SIXTH AMENDMENT TO SENIOR REVOLVING CREDIT AGREEMENT DATED AS OF OCTOBER 31, 2013 AMONG HALCN RESOURCES CORPORATION, AS BORROWER, THE GUARANTORS, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, WELLS FARGO BANK, N.A. AS SYNDICATION AGENT, BANK OF MONTREAL, AS DOCUMENTATION AGENT, AND THE LENDERS PARTY HERETO J. P. MORGAN SECURITIES LLC, AS SOLE LEAD ARRANGER J. P. MORGAN SECURITIES LLC AND WELLS FARGO SECURITIES, LLC, AS JOINT BOOKRUNNERS

EX-10.11 2 a2217109zex-10_11.htm EX-10.11

Exhibit 10.11

 

 

SIXTH AMENDMENT

 

TO

 

SENIOR REVOLVING CREDIT AGREEMENT

 

DATED AS OF OCTOBER 31, 2013

 

AMONG

 

HALCÓN RESOURCES CORPORATION,
AS BORROWER,

 

THE GUARANTORS,

 

JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,

 

WELLS FARGO BANK, N.A.
AS SYNDICATION AGENT,

 

BANK OF MONTREAL,
AS DOCUMENTATION AGENT,

 

AND

 

THE LENDERS PARTY HERETO

 

 

J. P. MORGAN SECURITIES LLC,

AS SOLE LEAD ARRANGER

 

J. P. MORGAN SECURITIES LLC AND WELLS FARGO SECURITIES, LLC,

AS JOINT BOOKRUNNERS

 



 

SIXTH AMENDMENT
TO SENIOR REVOLVING CREDIT AGREEMENT

 

THIS SIXTH AMENDMENT TO SENIOR REVOLVING CREDIT AGREEMENT (this “Sixth Amendment”) dated as of October 31, 2013 is among HALCÓN RESOURCES CORPORATION, a corporation duly formed and existing under the laws of the State of Delaware (the “Borrower”), each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”), each of the undersigned lenders party to the Credit Agreement referred to below, JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”), Wells Fargo Bank, N.A., as syndication agent for the Lenders and Bank of Montreal, as documentation agent for the Lenders.

 

R E C I T A L S

 

A.                                    The Borrower, the Administrative Agent, the Lenders and the other Agents party thereto, are parties to that certain Senior Revolving Credit Agreement dated as of February 8, 2012 (as amended by the First Amendment dated July 31, 2012, the Second Amendment dated January 25, 2013, the Third Amendment dated April 26, 2013, the Fourth Amendment dated May 8, 2013, the Fifth Amendment dated June 11, 2013 and as may be further amended, restated, modified or supplemented, the “Credit Agreement”), pursuant to which the Lenders have made certain credit and other financial accommodations available to and on behalf of the Borrower and its Subsidiaries.

 

B.                                    The Borrower has requested and the Administrative Agent and each of the Lenders have agreed to amend certain provisions of the Credit Agreement.

 

C.                                    NOW, THEREFORE, to induce the Administrative Agent and each of the Lenders to enter into this Sixth Amendment and 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 used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Sixth Amendment.  Unless otherwise indicated, all section references in this Sixth Amendment refer to sections of the Credit Agreement.

 

Section 2.                                           Amendments to Credit Agreement.

 

2.1                               Financial Covenants.  Section 9.01(a) of the Credit Agreement is amended, in its entirety, effective as of the Sixth Amendment Effective Date to read as follows:

 

“(a)                           Interest Coverage Ratio.  The Borrower will not, as of the last day of any fiscal quarter, permit its Interest Coverage Ratio to be to be less than 2.5 to 1.0; provided that (i) for the fiscal quarter ended December 31, 2013, the Interest Coverage Ratio shall be calculated by utilizing EBITDA for the three month period then ended multiplied by 4; (ii) for the fiscal quarter ended March 31, 2014, the Interest Coverage Ratio shall be calculated by utilizing EBITDA for the

 



 

six month period then ended multiplied by 2; and (iii) for the fiscal quarter ended June 30, 2014, the Interest Coverage Ratio shall be calculated by utilizing EBITDA for the nine month period then ended multiplied by 4/3.”

 

2.2                               Maximum Credit Amounts.  Annex I of the Credit Agreement is hereby deleted, in its entirety, effective as of the Sixth Amendment Effective Date, and replaced with Annex I attached hereto.

 

Section 3.                                                                   Increase in Borrowing Base.  As of the Sixth Amendment Effective Date, each of the Lenders and the Borrower agree that the amount of the Borrowing Base shall be $850,000,000 and such Borrowing Base shall remain in effect until the Borrowing Base is otherwise redetermined or adjusted in accordance with the Credit Agreement or Section 4 hereof.  This provision does not limit the right of the parties to initiate interim redeterminations of the Borrowing Base in accordance with Section 2.07(b) or further adjustments pursuant to Section 2.07(e), Section 2.07(f), Section 8.13(c) or Section 9.13.  The parties hereto acknowledge and agree that the Borrowing Base redetermination set forth in this Section 3 shall be deemed to be the Scheduled Redetermination scheduled for November 1, 2013 as provided in Section 2.07(b). This Section 3 constitutes the New Borrowing Base Notice in accordance with Section 2.07(d).

 

Section 4.                                                                   Automatic Reduction of the Borrowing Base upon Citation Sale.  The Borrower has entered into agreements pursuant to which it shall dispose of certain Oil and Gas Properties to Citation Oil & Gas Corp. (the “Subject Disposition”).  Upon the consummation of the Subject Disposition, each of the Lenders and the Borrower agree that the amount of the Borrowing Base shall be automatically reduced so that the amount of the Borrowing Base shall be $800,000,000 and such Borrowing Base shall remain in effect until the Borrowing Base is otherwise redetermined or adjusted in accordance with the Credit Agreement.  The Lenders hereby agree that the reduction in the Borrowing Base pursuant to this Section 4 shall satisfy the requirements of Section 9.13(e)(iii) insofar as such requirements apply to the Subject Disposition and no waiver, consent or additional reduction of the Borrowing Base shall be required in connection with the Subject Disposition.  This provision does not limit the right of the parties to initiate (a) interim redeterminations of the Borrowing Base in accordance with Section 2.07(b), (b) further adjustments pursuant to Section 2.07(e), Section 2.07(f) or Section 8.13(c), or (c) adjustments pursuant to Section 9.13 not made in connection with the Subject Disposition.

 

Section 5.                                           Conditions Precedent.  This Sixth Amendment shall become effective on the date when the Administrative Agent shall have received a counterpart of this Sixth Amendment signed by the Borrower, the Guarantors and each of the Lenders and each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (such date, the “Sixth Amendment Effective Date”):

 

At the time of and immediately after giving effect to this Sixth Amendment, (i) no Default or Event of Default shall have occurred and be continuing and (ii) no event or events shall have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

The Administrative Agent is hereby authorized and directed to declare this Sixth 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 5 or the waiver of such conditions as permitted in Section 12.02 of the Credit Agreement.  Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.

 

Section 6.                                           Miscellaneous.

 

6.1                               Confirmation.  The provisions of the Credit Agreement, as amended by this Sixth Amendment, shall remain in full force and effect following the effectiveness of this Sixth Amendment.

 

6.2                               Ratification and Affirmation; Representations and Warranties.  Each Obligor hereby (a) acknowledges the terms of this Sixth Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, and (c) represents and warrants to the Lenders that on and as of the date hereof, and immediately after giving effect to the terms of this Sixth Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except those which have a materiality qualifier, which shall be true and correct as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date; (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

6.3                               Loan Document.  This Sixth Amendment is a Loan Document.

 

6.4                               Counterparts.  This Sixth Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this Sixth Amendment by facsimile or electronic transmission in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

 

6.5                               NO ORAL AGREEMENT.  THIS SIXTH AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

6.6                               GOVERNING LAW.  THIS SIXTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

 

6.7                               Severability.  Any provision of this Sixth Amendment 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, and any

 



 

such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

6.8                               Successors and Assigns.  This Sixth Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[This page intentionally left blank.  Signature pages follow.]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to be duly executed as of the date first written above.

 

BORROWER:

HALCÓN RESOURCES CORPORATION

 

 

 

By:

/s/ MARK J. MIZE

 

 

Name:

Mark J. Mize

 

 

Title:

Executive Vice President, Chief Financial Officer and Treasurer

 

 

 

GUARANTORS:

HALCÓN HOLDINGS, INC.

 

HALCÓN RESOURCES OPERATING, INC.

 

HALCÓN ENERGY PROPERTIES, INC.

 

HALCÓN ENERGY HOLDINGS, LLC

 

HALCÓN GULF STATES, LLC

 

HALCÓN OPERATING CO., INC.

 

HRC ENERGY RESOURCES (WV), INC.

 

HRC ENERGY LOUISIANA, LLC

 

HRC PRODUCTION COMPANY

 

HALCÓN FIELD SERVICES, LLC

 

HALCÓN LOUISIANA OPERATING, L.P.

 

HRC ENERGY, LLC

 

HRC OPERATING, LLC

 

HK ENERGY, LLC

 

HK ENERGY OPERATING, LLC

 

HK LOUISIANA OPERATING, LLC

 

HK OIL & GAS, LLC

 

HALCÓN WILLISTON I, LLC

 

HALCÓN WILLISTON II, LLC

 

 

 

 

 

By:

/s/ MARK J. MIZE

 

 

Name:

Mark J. Mize

 

 

Title:

Executive Vice President, Chief Financial Officer and Treasurer, for and on behalf of each of the foregoing Guarantors

 



 

ADMINISTRATIVE AGENT
AND LENDER:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Lender

 

 

 

By:

/s/ RONALD DIERKER

 

 

Name:

Ronald Dierker

 

 

Title:

Authorized Signatory

 



 

LENDER:

WELLS FARGO BANK, N.A.,

 

as Lender

 

 

 

By:

/s/ TODD FOGLE

 

 

Name:

Todd Fogle

 

 

Title:

Vice President

 


 

LENDER:

BMO HARRIS FINANCING, INC.,
as Lender

 

 

 

By:

/s/ JAMES V. DUCOTE

 

 

Name:

James V. Ducote

 

 

Title:

Director

 



 

LENDER:

BARCLAYS BANK PLC,
as Lender

 

 

 

By:

/s/ VANESSA A. KURBATSKIY

 

 

Name:

Vanessa A. Kurbatskiy

 

 

Title:

Vice President

 



 

LENDER:

SUNTRUST BANK,
as Lender

 

 

 

By:

/s/ SHANNON JUHAN

 

 

Name:

Shannon Juhan

 

 

Title:

Vice President

 



 

LENDER:

CAPITAL ONE, NATIONAL ASSOCIATION,
as Lender

 

 

 

By:

/s/ VICTOR PONCE DE LEON

 

 

Name:

Victor Ponce de Leon

 

 

Title:

Vice President

 



 

LENDER:

GOLDMAN SACHS BANK USA,
as Lender

 

 

 

By:

/s/ MICHELLE LATZONI

 

 

Name:

Michelle Latzoni

 

 

Title:

Authorized Signatory

 



 

LENDER:

ROYAL BANK OF CANADA,
as Lender

 

 

 

By:

/s/ JAY SARTAIN

 

 

Name:

Jay Sartain

 

 

Title:

Authorized Signatory

 



 

LENDER:

BANK OF AMERICA, N.A.,
as Lender

 

 

 

By:

/s/ ADAM H. FEY

 

 

Name:

Adam H. Fey

 

 

Title:

Director

 



 

LENDER:

THE ROYAL BANK OF SCOTLAND PLC,
as Lender

 

 

 

By:

/s/ JAMES L. MOYES

 

 

Name:

James L. Moyes

 

 

Title:

Authorized Signatory

 


 

LENDER:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Lender

 

 

 

By:

/s/ VIPUL DHADDA

 

 

Name:

Vipul Dhadda

 

 

Title:

Authorized Signatory

 

 

 

 

 

By:

/s/ MICHAEL SPAIGHT

 

 

Name:

Michael Spaight

 

 

Title:

Authorized Signatory

 



 

LENDER:

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as Lender

 

 

 

By:

/s/ DENNIS PETITO

 

 

Name:

Dennis Petito

 

 

Title:

Managing Director

 

 

 

By:

/s/ MARK ROCHE

 

 

Name:

Mark Roche

 

 

Title:

Managing Director

 



 

LENDER:

NATIXIS,
as Lender

 

 

 

By:

/s/ TIMOTHY L POLVADO

 

 

Name:

Timothy L. Polvado

 

 

Title:

Managing Director

 

 

 

By:

/s/ STUART MURRAY

 

 

Name:

Stuart Murray

 

 

Title:

Managing Director

 



 

LENDER:

ING CAPITAL LLC,
as Lender

 

 

 

By:

/s/ CHARLES HALL

 

 

Name:

Charles Hall

 

 

Title:

Managing Director

 



 

LENDER:

COMERICA BANK,
as Lender

 

 

 

By:

/s/ WILLIAM ROBINSON

 

 

Name:

William Robinson

 

 

Title:

Vice President

 



 

LENDER:

DEUTSCHE BANK TRUST COMPANY OF AMERICAS,
as Lender

 

 

 

By:

/s/ MICHAEL GETZ

 

 

Name:

Michael Getz

 

 

Title:

Vice President

 

 

 

By:

/s/ MARCUS M. TARKINGTON

 

 

Name:

Marcus M. Tarkington

 

 

Title:

Director

 


 

LENDER:

SUMITOMO MITSUI BANKING CORPORATION,
as Lender

 

 

 

By:

/s/ JAMES D. WEINSTEIN

 

 

Name:

James D. Weinstein

 

 

Title:

Managing Director

 



 

LENDER:

THE BANK OF NOVA SCOTIA,
as Lender

 

 

 

By:

/s/ TERRY DONOVAN

 

 

Name:

Terry Donovan

 

 

Title:

Managing Director

 



 

LENDER:

KEYBANK NATIONAL ASSOCIATION
as Lender

 

 

 

By:

/s/ PAUL J. PACE

 

 

Name:

Paul J. Pace

 

 

Title:

Senior Vice President

 



 

ANNEX I

 

LIST OF MAXIMUM CREDIT AMOUNTS

 

Aggregate Maximum Credit Amounts

 

Name of Lender

 

Applicable Percentage

 

Maximum Credit Amount

 

JPMorgan Chase Bank, N.A.

 

7.29

%

$

109,411,764.71

 

Wells Fargo Bank, N.A.

 

7.29

%

$

109,411,764.68

 

BMO Harris Financing, Inc.

 

5.88

%

$

88,235,294.12

 

Capital One, N.A.

 

5.88

%

$

88,235,294.12

 

SunTrust Bank

 

5.88

%

$

88,235,294.12

 

Royal Bank of Canada

 

5.88

%

$

88,235,294.12

 

The Royal Bank of Scotland plc

 

5.88

%

$

88,235,294.12

 

Credit Agricole Corporate and Investment Bank

 

5.88

%

$

88,235,294.12

 

Natixis

 

5.88

%

$

88,235,294.12

 

Bank of America, N.A.

 

5.88

%

$

88,235,294.12

 

ING Capital LLC

 

5.88

%

$

88,235,294.12

 

Deutsche Bank Trust Company Americas

 

5.88

%

$

88,235,294.12

 

Barclays Bank PLC

 

4.94

%

$

74,117,647.06

 

Goldman Sachs Bank USA

 

4.94

%

$

74,117,647.06

 

Credit Suisse AG, Cayman Islands Branch

 

4.47

%

$

67,058,823.53

 

Comerica Bank

 

3.06

%

$

45,882,352.94

 

Sumitomo Mitsui Banking Corporation

 

3.06

%

$

45,882,352.94

 

The Bank of Nova Scotia

 

3.06

%

$

45,882,352.94

 

KeyBank National Association

 

3.06

%

$

45,882,352.94

 

TOTAL:

 

100.0

%

$

1,500,000,000.00