Agent shall not have nor be deemed to have any fiduciary relationship with the Trustee, the Company, any Guarantor or any Holder, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture and the Security Documents or otherwise exist against
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the Collateral Agent. The Trustee hereby acknowledges the appointment of the Collateral Agent and the Trustee and each Holder agree that the Collateral Agent shall, subject to the rights under this Indenture, have the rights, duties and responsibilities of
the Collateral Agent as set forth in the Security Documents. The Collateral Agent is hereby authorized and directed to enter into the Intercreditor Agreement on the Issue Date and, upon the Company’s request, any other Intercreditor Agreement after the Issue Date at the direction of the Majority Holders.
The Collateral Agent is hereby authorized to execute and deliver the Security Documents and each applicable Intercreditor Agreement or joinder thereto. Notwithstanding the foregoing, the Collateral Agent shall not be obligated to take any such action without the direction of the Holders of at least a majority in aggregate principal amount of the Notes (subject to Section 2.09) and may, at the expense of the Company, request the direction of the Holders of a majority in aggregate principal amount of the outstanding Notes (subject to Section 2.09) with respect to any such actions and, upon receipt of the written consent of the Holders of a majority in aggregate principal amount of the outstanding Notes (subject to Section 2.09) along with security and indemnity satisfactory to the Collateral Agent, shall take such actions; provided that all actions so taken shall, at all times, be in conformity with the requirements of the Intercreditor Agreement then extant, if entered into; provided , further , that upon execution of an Intercreditor Agreement, the Collateral Agent shall act at the direction of those directing parties entitled to so direct the Collateral Agent thereunder and the Collateral Agent shall be protected in the same manner contemplated by this Section.
Reference is made to the Intercreditor Agreement dated as of May 15, 2018, between TPG Specialty Lending, Inc., as Original Priority Lien Agent (as defined therein), and Wilmington Trust, National Association, as Original Second Lien Agent (as defined therein) and acknowledged and agreed by Northern Oil and Gas, Inc. and certain of its subsidiaries (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Issue Date Intercreditor Agreement ”). Each holder of Second Lien Indenture Notes (as defined in the Issue Date Intercreditor Agreement), by its acceptance of such Second Lien Indenture Notes (i) consents to the subordination of Liens provided for in the Issue Date Intercreditor Agreement, (ii) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Issue Date Intercreditor Agreement, (iii) authorizes and instructs the Original Second Lien Agent (as defined therein) on behalf of each Second Lien Secured Party (as defined therein) to enter into the Issue Date Intercreditor Agreement as Original Second Lien Agent on behalf of such Second Lien Secured Parties and (iv) acknowledges (or is deemed to acknowledge) that a copy of the Issue Date Intercreditor Agreement was delivered, or made available, to such Person. The foregoing provisions are intended as an inducement to the lenders under the Priority Lien Documents (as defined in the Issue Date Intercreditor Agreement) to extend credit to the Company, and such lenders are intended third-party beneficiaries of such provisions and the provisions of the Issue Date Intercreditor Agreement.
Neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents shall be responsible or liable (i) for the legality, enforceability, effectiveness or sufficiency of the Security Documents, (ii) for the creation, perfection, priority, sufficiency, maintenance, renewal or protection of any second priority Lien, (iii) for any defect or deficiency as to any such matters, (iv) for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the second priority Liens or Security Documents or any delay in doing
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so, (v) for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title, for insuring the Collateral or for the payment of Taxes or Liens upon the Collateral or otherwise as to the maintenance of the Collateral or (vi) 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 Liens on the Collateral.
The rights, privileges, protections, immunities and benefits given to the Trustee under this Indenture, including, without limitation, its right to be indemnified and compensated and all other rights, privileges, protections, immunities and benefits set forth in Sections 7.01, 7.02, 7.03 and 7.07, are extended to the Collateral Agent, and its agents, receivers and attorneys, and shall be enforceable by, the Collateral Agent, as if fully set forth in this Section 12.04 with respect to the Collateral Agent, except that the Collateral Agent shall only be liable for (and shall be indemnified and held harmless to the extent such Losses do not constitute) its gross negligence or willful misconduct. In acting under any Security Document, the Collateral Agent shall enjoy the rights, privileges, protections, immunities and benefits that are extended to the Collateral Agent hereunder.
Beyond the exercise of reasonable care in the custody of Collateral in its possession, the Collateral Agent will 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 Collateral Agent will 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 Liens on the Collateral.
The Collateral Agent will 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 property held by it as a collateral agent or any similar arrangement, and the Collateral Agent will 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 Collateral Agent in good faith.
The Collateral Agent shall not be required to acquire title to an asset for any reason and shall not be required to carry out any fiduciary or trust obligation for the benefit of another. The Collateral Agent is not a fiduciary and shall not be deemed to have assumed any fiduciary obligation. If the Collateral Agent in its sole discretion believes that any obligation to take or omit to take any action may cause the Collateral Agent to be considered an “owner or operator” under any environmental laws or otherwise cause the Collateral Agent to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Collateral Agent reserves the right, instead of taking such action, either to resign as Collateral Agent or to arrange for the transfer of the title or control of the asset to a court appointed receiver. The Collateral Agent will not be liable to any Person for any environmental liability or any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Collateral Agent’s actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.
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The Collateral Agent may resign or be replaced in accordance with the procedures set forth in Section 7.08 hereof, except that references to the Trustee in such section shall be deemed to be references to the Collateral Agent. If the Collateral Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Collateral Agent.
At all times when the Trustee is not itself the Collateral Agent, the Company shall 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 the Security Documents.
Upon the receipt by the Collateral Agent of a written request of the Company signed by any Officer (a “Security Document Order”), the Collateral Agent is hereby authorized to execute and enter into, without the further consent of any Holder or the Trustee, any Security Document to be executed after the Issue Date. Such Security Document Order shall (i) state that it is being delivered to the Collateral Agent pursuant to, and is a Security Document Order referred to in, this Section 12.04, (ii) instruct the Collateral Agent to execute and enter into such Security Document and (iii) certify that all conditions precedent to the execution and delivery of the Security Document have been satisfied. The Holders, by their acceptance of the Notes, hereby authorize and direct the Collateral Agent to execute such Security Documents.
The Collateral Agent shall be authorized to appoint co-collateral agents as necessary in its sole discretion. In the event the Trustee and the Collateral Agent shall at any time not be the same Person, the Collateral Agent shall take such actions under the Security Documents as are requested by the Trustee and as are not inconsistent with or contrary to the provisions of any Security Document.
Section 12.05 Compliance with Trust Indenture Act . The Company shall comply with the provisions of TIA § 314; provided that, with respect to TIA § 314(b): with respect to clause (2) thereof, the Company shall furnish to the Trustee and the Collateral Agent on or within one (1) month of June 15 of each year, commencing June 15, 2019, an Opinion of Counsel either (A) stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of Liens under the Security Documents on Article 9 Collateral as is necessary to maintain the perfection of such Liens, and reciting the details of such action or (B) stating that, in the Opinion of such Counsel, no such action is necessary to maintain the perfection of such Liens. For purposes of the foregoing, the term “ Article 9 Collateral ” shall mean Collateral with respect to which a Lien thereon may be perfected by the filing of a UCC-1 financing statement pursuant to the Uniform Commercial Code as adopted in any applicable jurisdiction.
To the extent applicable, the Company shall cause TIA § 313(b), relating to reports, and TIA § 314(d), relating to the release of property or securities subject to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA § 314(d) may be made by an Officer of the Company except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this paragraph, the Company shall not be required to comply with all or any portion of TIA § 314(d) if it determines, in good faith based on advice of counsel, that under the terms of TIA § 314(d) and/or any interpretation or guidance as to
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the meaning thereof of the SEC and its staff, including applicable “no action” letters or exemptive orders, all or any portion of TIA § 314(d) is inapplicable to one or a series of released Collateral. The Company shall be required to deliver an Opinion of Counsel to the Trustee, reasonably satisfactory to the Trustee to support such conclusion.
[ Signatures on following pages ]
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SIGNATURES | ||
NORTHERN OIL AND GAS, INC. | ||
By: |
/s/ Brandon Elliott |
|
Name: | Brandon Elliott | |
Title: | Interim President |
Signature Page to Indenture
TRUSTEE: | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: |
/s/ Sarah Vilhauer |
|
Name: | Sarah Vilhauer | |
Title: | Banking Officer | |
COLLATERAL AGENT: | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent | ||
By: |
/s/ Sarah Vilhauer |
|
Name: | Sarah Vilhauer | |
Title: | Banking Officer |
Signature Page to Indenture
APPENDIX
PROVISIONS RELATING TO THE NOTES
1 Definitions
1.1 Definitions .
For the purposes of this Appendix the following terms shall have the meanings indicated below:
“ Depository ” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company.
“ Exchange Agreement ” means the Exchange Agreement, dated as of January 31, 2018, by and among the Company and the Participating Noteholders, as amended from time to time.
“ Initial Notes ” means the $344,279,000 aggregate principal amount of 8.50% Senior Secured Second Lien Notes due 2023 issued pursuant to this Indenture on the Issue Date.
“ Notes ” has the meaning stated in the recitals of this Indenture and more particularly means any Notes authenticated and delivered under this Indenture. The Initial Notes and any PIK Notes subsequently issued shall be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any PIK Notes.
“ Notes Custodian ” means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.
“ Participating Noteholders ” means holders of the Company’s 8.000% Senior Notes due 2020 immediately before giving effect to the issuance of the Notes that are party to the Exchange Agreement.
“ Transfer Restricted Securities ” means Notes that bear or are required to bear the legend set forth in Section 2.3(b)(i) hereof.
1.2 Other Definitions .
Term |
Defined in
Section: |
|||
“ Agent Members ” |
2.1 | (b) | ||
“ Global Note ” |
2.1 | (a) | ||
“ Regulation S ” |
2.1 | (a) | ||
“ Regulation S Notes ” |
2.1 | (a) | ||
“ Resale Restriction Termination Date ” |
2.3 | (b) | ||
“ Restricted Global Note ” |
2.1 | (a) | ||
“ Rule 144A ” |
2.1 | (a) | ||
“ Rule 144A Notes ” |
2.1 | (a) | ||
“ Unrestricted Global Note ” |
2.1 | (a) |
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2.1 The Notes .
(a) Form and Dating. The Initial Notes are intended to be represented by unrestricted Notes that do not bear the legend set forth in Section 2.3(b)(i) of Exhibit 1 hereto, which shall be issued initially in the form of one or more permanent global Notes in fully registered form without interest coupons with the global Notes legend set forth in Exhibit 1 hereto (each, an “ Unrestricted Global Note ”), which shall be deposited on behalf of the Participating Holders represented thereby with the Trustee, as Notes Custodian for the Depository (or with such other custodian as the Depository may direct), and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. If so determined by the Company, Notes may be issued from time to time as Transfer Restricted Securities in reliance on Rule 144A (“ Rule 144A Notes ”) under the Securities Act (“ Rule 144A ”) or in reliance on Regulation S (“ Regulation S Notes ”) under the Securities Act (“ Regulation S ”). Such Transfer Restricted Securities shall be issued initially in the form of one or more permanent global Notes in fully registered form without interest coupons with the global Notes legend and Restricted Notes Legend set forth in Exhibit 1 hereto (each, a “ Restricted Global Note ”), which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Trustee, as Notes Custodian for the Depository (or with such other custodian as the Depository may direct), and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Beneficial interests in any Unrestricted Global Note or Restricted Global Note may be held through Euroclear or Clearstream, as indirect participants in the Depository. The aggregate principal amount of the Global Notes 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 hereinafter provided. Initial Notes issued in global form (including any increases as the result of a PIK Payment), Unrestricted Global Notes and Restricted Global Notes are sometimes referred to in this Appendix as “Global Notes.”
(b) Book-Entry Provisions . This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instructions or held by the Trustee as Notes Custodian for the Depository. If such Global Notes are Restricted Global Notes, then separate Global Notes shall be issued to represent Rule 144A Notes and Regulation S Notes so long as required by law or the Depository.
Members of, or participants in, the Depository (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the Notes Custodian of the Depository or under such Global Note, and the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the
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Guarantors, the Trustee or any agent of the Company, the Guarantors 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 of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
(c) Certificated Notes . Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of certificated Notes. Certificated Notes shall not be exchangeable for beneficial interests in Global Notes, except with the consent of the Company.
2.2 Authentication . The Trustee shall authenticate and deliver: (a) on the Issue Date, an aggregate principal amount of $344,279,000 8.50% Senior Secured Second Lien Notes due 2023 and (b) at any time and from time to time thereafter, (i) PIK Notes that may be validly issued under this Indenture and (ii) increase the principal amount of any Global Note as a result of a PIK Note Payment, in each case upon a written order of the Company. Such order (x) shall specify (i) the aggregate principal amount of the Notes to be authenticated, the date on which such Notes are to be authenticated and to whom such Notes shall be registered and delivered; (ii) whether such Notes constitute Initial Notes and (iii) whether or not such Notes constitute PIK Notes.
2.3 Transfer and Exchange .
(a) Transfer and Exchange of Global Notes .
(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.
(ii) Notwithstanding any other provisions of this Appendix, a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.
(iii) In the event that a Restricted Global Note is exchanged for Notes in certificated form pursuant to Section 2.4 of this Appendix, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A or Regulation S, as the case may be) and such other procedures as may from time to time be adopted by the Company.
APP - 3
(b) Legend .
(i) Except as permitted by the following paragraph (ii) each Note certificate evidencing the Restricted Global Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER SUCH NOTES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF ANY NOTE EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF (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 SUCH NOTE IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF SUCH NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF SUCH NOTE (OR ANY PREDECESSOR OF SUCH NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM SUCH NOTE IS TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, SUBJECT TO THE COMPANY’S AND THE REGISTRAR’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) THAT IS (A) PURSUANT TO CLAUSE (2)(D) PRIOR TO THE END OF THE FORTY DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES IN CLAUSES (i)(A) OR (B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND
APP - 4
DELIVERED BY THE TRANSFEROR TO THE REGISTRAR. THIS LEGEND WILL BE REMOVED AS TO ANY NOTE EVIDENCED HEREBY UPON DELIVERY TO THE REGISTRAR AND TRUSTEE BY THE COMPANY OR THE HOLDER THEREOF OF A WRITTEN REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT ANY TIME AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “ OFFSHORE TRANSACTION ,” “ UNITED STATES ” AND “ U.S. PERSON ” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(ii) The Company, acting in its discretion, may remove the legend set forth in paragraph (i) above from any Transfer Restricted Security at any time in compliance with the applicable securities laws. Without limiting the generality of the preceding sentence, the Company may effect such removal by issuing and delivering, in exchange for such Transfer Restricted Security, a Note without such legend, registered to the same Holder and in an equal principal amount, and upon receipt by the Trustee of a written order of the Company, accompanied by an Officers’ Certificate, given at least three (3) Business Days in advance of the proposed date of exchange specified therein (which shall be no earlier than the Resale Restriction Termination Date), the Trustee shall authenticate and deliver such Note as directed in such order.
(c) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, or if any certificated Note is exchanged for such a beneficial interest, the principal amount of Notes represented by such Global Note shall be reduced or increased, as appropriate, and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction or increase, as the case may be.
(d) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate certificated Notes, PIK Notes and Global Notes at the Registrar’s request.
(ii) No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer Tax payable in connection therewith (other than any such transfer Tax payable upon any exchange or transfer pursuant to Sections 3.06, 4.25, 4.37(b) and 9.05 of this Indenture).
(iii) The Registrar shall not be required to register the transfer of or exchange of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of fifteen (15) days before a selection of Notes to be redeemed.
APP - 5
(iv) Prior to the due presentation for registration of transfer of any Note, the Company, the Guarantors, the Trustee, the 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, interest, premium, if any, on, such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Guarantors, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
(v) 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. Accordingly, for purposes of clause (g) of Section 4.27 of this Indenture, “the Notes issued on the Issue Date” shall be deemed to refer to and include any Notes issued in exchange for, or upon registration of transfer of, or in lieu of, any such Notes (or any predecessor Notes thereof) pursuant to Section 2.3 or 2.4 hereof or Section 2.06, 2.07, 2.10, 3.06, 4.25, 4.37(b), or 9.05 of this Indenture.
(e) 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 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 optional redemption) 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 Holders under the Notes shall be given or made only to or upon the order of 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.
2.4 Certificated Notes .
(a) A Global Note deposited with the Depository or with the Trustee as custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be a “clearing agency” registered under the Exchange Act and in either event a successor depositary is not appointed by the Company within ninety (90) days, (ii) the Company, at its option, notifies the Trustee in writing that it elects
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to cause the issuance of the certificated Notes, or (iii) an Event of Default has occurred and is continuing and DTC notifies the Trustee of its decision to exchange the Global Notes. Except as provided in the preceding sentence, and notwithstanding any contrary indication in Section 2.3(b), beneficial interests in a Global Note may be exchanged for certificated Notes only with the consent of the Company, including if an affiliate (as defined in Rule 144) of the Company acquires such interests.
(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section shall be surrendered by the Depository or the Notes Custodian to the Trustee located at its Corporate Trust Office of the Trustee to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of certificated Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof, and registered in such names as the Depository shall direct. Any certificated Note delivered in exchange for an interest in a Restricted Global Note shall, except as otherwise provided by Section 2.3(b), bear the Restricted Notes Legend.
(c) Subject to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled to 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.
(d) In the event of the occurrence of any of the circumstances specified in Section 2.4(a), the Company shall promptly make available to the Trustee a reasonable supply of certificated Notes in definitive, fully registered form without interest coupons.
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EXHIBIT 1 TO APPENDIX
[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 NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S 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]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (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 SUCH NOTE IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
Exhibit 1 to App - 1
(“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, SUBJECT TO THE COMPANY’S AND THE REGISTRAR’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) THAT IS (A) PURSUANT TO CLAUSE (2)(D) PRIOR TO THE END OF THE FORTY DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES IN CLAUSES (i)(A) OR (B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR. THIS LEGEND WILL BE REMOVED UPON DELIVERY TO THE REGISTRAR AND TRUSTEE BY THE COMPANY OR THE HOLDER THEREOF OF A WRITTEN REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT ANY TIME AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Original Issue Discount Legend
THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. HOLDERS SHOULD CONTACT NORTHERN OIL AND GAS, INC., 601 CARLSON PKWY, SUITE 990, MINNETONKA, MN 55305.
Exhibit 1 to App - 2
NORTHERN OIL AND GAS, INC.
Principal Amount $[ ]
No. [ ] | CUSIP No. 665531 AE9 |
ISIN No. US665531AE93
8.50% Senior Secured Second Lien Notes due 2023
Northern Oil and Gas, Inc., a Delaware corporation, promises to pay to [ ], or its registered assigns, the principal sum of [ ] Dollars on May 15, 2023 [or such greater or lesser amount as may be indicated on Schedule A hereto]. 1
Quarterly Interest Payment Dates: January 1, April 1, July 1 and October 1
Quarterly Record Dates: December 15, March 15, June 15 and September 15
Additional provisions of this Note are set forth on the other side of this Note.
NORTHERN OIL AND GAS, INC. | ||
By: |
|
|
Name: | ||
Title: |
1 | If this is a Global Note, add this provision. |
Exhibit 1 to App - 3
TRUSTEE’S 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:
Exhibit 1 to App - 4
[FORM OF REVERSE SIDE OF INITIAL NOTE]
8.50% Senior Secured Second Lien Notes due 2023
Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest . Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), promises to pay Cash Interest on the principal amount of this Note at 8.50% per annum from May 15, 2018 until maturity (the “ Cash Interest Rate ”); provided , however , beginning on July 1, 2018, the Company shall pay additional interest in kind at 1.00% per annum (the “ PIK Interest Rate ”) (in addition to the Cash Interest Rate) on the then outstanding principal amount of this Note (a “ PIK Note Payment ”) by increasing the principal amount of this Note or by issuing additional Notes in a principal amount equal to such interest (“ PIK Interest ”) on the applicable Interest Payment Date. Notwithstanding the foregoing, if the Company delivers a PIK Interest Suspension Certificate to the Trustee on or before the Compliance Certificate Due Date for the most recently ended Measurement Fiscal Quarter, the PIK Interest shall not accrue from the Interest Payment Date following the delivery of such PIK Interest Suspension Certificate through the Interest Payment Date following the Compliance Certificate Due Date for the immediately succeeding Measurement Fiscal Quarter; provided , however , if a PIK Interest Suspension Certificate is not delivered by such Compliance Certificate Due Date, PIK Interest shall immediately and automatically begin accruing on the then outstanding principal amount of this Note on the next succeeding Interest Payment Date and shall continue to accrue until the next Interest Payment Date following the date on which a PIK Interest Suspension Certificate is delivered in compliance with Section 2.13 of the Indenture. The Company will pay interest quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing July 1, 2018 (each an “ Interest Payment Date ”), and at Stated Maturity, the Company will pay interest from the most recent date to which interest has been paid to the Stated Maturity date. If an Interest Payment Date falls on a day that is not a Business Day, the interest payment to be made on such Interest Payment Date will be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date, and no additional interest will accrue solely as a result of such delayed payment. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Notes, in which case interest shall accrue from the date of authentication. The Company shall pay in cash (i) interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 3% higher than the then applicable interest rate on the Notes to the extent lawful and (ii) interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate that is 3% higher than the then applicable interest rate on the Notes to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve (12) 30-day months.
Exhibit 1 to App - 5
PIK Note Payments shall be effected (i) with respect to Notes in certificated form, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest to be paid on the principal amount of Notes held by each Holder on the relevant record date, after giving effect to any interest to be paid in Cash Interest (rounded up to the nearest $1.00) or (ii) with respect to Global Notes, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest $1.00), and the Trustee will, at the written order of the Company signed by an Officer, authenticate and deliver such PIK Notes on the Interest Payment Date in certificated form for original issuance to the Holders of record on the relevant record date or cause such increase in principal amount with respect to Global Notes. Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Note Payment, the Notes will bear interest on such increased principal amount from and after the date of such PIK Note Payment. Any PIK Notes issued in certificated form will be dated as of the applicable Interest Payment Date and will bear interest from and after such date.
2. Method of Payment . The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the December 15, March 15, June 15 or September 15 next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Holders must surrender Notes to the Paying Agent to collect payments of principal and premium, if any, together with accrued and unpaid interest due at maturity. The Notes will be payable as to principal, Cash Interest, PIK Interest, if any, premium, if any, at the office or agency of the Company maintained for such purpose, or, at the option of the Company, payment of Cash Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds to an account in the United States of America will be required with respect to any amounts due on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company to be provided to the Paying Agent or the Paying Agent. Notwithstanding the foregoing, if this Note is a Global Note, payment may be made pursuant to the Applicable Procedures of the Depository as permitted in the Indenture. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, except in the case of any PIK Interest.
3. Paying Agent, Collateral Agent and Registrar . Initially, Wilmington Trust, National Association, the Trustee under the Indenture, will act as Paying Agent, Collateral Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture . The Company issued the Notes under an Indenture, dated as of May 15, 2018 (“ Indenture ”), between the Company, the Trustee and the Collateral Agent. 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, as amended (15 U.S. Code §§ 77a-77b). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Notes are secured by second priority liens in the Collateral pursuant to the Security Documents.
Exhibit 1 to App - 6
5. Optional Redemption . The Company shall have the option to redeem the Notes pursuant to this paragraph 5 in whole or in part at any time, at the following redemption prices (and, following any acceleration of the Notes pursuant to Section 6.02 of the Indenture (including, without limitation, any such automatic acceleration in connection with a voluntary or involuntary insolvency proceeding under any Bankruptcy Law), the Notes shall be accelerated at a price and any Asset Sale Offer pursuant to Section 3.09 of the Indenture shall be at the following redemption prices) (in each case, expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest on the Notes redeemed to, but excluding the applicable redemption date or acceleration date (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the redemption date or acceleration date) (i) from and after the Issue Date until May 15, 2021, 104.000%; (ii) on and after May 15, 2021 until May 15, 2022, 102.000%; and (iii) on and after May 15, 2022, 100.000% (the amount equal to the percentage in excess of 100% of the principal amount in the foregoing clauses (i) and (ii), the “ Applicable Premium ”); provided , that, any redemption of Notes (or acceleration of Notes) prior to May 15, 2020 shall also be accompanied by the Make Whole Premium (in addition to the Applicable Premium).
6. Notice of Redemption . Notice of redemption will be mailed at least thirty (30) days but not more than sixty (60) days (except as otherwise provided in the Indenture if the notice is issued in connection with a Legal Defeasance, Covenant Defeasance or Discharge) before the redemption date to each Holder whose Notes are to be redeemed at its registered address. If mailed in the manner provided for in Section 3.03 of the Indenture, the notice of optional redemption shall be conclusively presumed to have been given whether or not a Holder receives such notice. Notes in denominations larger than $1.00 may be redeemed in part but only in whole multiples of $1.00 in excess thereof, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest cease to accrue on the Notes or portions thereof called for redemption. The notice of redemption with respect to a redemption described in paragraph 5 above need not set forth the Make Whole Premium but only the manner of calculation thereof.
7. Mandatory Redemption . The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes at the option of the Holders.
8. Repurchase at Option of Holder .
(a) Within thirty (30) days following the occurrence of a Change of Control, the Company shall make an offer (a “ Change of Control Offer ”) to repurchase all or any part (equal to $1.00 or an integral multiple of $1.00 in excess thereof of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest thereon to the date of settlement (the “ Change of Control Settlement Date ”), subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Change of Control Settlement Date. Within thirty (30) days following a Change of Control, the Company shall mail a notice of the Change of Control Offer to each Holder and the Trustee describing the transaction that constitutes the Change of Control and setting forth the procedures governing the Change of Control Offer as required by Section 4.25 of the Indenture.
Exhibit 1 to App - 7
(b) If the Company or any Guarantor Transfers Oil and Gas Properties (or any Equity Interests in any Guarantor owning such Oil and Gas Properties) or Liquidates any Swap Agreement (in each case, other than Transfers permitted under Section 4.37(a)(i), Section 4.37(a)(iii), Section 4.37(a)(v), Section 4.37(a)(vi) or Section 4.37(a)(viii)), then the Company shall, subject to the prepayment provisions in the First Lien Credit Agreement, within ten (10) Business Days after such Transfer or Liquidation, make an Asset Sale Offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased from such Net Cash Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount of such Net Cash Proceeds in excess of $20,000,000 plus accrued and unpaid interest thereon to the Settlement Date plus the Make Whole Premium, subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Settlement Date, and will be payable in cash. Notwithstanding the foregoing, the company may, as long as no Default or Event of Default exists, within ten (10) Business Days after such Transfer or Liquidation, notify the Trustee and the Holders that it intends to reinvest such Net Cash Proceeds; provided that if no Default or Event of Default exists and the Company notifies the Trustee and the Holders that it plans to reinvest such Net Cash Proceeds in the acquisition or development of Oil and Gas Properties constituting Proved Reserves, then it shall do so within ninety (90) days after the date of such Transfer or Liquidation ( provided that the execution of a binding AFE during such period shall be deemed to be a reinvestment so long as the amounts owed under such AFE are funded within 180 days after the date such AFE is executed); provided further , that (A) if the Company fails to make such reinvestment in such period, it shall make an Asset Sale Offer in amount equal to 100% of such Net Cash Proceeds within ten (10) Business Days after the expiration of such 90-day period (or, as applicable, after the expiration of the 180-day period following the execution of a binding AFE) and (B) in no event shall the aggregate amount of Net Cash Proceeds permitted to be reinvested exceed $50,000,000 during the term of this Indenture. If the aggregate principal amount of Notes tendered into such Asset Sale Offer exceeds the amount of Net Cash Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1.00, or integral multiples of $1.00 in excess thereof, shall be purchased). Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.
9. Guarantees . The payment by the Company of the principal of and interest, premium, if any, on, the Notes is fully and unconditionally guaranteed on a joint and several senior unsecured basis by each of the Guarantors to the extent set forth in the Indenture.
10. Denominations, Transfer, Exchange . The Notes are in registered form without coupons in denominations of $1.00 and integral multiples of $1.00 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and the Company may require a Holder to pay any Taxes due on transfer or exchange. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of fifteen (15) days before a selection of Notes to be redeemed.
Exhibit 1 to App - 8
11. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver . Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of a majority in principal amount of the then outstanding Notes, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (subject to Section 2.09). Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented (1) to cure any ambiguity, defect or inconsistency, (2) to provide for uncertificated Notes in addition to or in place of certificated Notes, (3) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder in any material respect, (4) to secure the Notes or the Subsidiary Guarantee pursuant to Section 4.15 of the Indenture or otherwise, (5) to add any additional Guarantor with respect to the Notes or to evidence the release of any Guarantor from its Subsidiary Guarantee in accordance with Article 10 of the Indenture, (6) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, (7) to evidence or provide for the acceptance of appointment under the Indenture of a successor Trustee, (8) to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any of the Security documents or any discharge or release of any Collateral that is permitted by the Indenture or any of the Note Documents; (9) to implement any amendment contemplated by Section 4.24(a)(iii), Section 4.29(b)(iii)(3) or Section 4.47 of the Indenture, or (10) with respect to the Security Documents, as provided in the Intercreditor Agreement.
13. Defaults and Remedies . Events of Default include: (i) default for failure to pay any principal of any Note when due and payable, whether at the due date thereof or at a date fixed for redemption or repurchase thereof, by acceleration or otherwise; (ii) failure to pay any interest on any Note or any fee or any other amount payable under any Note Document, when and as the same shall become due and payable and such failure shall continue unremedied for a period of twenty (20) Business Days; (iii) material breaches of representations or warranties in the Exchange Agreement or any Note Document or any waiver thereof or certificate delivered pursuant thereto ( provided that to the extent that any representation and warranty is qualified by materiality, material adverse effect or a similar qualification, such representation and warranty shall be true in all respects); (iv) failure to observe or perform any covenant, condition or agreement contained in any of the Sections 4.03(h), 4.03(l), 4.04, 4.05, 4.13, 4.14, 4.15, 4.18, 4.19, 4.21, 4.24, 4.25 or 4.26 of the Indenture or in any of Sections 4.27 through 4.48 of the Indenture and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof from the Trustee to the Company or from the Holders of at least 25% of the aggregate principal amount of the Notes to the Company and the Trustee or (ii) an Officer of the Company or such Subsidiary otherwise becoming aware of such default; provided , however , the rate at which Cash Interest on the Notes accrues shall increase to the Default Rate effective immediately upon such failure without giving effect to such thirty (30)-day grace period; (v) failure to observe or perform any covenant, condition or agreement contained in the Indenture (other than those specified in (i), (ii) or (iv)) or any other Note Document and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (a) notice thereof from the Trustee to the Company or from the holders of at least 25% of the aggregate principal amount of the Notes to the Company and the Trustee (b) an Officer of the Company or such Subsidiary otherwise becoming aware of such default; (vi) failure
Exhibit 1 to App - 9
to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace or cure periods); (vii) any event or condition occurs that results in (a) any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require the Company or any Subsidiary to make an offer in respect thereof or (b) an “Event of Default” under the First Lien Credit Agreement or any equivalent under any Credit Facility shall have occurred; provided that an “Event of Default” or equivalent resulting from a breach of the First Lien Financial Covenants or Section 9.01(a) of the First Lien Credit Agreement (or any replacement financial covenants under any Credit Facility) to the extent then in effect under the First Lien Credit Agreement or the Credit Facility shall not constitute an Event of Default under this (vii)(b) until (A) the loans or other obligations under the First Lien Credit Agreement or Credit Facility have been accelerated, (B) the First Lien Agent has commenced exercising remedies or (C) such “Event of Default” or equivalent has not been cured or waived under the terms of the First Lien Credit Agreement or Credit Facility, as applicable, within thirty (30) days after notice of the occurrence of such “Event of Default” or equivalent has been delivered by the Company to the lenders under the First Lien Credit Agreement or Credit Facility (or was required to be delivered under the terms of the First Lien Credit Agreement or Credit Facility as in effect at such time); (viii) certain events of bankruptcy, insolvency or reorganization with respect to the Company or any of the Company’s Subsidiaries; (ix) (a) one or more judgments for the payment of money in an aggregate amount in excess of $2,000,000 (to the extent not covered by independent third party insurance provided by insurers of the highest claims paying rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding under any Bankruptcy Law) or (b) any one or more non-monetary judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, in either such case, shall have been rendered against a Note Party and the same shall remain undischarged for a period of forty-five (45) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of a Note Party to enforce any such judgment; (x) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and (xi) the Note Documents cease to be in full force and effect or are repudiated or cease to create a valid and perfected lien in favor of the Collateral Agent. If any Event of Default occurs and is continuing, the Trustee, by written notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes, by written notice to the Company with a copy to the Trustee, may declare all the Notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from such events of bankruptcy, insolvency or reorganization described in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding Notes will become due and payable immediately without further action or notice, together with all accrued and unpaid interest and premium (including the Applicable Premium and Make Whole Premium), if any, thereon. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, interest, premium, if any) if it in good faith determines that withholding notice is in their interests. The Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all the Notes rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of
Exhibit 1 to App - 10
Default (except with respect to nonpayment of principal, interest, premium, if any, that have become due solely because of the acceleration) have been cured or waived. The Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of, or interest, premium (including the Applicable Premium and Make Whole Premium), if any, on, the Notes. The Company is required to deliver to the Trustee annually an Officers’ Certificate regarding compliance with the Indenture, and, so long as any Notes are outstanding, the Company is required upon any Officer of the Company becoming aware of any Default or Event of Default, to deliver to the Trustee a statement describing such Default or Event of Default, its status and what action the Company is taking or proposes to take in respect thereof.
14. Defeasance and Discharge . The Notes are subject to defeasance and discharge upon the terms and conditions specified in the Indenture.
15. No Recourse Against Others . No director, officer, partner, employee, incorporator, manager or shareholder or other owner of Equity Interests of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantee or the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
16. Authentication . This Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee or an authenticating agent.
17. 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 right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
18. CUSIP Numbers . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers and corresponding ISIN numbers to be printed on the Notes and the Trustee may use CUSIP and corresponding ISIN numbers in notices of redemption as a convenience to 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.
19. Governing Law . THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Exhibit 1 to App - 11
20. Successors . In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:
Northern Oil and Gas, Inc.
601 Carlson Pkwy, Suite 990
Minnetonka, MN 55305
Attention: Secretary
Exhibit 1 to App - 12
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Company. 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:
(Signature must be guaranteed)
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
[Include the following only if the Restricted Notes Legend is included hereon]
[In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to one year after the later of the date of original issuance of such Notes (or the date of any subsequent reopening of the Notes) and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company (or, in the case of Regulation S Notes, prior to the expiration of the Distribution Compliance Period), the undersigned confirms that such Notes are being transferred in accordance with their terms:
CHECK ONE BOX BELOW
(1) ☐ to the Company or any Subsidiary thereof; or
(2) ☐ pursuant to an effective registration statement under the Securities Act of 1933 the (“ Securities Act ”); or
(3) ☐ to a person who the undersigned reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) that is purchasing 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; or
(4) ☐ pursuant to offers and sales to non-U.S. persons that occur 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; or
(5) ☐ pursuant to Rule 144 under the Securities Act; or
Exhibit 1 to App - 13
(6) ☐ pursuant to another exemption from registration under the Securities Act.
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 (4) or (6) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has 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.
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Signature |
Exhibit 1 to App - 14
TO BE COMPLETED BY PURCHASER IF (3) 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 Company and any Guarantors 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 undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated:
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Notice: To be executed by an executive officer |
Exhibit 1 to App - 15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.25 or Section 4.37(b) of the Indenture, check the box below:
☐ Section 4.25 ☐ Section 4.37(b)
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.25 or Section 4.37(b) of the Indenture, state the amount (in minimum denomination of $1.00 or integral multiples of $1.00 in excess thereof) you elect to have purchased: $
Dated: | ||||||
(Sign exactly as your name appears on the other side of this Note) |
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Soc. Sec. or Tax Identification No.: |
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Signature Guarantee: |
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(signature must be guaranteed) |
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit 1 to App - 16
[TO BE ATTACHED TO GLOBAL NOTE]
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date |
Amount of
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Amount of
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Principal
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Signatory of
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Exhibit 1 to App - 17
ANNEX A
NORTHERN OIL AND GAS, INC.
AND
THE GUARANTORS NAMED HEREIN
8.50% SENIOR SECURED SECOND LIEN NOTES DUE 2023
FORM OF SUPPLEMENTAL INDENTURE
Dated as of [ ],
[ ],
As Trustee and Collateral Agent
A-1
This SUPPLEMENTAL INDENTURE, dated as of [ ], (this “ Supplemental Indenture ”) is among Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), [ ] (the “ Guaranteeing Subsidiary ”), which is a subsidiary of the Company, each of the existing Guarantors (as defined in the Indenture referred to below) and Wilmington Trust, National Association, a national banking association, as Trustee and Collateral Agent.
RECITALS
WHEREAS, the Company, the Trustee and the Collateral Agent entered into an Indenture, dated as of May 15, 2018 (as heretofore amended, supplemented or otherwise modified, the “ Indenture ”), pursuant to which the Company has issued $344,279,000 in principal amount of 8.50% Senior Secured Second Lien Notes due 2023 (together with any PIK Notes in respect thereof, the “ Notes ”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee and Collateral Agent a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall become a Guarantor (as defined in the Indenture);
WHEREAS, Section 9.01(f) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or supplement the Indenture in order to add any additional Guarantor with respect to the Notes, without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by the Articles of Incorporation and the Bylaws (or comparable constituent documents) of the Company, of the Guarantors, of the Trustee and of the Collateral Agent necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guaranteeing Subsidiary, the other Guarantors, the Trustee and Collateral Agent covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:
Section 1. Capitalized Terms . Capitalized terms used herein without definition shall have the meanings ascribed to them in the Indenture.
Section 2. Relation to Indenture . This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.
Section 3. Effectiveness of Supplemental Indenture . This Supplemental Indenture shall become effective immediately upon its execution and delivery by the Company, the Guaranteeing Subsidiary, the other Guarantors, the Trustee and Collateral Agent.
Section 4. Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees, by its execution of this Supplemental Indenture, to be bound by the provisions of the Indenture applicable to Guarantors to the extent provided for in Article 10 thereof.
A-2
Section 5. Ratification of Obligations . Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.
Section 6. The Trustee . Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee or Collateral Agent by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee or Collateral Agent subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee and Collateral Agent with respect hereto.
Section 7. Governing Law . THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 8. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute the effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
[ Signatures on following pages ]
A-3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.
NORTHERN OIL AND GAS, INC. | ||
By: | ||
Name: | ||
Title: | ||
GUARANTEEING SUBSIDIARY : | ||
[ ] | ||
By: | ||
Name: | ||
Title: | ||
TRUSTEE : | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: | ||
Name: | ||
Title: | ||
COLLATERAL AGENT : | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent | ||
By: | ||
Name: | ||
Title: |
A-4
Exhibit 10.1
NORTHERN OIL AND GAS, INC.
601 Carlson Pkwy, Suite 990
Minnetonka, Minnesota 55305
May 15, 2018
CONFIDENTIAL
TRT Holdings, Inc.
4001 Maple Avenue
Suite 600
Dallas, Texas 75219
Attention: Mr. Robert B. Rowling, Chief Executive Officer
Ladies and Gentlemen:
This amended and restated letter agreement (this “ Agreement ”), dated as of the date written above (the “ Effective Date ”), is by and among Robert B. Rowling, Cresta Investments, LLC, Cresta Greenwood, LLC and TRT Holdings, Inc. (together, “ TRT ”) and Northern Oil and Gas, Inc. (the “ Company ”) and, (i) solely for the purpose of the second sentence of Section 1(g) below, the TRT Nominees (as defined below) and (ii) solely for the purposes of Section 2 below, Bahram Akradi (“ Akradi ”).
Recitals
a. The Company desires to reduce its outstanding debt and recapitalize itself with a substantial amount of new equity.
b. The Company and TRT have previously entered into that certain letter agreement, dated as of January 25, 2017 (the “ 2017 Agreement ”), and that certain letter agreement dated January 2, 2015 (the “ 2015 Agreement ,” and, together, with the 2017 Agreement, the “ Prior Agreements ”).
c. Each of the Company and TRT acknowledge that (i) in connection with entering into the 2015 Agreement and in accordance with Section 302A.673 of the Minnesota Business Corporation Act (the “ MBCA ”), a duly authorized committee of the Company’s Board of Directors (the “ Board ”) consisting of solely of disinterested directors approved the acquisition by TRT and their respective affiliates and associates of up to 20% of the issued and outstanding shares of the Company’s common stock, par value $0.001 (the “ Common Stock ”), (ii) pursuant to Section 203 of the Delaware General
Corporations Law (the “ DGCL ”), Section 203 of the DGCL shall not apply to restrict a business combination between a Delaware corporation and an “interested stockholder” (as defined in the DGCL) of the corporation if the interested stockholder became an interested stockholder before the date and time at which the Delaware corporation’s certificate of incorporation filed in accordance with Section 103 of the DGCL became effective thereunder, and (iii) TRT became an interested stockholder of the Company before the date and time which the Company’s certificate of incorporation became effective.
d. TRT is a significant holder of the Common Stock, and is also a significant holder of certain of the Company’s 8% senior unsecured notes, due 2020 (the “ Notes ” and all holders of such Notes, a “ Noteholder ,” and, collectively, the “ Noteholders ”).
e. On January 31, 2018, the Company, TRT and certain other Noteholders have entered into an agreement (the “ Exchange Agreement ”), pursuant to which the Company has agreed with the Noteholders that are parties to the Exchange Agreement (including TRT) to voluntarily exchange Notes held by such Noteholders for shares of Common Stock and new second lien senior secured notes pursuant to, and conditioned upon, the terms set forth in the Exchange Agreement (the “ Exchange ”).
f. On the date hereof, the Company and TRT entered into that certain Registration Rights Agreement, in the form attached hereto as Exhibit A .
g. The Company and TRT desire to amend and restate the Prior Agreements.
h. The Company and TRT desire to enter into this Agreement in connection with the Exchange to reflect certain agreed upon terms for TRT’s participation in the Exchange.
Agreement
In consideration of the respective representations, warranties, covenants, agreements and conditions set forth in this Agreement, and, intending to be legally bound, the parties hereto hereby agree as follows:
1. Board Nomination and Other Company Matters .
a. Promptly after the execution of this Agreement, the Company and the Board shall take all necessary actions to appoint Ernie Easley as a director of the Company to fill the current vacancy.
b. Subject to the terms set forth in Section 1(g) , the Company and the Board will take all necessary actions to nominate the TRT Nominees (as defined below) for election as an incumbent director of the Company at each annual meeting of the Company’s shareholders that occurs after the Effective Date (each, an “ Annual Meeting ”). Without limiting the generality of the foregoing and subject to the terms set forth in Section 1(g) , the Company and the Board shall (i) cause the slate of nominees standing for election, and recommended by the Board, at each Annual Meeting to include the TRT Nominees, (ii) nominate and reflect in the Company’s proxy statement on Schedule 14A for each Annual Meeting (each, a “ Company Proxy Statement ”) the nomination of the TRT Nominees for election at such Annual Meeting as directors of the Company with a term expiring at the next Annual Meeting, (iii) recommend and reflect in the Company Proxy Statement for each Annual Meeting the recommendation of the TRT Nominees for election as directors of the Company at such Annual Meeting, and cause the Company to use its reasonable best efforts to solicit proxies in favor of the election of the TRT Nominees with respect to such Annual Meeting, and (iv) cause all proxies received by the Company with respect to each Annual Meeting to be voted in the manner specified by such proxies and cause all proxies for which a vote is not specified to be voted for the election of the TRT Nominees as directors of the Company.
c. Prior to the execution of this Agreement, the Company and the Board have determined that each of Michael T. Popejoy, Michael Frantz and Ernie Easley (i) satisfies the requirements for being an independent director of the Company pursuant to applicable requirements of the NYSE American and the Securities and Exchange Commission (the “ SEC ”) and is “independent” in accordance with the requirements of all applicable rules and policies of the Company, and (ii) is otherwise qualified to serve as a member of the Board.
d. Each of the Company and TRT agrees that each of the TRT Nominees, upon election or appointment to the Board, will serve as an integral member of the Board and of the Committees (as defined below) and, subject to the terms and conditions set forth in this Agreement, will be governed by the same protections and obligations regarding confidentiality, conflicts of interest (including, when necessary under state law, obligations relating to recusal), fiduciary duties, trading and disclosure
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policies, and other governance guidelines, and will have the same rights and benefits, including with respect to insurance coverage, indemnification rights, exculpation, advancement of expenses, and compensation and fees, access to personnel and information as are applicable to all independent directors of the Company.
e. Except to the extent not permitted under SEC or NYSE American rules, or, with respect to the Compensation Committee of the Board, would not qualify as a “non-employee director” for purposes of Rule 16b-3 of the Securities Exchange Act of 1934 (the “ Exchange Act ”) or an “outside director” for purposes of Section 162(m) of the Internal Revenue Code, to the extent applicable, at least one of the TRT Nominees will serve on each of the committees of the Board (each such committee, a “ Committee ,” and, collectively, the “ Committees ”). When determining whether the conditions set forth above shall apply, such determination will be made reasonably and in good faith by the Board on a basis reasonably consistent with the Board’s evaluation of other proposed members of such Committee and any determination to exclude a TRT Nominee from a committee must be supported by legal memorandum presented to the entire Board at least five days prior to a vote by the Board to exclude a TRT Nominee. Subject to the conditions set forth above, the Company and the Board will take all actions necessary and appropriate to effect the appointment of at least one TRT Nominee to each of the Committees promptly after the execution of this Agreement. Subject to the condition above, such TRT Nominee will serve on each Committee until the first date that (i) TRT owns less than 53,220,888 of the issued and outstanding Common Stock; provided , however , that the aforementioned requisite threshold shall be subject to equitable adjustment if any change in the outstanding shares of Common Stock shall occur as a result of any reclassification, recapitalization, reorganization, stock split (including a reverse stock split) or combination, exchange or readjustment of shares or any stock dividend or stock distribution is declared (“ Equitable Adjustment ”) or (ii) on or after the third anniversary of the Effective Date, TRT owns less than 12.5% of the outstanding shares of Common Stock. The Company hereby confirms that the Company and the Board do not intend to create any additional Committees of the Board, but in the event that a new Committee (a “ New Committee ”) is created, the Company agrees that subject to the conditions set forth above, the Board will appoint at least one TRT Nominee to serve on the New Committee; provided , that the Board shall not be required to appoint any TRT Nominees to serve on a Special Committee (as defined below) formed solely for the purposes set forth in Section 3(d) . The Company hereby agrees that the Company and the Board will not delegate any authority to transact with respect to an Extraordinary Transaction to any Committee that does not include a TRT Nominee (but the Company and the Board may authorize any Committee to review, analyze and make recommendations to the Board regarding any Extraordinary Transaction). For purposes of this Agreement, the term “ Extraordinary Transaction ” means any merger, consolidation, business combination, tender or exchange offer, sale or purchase of a substantial amount of securities or assets other than in the ordinary course of business, dissolution, liquidation, restructuring, recapitalization or similar transaction with or involving the Company or any of its subsidiaries.
f. For purposes of this Agreement, the term “ TRT Nominees ” means Michael T. Popejoy, Michael Frantz and Ernie Easley. If any TRT Nominee is not elected to the Board at an Annual Meeting or, after election to the Board, thereafter is removed, resigns, or is otherwise unable to serve as a director of the Company, except pursuant to Section 1(g) , then TRT will be entitled to select a new designee to serve as a director, which designee (i) must qualify as an independent director of the Company pursuant to applicable requirements of the NYSE American and the SEC and (ii) will be chosen by TRT subject to a determination by the Nominating Committee of the Board that such designee is eligible to serve as a director under applicable law, such determination to be made promptly, reasonably and in good faith on a basis reasonably consistent with the Company’s evaluation of all other directors, and the Board will promptly appoint such designee to the Board (and to the Committees of the Board on which the TRT Nominee being replaced served, provided that such designee meets the applicable independence standards and applicable legal requirements for eligibility to serve on such Committee, as contemplated in this
3
Agreement) to serve until the next Annual Meeting after such appointment. Any such designee will be deemed a TRT Nominee for all purposes under this Agreement and TRT agrees to cause any designee appointed pursuant to this Section 1(f) to comply with all obligations of TRT and TRT Nominees under this Agreement. The Company will take any action necessary or appropriate to facilitate the discharge of its obligations under this Section 1(f) , including increasing the number of seats on the Board or amending the Company’s bylaws and its other governing documents, in each case, to the extent permissible under applicable law.
g. Notwithstanding anything to the contrary herein, if, at any time, (i) TRT and its Affiliates Beneficially Own (x) less than 53,220,888 of the outstanding shares of Common Stock, but 26,610,444 or more of the outstanding shares of Common Stock (in each case, subject to Equitable Adjustment), or (y) on or after the third anniversary of the Effective Date, less than 12.5% of the outstanding shares of Common Stock, TRT will be entitled to representation on the Board of just two TRT Nominees; (ii) TRT and its Affiliates Beneficially Own less than 26,610,444 of the outstanding shares of Common Stock, but 13,305,222 or more of the outstanding shares of Common Stock (in each case, subject to Equitable Adjustment), TRT will be entitled to representation on the Board of just one TRT Nominee; and (iii) TRT and its Affiliates Beneficially Own less than 13,305,222 of the outstanding shares of Common Stock (subject to Equitable Adjustment), TRT will not be entitled to any representation on the Board. If TRT’s and its Affiliates’ Beneficial Ownership of outstanding shares of Common Stock falls below the aforementioned requisite thresholds, (A) TRT will promptly notify the Company thereafter and will promptly cause the appropriate number of TRT Nominees to resign, and (B) such TRT Nominee(s) will promptly resign. For purposes of this Section 1(g), (1) the terms “Beneficially Own” and “Beneficial Ownership” will have the same meaning as “beneficial owner” set forth in Rule 13d-3 of the Exchange Act and (2) the term “Affiliates” will have the same meaning as such term set forth in Rule 12b-2 under the Exchange Act. In the event that TRT shall become entitled to fewer than three directors on the Board pursuant to this Section 1(g) , the Company’s obligations under this Section 1 shall continue in effect but will be revised to reflect such lesser number of TRT Nominees.
2. Non-Solicitation . During the period beginning on the Effective Date and continuing until and including the Annual Meeting to be held in calendar year 2020, neither TRT nor Akradi will, and will cause their respective affiliates and associates under their control not to, and each of TRT and Akradi will not encourage any third party to, “solicit” (as such term is defined in Rule 14a-1(l) under the Exchange Act) shareholders of the Company with respect to the approval of any shareholder proposal or the nomination or election of any candidate as a director of the Company in opposition to the recommendation of the Board.
3. Other Agreements .
a. TRT agrees that if TRT becomes the beneficial owner, directly or indirectly, of 40% or more of the Common Stock or voting power of the outstanding Common Stock of the Company (the “ 40% Shareholder ,” the date of such event, the “ 40% Shareholder Date ”), then TRT and TRT’s affiliates and associates may not engage in any Extraordinary Transaction for a period of four years following the 40% Shareholder Date unless the Extraordinary Transaction or the acquisition of shares made by TRT to cause TRT to become a 40% Shareholder is approved by a Special Committee (as defined below).
b. If TRT makes a good faith definitive proposal in writing to the Board regarding an Extraordinary Transaction, the Special Committee shall consider and take action on the proposal and respond in writing within 30 days after receipt of the proposal by TRT, setting forth its decision regarding the proposal.
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c. If TRT makes a good faith definitive proposal in writing to the Board to acquire shares such that TRT would become a 40% Shareholder, a Special Committee shall consider and take action on the proposal and respond in writing within 30 days after receipt of the proposal by TRT, setting forth its decision regarding the proposal.
d. If TRT makes a good faith definitive proposal in writing to the Board pursuant to Section 3(b) or Section 3(c) , the Board shall promptly form a committee (the “ Special Committee ”) composed solely of one or more disinterested directors. The Special Committee shall take action on the proposal by the affirmative vote of a majority of members of the Special Committee. No larger proportion or number of votes shall be required. The Special Committee shall not be subject to any direction or control by the Board with respect to the Special Committee’s consideration of, or any action concerning, an Extraordinary Transaction or acquisition of shares pursuant to this Section 3(d) .
e. Notwithstanding the foregoing, if TRT becomes a 40% Shareholder solely as a result of a repurchase of shares by, or a recapitalization of, the Company or other similar action, TRT shall not be deemed to be a 40% Shareholder for purposes of this Agreement, unless: (i) the repurchase, recapitalization, conversion, or similar action was proposed by or on behalf of, or pursuant to any agreement, arrangement, relationship, understanding, or otherwise (whether or not in writing) with, TRT or any affiliate or associate of TRT; or (ii) TRT thereafter acquires beneficial ownership, directly or indirectly, of outstanding shares of Common Stock and, immediately after the acquisition, is a 40% Shareholder.
f. For purposes of this Section 3 , the terms “affiliates,” “associates,” “beneficial owner,” “beneficial ownership,” “control,” “disinterested directors” and “interested shareholder” shall have the meanings assigned to such terms in the MBCA.
4. Miscellaneous .
a. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior written, and prior and contemporaneous oral, agreements and understandings between the parties with respect to the subject matter hereof. This Agreement may be modified or waived only by a separate writing executed by TRT and the Company expressly so modifying or waiving this Agreement.
b. Money damages would be an inadequate remedy for breach of this Agreement by TRT or the Company, as applicable, because of the difficulty of ascertaining the amount of damage that will be suffered by the non-breaching party in the event that this Agreement is breached, the irreparable injury that would be suffered by the non-breaching party in the event that any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached and that such injury would not be adequately compensable in damages. Therefore, TRT and the Company will be entitled to specific performance of this Agreement and injunctive or other equitable relief as a remedy for any such breach by TRT or the Company, as applicable, and TRT and the Company further waive any requirement for the securing or posting of any bond in connection with any such remedy and shall not take any action, directly or indirectly, in opposition to the party seeking relief on the grounds that any other remedy or relief is available at law or in equity. Such remedy shall not be deemed to be the sole or exclusive remedy for any breach of this Agreement by TRT or the Company, as applicable, but shall be in addition to all other remedies available at law or equity to the non-breaching party. The provisions of this Agreement shall be enforced to the fullest extent permissible under the law and public policies applied in the
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jurisdiction in which enforcement is sought. Accordingly, if any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Notwithstanding the foregoing, if such provision, covenant or restriction could be more narrowly drawn so as not to be invalid, prohibited or unenforceable, it shall be so narrowly drawn, without invalidating the remaining provisions of this Agreement.
c. This Agreement, and any claims arising out of, relating to or associated with this Agreement will be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the conflict of laws principles or any other principle that could require the application of the laws of any other jurisdiction. Each of TRT and the Company (i) irrevocably agrees that any suit, action or proceeding arising out of, relating to or associated with this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns shall be brought and determined exclusively in the Delaware Court of Chancery or any federal court within the State of Delaware, or, if both the Delaware Court of Chancery and the federal courts within the State of Delaware decline to accept jurisdiction over a particular matter, any other state court within the State of Delaware, and, in each case, any appellate court therefrom, (ii) consents to submit itself to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any suit, action or proceeding arising out of, relating to or associated with this Agreement in any court other than the aforesaid courts, (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (iv) irrevocably waives, and will not assert, to the fullest extent permitted by applicable law, that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
d. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by either the Company or TRT without the prior written consent of the other parties, and any attempt to do so will be void. Subject to the preceding sentence, all the terms and provisions of this Agreement will inure to the benefit of and will be enforceable by the successors, assigns, heirs, executors and administrators of the Company and TRT, as applicable. Except as otherwise expressly set forth herein, nothing contained in this Agreement will create any rights in, or be deemed to have been executed for the benefit of, any person that is not a party hereto or a successor, heir, executor, administrator (as applicable) or permitted assignee of such party.
e. Neither the Company nor TRT shall issue any press release or public announcement concerning this Agreement without obtaining the prior written approval of the other party hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole judgment of the Company or TRT (as applicable), disclosure is otherwise required by applicable law or by the applicable rules of any stock exchange on which the Company lists securities or in order to comply with any covenants contained in any credit agreements or indentures.
f. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if drafted jointly by the parties and no presumption or burden of proof must arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any words imparting the singular number only shall include the plural and vice versa. 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 word “including” means “including without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or thing extends, and such phrase shall not mean simply “if.”
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This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same agreement.
[ Signature Pages Follow ]
7
If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this Agreement, which will constitute our agreement with respect to the matters set forth herein.
Very truly yours, | ||
Northern Oil and Gas, Inc. | ||
By: |
/s/ Erik J. Romslo |
|
Name: Erik J. Romslo | ||
Title: EVP, General Counsel and Secretary |
[ Signature Page to Letter Agreement ]
Confirmed and Agreed to : | ||
TRT Holdings, Inc. |
By: |
/s/ Michael G. Smith |
Name: Michael G. Smith | ||
Title: Treasurer | ||
CRESTA INVESTMENTS, LLC |
By: |
/s/ Michael G. Smith |
Name: Michael G. Smith | ||
Title: Secretary | ||
CRESTA GREENWOOD, LLC |
By: |
/s/ Michael G. Smith |
Name: Michael G. Smith | ||
Title: Vice President and Secretary |
[ Signature Page to Letter Agreement ]
ROBERT B ROWLING , an individual |
/s/ Paul A. Jorge |
By: Paul A. Jorge, attorney-in-fact |
[ Signature Page to Letter Agreement ]
Solely for the purpose of the second sentence of Section 1(g) :
TRT NOMINEES : |
/s/ Michael T. Popejoy |
Michael T. Popejoy |
/s/ Michael Frantz |
Michael Frantz |
/s/ Roy Ernie Easley |
Roy Ernie Easley |
[ Signature Page to Letter Agreement ]
Solely for the purpose of Section 2 : |
/s/ Bahram Akradi |
Bahram Akradi |
[ Signature Page to Letter Agreement ]
Exhibit 10.2
Execution Version
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
NORTHERN OIL AND GAS, INC.
AND
THE HOLDERS PARTY HERETO
TABLE OF CONTENTS
ARTICLE I |
DEFINITIONS |
1 | ||||
Section 1.01 |
Definitions |
1 | ||||
Section 1.02 |
Registrable Securities |
5 | ||||
ARTICLE II |
REGISTRATION RIGHTS |
5 | ||||
Section 2.01 |
Shelf Registration |
5 | ||||
Section 2.02 |
Underwritten Shelf Offering Requests |
7 | ||||
Section 2.03 |
Delay and Suspension Rights |
9 | ||||
Section 2.04 |
Piggyback Registration Rights |
9 | ||||
Section 2.05 |
Participation in Underwritten Offerings |
11 | ||||
Section 2.06 |
Registration and Sale Procedures |
12 | ||||
Section 2.07 |
Cooperation by Holders |
15 | ||||
Section 2.08 |
[Intentionally Omitted] |
15 | ||||
Section 2.09 |
Expenses |
15 | ||||
Section 2.10 |
Indemnification and Contribution |
15 | ||||
Section 2.11 |
Rule 144 Reporting |
18 | ||||
Section 2.12 |
Transfer or Assignment of Registration Rights |
19 | ||||
Section 2.13 |
Other Registration Rights |
19 | ||||
ARTICLE III |
MISCELLANEOUS |
19 | ||||
Section 3.01 |
Communications |
19 | ||||
Section 3.02 |
Successors and Assigns |
19 | ||||
Section 3.03 |
Recapitalization, Exchanges, Etc. Affecting the Shares |
20 | ||||
Section 3.04 |
Aggregation of Registrable Securities |
20 | ||||
Section 3.05 |
Specific Performance |
20 | ||||
Section 3.06 |
Counterparts |
20 | ||||
Section 3.07 |
Headings |
20 | ||||
Section 3.08 |
Governing Law |
20 | ||||
Section 3.09 |
Severability of Provisions |
21 | ||||
Section 3.10 |
Entire Agreement |
21 | ||||
Section 3.11 |
Amendment |
21 | ||||
Section 3.12 |
No Presumption |
21 | ||||
Section 3.13 |
Obligations Limited to Parties to Agreement |
22 | ||||
Section 3.14 |
Independent Nature of Holders’ Obligations |
22 | ||||
Section 3.15 |
Interpretation |
22 |
Annex A – Selling Holder Notice and Questionnaire
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of May 15, 2018, by and among Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), and the holders party hereto (together with any permitted transferees or assignee, each, a “ Holder ” and collectively, the “ Holders ”).
WHEREAS, this Agreement is made pursuant to the Exchange Agreement, dated as of January 31, 2018 (as amended, the “ Exchange Agreement ”), among the Company and the Holders, pursuant to which the Holders will acquire 8.50% Senior Secured Second Lien Notes due 2023 of the Company (the “ Second Lien Notes ”) and shares of common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) on the date hereof (the “ Closing Date ”); and
WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Holders pursuant to the Exchange 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 are hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions .
Capitalized terms used herein without definition shall have the meanings given to them in the Exchange Agreement. The terms set forth below are used herein as so defined:
“ Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Business Day ” means any day other than a day on which banks are permitted or required to be closed in New York City.
“ Closing Date ” has the meaning specified therefor in the recitals of this Agreement.
“ Commission ” means the U.S. Securities and Exchange Commission, including the staff thereof as applicable.
“ Common Share Price ” means the volume weighted average closing price of the Common Stock (as reported by the Primary Exchange on which the Common Stock is then traded) for the ten (10) trading days immediately preceding the date on which the determination is made (or, if such price is not available, as determined in good faith by the Board of Directors).
“ Common Stock ” has the meaning specified therefor in the recitals of this Agreement.
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“ Company ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Company Securities ” has the meaning specified therefor in Section 2.04(c)(i) .
“ Effective Date ” has the meaning specified therefor in Section 2.01(a) .
“ Equity Raise ” has the meaning specified in the recitals of the Exchange Agreement.
“ Exchange Agreement ” has the meaning specified therefor in the recitals of this Agreement.
“ Existing Registration Rights Agreements ” means those certain Registration Rights Agreements, each dated as of the Closing Date and as may be amended from time to time, (i) among the Company and TPG Specialty Lending, Inc., TOP III Finance 1, LLC and TAO Finance 1, LLC (the “ TPG Registration Rights Agreement ”) and (ii) among the Company and TRT Holdings, Inc., Cresta Investments, LLC and Cresta Greenwood, LLC.
“ Existing Registration Rights Holders ” means parties provided registration rights pursuant to the Existing Registration Rights Agreements.
“ Expenses ” has the meaning specified therefor in Section 2.10(a) .
“ Family Member ” means with respect to any Holder or an Affiliate of such Holder, such person’s spouse, domestic partner, parents, parents-in-law, siblings, children, grandchildren and any other natural person who occupies the same principal residence as the undersigned (other than a tenant or employee), and the spouses, domestic partners, descendants and ancestors of each of the foregoing.
“ Holder ” and “ Holders ” have the meanings specified therefor in the introductory paragraph of this Agreement. A Person shall cease to be a Holder hereunder at such time as it ceases to hold any Registrable Security.
“ Indemnified Party ” has the meaning specified therefor in Section 2.10(c) .
“ Indemnifying Party ” has the meaning specified therefor in Section 2.10(c) .
“ Losses ” has the meaning specified therefor in Section 2.10(a) .
“ Majority Holders ” means, at any time, the Holder or Holders of more than fifty percent (50%) of the Registrable Securities at such time, calculated based on the aggregate principal amount of Registrable Notes plus the number of Registrable Shares times the Common Share Price.
“ Managing Underwriter ” means, with respect to any Underwritten Offering, the lead book-running manager(s) of such Underwritten Offering.
“ Other Registrable Securities ” has the meaning specified therefor in Section 2.02(b) .
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“ Other Securities ” has the meaning specified therefor in Section 2.04(c)(i) .
“ Permitted Transferee ” means with respect to any Holder, (a) an Affiliate of any Holder or any investment fund or other entity controlled or managed by any Holder; (b) any trust for the primary benefit of the Family Members of such Holder; provided that, in each case, either (i) such Holder or (ii) a bona fide third-party trustee continues to hold, directly or indirectly, 100% of the voting interests of such trust until the death or legal incapacity of such Holder; (c) any entity of which such Holder and any Permitted Transferees or Family Members of such Holder collectively are beneficial owners of 100% of the equity interests; provided that either (i) such Holder or (ii) a bona fide third-party trustee continues to hold, directly or indirectly, 100% of the voting interests of such entity until the death or legal incapacity of such Holder; or (d) any trust or non-profit corporation that (i) has obtained recognition of its tax exempt status under Section 501(c)(3) of the Internal Revenue Code of 1986 and (ii) is controlled by such Holder.
“ Piggybacking Holder ” has the meaning specified therefor in Section 2.04(a) .
“ Piggyback Underwritten Offering ” has the meaning specified therefor in Section 2.04(a) .
“ Records ” has the meaning specified therefor in Section 2.06(m) .
“ Registrable Securities ” means (a) the Second Lien Notes issued pursuant to the Exchange Agreement (and any Second Lien Notes that are issued as PIK interest thereon) and (b) the shares of Common Stock issued pursuant to the Exchange Agreement, in each case until such Registrable Securities cease to be Registrable Securities pursuant to Section 1.02 .
“ Registrable Notes ” means the aggregate principal amount of Second Lien Notes that are Registrable Securities.
“ Registrable Shares ” means shares of Common Stock that are Registrable Securities.
“ Registration Expenses ” means all expenses, other than Selling Expenses, incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing 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 and the fees and disbursements of counsel to the Company and the independent public accountants for the Company, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and the reasonable and documented fees and expenses of one counsel for all Holders in addition to one local counsel.
“ Registration Statement ” means (a) the Shelf Registration Statement and (b) any other registration statement of the Company filed or to be filed with the Commission under the Securities Act in which Registrable Securities are or, as the context requires, may be included in the securities registered thereby pursuant to this Agreement.
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“ Requesting Holder ” has the meaning specified therefor in Section 2.02(a) .
“ Rule 415 Limitation ” has the meaning specified therefor in Section 2.01(b) .
“ Second Lien Notes ” has the meaning specified therefor in the recitals of this Agreement.
“ Section 2.02 Maximum Number of Shares ” has the meaning specified therefor in Section 2.02(c) .
“ Section 2.04 Maximum Number of Shares ” has the meaning specified therefor in Section 2.04(c) .
“ Selling Expenses ” means all (a) underwriting fees, discounts and selling commissions allocable to the sale of Registrable Securities, (b) transfer taxes allocable to the sale of the Registrable Securities, (c) costs or expenses related to any roadshows conducted in connection with the marketing of any Shelf Underwritten Offering, and (d) fees and expenses of any counsel engaged by any Holder that are not expressly included in Registration Fees.
“ Selling Holder ” means a Holder selling Registrable Securities pursuant to a Registration Statement.
“ Selling Holder Questionnaire ” has the meaning specified therefor in Section 2.07 .
“ Shelf Piggybacking Holder ” has the meaning specified therefor in Section 2.02(b) .
“ Shelf Registration Statement ” has the meaning specified therefor in Section 2.01(a) , subject to Section 2.01(d) .
“ Shelf Underwritten Offering ” has the meaning specified therefor in Section 2.02(a) .
“ TPG Registrable Shares ” means the shares of Common Stock that are “Registrable Shares” as defined in the TPG Registration Rights Agreement.
“ TPG Registration Rights Holders ” means parties provided registration rights pursuant to the TPG Registration Rights Agreement.
“ Underwritten Offering ” means an offering (including an offering pursuant to the Shelf Registration Statement) in which shares of Common Stock are sold to an underwriter on a firm commitment basis for reoffering to the public.
“ Underwritten Offering Filing ” means (a) with respect to a Shelf Underwritten Offering, a preliminary prospectus supplement (or prospectus supplement if no preliminary prospectus supplement is used) to the Shelf Registration Statement relating to such Shelf Underwritten Offering, and (b) with respect to a Piggyback Underwritten Offering, (i) a preliminary prospectus supplement (or prospectus supplement if no preliminary prospectus supplement is used) to an effective shelf Registration Statement (other than the Shelf Registration Statement) in which Registrable Securities could be included and Holders could be named as selling security holders without the filing of a post-effective amendment thereto (other than a post-effective amendment
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that becomes effective upon filing) or (ii) a Registration Statement (other than the Shelf Registration Statement), in each case relating to such Piggyback Underwritten Offering. An Underwritten Offering Filing shall not include a registration statement on a Form S-4 or S-8 or filed in connection with an exchange offer or any employee benefit or stock purchase and/or dividend reinvestment plan, an offering of securities solely to the Company’s existing stockholders, or a registration statement registering securities that are issuable solely upon conversion of debt securities or a registration statement solely with respect to an equity compensation plan.
Section 1.02 Registrable Securities .
Any Registrable Security will cease to be a Registrable Security when (a) a Registration Statement covering such Registrable Security has become effective under the Securities Act and such Registrable Security has been sold or disposed of pursuant to such Registration Statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act; (c) such Registrable Security is held by the Company or one of its subsidiaries or ceases to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise); (d) such Registrable Security has been sold or disposed of in a transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such Registrable Security pursuant to Section 2.12 ; or (e) the later of the following occurs: (i) such Registrable Security becomes eligible for resale without restriction and without volume limitations or the need for current public information pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act and (ii) two (2) years have elapsed since the Closing. Any security that has ceased to be a Registrable Security shall not thereafter become a Registrable Security, and any security that is issued or distributed in respect of a security that has ceased to be a Registrable Security shall not be a Registrable Security.
ARTICLE II
REGISTRATION RIGHTS
Section 2.01 Shelf Registration .
(a) The Company shall prepare and file with the Commission, and use commercially reasonable efforts to cause to be declared effective as soon as practicable after the filing thereof, but in no event later than August 13, 2018, a Registration Statement under the Securities Act relating to the offer and sale of all the Registrable Securities by the Holders thereof (the “ Shelf Registration Statement ”) from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act. Promptly following the effective date of the Shelf Registration Statement (the “ Effective Date ”), the Company shall notify the Holders of the effectiveness thereof.
(b) Notwithstanding anything in Section 2.01(a) , if for any reason the Commission does not permit the Company to include any or all of the Registrable Securities in the initial Shelf Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Registrable Securities by the Holders (a “ Rule 415 Limitation ”), or the Commission informs the Company that any of the Selling Holders would be deemed to be
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statutory underwriters, the Company shall notify the Holders thereof and use commercially reasonable efforts to promptly file amendments to the initial Shelf Registration Statement as required by the Commission and/or withdraw the initial Shelf Registration Statement and file a new registration statement on Form S-3 or such other form available for registration of the Registrable Securities as a secondary offering, in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission and avoid the Selling Holders being deemed to be statutory underwriters; provided , however , that prior to such amendment or subsequent Shelf Registration Statement, the Company shall be obligated to use commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities and against the Selling Holders’ being deemed statutory underwriters in accordance with Commission guidance, including without limitation, the Compliance and Disclosure Interpretation “Securities Act Rules” No. 612.09, and the Securities Act. In the event the Company amends the initial Shelf Registration Statement by means of a post-effective amendment or files a subsequent Shelf Registration Statement, as the case may be, the Company will use commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission, Commission guidance or the Securities Act, one or more additional Shelf Registration Statements covering those Registrable Securities not included in the initial Shelf Registration Statement as amended or any subsequent Shelf Registration Statement previously filed. The number of Registrable Securities that may be included in each such Shelf Registration Statement shall be allocated among the Holders thereof in proportion (as nearly as practicable) to the aggregate principal amount or number of Registrable Securities, as applicable, owned by each Holder or in such other proportion as is necessary to avoid the Selling Holders being deemed to be statutory underwriters. If the Commission requires the Company to name any Holder as a statutory underwriter and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the Shelf Registration Statement and the Company shall have no further obligations under this Section 2.01 or Section 2.02 with respect to the Registrable Securities held by such Holder.
(c) The Shelf Registration Statement shall be on Form S-3 (or any equivalent or successor form) under the Securities Act or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statements as is then available to effect a registration for resale of the Registrable Securities; provided , however , that if the Company has filed the Shelf Registration Statement on Form S-1 and subsequently becomes eligible to use Form S-3 or any equivalent or successor form or forms, the Company shall (i) file a post-effective amendment to the Shelf Registration Statement converting such Registration Statement on Form S-1 to a Registration Statement on Form S-3 or any equivalent or successor form or forms or (ii) withdraw the Shelf Registration Statement on Form S-1 and file a subsequent Shelf Registration Statement on Form S-3 or any equivalent or successor form or forms.
(d) Unless otherwise specifically stated herein, the term “Shelf Registration Statement” shall refer individually to the initial Shelf Registration Statement and to each subsequent Shelf Registration Statement, if any, filed pursuant to Section 2.01(b) or Section 2.01(c) .
(e) Subject to Section 2.03, the Company shall use commercially reasonable efforts to cause the Shelf Registration Statement to remain effective, and to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available for the resale of all the Registrable Securities by the Holders until all of the Registrable Securities have ceased to be Registrable Securities.
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(f) When effective, the Shelf Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will 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 (in the case of any prospectus contained in the Shelf Registration Statement, in the light of the circumstances under which such statements are made); provided, however, the Company shall have no such obligations or liabilities with respect to any information pertaining to any Holder furnished in writing to the Company by or on behalf of such Holder specifically for inclusion therein.
Section 2.02 Underwritten Shelf Offering Requests .
(a) In the event that any Holder or group of Holders elects to dispose of Registrable Shares under the Shelf Registration Statement pursuant to an Underwritten Offering and reasonably expects gross proceeds of at least $20,000,000 from such Underwritten Offering (including proceeds attributable to any Registrable Shares included in such Underwritten Offering by any Shelf Piggybacking Holders), the Company shall, at the request (a “ Shelf Underwritten Offering Request ”) of such Holder or Holders (in such capacity, a “ Requesting Holder ”), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the underwriter or underwriters selected pursuant to Section 2.02(d) and shall take all such other reasonable actions as are requested by the Managing Underwriter of such Underwritten Offering and/or the Requesting Holders in order to expedite or facilitate the disposition of, subject to Section 2.02(c) , such Registrable Shares and the Registrable Shares requested to be included by any Shelf Piggybacking Holder (a “ Shelf Underwritten Offering ”); provided , however , that the Company shall have no obligation to facilitate or participate in more than one (1) Shelf Underwritten Offering in any 180-day period or more than two (2) Shelf Underwritten Offerings per calendar year; provided further , that a Shelf Underwritten Offering shall not count against such limit unless and until the Requesting Holder(s) are able to sell at least seventy-five percent (75%) of the Registrable Shares requested to be included in such Shelf Underwritten Offering.
(b) If the Company receives a Shelf Underwritten Offering Request, it will give written notice of such proposed Shelf Underwritten Offering to each Holder (other than the Requesting Holder), which notice shall be held in strict confidence by such Holders and shall include the anticipated filing date of the related Underwritten Offering Filing and, if known, the number of Registrable Shares that are proposed to be included in such Shelf Underwritten Offering, and of such Holders’ rights under this Section 2.02(b) . Such notice shall be given promptly (and in any event at least five (5) Business Days before the filing of the Underwritten Offering Filing or two (2) Business Days before the filing of the Underwritten Offering Filing in connection with a bought or overnight Underwritten Offering); provided , that if the Shelf Underwritten Offering is a bought or overnight Underwritten Offering and the Managing Underwriter advises the Company and the Requesting Holder in writing that the giving of notice pursuant to this Section 2.02(b) would adversely affect the offering, no such notice shall be required (and such Holders shall have no right to include Registrable Shares in such bought or
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overnight Underwritten Offering); and provided further , that the Company shall not so notify (or be required to so notify) any such other Holder that has notified the Company (and not revoked such notice) requesting that such Holder not receive notice from the Company of any proposed Shelf Underwritten Offering. Each such Holder shall then have four (4) Business Days (or one (1) Business Day in the case of a bought or overnight Underwritten Offering) after the date on which the Company delivered the notice pursuant to this Section 2.02(b) to request inclusion of Registrable Shares in the Shelf Underwritten Offering (which request shall specify the maximum number of Registrable Shares intended to be disposed of by such Holder and include such other information as is requested pursuant to clause (i) of Section 2.05(c) ) (any such Holder making such request, a “ Shelf Piggybacking Holder ”). If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Shelf Underwritten Offering. In connection with a Shelf Underwritten Offering Request made by Requesting Holders, the Company shall not include any securities that are not Registrable Shares or TPG Registrable Shares without the prior written consent of the Holders of a majority of the Registrable Shares included in such Shelf Underwritten Offering, which consent shall not be unreasonably withheld or delayed. If such consent of the Holders of a majority of the Registrable Shares is provided, holders of other securities who timely and validly request to have shares of Common Stock held by them that are subject to registration rights (such securities, including Exchange Registrable Shares, “ Other Registrable Securities ”) may include such Other Registrable Securities in the Shelf Underwritten Offering, subject to any applicable limitations set forth in the applicable registration rights agreement(s) and Section 2.02(c) below.
(c) If the Managing Underwriter of the requested Shelf Underwritten Offering shall inform the Company and the Requesting Holders in writing, with a copy to be provided upon request to any Shelf Piggybacking Holder, of its belief that the number of Registrable Shares requested to be included in such Shelf Underwritten Offering by the Requesting Holders, when added to the number of Registrable Shares requested to be included by any Shelf Piggybacking Holders and any holders of Other Registrable Securities permitted to be included in the Shelf Underwritten Offering pursuant to Section 2.02(b) , would materially adversely affect such offering, then the Company shall include in the applicable Underwritten Offering Filing, to the extent of the total number of Registrable Shares and such permitted Other Registrable Securities that the Company is so advised can be sold in such Shelf Underwritten Offering without so materially adversely affecting such offering (the “ Section 2.02 Maximum Number of Shares ”), in the following priority:
(i) First, all Registrable Shares that the Requesting Holders and any Shelf Piggybacking Holders requested to be included therein, allocated among the Requesting Holders and any Shelf Piggybacking Holders pro rata based on the number of Registrable Shares each requested to be included, in proportion to the total number of Registrable Shares requested to be included; and
(ii) Second, to the extent that the number of Registrable Shares subject to Section 2.02(c)(i) is less than the Section 2.02 Maximum Number of Shares, the Other Registrable Securities and shares of Common Stock requested to be included by any other Persons having registration rights with respect to such offering, pro rata among such other Persons based on the number of Other Registrable Securities or shares of Common Stock each requested to be included, in proportion to the total number of Other Registrable Securities and shares of Common Stock requested to be included by such other Persons.
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(d) The Company shall select the Managing Underwriter and any other underwriters in connection with such Shelf Underwritten Offering. The Requesting Holders shall determine the pricing of the Registrable Shares offered pursuant to any Shelf Underwritten Offering and the applicable underwriting discounts and commissions, subject to Section 2.03 .
Section 2.03 Delay and Suspension Rights .
Notwithstanding any other provision of this Agreement, the Company may (a) delay filing or effectiveness of the Shelf Registration Statement (or any amendment thereto) or effecting a Shelf Underwritten Offering or (b) suspend the Holders’ use of any prospectus that is a part of a Shelf Registration Statement upon written notice to each Holder whose Registrable Securities are included in such Shelf Registration Statement ( provided that in no event shall such notice contain any material non-public information regarding the Company) (in which event such Holder shall immediately discontinue sales of Registrable Securities pursuant to such Registration Statement but may settle any then-contracted sales of Registrable Securities), in each case for a period of up to 60 days, if the Company reasonably determines (i) that such delay or suspension is in the best interest of the Company and its stakeholders generally due to a pending securities offering by the Company, or any proposed material acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other material transaction involving the Company, in each case that would be materially and adversely affected by required disclosure of such transaction in such prospectus or Shelf Underwritten Offering, (ii) that such registration, offering or the use of any prospectus that is a part of a Shelf Registration Statement would render the Company unable to comply with applicable securities laws (including because of requirements to produce financial statements with regard to acquired businesses) or (iii) that such registration or offering would require disclosure of material information and such disclosure would materially adversely affect the Company (any such period, a “ Suspension Period ”); provided that such Suspension Period is also applied to all Existing Registration Rights Holders, provided further , however , that in no event shall any Suspension Periods applicable to the Holders collectively exceed an aggregate of 90 days in any twelve-month period.
Section 2.04 Piggyback Registration Rights .
(a) Subject to Section 2.04(c) , if the Company at any time proposes to file an Underwritten Offering Filing for an Underwritten Offering of shares of Common Stock for its own account or for the account of any other Persons who have or have been granted registration rights (a “ Piggyback Underwritten Offering ”), other than the filing of a shelf registration statement pursuant to the Existing Registration Rights Agreements, it will give written notice of such Piggyback Underwritten Offering to each Holder, which notice shall be held in strict confidence by such Holders and shall include the anticipated filing date of the Underwritten Offering Filing and, if known, the number of shares of Common Stock that are proposed to be included in such Piggyback Underwritten Offering, and of such Holders’ rights under this Section 2.04(a) . Such notice shall be given promptly (and in any event at least five (5) Business Days before the filing of the Underwritten Offering Filing or two (2) Business Days before the
9
filing of the Underwritten Offering Filing in connection with a bought or overnight Underwritten Offering); provided , that if the Piggyback Underwritten Offering is a bought or overnight Underwritten Offering and the Managing Underwriter advises the Company in writing that the giving of notice pursuant to this Section 2.04(a) would adversely affect the offering, no such notice shall be required (and such Holders shall have no right to include Registrable Shares in such bought or overnight Underwritten Offering); and provided further , that the Company shall not so notify (or be required to so notify) any such other Holder that has notified the Company (and not revoked such notice) requesting that such Holder not receive notice from the Company of any proposed Piggyback Underwritten Offering. Each such Holder shall then have four (4) Business Days (or one (1) Business Day in the case of a bought or overnight Underwritten Offering) after the date on which the Holders received notice pursuant to this Section 2.04(a) to request inclusion of Registrable Shares in the Piggyback Underwritten Offering (which request shall specify the maximum number of Registrable Shares intended to be disposed of by such Holder and include such other information as is requested pursuant to clause (i) of Section 2.05(c) ) (any such Holder making such request, a “ Piggybacking Holder ”). If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Piggyback Underwritten Offering. Subject to Section 2.04(c) , the Company shall use commercially reasonable efforts to include in the Piggyback Underwritten Offering all Registrable Shares that the Company has been so requested to include by the Piggybacking Holders; provided , however , that if, at any time after giving written notice of a proposed Piggyback Underwritten Offering pursuant to this Section 2.04(a) and prior to the execution of an underwriting agreement with respect thereto, the Company or such other Persons who have or have been granted registration rights, as applicable, shall determine for any reason not to proceed with or to delay such Piggyback Underwritten Offering, the Company shall give written notice of such determination to the Piggybacking Holders (which such Holders will hold in strict confidence) and (i) in the case of a determination not to proceed, shall be relieved of its obligation to include any Registrable Shares in such Piggyback Underwritten Offering (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), and (ii) in the case of a determination to delay, shall be permitted to delay inclusion of any Registrable Shares for the same period as the delay in including the shares of Common Stock to be sold for the Company’s account or for the account of such other Persons who have or have been granted registration rights, as applicable.
(b) Each Holder shall have the right to withdraw its request for inclusion of its Registrable Shares in any Piggyback Underwritten Offering at any time prior to the execution of an underwriting agreement with respect thereto by giving written notice to the Company of its request to withdraw; provided, that such withdrawal shall be irrevocable and, after making such withdrawal, a Holder shall no longer have any right to include Registrable Securities in the Piggyback Registration as to which such withdrawal was made.
(c) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.04 at any time in its sole discretion whether or not any Holder has elected to include Registrable Securities in such Registration Statement.
(d) If the Managing Underwriter of the Piggyback Underwritten Offering shall inform the Company of its belief that the number of Registrable Shares requested to be included in such Piggyback Underwritten Offering, when added to the number of shares of Common Stock
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proposed to be offered by the Company or such other Persons who have or have been granted registration rights (and any other shares of Common Stock requested to be included by any other Persons having registration rights on parity with the Piggybacking Holders with respect to such offering), would materially adversely affect such offering, then the Company shall include in such Piggyback Underwritten Offering, to the extent of the total number of securities which the Company is so advised can be sold in such offering without so materially adversely affecting such offering (the “ Section 2.04 Maximum Number of Shares ”), shares of Common Stock in the following priority:
(i) First, if the Piggyback Underwritten Offering is for the account of the Company, all shares of Common Stock that the Company proposes to include for its own account (the “ Company Securities ”) or, if the Piggyback Underwritten Offering is for the account of any other Persons who have or have been granted registration rights, all shares of Common Stock that such Persons propose to include (the “ Other Securities ”); and
(ii) Second, if the Piggyback Underwritten Offering is for the account of the Company, to the extent that the number of Company Securities is less than the Section 2.04 Maximum Number of Shares, the shares of Common Stock requested to be included by the Piggybacking Holders; and holders of any other shares of Common Stock requested to be included by Persons having rights of registration on parity with the Piggybacking Holders with respect to such offering, pro rata among the Piggybacking Holders and such other holders based on the number of shares of Common Stock each requested to be included and, if the Piggyback Underwritten Offering is for the account of any other Persons who have or have been granted registration rights, to the extent that the number of Other Securities is less than the Section 2.04 Maximum Number of Shares, the shares of Common Stock requested to be included by the Piggybacking Holders, pro rata among the Piggybacking Holders.
(e) The Company or the other Persons who have or have been granted registration rights initiating such Piggyback Underwritten Offering (if so entitled pursuant to such registration rights), as applicable, shall select the underwriters in any Piggyback Underwritten Offering and shall determine the pricing of the shares of Common Stock offered pursuant to any Piggyback Underwritten Offering, the applicable underwriting discounts and commissions and the timing of any such Piggyback Underwritten Offering.
Section 2.05 Participation in Underwritten Offerings .
(a) In connection with any Underwritten Offering contemplated by Section 2.02 or Section 2.04 , the underwriting agreement into which each Selling Holder and the Company shall enter into shall contain such representations, covenants, indemnities (subject to Section 2.10 ) and other rights and obligations as are customary in underwritten offerings. No Selling Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties, agreements or indemnities regarding such Selling Holder, such Selling Holder’s title in the securities being registered on its behalf, the Selling Holder’s authority to enter into such underwriting agreement and to sell, and information provided by such Selling Holder for inclusion in the Registration Statement relating thereto and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law.
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(b) Any participation by Holders in a Piggyback Underwritten Offering shall be in accordance with the plan of distribution of (i) the Company, if such Piggyback Underwritten Offering is for the account of the Company, or (ii) any other Persons who have or have been granted registration rights, if the Piggyback Underwritten Offering is for the account of such other Persons.
(c) In connection with any Piggyback Underwritten Offering in which any Holder has the right to include Registrable Shares pursuant to Section 2.04 , such Holder agrees (i) to supply any information reasonably requested by the Company in connection with the preparation of a Registration Statement and/or any other documents relating to such registered offering (including a Selling Holder Questionnaire) and (ii) to execute and deliver any agreements and instruments being executed by all holders on substantially the same terms reasonably requested by the Company or the Managing Underwriter, as applicable, to effectuate such registered offering, including, without limitation, underwriting agreements (subject to Section 2.05(a) ), custody agreements, customary lock-up agreements pursuant to which such Holder agrees not to sell or purchase any securities of the Company for the same period of time following the registered offering as is agreed to by the Company and the other participating holders (not to exceed a period of 90 days) or such shorter period as the Managing Underwriter shall agree to, powers of attorney and questionnaires.
(d) If the Company or the Managing Underwriter, as applicable, requests that the Holders take any of the actions referred to in clause (ii) of Section 2.05(c) , the Holders shall take such action promptly but in any event within two (2) Business Days following the date of such request.
Section 2.06 Registration and Sale Procedures .
In connection with its obligations under this Article II and with respect to each Registration Statement that includes Registrable Securities, the Company will:
(a) as promptly as reasonably practicable prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement;
(b) use commercially reasonable efforts to make available to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement, any prospectus used in connection therewith or any amendment thereto, upon its reasonable 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
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reasonably in advance of any such filing with respect to such information prior to filing the Registration Statement, prospectus or amendment thereto, and (ii) such number of copies of the Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered thereby;
(c) if applicable, use commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders 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, take any action that would subject the Company to any material tax in any such jurisdiction where it is not then so subject, or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;
(d) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of 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 the Registration Statement or any prospectus or prospectus supplement thereto;
(e) (i) immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (A) the happening of any event as a result of which the prospectus or prospectus supplement contained in the 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 to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which such statements were made); (B) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or the initiation of any proceedings for that purpose; or (C) 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; and (ii) subject to Section 2.03, following the provision of such notice, 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 to make the statements therein not misleading in the light of the circumstances then existing and take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(f) 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 the Registration Statement;
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(g) otherwise use 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;
(h) use commercially reasonable efforts to cause all such Registrable Shares registered pursuant to this Agreement to be listed on the principal securities exchange or nationally recognized quotation system on which the Common Stock is then listed;
(i) use 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 such Registrable Securities;
(j) provide a transfer agent and registrar for all Registrable Shares covered by such registration statement not later than the effective date of the Registration Statement;
(k) if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests in writing to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
(l) in connection with an Underwritten Offering, use commercially reasonable efforts to provide to each Selling Holder a copy of any auditor “comfort” letters, customary legal opinions or reports of the independent petroleum engineers of the Company relating to the oil and gas reserves of the Company, in each case that have been provided to the Managing Underwriter in connection with the Underwritten Offering; and
(m) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any Selling Holder of Registrable Securities, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such holder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”), and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement; provided , that the Company need not disclose any non-public information to any such person unless and until such person has entered into a confidentiality agreement with the Company.
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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 (e) of this Section 2.06 , shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.06 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, and, if so directed by the Company, such Selling Holder will deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
Section 2.07 Cooperation by Holders .
The Company shall have no obligation to include Registrable Securities of a Holder in a Registration Statement who has failed to furnish, (i) within five (5) Business Days of a request by the Company, such information that the Company determines, after consultation with its counsel, is reasonably required in order for the Registration Statement or prospectus supplement, as applicable, to comply with the Securities Act or (ii) the items required pursuant to Section 2.05(c) . The Company may require each Holder to furnish to the Company a written statement as to the aggregate principal amount of Second Lien Notes and/or the number of shares of Common Stock beneficially owned by such Holder. Without limiting the foregoing, with respect to the Shelf Registration Statement, each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex A (a “ Selling Holder Questionnaire ”) on a date that is not less than ten (10) Business Days after the Closing or three (3) Business Days following the date on which such Holder receives draft materials in accordance with Section 2.06(b) .
Section 2.08 [Intentionally Omitted].
Section 2.09 Expenses .
The Company will pay all reasonable Registration Expenses as determined in good faith. Each Selling Holder shall bear or pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder.
Section 2.10 Indemnification and Contribution .
(a) Indemnification by the Company . The Company will indemnify and hold harmless each Selling Holder, its directors, officers managers, employees, investment managers, agents and Affiliates and each other Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any losses, claims, damages or liabilities, joint or several (collectively, “ Losses ”) to which such Selling Holder or any such director, officer or controlling person may become subject, under the Securities 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 (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged
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omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulations promulgated under the Securities Act, or the Exchange Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance required under this Agreement, and the Company will reimburse such Selling Holder and each such director, officer, manager, employee, investment manager, agent, Affiliate and controlling person for reasonably and documented legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses, actions or proceedings (collectively, “ Expenses ”); provided that the Company shall not be liable in any such case to the extent that (i) any such Losses or Expenses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, free writing prospectus, final prospectus, amendment or supplement in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof, (ii) the Selling Holder continued to use a Registration Statement or Prospectus after the Company notified such Selling Holder to cease such use pursuant to Section 2.06(e) or (iii) the Company provided a corrected, supplemented or amended Registration Statement or Prospectus but the Selling Holder continued to use the then outdated or uncorrected Registration Statement or Prospectus. 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 director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
(b) Indemnification by Selling Holders . Each Selling Holder, severally and not jointly, will indemnify and hold harmless the Company, each director of the Company, its directors and officers and each other Person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange from and against any Losses to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, and will reimburse them for any Expenses reasonably incurred by any of them (in each case in the same manner and to the same extent as set forth in Section 2.10(a) ), insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) or Expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof (it being understood that any Selling Holder Questionnaire furnished by such Selling Holder is furnished expressly for this purpose). Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
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(c) Notices of Claims; Indemnification Procedures . In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.10(a) or Section 2.10(b) , such Person (the “ Indemnified Party ”) shall promptly notify the Person against whom such indemnity may be sought (the “ Indemnifying Party ”) in writing ( provided that the failure of the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.10 , except to the extent the Indemnifying Party is actually prejudiced by such failure to give notice), and the Indemnifying Party shall be entitled to participate in such proceeding and, unless in the reasonable opinion of outside counsel to the Indemnified Party a conflict of interest between the Indemnified Party and Indemnifying Party may exist in respect of such claim, to assume the defense thereof jointly with any other Indemnifying Party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party that it so chooses, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other Expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided , however , that (i) if the Indemnifying Party fails to assume the defense or employ counsel reasonably satisfactory to the Indemnified Party, (ii) if such Indemnified Party who is a defendant in any action or proceeding which is also brought against the Indemnifying Party reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party that are not available to the Indemnifying Party or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct then, in any such case, the Indemnified Party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all Indemnified Parties (plus one firm of local counsel for all Indemnified Parties in each relevant jurisdiction)), and the Indemnifying Party shall be liable for any Expenses therefor. No Indemnifying Party shall, without the written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and (B) 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) Contribution .
(i) If the indemnification provided for in this Section 2.10 is unavailable to an Indemnified Party in respect of any Losses in respect of which indemnity is to be provided hereunder, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company (on the one hand) and any Selling Holder (on the other hand) 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 such party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
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(ii) The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 2.10(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 2.10(d)(i) . The amount paid or payable by an Indemnified Party as a result of the Losses referred to in Section 2.10(d)(i) shall be deemed to include, subject to the limitations set forth above, any Expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. 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 was not guilty of such fraudulent misrepresentation.
(e) Limitation of Holders’ Liability . Notwithstanding the provisions of this Section 2.10 , no Holder shall be liable for indemnification or contribution pursuant to this Section 2.10 for any amount in excess of the net proceeds received by such Holder from the sale of Registrable Securities pursuant to a Registration Statement.
(f) Indemnification Payments . The indemnification and contribution required by this Section 2.10 shall be made by periodic payments of the amount of any such Losses or Expenses as and when bills are received or such Losses or Expenses are incurred.
Section 2.11 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, to the extent it shall be required to do so under the Exchange Act, the Company agrees to use its reasonable best efforts to:
(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 Securities Act and the Exchange Act at all times from and after the date hereof; and
(c) so long as a Holder owns any Registrable Securities, furnish, unless otherwise available via EDGAR, 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.
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Section 2.12 Transfer or Assignment of Registration Rights .
(a) The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article II may be transferred or assigned by the Holders only to one or more Permitted Transferees; provided , however , that (a) the Company is given written notice prior to such transfer or assignment, stating the name and address of each such Permitted Transferee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned and (b) each such Permitted Transferee assumes in writing responsibility for its portion of the obligations of the transferor under this Agreement.
Section 2.13 Other Registration Rights .
From and after the date hereof, the Company shall not, without the prior written consent of the Majority Holders, enter into any agreement (other than the Existing Registration Rights Agreements) with any current or future holder of any securities of the Company that would allow such current or future holder to require the Company to include securities in any registration statement filed by the Company for the Holders on a basis other than expressly subordinate to the piggyback rights of the Holders hereunder.
ARTICLE III
MISCELLANEOUS
Section 3.01 Communications .
All notices and other communications provided for or permitted hereunder shall be made in writing by electronic mail, courier service or personal delivery:
(a) if to a Holder, to such Holder at its address set forth in its Selling Holder Questionnaire or provided pursuant to Section 2.12 , as applicable; and
(b) if to the Company, to it at:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
; or, in each case, to such other address for such party as shall have been communicated by such party by like notice.
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 by electronic mail; and when actually received, if sent by courier service.
Section 3.02 Successors and Assigns .
This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein; provided , however , that all or any portion of the rights and obligations of any Holder under this Agreement may be transferred or assigned by such Holder only in accordance with Section 2.12 .
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Section 3.03 Recapitalization, Exchanges, Etc. Affecting the Shares .
The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of the Company or any successor or assign of the Company (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 Shares, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.
Section 3.04 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 and applicability of any obligations under this Agreement.
Section 3.05 Specific Performance .
Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, 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 Person from pursuing any other rights and remedies at law or in equity that such Person may have.
Section 3.06 Counterparts .
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
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 .
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 (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT), WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
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YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION AGAINST ANY PARTY RELATING TO THE FOREGOING SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF NEW YORK, AND THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED WITHIN THE STATE OF NEW YORK OVER ANY SUCH ACTION. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section 3.09 Severability of Provisions .
Any provision of this Agreement which 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 Entire Agreement .
This Agreement, the Exchange Agreement and the other Transaction Documents (as defined in the Exchange 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 Holder or Holders of more than fifty percent (50%) of (a) the aggregate number of Registrable Shares or (b) the aggregate principal amount of Registrable Notes; provided , however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
Section 3.12 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.
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Section 3.13 Obligations Limited to Parties to Agreement .
Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Holders and the Company 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 Holder 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 Holder 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 transferee or assignee of a Holder hereunder.
Section 3.14 Independent Nature of Holders ’ Obligations .
The obligations of each Holder under this Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
Section 3.15 Interpretation .
Article and Section references are to 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 a Holder under this Agreement, such action shall be in such Holder’s sole discretion unless otherwise specified.
[ Signature pages follow ]
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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
COMPANY: | ||
NORTHERN OIL AND GAS, INC. |
By: |
/s/ Brandon Elliott |
Name: | Brandon Elliott | |
Title: | Interim President |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
Annex A
NORTHERN OIL AND GAS, INC.
Selling Holder Notice and Questionnaire
The undersigned beneficial owner of Second Lien Notes and/or Common Stock, as applicable (the “ Registrable Securities ”), of Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “ Commission ”) a registration statement (the “ Registration Statement ”) for the registration and resale under the Securities Act of 1933, as amended (the “ Securities Act ”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “ Registration Rights Agreement ”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “ Selling Holder ”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. | Name. |
(a) | Full Legal Name of Selling Holder |
(b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held: |
(c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire): |
2. | Address for Notices to Selling Holder: |
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Telephone: |
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Email: |
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Contact Person: |
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3. | Broker-Dealer Status: |
(a) | Are you a broker-dealer? |
Yes ☐ No ☐
(b) | If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company? |
Yes ☐ No ☐
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) | Are you an affiliate of a broker-dealer? |
Yes ☐ No ☐
(d) | If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
Yes ☐ No ☐
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4. | Beneficial Ownership of Securities of the Company Owned by the Selling Holder. |
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Exchange Agreement.
(a) | Type and Amount of other securities beneficially owned by the Selling Holder: |
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5. | Relationships with the Company: |
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past two years.
State any exceptions here:
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The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided , that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date: | Beneficial Owner: | |
By: | ||
Name: | ||
Title: |
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
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Exhibit 10.3
Execution Version
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
NORTHERN OIL AND GAS, INC.
AND
THE HOLDERS PARTY HERETO
TABLE OF CONTENTS
ARTICLE I DEFINITIONS |
1 | |||||||
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Section 1.01 | Definitions | 1 | |||||
Section 1.02 | Registrable Shares | 4 | ||||||
ARTICLE II REGISTRATION RIGHTS |
4 | |||||||
Section 2.01 | Shelf Registration | 4 | ||||||
Section 2.02 | Underwritten Shelf Offering Requests | 6 | ||||||
Section 2.03 | Delay and Suspension Rights | 8 | ||||||
Section 2.04 | Participation in Underwritten Offerings | 8 | ||||||
Section 2.05 | Registration and Sale Procedures | 8 | ||||||
Section 2.06 | Cooperation by Holders | 11 | ||||||
Section 2.07 | Restrictions on Public Sales by Holders | 11 | ||||||
Section 2.08 | Expenses | 12 | ||||||
Section 2.09 | Indemnification and Contribution | 12 | ||||||
Section 2.10 | Rule 144 Reporting | 14 | ||||||
Section 2.11 | Transfer or Assignment of Registration Rights | 15 | ||||||
ARTICLE III MISCELLANEOUS |
15 | |||||||
Section 3.01 | Communications | 15 | ||||||
Section 3.02 | Successors and Assigns | 16 | ||||||
Section 3.03 | Recapitalization, Exchanges, Etc. Affecting the Shares | 16 | ||||||
Section 3.04 | Aggregation of Registrable Shares | 16 | ||||||
Section 3.05 | Specific Performance | 16 | ||||||
Section 3.06 | Counterparts | 16 | ||||||
Section 3.07 | Headings | 17 | ||||||
Section 3.08 | Governing Law | 17 | ||||||
Section 3.09 | Severability of Provisions | 17 | ||||||
Section 3.10 | Entire Agreement | 17 | ||||||
Section 3.11 | Amendment | 17 | ||||||
Section 3.12 | No Presumption | 18 | ||||||
Section 3.13 | Obligations Limited to Parties to Agreement | 18 | ||||||
Section 3.14 | Independent Nature of Holders’ Obligations | 18 | ||||||
Section 3.15 | Interpretation | 18 |
Annex A – Registrable Shares
Annex B – Selling Holder Notice and Questionnaire
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of May 15, 2018, by and among Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), and TRT Holdings, Inc. (“ TRT Holdings ”), Cresta Investments, LLC (“ Cresta Investments ”) and Cresta Greenwood, LLC (“ Cresta Greenwood ”) (together with any permitted transferees or assignee, each, a “ Holder ” and collectively, the “ Holders ”).
WHEREAS, this Agreement is made pursuant to the letter agreement, dated as of May 15, 2018 (the “ TRT Governance Agreement ”), among the Company, TRT Holdings, Cresta Investments, Cresta Greenwood and Robert B. Rowling;
WHEREAS, pursuant to the Exchange Agreement, dated as of January 31, 2018 (as amended, the “ Exchange Agreement ”), among the Company and the Holders, the Holders will acquire shares (the “ Exchange Shares ”) of common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) on the date hereof (the “ Closing Date ”); and
WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Holders pursuant to the TRT Governance 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 are hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions .
Capitalized terms used herein without definition shall have the meanings given to them in the Exchange Agreement. The terms set forth below are used herein as so defined:
“ Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Business Day ” means any day other than a day on which banks are permitted or required to be closed in New York City.
“ Closing Date ” has the meaning specified therefor in the recitals of this Agreement.
“ Commission ” means the U.S. Securities and Exchange Commission, including the staff thereof as applicable.
“ Common Stock ” has the meaning specified therefor in the recitals of this Agreement.
“ Company ” has the meaning specified therefor in the introductory paragraph of this Agreement.
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“ Effective Date ” has the meaning specified therefor in Section 2.01(a) .
“ Effectiveness Period ” has the meaning specified therefor in Section 2.01(e) .
“ Exchange Agreement ” has the meaning specified therefor in the recitals of this Agreement.
“ Exchange Shares ” has the meaning specified therefor in the recitals of this Agreement.
“ Existing Registrable Shares ” means the shares of Common Stock that are “Registrable Shares” as defined in either of the Existing Registration Rights Agreements.
“ Existing Registration Rights Agreements ” means those certain Registration Rights Agreements, each dated as of the Closing Date and as may be amended from time to time, (i) among the Company and TPG Specialty Lending, Inc., TOP III Finance 1, LLC and TAO Finance 1, LLC and (ii) among the Company and certain holders of the Company’s 8.50% Senior Secured Second Lien Notes due 2023.
“ Existing Registration Rights Holders ” means parties provided registration rights pursuant to the Existing Registration Rights Agreements.
“ Expenses ” has the meaning specified therefor in Section 2.09(a) .
“ Holder ” and “ Holders ” have the meanings specified therefor in the introductory paragraph of this Agreement. A Person shall cease to be a Holder hereunder at such time as it ceases to hold any Registrable Shares.
“ Indemnified Party ” has the meaning specified therefor in Section 2.09(c) .
“ Indemnifying Party ” has the meaning specified therefor in Section 2.09(c) .
“ Losses ” has the meaning specified therefor in Section 2.09(a) .
“ Managing Underwriter ” means, with respect to any Underwritten Offering, the lead book-running manager(s) of such Underwritten Offering.
“ Permitted Transferee ” means with respect to any Holder, an Affiliate of any Holder or any investment fund or other entity controlled or managed by any Holder.
“ Registrable Shares ” means, other than the Exchange Shares, the shares of Common Stock held by the Holders as of the date hereof and set forth on Annex A , until such Registrable Shares cease to be Registrable Shares pursuant to Section 1.02 . Notwithstanding anything to the contrary in the foregoing, if at any time the Exchange Shares are no longer “Registrable Securities” (as defined in that Registration Rights Agreement, dated as of the date hereof, by and among the Company and other parties thereto, including the Holders), than the Exchange Shares shall be considered Registrable Shares.
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“ Registration Expenses ” means all expenses, other than Selling Expenses, incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Shares on a Registration Statement and the disposition of such Registrable Shares, including, without limitation, all registration, filing, securities exchange listing 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 and the fees and disbursements of counsel to the Company and the independent public accountants for the Company, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and the reasonable and documented fees and expenses of one counsel for all Holders in addition to one local counsel.
“ Registration Statement ” means (a) the Shelf Registration Statement and (b) any other registration statement of the Company filed or to be filed with the Commission under the Securities Act in which Registrable Shares are included in the securities registered thereby pursuant to this Agreement.
“ Requesting Holder ” has the meaning specified therefor in Section 2.02(a) .
“ Rule 415 Limitation ” has the meaning specified therefor in Section 2.01(b) .
“ Section 2.02 Maximum Number of Shares ” has the meaning specified therefor in Section 2.02(c) .
“ Selling Expenses ” means all (a) underwriting fees, discounts and selling commissions allocable to the sale of Registrable Shares, (b) transfer taxes allocable to the sale of the Registrable Shares, (c) costs or expenses related to any roadshows conducted in connection with the marketing of any Shelf Underwritten Offering, and (d) fees and expenses of any counsel engaged by any Holder that are not expressly included in Registration Fees.
“ Selling Holder ” means a Holder selling Registrable Shares pursuant to a Registration Statement.
“ Selling Holder Questionnaire ” has the meaning specified therefor in Section 2.06 .
“ Shelf Piggybacking Holder ” has the meaning specified therefor in Section 2.02(b) .
“ Shelf Registration Statement ” has the meaning specified therefor in Section 2.01(a) , subject to Section 2.01(d) .
“ Shelf Underwritten Offering ” has the meaning specified therefor in Section 2.02(a) .
“ TRT Governance Agreement ” has the meaning specified therefor in the recitals of this Agreement.
“ Underwritten Offering ” means an offering (including an offering pursuant to the Shelf Registration Statement) in which shares of Common Stock are sold to an underwriter on a firm commitment basis for reoffering to the public.
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“ Underwritten Offering Filing ” means, with respect to a Shelf Underwritten Offering, a preliminary prospectus supplement (or prospectus supplement if no preliminary prospectus supplement is used) to the Shelf Registration Statement relating to such Shelf Underwritten Offering.
Section 1.02 Registrable Shares .
Any Registrable Share will cease to be a Registrable Share when (a) a Registration Statement covering such Registrable Share has become effective under the Securities Act and such Registrable Share has been sold or disposed of pursuant to such Registration Statement; (b) such Registrable Share has been disposed of pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act; (c) such Registrable Share is held by the Company or one of its subsidiaries or ceases to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise); (d) such Registrable Share has been sold or disposed of in a transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such Registrable Share pursuant to Section 2.11 ; or (e) such Registrable Share becomes eligible for resale without restriction and without volume limitations or the need for current public information pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act. Any security that has ceased to be a Registrable Share shall not thereafter become a Registrable Share, and any security that is issued or distributed in respect of a security that has ceased to be a Registrable Share shall not be a Registrable Share.
ARTICLE II
REGISTRATION RIGHTS
Section 2.01 Shelf Registration .
(a) The Company shall prepare and file with the Commission, and use commercially reasonable efforts to cause to be declared effective as soon as practicable after the filing thereof, but in no event later than August 13, 2018, a Registration Statement under the Securities Act relating to the offer and sale of all the Registrable Shares by the Holders thereof (the “ Shelf Registration Statement ”) from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act. Promptly following the effective date of the Shelf Registration Statement (the “ Effective Date ”), the Company shall notify the Holders of the effectiveness thereof.
(b) Notwithstanding anything in Section 2.01(a) , if for any reason the Commission does not permit the Company to include any or all of the Registrable Shares in the initial Shelf Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Registrable Shares by the Holders (a “ Rule 415 Limitation ”), or the Commission informs the Company that any of the Selling Holders would be deemed to be statutory underwriters, the Company shall notify the Holders thereof and use commercially reasonable efforts to promptly file amendments to the initial Shelf Registration Statement as required by the Commission and/or withdraw the initial Shelf Registration Statement and file a new registration statement on Form S-3 or such other form available for registration of the Registrable Shares as a secondary offering, in either case covering the maximum number of Registrable Shares permitted to be registered by the Commission and avoid the Selling Holders being deemed to be statutory
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underwriters; provided , however , that prior to such amendment or subsequent Shelf Registration Statement, the Company shall be obligated to use commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Shares and against the Selling Holders’ being deemed statutory underwriters in accordance with Commission guidance, including without limitation, the Compliance and Disclosure Interpretation “Securities Act Rules” No. 612.09, and the Securities Act. In the event the Company amends the initial Shelf Registration Statement by means of a post-effective amendment or files a subsequent Shelf Registration Statement, as the case may be, the Company will use commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission, Commission guidance or the Securities Act, one or more additional Shelf Registration Statements covering those Registrable Shares not included in the initial Shelf Registration Statement as amended or any subsequent Shelf Registration Statement previously filed. The number of Registrable Shares that may be included in each such Shelf Registration Statement shall be allocated among the Holders thereof in proportion (as nearly as practicable) to the aggregate principal amount or number of Registrable Shares, as applicable, owned by each Holder or in such other proportion as is necessary to avoid the Selling Holders being deemed to be statutory underwriters. If the Commission requires the Company to name any Holder as a statutory underwriter and such Holder does not consent thereto, then such Holder’s Registrable Shares shall not be included on the Shelf Registration Statement and the Company shall have no further obligations under this Section 2.01 or Section 2.02 with respect to the Registrable Shares held by such Holder.
(c) The Shelf Registration Statement shall be on Form S-3 (or any equivalent or successor form) under the Securities Act or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statements as is then available to effect a registration for resale of the Registrable Shares; provided , however , that if the Company has filed the Shelf Registration Statement on Form S-1 and subsequently becomes eligible to use Form S-3 or any equivalent or successor form or forms, the Company shall (i) file a post-effective amendment to the Shelf Registration Statement converting such Registration Statement on Form S-1 to a Registration Statement on Form S-3 or any equivalent or successor form or forms or (ii) withdraw the Shelf Registration Statement on Form S-1 and file a subsequent Shelf Registration Statement on Form S-3 or any equivalent or successor form or forms.
(d) Unless otherwise specifically stated herein, the term “Shelf Registration Statement” shall refer individually to the initial Shelf Registration Statement and to each subsequent Shelf Registration Statement, if any, filed pursuant to Section 2.01(b) or Section 2.01(c) .
(e) Subject to Section 2.03, the Company shall use commercially reasonable efforts to cause the Shelf Registration Statement to remain effective, and to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available for the resale of all the Registrable Shares by the Holders until all of the Registrable Shares have ceased to be Registrable Shares (the “ Effectiveness Period ”).
(f) When effective, the Shelf Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will 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 (in the case of any prospectus contained in the Shelf
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Registration Statement, in the light of the circumstances under which such statements are made); provided, however, the Company shall have no such obligations or liabilities with respect to any information pertaining to any Holder furnished in writing to the Company by or on behalf of such Holder specifically for inclusion therein.
Section 2.02 Underwritten Shelf Offering Requests .
(a) In the event that any Holder or group of Holders elects to dispose of Registrable Shares under the Shelf Registration Statement pursuant to an Underwritten Offering and reasonably expects gross proceeds of at least $20,000,000 from such Underwritten Offering (including proceeds attributable to any Registrable Shares included in such Underwritten Offering by any Shelf Piggybacking Holders), the Company shall, at the request (a “ Shelf Underwritten Offering Request ”) of such Holder or Holders (in such capacity, a “ Requesting Holder ”), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the underwriter or underwriters selected pursuant to Section 2.02(d) and shall take all such other reasonable actions as are requested by the Managing Underwriter of such Underwritten Offering and/or the Requesting Holders in order to expedite or facilitate the disposition of, subject to Section 2.02(c) , such Registrable Shares and the Registrable Shares requested to be included by any Shelf Piggybacking Holder (a “ Shelf Underwritten Offering ”); provided , however , that the Company shall have no obligation to facilitate or participate in more than one (1) Shelf Underwritten Offering in any 180-day period or more than two (2) Shelf Underwritten Offerings in total under this Agreement; provided further , that a Shelf Underwritten Offering shall not count against such limit unless and until the Requesting Holder(s) are able to sell at least seventy-five percent (75%) of the Registrable Shares requested to be included in such Shelf Underwritten Offering.
(b) If the Company receives a Shelf Underwritten Offering Request, it will give written notice of such proposed Shelf Underwritten Offering to each Holder (other than the Requesting Holder), which notice shall be held in strict confidence by such Holders and shall include the anticipated filing date of the related Underwritten Offering Filing and, if known, the number of Registrable Shares that are proposed to be included in such Shelf Underwritten Offering, and of such Holders’ rights under this Section 2.02(b) . Such notice shall be given promptly (and in any event at least five (5) Business Days before the filing of the Underwritten Offering Filing or two (2) Business Days before the filing of the Underwritten Offering Filing in connection with a bought or overnight Underwritten Offering); provided , that if the Shelf Underwritten Offering is a bought or overnight Underwritten Offering and the Managing Underwriter advises the Company and the Requesting Holder in writing that the giving of notice pursuant to this Section 2.02(b) would adversely affect the offering, no such notice shall be required (and such Holders shall have no right to include Registrable Shares in such bought or overnight Underwritten Offering); and provided further , that the Company shall not so notify (or be required to so notify) any such other Holder that has notified the Company (and not revoked such notice) requesting that such Holder not receive notice from the Company of any proposed Shelf Underwritten Offering. Each such Holder shall then have four (4) Business Days (or one (1) Business Day in the case of a bought or overnight Underwritten Offering) after the date on which the Company delivered the notice pursuant to this Section 2.02(b) to request inclusion of Registrable Shares in the Shelf Underwritten Offering (which request shall specify the maximum number of Registrable Shares intended to be disposed of by such Holder and such Holder agrees to supply any information reasonably requested by the
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Company in connection with the preparation of a Registration Statement and/or any other documents relating to such registered offering, including a Selling Holder Questionnaire) (any such Holder making such request, a “ Shelf Piggybacking Holder ”). If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Shelf Underwritten Offering. In connection with a Shelf Underwritten Offering Request made by Requesting Holders, the Company shall not include any securities that are not Registrable Shares or Existing Registrable Shares without the prior written consent of the Holders of a majority of the Registrable Shares included in such Shelf Underwritten Offering, which consent shall not be unreasonably withheld or delayed. If such consent of the Holders of a majority of the Registrable Shares is provided, holders of other securities who timely and validly request to have shares of Common Stock held by them that are subject to registration rights (such securities, including Existing Registrable Shares, “ Other Registrable Securities ”) may include such Other Registrable Securities in the Shelf Underwritten Offering, subject to any applicable limitations set forth in the applicable registration rights agreement(s) and Section 2.02(c) below.
(c) If the Managing Underwriter of the requested Shelf Underwritten Offering shall inform the Company and the Requesting Holders in writing, with a copy to be provided upon request to any Shelf Piggybacking Holder, of its belief that the number of Registrable Shares requested to be included in such Shelf Underwritten Offering by the Requesting Holders when added to the number of Registrable Shares requested to be included by any Shelf Piggybacking Holders and any holders of Other Registrable Securities permitted to be included in the Shelf Underwritten Offering pursuant to Section 2.02(b) , would materially adversely affect such offering, then the Company shall include in the applicable Underwritten Offering Filing, to the extent of the total number of Registrable Shares and such permitted Other Registrable Shares that the Company is so advised can be sold in such Shelf Underwritten Offering without so materially adversely affecting such offering (the “ Section 2.02 Maximum Number of Shares ”), in the following priority:
(i) First, all Registrable Shares that the Requesting Holders and any Shelf Piggybacking Holders requested to be included therein, allocated among the Requesting Holders and any Shelf Piggybacking Holders pro rata based on the number of Registrable Shares each requested to be included in proportion to the total number of Registrable Shares requested to be included; and
(ii) Second, to the extent that the number of Registrable Shares subject to Section 2.02(c)(i) is less than the Section 2.02 Maximum Number of Shares, the Other Registrable Shares and shares of Common Stock requested to be included by any other Persons having registration rights with respect to such offering, pro rata among such other Persons based on the number of Other Registrable Securities or shares of Common Stock each requested to be included, in proportion to the total number of Other Registrable Securities and shares of Common Stock requested to be included by such other Persons.
(d) The Company shall select the Managing Underwriter and any other underwriters in connection with such Shelf Underwritten Offering. The Requesting Holders shall determine the pricing of the Registrable Shares offered pursuant to any Shelf Underwritten Offering and the applicable underwriting discounts and commissions, subject to Section 2.03 .
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Section 2.03 Delay and Suspension Rights .
Notwithstanding any other provision of this Agreement, the Company may (a) delay filing or effectiveness of the Shelf Registration Statement (or any amendment thereto) or effecting a Shelf Underwritten Offering or (b) suspend the Holders’ use of any prospectus that is a part of a Shelf Registration Statement upon written notice to each Holder whose Registrable Shares are included in such Shelf Registration Statement ( provided that in no event shall such notice contain any material non-public information regarding the Company) (in which event such Holder shall immediately discontinue sales of Registrable Shares pursuant to such Registration Statement but may settle any then-contracted sales of Registrable Shares), in each case for a period of up to 60 days, if the Company reasonably determines (i) that such delay or suspension is in the best interest of the Company and its stakeholders generally due to a pending securities offering by the Company, or any proposed material acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other material transaction involving the Company, in each case that would be materially and adversely affected by required disclosure of such transaction in such prospectus or Shelf Underwritten Offering, (ii) that such registration, offering or the use of any prospectus that is a part of a Shelf Registration Statement would render the Company unable to comply with applicable securities laws (including because of requirements to produce financial statements with regard to acquired businesses) or (iii) that such registration or offering would require disclosure of material information and such disclosure would materially adversely affect the Company (any such period, a “ Suspension Period ”); provided that such Suspension Period is also applied to all Existing Registration Rights Holders, provided further , however , that in no event shall any Suspension Periods applicable to the Holders collectively exceed an aggregate of 90 days in any twelve-month period.
Section 2.04 Participation in Underwritten Offerings .
In connection with any Underwritten Offering contemplated by Section 2.02 , the underwriting agreement into which each Selling Holder and the Company shall enter into shall contain such representations, covenants, indemnities (subject to Section 2.09 ) and other rights and obligations as are customary in underwritten offerings. No Selling Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties, agreements or indemnities regarding such Selling Holder, such Selling Holder’s title in the securities being registered on its behalf, the Selling Holder’s authority to enter into such underwriting agreement and to sell, and information provided by such Selling Holder for inclusion in the Registration Statement relating thereto and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law.
Section 2.05 Registration and Sale Procedures .
In connection with its obligations under this Article II and with respect to each Registration Statement that includes Registrable Shares, the Company will:
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(a) as promptly as reasonably practicable prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Shares covered by the Registration Statement;
(b) use commercially reasonable efforts to make available to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement, any prospectus used in connection therewith or any amendment thereto, upon its reasonable 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 reasonably in advance of any such filing with respect to such information prior to filing the Registration Statement, prospectus or amendment thereto, and (ii) such number of copies of the Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Shares covered thereby;
(c) if applicable, use commercially reasonable efforts to register or qualify the Registrable Shares covered by the Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders 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, take any action that would subject the Company to any material tax in any such jurisdiction where it is not then so subject, or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;
(d) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of 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 the Registration Statement or any prospectus or prospectus supplement thereto;
(e) (i) immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (A) the happening of any event as a result of which the prospectus or prospectus supplement contained in the 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 to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which such statements were made); (B) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or the initiation of any proceedings for that purpose; or (C) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Shares for sale under the applicable
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securities or blue sky laws of any jurisdiction; and (ii) subject to Section 2.03, following the provision of such notice, 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 to make the statements therein not misleading in the light of the circumstances then existing and take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(f) 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 the Registration Statement;
(g) otherwise use 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;
(h) use commercially reasonable efforts to cause all such Registrable Shares registered pursuant to this Agreement to be listed on the principal securities exchange or nationally recognized quotation system on which the Common Stock is then listed;
(i) use commercially reasonable efforts to cause the Registrable Shares 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 such Registrable Shares;
(j) provide a transfer agent and registrar for all Registrable Shares covered by such registration statement not later than the effective date of the Registration Statement;
(k) if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests in writing to be included therein relating to the sale and distribution of Registrable Shares, including information with respect to the number of Registrable Shares being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Shares to be sold in such offering, and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
(l) in connection with an Underwritten Offering, use commercially reasonable efforts to provide to each Selling Holder a copy of any auditor “comfort” letters, customary legal opinions or reports of the independent petroleum engineers of the Company relating to the oil and gas reserves of the Company, in each case that have been provided to the Managing Underwriter in connection with the Underwritten Offering; and
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(m) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any Selling Holder of Registrable Shares, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such holder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”), and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement; provided , that the Company need not disclose any non-public information to any such person unless and until such person has entered into a confidentiality agreement with the Company.
Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (e) of this Section 2.05 , shall forthwith discontinue offers and sales of the Registrable Shares by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) 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, and, if so directed by the Company, such Selling Holder will deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Shares current at the time of receipt of such notice.
Section 2.06 Cooperation by Holders .
The Company shall have no obligation to include Registrable Shares of a Holder in a Registration Statement who has failed to furnish, within five (5) Business Days of a request by the Company, such information that the Company determines, after consultation with its counsel, is reasonably required in order for the Registration Statement or prospectus supplement, as applicable, to comply with the Securities Act. The Company may require each Holder to furnish to the Company a written statement as to the number of shares of Common Stock beneficially owned by such Holder. Without limiting the foregoing, with respect to the Shelf Registration Statement, each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex B (a “ Selling Holder Questionnaire ”) on a date that is not less than ten (10) Business Days after the Closing or three (3) Business Days following the date on which such Holder receives draft materials in accordance with Section 2.05(b) .
Section 2.07 Restrictions on Public Sales by Holders .
If requested by the Managing Underwriter, each Holder agrees not to effect any public sale or distribution of Registrable Shares for a period of up to 90 days following completion of an Underwritten Offering of equity securities by the Company; provided that (i) the Company gives written notice to such Holder of the date of the commencement and termination of such period with respect to any such Underwritten Offering and (ii) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters of such Underwritten Offering on the Company or on the officers or directors or any other shareholder of the Company on whom a restriction is imposed and (iii) the restrictions set forth in this Section 2.07 shall not apply to any Registrable Shares that are included in such Underwritten Offering by such Selling Holder; provided further , that this Section 2.07 shall not apply to any Holder that, together with such Holder’s Affiliates, holds less than 5% of the outstanding shares of Common Stock.
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Section 2.08 Expenses .
The Company will pay all reasonable Registration Expenses as determined in good faith. Each Selling Holder shall bear or pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Shares hereunder.
Section 2.09 Indemnification and Contribution .
(a) Indemnification by the Company . The Company will indemnify and hold harmless each Selling Holder, its directors, officers managers, employees, investment managers, agents and Affiliates and each other Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any losses, claims, damages or liabilities, joint or several (collectively, “ Losses ”) to which such Selling Holder or any such director, officer or controlling person may become subject, under the Securities 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 (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulations promulgated under the Securities Act, or the Exchange Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance required under this Agreement, and the Company will reimburse such Selling Holder and each such director, officer, manager, employee, investment manager, agent, Affiliate and controlling person for reasonably and documented legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses, actions or proceedings (collectively, “ Expenses ”); provided that the Company shall not be liable in any such case to the extent that (i) any such Losses or Expenses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, free writing prospectus, final prospectus, amendment or supplement in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof, (ii) the Selling Holder continued to use a Registration Statement or Prospectus after the Company notified such Selling Holder to cease such use pursuant to Section 2.05(e) or (iii) the Company provided a corrected, supplemented or amended Registration Statement or Prospectus but the Selling Holder continued to use the then outdated or uncorrected Registration Statement or Prospectus. 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 director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
(b) Indemnification by Selling Holders . Each Selling Holder, severally and not jointly, will indemnify and hold harmless the Company, each director of the Company, its directors and officers and each other Person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange from and against any Losses to which the
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Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, and will reimburse them for any Expenses reasonably incurred by any of them (in each case in the same manner and to the same extent as set forth in Section 2.09(a) ), insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) or Expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof (it being understood that any Selling Holder Questionnaire furnished by such Selling Holder is furnished expressly for this purpose). Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
(c) Notices of Claims; Indemnification Procedures . In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.09(a) or Section 2.09(b) , such Person (the “ Indemnified Party ”) shall promptly notify the Person against whom such indemnity may be sought (the “ Indemnifying Party ”) in writing ( provided that the failure of the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.09 , except to the extent the Indemnifying Party is actually prejudiced by such failure to give notice), and the Indemnifying Party shall be entitled to participate in such proceeding and, unless in the reasonable opinion of outside counsel to the Indemnified Party a conflict of interest between the Indemnified Party and Indemnifying Party may exist in respect of such claim, to assume the defense thereof jointly with any other Indemnifying Party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party that it so chooses, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other Expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided , however , that (i) if the Indemnifying Party fails to assume the defense or employ counsel reasonably satisfactory to the Indemnified Party, (ii) if such Indemnified Party who is a defendant in any action or proceeding which is also brought against the Indemnifying Party reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party that are not available to the Indemnifying Party or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct then, in any such case, the Indemnified Party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all Indemnified Parties (plus one firm of local counsel for all Indemnified Parties in each relevant jurisdiction)), and the Indemnifying Party shall be liable for any Expenses therefor. No Indemnifying Party shall, without the written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and (B) 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.
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(d) Contribution .
(i) If the indemnification provided for in this Section 2.09 is unavailable to an Indemnified Party in respect of any Losses in respect of which indemnity is to be provided hereunder, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company (on the one hand) and any Selling Holder (on the other hand) 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 such party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(ii) The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 2.09(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 2.09(d)(i) . The amount paid or payable by an Indemnified Party as a result of the Losses referred to in Section 2.09(d)(i) shall be deemed to include, subject to the limitations set forth above, any Expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. 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 was not guilty of such fraudulent misrepresentation.
(e) Limitation of Holders’ Liability . Notwithstanding the provisions of this Section 2.09 , no Holder shall be liable for indemnification or contribution pursuant to this Section 2.09 for any amount in excess of the net proceeds received by such Holder from the sale of Registrable Shares pursuant to a Registration Statement.
(f) Indemnification Payments . The indemnification and contribution required by this Section 2.09 shall be made by periodic payments of the amount of any such Losses or Expenses as and when bills are received or such Losses or Expenses are incurred.
Section 2.10 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 Shares to the public without registration, to the extent it shall be required to do so under the Exchange Act, the Company agrees to use its reasonable best efforts to:
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(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 Securities Act and the Exchange Act at all times from and after the date hereof; and
(c) so long as a Holder owns any Registrable Shares, furnish, unless otherwise available via EDGAR, 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 2.11 Transfer or Assignment of Registration Rights .
The rights to cause the Company to register Registrable Shares granted to the Holders by the Company under this Article II may be transferred or assigned by the Holders only to one or more Permitted Transferees; provided , however , that (a) the Company is given written notice prior to such transfer or assignment, stating the name and address of each such Permitted Transferee and identifying the Registrable Shares with respect to which such registration rights are being transferred or assigned and (b) each such Permitted Transferee assumes in writing responsibility for its portion of the obligations of the transferor under this Agreement.
ARTICLE III
MISCELLANEOUS
Section 3.01 Communications .
All notices and other communications provided for or permitted hereunder shall be made in writing by electronic mail, courier service or personal delivery:
(a) if to a Holder, to such Holder at its address set forth in its Selling Holder Questionnaire or provided pursuant to Section 2.11 , as applicable; and
(b) if to the Company, to it at:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
; or, in each case, to such other address for such party as shall have been communicated by such party by like notice.
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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 by electronic mail; and when actually received, if sent by courier service.
Section 3.02 Successors and Assigns .
This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Shares to the extent permitted herein; provided , however , that all or any portion of the rights and obligations of any Holder under this Agreement may be transferred or assigned by such Holder only in accordance with Section 2.11 .
Section 3.03 Recapitalization, Exchanges, Etc. Affecting the Shares .
The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of the Company or any successor or assign of the Company (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 Shares, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.
Section 3.04 Aggregation of Registrable Shares .
All Registrable Shares 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 and applicability of any obligations under this Agreement.
Section 3.05 Specific Performance .
Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, 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 Person from pursuing any other rights and remedies at law or in equity that such Person may have.
Section 3.06 Counterparts .
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
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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 .
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 (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT), WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION AGAINST ANY PARTY RELATING TO THE FOREGOING SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF NEW YORK, AND THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED WITHIN THE STATE OF NEW YORK OVER ANY SUCH ACTION. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section 3.09 Severability of Provisions .
Any provision of this Agreement which 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 Entire 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 Holder or Holders of more than fifty percent (50%) of the aggregate number of Registrable Shares; provided , however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
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Section 3.12 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 3.13 Obligations Limited to Parties to Agreement .
Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Holders and the Company 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 Holder 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 Holder 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 transferee or assignee of a Holder hereunder.
Section 3.14 Independent Nature of Holders ’ Obligations .
The obligations of each Holder under this Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
Section 3.15 Interpretation .
Article and Section references are to 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 a Holder under this Agreement, such action shall be in such Holder’s sole discretion unless otherwise specified.
[ Signature pages follow ]
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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
COMPANY: | ||
NORTHERN OIL AND GAS, INC. | ||
By: |
/s/ Brandon Elliott |
|
Name: | Brandon Elliott | |
Title: | Interim President |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
SEVERALLY AND NOT JOINTLY FOR EACH ENTITY LISTED BELOW: | ||
TRT Holdings, Inc. | ||
By: |
/s/ Michael G. Smith |
|
Name: Michael G. Smith | ||
Title: Treasurer | ||
CRESTA INVESTMENTS, LLC | ||
By: |
/s/ Michael G. Smith |
|
Name: Michael G. Smith | ||
Title: Secretary | ||
CRESTA GREENWOOD, LLC | ||
By: |
/s/ Michael G. Smith |
|
Name: Michael G. Smith | ||
Title: Vice President and Secretary |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
ROBERT B. ROWLING , an individual |
/s/ Paul A. Jorge |
By: Paul A. Jorge, attorney-in-fact |
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
Annex A
Registrable Shares
19,128,552 shares of Common Stock.
A-1
Annex B
NORTHERN OIL AND GAS, INC.
Selling Holder Notice and Questionnaire
The undersigned beneficial owner of Common Stock, as applicable (the “ Registrable Shares ”), of Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “ Commission ”) a registration statement (the “ Registration Statement ”) for the registration and resale under the Securities Act of 1933, as amended (the “ Securities Act ”), of the Registrable Shares, in accordance with the terms of the Registration Rights Agreement (the “ Registration Rights Agreement ”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Shares are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “ Selling Holder ”) of Registrable Shares hereby elects to include the Registrable Shares owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. | Name. |
(a) | Full Legal Name of Selling Holder |
(b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Shares are held: |
(c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire): |
2. | Address for Notices to Selling Holder: |
B-1
Telephone: |
|
|
Email: |
|
|
Contact Person: |
|
3. | Broker-Dealer Status: |
(a) | Are you a broker-dealer? |
Yes ☐ No ☐
(b) | If “yes” to Section 3(a), did you receive your Registrable Shares as compensation for investment banking services to the Company? |
Yes ☐ No ☐
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) | Are you an affiliate of a broker-dealer? |
Yes ☐ No ☐
(d) | If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Shares in the ordinary course of business, and at the time of the purchase of the Registrable Shares to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Shares? |
Yes ☐ No ☐
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4. | Beneficial Ownership of Securities of the Company Owned by the Selling Holder. |
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Exchange Agreement.
(a) | Type and Amount of other securities beneficially owned by the Selling Holder: |
|
|
B-2
5. | Relationships with the Company: |
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past two years.
State any exceptions here:
|
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The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided , that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
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PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
B-3
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
NORTHERN OIL AND GAS, INC.
AND
THE HOLDERS PARTY HERETO
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of May 15, 2018, by and among Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), and TPG Specialty Lending, Inc., TOP III Finance 1, LLC and TAO Finance 1, LLC (together with any permitted transferees or assignee, each, a “ Holder ” and collectively, the “ Holders ”).
WHEREAS, this Agreement is made pursuant to the Subscription Agreement, dated as of March 18, 2018 (the “ Subscription Agreement ”), among the Company and TPG Specialty Lending, Inc., TOP III Finance 1, LLC and TAO Finance 1, LLC (collectively, the “ TPG Investors ”);
WHEREAS, pursuant to the Subscription Agreement, the TPG Investors acquired, in the aggregate, 8,000,000 shares (the “ Shares ”) of common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) on the date hereof (the “ Closing Date ”); and
WHEREAS, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of the Holders pursuant to the Subscription 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 are hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions .
The terms set forth below are used herein as so defined:
“ Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Anticipated Registration Rights Agreements ” means those certain Registration Rights Agreements, each to be entered into as of the Closing Date and as may be amended from time to time, (i) among the Company and certain holders of the Company’s 8.00% Senior Notes due 2020 (the “ Exchange Rights Agreement ”) and (ii) among the Company and TRT Holdings, Inc., Cresta Investments, LLC and Cresta Greenwood, LLC.
“ Anticipated Rights Holders ” means parties provided registration rights pursuant to the Anticipated Registration Rights Agreements.
“ Business Day ” means any day other than a day on which banks are permitted or required to be closed in New York City.
“ Closing Date ” has the meaning specified therefor in the recitals of this Agreement.
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“ Commission ” means the U.S. Securities and Exchange Commission, including the staff thereof as applicable.
“ Common Stock ” has the meaning specified therefor in the recitals of this Agreement.
“ Company ” has the meaning specified therefor in the introductory paragraph of this Agreement.
“ Company Securities ” has the meaning specified therefor in Section 2.04(d)(i) .
“ Effective Date ” has the meaning specified therefor in Section 2.01(a) .
“ Effectiveness Deadline ” has the meaning specified therefor in Section 2.01(a) .
“ Effectiveness Period ” has the meaning specified therefor in Section 2.01(e) .
“ Exchange Act ” means the Securities and Exchange Act of 1934, as amended.
“ Exchange Registrable Shares ” means the shares of Common Stock that are “Registrable Shares” as defined in the Exchange Rights Agreement.
“ Exchange Rights Holders ” means parties provided registration rights pursuant to the Exchange Rights Agreement.
“ Expenses ” has the meaning specified therefor in Section 2.10(a) .
“ Holder ” and “ Holders ” have the meanings specified therefor in the introductory paragraph of this Agreement. A Person shall cease to be a Holder hereunder at such time as it ceases to hold any Registrable Shares.
“ Indemnified Party ” has the meaning specified therefor in Section 2.10(c) .
“ Indemnifying Party ” has the meaning specified therefor in Section 2.10(c) .
“ Inspectors ” has the meaning specified therefor in Section 2.06(l) .
“ Lock-up Period ” has the meaning specified therefor in the Subscription Agreement.
“ Losses ” has the meaning specified therefor in Section 2.10(a) .
“ Managing Underwriter ” means, with respect to any Underwritten Offering, the lead book-running manager(s) of such Underwritten Offering.
“ Maximum Number of Shares ” has the meaning specified therefor in Section 2.02(c) .
“ Other Registrable Securities ” has the meaning specified therefor in Section 2.02(b) .
“ Other Securities ” has the meaning specified therefor in Section 2.04(d)(i) .
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“ Permitted Transferee ” means with respect to any Holder, (i) an Affiliate of any Holder or any investment fund or other entity controlled or managed by any Holder, (ii) if such Holder is a partnership, a partner of such partnership, or to the estate of any such partner or the transferee by gift, will or intestate succession of any partner, (iii) if such Holder is a limited liability company, a member of such limited liability company, or to the estate of any such member or the transferee by gift, will or intestate succession of any member, and (iv) if such Holder is a corporation, a stockholder of such corporation, or to the estate of any such stockholder or the transferee by gift, will or intestate succession of any stockholder.
“ Person ” means any individual or entity of any type.
“ Piggyback Underwritten Offering ” has the meaning specified therefor in Section 2.04(a) .
“ Piggybacking Holder ” has the meaning specified therefor in Section 2.04(a) .
“ pro rata ” means, except as otherwise specified herein, with respect to each Holder, an amount determined by multiplying the applicable amount by the quotient obtained by dividing (a) the number of Registrable Shares held by the applicable Holder by (b) the number of Registrable Shares then held by all Holders.
“ Records ” has the meaning specified therefor in Section 2.06(l) .
“ Registrable Shares ” means (i) the Shares, (ii) any shares of Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the Shares, and (iii) any other securities issued in respect of, in exchange for or in substitution of the Shares.
“ Registration Expenses ” means all expenses, other than Selling Expenses, incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Shares on a Registration Statement and the disposition of such Registrable Shares, including, without limitation, all registration, filing, securities exchange listing 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, costs or expenses related to any roadshows conducted in connection with the marketing of any offering of Registrable Shares (except to the extent expressly included in Selling Expenses), and all word processing, duplicating and printing expenses and the fees and disbursements of counsel to the Company and the independent public accountants for the Company, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, and the reasonable and documented fees and expenses of one counsel for all Holders in addition to one local counsel.
“ Registration Statement ” means (a) the Shelf Registration Statement and (b) any other registration statement of the Company filed or to be filed with the Commission under the Securities Act in which Registrable Shares are included in the securities registered thereby pursuant to this Agreement, including the prospectus included in the registration statement, as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the thereto, including post-effective amendments, and all materials incorporated or deemed to be incorporated by reference in such registration statement or prospectus.
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“ Requesting Holder ” has the meaning specified therefor in Section 2.02(a) .
“ Rule 144 ” means Rule 144 promulgated under the Securities Act (or any similar rule or provision then in effect).
“ Section 2.04 Maximum Number of Shares ” has the meaning specified therefor in Section 2.04(d) .
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Selling Expenses ” means all (a) underwriting fees, discounts and selling commissions allocable to the sale of Registrable Shares, (b) transfer taxes allocable to the sale of the Registrable Shares, (c) costs or expenses related to any roadshows conducted in connection with the marketing of any offering of Registrable Shares in a Shelf Underwritten Offering, and (d) fees and expenses of any counsel engaged by any Holder that are not expressly included in Registration Expenses.
“ Selling Holder ” means a Holder selling Registrable Shares pursuant to a Registration Statement.
“ Selling Holder Questionnaire ” has the meaning specified therefor in Section 2.07 .
“ Shares ” has the meaning specified therefor in the recitals of this Agreement.
“ Shelf Piggybacking Holder ” has the meaning specified therefor Section 2.02(b) .
“ Shelf Registration Statement ” has the meaning specified therefor in Section 2.01(a) , subject to Section 2.01(d) .
“ Shelf Underwritten Offering ” has the meaning specified therefor in Section 2.02(a) .
“ Subscription Agreement ” has the meaning specified therefor in the recitals of this Agreement.
“ Underwritten Offering ” means an offering (including an offering pursuant to the Shelf Registration Statement) in which shares of Common Stock are sold to an underwriter on a firm commitment basis for reoffering to the public.
“ Underwritten Offering Filing ” means, (a) with respect to a Shelf Underwritten Offering, a preliminary prospectus supplement (or prospectus supplement if no preliminary prospectus supplement is used) to the Shelf Registration Statement relating to such Shelf Underwritten Offering, and (b) with respect to a Piggyback Underwritten Offering, (i) a preliminary prospectus supplement (or prospectus supplement if no preliminary prospectus supplement is used) to an effective shelf Registration Statement (other than the Shelf Registration Statement) in which Registrable Securities could be included and Holders could be named as selling security holders
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without the filing of a post-effective amendment thereto (other than a post-effective amendment that becomes effective upon filing) or (ii) a Registration Statement (other than the Shelf Registration Statement), in each case relating to such Piggyback Underwritten Offering. An Underwritten Offering Filing shall not include a registration statement on a Form S-4 or S-8 or filed in connection with an exchange offer or any employee benefit or stock purchase and/or dividend reinvestment plan, an offering of securities solely to the Company’s existing stockholders, or a registration statement registering securities that are issuable solely upon conversion of debt securities or a registration statement solely with respect to an equity compensation plan.
Section 1.02 Registrable Shares .
Any Registrable Share will cease to be a Registrable Share when (a) a Registration Statement covering such Registrable Share has become effective under the Securities Act and such Registrable Share has been sold or disposed of pursuant to such Registration Statement; (b) such Registrable Share has been disposed of pursuant to any section of Rule 144 under the Securities Act; (c) such Registrable Share is held by the Company or one of its subsidiaries or ceases to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise); (d) such Registrable Share has been sold or disposed of in a transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such Registrable Share pursuant to Section 2.12 ; or (e) such Registrable Share becomes eligible for resale pursuant to Rule 144 without restriction, without being subject to any holding period, without manner of sale restrictions, and without volume limitations or the need for current public information. Any security that has ceased to be a Registrable Share shall not thereafter become a Registrable Share, and any security that is issued or distributed in respect of a security that has ceased to be a Registrable Share shall not be a Registrable Share.
ARTICLE II
REGISTRATION RIGHTS
Section 2.01 Shelf Registration .
(a) The Company shall prepare and file with the Commission, and use best efforts to cause to be declared effective as soon as practicable after the filing thereof, but in no event later than the earliest of (i) the ninetieth (90th) day after the Closing Date, (ii) the day preceding the expiration of the Lock-up Period and (iii) the day preceding the date a Holder is released from its lock-up pursuant to Section 7(e)(v) of the Subscription Agreement (the earliest of (i), (ii) or (iii), the “ Effectiveness Deadline ”), a Registration Statement under the Securities Act relating to the offer and sale or other distribution of all the Registrable Shares by the Holders thereof (the “ Shelf Registration Statement ”) from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act. Upon the earlier of the date that the Company receives oral confirmation from the staff of the Commission of the effectiveness of the Shelf Registration Statement or the date evidence of such effectiveness is received by the Company (the “ Effective Date ”), the Company shall notify the Holders of the effectiveness thereof. No shares of the Company’s Common Stock held by Anticipated Rights Holders shall be included in the Shelf Registration Statement if such inclusion could affect the Company’s eligibility to register the Registrable Shares pursuant to the Shelf Registration Statement, including without limitation, due to limitations on the use of Rule 415 under the Securities Act for the resale of such other shares of the Company’s Common Stock.
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(b) [Intentionally omitted]
(c) The Shelf Registration Statement shall be on Form S-3 (or any equivalent or successor form) under the Securities Act or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statements as is then available to effect a registration for resale of the Registrable Shares; provided , however , that if the Company has filed the Shelf Registration Statement on Form S-1 and subsequently becomes eligible to use Form S-3 or any equivalent or successor form or forms, the Company shall promptly notify the Holders, but in any event within ten (10) Business Days, and, either upon the election of the Holders, the Company shall, or, with the prior written consent of the Holders of a majority of the Registrable Shares, the Company may, (i) file a post-effective amendment to the Shelf Registration Statement converting such Registration Statement on Form S-1 to a Registration Statement on Form S-3 or any equivalent or successor form or forms or (ii) file a successor Shelf Registration Statement on Form S-3 or any equivalent or successor form or forms, and withdraw the Shelf Registration Statement on Form S-1.
(d) Unless otherwise specifically stated herein, the term “Shelf Registration Statement” shall refer individually to the initial Shelf Registration Statement filed pursuant to Section 2.01(a) and to each subsequent Shelf Registration Statement, if any, filed pursuant to Section 2.01(c) .
(e) Subject to Section 2.03, the Company shall use best efforts to cause the Shelf Registration Statement to remain effective, and to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available for the resale of all the Registrable Shares by the Holders, until the later of (i) two years following the Effective Date and (ii) such time that all Registrable Shares become eligible for resale pursuant to Rule 144 without restriction, without being subject to any holding period, without manner of sale restrictions, and without volume limitations or the need for current public information (the “ Effectiveness Period ”); provided, however , that the Effectiveness Period shall be extended for a period of time equal to any period that the effectiveness of the Shelf Registration Statement is delayed and for any period of time that the Holders’ use of any prospectus that is a part of a Shelf Registration Statement is suspended pursuant to Section 2.03 .
(f) When effective, the Shelf Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will 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 (in the case of any prospectus contained in the Shelf Registration Statement, in the light of the circumstances under which such statements are made); provided, however, the Company shall have no such obligations or liabilities with respect to any information pertaining to any Holder furnished in writing to the Company by or on behalf of such Holder specifically for inclusion therein.
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Section 2.02 Underwritten Offering .
(a) In the event that any Holder or group of Holders holding at least twenty-five percent (25%) of the Registrable Shares (the “ Requesting Holders ”) elects to dispose of Registrable Shares under the Shelf Registration Statement pursuant to an Underwritten Offering, the Holders or group of Holders shall so advise the Company, the Company shall, at the request of such Requesting Holders, enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities with the underwriter or underwriters selected pursuant to Section 2.02(d) and shall take all such other reasonable actions as are requested by the Managing Underwriter of such Underwritten Offering and/or the Requesting Holders in order to expedite or facilitate the disposition of, subject to Section 2.02(c) , such Registrable Shares and the Registrable Shares requested to be included by any Shelf Piggybacking Holder (a “ Shelf Underwritten Offering ”); provided, however , that the Company shall have no obligation to facilitate or participate in more than one (1) Shelf Underwritten Offering in any 180-day period or more than three (3) Shelf Underwritten Offerings in total under this Agreement; provided further, that a Shelf Underwritten Offering shall not count against such limit unless and until the Holder(s) requesting such registration are able to sell at least seventy-five percent (75%) of the Registrable Shares requested to be included in such Shelf Underwritten Offering.
(b) If the Company receives a Shelf Underwritten Offering Request from Requesting Holders, it will give written notice of such proposed Shelf Underwritten Offering to each Holder (other than the Requesting Holder), which notice shall be held in strict confidence by such Holders and shall include the anticipated filing date of the related Underwritten Offering Filing and, if known, the number of Registrable Shares that are proposed to be included in such Shelf Underwritten Offering, and of such Holders’ rights under this Section 2.02(b) . Such notice shall be given promptly and in any event, at least five (5) Business Days before the filing of the Underwritten Offering Filing or two (2) Business Days before the filing of the Underwritten Offering Filing in connection with a bought or overnight Underwritten Offering); provided, that if the Shelf Underwritten Offering is a bought or overnight Underwritten Offering and the Managing Underwriter advises the Company and the Requesting Holder in writing that the giving of notice pursuant to this Section 2.02(b) would adversely affect the offering, no such notice shall be required (and such Holders shall have no right to include Registrable Shares in such bought or overnight Underwritten Offering); and provided further, that the Company shall not so notify (or be required to so notify) any such other Holder that has notified the Company (and not revoked such notice) requesting that such Holder not receive notice from the Company of any proposed Shelf Underwritten Offering. Each such Holder shall then have four (4) Business Days (or one (1) Business Day in the case of a bought or overnight Underwritten Offering) after the date on which the Company delivered the notice pursuant to this Section 2.02(b) to request inclusion of Registrable Shares in the Shelf Underwritten Offering (which request shall specify the maximum number of Registrable Shares intended to be disposed of by such Holder and such Holder agrees to supply any information reasonably requested by the Company in connection with the preparation of a Registration Statement and/or any other documents relating to such registered offering, including a Selling Holder Questionnaire) (any such Holder making such request, a “ Shelf Piggybacking Holder ”). If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Shelf Underwritten Offering. In connection with a Shelf Underwritten Offering Request made by Requesting Holders, the Company shall not include any securities that
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are not Registrable Shares or Exchange Registrable Shares without the prior written consent of the Holders of a majority of the Registrable Shares included in such Shelf Underwritten Offering, which consent shall not be unreasonably withheld or delayed. If such consent of the Holders of majority of the Registrable Shares is provided, holders of securities other than Registrable Shares who timely and validly request to have shares of Common Stock held by them that are subject to registration rights (such securities, including Exchange Shares, “ Other Registrable Securities ”) may include such Other Registrable Securities in the Shelf Underwritten Offering, subject to any applicable limitations set forth in the applicable registration rights agreement(s) and Section 2.02(c) below.
(c) If the Managing Underwriter of the requested Shelf Underwritten Offering shall inform the Company and the Requesting Holders in writing of its belief that the number of Registrable Shares requested to be included in such Shelf Underwritten Offering by the Requesting Holders, when added to the number of Other Registrable Securities requested to be included by any Shelf Piggybacking Holders and any holders of Other Registrable Securities permitted to be included in the Shelf Underwritten Offering pursuant to Section 2.03(b) , would materially adversely affect such offering, then the Company shall include in the applicable Underwritten Offering Filing, to the extent of the total number of Registrable Shares and such permitted Other Registrable Securities that the Company is so advised can be sold in such Shelf Underwritten Offering without so materially adversely affecting such offering (the “ Maximum Number of Shares ”), in the following priority:
(i) First, all Registrable Shares that the Requesting Holders and any Shelf Piggybacking Holders requested to be included therein, allocated among the Requesting Holders and any Shelf Piggybacking Holders pro rata based on the number of Registrable Shares each requested to be included, in proportion to the total number of Registrable Shares requested to be included;
(ii) Second, to the extent that the number of Registrable Shares subject to Section 2.02(c)(i) is less than the Maximum Number of Shares, the Other Registrable Securities and shares of Common Stock requested to be included by any other Persons having registration rights with respect to such offering, pro rata among such other Persons based on the number of Other Registrable Securities or shares of Common Stock each requested to be included, in proportion to the total number of Other Registrable Securities and shares of Common Stock requested to be included by such other Persons.
(d) The Company shall select the Managing Underwriter and any other underwriters in connection with such Shelf Underwritten Offering. The Requesting Holders shall determine the pricing of the Registrable Shares offered pursuant to any Shelf Underwritten Offering and the applicable underwriting discounts and commissions, subject to Section 2.03 .
Section 2.03 Delay and Suspension Rights . Notwithstanding any other provision of this Agreement, the Company may suspend the Holders’ use of any prospectus that is a part of a Shelf Registration Statement or delay effecting a Shelf Underwritten Offering upon written notice to each Holder whose Registrable Shares are included in such Shelf Registration Statement or such Shelf Underwritten Offering ( provided that in no event shall such notice contain any material non-public information regarding the Company) (in which event such
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Holder shall immediately discontinue sales of Registrable Shares pursuant to such Registration Statement but may settle any then-contracted sales of Registrable Shares), in each case for a period of up to 60 days, if the Company reasonably determines (i) that such delay or suspension is in the best interest of the Company and its stakeholders generally due to a pending securities offering by the Company, or any proposed material acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other material transaction involving the Company, in each case that would be materially and adversely affected by required disclosure of such transaction in such prospectus or Shelf Underwritten Offering, (ii) that such registration, offering or the use of any prospectus that is a part of a Shelf Registration Statement would render the Company unable to comply with applicable securities laws (including because of requirements to produce financial statements with regard to acquired businesses) or (iii) that such registration or offering would require disclosure of material information and such disclosure would materially and adversely affect the Company (any such period, a “ Suspension Period ”); provided that such Suspension Period is also applied to all Anticipated Rights Holders; provided further , however , that in no event shall any Suspension Periods applicable to the Holders collectively exceed an aggregate of 90 days in any twelve-month period.
Section 2.04 Piggyback Registration Rights .
(a) Subject to Section 2.04(c) , if the Company at any time proposes to file an Underwritten Offering Filing for an Underwritten Offering of shares of Common Stock for its own account or for the account of any other Persons who have or have been granted registration rights (a “ Piggyback Underwritten Offering ”), other than the filing of a registration statement pursuant to the Anticipated Registration Rights Agreements, it will give written notice of such Piggyback Underwritten Offering to each Holder, which notice shall be held in strict confidence by such Holders and shall include the anticipated filing date of the Underwritten Offering Filing and, if known, the number of shares of Common Stock that are proposed to be included in such Piggyback Underwritten Offering, and of such Holders’ rights under this Section 2.04(a) . Such notice shall be given promptly (and in any event at least five (5) Business Days before the filing of the Underwritten Offering Filing or two (2) Business Days before the filing of the Underwritten Offering Filing in connection with a bought or overnight Underwritten Offering); provided, that if the Piggyback Underwritten Offering is a bought or overnight Underwritten Offering and the Managing Underwriter advises the Company in writing that the giving of notice pursuant to this Section 2.04(a) would adversely affect the offering, no such notice shall be required (and such Holders shall have no right to include Registrable Shares in such bought or overnight Underwritten Offering). Each such Holder shall then have four (4) Business Days (or one (1) Business Day in the case of a bought or overnight Underwritten Offering) after the date on which the Holders received notice pursuant to this Section 2.04(a) to request inclusion of Registrable Shares in the Piggyback Underwritten Offering (which request shall specify the maximum number of Registrable Shares intended to be disposed of by such Holder and include such other information as is requested pursuant to clause (i) of Section 2.05(f) ) (any such Holder making such request, a “ Piggybacking Holder ”). If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Piggyback Underwritten Offering. Subject to Section 2.04(c) , the Company shall use commercially reasonable efforts to include in the Piggyback Underwritten Offering all Registrable Shares that the Company has been so requested to include by the Piggybacking Holders; provided, however , that if, at any time after giving written notice of a proposed
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Piggyback Underwritten Offering pursuant to this Section 2.04(a) and prior to the execution of an underwriting agreement with respect thereto, the Company or such other Persons who have or have been granted registration rights, as applicable, shall determine for any reason not to proceed with or to delay such Piggyback Underwritten Offering, the Company shall give written notice of such determination to the Piggybacking Holders (which such Holders will hold in strict confidence) and (i) in the case of a determination not to proceed, shall be relieved of its obligation to include any Registrable Shares in such Piggyback Underwritten Offering (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), and (ii) in the case of a determination to delay, shall be permitted to delay inclusion of any Registrable Shares for the same period as the delay in including the shares of Common Stock to be sold for the Company’s account or for the account of such other Persons who have or have been granted registration rights, as applicable.
(b) Each Holder shall have the right to withdraw its request for inclusion of its Registrable Shares in any Piggyback Underwritten Offering at any time prior to the execution of an underwriting agreement with respect thereto by giving written notice to the Company of its request to withdraw; provided, that such withdrawal shall be irrevocable and, after making such withdrawal, a Holder shall no longer have any right to include Registrable Shares in the Piggyback Registration as to which such withdrawal was made.
(c) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.04 at any time in its sole discretion whether or not any Holder has elected to include Registrable Shares in such Registration Statement.
(d) If the Managing Underwriter of the Piggyback Underwritten Offering shall inform the Company of its belief that the number of Registrable Shares requested to be included in such Piggyback Underwritten Offering, when added to the number of shares of Common Stock proposed to be offered by the Company or such other Persons who have or have been granted registration rights (and any other shares of Common Stock requested to be included by any other Persons having registration rights on parity with the Piggybacking Holders with respect to such offering), would materially adversely affect such offering, then the Company shall include in such Piggyback Underwritten Offering, to the extent of the total number of securities which the Company is so advised can be sold in such offering without so materially adversely affecting such offering (the “ Section 2.04 Maximum Number of Shares ”), shares of Common Stock in the following priority:
(i) First, if the Piggyback Underwritten Offering is for the account of the Company, all shares of Common Stock that the Company proposes to include for its own account (the “ Company Securities ”) or, if the Piggyback Underwritten Offering is for the account of any other Persons who have or have been granted registration rights, all shares of Common Stock that such Persons propose to include (the “ Other Securities ”); and
(ii) Second, if the Piggyback Underwritten Offering is for the account of the Company, to the extent that the number of Company Securities is less than the Section 2.04 Maximum Number of Shares, the shares of Common Stock requested to be included by the Piggybacking Holders and holders of any other shares of Common Stock requested to be included by Persons having rights of registration on parity with the
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Piggybacking Holders with respect to such offering, pro rata among the Piggybacking Holders and such other holders based on the number of shares of Common Stock each requested to be included and, if the Piggyback Underwritten Offering is for the account of any other Persons who have or have been granted registration rights, to the extent that the number of Other Securities is less than the Section 2.04 Maximum Number of Shares, the shares of Common Stock requested to be included by the Piggybacking Holders, pro rata among the Piggybacking Holders.
(e) The Company or the other Persons who have or have been granted registration rights initiating such Piggyback Underwritten Offering (if so entitled pursuant to such registration rights), as applicable, shall select the underwriters in any Piggyback Underwritten Offering and shall determine the pricing of the shares of Common Stock offered pursuant to any Piggyback Underwritten Offering, the applicable underwriting discounts and commissions and the timing of any such Piggyback Underwritten Offering.
Section 2.05 Participation in Underwritten Offerings . In connection with any Underwritten Offering contemplated by Section 2.02 or Section 2.04 :
(a) the underwriting agreement into which each Selling Holder and the Company shall enter into shall contain such representations, covenants, indemnities (subject to Section 2.10 ) and other rights and obligations as are customary in underwritten offerings;
(b) no Selling Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties, agreements or indemnities regarding such Selling Holder, such Selling Holder’s title in the securities being registered on its behalf, the Selling Holder’s authority to enter into such underwriting agreement and to sell, and information provided by such Selling Holder for inclusion in the Registration Statement relating thereto and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law;
(c) the Company shall enter into such customary agreements and take all such other customary actions as the Selling Holders or the Managing Underwriter of such offering reasonably request in order to expedite or facilitate the disposition of such Registrable Shares (including, without limitation, making appropriate officers of the Company available to participate in “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Shares);
(d) the Company shall use commercially reasonable efforts to provide to each Selling Holder a copy of any auditor “comfort” letters, customary legal opinions or reports of the independent petroleum engineers of the Company relating to the oil and gas reserves of the Company, in each case that have been provided to the Managing Underwriter in connection with the Underwritten Offering;
(e) any participation by Holders in a Piggyback Underwritten Offering shall be in accordance with the plan of distribution of (i) the Company, if such Piggyback Underwritten Offering is for the account of the Company, or (ii) any other Persons who have or have been granted registration rights, if the Piggyback Underwritten Offering is for the account of such other Persons; and
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(f) in connection with any Piggyback Underwritten Offering in which any Holder includes Registrable Shares pursuant to Section 2.04 , such Holder agrees (i) to supply any information reasonably requested by the Company in connection with the preparation of a Registration Statement and/or any other documents relating to such registered offering (including a Selling Holder Questionnaire) and (ii) to execute and deliver any agreements and instruments being executed by all holders on substantially the same terms reasonably requested by the Company or the Managing Underwriter, as applicable, to effectuate such registered offering, including, without limitation, underwriting agreements (subject to Section 2.05(a)-(b) ), custody agreements, customary lock-up agreements pursuant to which such Holder agrees not to sell or purchase any securities of the Company for the same period of time following the registered offering as is agreed to by the Company and the other participating holders (not to exceed a period of 90 days) or such shorter period as the Managing Underwriter shall agree to, powers of attorney and questionnaires.
Section 2.06 Registration and Sale Procedures .
In connection with its obligations under this Article II and with respect to each Registration Statement that includes Registrable Shares, the Company will:
(a) as promptly as reasonably practicable prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Shares covered by the Registration Statement;
(b) use commercially reasonable efforts to make available to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement, any prospectus used in connection therewith or any amendment thereto, upon its reasonable 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 reasonably in advance of any such filing with respect to such information prior to filing the Registration Statement, prospectus or amendment thereto, and (ii) such number of copies of the Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Shares covered thereby;
(c) if applicable, use commercially reasonable efforts to register or qualify the Registrable Shares covered by the Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders 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, take any action that would subject the Company to any material tax in any such jurisdiction where it is not then so subject, or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;
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(d) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of 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 the Registration Statement or any prospectus or prospectus supplement thereto;
(e) (i) immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (A) the happening of any event as a result of which the prospectus or prospectus supplement contained in the 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 to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which such statements were made); (B) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or the initiation of any proceedings for that purpose; or (C) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Shares for sale under the applicable securities or blue sky laws of any jurisdiction; and (ii) subject to Section 2.03, following the provision of such notice, 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 to make the statements therein not misleading in the light of the circumstances then existing and use commercially reasonable efforts to remove a stop order, suspension, threat thereof or proceedings related thereto;
(f) 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 the Registration Statement;
(g) otherwise use 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;
(h) use commercially reasonable efforts to cause all such Registrable Shares registered pursuant to this Agreement to be listed on the principal securities exchange or nationally recognized quotation system on which the Common Stock is then listed;
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(i) use commercially reasonable efforts to cause the Registrable Shares 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 such Registrable Shares;
(j) provide a transfer agent and registrar for all Registrable Shares covered by such Registration Statement and a CUSIP number for all such Registrable Shares, in each case, not later than the effective date of the Registration Statement, and in the case of any Shelf Registration Statement, deliver to the Company’s transfer agent on the date such Shelf Registration Statement is declared effective by the Commission written notice that such Shelf Registration Statement has been declared effective and may be used for resales of Registrable Shares;
(k) if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests in writing to be included therein relating to the sale and distribution of Registrable Shares, including information with respect to the number of Registrable Shares being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Shares to be sold in such offering, and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
(l) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any Selling Holder of Registrable Shares, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such Selling Holder or underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”), and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement; provided , that the Company need not disclose any non-public information to any such person unless and until such person has entered into a confidentiality agreement with the Company on terms reasonably acceptable to the Company and such third party;
(m) permit any Holder that, in the reasonable judgment of such Holder and its counsel might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such Holder and its counsel should be included;
(n) in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Shares included in such Registration Statement for sale in any jurisdiction, use commercially reasonable efforts promptly to obtain the withdrawal of such order; and
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(o) otherwise use commercially reasonable efforts to take all other steps necessary to effect the registration of such Registrable Shares contemplated hereby.
For the avoidance of doubt, references in this Section 2.06 to the Company using commercially reasonable efforts with respect to specific actions described herein above do not diminish or alter the Company’s obligations to use best efforts pursuant to Section 2.01(a) to file and cause the Shelf Registration Statement to be declared effective by the Effectiveness Deadline and the Company’s obligations to use best efforts pursuant to Section 2.01(e) to cause the Shelf Registration Statement to remain effective, and, subject to Section 2.03 , to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available for the resale of all of the Registrable Shares by the Holders throughout the Effectiveness Period.
Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (e) of this Section 2.06 , shall forthwith discontinue offers and sales of the Registrable Shares by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.06 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, and, if so directed by the Company, such Selling Holder will deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Shares current at the time of receipt of such notice.
Section 2.07 Cooperation by Holders .
The Company shall have no obligation to include Registrable Shares of a Holder in a Registration Statement who has failed to furnish, within five (5) Business Days of a request by the Company, such information that the Company determines, after consultation with its counsel, is reasonably required in order for the Registration Statement or prospectus supplement, as applicable, to comply with the Securities Act. The Company may require each Holder to furnish to the Company a written statement as to the aggregate number of shares of Common Stock beneficially owned by such Holder. Without limiting the foregoing, with respect to the Shelf Registration Statement, each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex A (a “ Selling Holder Questionnaire ”) on a date that is not less than ten (10) Business Days after the Closing Date or three (3) Business Days following the date on which such Holder receives draft materials in accordance with Section 2.06(b) .
Section 2.08 [Intentionally Omitted] .
Section 2.09 Expenses .
The Company will pay all Registration Expenses. Each Selling Holder shall bear or pay its pro rata share (based on Registrable Shares sold hereunder) of all Selling Expenses in connection with any sale of its Registrable Shares hereunder.
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Section 2.10 Indemnification and Contribution .
(a) Indemnification by the Company . The Company shall indemnify and hold harmless each Selling Holder, its directors, officers managers, employees, investment managers, agents and Affiliates and each other Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any losses, claims, damages or liabilities, joint or several (collectively, “ Losses ”) to which such Selling Holder or any such director, officer or controlling person may become subject, under the Securities 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 (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulations promulgated under the Securities Act, or the Exchange Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance required under this Agreement, and the Company will promptly reimburse such Selling Holder and each such director, officer, manager, employee, investment manager, agent, Affiliate and controlling person for reasonably and documented legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Losses, actions or proceedings (collectively, “ Expenses ”); provided that the Company shall not be liable in any such case to the extent that (i) any such Losses or Expenses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, free writing prospectus, final prospectus, amendment or supplement in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof, (ii) the Selling Holder continued to use a Registration Statement or Prospectus after the Company notified such Selling Holder to cease such use pursuant to Section 2.03(e) or (iii) the Company provided a corrected, supplemented or amended Registration Statement or Prospectus, and such corrected, supplemented or amended Registration Statement or Prospectus would have cured the defect giving rise to such Losses or Claim, but the Selling Holder continued to use the then outdated or uncorrected Registration Statement or Prospectus. 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 director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
(b) Indemnification by Selling Holders . Each Selling Holder, severally and not jointly and severally, will indemnify and hold harmless the Company, its directors and officers and each other Person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any Losses to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, and will reimburse them for any Expenses reasonably incurred by any of them (in each case in the same manner and to the same extent as set forth in Section
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2.10(a) ), insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) or Expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or any preliminary prospectus, free writing prospectus or final prospectus contained therein or related thereto, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus, in the light of the circumstances under which such statements were made), if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information furnished to the Company in writing or electronically by or on behalf of such Selling Holder expressly for use in the preparation thereof (it being understood that any Selling Holder Questionnaire furnished by such Selling Holder is furnished expressly for this purpose). Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such Selling Holder.
(c) Notices of Claims; Indemnification Procedures . In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.10(a) or Section 2.10(b) , such Person (the “ Indemnified Party ”) shall promptly notify the Person against whom such indemnity may be sought (the “ Indemnifying Party ”) in writing ( provided that the failure of the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.10 , except to the extent the Indemnifying Party is actually prejudiced by such failure to give notice), and the Indemnifying Party shall be entitled to participate in such proceeding and, unless in the reasonable opinion of outside counsel to the Indemnified Party a conflict of interest between the Indemnified Party and Indemnifying Party may exist in respect of such claim, to assume the defense thereof jointly with any other Indemnifying Party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party that it so chooses, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other Expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation and costs incurred by the Indemnified Party as a witness or deponent in such matter; provided , however , that (i) if the Indemnifying Party fails to assume the defense or employ counsel reasonably satisfactory to the Indemnified Party, (ii) if such Indemnified Party who is a defendant in any action or proceeding which is also brought against the Indemnifying Party reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party that are not available to the Indemnifying Party or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct then, in any such case, the Indemnified Party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all Indemnified Parties (plus one firm of local counsel for all Indemnified Parties in each relevant jurisdiction)), and the Indemnifying Party shall be liable for any Expenses therefor. No Indemnifying Party shall, without the written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and (B) 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.
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(d) Contribution .
(i) If the indemnification provided for in this Section 2.09 is unavailable to an Indemnified Party in respect of any Losses in respect of which indemnity is to be provided hereunder, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company (on the one hand) and any Selling Holder (on the other hand) 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 such party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(ii) The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 2.09(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 2.09(d)(i) . The amount paid or payable by an Indemnified Party as a result of the Losses referred to in Section 2.09(d)(i) shall be deemed to include, subject to the limitations set forth above, any Expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. 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 was not guilty of such fraudulent misrepresentation.
(e) Underwritten Offerings . Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an Underwritten Offering with respect to the Registrable Shares are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f) Limitation of Holders’ Liability . Notwithstanding the provisions of this Section 2.09 , no Holder shall be liable for indemnification or contribution pursuant to this Section 2.09 for any amount in excess of the net proceeds received by such Holder from the sale of Registrable Shares pursuant to a Registration Statement.
(g) Indemnification Payments . The indemnification and contribution required by this Section 2.09 shall be made by periodic payments of the amount of any such Losses or Expenses as and when bills are received or such Losses or Expenses are incurred.
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Section 2.11 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 Shares to the public without registration, to the extent it shall be required to do so under the Exchange Act, the Company agrees to use reasonable best efforts to:
(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 Securities Act and the Exchange Act at all times from and after the date hereof; and
(c) so long as a Holder owns any Registrable Shares, (i) furnish to a Holder promptly upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act and (ii) furnish to a Holder, unless otherwise made available via EDGAR, promptly 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 2.12 Transfer or Assignment of Registration Right; Restriction on Granting Conflicting Registration Rights .
(a) The rights to cause the Company to register Registrable Shares granted to the Holders by the Company under this Article II may be transferred or assigned by the Holders only to one or more Permitted Transferees; provided , however , that (i) the Company is given written notice prior to such transfer or assignment, stating the name and address of each such Permitted Transferee and identifying the Registrable Shares with respect to which such registration rights are being transferred or assigned and (ii) each such Permitted Transferee assumes in writing responsibility for its portion of the obligations of the transferor under this Agreement.
(b) Except for this Agreement and the Anticipated Rights Agreements, the Company has not granted any registration rights with respect to Company Securities that are currently in effect. The Company represents that the Anticipated Rights Agreements, when effective, shall not conflict with or interfere with the rights granted to the Holders of Registrable Shares in this Agreement.
ARTICLE III
MISCELLANEOUS
Section 3.01 Communications .
All notices and other communications provided for or permitted hereunder shall be made in writing by electronic mail, courier service or personal delivery:
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(a) if to a Holder, to such Holder at its address set forth in its Selling Holder Questionnaire or provided pursuant to Section 2.12 , as applicable; and
(b) if to the Company, to it at:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
; or, in each case, to such other address for such party as shall have been communicated by such party by like notice.
All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when delivery confirmed (including by electronic delivery confirmation), if sent by electronic mail; and when actually received, if sent by courier service.
Section 3.02 Successors and Assigns .
This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Shares to the extent permitted herein; provided , however , that all or any portion of the rights and obligations of any Holder under this Agreement may be transferred or assigned by such Holder only in accordance with Section 2.12 .
Section 3.03 Recapitalization, Exchanges, Etc. Affecting the Shares .
The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of the Company or any successor or assign of the Company (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 Shares, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.
Section 3.04 Aggregation of Registrable Shares .
All Registrable Shares 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 and applicability of any obligations under this Agreement.
Section 3.05 Specific Performance .
Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, 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
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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 Person from pursuing any other rights and remedies at law or in equity that such Person may have.
Section 3.06 Counterparts .
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
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 .
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 (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT), WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION AGAINST ANY PARTY RELATING TO THE FOREGOING SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF NEW YORK, AND THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED WITHIN THE STATE OF NEW YORK OVER ANY SUCH ACTION. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section 3.09 Severability of Provisions .
Any provision of this Agreement which 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.
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Section 3.10 Entire 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 Holder or Holders of more than fifty percent (50%) of the aggregate number of Registrable Shares; provided , however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
Section 3.12 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 3.13 [Intentionally omitted] .
Section 3.14 Independent Nature of Holders’ Obligations .
The obligations of each Holder under this Agreement are several and not joint and several, with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
Section 3.15 Interpretation .
Article and Section references are to 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 a Holder under this Agreement, such action shall be in such Holder’s sole discretion unless otherwise specified.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
COMPANY: | ||
NORTHERN OIL AND GAS, INC. | ||
By: |
/s/ Erik Romslo |
|
Name: Erik Romslo | ||
Title: Executive Vice President, General Counsel and Secretary |
S IGNATURE P AGE TO R EGISTRATION R IGHTS A GREEMENT
SEVERALLY AND NOT JOINTLY FOR EACH ENTITY LISTED BELOW: | ||
TPG SPECIALTY LENDING, INC. | ||
By: |
/s/ Joshua W. Easterly |
|
Joshua W. Easterly, CEO | ||
TOP III FINANCE 1, LLC | ||
By: |
/s/ Joshua Peck |
|
Josh Peck, Vice President | ||
TAO FINANCE 1, LLC | ||
By: |
/s/ Joshua Peck |
|
Josh Peck, Vice President |
S IGNATURE P AGE TO R EGISTRATION R IGHTS A GREEMENT
Annex A
NORTHERN OIL AND GAS, INC.
Selling Holder Notice and Questionnaire
The undersigned beneficial owner of Second Lien Notes and/or Common Stock, as applicable (the “ Registrable Shares ”), of Northern Oil and Gas, Inc., a Delaware corporation (the “ Company ”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “ Commission ”) a registration statement (the “ Registration Statement ”) for the registration and resale under the Securities Act of 1933, as amended (the “ Securities Act ”), of the Registrable Shares, in accordance with the terms of the Registration Rights Agreement (the “ Registration Rights Agreement ”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Shares are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “ Selling Holder ”) of Registrable Shares hereby elects to include the Registrable Shares owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. | Name. |
(a) | Full Legal Name of Selling Holder |
(b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Shares are held: |
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(c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire): |
2. | Address for Notices to Selling Holder: |
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Telephone: |
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Fax: |
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Contact Person: |
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3. | Broker-Dealer Status: |
(a) | Are you a broker-dealer? |
Yes | ☐ No ☐ |
(b) | If “yes” to Section 3(a), did you receive your Registrable Shares as compensation for investment banking services to the Company? |
Yes | ☐ No ☐ |
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) | Are you an affiliate of a broker-dealer? |
Yes | ☐ No ☐ |
(d) | If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Shares in the ordinary course of business, and at the time of the purchase of the Registrable Shares to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Shares? |
Yes | ☐ No ☐ |
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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4. | Beneficial Ownership of Securities of the Company Owned by the Selling Holder. |
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Exchange Agreement.
(a) | Type and Amount of other securities beneficially owned by the Selling Holder: |
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5. | Relationships with the Company: |
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past two years.
State any exceptions here:
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The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein by the undersigned at any time while the Registration Statement remains effective; provided , that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date: |
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Beneficial Owner: |
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By: | ||
Name: | ||
Title: |
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Northern Oil and Gas, Inc.
601 Carlson Pkwy – Suite 990
Minnetonka, Minnesota 55305
Attention: General Counsel
Email: eromslo@northernoil.com
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Exhibit 10.5
Execution Version
S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT
This S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT (this “ Second Amendment ”), dated as of May 15, 2018 (the “ Second Amendment Effective Date ”), is among Northern Oil and Gas, Inc., a Delaware corporation (the “ Borrower ”); TPG Specialty Lending, Inc., as administrative agent (in such capacity, the “ Administrative Agent ”) and collateral agent (in such capacity, the “ Collateral Agent ”); and each of the Lenders party hereto.
R E C I T A L S :
A. The Borrower, the Administrative Agent, the Collateral Agent and the Lenders are parties to that certain Term Loan Credit Agreement dated as of November 1, 2017 (as amended by that certain Limited Waiver and Amendment to Credit Agreement dated March 18, 2018 (as amended), between the Borrower, the Administrative Agent and the Lenders party thereto and as further amended or otherwise modified from time to time prior to the date hereof, including the annexes, exhibits and schedules thereto, the “ Credit Agreement ”; and as amended by this Second Amendment, the “ Amended Credit Agreement ”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit available to and on behalf of the Borrower.
B. On May 9, 2018, the Borrower reincorporated under the laws of the State of Delaware (the “ Reincorporation ”).
C. On the Second Amendment Effective Date, the Borrower will, among other things, (i) consummate an issuance of its common stock resulting in gross proceeds (when aggregated with the issuance of its common stock on each of April 10, 2018 and April 16, 2018) of not less than $140,000,000 (the “ Specified Equity Issuance ”), (ii) enter into that certain Indenture dated as of the date hereof, between the Borrower and Wilmington Trust, National Association, as trustee and as collateral agent (the “ Trustee ”), pursuant to which the Borrower will issue 8.50% Senior Secured Second Lien Notes due 2023 in an aggregate principal amount of $344,279,000 and (iii) exchange outstanding 8.00% Senior Notes due 2020 with an aggregate outstanding principal amount of $496,683,000 for an aggregate of 103,249,915 shares of its common stock and the Second Lien Notes described in the preceding clause (iii) (the “ Exchange ”; together with the Specified Equity Issuance and the issuance of the Second Lien Notes, collectively, the “ Transactions ”).
D. In connection with the issuance of the Second Lien Notes, the Borrower, the Administrative Agent and the Trustee will enter into that certain Intercreditor Agreement, dated as of the date hereof which is attached hereto as Exhibit A (the “ Intercreditor Agreement ”).
E. In connection with the Transactions, the parties hereto have agreed to amend certain terms of the Credit Agreement as set forth herein, to be effective as of the Second Amendment Effective Date.
F. Subject to and upon the terms and conditions set forth herein, the undersigned Lenders have agreed to enter into this Second Amendment to amend certain provisions of the Credit Agreement as more specifically provided for herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms . Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed to such term in the Amended Credit Agreement.
Section 2. Amendments . In reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement shall be amended effective as of the Second Amendment Effective Date as follows:
2.1 Section 1.02 of the Credit Agreement is hereby amended as follows:
(a) the definition of “Approved Petroleum Engineers” is hereby amended and restated in its entirety to read as follows:
“ Approved Petroleum Engineers ” means (a) Ryder Scott Company Petroleum Consultants, L.P., (b) Netherland, Sewell & Associates, Inc., (c) Cawley, Gillespie & Associates, Inc., and, in each case, any and all successors thereto, and (d) any other independent petroleum engineers reasonably acceptable to the Administrative Agent.
(b) the definition of “Call Protection Amount” is hereby amended and restated in its entirety to read as follows:
“ Call Protection Amount ” means:
(a) in the case of the Initial Term Loans, an amount equal to the applicable percentage set forth in the table below of any payment, refinancing, substitution or replacement of principal of the Initial Loans based on the number of months elapsed since the Second Amendment Effective Date, including any payment made in accordance with Section 3.01, Section 3.04 or Section 10.02(a) (or in the case of an acceleration of any Loans pursuant to Section 10.02(a), the applicable percentage set forth in the table below of the principal amount of the Loans accelerated):
Relevant period (number of months elapsed since the Second Amendment Effective Date) |
Call Protection Amount as a
percentage of the amount so repaid (or accelerated) |
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On or prior to 36 months after the Second Amendment Effective Date |
4.00 | % | ||
After 36 months but on or prior to 48 months after the Second Amendment Effective Date |
2.00 | % |
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and
(b) in the case of the Delayed Draw Loans, an amount equal to the applicable percentage set forth in the table below of any payment, refinancing, substitution or replacement of principal of such Delayed Draw Loans based on the number of months elapsed since the date that the applicable Delayed Draw Loan was funded, including any payment made in accordance with Section 3.01, Section 3.04 or Section 10.02(a) (or in the case of an acceleration of any Loans pursuant to Section 10.02(a), the applicable percentage set forth in the table below of the principal amount of the Loans accelerated):
Relevant period (number of months elapsed since the funding date of applicable Delayed Draw Loan) |
Call Protection Amount as a
percentage of the amount so repaid (or accelerated) |
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On or prior to 36 months after the date of funding of such Delayed Draw Loan |
4.00 | % | ||
After 36 months but on or prior to 48 months after the date of funding of such Delayed Draw Loan |
2.00 | % |
In the case of each of the foregoing clauses (a) and (b), if any acceleration occurs prior to such dates, the applicable Call Protection Amount shall be due and payable, regardless of when any payment is made on the Loans.
(c) Clause (a) of the definition of “Debt” is hereby amended and restated in its entirety to read as follows:
(a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments including, without limitation, all interest, premiums and call protection (if any), yield maintenance amounts (if any), make-whole amounts (if any), fees, indemnities, reimbursement obligations and expenses payable in connection therewith;
(d) the definition of “Existing Notes” is hereby amended and restated in its entirety to read as follows:
“ Existing Notes ” means the 8.000% Senior Notes due 2020 issued by the Borrower outstanding on the Second Amendment Effective Date immediately after giving effect to the issuance of the Second Lien Notes and the transactions contemplated under the Exchange Agreement.
(e) clause (b)(iii) of the definition of “Net Cash Proceeds” is hereby amended to add the words “or the Second Lien Notes or any other Permitted Junior Lien Debt” inside the parenthetical thereof immediately following the words “this Agreement”.
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(f) the definition of “Permitted Acquisition” is hereby amended and restated in its entirety read as follows:
“ Permitted Acquisition ” means any acquisition after the Effective Date by the Borrower or any Guarantor of upstream Oil and Gas Properties if each such acquisition meets all of the following requirements:
(a) no less than five (5) Business Days (or such shorter time as the Administrative Agent may agree in its sole discretion) prior to the proposed closing date of any Material Acquisition, the Borrower shall have delivered a written notice and description of such Material Acquisition to the Administrative Agent, which notice shall include the proposed closing date of such Material Acquisition, together with all material agreements, documents and instruments in respect of such acquisition, including, without limitation, the purchase, sale or transfer agreements therefor, pro forma financial information necessary to determine the Borrower’s and its Subsidiaries’ compliance with the terms of this Agreement after giving effect to such Material Acquisition, and all Security Instruments required by this Agreement; provided that the Borrower shall not be required to provide the foregoing notice and related documents with respect to any De Minimis Acquisition consummated during a De Minimis Acquisition Period;
(b) each applicable Credit Party shall have complied with the requirements of Section 8.14(b);
(c) both before and after giving effect to any Material Acquisition, no Default or Event of Default shall have occurred and be continuing;
(d) both before and after giving effect to any Material Acquisition, the Borrower is in pro forma compliance with Section 9.01 and the PDP Coverage Ratio is equal to or greater than 1.40 to 1.00; provided that the foregoing shall not apply to any De Minimis Acquisition consummated during a De Minimis Acquisition Period;
(e) both before and after giving effect to any Material Acquisition, the Credit Parties shall be in compliance with Section 9.06; and
(f) such acquisition is permitted under the Indenture.
(g) the definition of “Permitted Junior Lien Debt” is hereby amended and restated in its entirety to read as follows:
“ Permitted Junior Lien Debt ” means Debt secured by a Lien junior in priority to the Liens securing the Secured Obligations and satisfies the following conditions: (a) such Debt does not have an interest rate that would cause any non-compliance with Section 9.22; (b) such Debt (or the documents governing such Debt) shall not contain (i) any individual financial maintenance covenant, (ii) an event of default that is more restrictive or onerous with respect to the Borrower and the Subsidiaries than any event of default in this Agreement, unless this Agreement is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become
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outstanding) to include such applicable and more restrictive events of default, (iii) any covenants (other than financial maintenance covenants, which are addressed in clause (i) above) that, taken as a whole, are more onerous or restrictive with respect to the Borrower and the Subsidiaries than the covenants in this Agreement, unless this Agreement is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) to include such applicable and more restrictive or onerous covenants, (iv) restrictions on the ability of the Borrower or any of its Subsidiaries to guarantee the Secured Obligations or to pledge assets as collateral security for the Secured Obligations, or (v) any prohibition on the prior repayment of any Secured Obligations; (c) the Liens securing such Debt are subordinated to the Liens securing the Secured Obligations and such Liens and the terms of such Debt are subject to the Second Lien Intercreditor Agreement and the security documents creating junior liens securing such Debt shall be in the form required by the Intercreditor Agreement (or if requested by the Borrower, such other form reasonably acceptable to the Administrative Agent); (d) at the time of issuing or incurring such Debt (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) (i) no Default has occurred and is then continuing, (ii) no Default would result from the incurrence of such Debt after giving effect to the incurrence of such Debt, and (iii) after giving effect to the issuance or incurrence (or otherwise becoming outstanding) thereof, the Borrower is in pro forma compliance with the financial covenants contained in Section 9.01, (e) the terms of such Debt (or the documents governing such Debt) do not provide for a maturity date or any scheduled principal repayment, mandatory principal redemption or sinking fund obligation in each case prior to the 180th day after the Maturity Date (other than customary offers to purchase upon a change of control, asset sale, or casualty or condemnation event (so long as any such mandatory prepayment or offer to purchase in respect of any asset sale, casualty or condemnation event is made subject to the applicable prepayment provisions set forth in this Agreement) and customary acceleration rights after an event of default), and (f) substantially contemporaneously with the issuance or incurrence (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) of such Debt, the definitions of “Call Protection Amount” and “Yield Maintenance Amount” contained in this Agreement and any related provisions of this Agreement are validly amended to the extent necessary so that the time periods (including the time periods with respect to the Initial Term Loans, which for the avoidance of doubt, shall be amended so that such time periods are deemed to commence on the date that such Permitted Junior Lien Debt is incurred) and percentages contained in the call protection, prepayment premium and yield maintenance provisions applicable to the Loans are no less favorable (from the perspective of the Lenders) than the more favorable (from the perspective of the Lenders) of the time periods and percentages for the call protection, prepayment premium and yield maintenance provisions of such Debt.
(h) the definition of “Permitted Refinancing Debt” is hereby amended and restated in its entirety as follows:
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“ Permitted Refinancing Debt ” means Debt (for purposes of this definition, “new Debt”) incurred in exchange for, or proceeds of which are used to substantially contemporaneously refinance, all of any other Debt (the “Refinanced Debt”); provided that (a) such new Debt is in an aggregate principal amount not in excess of the sum of (i) the aggregate principal amount then outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged or acquired for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount) and (ii) an amount necessary to pay any accrued and unpaid interest thereon and any fees and expenses, including premiums, related to such exchange or refinancing; (b) such new Debt has (i) a stated maturity no earlier than the later of (A) the stated maturity of the Refinanced Debt and (B) the date that is 180 days following the Maturity Date and (ii) an average life no shorter than the average life of the Refinanced Debt; (c) such new Debt does not have an interest rate that would cause any non-compliance with Section 9.22; (d) such new Debt does not contain (i) any individual financial maintenance covenant or any event of default that, in the case of any individual event of default, is more restrictive or onerous with respect to the Borrower and the Subsidiaries than any individual event of default in the Refinanced Debt or this Agreement, or (ii) any covenants (other than financial maintenance covenants) that, taken as a whole, are more onerous or restrictive with respect to the Borrower and the Subsidiaries than the covenants in the Refinanced Debt or this Agreement; (e) if the Refinanced Debt is contractually subordinated to the Secured Obligations, such new Debt (and any guarantees thereof) is subordinated in right of payment to the Secured Obligations (or, if applicable, the Guaranty Agreement) to at least the same extent as the Refinanced Debt and is otherwise subordinated pursuant to an intercreditor agreement reasonably satisfactory to the Administrative Agent; (f) if the Refinanced Debt is unsecured, such new Debt is unsecured; (g) the terms of Permitted Refinancing Debt do not provide for any scheduled principal repayment, mandatory principal redemption or sinking fund obligation prior to the 180th day after the Maturity Date (other than customary offers to purchase upon a change of control, asset sale, or casualty or condemnation event (so long as any such mandatory prepayment or offer to purchase in respect of any asset sale, casualty or condemnation event is made subject to the applicable prepayment provisions set forth in this Agreement) and customary acceleration rights after an event of default); and (h) if the Refinanced Debt is secured, such new Debt shall be either unsecured or secured; provided that to the extent such new Debt is secured, such new Debt shall be subject at all times to the Second Lien Intercreditor Agreement and any security documents creating junior liens securing such new Debt shall be in the form required by the Intercreditor Agreement (or, if requested by the Borrower, such other form reasonably acceptable to the Administrative Agent).
(i) the definition of “Second Lien Intercreditor Agreement” is hereby amended and restated in its entirety as follows:
“ Second Lien Intercreditor Agreement ” means that certain Intercreditor Agreement dated as of May 15, 2018, between the Administrative Agent, as Original Priority Lien Agent (as defined therein) and Wilmington Trust, National Association, as Original Second Lien Agent (as defined therein) and acknowledged by the Borrower and certain of its subsidiaries, as amended, supplemented, amended and restated or otherwise modified and in effect from time to time in accordance with the terms thereof and with this Agreement.
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(j) the definition of “Yield Maintenance Amount” is hereby amended and restated in its entirety to read as follows:
“ Yield Maintenance Amount ” means an amount equal to the sum of:
(a) (i) in the case of the Initial Loans, for any payment, refinancing, substitution or replacement with respect to such Initial Loans, including any payment made in accordance with Section 3.01, Section 3.04 or Section 10.02(a) (it being agreed that, in the case of an acceleration of any Loans pursuant to Section 10.02(a), the principal amount of the Initial Loans accelerated shall be deemed to have been paid on the date of acceleration solely for purposes of calculating the Yield Maintenance Amount) in each case paid or deemed paid prior to the two year anniversary of the Second Amendment Effective Date an amount equal to the difference (which shall not be less than zero) of (A) the aggregate amount of interest (including, without limitation, interest payable in cash, in kind or deferred) which would have otherwise been payable on the amount of the principal repayment from the date of repayment (or deemed repayment in the case of an acceleration of the Loans) or reduction until the two year anniversary of the Second Amendment Effective Date, minus (B) the aggregate amount of interest Lenders would earn if the repaid (or deemed repaid in the case of an acceleration of the Loans) or reduced principal amount were reinvested for the period from the date of prepayment (or deemed prepayment in the case of an acceleration of the Loans) or reduction until the two year anniversary of the Second Amendment Effective Date at the Treasury Rate,
plus
(ii) in the case of any Delayed Draw Loan, for any payment, refinancing, substitution or replacement with respect to such Delayed Draw Loans, including any payment made in accordance with Section 3.01, Section 3.04 or Section 10.02(a) (it being agreed that, in the case of an acceleration of any Loans pursuant to Section 10.02(a), the principal amount of the Loans accelerated shall be deemed to have been paid on the date of acceleration solely for purposes of calculating the Yield Maintenance Amount) in each case paid or deemed paid prior to the two year anniversary of the funding date of the applicable Delayed Draw Loan, an amount equal to the difference (which shall not be less than zero) of (A) the aggregate amount of interest (including, without limitation, interest payable in cash, in kind or deferred) which would have otherwise been payable on the amount of the principal repayment from the date of repayment (or deemed repayment in the case of an acceleration of the Loans) or reduction until the two year anniversary of the funding date of the applicable Delayed Draw Loan, minus (B) the aggregate amount of interest Lenders would earn if the repaid (or deemed repaid in the case of an acceleration of the Loans) or reduced principal amount were reinvested for the period from the date of prepayment (or deemed prepayment in the case of an acceleration of the Loans) or reduction until the two year anniversary of the funding date of the applicable Delayed Draw Loan at the Treasury Rate,
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plus
(b) solely to the extent that the Loans are refinanced in full prior to the date that is 18 months following the Effective Date, an amount equal to the present value (discounted at the Treasury Rate) of the fee that would have accrued under Section 3.05(a) on the undrawn Delayed Draw Commitments (without giving effect to any optional termination or reduction of the Delayed Draw Commitments pursuant to Section 2.06(b)) through the earlier of (i) the date that is one year following the date of such refinancing and (ii) the date that is 18 months following the Effective Date.
Notwithstanding the foregoing, to the extent the Yield Maintenance Amount becomes due and payable as a result of the occurrence of an Event of Default or acceleration of the Loans, the interest rate to be used in calculating the Yield Maintenance Amount pursuant to clause (a)(i) of the preceding sentence shall be the interest rate set forth in Section 3.02(b). The term “ Treasury Rate ” shall mean a rate per annum (computed on the basis of actual days elapsed over a year of 360 days) equal to the rate determined by Administrative Agent on the date three (3) Business Days prior to the date of repayment (or deemed repayment), to be the yield expressed as a rate listed in The Wall Street Journal for United States Treasury securities having a term of no greater than the period for the remaining months until, in the case of the Initial Term Loans, the two year anniversary of the Second Amendment Effective Date and, in the case of Delayed Draw Loans, the two year anniversary of the funding date of the applicable Delayed Draw Loan.
(k) the following new defined terms are added in the correct alphabetical order as follows:
“ De Minimis Acquisition ” means any Material Acquisition (whether in an individual transaction or a series of related transactions) by the Borrower or its Subsidiaries of Property for which (a) the consideration for such acquisition is less than $2,500,000 and (b) the aggregate consideration of all such acquisitions during the De Minimis Acquisition Period in which such acquisition is consummated does not exceed $20,000,000.
“ De Minimis Acquisition Period ” means any period between the Borrower’s delivery of two successive compliance certificates pursuant to Section 8.01(c) if the most recent compliance certificate delivered by the Borrower pursuant to Section 8.01(c) demonstrates that the PDP Coverage Ratio as of the last day of the fiscal period covered by such compliance certificate was equal to or greater than 1.60 to 1.00.
“ Exchange Agreement ” means the Exchange Agreement dated as of January 31, 2018, by and among the Borrower and the Participating Holders (as defined therein) as amended prior to and as in effect on the Second Amendment Effective Date.
“ Indenture ” means that certain Indenture, dated as of May 15, 2018 between the Borrower and Wilmington Trust, National Association, as may be amended, amended and restated, restated, supplemented, refinanced, replaced, extended or otherwise modified in accordance with the terms thereof and the terms of this Agreement and the Second Lien Intercreditor Agreement.
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“ Mortgage Threshold EBITDAX ” means, as of any date of determination, the sum of Consolidated Net Income for the most recently ended four fiscal quarters (including any such quarter ending on such date of determination) plus the following expenses or charges to the extent deducted from Consolidated Net Income in such four fiscal quarter period: (a) Interest Expense, (b) income Taxes, (c) depreciation, (d) depletion, (e) amortization, (f) one-time transaction fees and expenses paid or accrued in connection with debt financings, capital raising transactions, acquisitions and dispositions in an aggregate amount for this clause (f) not to exceed $5,000,000 in any four fiscal quarter period, (g) exploration expenses, (h) pro forma “run rate” cost savings, operating expense reductions and synergies related to mergers and other business combinations, acquisitions, divestitures, dispositions, discontinuance of activities or operations and other specified transactions, restructurings, cost savings initiatives, operational changes and other initiatives or specified transactions that are reasonably identifiable and factually supportable and projected by the Borrower in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) within 12 months thereafter (including any actions taken on or prior to the Second Amendment Effective Date) in an amount not to exceed 10% of Mortgage Threshold EBITDAX for such four fiscal quarter period calculated before giving effect to this clause (h), but, in any case, only, to the extent reasonably acceptable to the Administrative Agent, and (i) other non-cash charges (including non-cash expenses associated with the granting of stock-based compensation to employees and directors of the Borrower or its Subsidiaries, non-recurring non-cash losses (or minus any gains), non-cash mark to market losses (or minus any gains), and non-cash impairments or accounting adjustments with respect to any disposition of assets permitted hereby), minus all non-cash income added to Consolidated Net Income minus all gains (whether cash or non-cash) from asset dispositions (other than Hydrocarbons produced in the ordinary course of business) and Liquidations of Swap Agreements (in each case to the extent included in Consolidated Net Income during the applicable period); provided that if the Borrower or any Consolidated Subsidiary shall make a Material Acquisition or Material Divestiture during such period, then Consolidated Net Income shall be calculated after giving pro forma effect to such Material Acquisition or Material Divestiture, as if such Material Acquisition or Material Divestiture had occurred on the first day of such period, with such pro forma calculations being reasonably acceptable to the Administrative Agent (but excluding, for the avoidance of doubt and in all cases, any adjustments on account of pro forma cost savings, synergies or similar items, except as provided in clause (h) above).
“ Second Amendment Effective Date ” means May 15, 2018.
“ Second Lien Notes ” means, the 8.50% Senior Secured Second Lien Notes due 2023 issued by the Borrower pursuant to the Indenture, as may be amended, amended and restated, restated, supplemented, refinanced, replaced, extended or otherwise modified in accordance with the terms thereof and the terms of this Agreement and the Second Lien Intercreditor Agreement.
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“ Total Debt ” means, at any date, the sum of all Debt of the Borrower and its Subsidiaries on such date.
“ Weighted Yield ” shall mean as to any Permitted Junior Lien Debt (including the Second Lien Notes and any Permitted Refinancing Debt in respect thereof), the weighted yield to maturity thereof based on interest rate margin, original issue discount or fees (in each case amortized over the life of such indebtedness), interest rate floors or other similar component of yield, in each case, incurred or payable by the borrower of such indebtedness, and excluding, for the avoidance of doubt, (a) any changes in yield due to (i) changes in the underlying reference rate (such as LIBOR or the prime rate), (ii) application of any default rate that is less than or equal to 3.00% per annum or (iii) the imposition of a paid in-kind rate of interest that is less than or equal to 1.00% per annum, (b) premiums and call protection amounts, (c) make-whole amounts and yield maintenance amounts and (d) customary annual agency fees (regardless of whether any of the foregoing amounts are paid to, or shared with, in whole or in part, any lender).
2.2 Section 8.01(f) of the Credit Agreement is hereby amended and restated in its entirety as follows:
(f) Certificate of Insurer – Insurance Coverage . Concurrently with any delivery of financial statements under Section 8.01(a) , (i) a certificate of insurance coverage from each insurer or one or more insurance agencies with respect to the insurance required by Section 8.07 , in form and substance reasonably satisfactory to the Administrative Agent, (ii) if requested by the Administrative Agent, copies of the applicable policies and (iii) a certificate of a Responsible Officer certifying the Borrower’s compliance with Section 8.07 .
2.3 Section 8.01 of the Credit Agreement is hereby amended by adding the following as the new clause (x) immediately following clause (w):
(w) De Minimis Acquisitions . Concurrently with any delivery of financial statements under Section 8.01(a) or (b) , a certificate of a Responsible Officer (i) setting forth each De Minimis Acquisition consummated during the immediately preceding fiscal quarter (including the material terms of each such De Minimis Acquisition), and (ii) attaching thereto all material agreements, documents and instruments in respect of each such De Minimis Acquisition, including, without limitation, the purchase, sale or transfer agreements therefor to the extent available.
2.4 Section 8.14(a) of the Credit Agreement is hereby amended to replace each reference to “90%” with a reference to “95%”.
2.5 Section 8.14(f) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
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(f) Notwithstanding the foregoing provisions of Section 8.14,
(i) during the period commencing on the Second Amendment Effective Date and ending on the date that is ninety (90) days following the Second Amendment Effective Date (or such later date as the Administrative Agent may agree in its sole discretion) (such period, the “ Post-Closing Mortgage Period ”), the Mortgaged Properties shall only be required to include (A) (1) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Developed Producing Reserves evaluated in the Initial Reserve Report and (2) Oil and Gas Properties constituting Proved Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in the most recently delivered Reserve Report, (B) substantially all of the Credit Parties’ Oil and Gas Properties not constituting Proved Reserves to the extent that such Oil and Gas Properties are located in counties in which filings have been made, or are required to be made, to satisfy clause (A) herein and (C) substantially all midstream assets and any infrastructure or related Oil and Gas Property; provided that on or prior to the expiration of the Post-Closing Mortgage Period, the Borrower shall, and shall cause its Subsidiaries to, deliver supplemental mortgages (including mortgages covering leasehold interests in wellbores owned by the Credit Parties as of the Second Amendment Effective Date that were not previously mortgaged on the Second Amendment Effective Date) so that the Mortgaged Property includes (x) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Developed Producing Reserves evaluated in such Reserve Report and (y) Oil and Gas Properties constituting Proved Reserves representing at least 95% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in such Reserve Report; and
(ii) during such periods in which the Borrower maintains a Total Debt to Mortgage Threshold EBITDAX ratio of less than 3.00 to 1.00, measured as of the last day of the four fiscal quarter period most recently ended for which financial statements are available, the Mortgaged Properties shall only be required to include (1) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Developed Producing Reserves evaluated in the most recently delivered Reserve Report, (2) Oil and Gas Properties constituting Proved Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in the most recently delivered Reserve Report, (3) substantially all of the Credit Parties’ Oil and Gas Properties not constituting Proved Reserves and (4) substantially all midstream assets and any infrastructure or related Oil and Gas Property.
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2.6 Section 8.18 of the Credit Agreement is hereby amended and restated in its entirety as follows:
Section 8.18 Acquisition of Oil and Gas Properties – Mortgage Coverage . In connection with any Material Acquisition (other than a De Minimis Acquisition consummated during any De Minimis Acquisition Period), the Borrower shall, and shall cause its Subsidiaries to, grant within 30 days of such acquisition of such Oil and Gas Properties by the Borrower or such Subsidiary, to the Collateral Agent as security for the Secured Obligations a first-priority Lien (provided that Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof may exist, but subject to the provisos at the end of such definition) on (i) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 95% of the total present value (using a 10% discount rate) of all Proved Developed Producing Reserves acquired, (ii) Oil and Gas Properties constituting Proved Reserves representing at least 95% of the total present value (using a 10% discount rate) of all Proved Reserves acquired, (iii) substantially all of the Oil and Gas Properties not constituting Proved Reserves acquired, and (iv) substantially all midstream assets and any infrastructure or related Oil and Gas Property acquired. All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent and the Borrower and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes. In order to comply with the foregoing, if any Subsidiary places a Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with Section 8.14(b) .
2.7 The last sentence of Section 8.20 of the Credit Agreement is hereby amended and restated in its entirety as follows:
Borrower’s compliance with the requirements of this Section 8.20 shall be measured as of (i) the fifth Business Day following the Effective Date, (ii) the forty-fifth day following the Effective Date, and (iii) thereafter, the last day of each fiscal quarter, in each case using the most recently delivered Reserve Report (including the Initial Reserve Report); provided that compliance shall also be measured on the date that is the fifth Business Day following the Second Amendment Effective Date.
2.8 Section 9.03 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (g), and by replacing clause (h) thereof with the new clauses (h) and (i) set forth below:
(h) customary liens in favor of a trustee (in such trustee’s capacity as such and not in its capacity as collateral agent or collateral trustee) pursuant to an indenture relating to any Debt permitted by this Agreement to the extent such Liens (i) only secure customary compensation, reimbursement and indemnification obligations owing to such trustee (in
Page 12
such trustee’s capacity as such and not in its capacity as collateral agent or collateral trustee), (ii) are limited to the money or property held by such trustee (in such trustee’s capacity as such and not in its capacity as collateral agent or collateral trustee) (excluding money or property held in trust for the payment of such Debt) and (iii) do not secure Debt for borrowed money; provided that no intention to subordinate the first priority Lien granted in favor of the Collateral Agent and the Lenders is to be hereby implied or expressed by the permitted existence of such Lien; and
(i) Liens on Property not otherwise permitted by the foregoing clauses of this Section 9.03; provided that (i) such Liens do not secure Debt for borrowed money and (ii) the aggregate amount of all Debt secured by Liens permitted by this Section 9.03(i) shall not exceed $2,000,000 at any time.
2.9 Section 9.04(a)(iv) is hereby amended by adding a new clause (E) at the end thereof that reads “and (E) such Restricted Payment is permitted to be made under the Indenture”.
2.10 Section 9.04(b)(i)(A) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(A) prepay, repay or Redeem the Existing Notes (1) with the proceeds of any Permitted Refinancing Debt in respect thereof, or (2) so long as (w) the PDP Coverage Ratio is equal to or greater than 1.50 to 1.00 and the Total Debt to Mortgage Threshold EBITDAX ratio measured as of the most recently ended fiscal quarter for which financial statements are available is less than 3.00 to 1.00, in each case as measured immediately prior to and after giving pro forma effect to such prepayment, repayment, or Redemption and to the other transactions to occur on such date (and the Borrower has delivered the certificate required by Section 8.01(w) certifying to such pro forma compliance and attaching calculations demonstrating such pro forma compliance), (x) the aggregate cash consideration paid by the Credit Parties in respect of such Redemptions during the term of this Agreement does not exceed $75,000,000, (y) no Default or Event of Default shall exist at the time of such Redemption or result therefrom and (z) concurrently with any such prepayment, repayment or Redemption, the Borrower shall deliver a certificate executed by its Chief Financial Officer certifying that, after giving effect to such prepayment, repayment or Redemption, the representation and warranty contained in Section 7.22 is true and correct in all respects as of such date;
2.11 Section 9.04(b)(ii) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(ii) amend, modify, waive or otherwise change, consent or agree to any amendment, modification, waiver or other change to, any of the terms of or documents governing the Existing Notes, any Permitted Junior Lien Debt (including the Second Lien Notes) or any Permitted Refinancing Debt in respect of any of the foregoing if:
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(A) in the case of the Existing Notes or any Permitted Junior Lien Debt and any Permitted Refinancing Debt in respect of either of the foregoing, the effect thereof would be to (i) shorten its maturity or average life, (ii) except in the case of the Second Lien Notes, increase the amount of any payment of principal thereof or premium or fee (other than a consent, amendment or similar fee in an aggregate amount for all such fees during the term of this Agreement not to exceed 1.00% of the outstanding principal amount of the Existing Notes, any Permitted Junior Lien Debt (other than the Second Lien Notes) or any Permitted Refinancing Debt being amended, modified or otherwise changed or any fee owed to the Existing Notes trustee) with respect thereto, (iii) except in the case of the Second Lien Notes, increase the rate or shorten any period for payment of interest thereon or (iv) cause such Permitted Junior Lien Debt or Permitted Refinancing Debt in respect thereof to no longer satisfy the requirements of the definitions of Permitted Junior Lien Debt or Permitted Refinancing Debt, as applicable; or
(B) in the case of the Second Lien Notes and any Permitted Refinancing Debt in respect thereof, the effect thereof would be to (i) modify or add any covenant or event of default that would prohibit one or more Credit Parties from making any payment in respect of the Secured Obligations, (ii) shorten the final maturity or weighted average life to maturity of the Second Lien Notes or any Permitted Refinancing Debt in respect thereof, (iii) add any additional Property as collateral for the Second Lien Notes or Permitted Refinancing Debt in respect thereof unless such Property is added as collateral for the Secured Obligations or the Secured Parties decline to take such collateral, (iv) provide for any Person to issue a guarantee or be required to issue a guarantee unless such Person guarantees the Secured Obligations or the Secured Parties decline to take such guarantee, (v) add or provide for any increase in, or shorten the period for payment of, any mandatory prepayment or redemption provisions or shorten the period for reinvestment of any net cash proceeds (other than change of control or asset sale tender offer provisions substantially similar to those applicable under the Indenture, as in effect on the Second Amendment Effective Date, or otherwise customary in the market at the time of such amendment, exchange or refinancing), (vi) result in the Weighted Yield applicable to the Second Lien Notes increasing by more than 250 basis points above the Weighted Yield applicable to the Second Lien Notes on the issue date thereof, (vii) modify the amounts of or time periods applicable to any make-whole amounts, yield maintenance amounts, premium or call protection applicable to the Second Lien Notes unless this Agreement is amended at such time to provide equivalent or better terms (from the perspective of the Secured Parties), (viii) amend or otherwise modify any “Default” or “Event of Default” or covenants thereunder in a manner that is more onerous or restrictive to any Credit Party unless this Agreement is amended at such time to provide equivalent or better terms (from the perspective of the Secured Parties), (ix) amend or otherwise modify Section 6.01(g)(ii) of the Indenture (or any corresponding provision in any document governing Permitted Refinancing Debt of the Second Lien Notes) in a manner that would shorten or eliminate the grace period provided for in such section, (x) adversely affect the lien priority rights of the Secured Parties, (xi) result in the aggregate principal amount of all Permitted Junior Lien Debt (including the Second Lien Notes and Permitted Refinancing Debt in respect thereof) being greater than $500,000,000 or (xii) contravene the provisions of the Second Lien Intercreditor; or
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(C) other than in the case of the Second Lien Notes and the Indenture, such amendment, modification, waiver, change or consent would adversely affect the Lenders; or
(D) in the case of Permitted Junior Lien Debt or any Permitted Refinancing Debt in respect thereof, such amendment, modification, waiver, change or consent is prohibited under the terms of the Second Lien Intercreditor Agreement;
provided that the foregoing shall not prohibit the execution of other indentures or agreements in connection with the issuance of Permitted Refinancing Debt or the execution of supplemental indentures to add guarantors provided such Person complies with Section 8.14(b) and Section 8.14(c) .
2.12 Section 9.05(e) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(e) Permitted Acquisitions, provided that, to the extent required by the definition of “Permitted Acquisition”, the Borrower shall deliver concurrently with the consummation of any Permitted Acquisition the certificate required by Section 8.01(w) certifying to pro forma compliance with Section 9.01 and that the PDP Coverage Ratio is greater than or equal to 1.40 to 1.00 and attaching calculations demonstrating such compliance;
2.13 Section 10.01(g) of the Credit Agreement is hereby amended and restated in its entirety as follows:
(g) any event or condition occurs that results in (i) any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require the Borrower or any Subsidiary to make an offer in respect thereof or (ii) an “Event of Default” under the Indenture.
Section 3. Reincorporation . The Administrative Agent acknowledges that it received sufficient notice in satisfaction of Section 8.01(m) of the Credit Agreement and Section 5.05 of the Guaranty Agreement as to the Reincorporation. The Administrative Agent and the Lenders hereby confirm that the Reincorporation did not violate Section 9.21 of the Credit Agreement. The Borrower hereby confirms that it authorized the Administrative Agent to file one or more financing statements, and amendments thereto to perfect, protect or preserve the Liens created under the Credit Agreement (included as amended hereby) and the Security Instruments.
Section 4. Conditions Precedent . The effectiveness of this Second Amendment is subject to the following:
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4.1 The Administrative Agent shall have received counterparts (in such number as may be requested by the Administrative Agent) of this Second Amendment from the Borrower and each Lender.
4.2 The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower setting forth (1) resolutions of its board of directors or other appropriate governing body with respect to the authorization of the Borrower to execute, deliver and perform under the Transactions, this Second Amendment and the documents being authorized, executed and/or delivered in connection herewith and therewith and to enter into the transactions contemplated in those documents, (2) the officers of the Borrower (a) who are authorized to sign the Loan Documents to which the Borrower is a party and (b) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Second Amendment and the transactions contemplated hereby and specimen signatures of such authorized officers (or certifying that there has been no change to such authorized officers since the date of the Officer’s Certificate of the Borrower delivered to the Administrative Agent on November 1, 2017 (the “ Prior Officer’s Certificate ”)), (3) the Organizational Documents of the Borrower as in effect immediately after giving effect to the Reincorporation, certified as being true and complete and (4) a customary certificate reasonably satisfactory to the Administrative Agent of the appropriate State agencies where the Borrower is formed or incorporated. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.
4.3 The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (a) attaching true and correct executed copies of the Indenture and all other material documents executed by the Credit Parties in connection with the incurrence of the Second Lien Notes and (b) certifying that (i) the Transactions have been consummated in accordance with the terms of that certain Exchange Agreement, dated as of January 31, 2018, by and among the Borrower and the noteholders party thereto, as amended by the First Amendment to Exchange Agreement, dated as of March 20, 2018, and the Second Amendment to Exchange Agreement, dated as of April 2, 2018 and (ii) after giving effect to the Transactions and the effectiveness of this Second Amendment, the aggregate outstanding principal amount of the Existing Notes will be less than or equal to $203,317,000 and the amount of the Second Lien Notes will not exceed $344,279,000.
4.4 The Administrative Agent shall have received from each party thereto duly authorized and/or executed counterparts (in such number as may be requested by the Administrative Agent) of the Intercreditor Agreement.
4.5 The Administrative Agent shall be reasonably satisfied that (i) the Second Lien Security Documents (including all real property exhibits thereto) creating Liens on the Collateral are in all material respects the same forms of documents as the respective Security Instruments and (ii) upon the filing of any additional mortgages (including amendments and/or supplements to any previously filed mortgages) delivered by the Borrower to the Administrative Agent on the Second Amendment Effective Date and the filing of a UCC-1 financing statement with the Delaware Secretary of State, the Security Instruments create first priority, perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d) and (f) of the definition thereof,
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but subject to the provisos at the end of such definition) on (a) (1) Oil and Gas Properties constituting Proved Developed Producing Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report (which shall be the Reserve Report dated December 31, 2017) of all Proved Developed Producing Reserves evaluated in the most recently delivered Reserve Report and (2) Oil and Gas Properties constituting Proved Reserves representing at least 90% of the total present value (using a 10% discount rate and as such value is set forth in the most recently delivered Reserve Report) of all Proved Reserves evaluated in the most recently delivered Reserve Report, (b) substantially all of the Credit Parties’ Oil and Gas Properties not constituting Proved Reserves to the extent that such Oil and Gas Properties are located in counties in which filings have been made, or are required to be made, to satisfy clause (a) herein, (c) substantially all midstream assets and any infrastructure or related Oil and Gas Property and (d) the other Mortgaged Property purported to be pledged under the Security Instruments.
4.6 The Administrative Agent shall have received an opinion of (i) Jones Day, special counsel to the Borrower, (ii) Browning Kaleczyc Berry & Hoven, P.C., local Montana counsel to the Borrower and (iii) Fredrikson & Byron, P.A., local North Dakota counsel to the Borrower, in each case, in form and substance acceptable to the Administrative Agent and its counsel.
4.7 No Default or Event of Default shall have occurred and be continuing as of the date hereof both immediately prior to and after giving effect to the terms of this Second Amendment.
4.8 The Borrower shall have submitted a Borrowing Request for a Delayed Draw Loan in accordance with Section 2.03(b) of the Credit Agreement ( provided that the Administrative Agent and the Lenders hereby waive the five Business Day requirement with respect to such Borrowing Request) in a principal amount of not less than $60,000,000, which shall have been drawn prior to, or substantially contemporaneous with, the Second Amendment Effective Date.
4.9 The Administrative Agent and the Lenders shall have received all commitment, amendment, upfront and agency fees and all other fees, expenses and amounts due and payable on or prior to the Second Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder (including the fees and expenses of Vinson & Elkins L.L.P., counsel to the Administrative Agent).
The Administrative Agent is hereby authorized and directed to declare this Second Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted hereby. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement and Amended Credit Agreement for all purposes.
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Section 5. Miscellaneous .
5.1 Confirmation and Effect . The provisions of the Credit Agreement shall remain in full force and effect in accordance with its terms following the Second Amendment Effective Date, and this Second Amendment shall not constitute a waiver of any provision of the Credit Agreement or any other Loan Document, except as expressly provided for herein. Each reference in the Amended Credit Agreement to “this Agreement”, “hereunder”, “hereof’, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.
5.2 No Waiver . Neither the execution by the Administrative Agent or the Lenders of this Second Amendment, nor any other act or omission by the Administrative Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the Lenders of any Defaults or Events of Default which may exist, which may have occurred prior to the date of the effectiveness of this Second Amendment or which may occur in the future under the Amended Credit Agreement and/or the other Loan Documents. Similarly, nothing contained in this Second Amendment shall directly or indirectly in any way whatsoever either: (a) impair, prejudice or otherwise adversely affect the Administrative Agent’s or the Lenders’ right at any time to exercise any right, privilege or remedy in connection with the Loan Documents with respect to any Default or Event of Default, (b) except as expressly provided herein, amend or alter any provision of the Credit Agreement, the other Loan Documents, or any other contract or instrument, or (c) constitute any course of dealing or other basis for altering any obligation of the Borrower or any right, privilege or remedy of the Administrative Agent or the Lenders under the Amended Credit Agreement, the other Loan Documents, or any other contract or instrument.
5.3 Ratification and Affirmation of Credit Parties . The Borrower hereby expressly (i) acknowledges the terms of this Second Amendment, (ii) ratifies and affirms its obligations under the Guaranty Agreement, the Swap Intercreditor Agreement and the other Security Instruments and Loan Documents to which it is a party, (iii) acknowledges, renews and extends its continued liability under the Guaranty Agreement, the Swap Intercreditor Agreement and the other Security Instruments and Loan Documents to which it is a party, (iv) agrees that its guarantee and pledge of collateral under the Guaranty Agreement and the other Security Instruments and Loan Documents to which it is a party remain in full force and effect with respect to the Indebtedness as amended hereby, (v) represents and warrants to the Lenders and the Administrative Agent that each representation and warranty of such Person contained in the Amended Credit Agreement and the other Loan Documents to which it is a party is true and correct in all material respects as of the date hereof and after giving effect to this Second Amendment except (A) to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties shall continue to be true and correct as of such specified earlier date, and (B) to the extent that any such representation and warranty is expressly qualified by materiality, Material Adverse Effect or a similar qualification, such representations and warranties shall be true and correct in all respects, (vi) represents and warrants to the Lenders and the Administrative Agent that the execution, delivery and/or performance by such Person of this Second Amendment and each other Security Instrument and Loan Document being are within such Person’s corporate, limited partnership or limited liability company powers (as applicable), have been duly authorized by all necessary action and that this Second Amendment constitutes the valid and binding obligation of such Person enforceable in accordance with its terms, subject to applicable
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bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, and (vii) represents and warrants to the Lenders and the Administrative Agent that, after giving effect to this Second Amendment, no Default or Event of Default exists.
5.4 Counterparts . This Second Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Second Amendment by facsimile or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed counterpart of this Second Amendment.
5.5 No Oral Agreement . T HIS WRITTEN S ECOND A MENDMENT , THE A MENDED C REDIT A GREEMENT AND THE OTHER L OAN D OCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR , CONTEMPORANEOUS , OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES . T HERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES .
5.6 Governing Law . T HIS S ECOND A MENDMENT SHALL BE GOVERNED BY , AND CONSTRUED IN ACCORDANCE WITH , THE LAWS OF THE S TATE OF N EW Y ORK .
5.7 Payment of Expenses . The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket costs and expenses incurred in connection with this Second Amendment in accordance with Section 12.03 of the Credit Agreement.
5.8 Severability . Any provision of this Second Amendment or any other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
5.9 Successors and Assigns . This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (in each case, as permitted by Section 12.04 of the Credit Agreement).
5.10 Loan Document . This Second Amendment shall constitute a “Loan Document” under and as defined in Section 1.02 of the Amended Credit Agreement.
[Signature Pages Follow]
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The parties hereto have caused this Second Amendment to be duly executed as of the day and year first above written.
BORROWER: | NORTHERN OIL AND GAS, INC., | |||||
a Delaware corporation | ||||||
By: |
/s/ Brandon Elliott |
|||||
Name: Brandon Elliott | ||||||
Title: Interim President |
S IGNATURE P AGE TO S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT
N ORTHERN O IL AND G AS , I NC .
TPG SPECIALTY LENDING, INC. as Administrative Agent and a Lender |
||
By: |
/s/ Joshua W. Easterly |
|
Name: | Joshua W. Easterly | |
Title: | CEO |
S IGNATURE P AGE TO S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT
N ORTHERN O IL AND G AS , I NC .
TAO TALENTS, LLC as a Lender |
||
By: |
/s/ Steven Pluss |
|
Name: | Steven Pluss | |
Title: | Vice President |
S IGNATURE P AGE TO S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT
N ORTHERN O IL AND G AS , I NC .
TOP III TALENTS, LLC as a Lender |
||
By: |
/s/ Steven Pluss |
|
Name: | Steven Pluss | |
Title: | Vice President |
S IGNATURE P AGE TO S ECOND A MENDMENT TO T ERM L OAN C REDIT A GREEMENT
N ORTHERN O IL AND G AS , I NC .
Exhibit A
INTERCREDITOR AGREEMENT
dated as of May 15, 2018 between
TPG Specialty Lending, Inc.,
as Original Priority Lien Agent,
and
Wilmington Trust, National Association,
as Original Second Lien Agent
and Acknowledged and Agreed by
Northern Oil and Gas, Inc. and certain of its subsidiaries from time to time party hereto
THIS IS THE SECOND LIEN INTERCREDITOR AGREEMENT OR INTERCREDITOR AGREEMENT, AS APPLICABLE, REFERRED TO IN (A) THE INDENTURE DATED AS OF MAY 15, 2018, AMONG NORTHERN OIL AND GAS, INC., CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY THERETO, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, (B) THE TERM LOAN CREDIT AGREEMENT DATED AS OF NOVEMBER 1, 2017 AS HERETOFORE OR HEREAFTER AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG NORTHERN OIL AND GAS, INC., THE LENDERS PARTY THERETO FROM TIME TO TIME AND TPG SPECIALTY LENDING, INC., AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT, (C) THE OTHER NOTE DOCUMENTS REFERRED TO IN SUCH INDENTURE AND (D) THE OTHER LOAN DOCUMENTS REFERRED TO IN SUCH TERM LOAN CREDIT AGREEMENT.
TABLE OF CONTENTS
PAGE | ||||||
ARTICLE I | ||||||
DEFINITIONS | ||||||
Section 1.01 |
Construction; Certain Defined Terms |
1 | ||||
ARTICLE II | ||||||
LIEN PRIORITIES | ||||||
Section 2.01 |
Relative Priorities |
16 | ||||
Section 2.02 |
Prohibition on Marshalling, Etc. |
17 | ||||
Section 2.03 |
No New Liens |
17 | ||||
Section 2.04 |
Similar Collateral and Agreements |
18 | ||||
Section 2.05 |
No Duties of Priority Lien Agent |
19 | ||||
Section 2.06 |
No Duties of Second Lien Agent |
19 | ||||
ARTICLE III | ||||||
ENFORCEMENT RIGHTS; PURCHASE OPTION | ||||||
Section 3.01 |
Limitation on Enforcement Action |
20 | ||||
Section 3.02 |
Standstill Periods; Permitted Enforcement Action |
22 | ||||
Section 3.03 |
Insurance |
24 | ||||
Section 3.04 |
Notification of Release of Collateral |
25 | ||||
Section 3.05 |
No Interference; Payment Over |
26 | ||||
Section 3.06 |
Purchase Option |
29 | ||||
ARTICLE IV | ||||||
OTHER AGREEMENTS | ||||||
Section 4.01 |
Release of Liens; Automatic Release of Second Liens and Third Liens |
31 | ||||
Section 4.02 |
Certain Agreements with Respect to Insolvency or Liquidation Proceedings |
33 | ||||
Section 4.03 |
Reinstatement |
42 | ||||
Section 4.04 |
Refinancings; Initial Third Lien Debt; Additional Third Lien Debt |
43 | ||||
Section 4.05 |
Amendments to Priority Lien Documents, Second Lien Documents and Third Lien Documents |
45 | ||||
Section 4.06 |
Legends |
47 | ||||
Section 4.07 |
Second Lien Secured Parties and Third Lien Secured Parties Rights as Unsecured Creditors; Judgment Lien Creditor |
47 | ||||
Section 4.08 |
Postponement of Subrogation |
47 | ||||
Section 4.09 |
Acknowledgment by the Secured Debt Representatives |
48 | ||||
ARTICLE V | ||||||
GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS | ||||||
Section 5.01 |
General |
48 | ||||
Section 5.02 |
Accounts |
49 |
i
ARTICLE VI | ||||||
APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS | ||||||
Section 6.01 |
Application of Proceeds |
50 | ||||
Section 6.02 |
Determination of Amounts |
51 | ||||
ARTICLE VII | ||||||
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE; | ||||||
CONSENT OF GRANTORS, ETC. | ||||||
Section 7.01 |
No Reliance; Information |
51 | ||||
Section 7.02 |
No Warranties or Liability |
51 | ||||
Section 7.03 |
Obligations Absolute |
53 | ||||
Section 7.04 |
Grantors Consent |
53 | ||||
ARTICLE VIII | ||||||
REPRESENTATIONS AND WARRANTIES | ||||||
Section 8.01 |
Representations and Warranties of Each Party |
53 | ||||
Section 8.02 |
Representations and Warranties of Each Representative |
54 | ||||
ARTICLE IX | ||||||
MISCELLANEOUS | ||||||
Section 9.01 |
Notices |
54 | ||||
Section 9.02 |
Waivers; Amendment |
54 | ||||
Section 9.03 |
Actions Upon Breach; Specific Performance |
55 | ||||
Section 9.04 |
Parties in Interest |
56 | ||||
Section 9.05 |
Survival of Agreement |
56 | ||||
Section 9.06 |
Counterparts |
56 | ||||
Section 9.07 |
Severability |
56 | ||||
Section 9.08 |
Governing Law; Jurisdiction; Consent to Service of Process |
56 | ||||
Section 9.09 |
WAIVER OF JURY TRIAL |
57 | ||||
Section 9.10 |
Headings |
57 | ||||
Section 9.11 |
Conflicts |
57 | ||||
Section 9.12 |
Provisions Solely to Define Relative Rights |
57 | ||||
Section 9.13 |
Certain Terms Concerning the Second Lien Agent and the Third Lien Collateral Trustee |
58 | ||||
Section 9.14 |
Certain Terms Concerning the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee |
58 | ||||
Section 9.15 |
Authorization of Secured Agents |
58 | ||||
Section 9.16 |
Further Assurances |
59 | ||||
Section 9.17 |
Relationship of Secured Parties |
59 | ||||
Section 9.18 |
Third Lien Provisions |
59 |
Annex and Exhibits
Annex I | Legends | |||
Exhibit A | Form of Priority Confirmation Joinder | |||
Exhibit B | Security Documents |
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INTERCREDITOR AGREEMENT , dated as of May 15, 2018 (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof, this “ Agreement ”), between TPG S PECIALTY L ENDING , I NC ., as administrative agent and collateral agent for the Priority Lien Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “ Original Priority Lien Agent ”), and W ILMINGTON T RUST , N ATIONAL A SSOCIATION , solely in its capacity as collateral agent for the Second Lien Secured Parties referred to herein (in such capacity, and together with its successors in such capacity, the “ Original Second Lien Agent ”) and acknowledged and agreed by N ORTHERN O IL AND G AS , I NC ., a Delaware corporation (together with its successors and assigns, “ NOG ”) and certain of its subsidiaries.
Reference is made to (a) the Priority Lien Credit Agreement (defined below) and (b) the Second Lien Indenture (defined below) governing the Second Lien Indenture Notes (defined below).
From time to time following the date hereof, NOG may incur Initial Third Lien Obligations and Additional Third Lien Obligations (each as defined below) to the extent, if any, permitted by the Secured Debt Documents, and (a) in connection with the Initial Third Lien Obligations, NOG and certain of its subsidiaries, the Third Lien Representative (defined below) and the Third Lien Collateral Trustee (defined below) shall, concurrently with the incurrence of such Initial Third Lien Obligations, enter into a Third Lien Collateral Trust Agreement (defined below) and (b) in connection with any Additional Third Lien Obligations, the applicable Third Lien Representative (defined below) and the Third Lien Collateral Trustee shall, concurrently with the incurrence of such Additional Third Lien Obligations, enter into a joinder to the Third Lien Collateral Trust Agreement.
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Original Priority Lien Agent (for itself and on behalf of the Priority Lien Secured Parties) and the Original Second Lien Agent (for itself and on behalf of the Second Lien Secured Parties) agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Construction; Certain Defined Terms . (a) 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, (i) any reference herein to any agreement, instrument, other document, statute or regulation shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, restated, amended and restated, adjusted, waived, renewed, extended, supplemented, replaced, refinanced or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) 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, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles and Sections of and Annexes to this Agreement, (v) 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 (vi) the term “or” shall not be exclusive.
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(b) All terms capitalized but not defined herein have the meanings assigned to them in the Priority Lien Credit Agreement as in effect on the date hereof.
(c) All terms used in this Agreement that are defined in Article 1, 8 or 9 of the New York UCC (whether capitalized herein or not) and not otherwise defined herein have the meanings assigned to them in Article 1, 8 or 9 of the New York UCC. If a term is defined in Article 9 of the New York UCC and another Article of the New York UCC, such term shall have the meaning assigned to it in Article 9 of the New York UCC.
(d) Unless otherwise set forth herein, all references herein to (i) the Second Lien Agent shall be deemed to refer to the Second Lien Agent in its capacity as collateral agent under the Second Lien Documents and (ii) the Third Lien Collateral Trustee shall be deemed to refer to the Third Lien Collateral Trustee in its capacity as collateral trustee under the Third Lien Collateral Trust Agreement.
(e) As used in this Agreement, the following terms have the meanings specified below:
“ Accounts ” has the meaning assigned to such term in Section 3.01(a) .
“ Additional Third Lien Debt Facility ” means any Debt for which the requirements of Section 4.04(b) of this Agreement have been satisfied, as amended, restated, modified, renewed, refunded, restated, restructured, increased, supplemented, replaced or refinanced in whole or in part from time to time in accordance with each applicable Secured Debt Document; provided that no Third Lien Substitute Facility shall constitute an Additional Third Lien Debt Facility at any time.
“ Additional Third Lien Documents ” means any Additional Third Lien Debt Facility and the Additional Third Lien Security Documents.
“ Additional Third Lien Obligations ” means, with respect to any Grantor, any Obligations of such Grantor owed to any Additional Third Lien Secured Party (or any of its Affiliates) in respect of the Additional Third Lien Documents.
“ Additional Third Lien Secured Parties ” means, at any time, the trustee, agent or other representative of the holders of any Series of Third Lien Debt who maintains the transfer register for such Series of Third Lien Debt, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Additional Third Lien Document and each other holder of, or obligee in respect of, any Series of Third Lien Debt outstanding at such time.
“ Additional Third Lien Security Documents ” means the Additional Third Lien Debt Facility (insofar as the same grants a Lien on the Collateral) and any other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements, or grants or transfers for security, now existing or entered into after the date hereof, executed and delivered by NOG or any other Grantor creating (or purporting to create) a Lien upon the Third Lien Collateral in favor of the Additional Third Lien Secured Parties.
“ 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 the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
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“ Agreement ” has the meaning assigned to such term in the preamble hereto.
“ Bank Product ” means each and any of the following bank services and products provided to NOG or any other Grantor by any lender under the Priority Lien Credit Agreement or any Affiliate of any such lender: (a) commercial credit cards, merchant card services, purchase or debit cards, including non-card e-payables services, (b) treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services) and (c) any other demand deposit or operating account relationships or other cash management services, including pursuant to any agreement in respect of the foregoing.
“ Bank Product Obligations ” means any and all Obligations of NOG or any other Grantor, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with any Bank Product.
“ Bankruptcy Code ” means Title 11 of the United States Code.
“ Bankruptcy Law ” means the Bankruptcy Code and any similar federal, state or foreign law providing for the relief of debtors.
“ Board of Directors ” means, with respect to any Person, the board of directors or other governing body of such Person or any committee thereof duly authorized to act on behalf of such board of directors or such other governing body.
“ Business Day ” means any day excluding Saturday, Sunday and any other day on which banking institutions in New York City are authorized or required by law to remain closed.
“ Capital Stock ” means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests (however designated) in equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
“ Class ” means (a) in the case of Priority Lien Debt, the Priority Lien Debt, (b) in the case of Second Lien Debt, all Series of Second Lien Debt, taken together, and (c) in the case of Third Lien Debt, all Series of Third Lien Debt, taken together.
“ Collateral ” means all of the assets and property of any Grantor, whether real, personal or mixed, constituting Priority Lien Collateral, Second Lien Collateral and/or Third Lien Collateral.
“ Credit Facilities ” means one or more debt facilities (including the Priority Lien Credit Agreement), commercial paper facilities or secured or unsecured capital market debt financings, in each case with banks or other institutional lenders or institutional investors providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), letters of credit or other borrowings or capital markets debt financings, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including refinancing with any capital markets debt transaction) in whole or in part from time to time.
“ Debt ” means, for any Person, each of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all reimbursement obligations of such Person (whether contingent or otherwise)
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in respect of letters of credit, surety or other bonds and similar instruments; (c) all (i) accounts payable and (ii) accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services, in each case (other than deferred purchase price obligations in connection with the acquisition of Oil and Gas Properties), which are greater than ninety (90) days past the date of invoice other than those which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) all obligations of such Person under Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Debt is assumed by such Person; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of such Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Debt or Property of others; (i) all obligations of such Person to deliver commodities, goods or services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments, other than gas balancing arrangements, take or pay arrangements for the gathering, processing or transportation of production, or other similar arrangements, in each case in the ordinary course of business; (j) obligations of such Person to pay for goods or services even if such goods or services are not actually received or utilized by such Person; (k) any Debt of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock of such Person; and (m) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP.
“ DIP Financing ” has the meaning assigned to such term in Section 4.02(b) .
“ DIP Financing Liens ” has the meaning assigned to such term in Section 4.02(b) .
“ DIP Lenders ” has the meaning assigned to such term in Section 4.02(b) .
“ Discharge of Priority Lien Obligations ” means the occurrence of all of the following:
(a) termination or expiration of all commitments to extend credit that would constitute Priority Lien Obligations (other than Excess Priority Lien Obligations);
(b) payment in full in cash of the principal of and interest, premium or call protection (if any), yield maintenance amounts (if any) and make-whole amounts (if any) on all Priority Lien Debt (other than Excess Priority Lien Obligations and other than any undrawn letters of credit);
(c) discharge or cash collateralization (in an amount equal to the lesser of (i) 105% of the aggregate undrawn amount and (ii) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit the reimbursement obligations in respect of which constitute Priority Lien Obligations (other than Excess Priority Lien Obligations) and the aggregate fronting and similar fees which will accrue thereon through the stated expiry of such letters of credit;
(d) payment in full in cash of Hedging Obligations constituting Priority Lien Obligations (and, with respect to any particular Hedge Agreement, termination of such agreement and payment in full in cash of all Hedging Obligations thereunder or such other arrangements as shall have been made by the counterparty thereto (and communicated to the Priority Lien Agent) pursuant to the terms of the Priority Lien Credit Agreement); and
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(e) payment in full in cash of all other Priority Lien Obligations other than Excess Priority Lien Obligations (including without limitation, Bank Product Obligations to the extent included in Priority Lien Obligations) that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at or prior to such time);
provided however , that if, at any time after the Discharge of Priority Lien Obligations has occurred, NOG enters into any Priority Lien Document evidencing a Priority Lien Obligation which incurrence is not prohibited by the applicable Secured Debt Documents, then such Discharge of Priority Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement with respect to such new Priority Lien Obligations (other than with respect to any actions taken after and permitted as a result of the occurrence of such first Discharge of Priority Lien Obligations), and, from and after the date on which NOG designates such obligations as Priority Lien Obligations (subject to the Priority Lien Cap) in accordance with this Agreement, the obligations under such Priority Lien Document shall automatically and without any further action be treated as Priority Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth in this Agreement, any Second Lien Obligations shall be deemed to have been at all times Second Lien Obligations and at no time Priority Lien Obligations and any Third Lien Obligations shall be deemed to have been at all times Third Lien Obligations and at no time Priority Lien Obligations or Second Lien Obligations. For the avoidance of doubt, a Replacement as contemplated by Section 4.04(a) shall not be deemed to cause a Discharge of Priority Lien Obligations.
“ Discharge of Second Lien Obligations ” means the occurrence of all of the following:
(a) payment in full in cash of the principal of and interest, premium (if any), yield maintenance amounts (if any) and make-whole amounts (if any) on all Second Lien Debt; and
(b) payment in full in cash of all other Second Lien Obligations that are outstanding and unpaid at the time the Second Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at or prior to such time);
provided, however that if, at any time after the Discharge of Second Lien Obligations, NOG enters into any Second Lien Document evidencing a Second Lien Obligation which incurrence is not prohibited by the applicable Secured Debt Documents, then such Discharge of Second Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement with respect to such new Second Lien Obligations (other than with respect to any actions taken after and permitted as a result of the occurrence of such first Discharge of Second Lien Obligations), and, from and after the date on which NOG designates such Debt as Second Lien Debt in accordance with this Agreement, the Obligations under such Second Lien Document shall automatically and without any further action be treated as Second Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth in this Agreement, and any Third Lien Obligations shall be deemed to have been at all times Third Lien Obligations and at no time Second Lien Obligations. For the avoidance of doubt, a Replacement as contemplated by Section 4.04(a) shall not be deemed to cause a Discharge of Second Lien Obligations.
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“ Disposition ” means any sale, lease, exchange, assignment, license, contribution, transfer or other disposition. “ Dispose ” shall have a correlative meaning.
“ Excess Priority Lien Obligations ” means the principal amount of Debt (including letters of credit and letter of credit reimbursement obligations but excluding any increases in principal as a result of interest that is paid in kind or capitalized) under the Priority Lien Credit Agreement that shall at the time of incurrence thereof, together with all other Priority Lien Debt then outstanding, exceed the then-applicable amount in clause (a) of the definition of “Priority Lien Cap”, and interest, fees, costs and other charges with respect to the principal amount of such excess Debt. For the avoidance of doubt, in no event shall any Hedging Obligations constituting Priority Lien Obligations or any Bank Product Obligations constituting Priority Lien Obligations constitute Excess Priority Lien Obligations.
“ Governmental Authority ” means the government of the United States or any other nation, or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“ Grantor ” means NOG and each Subsidiary that shall have granted any Lien in favor of any of the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee on any of its assets or properties to secure any of the Secured Obligations.
“ Hedge Agreements ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity 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 rate swap transactions, currency options, 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 any confirmations or trades, which 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; provided , that notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered “Hedge Agreements”.
“ Hedging Obligations ” means, with respect to any Person, the obligations of such Person under Hedge Agreements.
“ Hydrocarbon Interests ” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, fee interests, surface interests, mineral fee interests, overriding royalty interests and other royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.
“ Hydrocarbons ” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.
“ Initial DIP Purchase Option Notice ” has the meaning assigned to such term in Section 4.02(dd) .
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“ Initial DIP Purchase Option Statement ” has the meaning assigned to such term in Section 4.02(dd) .
“ Initial Third Lien Debt Facility ” means Debt secured by a Third Lien for which the requirements of Section 4.04(c) of this Agreement have been satisfied, as amended, restated, modified, renewed, refunded, restated, restructured, increased, supplemented, replaced or refinanced in whole or in part from time to time in accordance with each applicable Secured Debt Document.
“ Initial Third Lien Documents ” means the Initial Third Lien Debt Facility and the Initial Third Lien Security Documents.
“ Initial Third Lien Obligations ” means, with respect to any Grantor, any Obligations of such Grantor owed to any Initial Third Lien Secured Party (or any of its Affiliates) in respect of the Initial Third Lien Documents.
“ Initial Third Lien Secured Parties ” means, at any time, the Third Lien Collateral Trustee, the trustees, agents and other representatives of the holders of the Initial Third Lien Debt Facility (including any holders of notes pursuant to supplements executed in connection with the issuance of Series of Third Lien Debt under the Initial Third Lien Debt Facility) who maintain the transfer register for such Third Lien Debt, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Initial Third Lien Document and each other holder of, or obligee in respect of, any Initial Third Lien Obligations, any holder or lender pursuant to any Initial Third Lien Document outstanding at such time; provided that the Additional Third Lien Secured Parties shall not be deemed Initial Third Lien Secured Parties.
“ Initial Third Lien Security Documents ” means the Initial Third Lien Debt Facility (insofar as the same grants a Lien on the Collateral) and any other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or grants or transfers for security, now existing or entered into after the date hereof, executed and delivered by NOG or any other Grantor creating (or purporting to create) a Lien upon the Third Lien Collateral in favor of the Initial Third Lien Secured Parties (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Third Lien Substitute Facility).
“ Insolvency or Liquidation Proceeding ” means:
(a) any case commenced by or against NOG or any other Grantor under the Bankruptcy Code or any other Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of NOG or any other Grantor, any receivership or assignment for the benefit of creditors relating to NOG or any other Grantor or any similar case or proceeding relative to NOG or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(b) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to NOG or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(c) any other proceeding of any type or nature (including any composition agreement) in which substantially all claims of creditors of NOG or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.
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“ Lien ” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) production payments and the like payable out of Oil and Gas Properties. The term “ Lien ” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations.
“ New York UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York.
“ NOG ” has the meaning assigned to such term in the preamble hereto.
“ Obligations ” means any principal (including reimbursement obligations and obligations to provide cash collateral with respect to letters of credit whether or not drawn), interest, premiums and call protection (if any), yield maintenance amounts (if any), make-whole amounts (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Debt. Notwithstanding any other provision hereof, the term “Obligations” will include accrued interest, fees, costs and other charges incurred under such documentation, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding and whether or not allowable in an Insolvency or Liquidation Proceeding.
“ Officer ” means, with respect to any Person, the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the General Counsel, the Controller, the Secretary or Corporate Secretary, any Executive Vice President, any Senior Vice President, any Vice President or any Assistant Vice President of such Person.
“ Officer ’ s Certificate ” means a certificate signed on behalf of NOG by any Officer of NOG.
“ Oil and Gas Properties ” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, pipelines, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
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“ Original Priority Lien Agent ” has the meaning assigned to such term in the preamble hereto.
“ Original Second Lien Agent ” has the meaning assigned to such term in the preamble hereto.
“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or a Governmental Authority.
“ Preferred Stock ”, as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“ Priority Confirmation Joinder ” means an agreement substantially in the form of Exhibit A .
“ Priority Lien ” means a Lien granted by NOG or any other Grantor in favor of the Priority Lien Agent at any time upon any Collateral of NOG or such Grantor to secure Priority Lien Obligations (including Liens on such Collateral under the security documents associated with any Priority Lien Substitute Facility).
“ Priority Lien Agent ” means the Original Priority Lien Agent, and, from and after the date of execution and delivery of a Priority Lien Substitute Facility, the agent, collateral agent, trustee or other representative of the lenders or holders of the Debt and other Obligations evidenced thereunder or governed thereby, in each case, together with its successors in such capacity.
“ Priority Lien Cap ” means, with respect to any Priority Lien Debt as of any date, (a) subject to the proviso at the end of this definition, a principal amount of Priority Lien Debt (with outstanding letters of credit being deemed to have a principal amount equal to the stated amount thereof) equal to $400,000,000 (excluding interest paid in kind or capitalized described in clause (f) of this definition), plus (b) the amount of all Hedging Obligations, to the extent such Hedging Obligations are secured by the Priority Liens, plus (c) the amount of all Bank Product Obligations, to the extent such Bank Product Obligations are secured by the Priority Liens, plus (d) the amount of accrued and unpaid interest (excluding any interest paid-in-kind) with respect to such principal amount and outstanding fees, plus (e) any amount of protective advances made by the Priority Lien Secured Parties in respect of any Collateral for insurance, taxes or maintenance of Collateral in an amount not to exceed 2.00% of the outstanding principal amount of the Priority Lien Debt (excluding Excess Priority Lien Obligations and any DIP Financing) at the time of determination, plus (f) any amount of interest added to the principal amount of the Priority Lien Debt as a result of being paid in kind or capitalized, plus (g) fees, premiums and call protection (if any), yield maintenance amounts (if any), make-whole amounts (if any), indemnifications, reimbursements and expenses due pursuant to the terms of any Priority Lien Debt; provided that, (i) in the event that the Priority Lien Obligations are Replaced in accordance with Section 4.04(a) , the amount in clause (a) of this definition shall be deemed to be increased to an amount, not to exceed $460,000,000, equal to the principal amount of Priority Lien Debt being Replaced plus any amount necessary to pay any accrued interest, fees, make-whole amounts, yield maintenance amounts, premiums and call protection amounts and other expenses due in connection with such Replacement), (ii) in the event that the Priority Lien Obligations are refunded, refinanced, replaced or otherwise repaid in part or in their entirety with unsecured Debt or secured Debt with Liens subordinate to the Second Liens, the amount in clause (a) of this definition shall be the difference between (x) $460,000,000 and (y) the aggregate principal amount of the unsecured Debt and/or secured Debt with Liens subordinate to the Second Liens that is incurred to refund, refinance, replace or otherwise repay such Priory Lien Debt, and (iii) for the avoidance of doubt in no event shall the Priority Lien Cap apply to any DIP Financing.
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“ Priority Lien Collateral ” means all “Collateral” and “Mortgaged Property”, as defined in the Priority Lien Credit Agreement or any other Priority Lien Document, and any other assets of any Grantor now or at any time hereafter subject to Liens which secure, but only to the extent securing, any Priority Lien Obligation.
“ Priority Lien Credit Agreement ” means the Term Loan Credit Agreement among NOG as borrower and TPG Specialty Lending, Inc., as administrative agent and collateral agent and certain other financial institutions, dated November 1, 2017, as such agreement may be amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time with the same and/or different lenders and/or agents and any credit agreement, loan agreement or any other agreement or instrument evidencing or governing the terms of any Priority Lien Substitute Facility.
“ Priority Lien Debt ” means the Debt under the Priority Lien Credit Agreement (including reimbursement obligations with respect to letters of credit).
“ Priority Lien Documents ” means the Priority Lien Credit Agreement, the Priority Lien Security Documents, the other “Loan Documents” (as defined in the Priority Lien Credit Agreement), any documents with respect to Hedging Obligations and Bank Product Obligations secured under the terms of Priority Lien Security Documents and all other loan documents, notes, guarantees, instruments and agreements governing or evidencing, or executed or delivered in connection with, any Priority Lien Substitute Facility.
“ Priority Lien Obligations ” means the Priority Lien Debt and all other Obligations in respect of or in connection with Priority Lien Debt together with Hedging Obligations and Bank Product Obligations. For the avoidance of doubt, Hedging Obligations and Bank Product Obligations shall only constitute Priority Lien Obligations to the extent that such Hedging Obligations or Bank Product Obligations, as applicable, are secured under the terms of the Priority Lien Credit Agreement and Priority Lien Security Documents. Notwithstanding any other provision hereof, the term “Priority Lien Obligations” will include accrued interest, fees, premiums, call protection amounts, make-whole amounts, yield maintenance amounts, costs and other charges incurred under the Priority Lien Credit Agreement and the other Priority Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding and whether or not allowable in an Insolvency or Liquidation Proceeding. To the extent that any payment with respect to the Priority Lien Obligations (whether by or on behalf of NOG or any other Grantor, as proceeds of security, enforcement of any right of set-off, or otherwise) is declared to be fraudulent or preferential in any respect, set aside, or required to be paid to a debtor in possession, trustee, receiver, or similar Person, then the obligation or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding as if such payment had not occurred.
“ Priority Lien Purchasers ” has the meaning assigned to such term in Section 4.02(dd) .
“ Priority Lien Secured Parties ” means, at any time, (a) the Priority Lien Agent, (b) each lender or issuing bank under the Priority Lien Credit Agreement, (c) each holder, provider or obligee of any Hedging Obligations or Bank Product Obligations that (i) is a lender under the Priority Lien Credit Agreement or an Affiliate (as defined in the Priority Lien Credit Agreement) thereof or of the Priority Lien Agent, (ii) was such a lender or Affiliate of a lender or of the Priority Lien Agent at the time such Hedging Obligation or Bank Product Obligation, as applicable, was entered into, and is a secured party (or a party entitled to the benefits of the security) under any Priority Lien Document or (iii) is otherwise a Secured Swap Party under the Priority Lien Documents, (d) the beneficiaries of each indemnification
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obligation undertaken by any Grantor under any Priority Lien Document, (e) each other Person that provides letters of credit, guarantees or other credit support related thereto under any Priority Lien Document and (f) each other holder of, or obligee in respect of, any Priority Lien Obligations (including pursuant to a Priority Lien Substitute Facility), in each case to the extent designated as a secured party (or a party entitled to the benefits of the security) under any Priority Lien Document outstanding at such time.
“ Priority Lien Security Documents ” means each agreement listed in Part A of Exhibit B hereto, and any other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements or grants or transfers for security, now existing or entered into after the date hereof, executed and delivered by NOG or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Priority Lien Agent (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Priority Lien Substitute Facility).
“ Priority Lien Substitute Facility ” means any Credit Facility (without regard to any subsequent replacements thereof contemplated in the definition thereof unless each such replacement also complies with the requirements of this definition) with respect to which the requirements of Section 4.04(a) of this Agreement have been satisfied and that Replaces the Priority Lien Credit Agreement then in existence. For the avoidance of doubt, no Priority Lien Substitute Facility shall be required to be a revolving or asset-based loan facility and any such facility may be evidenced or governed by a credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument; provided that the Liens securing any such Priority Lien Substitute Facility shall be subject to the terms of this Agreement for all purposes (including the lien priorities set forth herein as of the date hereof) to the same extent as the Liens securing the other Priority Lien Obligations.
“ Priority Lien Swap Intercreditor Agreement ” means any “Swap Intercreditor Agreement” as defined in the Priority Lien Credit Agreement.
“ Property ” means, with respect to any Person, any interest of such Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts, contract rights, Capital Stock and other securities issued by any other Person (but excluding Capital Stock or other securities issued by such first mentioned Person).
“ Purchasable DIP Obligations ” has the meaning assigned to such term in Section 4.02(dd) .
“ Purchasable Obligations ” has the meaning assigned to such term in Section 3.06(a) .
“ Recovery ” has the meaning assigned to such term in Section 4.03(a) .
“ Replaces ” means, (a) in respect of any agreement with reference to the Priority Lien Credit Agreement or the Priority Lien Obligations or any Priority Lien Substitute Facility, that such agreement refunds, refinances, amends and restates or replaces the Priority Lien Credit Agreement, the Priority Lien Obligations or such Priority Lien Substitute Facility in whole (in a transaction that is in compliance with Section 4.04(a) ) and results in all commitments thereunder being terminated, or, to the extent permitted by the terms of the Priority Lien Credit Agreement, Priority Lien Obligations or such Priority Lien Substitute Facility, in part, (b) in respect of any agreement with reference to the Second Lien Documents, the Second Lien Obligations or any Second Lien Substitute Facility, that such Debt refunds, refinances, amends and restates or replaces the Second Lien Documents, the Second Lien Obligations or such Second Lien Substitute Facility in whole (in a transaction that is in compliance with Section 4.04(a) ) and that results in all commitments thereunder being terminated, or, to the extent permitted by the terms of the Second Lien Documents, the Second Lien Obligations or such Second Lien Substitute Facility, in part and (c) in respect of any agreement with reference to the Third Lien Documents, the Third Lien Obligations or
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any Third Lien Substitute Facility, that such Debt refunds, refinances, amends and restates or replaces the Third Lien Documents, the Third Lien Obligations or such Third Lien Substitute Facility in whole (in a transaction that is in compliance with Section 4.04(a) ) and that results in all commitments thereunder being terminated, or, to the extent permitted by the terms of the Third Lien Documents, the Third Lien Obligations or such Third Lien Substitute Facility, in part. “ Replace ,” “ Replaced ,” “ Replacing ” and “ Replacement ” shall have correlative meanings.
“ Second Lien ” means a Lien granted by any Grantor in favor of the Second Lien Agent, at any time, upon any Collateral of such Grantor to secure the Second Lien Obligations (including Liens on such Collateral under the security documents associated with any Second Lien Substitute Facility).
“ Second Lien Agent ” means the Original Second Lien Agent and, from and after the date of execution and delivery of a Second Lien Substitute Facility, the agent, collateral agent, trustee or other representative of the lenders or other holders of the Debt and other obligations evidenced or governed thereby, in each case together with its successors in such capacity appointed in accordance with the terms of the Second Lien Indenture.
“ Second Lien Collateral ” means all “Collateral” and “Mortgaged Property”, as defined in any Second Lien Document, and any other assets of any Grantor now or at any time hereafter subject to Liens which secure, but only to the extent securing, any Second Lien Obligations.
“ Second Lien Debt ” means the Debt under the Second Lien Indenture Notes issued on the date hereof and guarantees thereof and all Debt incurred under any Second Lien Substitute Facility.
“ Second Lien DIP Lenders ” has the meaning set forth in Section 4.02(dd) .
“ Second Lien Documents ” means the Second Lien Indenture, the Second Lien Indenture Notes, the Second Lien Security Documents and all other documents, notes, guarantees, instruments and agreements governing or evidencing the Second Lien Obligations or any Second Lien Substitute Facility.
“ Second Lien Indenture ” means the Indenture dated as of the date hereof among NOG, the Grantors party thereto from time to time, the Second Lien Indenture Trustee, and the Original Second Lien Agent, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof (including any supplements executed in connection with the issuance of any Series of Second Lien Debt under the Second Lien Indenture) unless restricted by the terms of this Agreement, and any credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Second Lien Substitute Facility.
“ Second Lien Indenture Notes ” means the 8.5% Senior Secured Second Lien Notes due 2023 issued under the Second Lien Indenture on the date hereof.
“ Second Lien Indenture Trustee ” means Wilmington Trust, National Association, in its capacity as trustee under the Second Lien Indenture, together with its successors in such capacity.
“ Second Lien Obligations ” means Second Lien Debt and all other Obligations in respect thereof. Notwithstanding any other provision hereof, the term “Second Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the Second Lien Indenture and the other Second Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding and whether or not allowable in an Insolvency or Liquidation Proceeding.
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“ Second Lien Purchasers ” has the meaning assigned to such term in Section 3.06(a) .
“ Second Lien Recovery ” has the meaning assigned to such term in Section 4.03(b) .
“ Second Lien Secured Parties ” means, at any time, the Second Lien Agent, the Second Lien Indenture Trustee, the holders of Second Lien Indenture Notes, and the other trustees, agents and other representatives of the holders of the Second Lien Indenture Notes (including any holders of Second Lien Indenture Notes pursuant to supplements executed in connection with the issuance of any Series of Second Lien Debt under the Second Lien Indenture) who maintain the transfer register for such Second Lien Indenture Notes or such Series of Second Lien Debt, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Second Lien Document, each other holder of, or obligee in respect of, any Second Lien Indenture Notes or any other Second Lien Document outstanding at such time.
“ Second Lien Security Documents ” means each agreement listed in Part B of Exhibit B hereto and any other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements, or grants or transfers for security, now existing or entered into after the date hereof, executed and delivered by NOG or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Second Lien Agent (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Second Lien Substitute Facility).
“ Second Lien Standstill Period ” has the meaning assigned to such term in Section 3.02(a)(i) .
“ Second Lien Substitute Facility ” means any facility with respect to which the requirements of Section 4.04(a) of this Agreement have been satisfied and that is permitted to be incurred pursuant to the Priority Lien Documents and that Replaces the Second Lien Indenture. For the avoidance of doubt, no Second Lien Substitute Facility shall be required to be evidenced by notes or other instruments and any such facility may be evidenced or governed by a credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument; provided that the Liens securing any such Second Lien Substitute Facility shall be subject to the terms of this Agreement for all purposes (including the lien priorities set forth herein as of the date hereof) to the same extent as the Liens securing the other Second Lien Obligations.
“ Secured Debt Documents ” means the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents.
“ Secured Debt Representative ” means the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee, as applicable.
“ Secured Obligations ” means the Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations.
“ Secured Parties ” means the Priority Lien Secured Parties, the Second Lien Secured Parties and the Third Lien Secured Parties.
“ Security Documents ” means the Priority Lien Security Documents, the Second Lien Security Documents and the Third Lien Security Documents.
“ Series of Second Lien Debt ” means, severally, the Second Lien Indenture Notes and each other issue or series of Second Lien Debt for which a single transfer register is maintained.
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“ Series of Secured Debt ” means the Priority Lien Debt, each Series of Second Lien Debt and each Series of Third Lien Debt.
“ Series of Third Lien Debt ” means, severally, the Initial Third Lien Debt Facility and each other issue or series of Third Lien Debt (including any Additional Third Lien Debt Facility) for which a single transfer register is maintained.
“ Standstill Period ” means the Second Lien Standstill Period, the Third Lien First Standstill Period and the Third Lien Second Standstill Period, as applicable.
“ Subsidiary ” means any subsidiary of NOG.
“ subsidiary ” means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (a) such Person, (b) such Person and one or more subsidiaries of such Person or (c) one or more subsidiaries of such Person.
“ Third Lien ” means a Lien granted by any Grantor in favor of the Third Lien Collateral Trustee at any time, upon any Collateral of such any Grantor to secure Third Lien Obligations (including Liens on such Collateral under the security documents associated with any Third Lien Substitute Facility).
“ Third Lien Collateral ” means all “Collateral” and “Mortgaged Property”, as defined in any Third Lien Document, and any other assets of any Grantor now or at any time hereafter subject to Liens which secure, but only to the extent securing, any Third Lien Obligations.
“ Third Lien Collateral Trust Agreement ” means from and after the date of execution and delivery of the Initial Third Lien Debt Facility, a collateral trust agreement entered into among NOG, the other Grantors, the other Third Lien Representatives and the Third Lien Collateral Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time, in accordance with each applicable Third Lien Document.
“ Third Lien Collateral Trustee ” means from and after the date of execution and delivery of the Initial Third Lien Debt Facility, the agent, collateral agent, trustee, collateral trustee or other representative of the lenders or other holders of the Debt and other Obligations evidenced or governed thereby, together with its successors in such capacity appointed in accordance with the terms of the Third Lien Collateral Trust Agreement.
“ Third Lien Debt ” means Debt under the Initial Third Lien Debt Facility and Debt incurred under any Additional Third Lien Documents with respect to which the requirements of Section 4.04(c) have been satisfied, and all Debt incurred under any Third Lien Substitute Facility.
“ Third Lien Documents ” means the Initial Third Lien Documents, the Additional Third Lien Documents and all other loan documents, notes, guarantees, instruments and agreements governing or evidencing any Third Lien Substitute Facility.
“ Third Lien First Standstill Period ” has the meaning assigned to such term in Section 3.02(a)(ii) .
“ Third Lien Obligations ” means Third Lien Debt and all other Obligations in respect thereof. Notwithstanding any other provision hereof, the term “Third Lien Obligations” will include accrued interest, fees, costs and other charges incurred under the Third Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding.
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“ Third Lien Representative ” means (a) in the case of the Initial Third Lien Debt Facility, the Third Lien Collateral Trustee and (b) in the case of any other Series of Third Lien Debt, the trustee, agent or representative of the holders of such Series of Third Lien Debt who (i) is appointed as a Third Lien Representative (for purposes related to the administration of the security documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Third Lien Debt, in each case, together with its successors in such capacity, and (ii) has become party to the Third Lien Collateral Trust Agreement by executing a joinder in the form required under the Third Lien Collateral Trust Agreement.
“ Third Lien Second Standstill Period ” has the meaning assigned to such term in Section 3.02(b) .
“ Third Lien Secured Parties ” means the Initial Third Lien Secured Parties and the Additional Third Lien Secured Parties.
“ Third Lien Security Documents ” means the Initial Third Lien Security Documents and the Additional Third Lien Security Documents.
“ Third Lien Substitute Facility ” means any facility with respect to which the requirements of Section 4.04(a) and (b) of this Agreement have been satisfied and that is permitted to be incurred pursuant to the Priority Lien Documents and the Second Lien Documents and that Replaces any Initial Third Lien Debt Facility and/or Additional Third Lien Debt Facility then in existence. For the avoidance of doubt, no Third Lien Substitute Facility shall be required to be evidenced by notes or other instruments and any such facility may be evidenced or governed by a credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument; provided that the Liens securing any such Third Lien Substitute Facility shall be subject to the terms of this Agreement for all purposes (including the lien priorities set forth herein as of the date hereof) to the same extent as the Liens securing the other Third Lien Obligations.
“ Third Party Hedging Obligations ” means Hedging Obligations that are (a) secured by a Priority Lien and (b) owed to a Person other than the Priority Lien Agent or any Person who is a lender under the Priority Lien Credit Agreement or an Affiliate of a lender under the Priority Lien Credit Agreement at the time of determination.
“ Voting Stock ” means, with respect to any Person, securities of any class or classes of Capital Stock in such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of contingency) to vote in the election of members of the Board of Directors of such Person.
“ Weighted Yield ” shall mean as to any Priority Lien Debt, Second Lien Debt or Third Lien Debt, the weighted yield to maturity thereof based on interest rate margin, original issue discount or fees (in each case amortized over the life of such indebtedness), interest rate floors or other similar component of yield, in each case, incurred or payable by the borrower of such indebtedness, and excluding, for the avoidance of doubt, (a) any changes in yield due to (i) changes in the underlying reference rate (such as LIBOR or the prime rate), (ii) application of any default rate that is less than or equal to 3.00% per annum or (iii) in the case of the Second Lien Obligations, the imposition of a paid-in-kind rate of interest that is less than or equal to 1.00% per annum, (b) premiums and call protection amounts, (c) make-whole amounts and yield maintenance amounts and (d) customary annual agency fees (regardless of whether any of the foregoing amounts are paid to, or shared with, in whole or in part, any lender).
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ARTICLE II
LIEN PRIORITIES
Section 2.01 Relative Priorities .
(a) The grant of the Priority Liens pursuant to the Priority Lien Documents, the grant of the Second Liens pursuant to the Second Lien Documents and the grant of the Third Liens pursuant to the Third Lien Documents each create separate and distinct Liens on the Collateral.
(b) Notwithstanding anything contained in this Agreement, the Priority Lien Documents, the Second Lien Documents, the Third Lien Documents or any other agreement or instrument or operation of law to the contrary, or any other circumstance whatsoever and irrespective of (i) how a Lien was acquired (whether by grant, possession, statute, operation of law, subrogation, or otherwise), (ii) the time, manner, or order of the grant, attachment or perfection of a Lien, (iii) any conflicting provision of the New York UCC or other applicable law, (iv) any defect in, or non-perfection, setting aside, or avoidance of, a Lien or a Priority Lien Document, a Second Lien Document or a Third Lien Document, (v) the modification of a Priority Lien Obligation, a Second Lien Obligation or a Third Lien Obligation, or (vi) the subordination of a Lien on Collateral securing a Priority Lien Obligation to a Lien securing another obligation of NOG or any other Person that is permitted under the Priority Lien Documents as in effect on the date hereof or securing a DIP Financing, each of the Second Lien Agent, on behalf of itself and the other Second Lien Secured Parties, and the Third Lien Collateral Trustee, on behalf of itself and the other Third Lien Secured Parties, hereby agrees that (i) any Priority Lien on any Collateral now or hereafter held by or for the benefit of any Priority Lien Secured Party shall be senior in right, priority, operation, effect and in all other respects to (A) any and all Second Liens on any Collateral, subject to the Priority Lien Cap, and (B) any and all Third Liens on any Collateral, (ii) any Second Lien on any Collateral now or hereafter held by or for the benefit of any Second Lien Secured Party shall be (A) junior and subordinate in right, priority, operation, effect and in all other respects to any and all Priority Liens on any Collateral, subject to the Priority Lien Cap, and (B) senior in right, priority, operation, effect and in all other respects to any and all Third Liens on any Collateral and (iii) any Third Lien on any Collateral now or hereafter held by or for the benefit of any Third Lien Secured Party shall be junior and subordinate in right, priority, operation, effect and in all other respects to (A) any and all Priority Liens on any Collateral (without regard to the Priority Lien Cap) and (B) any and all Second Liens on any Collateral. The subordination of the Liens securing the Second Lien Obligations to the Liens securing the Priority Lien Obligations (subject to the Priority Lien Cap) and the subordination of the Liens securing the Third Lien Obligations to the Liens securing Priority Lien Obligations (without regard to the Priority Lien Cap) and to the Liens securing the Second Lien Obligations set forth in this Section 2.01(b) affects only the relative priority of those Liens, and does not subordinate the Second Lien Obligations or the Third Lien Obligations in right of payment to the Priority Lien Obligations, and does not subordinate the Excess Priority Lien Obligations or the Third Lien Obligations in right of payment to the Second Lien Obligations.
(c) It is acknowledged that (i) the aggregate amount of the Priority Lien Obligations may be increased from time to time pursuant to the terms of the Priority Lien Documents, (ii) a portion of the Priority Lien Obligations consists or may consist of Debt that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and (iii) (A) the Priority Lien Documents may be replaced, restated, supplemented, restructured or otherwise amended or modified from time to time and (B) the Priority Lien Obligations may be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, in the case of the foregoing (A) and (B) all without affecting the subordination of the Second Liens (subject to the Priority Lien Cap) or Third Liens (without regard to the Priority Lien Cap) hereunder or the provisions of this Agreement defining the relative rights of the Priority Lien Secured Parties, the Second Lien Secured Parties and the
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Third Lien Secured Parties in connection with the Collateral. Subject to this Agreement, it is acknowledged that (i) the aggregate amount of Second Lien Obligations may be increased from time to time pursuant to the terms of the Second Lien Documents and (ii) (A) the Second Lien Documents may be replaced, restated, supplemented, restructured or otherwise amended or modified from time to time and (B) the Second Lien Obligations may be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time in accordance with the terms hereof, in the case of the foregoing (A) and (B) all without affecting the subordination of the Third Liens hereunder or the provisions of this Agreement defining the relative rights of the Priority Lien Secured Parties, the Second Lien Secured Parties and the Third Lien Secured Parties in connection with the Collateral. The lien priorities provided for herein shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, renewal, restatement or Replacement of the Priority Lien Obligations (or any part thereof), the Second Lien Obligations (or any part thereof) or the Third Lien Obligations (or any part thereof), by the release of any Collateral or of any guarantees for any Priority Lien Obligations or the Second Lien Obligations or by any action that any Secured Debt Representative or Secured Party may take or fail to take in respect of any Collateral.
Section 2.02 Prohibition on Marshalling, Etc .
(a) So long as the Discharge of Priority Lien Obligations has not occurred, the Second Lien Agent will not assert any marshalling, appraisal, valuation, or other similar right that may otherwise be available to such Second Lien Agent, for itself, or as a representative of another Person.
(b) So long as the Discharge of Priority Lien Obligations and the Discharge of Second Lien Obligations has not occurred, the Third Lien Collateral Trustee will not assert any marshalling, appraisal, valuation, or other similar right that may otherwise be available to such Third Lien Collateral Trustee, for itself, or as a representative of another Person.
Section 2.03 No New Liens . The parties hereto agree that, (a) so long as the Discharge of Priority Lien Obligations has not occurred, none of the Grantors shall, nor shall any Grantor permit any of its subsidiaries to, (i) grant or permit any additional Liens on any asset of such Grantor to secure any Third Lien Obligation, or take any action to perfect any additional Liens to secure any Third Lien Obligation, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset to secure (A) the Priority Lien Obligations and has taken all actions required to perfect such Liens and (B) the Second Lien Obligations and has taken all actions required to perfect such Liens; provided , however , that the refusal or inability of the Priority Lien Agent or the Second Lien Agent to accept such Lien will not prevent the Third Lien Collateral Trustee from taking the Lien, (ii) grant or permit any additional Liens on any asset of any Grantor to secure any Second Lien Obligation, or take any action to perfect any additional Liens to secure any Second Lien Obligation, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure (A) the Priority Lien Obligations and has taken all actions required to perfect such Liens and (B) the Third Lien Obligations and has taken all actions required to perfect such Liens; provided , however , that the refusal or inability of the Priority Lien Agent or the Third Lien Collateral Trustee to accept such Lien will not prevent the Second Lien Agent from taking the Lien, or (iii) grant or permit any additional Liens on any asset of a Grantor to secure any Priority Lien Obligation, or take any action to perfect any additional Liens to secure any Priority Lien Obligation, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure (A) the Second Lien Obligations and has taken all actions required to perfect such Liens and (B) the Third Lien Obligations and has taken all actions required to perfect such Liens; provided , however , that the refusal or inability of the Second Lien Agent or the Third Lien Collateral Trustee to accept such Lien will not prevent the Priority Lien Agent from taking the Lien and (b) after the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, none of the Grantors shall, nor shall
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any Grantor permit any of its subsidiaries to, (i) grant or permit any additional Liens on any asset of a Grantor to secure any Second Lien Obligation, or take any action to perfect any additional Liens to secure any Second Lien Obligation, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of a Grantor to secure the Third Lien Obligations and has taken all actions required to perfect such Liens; provided , however , that the refusal or inability of the Third Lien Collateral Trustee to accept such Lien will not prevent the Second Lien Agent from taking the Lien, or (ii) grant or permit any additional Liens on any asset to secure any Third Lien Obligations, or take any action to perfect any additional Liens to secure any Third Lien Obligation, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset to secure the Second Lien Obligations and has taken all actions required to perfect such Liens; provided , however , that the refusal or inability of the Second Lien Agent to accept such Lien will not prevent the Third Lien Collateral Trustee from taking the Lien, with each such Lien as described in clauses (a) and (b) of this Section 2.03 to be subject to the provisions of this Agreement. To the extent that the provisions of the immediately preceding sentence are not complied with for any reason, without limiting any other right or remedy available to the Priority Lien Agent, the other Priority Lien Secured Parties, the Second Lien Agent, the other Second Lien Secured Parties, the Third Lien Collateral Trustee or the other Third Lien Secured Parties, each of the Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, and the Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, agrees that any amounts received by or distributed to any Second Lien Secured Party or Third Lien Secured Party, as applicable, pursuant to or as a result of any Lien granted in contravention of this Section 2.03 , shall be subject to Section 3.05(b) .
Section 2.04 Similar Collateral and Agreements . The parties hereto acknowledge and agree that it is their intention that the Priority Lien Collateral, the Second Lien Collateral and the Third Lien Collateral be identical. In furtherance of the foregoing, the parties hereto agree (a) to cooperate in good faith in order to determine, upon any reasonable request by the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee, the specific assets included in the Priority Lien Collateral, the Second Lien Collateral and the Third Lien Collateral, the steps taken to perfect the Priority Liens, the Second Liens and the Third Liens thereon and the identity of the respective parties obligated under the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents in respect of the Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations, respectively, (b) that the Second Lien Security Documents creating Liens on the Collateral shall be in all material respects the same forms of documents as the respective Priority Lien Security Documents creating Liens on the Collateral other than (i) with respect to the priority nature of the Liens created thereunder in such Collateral, (ii) other modifications to the Second Lien Security Documents that are less restrictive than the corresponding Priority Lien Security Documents, (iii) provisions in the Second Lien Security Documents that are solely applicable to the rights and duties of the Second Lien Secured Parties, and (iv) deletions or modifications of representations, warranties and covenants that are customary with respect to security documents establishing Liens securing publicly traded debt securities, (c) that the Third Lien Security Documents creating Liens on the Collateral shall be in all material respects the same forms of documents as the respective Priority Lien Security Documents and Second Lien Security Documents creating Liens on the Collateral other than (i) with respect to the priority nature of the Liens created thereunder in such Collateral, (ii) other modifications to such Third Lien Security Documents that are less restrictive than the corresponding Priority Lien Security Documents and Second Lien Security Documents, (iii) provisions in the Third Lien Security Documents that are solely applicable to the rights and duties of the Third Lien Secured Parties, and (iv) deletions or modifications of representations, warranties and covenants that are customary with respect to security documents establishing Liens securing publicly traded debt securities, (d) that at no time shall there be any Grantor that is an obligor in respect of the Second Lien Obligations that is not also an obligor in respect of the Priority Lien Obligations, (e) that at no time shall there be any Grantor that is an obligor in respect of the Third Lien Obligations that is not also an obligor in respect of the Priority Lien Obligations and the Second Lien Obligations (except to the extent otherwise permitted
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by the Second Lien Documents), and (f) that at no time shall there be a Grantor that is an obligor in respect of the Priority Lien Obligations that is not also an obligor in respect of the Second Lien Obligations and, if required by the Third Lien Documents, the Third Lien Obligations (except to the extent otherwise permitted by the Second Lien Documents); provided that in the cases of the foregoing clauses (e)-(f), the refusal or inability of the Priority Lien Agent, Second Lien Agent or the Third Lien Collateral Trustee to accept a guarantee or Lien from such Grantor will not prevent the Priority Lien Agent, Second Lien Agent or the Third Lien Collateral Trustee, as applicable from accepting such guarantee or taking the Lien.
Section 2.05 No Duties of Priority Lien Agent . Each of the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, acknowledges and agrees that neither the Priority Lien Agent nor any other Priority Lien Secured Party shall have any duties or other obligations to any such Second Lien Secured Party or Third Lien Secured Party with respect to any Collateral, other than to transfer to the Second Lien Agent any remaining Collateral and any proceeds of the sale or other Disposition of any such Collateral remaining in its possession following the associated Discharge of Priority Lien Obligations, in each case without representation or warranty on the part of the Priority Lien Agent or any Priority Lien Secured Party. In furtherance of the foregoing, each Second Lien Secured Party and Third Lien Secured Party acknowledges and agrees that until the Discharge of Priority Lien Obligations (subject to the terms of Section 3.02 , including the rights of the Second Lien Secured Parties and the Third Lien Secured Parties following the expiration of any applicable Standstill Period), the Priority Lien Agent shall be entitled, for the benefit of the Priority Lien Secured Parties, to sell, transfer or otherwise Dispose of or deal with such Collateral, as provided herein and in the Priority Lien Documents, without regard to (a) any Second Lien or any rights to which the Second Lien Agent or any Second Lien Secured Party would otherwise be entitled as a result of such Second Lien or (b) any Third Lien or any rights to which the Third Lien Collateral Trustee or any Third Lien Secured Party would otherwise be entitled as a result of such Third Lien. Without limiting the foregoing, each Second Lien Secured Party and Third Lien Secured Party agrees that neither the Priority Lien Agent nor any other Priority Lien Secured Party shall have any duty or obligation first to marshal or realize upon any type of Collateral, or to sell, Dispose of or otherwise liquidate all or any portion of such Collateral, in any manner that would maximize the return to the Second Lien Secured Parties or the Third Lien Secured Parties, notwithstanding that the order and timing of any such realization, sale, Disposition or liquidation may affect the amount of proceeds actually received by the Second Lien Secured Parties or the Third Lien Secured Parties, as applicable, from such realization, sale, Disposition or liquidation. Each of the Second Lien Secured Parties and Third Lien Secured Parties waives any claim such Second Lien Secured Party or Third Lien Secured Party may now or hereafter have against the Priority Lien Agent or any other Priority Lien Secured Party arising out of any actions which the Priority Lien Agent or the Priority Lien Secured Parties take or omit to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral, and actions with respect to the collection of any claim for all or any part of the Priority Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Priority Lien Documents or the valuation, use, protection or release of any security for the Priority Lien Obligations.
Section 2.06 No Duties of Second Lien Agent . The Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, acknowledges and agrees that neither the Second Lien Agent nor any other Second Lien Secured Party shall have any duties or other obligations to such Third Lien Secured Party with respect to any Collateral, other than to transfer to the Third Lien Collateral Trustee any remaining Collateral and any proceeds of the sale or other Disposition of any such Collateral remaining in its possession following the associated Discharge of Second Lien Obligations (provided such Discharge of Second Lien Obligations occurs after the Discharge of Priority Lien Obligations), in
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each case without representation or warranty on the part of the Second Lien Agent or any Second Lien Secured Party. In furtherance of the foregoing, each Third Lien Secured Party acknowledges and agrees that after the Discharge of Priority Lien Obligations and until the Discharge of Second Lien Obligations (subject to the terms of Section 3.02 , including the rights of the Third Lien Secured Parties following expiration of the Third Lien Second Standstill Period), the Second Lien Agent shall be entitled, for the benefit of the Second Lien Secured Parties, to sell, transfer or otherwise Dispose of or deal with such Collateral, as provided herein and in the Second Lien Documents, without regard to any Third Lien or any rights to which the Third Lien Collateral Trustee or any Third Lien Secured Party would otherwise be entitled as a result of such Third Lien. Without limiting the foregoing, each Third Lien Secured Party agrees that neither the Second Lien Agent nor any other Second Lien Secured Party shall have any duty or obligation first to marshal or realize upon any type of Collateral, or to sell, Dispose of or otherwise liquidate all or any portion of such Collateral in any manner that would maximize the return to the Third Lien Secured Parties, notwithstanding that the order and timing of any such realization, sale, Disposition or liquidation may affect the amount of proceeds actually received by the Third Lien Secured Parties from such realization, sale, Disposition or liquidation. Following the Discharge of Priority Lien Obligations and the Discharge of Second Lien Obligations, the Third Lien Collateral Trustee and the other Third Lien Secured Parties may, subject to any other agreements binding on the Third Lien Collateral Trustee or such other Third Lien Secured Parties, assert their rights under the New York UCC or otherwise to any proceeds remaining following a sale, Disposition or other liquidation of Collateral by, or on behalf of the Third Lien Secured Parties. Each of the Third Lien Secured Parties waives any claim such Third Lien Secured Party may now or hereafter have against the Second Lien Agent or any other Second Lien Secured Party arising out of any actions which the Second Lien Agent or the Second Lien Secured Parties take or omit to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral, and actions with respect to the collection of any claim for all or any part of the Second Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Second Lien Documents or the valuation, use, protection or release of any security for the Second Lien Obligations.
ARTICLE III
ENFORCEMENT RIGHTS; PURCHASE OPTION
Section 3.01 Limitation on Enforcement Action .
(a) Prior to the Discharge of Priority Lien Obligations, each of the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, hereby agrees that, subject to Sections 3.02 , 3.05(b) and 4.07 , none of the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party shall commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, any Collateral under any Second Lien Security Document or Third Lien Security Document, as applicable, applicable law or otherwise (including but not limited to any right of setoff), it being agreed that only the Priority Lien Agent, acting in accordance with the applicable Priority Lien Documents, shall have the exclusive right (whether or not any Insolvency or Liquidation Proceeding has been commenced), to take any such actions or exercise any such remedies, in each case without any consultation with or the consent of the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party. In exercising rights and remedies with respect to the Collateral, the Priority Lien Agent and the other Priority Lien Secured Parties may enforce the provisions of the Priority Lien Documents and exercise remedies thereunder, all in such order and in such manner as
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they may determine in their sole discretion and regardless of whether such exercise and enforcement is adverse to the interest of any Second Lien Secured Party or Third Lien Secured Party. Such exercise and enforcement shall include the rights of an agent appointed by them to Dispose of Collateral upon foreclosure, to incur expenses in connection with any such Disposition and to exercise all the rights and remedies of a secured creditor under the Uniform Commercial Code, the Bankruptcy Code or any other Bankruptcy Law. Without limiting the generality of the foregoing, prior to the Discharge of Priority Lien Obligations, the Priority Lien Agent will have the exclusive right to deal with that portion of the Collateral consisting of deposit accounts, securities accounts and commodities accounts (collectively, “ Accounts ”), including exercising rights under control agreements with respect to such Accounts. Each of the Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, and the Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Second Lien Security Document, any other Second Lien Document, any Third Lien Security Document or any other Third Lien Document, as applicable, shall be deemed to restrict in any way the rights and remedies of the Priority Lien Agent or the other Priority Lien Secured Parties with respect to the Collateral as set forth in this Agreement. Notwithstanding the foregoing, subject to Section 3.05 , the Second Lien Agent, on behalf of the Second Lien Secured Parties, may, but will have no obligation to, take all such actions (not adverse to the Priority Liens or the rights of the Priority Lien Agent and the Priority Lien Secured Parties) it deems necessary to perfect or continue the perfection of the Second Liens in the Collateral or to create, preserve or protect (but not enforce) the Second Liens in the Collateral, and the Third Lien Collateral Trustee, on behalf of the Third Lien Secured Parties, may, but will have no obligation to, take all such actions (not adverse to the Priority Liens or Second Liens or the rights of the Priority Lien Agent, the Priority Lien Secured Parties, the Second Lien Agent or the Second Lien Secured Parties) it deems necessary to perfect or continue the perfection of the Third Liens in the Collateral or to create, preserve or protect (but not enforce) the Third Liens in the Collateral.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, hereby agrees that, subject to Sections 3.02 , 3.05(b) and 4.07 , neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, any Collateral under any Third Lien Security Document, applicable law or otherwise (including but not limited to any right of setoff), it being agreed that the Second Lien Agent, acting in accordance with the applicable Second Lien Documents, shall have the exclusive right (but shall not be obligated to, whether or not any Insolvency or Liquidation Proceeding has been commenced), to take any such actions or exercise any such remedies, in each case without any consultation with or the consent of the Third Lien Collateral Trustee or any other Third Lien Secured Party. In exercising rights and remedies with respect to the Collateral, the Second Lien Agent and the other Second Lien Secured Parties may (but shall not be obligated to) enforce the provisions of the Second Lien Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in their sole discretion and regardless of whether such exercise and enforcement is adverse to the interest of any Third Lien Secured Party. Such exercise and enforcement shall include the rights of an agent appointed by them to Dispose of Collateral upon foreclosure, to incur expenses in connection with any such Disposition and to exercise all the rights and remedies of a secured creditor under the Uniform Commercial Code, the Bankruptcy Code or any other Bankruptcy Law. Without limiting the generality of the foregoing, following the Discharge of Priority Lien Obligations and until the Discharge of Second Lien Obligations, the Second Lien Agent will have the exclusive right but shall not be obligated to deal with the Accounts, including exercising rights under control agreements with respect to such Accounts. The Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, hereby
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acknowledges and agrees that no covenant, agreement or restriction contained in any Third Lien Security Document or any other Third Lien Document shall be deemed to restrict in any way the rights and remedies of the Second Lien Agent or the other Second Lien Secured Parties with respect to the Collateral as set forth in this Agreement. Notwithstanding the foregoing, subject to Section 3.05 , the Third Lien Collateral Trustee may, but will have no obligation to, on behalf of the Third Lien Secured Parties, take all such actions (not adverse to the Second Liens or the rights of the Second Lien Agent and the Second Lien Secured Parties) it deems necessary to perfect or continue the perfection of the Third Liens in the Collateral or to create, preserve or protect (but not enforce) the Third Liens in the Collateral.
(c) Nothing herein shall limit the right or ability of the Second Lien Secured Parties or any Third Lien Secured Parties to (i) purchase (by credit bid or otherwise) all or any portion of the Collateral, including in connection with any enforcement of remedies by the Priority Lien Agent (or, to the extent permitted hereunder, by the Second Lien Agent), to the extent that, and so long as, the Priority Lien Secured Parties (and, in the case of a purchase by any Third Lien Secured Parties, the Second Lien Secured Parties) receive payment in full in cash of all Priority Lien Obligations other than, in the case of a purchase by the Second Lien Secured Parties, the Excess Priority Lien Obligations after giving effect thereto, (ii) file a proof of claim with respect to the Second Lien Obligations or the Third Lien Obligations, as applicable or (iii) file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading objecting to or otherwise seeking the disallowance of the claims or Liens of any holders of Second Lien Obligations or Third Lien Obligations, as applicable.
Section 3.02 Standstill Periods; Permitted Enforcement Action .
(a) Prior to the Discharge of Priority Lien Obligations and notwithstanding Section 3.01 , both before and during an Insolvency or Liquidation Proceeding:
(i) after a period of 180 days has elapsed (which period will be tolled during any period in which the Priority Lien Agent is not entitled, on behalf of the Priority Lien Secured Parties, to enforce or exercise any rights or remedies with respect to any Collateral as a result of (A) any injunction issued by a court of competent jurisdiction or (B) the automatic stay or any other stay or prohibition in any Insolvency or Liquidation Proceeding) since the later of (1) the date on which the Second Lien Debt is accelerated and (2) the date on which the Second Lien Agent has delivered to the Priority Lien Agent written notice of the acceleration of any Second Lien Debt (the “ Second Lien Standstill Period ”), the Second Lien Agent and the other Second Lien Secured Parties may but shall not be obligated to enforce or exercise any rights or remedies with respect to any Collateral; provided , however , that notwithstanding the expiration of the Second Lien Standstill Period the Second Lien Documents to the contrary, in no event may the Second Lien Agent or any other Second Lien Secured Party enforce or exercise any rights or remedies with respect to any Collateral, or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding, if the Priority Lien Agent on behalf of the Priority Lien Secured Parties or any other Priority Lien Secured Party shall have commenced, and shall be diligently pursuing (or, if necessary to permit the commencement and pursuit thereof, shall have sought or requested relief from, or modification of, the automatic stay or any other stay or other prohibition 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 material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Second Lien Agent by the Priority Lien Agent); provided , further , that, at any time after the expiration of the Second Lien Standstill Period, if neither the Priority Lien Agent nor any other Priority Lien Secured Party shall have commenced and be diligently pursuing (or shall have sought or requested relief from, or modification of, the automatic stay or any other stay or other prohibition in any Insolvency or
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Liquidation Proceeding to enable the commencement and pursuit thereof) the enforcement or exercise of any rights or remedies with respect to any material portion of the Collateral, or any such action or proceeding in respect of such rights or remedies, then the Second Lien Agent shall be free to commence (or refrain from commencing) the enforcement or exercise of any rights or remedies with respect to the Collateral, or any such action or proceeding in respect of such rights and remedies, and for so long as the Second Lien Agent is diligently pursuing such rights or remedies, none of any Priority Lien Secured Party, the Priority Lien Agent, any Third Lien Secured Party or the Third Lien Collateral Trustee shall take any action of a similar nature with respect to such Collateral or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding; provided , further , that, if the Second Lien Agent or any Second Lien Secured Party exercises rights or remedies in accordance with the terms of this Section 3.02(a)(i) , then such Person shall promptly give written notice thereof to the Priority Lien Agent; and
(ii) after a period of 270 days has elapsed (which period will be tolled during any period in which the Priority Lien Agent is not entitled, on behalf of the Priority Lien Secured Parties, to enforce or exercise any rights or remedies with respect to any Collateral as a result of (A) any injunction issued by a court of competent jurisdiction or (B) the automatic stay or any other stay or prohibition in any Insolvency or Liquidation Proceeding) since the later of (1) the date on which the Third Lien Debt is accelerated or (2) the date on which the Third Lien Collateral Trustee has delivered to the Priority Lien Agent and the Second Lien Agent written notice of the acceleration of any Third Lien Debt (the “ Third Lien First Standstill Period ”), the Third Lien Collateral Trustee and the other Third Lien Secured Parties may but shall not be obligated to enforce or exercise any rights or remedies with respect to any Collateral; provided , however , that notwithstanding the expiration of the Third Lien First Standstill Period or anything in the Third Lien Collateral Trust Agreement or the Third Lien Documents to the contrary, in no event may the Third Lien Collateral Trustee or any other Third Lien Secured Party enforce or exercise any rights or remedies with respect to any Collateral, or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding, if (I) the Priority Lien Agent on behalf of the Priority Lien Secured Parties or any other Priority Lien Secured Party or (II) the Second Lien Agent on behalf of the Second Lien Secured Parties or any other Second Lien Secured Party shall have commenced, and shall be diligently pursuing (or, if necessary to permit the commencement and pursuit thereof, shall have sought or requested relief from, or modification of, the automatic stay or any other stay or other prohibition 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 material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Third Lien Representatives by the Priority Lien Agent or the Second Lien Agent, as applicable); provided , further , that, at any time after the expiration of the Third Lien First Standstill Period, if none of any Priority Lien Secured Party, the Priority Lien Agent, any Second Lien Secured Party or the Second Lien Agent shall have commenced and be diligently pursuing the enforcement or exercise of any rights or remedies with respect to any material portion of the Collateral or any such action or proceeding, and the Third Lien Collateral Trustee shall have commenced the enforcement or exercise of any rights or remedies with respect to any of the Collateral or any such action or proceeding, then for so long as the Third Lien Collateral Trustee is diligently pursuing such rights or remedies, none of any Priority Lien Secured Party, the Priority Lien Agent, any Second Lien Secured Party or the Second Lien Agent shall take any action of a similar nature with respect to such Collateral, or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding; provided , further , that, if the Third Lien Collateral Trustee or any Third Lien Secured Party exercises rights or remedies in accordance with the terms of this Section 3.02(a)(ii) , then such Person shall promptly give written notice thereof to the Priority Lien Agent and the Second Lien Agent.
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(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations and notwithstanding Section 3.01 , both before and during an Insolvency or Liquidation Proceeding, after a period of 180 days has elapsed (which period will be tolled during any period in which the Second Lien Agent is not entitled, on behalf of the Second Lien Secured Parties, to enforce or exercise any rights or remedies with respect to any Collateral as a result of (A) any injunction issued by a court of competent jurisdiction, (B) the automatic stay or any other stay or prohibition in any Insolvency or Liquidation Proceeding or (C) this Agreement) since the later of (1) the date on which the Third Lien Debt is accelerated and (2) the date on which the Third Lien Collateral Trustee has delivered to the Second Lien Agent written notice of the acceleration of any Third Lien Debt (the “ Third Lien Second Standstill Period ”), the Third Lien Collateral Trustee and the other Third Lien Secured Parties may but shall not be obligated to enforce or exercise any rights or remedies with respect to any Collateral; provided , however , that notwithstanding the expiration of the Third Lien Second Standstill Period or anything in the Third Lien Collateral Trust Agreement or the Third Lien Documents to the contrary, in no event may the Third Lien Collateral Trustee or any other Third Lien Secured Party enforce or exercise any rights or remedies with respect to any Collateral, or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding, if the Second Lien Agent on behalf of the Second Lien Secured Parties or any other Second Lien Secured Party shall have commenced, and shall be diligently pursuing (or, if necessary to permit the commencement and pursuit thereof, shall have sought or requested relief from, or modification of, the automatic stay or any other stay or other prohibition 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 material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Third Lien Representatives by the Second Lien Agent); provided , further , that, at any time after the expiration of the Third Lien Second Standstill Period, if neither the Second Lien Agent nor any other Second Lien Secured Party shall have commenced and be diligently pursuing the enforcement or exercise of any rights or remedies with respect to any material portion of the Collateral or any such action or proceeding, and the Third Lien Collateral Trustee shall have commenced the enforcement or exercise of any rights or remedies with respect to any of the Collateral or any such action or proceeding, then for so long as the Third Lien Collateral Trustee is diligently pursuing such rights or remedies, neither any Second Lien Secured Party nor the Second Lien Agent shall take any action of a similar nature with respect to such Collateral, or commence, join with any Person at any time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding; provided , further , that, if the Third Lien Collateral Trustee or any Third Lien Secured Party exercises rights or remedies in accordance with the terms of this Section 3.02(b) , then such Person shall promptly give written notice thereof to the Second Lien Agent.
Section 3.03 Insurance .
(a) Unless and until the Discharge of Priority Lien Obligations has occurred, (subject to the terms of Section 3.02 , including the rights of the Second Lien Secured Parties and the Third Lien Secured Parties following expiration of any applicable Standstill Period), the Priority Lien Agent shall have the sole and exclusive right, subject to the rights of the Grantors under the Priority Lien Documents, to adjust and settle claims in respect of Collateral under any insurance policy in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. If the Second Lien Agent, any Second Lien Secured Party, the Third Lien Collateral Trustee or any Third Lien Secured Party shall, at any time prior to the Discharge of Priority Lien Obligations, receive any proceeds of any such insurance policy or any such award or payment in contravention of the foregoing, it shall forthwith pay such proceeds over to the Priority Lien
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Agent. In addition, if by virtue of being named as an additional insured or loss payee of any insurance policy of any Grantor covering any of the Collateral, the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party shall have the right to adjust or settle any claim under any such insurance policy, then unless and until the Discharge of Priority Lien Obligations has occurred, the Second Lien Agent, any such Second Lien Secured Party, the Third Lien Collateral Trustee and any such Third Lien Secured Party shall promptly, without delay or hindrance, follow the instructions of the Priority Lien Agent.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations (subject to the terms of Section 3.02 , including the rights of the Third Lien Secured Parties following expiration of the Third Lien Second Standstill Period), the Second Lien Agent shall have the sole and exclusive right (but not the obligation), subject to the rights of the Grantors under the Second Lien Documents, to adjust and settle claims in respect of Collateral under any insurance policy in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. If the Third Lien Collateral Trustee or any Third Lien Secured Party shall, at any time following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, receive any proceeds of any such insurance policy or any such award or payment in contravention of the foregoing, it shall forthwith pay such proceeds over to the Second Lien Agent. In addition, if by virtue of being named as an additional insured or loss payee of any insurance policy of any Grantor covering any of the Collateral, the Third Lien Collateral Trustee or any other Third Lien Secured Party shall have the right to adjust or settle any claim under any such insurance policy, then unless and until the Discharge of Second Lien Obligations has occurred, the Third Lien Collateral Trustee and any such Third Lien Secured Party shall promptly, without delay or hindrance, follow the instructions of the Second Lien Agent.
(c) All proceeds of any insurance policy or any award or payment granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) in respect of the Collateral shall (i) first, prior to the Discharge of Priority Lien Obligations, be paid to the Priority Lien Agent pursuant to the terms of the Priority Lien Documents (including for purposes of cash collateralization of commitments, letters of credit and Hedging Obligations, but excluding for the payment of any Excess Priority Lien Obligations), (ii) second, after the Discharge of Priority Lien Obligations, be paid to the Second Lien Agent pursuant to the terms of the Second Lien Documents, (iii) third, after the Discharge of Second Lien Obligations, if any Excess Priority Lien Obligations are outstanding, be paid to the Priority Lien Collateral Agent pursuant to the Priority Lien Documents (except as otherwise agreed in a writing executed by the Priority Lien Agent, on behalf of the Priority Lien Secured Parties, and any Third Lien Collateral Trustee), (iv) fourth, to the extent no Excess Priority Lien Obligations are outstanding (unless otherwise agreed in a writing executed by the Priority Lien Agent, on behalf of the Priority Lien Secured Parties, and any Third Lien Collateral Trustee), to the Third Lien Collateral Trustee pursuant to the Third Lien Documents, and (v) fifth, to the extent no Excess Priority Lien Obligations or Third Lien Obligations are outstanding, to the owner of the subject property or to such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct.
Section 3.04 Notification of Release of Collateral . NOG shall give each Secured Debt Representative prompt written notice of the Disposition by any Grantor of, and release of the Lien on, any Collateral. Such notice shall describe in reasonable detail the subject Collateral, the parties involved in such Disposition or release, the place, time, manner and method thereof, and the consideration, if any, received therefor; provided , however , that the failure to give any such notice shall not in and of itself in any way impair the effectiveness of any such Disposition or release.
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Section 3.05 No Interference; Payment Over .
(a) No Interference .
(i) The Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, agrees that each Second Lien Secured Party (A) prior to the Discharge of Priority Lien Obligations, will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Second Lien pari passu with, or to give such Second Lien Secured Party any preference or priority relative to, any Priority Lien with respect to the Collateral or any part thereof, (B) will not challenge or question in any proceeding the validity or enforceability of any Priority Lien Obligations or Priority Lien Document, or the validity, attachment, perfection or, subject to the Priority Lien Cap, priority of any Priority Lien, or the validity or enforceability of the priorities, rights or duties established by the provisions of this Agreement, (C) will not take or cause to be taken any action the purpose or effect of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other Disposition of the Collateral by any Priority Lien Secured Party or the Priority Lien Agent in any enforcement action, (D) shall have no right to (1) direct the Priority Lien Agent or any other Priority Lien Secured Party to exercise any right, remedy or power with respect to any Collateral or (2) consent to the exercise by the Priority Lien Agent or any other Priority Lien Secured Party of any right, remedy or power with respect to any Collateral, (E) will not institute any suit or assert in any suit or Insolvency or Liquidation Proceeding any claim against the Priority Lien Agent or other Priority Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither the Priority Lien Agent nor any other Priority Lien Secured Party shall be liable for, any action taken or omitted to be taken by the Priority Lien Agent or other Priority Lien Secured Party with respect to any Priority Lien Collateral, (F) prior to the Discharge of Priority Lien Obligations, will not seek, and hereby waives any right, to have any Collateral or any part thereof marshaled upon any foreclosure or other Disposition of such Collateral, (G) will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement, (H) will not object to forbearance by the Priority Lien Agent or any Priority Lien Secured Party, and (I) prior to the Discharge of Priority Lien Obligations will not assert, and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available under applicable law with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law with respect to the Collateral; and
(ii) The Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that each Third Lien Secured Party (A) will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Third Lien pari passu with, or to give such Third Lien Secured Party any preference or priority relative to, any Priority Lien or Second Lien with respect to the Collateral or any part thereof, (B) will not challenge or question in any proceeding the validity or enforceability of any Priority Lien Obligations, Priority Lien Document, Second Lien Obligations or Second Lien Document, or the validity, attachment, perfection or priority of any Priority Lien or Second Lien, or the validity or enforceability of the priorities, rights or duties established by the provisions of this Agreement, (C) will not take or cause to be taken any action the purpose or effect of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other Disposition of the Collateral by any Priority Lien Secured Party, the Priority Lien Agent, any Second Lien Secured Party or the Second Lien Agent, in each case in any enforcement action, (D) shall have no right to (1) direct the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party to exercise any right,
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remedy or power with respect to any Collateral or (2) consent to the exercise by the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party of any right, remedy or power with respect to any Collateral, (E) will not institute any suit or assert in any suit or Insolvency or Liquidation Proceeding any claim against the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and none of the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party shall be liable for, any action taken or omitted to be taken by the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party with respect to any Priority Lien Collateral or Second Lien Collateral, as applicable, (F) prior to the Discharge of Priority Lien Obligations and Discharge of Second Lien Obligations, will not seek, and hereby waives any right, to have any Collateral or any part thereof marshaled upon any foreclosure or other Disposition of such Collateral, (G) will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement, (H) will not object to forbearance by the Priority Lien Agent, any Priority Lien Secured Party, the Second Lien Agent or any Second Lien Secured Party and (I) prior to the Discharge of Priority Lien Obligations and Discharge of Second Lien Obligations will not assert, and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available under applicable law with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law with respect to the Collateral.
(b) Payment Over .
(i) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that if any Second Lien Secured Party or Third Lien Secured Party, as applicable, shall obtain possession of any Collateral or shall realize any proceeds or payment in respect of any Collateral, pursuant to the exercise of any rights or remedies with respect to the Collateral under any Second Lien Security Document or Third Lien Security Document, as applicable, or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding, at any time prior to the Discharge of Priority Lien Obligations, to the extent such Priority Liens Obligations are secured, or intended to be secured, by such Collateral, then it shall hold such Collateral, proceeds or payment in trust for the Priority Lien Agent and the other Priority Lien Secured Parties and transfer such Collateral, proceeds or payment, as the case may be, to the Priority Lien Agent as promptly as practicable. Furthermore, each of the Second Lien Agent and the Third Lien Collateral Trustee, as applicable, shall, at the Grantors’ expense, promptly send written notice to the Priority Lien Agent upon receipt of such Collateral, proceeds or payment by any Second Lien Secured Party or Third Lien Secured Party, as applicable, and within five (5) Business Days after receipt of written instructions from the Priority Lien Agent of where and in what manner to remit such Collateral, proceeds or payment (or such later date as consented to in writing by the Priority Lien Agent), shall deliver such Collateral, proceeds or payment to the Priority Lien Agent, in the same form as received, with any endorsements reasonably requested by the Priority Lien Agent, or as a court of competent jurisdiction may otherwise direct. The Priority Lien Agent is hereby authorized to make any such endorsements as agent for the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party, as applicable. Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, it obtains written notice that all or part of any payment with
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respect to any Priority Lien Obligations previously made shall be rescinded for any reason whatsoever, it will promptly pay over to the Priority Lien Agent any payment received by it and then in its possession or under its direct control in respect of any such Collateral securing Priority Liens and shall promptly turn any such Collateral then held by it over to the Priority Lien Agent, in each case, for application in accordance with Section 6.01 to the extent such application is required by Section 6.01 , and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the Discharge of Priority Lien Obligations. All Second Liens and Third Liens will remain attached to and enforceable against all proceeds so held or remitted, subject to the priorities set forth in this Agreement. Notwithstanding anything contained herein to the contrary, this Section 3.05(b) shall not apply to any proceeds of Collateral realized in a transaction not prohibited by the Priority Lien Documents and as to which the possession or receipt thereof by the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party, as applicable, is otherwise permitted by the Priority Lien Documents.
(ii) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that if any Third Lien Secured Party shall obtain possession of any Collateral or shall realize any proceeds or payment in respect of any Collateral, pursuant to the exercise of any rights or remedies with respect to the Collateral under any Third Lien Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding, at any time following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, to the extent Second Lien Obligations are secured, or intended to be secured, by such Collateral, then it shall hold such Collateral, proceeds or payment in trust for the Second Lien Agent and the other Second Lien Secured Parties and transfer such Collateral, proceeds or payment, as the case may be, to the Second Lien Agent as promptly as practicable. Furthermore, at any time following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, shall, at the Grantors’ expense, promptly send written notice to the Second Lien Agent upon receipt of such Collateral, proceeds or payment by any Third Lien Secured Party, and, within five (5) Business Days after receipt of such Collateral, proceeds or payment (or such later date as consented to in writing by the Second Lien Agent), shall deliver such Collateral, proceeds or payment to the Second Lien Agent, in the same form as received, with any endorsements reasonably requested by the Second Lien Agent, or as a court of competent jurisdiction may otherwise direct. The Second Lien Agent is hereby authorized to make any such endorsements as agent for the Third Lien Collateral Trustee or any other Third Lien Secured Party. The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, it obtains written notice that all or part of any payment with respect to any Second Lien Obligations previously made shall be rescinded for any reason whatsoever, it will promptly pay over to the Second Lien Agent any payment received by it and then in its possession or under its direct control in respect of any such Collateral securing Second Lien Obligations and shall promptly turn any such Collateral then held by it over to the Second Lien Agent, in each case, for application in accordance with Section 6.01 to the extent such application is required by Section 6.01 , and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the Discharge of Second Lien Obligations. All Third Liens will remain attached to and enforceable against all proceeds so held or remitted, subject to the priorities set forth in this Agreement. Notwithstanding anything contained herein to the contrary, this Section 3.05(b) shall not apply to any proceeds of Collateral realized in a transaction not prohibited by the Second Lien Documents and as to which the possession or receipt thereof by the Third Lien Collateral Trustee or any other Third Lien Secured Party is otherwise permitted by the Second Lien Documents.
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Section 3.06 Purchase Option .
(a) Notwithstanding anything in this Agreement to the contrary, on or at any time after (i) the commencement of an Insolvency or Liquidation Proceeding, (ii) the acceleration of the Priority Lien Obligations or (iii) the exercise by the Priority Lien Agent of remedies with respect to any material portion of the Collateral (each of the foregoing, a “ Trigger Event ”), each of the Second Lien Secured Parties and each of their respective designated Affiliates (the “ Second Lien Purchasers ”) will have the right, at its sole option and election (but will not be obligated), at any time upon prior written notice (which shall include the names and notice information of each of the Second Lien Purchasers) to the Priority Lien Agent (the “ Initial Purchase Option Notice ”), but only so long as no Second Lien Secured Party has objected to or is challenging the amount or validity of the Priority Lien Obligations or the Priority Liens securing the Priority Lien Obligations or the enforceability of the Priority Lien Documents, to purchase (in the manner set forth in Section 3.06(b) below) from the Priority Lien Secured Parties both of the following in whole but not in part: (x) all (but not less than all) Priority Lien Obligations (including (A) unfunded commitments to the extent not then terminated in accordance with their terms, (B) fees and (C) the amount of any premium, yield maintenance amount, call protection amount and make-whole amount, in each case with respect to this clause (C) calculated as though NOG had voluntarily prepaid the Priority Lien Obligations in full on the date of purchase of the Priority Lien Obligations), other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and, to the extent that the conditions in clause (f) below are satisfied, other than any Third Party Hedging Obligations, and (y) all (but not less than all) of any loans provided by any of the Priority Lien Secured Parties in connection with a DIP Financing that are outstanding on the date of such purchase (the foregoing clauses (x) and (y), the “ Purchasable Obligations ”). The Second Lien Purchasers may deliver the Initial Purchase Option Notice at any time within the fifteen day period following the occurrence of any Trigger Event (provided that such period shall commence from the date notice of the applicable Trigger Event is given by the Priority Lien Agent in the case of a Trigger Event described in clauses (ii) or (iii) of the definition thereof) (such period, the “ Initial Option Period ”). Promptly following the receipt of such Initial Purchase Option Notice, the Priority Lien Agent will deliver to the Second Lien Purchasers named in such Initial Purchase Option Notice a statement (the “ Initial Purchase Option Statement ”) of the respective amounts of Priority Lien Debt and other Priority Lien Obligations (other than any Priority Lien Obligations constituting Excess Priority Lien Obligations) and DIP Financing provided by any of the Priority Lien Secured Parties, if any, then outstanding and the amount of the cash collateral requested by the Priority Lien Agent to be delivered pursuant to Section 3.06(b)(ii) below. The right to purchase provided for in this Section 3.06 will expire unless, within 10 Business Days after the receipt by the Second Lien Purchasers named in the Initial Purchase Option Notice of such Initial Purchase Option Statement from the Priority Lien Agent, the Second Lien Purchasers deliver to the Priority Lien Agent an irrevocable commitment of the Second Lien Purchasers to purchase the Purchasable Obligations in their entirety, and to otherwise complete such purchase on the terms set forth under this Section 3.06 . To the extent that the Second Lien Secured Parties either (i) fail to deliver an Initial Purchase Option Notice of the Second Lien Purchasers during the Initial Option Period for any Trigger Event or (ii) fail to deliver an irrevocable commitment of the Second Lien Purchasers to purchase the Purchasable Obligations in their entirety in accordance with the immediately preceding sentence, the purchase option provided for in this Section 3.06 shall permanently expire and be of no further force and effect with respect to such Second Lien Secured Party with respect to such Trigger Event.
(b) On the date specified by the Second Lien Purchasers in such irrevocable commitment (which shall not be less than five Business Days, nor more than 20 Business Days, after the receipt by the Priority Lien Agent of such irrevocable commitment), the Priority Lien Secured Parties shall sell to the Second Lien Purchasers the entirety of the Purchasable Obligations on the date of such sale (calculated as set forth above in clause (a) ), subject to any required approval of any Governmental Authority then in effect, if any, and only if on the date of such sale, the Priority Lien Agent receives the following:
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(i) payment in cash, as the purchase price for all Purchasable Obligations sold in such sale, of an amount equal to the full value amount of the Purchasable Obligations (other than outstanding letters of credit as referred to in clause (ii) below) (including principal, interest, fees, premiums, call protection amounts, yield maintenance amounts and make-whole amounts (calculated as though NOG had voluntarily prepaid the Priority Lien Obligations in full on the date of purchase of the Priority Lien Obligations), reasonable attorneys’ fees and legal expenses, but excluding contingent indemnification obligations for which no claim or demand for payment has been made at or prior to such time); provided that, in the case of Hedging Obligations that constitute Priority Lien Obligations (other than Third Party Hedging Obligations subject to clause (f) below), the Second Lien Purchasers shall cause the applicable agreements governing such Hedging Obligations to be assigned and novated or, if such agreements have been terminated, such purchase price shall include an amount equal to the sum of any unpaid amounts then due in respect of such Hedging Obligations, calculated in accordance with the terms of the applicable Hedging Agreement and after giving effect to any netting arrangements;
(ii) a cash collateral deposit in such amount as the Priority Lien Agent determines is reasonably necessary to secure the payment of any outstanding letters of credit constituting Priority Lien Obligations that may become due and payable after such sale (but not in any event in an amount greater than one hundred five percent (105%) of the amount then reasonably estimated by the Priority Lien Agent to be the aggregate outstanding amount of such letters of credit at such time), which cash collateral shall be (A) held by the issuer of such letters of credit as security solely to reimburse the issuers of such letters of credit that become due and payable after such sale and any fees and expenses incurred in connection with such letters of credit and (B) returned to the Second Lien Purchasers (except as may otherwise be required by applicable law or any order of any court or other Governmental Authority) promptly after the expiration or termination from time to time of all payment contingencies affecting such letters of credit;
(iii) any agreements, documents or instruments which the Priority Lien Agent may reasonably request pursuant to which the Second Lien Purchasers in such sale expressly release and waive any and all claims against the Priority Lien Agent and the other Priority Lien Secured Parties (other than for (x) breach of the representation referred to in Section 3.06 (d) or (y) fraud or other willful misconduct on the part of the Priority Lien Secured Parties in connection with this Agreement) arising out of this Agreement and the transactions contemplated hereby with respect to the Purchasable Obligations as a result of exercising the purchase option provided for by this Section 3.06 , and the Second Lien Purchasers assume and adopt all of the obligations of the Priority Lien Agent and the Priority Lien Secured Parties under the Priority Lien Documents and all obligations in connection with loans provided by any of the Priority Lien Secured Parties in connection with a DIP Financing on and after the date of the purchase and sale, and the Second Lien Agent (or any other representative appointed by the holders of a majority in aggregate principal amount of the Second Lien Debt then outstanding owned by such Second Lien Purchasers) becomes a successor agent thereunder; and
(iv) any agreements, documents or instruments which the Priority Lien Agent may reasonably request pursuant to which the Grantors expressly release and waive any and all claims against the Priority Lien Agent and the other Priority Lien Secured Parties (other than for fraud) arising out of this Agreement and the other Priority Lien Documents and the transactions contemplated hereby and thereby.
(c) Such purchase of the Purchasable Obligations shall be made on a pro rata basis among the Second Lien Purchasers (or on such other basis as such Second Lien Purchasers may determine) giving notice to the Priority Lien Agent of their interest to exercise the purchase option hereunder
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according to each such Second Lien Purchaser’s portion of the Second Lien Debt outstanding on the date of purchase or such portion as such Second Lien Purchasers may otherwise agree among themselves. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of the Priority Lien Agent as the Priority Lien Agent may designate in writing to the Second Lien Purchasers for such purpose. Interest shall be calculated to but excluding the Business Day on which such sale occurs if the amounts so paid by the Second Lien Purchasers to the bank account designated by the Priority Lien Agent are received in such bank account prior to 12:00 noon, New York City time, and interest shall be calculated to and including such Business Day if the amounts so paid by the Second Lien Purchasers to the bank account designated by the Priority Lien Agent are received in such bank account later than 12:00 noon, New York City time.
(d) Such sale shall be expressly made without representation or warranty of any kind by the Priority Lien Secured Parties as to the Purchasable Obligations, the Collateral or otherwise and without recourse to any Priority Lien Secured Party, except that the applicable Priority Lien Secured Parties shall represent and warrant severally as to the Purchasable Obligations: (i) that such applicable Priority Lien Secured Party owns such Purchasable Obligations; and (ii) that such applicable Priority Lien Secured Party has the necessary corporate or other governing authority to assign such interests.
(e) After such sale becomes effective, the outstanding letters of credit will remain enforceable against the issuers thereof and will remain secured by the Priority Liens upon the Collateral in accordance with the applicable provisions of the Priority Lien Documents as in effect at the time of such sale, and the issuers of letters of credit and the counterparties to Third Party Hedging Obligations subject to clause (f) below will remain entitled to the benefit of the Priority Liens upon the Collateral and sharing rights in the proceeds thereof in accordance with the provisions of the Priority Lien Documents (including the Priority Lien Swap Intercreditor Agreement) as in effect at the time of such sale, as fully as if the sale of the Priority Lien Debt had not been made, except with respect to cash Collateral held by the issuer(s) of such letters of credit, but only the Person or successor agent to whom the Priority Liens are transferred in such sale will have the right to foreclose upon or otherwise enforce the Priority Liens and only the Second Lien Purchasers in the sale will have the right to direct such Person or successor as to matters relating to the foreclosure or other enforcement of the Priority Liens.
(f) Notwithstanding the foregoing, the Purchasable Obligations shall not include Third Party Hedging Obligations to the extent that (i) the Priority Lien Agent is replaced as the administrative agent and the collateral agent under the Priority Lien Credit Agreement pursuant to the terms thereof by a designee of the Second Lien Purchasers, (ii) the Priority Lien Agent is replaced as the collateral agent under the Priority Lien Swap Intercreditor Agreement pursuant to the terms thereof by a designee of the Second Lien Purchasers and (iii) the Second Lien Purchasers have executed an agreement or other documentation necessary in order to authorize their designee to become party to the Priority Lien Swap Intercreditor Agreement on their behalf and binding them to the terms of such Priority Lien Swap Intercreditor Agreement.
ARTICLE IV
OTHER AGREEMENTS
Section 4.01 Release of Liens; Automatic Release of Second Liens and Third Liens .
(a) Prior to the Discharge of Priority Lien Obligations, each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that, in the event the Priority Lien Secured Parties release their Lien on any Collateral, each of the Second Lien and the Third Lien on such Collateral shall terminate and be released automatically and without further action if (i) (A) in the case of
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the Second Liens, such release is effected in connection with a sale, transfer or other Disposition of Collateral (other than to NOG or a Subsidiary) in a transaction or under a circumstance that is not prohibited by the Second Lien Documents and (B) in the case of the Third Liens, such release is effected in connection with a sale, transfer or other Disposition of Collateral (other than to NOG or a Subsidiary) in a transaction or under a circumstance that is not prohibited by the Third Lien Documents, (ii) such release is effected in connection with the Priority Lien Agent’s foreclosure upon, or other exercise of rights or remedies with respect to, such Collateral, or (iii) such release is effected in connection with a sale or other Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the Priority Lien Secured Parties shall have consented to such sale or Disposition of such Collateral; provided that, in the case of each of clauses (i) , (ii) and (iii) , (I) the Second Liens on such Collateral shall attach to or remain in place with respect to (and shall remain subject and subordinate to all Priority Liens securing Priority Lien Obligations, subject to the Priority Lien Cap, with respect to) any proceeds of a sale, transfer or other Disposition of Collateral not paid to the holders of Priority Lien Obligations (other than Excess Priority Lien Obligations) or that remain after the Discharge of Priority Lien Obligations and (II) the Third Liens on such Collateral shall remain in place (and shall remain subject and subordinate to all Priority Liens securing Priority Lien Obligations (including for the avoidance of doubt, the Excess Priority Lien Obligations) and all Second Liens securing Second Lien Obligations) with respect to any proceeds of a sale, transfer or other Disposition of Collateral not paid to the holders of Priority Lien Obligations or Second Lien Obligations or that remain after the Discharge of Priority Lien Obligations or Discharge of Second Lien Obligations. Notwithstanding the foregoing, if the holders of Second Lien Obligations have irrevocably committed to purchase the Purchasable Obligations in accordance with the provisions of Section 3.06 , no release pursuant to the preceding clauses (ii) and (iii) shall be permitted to the extent (and only to the extent) that the holders of Second Lien Obligations shall not have defaulted on their obligations to consummate the purchase of the Priority Lien Debt.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that, in the event the Second Lien Secured Parties release their Lien on any Collateral, the Third Lien on such Collateral shall terminate and be released automatically and without further action if (i) such release is in connection with a sale, transfer or other Disposition of Collateral (other than to NOG or a Subsidiary) in a transaction or under a circumstance that does not violate the applicable provisions of the Third Lien Documents, (ii) such release is effected in connection with the Second Lien Agent’s foreclosure upon, or other exercise of rights or remedies with respect to, such Collateral, or (iii) such release is effected in connection with a sale or other Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the Second Lien Secured Parties shall have consented to such sale or Disposition of such Collateral; provided that, in the case of each of clauses (i) , (ii) and (iii) , the Third Liens on such Collateral shall attach to or remain in place with respect to (and shall remain subject and subordinate to all Second Liens securing Second Lien Obligations with respect to) any proceeds of a sale, transfer or other Disposition of Collateral not paid to the holders of Second Lien Obligations or that remain after the Discharge of Second Lien Obligations.
(c) Each of the Second Lien Agent and the Third Lien Collateral Trustee agrees to execute and deliver (at the sole cost and expense of the Grantors and without recourse to, or representation or warranty by, the Second Lien Agent or the Third Lien Collateral Trustee in their capacities as agent or trustee) all such releases and other instruments as shall reasonably be requested by the Priority Lien Agent or the Second Lien Agent, as applicable, to evidence and confirm any release of Collateral provided for in this Section 4.01 .
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Section 4.02 Certain Agreements with Respect to Insolvency or Liquidation Proceedings .
(a) The parties hereto acknowledge that this Agreement is a “subordination agreement” under Section 510(a) of the Bankruptcy Code and shall continue in full force and effect, notwithstanding the commencement of any Insolvency or Liquidation Proceeding by or against NOG or any other Grantor. All references in this Agreement to NOG, any other Grantor or any subsidiary of any other Grantor will include such Person or Persons as a debtor-in-possession and any receiver or trustee for such Person or Persons in an Insolvency or Liquidation Proceeding. For the purposes of this Section 4.02 , unless otherwise provided herein, clauses (b) through and including (o) shall be in full force and effect prior to the Discharge of Priority Lien Obligations and clauses (p) through and including (cc) shall be in full force and effect following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations.
(b) If NOG or any other Grantor or any of their respective subsidiaries shall become subject to any Insolvency or Liquidation Proceeding and shall, as debtor(s)-in-possession, or if any receiver or trustee for such Person or Persons shall, move for approval of financing (“ DIP Financing ”) to be provided by one or more lenders (the “ DIP Lenders ”) under Section 364 of the Bankruptcy Code and/or the use of cash collateral that constitutes Collateral under Section 363 of the Bankruptcy Code, (i) the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, agrees that neither it nor any other Second Lien Secured Party and (ii) the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that neither it nor any other Third Lien Secured Party, will raise any objection, contest or oppose, and each Second Lien Secured Party and Third Lien Secured Party will waive any claim such Person may now or hereafter have, to any such financing or to the Liens on the Collateral securing the same (“ DIP Financing Liens ”), or to any use, sale or lease of cash collateral that constitutes Collateral or to any grant of administrative expense priority under Section 364 of the Bankruptcy Code, unless (A) the Priority Lien Agent or the Priority Lien Secured Parties oppose or object to such DIP Financing or such DIP Financing Liens or such use of cash collateral, (B) the maximum principal amount of Debt permitted under such DIP Financing (not including any Priority Lien Obligations (other than Excess Priority Lien Obligations) refinanced with the proceeds of, or “rolled up” into, such DIP Financing) exceeds $75,000,000 (or any Excess Priority Lien Obligations are, or are to be refinanced with, the proceeds of, or “rolled up” into, such DIP Financing) or (C) the terms of such DIP Financing require the confirmation of a plan of reorganization containing specific terms or provisions (other than repayment in cash of such DIP Financing on the effective date thereof). To the extent such DIP Financing Liens are senior to, or rank pari passu with, the Priority Liens, (1) the Second Lien Agent will, for itself and on behalf of the other Second Lien Secured Parties, subordinate the Second Liens on the Collateral to the Priority Liens, subject to the Priority Lien Cap, and to such DIP Financing Liens, so long as the Second Lien Agent, on behalf of the Second Lien Secured Parties, retains Liens on all the Collateral, including proceeds thereof arising after the commencement of any Insolvency or Liquidation Proceeding, with the same priority relative to the Priority Liens and the Third Liens as existed prior to the commencement of the case under the Bankruptcy Code and (2) the Third Lien Collateral Trustee will, for itself and on behalf of the other Third Lien Secured Parties, subordinate the Third Liens on the Collateral to the Priority Liens, the Second Liens and to such DIP Financing Liens, so long as the Third Lien Collateral Trustee, on behalf of the Third Lien Secured Parties, retains Liens on all the Collateral, including proceeds thereof arising after the commencement of any Insolvency or Liquidation Proceeding, with the same priority relative to the Priority Liens and the Second Liens as existed prior to the commencement of the case under the Bankruptcy Code.
(c) Prior to the Discharge of Priority Lien Obligations, without the prior written consent of the Priority Lien Agent, in its sole discretion, each of the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees not to propose or enter into any DIP Financing or support any DIP
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Financing except as permitted by clause (b) above; provided that the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, may propose or provide DIP Financing so long as (i) (A) such DIP Financing results in the Discharge of the Priority Lien Obligations concurrently with the incurrence of such DIP Financing or (B) either (1) the Priority Lien Agent shall have stated in writing that it will not make a proposal for DIP Financing, (2) the Priority Lien Agent has stated in writing that it is ceasing its efforts to provide a DIP Financing for which it has previously made a proposal (on its own behalf or on behalf of another Priority Lien Secured Party) or (3) NOG or any other Grantor has delivered a request for DIP Financing to the Priority Lien Agent (which request the Grantor agrees to share concurrently with the Second Lien Agent) and thirty (30) calendar days shall have expired without delivery of a bona fide proposal in good faith for DIP Financing to NOG from the Priority Lien Agent (on its own behalf or on behalf of another Priority Lien Secured Party) (provided further, that, if prior to consummation of a DIP Financing provided by any Second Lien Secured Party, the Priority Lien Agent subsequently delivers a bona fide good faith proposal for a DIP Financing, then the Second Lien Secured Parties shall no longer be permitted to propose or provide a DIP Financing unless the conditions contained in the foregoing clauses (1) or (2) are subsequently satisfied), (ii) (A) such DIP Financing is secured by DIP Financing Liens that are subordinated (as set forth in Section 2.01) to the Priority Liens that existed prior to the commencement of the Insolvency or Liquidation Proceeding and all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties (unless such DIP Financing also causes the Discharge of Priority Lien Obligations to occur), (B) any replacement liens or superpriority claims granted to the Second Lien Secured Parties in connection with such DIP Financing as adequate protection are subordinated (as set forth in Section 2.01) to the Priority Liens that existed prior to the commencement of the Insolvency or Liquidation Proceeding and all Liens or superpriority claims granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties (unless such DIP Financing also causes the Discharge of Priority Lien Obligations to occur), and (C) such DIP Financing does not include a “roll-up” of any Second Lien Obligations (unless such DIP Financing also causes the Discharge of Priority Lien Obligations to occur), (iii) the maximum principal amount of Debt permitted under such DIP Financing does not exceed $75,000,000 plus amounts permitted to be rolled up under clause (ii)(C) above, (iv) the terms of such DIP Financing do not require the confirmation of a plan of reorganization containing specific terms or provisions (other than repayment in cash of such DIP Financing on the effective date thereof), and (v) any such DIP Financing that does not result in the Discharge of Priority Lien Obligations shall be subject to the purchase option set forth in Section 4.02(dd) below.
(d) Each of the Second Lien Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that it will not object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting) a sale or other Disposition, a motion to sell or Dispose or the bidding procedure for such sale or Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if (1) the Priority Lien Agent or the requisite holders of Priority Lien Obligations shall have consented to such sale or Disposition, such motion to sell or Dispose or such bidding procedure for such sale or Disposition of such Collateral and (2) all Second Liens and Third Liens on the Collateral securing the Second Lien Obligations and the Third Lien Obligations, as applicable, shall attach to the proceeds of such sale in the same respective priorities as set forth in this Agreement with respect to the Collateral. It is understood and agreed that notwithstanding anything above, the Second Lien Secured Parties shall retain at all times their right to “credit bid” the Second Lien Obligations in accordance with Section 3.01(c) in connection with any sale or Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code.
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(e) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, waives any claim that may be had against the Priority Lien Agent or any other Priority Lien Secured Party arising out of any DIP Financing Liens (that are granted in a manner that is consistent with this Agreement), request for adequate protection or administrative expense priority under Section 364 of the Bankruptcy Code.
(f) The Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Agent nor any other Second Lien Secured Party and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party will file or prosecute in any Insolvency or Liquidation Proceeding any motion for adequate protection (or any comparable request for relief) based upon their interest in the Collateral, nor object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting) (i) any request by the Priority Lien Agent or any other Priority Lien Secured Party for adequate protection or (ii) any objection by the Priority Lien Agent or any other Priority Lien Secured Party to any motion, relief, action or proceeding based on the Priority Lien Agent or Priority Lien Secured Parties claiming a lack of adequate protection, except that
(iii) the Second Lien Secured Parties may:
(A) freely seek and obtain relief granting adequate protection in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01 ) to, and with the same relative priority to the Priority Liens and the Third Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties;
(B) freely seek and obtain relief granting a superpriority administrative claim with priority over any and all claims in an Insolvency or Liquidation Proceeding (except for any such superpriority administrative claims granted to or for the benefit of the Priority Lien Secured Parties, it being understood that any superpriority administrative claims granted to or for the benefit of the Priority Lien Secured Parties shall have priority over any such claims granted to or for the benefit of the Second Lien Secured Parties and the Third Lien Secured Parties) co-extensive in all respects with any such claims granted in the Insolvency or Liquidation Proceeding to or for the benefit of the Priority Lien Secured Parties and relating to the Collateral, provided, that any payments or proceeds in respect of such superpriority administrative claim shall be considered proceeds of Collateral for purposes of Section 3.05(b) and Section 6.01 ; and
(C) freely seek and obtain any relief upon a motion for adequate protection (or any comparable relief), without any condition or restriction whatsoever, at any time after the Discharge of Priority Lien Obligations; and
(iv) the Third Lien Secured Parties may:
(A) freely seek and obtain relief granting adequate protection in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01 ) to, and with the same relative priority to the Priority Liens and the Second Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties and the Second Lien Secured Parties; and
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(B) freely seek and obtain any relief upon a motion for adequate protection (or any comparable relief), without any condition or restriction whatsoever, at any time after the Discharge of Priority Lien Obligations and the Discharge of Second Lien Obligations.
(g) Each of the Second Lien Agent, for itself and on behalf of each of the other of the Second Lien Secured Parties, and the Third Lien Collateral Trustee, for itself and on behalf of each of the other Third Lien Secured Parties, waives any claim it or any such other Second Lien Secured Party or Third Lien Secured Party, as applicable, may now or hereafter have against the Priority Lien Agent or any other Priority Lien Secured Party (or their representatives) arising out of any election by the Priority Lien Agent or any Priority Lien Secured Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code.
(h) The Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that in any Insolvency or Liquidation Proceeding, neither the Second Lien Agent nor any other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that in any Insolvency or Liquidation Proceeding, neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party, shall, prior to the Discharge of Priority Lien Obligations, support or vote to accept any plan of reorganization or disclosure statement of NOG or any other Grantor unless such plan is accepted by the Class of Priority Lien Secured Parties in accordance with Section 1126(c) of the Bankruptcy Code or otherwise provides for the payment in full in cash of all Priority Lien Obligations (including all post-petition interest approved by the bankruptcy court, fees and expenses and cash collateralization of all letters of credit) on the effective date of such plan of reorganization. Except as provided herein, each of the Second Lien Secured Parties and the Third Lien Secured Parties shall remain entitled to vote their claims in any such Insolvency or Liquidation Proceeding.
(i) So long as the Discharge of the Priority Lien Obligations has not occurred, the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Agent nor any other Second Lien Secured Party shall, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall, seek relief, pursuant to Section 362(d) of the Bankruptcy Code or otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay or other prohibition in any Insolvency or Liquidation Proceeding in respect of the Collateral without the prior written consent of the Priority Lien Agent.
(j) The Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Agent nor any other Second Lien Secured Party shall, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall, oppose or seek to challenge any claim by the Priority Lien Agent or any other Priority Lien Secured Party for allowance or payment in any Insolvency or Liquidation Proceeding of Priority Lien Obligations consisting of post-petition interest, fees or expenses or cash collateralization of all letters of credit to the extent of the value of the Priority Liens (it being understood that such value will be determined without regard to the existence of the Second Liens or the Third Liens on the Collateral). Neither the Priority Lien Agent nor any other Priority Lien Secured Party shall oppose or seek to challenge any claim by the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party for allowance or payment in any Insolvency or Liquidation Proceeding of Second Lien Obligations or Third Lien Obligations, as applicable, consisting of post-petition interest, fees or expenses to the extent of the value of the Second Liens or the Third Liens, as applicable, on the Collateral; provided that if the Priority Lien Agent or any other Priority Lien Secured Party shall have made any
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claim for post-petition interest, fees or expenses in respect of Priority Lien Obligations, such claim (i) shall have been approved or (ii) will be approved contemporaneously with the approval of any such claim by the Second Lien Agent or any Second Lien Secured Party or the Third Lien Collateral Trustee or any Third Lien Secured Party, as applicable.
(k) So long as the Discharge of Priority Lien Obligations has not occurred, without the express written consent of the Priority Lien Agent, none of the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be), in any Insolvency or Liquidation Proceeding involving any Grantor, (i) oppose, object to or contest the determination of the extent of any Liens held by any Priority Lien Secured Party or the value of any claims of any such holder under Section 506(a) of the Bankruptcy Code or (ii) oppose, object to or contest the payment to the Priority Lien Secured Party of interest, fees or expenses under Section 506(b) of the Bankruptcy Code, other than, in the case of the Second Lien Agent or any other Second Lien Secured Party, in respect of any Excess Priority Lien Obligations and subject to the Priority Lien Cap.
(l) Notwithstanding anything to the contrary contained herein, if in any Insolvency or Liquidation Proceeding a determination by a court of competent jurisdiction is made that any Lien encumbering any Collateral is not enforceable for any reason, then each of the Second Lien Agent for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that, any distribution or recovery they may receive with respect to, or allocable to, the value of the assets constituting Collateral subject to an enforceable Lien in favor of the Second Lien Secured Parties or Third Lien Secured Parties or any proceeds thereof, shall (for so long as the Discharge of the Priority Lien Obligations has not occurred) be segregated and held in trust and forthwith paid over to the Priority Lien Agent for the benefit of the Priority Lien Secured Parties, to be applied in accordance with Article VI , in the same form as received without recourse, representation or warranty (other than a representation of the Second Lien Agent or the Third Lien Collateral Trustee, as applicable, that such Person (and, for the avoidance of doubt, only with respect to itself and none of the Persons for which it acts as Secured Debt Representative) has not otherwise sold, assigned, transferred or pledged any right, title or interest in and to such distribution or recovery) but with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. Until Discharge of Priority Lien Obligations has occurred, each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby appoints the Priority Lien Agent, and any officer or agent of the Priority Lien Agent, with full power of substitution, the attorney-in-fact of each Second Lien Secured Party and Third Lien Secured Party for the limited purpose of carrying out the provisions of this Section 4.02(l) and taking any action and executing any instrument that the Priority Lien Agent may deem necessary or advisable to accomplish the purposes of this Section 4.02(l) , which appointment is irrevocable and coupled with an interest.
(m) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that the Priority Lien Agent shall have the exclusive right to credit bid the Priority Lien Obligations and further that none of the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be) oppose, object to or contest such credit bid by the Priority Lien Agent (except, solely with respect to the Second Lien Agent or any other Second Lien Secured Party, to the extent such credit bid includes amounts constituting Excess Priority Lien Obligations). It is understood and agreed that foregoing shall not limit the right of the Second Lien Secured Parties to credit bid the Second Lien Obligations in accordance with Section 3.01(c) .
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(n) Without the prior written consent of the Priority Lien Agent to be granted or withheld in its sole discretion, each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees it will not file or join an involuntary bankruptcy petition or claim against NOG or any other Grantor or seek the appointment of an examiner or a trustee for NOG or any other Grantor.
(o) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, waives any right to assert or enforce any claim under Section 506(c) or 552 of the Bankruptcy Code as against any Priority Lien Secured Party or any of the Collateral except as expressly permitted by this Agreement.
(p) If NOG or any other Grantor shall become subject to any Insolvency or Liquidation Proceeding and shall, as debtor(s)-in-possession, or if any receiver or trustee for such Person or Persons shall, move for approval of DIP Financing to be provided by one or more DIP Lenders under Section 364 of the Bankruptcy Code or the use of cash collateral under Section 363 of the Bankruptcy Code, the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that neither it nor any other Third Lien Secured Party will raise any objection, contest or oppose, and each Third Lien Secured Party will waive any claim such Person may now or hereafter have, to any such financing or to the DIP Financing Liens on the Collateral securing the same, or to any use, sale or lease of cash collateral that constitutes Collateral or to any grant of administrative expense priority under Section 364 of the Bankruptcy Code, unless (A) the Second Lien Agent or the Second Lien Secured Parties oppose or object to such DIP Financing or such DIP Financing Liens or such use of cash collateral, or (B) maximum principal amount of Debt permitted under such DIP Financing (not including any Priority Lien Obligations or Second Lien Obligations refinanced with the proceeds of, or “rolled up” into, such DIP Financing) exceeds $75,000,000. To the extent such DIP Financing Liens are senior to, or rank pari passu with, the Second Liens, the Third Lien Collateral Trustee will, for itself and on behalf of the other Third Lien Secured Parties, subordinate the Third Liens on the Collateral to the Second Liens and to such DIP Financing Liens, so long as the Third Lien Collateral Trustee, on behalf of the Third Lien Secured Parties, retains Liens on all the Collateral, including proceeds thereof arising after the commencement of any Insolvency or Liquidation Proceeding, with the same priority relative to the Priority Liens and the Second Liens as existed prior to the commencement of the case under the Bankruptcy Code.
(q) Without the prior written consent of the Second Lien Agent in its sole discretion, the Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees not to propose, support or enter into any DIP Financing except as permitted by clause (p) above.
(r) The Third Lien Collateral Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that it will not object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting) a sale or other Disposition, a motion to sell or Dispose or the bidding procedure for such sale or Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if (1) the Second Lien Agent or the requisite holders of Second Lien Obligations shall have consented to such sale or Disposition, such motion to sell or Dispose or such bidding procedure for such sale or Disposition of such Collateral and (2) the Third Liens will attach to the proceeds of such sale subject to the priorities set forth in this Agreement.
(s) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, waives any claim that may be had against the Second Lien Agent or any other Second Lien Secured Party arising out of any DIP Financing Liens (that is granted in a manner that is consistent with this Agreement), request for adequate protection or administrative expense priority under Section 364 of the Bankruptcy Code.
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(t) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party will file or prosecute in any Insolvency or Liquidation Proceeding any motion for adequate protection (or any comparable request for relief) based upon their interest in the Collateral, nor object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting) (i) any request by the Second Lien Agent or any other Second Lien Secured Party for adequate protection or (ii) any objection by the Second Lien Agent or any other Second Lien Secured Party to any motion, relief, action or proceeding based on the Second Lien Agent or Second Lien Secured Parties claiming a lack of adequate protection, except that the Third Lien Secured Parties may:
(A) freely seek and obtain relief granting adequate protection in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01 ) to, and with the same relative priority to the Second Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Second Lien Secured Parties; and
(B) freely seek and obtain any relief upon a motion for adequate protection (or any comparable relief), without any condition or restriction whatsoever, at any time after the Discharge of Second Lien Obligations.
(u) The Third Lien Collateral Trustee, for itself and on behalf of each of the other of the Third Lien Secured Parties, waives any claim the Third Lien Collateral Trustee or any such other Third Lien Secured Party may now or hereafter have against the Second Lien Agent or any other Second Lien Secured Party (or their representatives) arising out of any election by the Second Lien Agent or any Second Lien Secured Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code.
(v) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that in any Insolvency or Liquidation Proceeding, without the prior written consent of the Second Lien Agent, neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall, prior to the Discharge of Second Lien Obligations, support or vote for any plan of reorganization or disclosure statement of NOG or any other Grantor unless such plan is accepted by the Class of Second Lien Secured Parties in accordance with Section 1126(c) of the Bankruptcy Code or otherwise provides for the payment in full in cash of all Second Lien Obligations (including all post-petition interest, fees and expenses) on the effective date of such plan of reorganization. Except as provided herein, the Third Lien Secured Parties shall remain entitled to vote their claims in any such Insolvency or Liquidation Proceeding.
(w) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that until the Discharge of Second Lien Obligations has occurred, neither the Third Lien Collateral Trustee nor any Third Lien Secured Party shall seek relief, pursuant to Section 362(d) of the Bankruptcy Code or otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay or other prohibition in any Insolvency or Liquidation Proceeding in respect of the Collateral, without the prior written consent of the Second Lien Agent.
(x) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee nor any other Third 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 or payment in any Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Second
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Liens (it being understood that such value will be determined without regard to the existence of the Third Liens on the Collateral). Neither the Second Lien Agent nor any other Second Lien Secured Party shall oppose or seek to challenge any claim by the Third Lien Collateral Trustee or any other Third Lien Secured Party for allowance or payment in any Insolvency or Liquidation Proceeding of Third Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Third Liens on the Collateral; provided that if the Second Lien Agent or any other Second Lien Secured Party shall have made any claim for post-petition interest, fees or expenses in respect of Second Lien Obligations, such claim (i) shall have been approved or (ii) will be approved contemporaneously with the approval of any such claim by the Third Lien Collateral Trustee or any Third Lien Secured Party.
(y) Without the express written consent of the Second Lien Agent, neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be), in any Insolvency or Liquidation Proceeding involving any Grantor, (i) oppose, object to or contest the determination of the extent of any Liens held by any of Second Lien Secured Party or the value of any claims of any such holder under Section 506(a) of the Bankruptcy Code or (ii) oppose, object to or contest the payment to the Second Lien Secured Party of interest, fees or expenses under Section 506(b) of the Bankruptcy Code.
(z) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, notwithstanding anything to the contrary contained herein, if in any Insolvency or Liquidation Proceeding a determination is made by a court of competent jurisdiction that any Second Lien encumbering any Collateral is not enforceable for any reason, then the Third Lien Collateral Trustee for itself and on behalf of each other Third Lien Secured Party, agrees that any distribution or recovery they may receive in respect of such Collateral shall be segregated and held in trust and forthwith paid over to the Second Lien Agent for the benefit of the Second Lien Secured Parties, to be applied in accordance with Article VI , in the same form as received without recourse, representation or warranty (other than a representation of the Third Lien Collateral Trustee that it has not otherwise sold, assigned, transferred or pledged any right, title or interest in and to such distribution or recovery) but with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby appoints the Second Lien Agent, and any officer or agent of the Second Lien Agent, with full power of substitution, the attorney-in-fact of each Third Lien Secured Party for the limited purpose of carrying out the provisions of this Section 4.02(z) and taking any action and executing any instrument that the Second Lien Agent may deem necessary or advisable to accomplish the purposes of this Section 4.02(z) , in each case following the Discharge of Priority Lien Obligations but prior to the occurrence of the Discharge of Second Lien Obligations, which appointment is irrevocable and coupled with an interest.
(aa) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that the Second Lien Agent shall have the exclusive right (but not the obligation) after the Discharge of Priority Lien Obligations to credit bid the Second Lien Obligations and further that neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be) oppose, object to or contest such credit bid by the Second Lien Agent.
(bb) Without the prior written consent of the Second Lien Agent to be granted or withheld in its sole discretion, the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees it will not file or join an involuntary bankruptcy petition or claim against NOG or any other Grantor or seek the appointment of an examiner or a trustee for NOG or any other Grantor.
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(cc) The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, waives any right to assert or enforce any claim under Section 506(c) or 552 of the Bankruptcy Code as against any Second Lien Secured Party or any of the Collateral, except as expressly permitted by this Agreement.
(dd) (i) Notwithstanding anything in this Agreement to the contrary, if prior to the Discharge of Priority Lien Obligations, any Second Lien Secured Party provides any DIP Financing to any Grantor that does not result in the Discharge of Priority Lien Obligations (such Second Lien Secured Parties, the “ Second Lien DIP Lenders ”), each of the Priority Lien Secured Parties and each of their respective designated Affiliates (the “ Priority Lien Purchasers ”) will have the right, at its sole option and election (but will not be obligated), at any time upon prior written notice to the Second Lien DIP Lenders (the “ Initial DIP Purchase Option Notice ”), to purchase (in the manner set forth in clause (ii) below) from the Second Lien DIP Lenders all (but not less than all) obligations under such DIP Financing (the “ Purchasable DIP Obligations ”). The Priority Lien Purchasers may deliver the Initial DIP Purchase Option Notice at any time prior to the Discharge of Priority Lien Obligations. Promptly following the receipt of such notice, the Second Lien DIP Lenders will deliver to the Priority Lien Agent a statement (the “ Initial DIP Purchase Option Statement ”) of the Purchasable DIP Obligations provided by the Second Lien DIP Lenders then outstanding. The right to purchase provided for in this Section 4.02(dd) will expire unless, within 10 Business Days after the receipt by the Priority Lien Purchasers of such Initial DIP Purchase Option Statement from the Second Lien DIP Lenders, the Priority Lien Purchasers deliver to the Second Lien DIP Lenders an irrevocable commitment of the Priority Lien Purchasers to purchase the Purchasable DIP Obligations in their entirety, and to otherwise complete such purchase on the terms set forth under this Section 4.02(dd) .
(ii) On the date specified by the Priority Lien Purchasers in such irrevocable commitment (which shall not be less than five Business Days, nor more than 20 Business Days, after the receipt by the Priority Lien Agent of such irrevocable commitment), the Second Lien DIP Lenders shall sell to the Priority Lien Purchasers the entirety of the Purchasable DIP Obligations on the date of such sale, subject to any required approval of any Governmental Authority then in effect, if any, and only if on the date of such sale, the Second Lien DIP Lenders receive the following:
(A) payment in cash, as the purchase price for all Purchasable DIP Obligations sold in such sale, of an amount equal to the at-cost value of the Purchasable DIP Obligations (including principal and interest, but excluding any discount on principal or upfront fees or similar fees paid by the borrower under such DIP Financing in respect of such DIP Financing) and reasonable and documented attorneys’ fees and legal expenses, but excluding contingent indemnification obligations for which no claim or demand for payment has been made at or prior to such time;
(B) any agreements, documents or instruments which the Second Lien DIP Lenders may reasonably request pursuant to which the Priority Lien Purchasers in such sale expressly release and waive any and all claims against the Second Lien DIP Lenders (other than for (x) breach of the representation referred to in clause (iv) below or (y) fraud or other willful misconduct on the part of the Second Lien DIP Lenders in connection with this Agreement) arising out of this Agreement and the transactions contemplated hereby with respect to the Purchasable DIP Obligations as a result of exercising the purchase option provided for by this Section 4.02(dd) , and the Priority Lien Purchasers assume and adopt all of the obligations of the Second Lien DIP Lenders under such DIP Financing and the designee of the Priority Lien Purchasers becomes a successor agent thereunder; and
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(C) any agreements, documents or instruments which the Second Lien DIP Lenders may reasonably request pursuant to which the Grantors expressly release and waive any and all claims against the Second Lien DIP Lenders (other than for fraud) arising out of this Agreement and the other documents governing such DIP Financing and the transactions contemplated hereby and thereby.
(iii) Such purchase of the Purchasable DIP Obligations shall be made on a pro rata basis among the Priority Lien Purchasers (or on such other basis as such Priority Lien Purchasers may determine) giving notice to the Second Lien DIP Lenders of their interest to exercise the purchase option hereunder according to each such Priority Lien Purchaser’s portion of the Priority Lien Debt outstanding on the date of purchase or such portion as such Priority Lien Purchasers may otherwise agree among themselves. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of a representative of the Second Lien DIP Lenders as the Second Lien DIP Lenders may designate in writing to the Priority Lien Purchasers for such purpose. Interest shall be calculated to but excluding the Business Day on which such sale occurs if the amounts so paid by the Priority Lien Purchasers to the bank account designated by the Second Lien DIP Lenders are received in such bank account prior to 12:00 noon, New York City time, and interest shall be calculated to and including such Business Day if the amounts so paid by the Second Lien Purchasers to the bank account designated by the Second Lien DIP Lenders are received in such bank account later than 12:00 noon, New York City time.
(iv) Such sale shall be expressly made without representation or warranty of any kind by the Second Lien DIP Lenders as to the Purchasable DIP Obligations, the Collateral or otherwise and without recourse to any Second Lien DIP Lenders, except that the applicable Priority Lien Secured Parties shall represent and warrant severally as to the Purchasable DIP Obligations: (A) that such applicable Second Lien DIP Lender owns such Purchasable DIP Obligations; and (B) that such applicable Second Lien DIP Lender has the necessary corporate or other governing authority to assign such interests.
Section 4.03 Reinstatement .
(a) If any Priority Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor any amount (a “ Recovery ”) for any reason whatsoever, then the Priority Lien Obligations shall be reinstated to the extent of such Recovery and the Priority Lien Secured Parties shall be entitled to a reinstatement of Priority Lien Obligations with respect to all such recovered amounts. Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, a Second Lien Secured Party or a Third Lien Secured Party, as applicable, receives notice of any Recovery, the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party, as applicable, shall promptly pay over to the Priority Lien Agent any payment received by it and then in its possession or under its control in respect of any Collateral subject to any Priority Lien securing such Priority Lien Obligations and shall promptly turn any Collateral subject to any such Priority Lien then held by it over to the Priority Lien Agent, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made. If this Agreement shall have been terminated prior to any 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 from such date of reinstatement. Any amounts received by the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party and then in its possession or under its control on account of the Second Lien Obligations or Third Lien Obligations, as
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applicable, after the termination of this Agreement shall, in the event of a reinstatement of this Agreement pursuant to this
Section
4.03(a)
, be held in trust for and
paid over to the Priority Lien Agent for the benefit of the Priority Lien Secured Parties for application to the reinstated Priority Lien Obligations until the discharge thereof.
(b) If any Second Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor any amount (a “ Second Lien Recovery ”) for any reason whatsoever, then the Second Lien Obligations shall be reinstated to the extent of such Second Lien Recovery and the Second Lien Secured Parties shall be entitled to a reinstatement of Second Lien Obligations with respect to all such recovered amounts. The Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, a Third Lien Secured Party receives notice of any Second Lien Recovery, the Third Lien Collateral Trustee or any other Third Lien Secured Party, as applicable, shall promptly pay over to the Second Lien Agent any payment received by it and then in its possession or under its control in respect of any Collateral subject to any Second Lien securing such Second Lien Obligations and shall promptly turn any Collateral subject to any such Second Lien then held by it over to the Second Lien Agent, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made. If this Agreement shall have been terminated prior to any such Second Lien 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 from such date of reinstatement. Any amounts received by the Third Lien Collateral Trustee or any other Third Lien Secured Party and then in its possession or under its control on account of the Third Lien Obligations after the termination of this Agreement shall, in the event of a reinstatement of this Agreement pursuant to this Section 4.03(b) , be held in trust for and paid over to the Second Lien Agent for the benefit of the Second Lien Secured Parties for application to the reinstated Second Lien Obligations until the discharge thereof.
(c) This Section 4.03 shall survive termination of this Agreement.
Section 4.04 Refinancings; Initial Third Lien Debt; Additional Third Lien Debt .
(a) The Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations may be Replaced, by any Priority Lien Substitute Facility, Second Lien Substitute Facility or Third Lien Substitute Facility, as the case may be, in each case, without notice to, or the consent of any Secured Party, all without affecting the Lien priorities provided for herein or the other provisions hereof; provided , that (i) the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee shall receive on or prior to incurrence of a Priority Lien Substitute Facility, Second Lien Substitute Facility or Third Lien Substitute Facility (A) an Officer’s Certificate from NOG stating that (I) the incurrence thereof is permitted by each applicable Secured Debt Document, to be incurred and (II) the requirements of Section 4.05 have been satisfied, and (B) a Priority Confirmation Joinder from the holders or lenders of any Debt that Replaces the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations (or an authorized agent, trustee or other representative on their behalf), (ii) the aggregate outstanding principal amount of the Priority Lien Obligations, after giving effect to such Priority Lien Substitute Facility, shall not exceed the Priority Lien Cap and (iii) on or before the date of such incurrence, such Priority Lien Substitute Facility, Second Lien Substitute Facility or Third Lien Substitute Facility is designated by NOG, in an Officer’s Certificate delivered to the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee, as “Priority Lien Debt”, “Second Lien Debt” or “Third Lien Debt”, as applicable, for the purposes of the Secured Debt Documents and this Agreement; provided that no Series of Secured Debt may be designated as more than one of Priority Lien Debt, Second Lien Debt or Third Lien Debt.
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(b) NOG will be permitted to designate as an additional holder of Third Lien Obligations hereunder each Person who is, or who becomes, the registered holder of Third Lien Debt incurred by NOG after the date of this Agreement in accordance with the terms of all applicable Secured Debt Documents. NOG may effect such designation by delivering to the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee, each of the following:
(i) an Officer’s Certificate stating that NOG intends to incur (A) Initial Third Lien Obligations which will be Third Lien Debt or (B) Additional Third Lien Obligations which will be Third Lien Debt, which in each case is permitted by each applicable Secured Debt Document to be incurred and secured by a Third Lien equally and ratably with all previously existing and future Third Lien Debt;
(ii) an authorized agent, trustee or other representative on behalf of the holders or lenders of Initial Third Lien Obligations or Additional Third Lien Obligations, as applicable, must be designated as an additional holder of Secured Obligations hereunder and must, prior to such designation, sign and deliver on behalf of the holders or lenders of such Initial Third Lien Obligations or Additional Third Lien Obligations, as applicable, a Priority Confirmation Joinder, and in the case of any Additional Third Lien Obligation, a joinder to the Third Lien Collateral Trust Agreement; and
(iii) evidence that NOG has duly authorized, executed (if applicable) and recorded (or caused to be recorded) in each appropriate governmental office all relevant filings and recordations deemed necessary by NOG and the holder of such Initial Third Lien Obligations or Additional Third Lien Obligations, as applicable, or its Secured Debt Representative, to ensure that the Initial Third Lien Obligations or Additional Third Lien Obligations are secured by the Collateral in accordance with the Third Lien Security Documents ( provided that such filings and recordings may be authorized, executed and recorded following any incurrence on a post-closing basis if permitted by the Third Lien Representative for such Initial Third Lien Obligations or Additional Third Lien Obligations, as applicable).
(c) NOG will be permitted to enter into an Initial Third Lien Debt Facility to the extent such Initial Third Lien Debt Facility is permitted by the Priority Lien Credit Agreement, the other Priority Lien Documents, the Second Lien Indenture and the other Second Lien Documents. Any Third Lien Debt incurred pursuant to such Initial Third Lien Debt Facility may be secured by a Third Lien under and pursuant to the Initial Third Lien Security Documents, provided that the Third Lien Collateral Trustee, acting for itself and on behalf of the Initial Third Lien Secured Parties, becomes a party to this Agreement by satisfying the relevant conditions set forth in Section 4.04(b) and in this Section 4.04(c) .
In order for the Third Lien Collateral Trustee to become a party to this Agreement,
(i) the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee shall have executed and delivered a Priority Confirmation Joinder pursuant to which (A) such Third Lien Collateral Trustee becomes a Secured Debt Representative hereunder and (B) the Third Lien Debt and the related Initial Third Lien Secured Parties become subject hereto and bound hereby;
(ii) NOG shall have delivered to the Priority Lien Agent and the Second Lien Agent (A) true and complete copies of each Initial Third Lien Document and (B) an Officer’s Certificate certifying such copies as being true and correct and identifying the obligations to be designated as Initial Third Lien Obligations and the initial aggregate principal amount thereof; and
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(iii) without limiting Section 4.06 , the Initial Third Lien Documents relating to such Third Lien Debt shall provide, in a manner satisfactory to the Priority Lien Agent, that each Initial Third Lien Secured Party shall be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Third Lien Debt.
Notwithstanding the foregoing, nothing in this Agreement will be construed to allow NOG or any other Grantor to incur additional Debt unless otherwise permitted by the terms of each applicable Secured Debt Document.
Each of the then-existing Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee shall be authorized to execute and deliver such documents and agreements (including amendments or supplements to this Agreement) as such holders, lenders, agent, trustee or other representative may reasonably request to give effect to any such Replacement or any incurrence of Initial Third Lien Obligations or Additional Third Lien Obligations, it being understood that the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee or (if permitted by the terms of the applicable Secured Debt Documents) the Grantors, without the consent of any other Secured Party or (in the case of the Grantors) one or more Secured Debt Representatives, may amend, supplement, modify or restate this Agreement to the extent necessary or appropriate to facilitate such amendments or supplements to effect such Replacement or incurrence all at the expense of the Grantors. Upon the consummation of such Replacement or incurrence and the execution and delivery of the documents and agreements contemplated in the preceding sentence, the holders or lenders of such Debt and any authorized agent, trustee or other representative thereof shall be entitled to the benefits of, and bound by the terms and conditions of, this Agreement.
Section 4.05 Amendments to Priority Lien Documents, Second Lien Documents and Third Lien Documents .
(a) Prior to the Discharge of Second Lien Obligations, without the prior written consent of the Second Lien Agent (unless such consent is not required by the terms of any Second Lien Document or Second Lien Substitute Facility then in effect), no Priority Lien Document may be amended, supplemented, restated or otherwise modified and/or refinanced or entered into to the extent such amendment, supplement, restatement or modification and/or refinancing, or the terms of any new Priority Lien Document, would (i) cause the principal amount of the Priority Lien Obligations to exceed the Priority Lien Cap then in effect, (ii) result in the Weighted Yield applicable to the Priority Lien Debt increasing by more than 250 basis points above the Weighted Yield applicable to the Priority Lien Debt on the date hereof, (iii) modify or add any covenant, event of default or any other provision that would result in prohibiting or otherwise restricting one or more Grantors from making payments, repayments, redemptions, repurchases or other refinancings of the Second Lien Obligations that would otherwise be permitted under this Agreement and the Priority Lien Documents as in effect on the date hereof, (iv) contravene the provisions of this Agreement, (v) modify the amounts of or time periods applicable to any make-whole amounts, yield maintenance amounts, premium or call protection applicable to the Priority Lien Obligations unless (a) the Second Lien Documents are amended at such time to provide equivalent or better terms (from the perspective of the Second Lien Secured Parties), (b) the Second Lien Documents contain provisions providing for an automatic amendment or other expedited modification provisions in order to provide equivalent terms (from the perspective of the Second Lien Secured Parties) or (c) the Second Lien Secured Parties are offered an amendment to the Second Lien Documents at such time to provide equivalent or better terms (from the perspective of the Second Lien Secured Parties), (vi) add any additional Property as collateral for the Priority Lien Obligations unless such Property is added as collateral for the Second Lien Obligations or the Second Lien Secured Parties decline to take such collateral or (vii) provide for any Person to issue a guarantee or be required to issue a guarantee unless such Person guarantees the Second Lien Obligations or the Second Lien Secured Parties decline to take such guarantee.
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(b) Prior to the Discharge of Priority Lien Obligations, without the prior written consent of the Priority Lien Agent (unless such consent is not required by the terms of any Priority Lien Substitute Facility then in effect), no Second Lien Document or Third Lien Document and prior to the Discharge of the Second Lien Obligations, without the prior written consent of the Second Lien Agent, no Third Lien Document may be amended, supplemented, restated or otherwise modified and/or refinanced or entered into to the extent such amendment, supplement, restatement or modification and/or refinancing, or the terms of any new Second Lien Document or Third Lien Document, as applicable, would (i) modify or add any covenant or event of default that would prohibit one or more Grantors from making any payment in respect of the Priority Lien Obligations or, in the case of any Third Lien Document, in respect of the Second Lien Obligations, (ii) shorten the final maturity or weighted average life to maturity of the Second Lien Obligations or Third Lien Obligations, (iii) add any additional Property as collateral for the Second Lien Obligations or Third Lien Obligations unless such Property is added as collateral for the Priority Lien Obligations and the Second Lien Obligations or the Priority Lien Secured Parties or Second Lien Secured Parties, as applicable, decline to take such collateral, (iv) provide for any Person to issue a guarantee or be required to issue a guarantee unless such Person guarantees the Priority Lien Obligations and the Second Lien Obligations or the Priority Lien Secured Parties or Second Lien Secured Parties, as applicable, decline to take such guarantee, (v) add or provide for any increase in, or shorten the period for payment of, any mandatory prepayment or redemption provisions or shorten the period for reinvestment of any net cash proceeds (other than change of control or asset sale tender offer provisions substantially similar to those applicable under the Second Lien Documents, as in effect on the date hereof, or otherwise customary in the market at the time of such amendment, exchange or refinancing), (vi) result in the Weighted Yield applicable to the Second Lien Obligations or Third Lien Obligations as in effect on the issue date thereof increasing by more than 250 basis points above the Weighted Yield applicable to the Second Lien Obligations on the date hereof or Third Lien Obligations as in effect on the issue date thereof, (vii) modify the amounts of or time periods applicable to any make-whole amounts, yield maintenance amounts, premium or call protection applicable to the Second Lien Obligations or Third Lien Obligations unless (a) the Priority Lien Documents and Second Lien Documents, as applicable, are amended at such time to provide equivalent or better terms (from the perspective of the Priority Lien Secured Parties and, solely in the case of modifications to the Third Lien Obligations, the Second Lien Secured Parties), (b) the Priority Lien Documents contain provisions providing for an automatic amendment or other expedited modification provisions in order to provide equivalent terms (from the perspective of the Priority Lien Secured Parties and, solely in the case of modifications to the Third Lien Obligations, the Second Lien Secured Parties) or (c) the Priority Lien Secured Parties are offered an amendment to the Priority Lien Documents at such time to provide equivalent or better terms (from the perspective of the Priority Lien Secured Parties and, solely in the case of modifications to the Third Lien Obligations, the Second Lien Secured Parties), (viii) amend or otherwise modify any “Default” or “Event of Default” or covenants thereunder in a manner that is more onerous or restrictive to any Grantor as compared to the Priority Lien Documents (and, if applicable, the Second Lien Documents) unless the Priority Lien Documents and Second Lien Documents, as applicable, are amended at such time to provide equivalent or better terms (from the perspective of the Priority Lien Secured Parties and, solely in the case of modifications to the Third Lien Obligations, the Second Lien Secured Parties), (ix) amend or otherwise modify Section 6.01(g)(ii) of the Second Lien Indenture (or any corresponding provision of any Second Lien Substitute Facility) in a manner that would shorten or eliminate the time period during which a financial covenant default under the Priority Lien Credit Agreement does not result in an event of default under the Second Lien Indenture, (x) adversely affect the lien priority rights of the Priority Lien Secured Parties or Second Lien Secured Parties or (xi) contravene the provisions of this Agreement.
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(c) For the avoidance of doubt but subject in all respects to Sections 4.05(a) and (b) , (i) any Priority Lien Security Document may be amended or supplemented in accordance with the terms of the Priority Lien Documents, (ii) any Second Lien Security Document may be amended or supplemented in accordance with the terms of the Second Lien Documents and (iii) any Third Lien Security Document may be amended or supplemented in accordance with the applicable provisions of the Third Lien Collateral Trust Agreement.
Section 4.06 Legends . Each of:
(a) the Second Lien Agent acknowledges with respect to the Second Lien Indenture and the Second Lien Security Documents, and
(b) the Third Lien Collateral Trustee acknowledges with respect to (i) the Initial Third Lien Debt Facility and the Initial Third Lien Security Documents, if any, and (ii) the Additional Third Lien Debt Facility and the Additional Third Lien Security Documents, if any, that
the Grantors shall cause the Second Lien Indenture, the Initial Third Lien Debt Facility (if any), the Additional Third Lien Debt Facility (if any), the Second Lien Documents (other than control agreements to which both the Priority Lien Agent and the Second Lien Agent are parties), the Third Lien Documents (other than control agreements to which the Priority Lien Agent or the Second Lien Agent, as applicable, and the Third Lien Collateral Trustee are parties) and each associated Security Document (other than control agreements to which both the Priority Lien Agent and the Second Lien Agent are parties or, in the case of Third Lien Security Documents, other than control agreements to which the Priority Lien Agent or the Second Lien Agent, as applicable, and the Third Lien Collateral Trustee are parties) granting any security interest in the Collateral to contain a legend to the effect set forth on Annex I .
Section 4.07 Second Lien Secured Parties and Third Lien Secured Parties Rights as Unsecured Creditors; Judgment Lien Creditor . Both before and during an Insolvency or Liquidation Proceeding and whether before or after the Discharge of Priority Lien Obligations, any of the Second Lien Secured Parties and the Third Lien Secured Parties may take any actions and exercise any and all rights that would be available to a holder of unsecured claims; provided , however , that the Second Lien Secured Parties and the Third Lien Secured Parties may not take any of the actions prohibited by Section 3.01 , Section 3.02 , Section 3.05(a) or Section 4.02 ; provided , further , that in the event that any of the Second Lien Secured Parties or Third Lien Secured Parties becomes a judgment lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Second Lien Obligations or the Third Lien Obligations, as applicable, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations, as applicable) as the Second Liens and Third Liens, as applicable, are subject to this Agreement.
Section 4.08 Postponement of Subrogation .
(a) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that no payment or distribution to any Priority Lien Secured Party pursuant to the provisions of this Agreement shall entitle any Second Lien Secured Party or Third Lien Secured Party to exercise any rights of subrogation in respect thereof until, in the case of the Second Lien Secured Parties, the Discharge of Priority Lien Obligations shall each have occurred and, in the case of the Third Lien Secured Parties, the Discharge of Priority Lien Obligations and the Discharge of Second Lien Obligations shall each have occurred. Following the Discharge of Priority Lien Obligations, but subject to the reinstatement provided for in Section 4.03 , each Priority Lien Secured Party will execute such
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documents, agreements, and instruments as any Second Lien Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Priority Lien Obligations resulting from payments or distributions to such Priority Lien Secured Party by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Priority Lien Secured Party are paid by such Person upon request for payment thereof.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees that no payment or distribution to any Second Lien Secured Party pursuant to the provisions of this Agreement shall entitle any Third Lien Secured Party to exercise any rights of subrogation in respect thereof. Following the Discharge of Second Lien Obligations, but subject to the reinstatement provided for in Section 4.03 , each Second Lien Secured Party will execute such documents, agreements, and instruments as any Third Lien Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Second Lien Obligations resulting from payments or distributions to such Second Lien Secured Party by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Second Lien Secured Party are paid by such Person upon request for payment thereof.
Section 4.09 Acknowledgment by the Secured Debt Representatives . Each of the Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured Parties, the Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, and the Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, hereby acknowledges that this Agreement is a material inducement to enter into a business relationship, that each has relied on this Agreement to enter into the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents, as applicable, and all documentation related thereto, and that each will continue to rely on this Agreement in their related future dealings.
ARTICLE V
GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS
Section 5.01 General . (a) Prior to the Discharge of Priority Lien Obligations, the Priority Lien Agent agrees that if it shall at any time hold a Priority Lien on any Collateral that can be perfected by the possession or control of such Collateral, and if such Collateral is in fact in the possession or under the control of the Priority Lien Agent, the Priority Lien Agent will serve as gratuitous bailee for (i) the Second Lien Agent for the sole purpose of perfecting the Second Lien of the Second Lien Agent on such Collateral and (ii) the Third Lien Collateral Trustee for the sole purpose of perfecting the Third Lien of the Third Lien Collateral Trustee on such Collateral. It is agreed that the obligations of the Priority Lien Agent and the rights of the Second Lien Agent, the other Second Lien Secured Parties, the Third Lien Collateral Trustee and the other Third Lien Secured Parties in connection with any such bailment arrangement will be in all respects subject to the provisions of Article II . Notwithstanding anything to the contrary herein, the Priority Lien Agent will be deemed to make no representation as to the adequacy of the steps taken by it to perfect the Second Lien or Third Lien on any such Collateral and shall have no responsibility, duty, obligation or liability to the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party or any other Person for such perfection or failure to perfect, it being understood that the sole purpose of this Article is to enable the Second Lien Secured Parties to obtain a perfected Second Lien and the Third Lien Secured Parties to obtain a perfected Third Lien in such Collateral to the extent, if any, that such perfection results from the possession or control of such Collateral by the Priority Lien Agent. The Priority Lien Agent acting pursuant to this Section 5.01(a) shall not have by reason of the Priority Lien Security Documents, the Second Lien Security Documents, the Third Lien Security Documents, this Agreement or any other document or theory, a fiduciary relationship in respect of any Priority Lien Secured Party, the Second
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Lien Agent, any Second Lien Secured Party, the Third Lien Collateral Trustee or any Third Lien Secured Party. Subject to Section 4.03 , from and after the Discharge of Priority Lien Obligations, the Priority Lien Agent shall take all such actions in its power as shall be necessary or reasonably be requested by the Second Lien Agent (at the sole cost and expense of the Grantors) to transfer possession or control of such Collateral (in each case to the extent the Second Lien Agent has a Lien on such Collateral after giving effect to any prior or concurrent releases of Liens) to the Second Lien Agent for the benefit of all Second Lien Secured Parties.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Second Lien Agent agrees that if it shall at any time hold a Second Lien on any Collateral that can be perfected by the possession or control of such Collateral or of an Account in which such Collateral is held, and if such Collateral or any such Account is in fact in the possession or under the control of the Second Lien Agent, the Second Lien Agent will serve as gratuitous bailee for (and hereby acknowledges that it shall have “control” (as defined in Section 9-104 of the New York UCC) over such Account for the benefit of) the Third Lien Collateral Trustee for the sole purpose of perfecting the Third Lien of the Third Lien Collateral Trustee on such Collateral. It is agreed that the obligations of the Second Lien Agent and the rights of the Third Lien Collateral Trustee and the other Third Lien Secured Parties in connection with any such bailment arrangement will be in all respects subject to the provisions of Article II . Notwithstanding anything to the contrary herein, the Second Lien Agent will be deemed to make no representation as to the adequacy of the steps taken by it to perfect the Third Lien on any such Collateral and shall have no responsibility, duty, obligation or liability to the Third Lien Collateral Trustee or any other Third Lien Secured Party or any other Person for such perfection or failure to perfect, it being understood that the sole purpose of this Article is to enable the Third Lien Secured Parties to obtain a perfected Third Lien in such Collateral to the extent, if any, that such perfection results from the possession or control of such Collateral or any such Account by the Second Lien Agent. The Second Lien Agent acting pursuant to this Section 5.01(b) shall not have by reason of the Second Lien Security Documents, the Third Lien Security Documents, this Agreement or any other document or theory, a fiduciary relationship in respect of any Second Lien Secured Party, the Third Lien Collateral Trustee or any Third Lien Secured Party. Subject to Section 4.03 , from and after the Discharge of Second Lien Obligations, the Second Lien Agent shall take all such actions in its power as shall reasonably be requested by the Third Lien Collateral Trustee (at the sole cost and expense of the Grantors) to transfer possession or control of such Collateral or any such Account (in each case to the extent the Third Lien Collateral Trustee has a Lien on such Collateral or Account after giving effect to any prior or concurrent releases of Liens) to the Third Lien Collateral Trustee for the benefit of all Third Lien Secured Parties.
Section 5.02 Accounts . (a) Prior to the Discharge of Priority Lien Obligations, to the extent that any Account is under the control of the Priority Lien Agent at any time, the Priority Lien Agent will act as gratuitous bailee for (and hereby acknowledges that it shall have “control” (as defined in Section 9-104 of the New York UCC) over such Account for the benefit of) (i) the Second Lien Agent for the purpose of perfecting the Liens of the Second Lien Secured Parties and (ii) the Third Lien Collateral Trustee for the purpose of perfecting the Liens of the Third Lien Secured Parties in such Accounts and the cash and other assets therein as provided in Section 5.01 (but will have no duty, responsibility or obligation to the Second Lien Secured Parties or the Third Lien Secured Parties (including, without limitation, any duty, responsibility or obligation as to the maintenance of such control, the effect of such arrangement or the establishment of such perfection) except as set forth in the last sentence of this Section 5.02(a) ). Unless the Second Liens on such Collateral shall have been or concurrently are released, after the occurrence of Discharge of Priority Lien Obligations, the Priority Lien Agent shall, at the request of the Second Lien Agent, cooperate with the Grantors and the Second Lien Agent (at the expense of the Grantors) in permitting control of any Accounts to be transferred to the Second Lien Agent (or for other arrangements with respect to each such Account satisfactory to the Second Lien Agent to be made); provided, that nothing herein shall be deemed to limit the Second Lien Agent’s right to be (and remain) a party to any control agreement or the Third Lien Collateral Trustee’s right to be (and remain) a party to any control agreement.
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(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, to the extent that any Account is under the control of the Second Lien Agent at any time, the Second Lien Agent will act as gratuitous bailee for (and hereby acknowledges that it shall have “control” (as defined in Section 9-104 of the New York UCC) over such Account for the benefit of) the Third Lien Collateral Trustee for the purpose of perfecting the Liens of the Third Lien Secured Parties in such Accounts and the cash and other assets therein as provided in Section 5.01 (but will have no duty, responsibility or obligation to the Third Lien Secured Parties (including, without limitation, any duty, responsibility or obligation as to the maintenance of such control, the effect of such arrangement or the establishment of such perfection) except as set forth in the last sentence of this Section 5.02(b) ). Unless the Third Liens on such Collateral shall have been or concurrently are released, after the occurrence of Discharge of Second Lien Obligations, the Second Lien Agent shall, at the request of the Third Lien Collateral Trustee, cooperate with the Grantors and the Third Lien Collateral Trustee (at the expense of the Grantors) in permitting control of any Accounts to be transferred to the Third Lien Collateral Trustee (or for other arrangements with respect to each such Account satisfactory to the Third Lien Collateral Trustee to be made).
ARTICLE VI
APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS
Section 6.01 Application of Proceeds . (a) Prior to the Discharge of Priority Lien Obligations, and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, Collateral or proceeds received in connection with the enforcement or exercise of any rights or remedies with respect to any portion of the Collateral will be applied:
(i) first , to the payment in full in cash of all Priority Lien Obligations that are not Excess Priority Lien Obligations;
(ii) second , to the payment in full in cash of all Second Lien Obligations;
(iii) third , to the payment in full in cash of all Excess Priority Lien Obligations;
(iv) fourth , to the payment in full in cash of all Third Lien Obligations; and
(v) fifth , to NOG or as otherwise required by applicable law.
(b) Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, Collateral or proceeds received in connection with the enforcement or exercise of any rights or remedies with respect to any portion of the Collateral will be applied:
(i) first , to the payment in full in cash of all Second Lien Obligations;
(ii) second , to the payment in full in cash of all Excess Priority Lien Obligations;
(iii) third , to the payment in full in cash of all Third Lien Obligations; and
(iv) fourth , to NOG or as otherwise required by applicable law.
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Payments made on account of Secured Obligations under this Section 6.01 shall be made to the applicable Secured Debt Representative for application in accordance with its applicable Secured Debt Documents
Section 6.02 Determination of Amounts . Whenever a Secured Debt Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Priority Lien Obligations, Second Lien Obligations or Third Lien Obligations (or the existence of any commitment to extend credit that would constitute any such obligations), or the existence of any Lien securing any such obligations, or the Collateral subject to any such Lien, it may request in writing that such information be furnished to it in writing by the other Secured Debt Representatives and shall be entitled to make such determination on the basis of the information so furnished; provided , however , that if a Secured Debt Representative shall fail or refuse reasonably promptly to provide the requested information, the requesting Secured Debt Representative shall be entitled to make any such determination by such method as it may, in the exercise of its good faith judgment, determine, including by reliance upon an Officer’s Certificate of NOG. Each Secured Debt Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to NOG or any of its subsidiaries, any Secured Party or any other Person as a result of such determination.
ARTICLE VII
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;
CONSENT OF GRANTORS, ETC.
Section 7.01 No Reliance; Information . The Priority Lien Secured Parties, the Second Lien Secured Parties and the Third Lien Secured Parties shall have no duty to disclose to any Secured Party any information relating to NOG or any of the other Grantors, or any other circumstance bearing upon the risk of non-payment of any of the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations, as the case may be, that is known or becomes known to any of them or any of their Affiliates. In the event any Priority Lien Secured Party, any Second Lien Secured Party or any Third Lien Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information, to any Third Lien Secured Party, any Second Lien Secured Party or any Priority Lien Secured Party, as the case may be, it shall be under no obligation (a) to make, and shall not make or be deemed to have made, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of the information so provided, (b) to provide any additional information or to provide any such information on any subsequent occasion or (c) to undertake any investigation.
Section 7.02 No Warranties or Liability .
(a) The Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured Parties, acknowledges and agrees that, except for the representations and warranties set forth in Article VIII , (i) neither the Second Lien Agent nor any other Second Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Second Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon and (ii) neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Third Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.
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(b) The Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, acknowledges and agrees that, except for the representations and warranties set forth in Article VIII , (i) neither the Priority Lien Agent nor any other Priority Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Priority Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon and (ii) neither the Third Lien Collateral Trustee nor any other Third Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Third Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.
(c) The Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, acknowledges and agrees that, except for the representations and warranties set forth in Article VIII , (i) neither the Priority Lien Agent nor any other Priority Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Priority Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon and (ii) neither the Second Lien Agent nor any other Second Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Second Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.
(d) (i) The Priority Lien Agent and the other Priority Lien Secured Parties shall have no express or implied duty to the Second Lien Agent, any other Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party, (ii) the Second Lien Agent and the other Second Lien Secured Parties shall have no express or implied duty to the Priority Lien Agent, any other Priority Lien Secured Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party, and (iii) the Third Lien Collateral Trustee shall have no express or implied duty to the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Agent or any other Second Lien Secured Party, in each case to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of a default or an event of default under any Priority Lien Document, any Second Lien Document and any Third Lien Document (other than, in each case, this Agreement), regardless of any knowledge thereof which they may have or be charged with.
(e) Each of the Second Lien Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for itself and on behalf of each other Third Lien Secured Party, hereby waives any claim that may be had against the Priority Lien Agent or any other Priority Lien Secured Party arising out of any actions which the Priority Lien Agent or such Priority Lien Secured Party takes or omits to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any Collateral, and actions with respect to the collection of any claim for all or only part of the Priority Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Priority Lien Documents or the valuation, use, protection or release of any security for such Priority Lien Obligations. The Third Lien Collateral Trustee, for itself and on behalf each other Third Lien Secured Party, hereby waives any claim that may be had against the Second Lien Agent or any other Second Lien Secured Party arising out of any actions which the Second Lien Agent or such Second Lien Secured Party takes or omits to take following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any Collateral, and actions with respect to the collection of any claim for all or only part of the Second Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Second Lien Documents or the valuation, use, protection or release of any security for such Second Lien Obligations.
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Section 7.03 Obligations Absolute . The Lien priorities provided for herein and the respective rights, interests, agreements and obligations hereunder of the Priority Lien Agent and the other Priority Lien Secured Parties, the Second Lien Agent and the other Second Lien Secured Parties, and the Third Lien Collateral Trustee and the other Third Lien Secured Parties shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Secured Debt Document;
(b) subject to the limitations set forth in Section 4.05 , any change in the time, place or manner of payment of, or in any other term of (including the Replacing of), all or any portion of the Priority Lien Obligations or the Second Lien Obligations, it being specifically acknowledged that a portion of the Priority Lien Obligations or the Second Lien Obligations consist or may consist of Debt that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed;
(c) subject to the limitations set forth in Section 4.05 , any amendment, waiver or other modification, whether by course of conduct or otherwise, of any Secured Debt Document;
(d) the securing of any Priority Lien Obligations, Second Lien Obligations or Third Lien Obligations with any additional collateral or guarantees, or any exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral or any other collateral or any release of any guarantee securing any Priority Lien Obligations, Second Lien Obligations or Third Lien Obligations;
(e) the commencement of any Insolvency or Liquidation Proceeding in respect of NOG or any other Grantor; or
(f) any other circumstances that otherwise might constitute a defense available to, or a discharge of, NOG or any other Grantor in respect of the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations.
Section 7.04 Grantors Consent . Each Grantor hereby consents to the provisions of this Agreement and the intercreditor arrangements provided for herein and agrees that the obligations of the Grantors under the Secured Debt Documents will in no way be diminished or otherwise affected by such provisions or arrangements (except as expressly provided herein).
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.01 Representations and Warranties of Each Party . Each party hereto represents and warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement.
(b) This Agreement has been duly executed and delivered by such party.
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(c) The execution, delivery and performance by such party of this Agreement (i) do not require any consent or approval of, registration or filing with or any other action by any Governmental Authority, (ii) will not violate any applicable law or regulation or any order of any Governmental Authority or any indenture, agreement or other instrument binding upon such party and (iii) will not violate the charter, by-laws or other organizational documents of such party.
Section 8.02 Representations and Warranties of Each Representative . Each of the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee represents and warrants to the other parties hereto that it is authorized under the Priority Lien Credit Agreement, the Second Lien Indenture and the Third Lien Collateral Trust Agreement, as the case may be, to enter into this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01 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 or sent by telecopy, as follows:
(a) if to the Original Priority Lien Agent, to it at:
TPG Specialty Lending, Inc.
301 Commerce Street, Suite 3300
Fort Worth, TX 76012, Attention of Shari Williams
Telecopy No. (212) 430-7515
(b) if to the Original Second Lien Agent, to it at:
Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, Minnesota 55402
Attention: Northern Oil and Gas, Inc. Notes Administrator; and
(c) if to any other Secured Debt Representative, to such address as specified in the applicable Priority Confirmation Joinder.
Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. 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 telecopy or on the date five 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 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01 . As agreed to in writing among NOG, the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.
Section 9.02 Waivers; Amendment . (a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
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The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.02 , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified except pursuant to an agreement or agreements in writing entered into by each Secured Debt Representative; provided , however , that this Agreement may be amended from time to time as provided in the last paragraph of Section 4.04 ; provided further that any amendment, waiver or modification to Section 4.01 , 4.02 , 4.04 , and 4.05 , Article VII and Article IX that adversely affect the rights and obligations of NOG shall require the written consent of NOG. None of the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee shall be “bound” by any amendment, modification or waiver of this Agreement that adversely affects its or any Priority Lien Secured Party’s, Second Lien Secured Party’s or Third Lien Secured Party’s obligations, rights and protections, respectively, without its written consent.
Section 9.03 Actions Upon Breach; Specific Performance . (a) (i) Prior to the Discharge of Priority Lien Obligations, if any Second Lien Secured Party or Third Lien Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Grantor or the Collateral, such Grantor, with the prior written consent of the Priority Lien Agent, may interpose as a defense or dilatory plea the making of this Agreement, and any Priority Lien Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Grantor and (ii) following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, if any Third Lien Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Grantor or the Collateral, such Grantor, with the prior written consent of the Second Lien Agent, may interpose as a defense or dilatory plea the making of this Agreement, and any Second Lien Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Grantor.
(b) (i) Prior to the Discharge of Priority Lien Obligations, should any Second Lien Secured Party or Third Lien Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or take any other action in violation of this Agreement or fail to take any action required by this Agreement, the Priority Lien Agent or any other Priority Lien Secured Party (in its own name or in the name of the relevant Grantor) or the relevant Grantor, with the prior written consent of the Priority Lien Agent, (A) may obtain relief against such Second Lien Secured Party or Third Lien Secured Party, as applicable, by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each of the Second Lien Agent on behalf of each Second Lien Secured Party and the Third Lien Collateral Trustee on behalf of each Third Lien Secured Party that (I) the Priority 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 and Third Lien Secured Party waives any defense that the Grantors and/or the Priority Lien Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages, and (B) shall be entitled to damages, as well as reimbursement for all reasonable and documented costs and expenses incurred in connection with any action to enforce the provisions of this Agreement (provided that, for the avoidance of doubt and subject to Section 9.13, the Priority Lien Secured Parties shall only be entitled to such reimbursement from the Second Lien Secured Parties to the extent that the Priority Lien Secured Parties prevail in such action pursuant to a final non-appealable judgment or order from a court of competent jurisdiction) and (ii) following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien
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Obligations, should any Third Lien Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or take any other action in violation of this Agreement or fail to take any action required by this Agreement, the Second Lien Agent or any other Second Lien Secured Party (in its own name or in the name of the relevant Grantor) or the relevant Grantor, with the prior written consent of the Second Lien Agent, (A) may obtain relief against such Third Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by the Third Lien Collateral Trustee on behalf of each Third Lien Secured Party that (I) the Second Lien Secured Parties’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (II) each Third Lien Secured Party waives any defense that the Grantors and/or the Second Lien Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages, and (B) shall be entitled to damages, as well as reimbursement for all reasonable and documented costs and expenses incurred in connection with any action to enforce the provisions of this Agreement (provided that, for the avoidance of doubt and subject to Section 9.13, the Second Lien Secured Parties shall only be entitled to such reimbursement from the Third Lien Secured Parties to the extent that the Second Lien Secured Parties prevail in such action pursuant to a final non-appealable judgment from a court of competent jurisdiction).
Section 9.04 Parties in Interest . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Secured Parties, all of whom are intended to be bound by, and to be third-party beneficiaries of, this Agreement. No other Person will be entitled to rely on, have the benefit of or enforce this Agreement.
Section 9.05 Survival of Agreement . All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
Section 9.06 Counterparts . This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 9.07 Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate 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.
Section 9.08 Governing Law; Jurisdiction; Consent to Service of Process . (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY: SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; PROVIDED , THAT NOTHING CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT WILL PREVENT ANY PARTY FROM BRINGING ANY ACTION TO ENFORCE ANY AWARD OR JUDGMENT OR EXERCISE ANY RIGHT UNDER THIS AGREEMENT IN ANY OTHER FORUM IN WHICH JURISDICTION CAN BE ESTABLISHED.
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(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which 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 court referred to in paragraph (b) of this Section 9.08 . 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.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01 . Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.09 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, (i) 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 AND (ii) ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. 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.
Section 9.10 Headings . Article, Section and Annex headings 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 9.11 Conflicts . In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any Secured Debt Documents, the provisions of this Agreement shall control.
Section 9.12 Provisions Solely to Define Relative Rights . The provisions of this Agreement are and are intended solely for the purpose of defining the distinct and separate relative rights of the Priority Lien Secured Parties, the Second Lien Secured Parties and the Third Lien Secured Parties with respect to the Liens securing the Secured Obligations. None of NOG, any other Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement ( provided that nothing in this Agreement (other than Section 4.01 , 4.02 , 4.04 , and 4.05 ) is intended to or will amend, waive or otherwise modify the provisions of the Priority Lien Documents, the Second Lien Documents or the Third Lien Documents, as applicable), and except as expressly provided in this Agreement neither NOG nor any other Grantor may rely on the terms hereof (other than Section 4.01 , 4.02 , 4.04 , and 4.05 , Article VII and Article IX ). Nothing in this Agreement is intended to or shall impair the obligations of NOG or any other Grantor to pay the Obligations under the Secured Debt Documents as and when the same shall become due and payable in accordance with their terms, which are absolute and unconditional.
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Section 9.13 Certain Terms Concerning the Second Lien Agent and the Third Lien Collateral Trustee . (a) The Second Lien Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Second Lien Indenture and other Second Lien Documents; and in so doing, the Second Lien Agent shall not be responsible for the terms or sufficiency of this Agreement for any purpose. The Second Lien Agent shall have no duties or obligations under or pursuant to this Agreement other than such duties and obligations as are expressly set forth in this Agreement as duties and obligations on its part to be performed or observed. The Second Lien Agent shall be entitled to and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Second Lien Indenture and the other Second Lien Documents (including without limitation Article Seven and Article Twelve of the Second Lien Indenture and Article VII and Section 9.03 of the Security Agreement (as defined in the Second Lien Indenture)) as if such rights, immunities, indemnities and other protections were set forth herein.
(b) The Third Lien Collateral Trustee is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Third Lien Documents; and in so doing, the Third Lien Collateral Trustee shall not be responsible for the terms or sufficiency of this Agreement for any purpose. The Third Lien Collateral Trustee shall have no duties or obligations under or pursuant to this Agreement other than such duties and obligations as may be expressly set forth in this Agreement as duties and obligations on its part to be performed or observed. The Third Lien Collateral Trustee shall be entitled to and be protected by all of the rights, immunities, indemnities and other protections granted to it under any Third Lien Debt Facility and the Third Lien Documents as if such rights, immunities, indemnities and other protections were set forth herein.
Section 9.14 Certain Terms Concerning the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee . None of the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee shall have any liability or responsibility for the actions or omissions of any other Secured Party, or for any other Secured Party’s compliance with (or failure to comply with) the terms of this Agreement. None of the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee shall have individual liability to any Person if it shall mistakenly pay over or distribute to any Secured Party (or NOG) or otherwise any amounts in violation of the terms of this Agreement, so long as the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee, as the case may be, has not acted with gross negligence or willful misconduct. Each party hereto hereby acknowledges and agrees that each of the Priority Lien Agent, the Second Lien Agent and the Third Lien Collateral Trustee is entering into this Agreement solely in its capacity as such under the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents, respectively, and not in its individual capacity.
(a) The Priority Lien Agent shall not be deemed to owe any fiduciary duty to (i) the Second Lien Agent or any other Second Lien Secured Party or (ii) the Third Lien Collateral Trustee or any other Third Lien Representative or any other Third Lien Secured Party;
(b) the Second Lien Agent shall not be deemed to owe any fiduciary duty to (i) the Priority Lien Agent or any other Priority Lien Secured Party or (ii) the Third Lien Collateral Trustee or any other Third Lien Representative or any other Third Lien Secured Party; and
(c) the Third Lien Collateral Trustee shall not be deemed to owe any fiduciary duty to (i) the Priority Lien Agent or any other Priority Lien Secured Party or (ii) the Second Lien Agent or any other Second Lien Secured Party.
Section 9.15 Authorization of Secured Agents . By accepting the benefits of this Agreement and the other Priority Lien Security Documents, each Priority Lien Secured Party authorizes the Priority Lien Agent to enter into this Agreement and to act on its behalf as collateral agent hereunder and in connection
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herewith. By accepting the benefits of this Agreement and the other Second Lien Security Documents, each Second Lien Secured Party authorizes the Second Lien Agent to enter into this Agreement and to act on its behalf as collateral agent hereunder and in connection herewith. By accepting the benefits of this Agreement and the other Third Lien Security Documents, each Third Lien Secured Party authorizes the Third Lien Collateral Trustee to enter into this Agreement and to act on its behalf as collateral agent hereunder and in connection herewith.
Section 9.16 Further Assurances . Each of the Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured Parties, the Second Lien Agent, for itself and on behalf of the other Second Lien Secured Parties, the Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien Secured Parties, and each Grantor party hereto, for itself and on behalf of its subsidiaries, agrees that it will execute, or will cause to be executed, any and all further documents, agreements and instruments, and take all such further actions, as may be required under any applicable law, or which the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee may reasonably request, to effectuate the terms of this Agreement, including the relative Lien priorities provided for herein.
Section 9.17 Relationship of Secured Parties . Nothing set forth herein shall create or evidence a joint venture, partnership or an agency or fiduciary relationship among the Secured Parties. Neither any of the Secured Parties nor any of their respective directors, officers, agents or employees shall be responsible to any other Secured Party or to any other Person for any Grantor’s solvency, financial condition or ability to repay the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations, or for statements of any Grantor, oral or written, or for the validity, sufficiency or enforceability of the Priority Lien Documents, the Second Lien Documents or the Third Lien Documents, or any security interests granted by any Grantor to any Secured Party in connection therewith. Each Secured Party has entered into its respective financing agreements with the Grantors based upon its own independent investigation, and none of the Priority Lien Agent, the Second Lien Agent or the Third Lien Collateral Trustee makes any warranty or representation to the other Secured Debt Representatives or the Secured Parties for which it acts as agent nor does it rely upon any representation of the other agents or the Secured Parties for which it acts as agent with respect to matters identified or referred to in this Agreement; provided that, nothing herein shall impose an obligation on the Second Lien Agent to undertake any investigation with respect to the Grantors beyond that which may be required by the Second Lien Indenture.
Section 9.18 Third Lien Provisions . Notwithstanding any of the foregoing provisions, until such time as the Third Lien Collateral Trustee has, pursuant to the terms hereof (including, but not limited to Section 4.04(c) ), entered into, and, for itself and on behalf of the Third Lien Secured Parties, agreed to be bound by the terms of, this Agreement and executed a Priority Confirmation Joinder, the provisions of this Agreement relating to the Third Lien Obligations (including, but not limited to, the definitions of “Additional Third Lien Debt Facility”, “Additional Third Lien Documents”, “Additional Third Lien Obligations”, “Additional Third Lien Secured Parties”, “Additional Third Lien Security Documents”, “Third Lien”, “Third Lien Collateral”, “Third Lien Collateral Trust Agreement”, “Third Lien Collateral Trustee”, “Third Lien Debt”, “Third Lien Documents”, “Third Lien First Standstill Period”, “Third Lien Obligations”, “Third Lien Representative”, “Third Lien Second Standstill Period”, “Third Lien Secured Parties”, “Third Lien Security Documents” and “Third Lien Substitute Facility” and provisions, insofar as they relate to Third Lien Obligations, Third Liens or Third Lien Documents, regarding priority, enforcement actions, Standstill Periods, release, Insolvency or Liquidation Proceedings, reinstatement, amendments and application of proceeds) shall not be operative.
[SIGNATURES BEGIN NEXT PAGE]
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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 day and year first above written.
TPG SPECIALTY LENDING, INC. , as Original Priority Lien Agent | ||
By: | ||
Name: | ||
Title: |
Signature Page
Intercreditor Agreement
WILMINGTON TRUST, NATIONAL ASSOCIATION , as Original Second Lien Agent |
By: | ||
Name: | ||
Title: |
Signature Page
Intercreditor Agreement
ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: | ||
NORTHERN OIL AND GAS, INC. |
By: | ||
Name: | ||
Title: |
Signature Page
Intercreditor Agreement
OTHER GRANTORS: | ||
[ ] | ||
By: | ||
Name: | ||
Title: |
Signature Page
Intercreditor Agreement
ANNEX I
Provision for the Second Lien Indenture, the Second Lien Documents, the Initial Third Lien Debt Facility, any Additional Third Lien Debt Facility and the Third Lien Documents
Reference is made to the Intercreditor Agreement dated as of May 15, 2018, between TPG Specialty Lending, Inc., as Priority Lien Agent (as defined therein), and Wilmington Trust, National Association, as Second Lien Agent (as defined therein) and acknowledged and agreed by Northern Oil and Gas, Inc. and certain of its subsidiaries (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Intercreditor Agreement ”). Each holder of [Second Lien Indenture Notes][Initial Third Lien Obligations][Additional Third Lien Obligations] (as defined therein), by its acceptance of such [Second Lien Indenture Notes][Initial Third Lien Obligations][Additional Third Lien Obligations] (i) consents to the subordination of Liens provided for in the Intercreditor Agreement, (ii) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement, (iii) authorizes and instructs the [Second Lien Agent][Third Lien Collateral Trustee] (as defined therein) on behalf of each [Second/Third] Lien Secured Party (as defined therein) to enter into the Intercreditor Agreement as [Second Lien Agent][Third Lien Collateral Trustee] on behalf of such [Second/Third] Lien Secured Parties and (iv) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available, to such Person. The foregoing provisions are intended as an inducement to the lenders under the Priority Lien Documents (as defined in the Intercreditor Agreement) to extend credit to Northern Oil and Gas, Inc., and such lenders are intended third-party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.
Provision for all Second Lien Security Documents the Initial Third Lien Security Documents and the Additional Third Lien Security Documents that Grant a Security Interest in Collateral
Reference is made to the Intercreditor Agreement, dated as of May 15, 2018, between TPG Specialty Lending, Inc., as Priority Lien Agent (as defined therein), and Wilmington Trust, National Association, as Second Lien Agent (as defined therein) and acknowledged and agreed by Northern Oil and Gas, Inc. and certain of its subsidiaries (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Intercreditor Agreement ”). Each Person that is secured hereunder, by accepting the benefits of the security provided hereby, (i) consents (or is deemed to consent), to the subordination of Liens provided for in the Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the [Second Lien Agent] [Third Lien Collateral Trustee] (as defined in the Intercreditor Agreement) on behalf of such Person to enter into, and perform under, the Intercreditor Agreement and (iv) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available, to such Person.
Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Security Documents (as defined in the Intercreditor Agreement). In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.
Annex I-1
EXHIBIT A
to Intercreditor Agreement
[FORM OF]
PRIORITY CONFIRMATION JOINDER
Reference is made to the Intercreditor Agreement, dated as of May 15, 2018 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Intercreditor Agreement ”) between TPG Specialty Lending, Inc., as Priority Lien Agent for the Priority Lien Secured Parties (as defined therein), and Wilmington Trust, National Association, as Second Lien Agent for the Second Lien Secured Parties (as defined therein) and acknowledged and agreed by Northern Oil and Gas, Inc. and certain of its subsidiaries.
Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Intercreditor Agreement. This Priority Confirmation Joinder is being executed and delivered pursuant to Section 4.04 [(a) ][(b)][(c)] of the Intercreditor Agreement as a condition precedent to the debt for which the undersigned is acting as representative being entitled to the rights and subject to the obligations of being [Priority Lien Obligations][Second Lien Obligations][Additional Third Lien Obligations][Initial Third Lien Obligations] under the Intercreditor Agreement.
1. Joinder . The undersigned, [ ], a [ ], (the “ New Representative ”) as [trustee] [collateral trustee] [administrative agent] [collateral agent] under that certain [describe applicable indenture, credit agreement or other document governing the [Priority Lien][Second Lien][Initial Third Lien][Additional Third Lien] Obligations] hereby:
(a) represents that the New Representative has been authorized to become a party to the Intercreditor Agreement on behalf of the [Priority Lien Secured Parties under a Priority Lien Substitute Facility] [Second Lien Secured Parties under the Second Lien Substitute Facility] [Initial Third Lien Secured Parties under the Initial Third Lien Debt Facility] [Additional Third Lien Secured Parties under the Additional Third Lien Debt Facility] as [a Priority Lien Agent under a Priority Lien Substitute Facility] [a Second Lien Agent under a Second Lien Substitute Facility] [a Third Lien Collateral Trustee under a Third Lien Substitute Facility] [Secured Debt Representative] [Third Lien Representative] under the Intercreditor Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Intercreditor Agreement as fully as if the undersigned had executed and delivered the Intercreditor Agreement as of the date thereof; and
(b) agrees that its address for receiving notices pursuant to the Intercreditor Agreement shall be as follows:
[Address];
2. Priority Confirmation .
[ Option A: to be used if additional debt constitutes Priority Lien Debt ] The undersigned New Representative, on behalf of itself and each Priority Lien Secured Party for which the undersigned is acting as [Administrative Agent] hereby agrees, for the benefit of all Secured Parties and each future Secured Debt Representative, and as a condition to being treated as Priority Lien Obligations under the Intercreditor Agreement, that:
Exhibit A-1
the New Representative is bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens (subject, in the case of Second Liens, to the Priority Lien Cap) Second Liens and Third Liens and the order of application of proceeds from enforcement of Priority Liens (subject, in the case of Second Liens, to the Priority Lien Cap) Second Liens and Third Liens. [or]
[ Option B: to be used if additional debt constitutes Second Lien Debt ] The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Second Lien Debt that constitutes a Second Lien Substitute Facility for which the undersigned is acting as [Second Lien Agent] hereby agrees, for the benefit of all Secured Parties and each future Secured Debt Representative, and as a condition to being treated as Secured Obligations under the Intercreditor Agreement, that:
(a) all Second Lien Obligations will be and are secured equally and ratably by all Second Liens at any time granted by NOG or any other Grantor to secure any Obligations in respect of such Second Lien Debt, whether or not upon property otherwise constituting Collateral for such Second Lien Debt, and that all such Second Liens will be enforceable by the Second Lien Agent with respect to such Second Lien Debt for the benefit of all Second Lien Secured Parties equally and ratably; and
(b) the New Representative and each holder of Obligations in respect of Second Lien Debt for which the undersigned is acting as [Second Lien Agent] are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens, Second Liens and Third Liens and the order of application of proceeds from enforcement of Priority Liens, Second Liens and Third Liens; [or]
[ Option C: to be used if additional debt constitutes a Series of Third Lien Debt ] The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Third Lien Debt [that constitutes the Initial Third Lien Debt Facility] [that constitutes a Third Lien Substitute Facility] [that constitutes an Additional Third Lien Debt Facility] for which the undersigned is acting as [Third Lien Representative] [Third Lien Collateral Trustee] hereby agrees, for the benefit of all Secured Parties and each future Secured Debt Representative, and as a condition to being treated as Secured Obligations under the Intercreditor Agreement, that:
(a) all Third Lien Obligations will be and are secured equally and ratably by all Third Liens at any time granted by NOG or any other Grantor to secure any Obligations in respect of such Series of Third Lien Debt, whether or not upon property otherwise constituting Collateral for such Series of Third Lien Debt, and that all such Third Liens will be enforceable by the Third Lien Collateral Trustee with respect to such Series of Third Lien Debt for the benefit of all Third Lien Secured Parties equally and ratably;
(b) the New Representative and each holder of Obligations in respect of the Series of Third Lien Debt for which the undersigned is acting as [ Third Lien Representative ] [ Third Lien Collateral Trustee ] are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens, Second Liens and Third Liens and the order of application of proceeds from enforcement of Priority Liens, Second Liens and Third Liens; and
[(c) the New Representative and each holder of Obligations in respect of the Series of Third Lien Debt for which the undersigned is acting as [ Third Lien Representative ] appoints the Third Lien Collateral Trustee and consents to the terms of the Intercreditor Agreement and the performance by the Third Lien Collateral Trustee of, and directs the Third Lien Collateral Trustee to perform, its obligations under the Intercreditor Agreement and the Third Lien Collateral Trust Agreement, together with all such powers as are reasonably incidental thereto.] 1
1 | Necessary only in the case of an incurrence of Additional Third Lien Obligations. |
Exhibit A-2
3. Full Force and Effect of Intercreditor Agreement . Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
4. Governing Law and Miscellaneous Provisions . The provisions of Article IX of the Intercreditor Agreement will apply with like effect to this Priority Confirmation Joinder.
5. Expenses . NOG agrees to reimburse each Secured Debt Representative for its reasonable out-of-pocket expenses in connection with this Priority Confirmation Joinder, including the reasonable fees, other charges and disbursements of counsel.
Exhibit A-3
IN WITNESS WHEREOF, the parties hereto have caused this Priority Confirmation Joinder to be executed by their respective officers or representatives as of [ , 20 ].
[insert name of New Representative] |
By: | ||
Name: | ||
Title: |
The Priority Lien Agent hereby acknowledges receipt of this Priority Confirmation Joinder [and agrees to act as Priority Lien Agent for the New Representative and the holders of the Obligations represented thereby]:
|
||
as Priority Lien Agent | ||
By: | ||
Name: | ||
Title: |
The Second Lien Agent hereby acknowledges receipt of this Priority Confirmation Joinder:
|
||
as Second Lien Agent | ||
By: | ||
Name: | ||
Title: |
[The Third Lien Collateral Trustee hereby acknowledges receipt of this Priority Confirmation Joinder [and agrees to act as Third Lien Collateral Trustee for the New Representative and the holders of the Obligations represented thereby]:
|
||
as Third Lien Collateral Trustee | ||
By: | ||
Name: | ||
Title: |
Exhibit A-4
Acknowledged and Agreed to by: | ||
NORTHERN OIL AND GAS, INC. |
By: | ||
Name: | ||
Title: |
Exhibit A-5
EXHIBIT B
to Intercreditor Agreement
SECURITY DOCUMENTS
PART A.
List of Priority Lien Security Documents
[ ]
PART B.
List of Second Lien Security Documents
[ ]
PART C.
List of Initial Third Lien Security Documents
None as of the date hereof.
Exhibit B-1