FOURTH AMENDMENT to Senior SECURED Revolving Credit Agreement
Exhibit 10.1.4
FOURTH AMENDMENT to Senior SECURED Revolving Credit Agreement
This FOURTH AMENDMENT to Senior SECURED Revolving Credit Agreement, dated as of May 10, 2021 (this “Agreement”), is made by and among BATTALION OIL 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 “Loan Parties”), each of the undersigned Lenders and Issuing Banks party to the Credit Agreement referenced below, and BANK OF MONTREAL, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”). Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Credit Agreement. Unless otherwise indicated, all section references in this Agreement refer to the applicable section of the Credit Agreement.
PRELIMINARY STATEMENTS
“Applicable Margin” means, for any day, with respect to any ABR Loan or Eurodollar Loan or the Commitment Fee Rate, as the case may be, the rate per annum set forth in the Borrowing Base Utilization Percentage grid below based upon the Borrowing Base Utilization Percentage then in effect:
Level | Borrowing Base Utilization Percentage | Eurodollar Loans | ABR Loans | Commitment Fee Rate |
1 | > 90% | 4.00 % | 3.00% | 0.50% |
2 | > 75% < 90% | 3.75% | 2.75% | 0.50% |
3 | > 50% < 75% | 3.50% | 2.50% | 0.50% |
4 | > 25% < 50% | 3.25% | 2.25% | 0.50% |
5 | < 25% | 3.00% | 2.00% | 0.50% |
Each change in the Applicable Margin or Commitment Fee Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change; provided, however, that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then the “Applicable Margin” and “Commitment Fee Rate” mean the rate per annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level.
“Bank Products” means commercial credit cards, merchant card services, purchase or debit cards, including non-card e-payables services, and treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
“Fourth Amendment Effective Date” means May 10, 2021.
(a)Reduction of Borrowing Base Upon Asset Dispositions and Termination of Swap Positions. If the Borrower or a Restricted Subsidiary (i) Disposes of (or any Casualty Event occurs in respect of) Oil and Gas Properties in excess of $1,000,000 per fiscal year (or, solely with respect to the fiscal year ending December 31, 2021, for the period commencing on the Fourth Amendment Effective Date and ending on December 31, 2021) (but excluding any Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in each case, subject to prior written notice to the extent required by Section 8.01(k)) or any Equity Interests in any Person owning Oil and Gas Properties (but excluding any Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in each case, subject to prior written notice to the extent required by Section 8.01(k)), or (ii) Unwinds Swap Agreements which, in each case are attributed any Borrowing Base Value, then the Borrowing Base shall be automatically reduced by an amount equal to (A) in the case of an Unwound Swap Agreement, the Borrowing Base Value attributable to such Unwound Swap Agreement in the current Borrowing Base or (B) in the case of any such Disposition, the Net Cash Proceeds received in respect of such Disposition. For the purposes of this Section 2.08(a), a Disposition of Oil and Gas Properties shall be deemed to include the designation of a Restricted Subsidiary owning Oil and Gas Properties as an Unrestricted Subsidiary and the Disposition of Oil and Gas Properties, or Equity Interests in any Person owning Oil and Gas Properties, to an Unrestricted Subsidiary.
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(vi)Dispositions and Unwinds. In addition to the foregoing mandatory prepayments set forth in this Section 3.04(c), from and after the Fourth Amendment Effective Date, upon any (A) Disposition of (or any Casualty Event in respect of) Oil and Gas Properties in excess of $1,000,000 per fiscal year (or, solely with respect to the fiscal year ending December 31, 2021, for the period commencing on the Fourth Amendment Effective Date and ending on December 31, 2021) (but excluding any Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in each case, subject to prior written notice to the extent required by Section 8.01(k)) or any Equity Interests in any Person owning Oil and Gas Properties (but excluding any Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in each case, subject to prior written notice to the extent required by Section 8.01(k)), or (B) Unwind of Swap Agreements, which, in each case are attributed any Borrowing Base Value, the Borrower shall prepay the Loans in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Disposition or Unwind.
(s)Strategic Alternatives. The Borrower shall, and shall make its representatives available for, conference calls to be conducted on a periodic basis, but no less frequently than once a calendar month (beginning in June, 2021), for the purpose of providing the Administrative Agent with an update on the status and progress of any material transactions affecting the Loan Parties or their assets and liabilities, including any refinancing and/or sale transactions, accompanied, in each case and subject to the Administrative Agent’s reasonable request, by a written summary of such update. The Borrower shall provide the Administrative Agent of no less than three (3) Business Days’ advance notice of such conference calls.
From and after the Fourth Amendment Effective Date, in the event that any Subsidiary is formed or acquired by the Borrower or any of its Subsidiaries, the Borrower shall promptly cause such Subsidiary to guarantee and secure the Secured Obligations pursuant to the Guaranty Agreement.
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provided that the aggregate amount of such Indebtedness and Indebtedness incurred pursuant to Section 9.02(i), Section 9.02(j) and Section 9.02(k) does not exceed the greater of $10,000,000 or 5% of the then effective Borrowing Base at any one time outstanding;
(ii) the aggregate amount of such Indebtedness and Indebtedness incurred pursuant to Section 9.02(d), Section 9.02(j) and Section 9.02(k) does not exceed the greater of $10,000,000 or 5% of the then effective Borrowing Base at any one time outstanding;
; provided further that, the aggregate amount of such Specified Additional Indebtedness and Indebtedness incurred pursuant to Section 9.02(d), Section 9.02(i) and Section 9.02(k) does not exceed the greater of $10,000,000 or 5% of the then effective Borrowing Base at any one time outstanding; and
; provided that the aggregate amount of such Indebtedness and other Indebtedness incurred pursuant to Section 9.02(d), Section 9.02(i) and Section 9.02(j) does not exceed the greater of $10,000,000 or 5% of the then effective Borrowing Base at any one time outstanding.
[reserved].
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Section 9.06Designation and Conversion of Restricted and Unrestricted Subsidiaries. On and after the Fourth Amendment Effective Date, the Borrower will not, and will not permit any Subsidiary to, at any time be designated or classified as an Unrestricted Subsidiary. The Borrower shall not, and shall not permit any other Restricted Subsidiary to have any Unrestricted Subsidiaries.
(i)at least 100% of the consideration received in respect of any such sale or other Disposition or Unwind shall be cash and if a Borrowing Base Deficiency exists at such time then 100% of such cash consideration received in respect of any such sale or other Disposition or Unwind shall be applied as a prepayment to reduce the Borrowing Base Deficiency,
Notwithstanding anything herein to the contrary, any Disposition or Unwind that is permitted by this Section 9.13 and which has a fair market value in excess of the greater of $7,500,000 or 3.5% of the then effective Borrowing Base shall not be permitted without the prior written consent of the Lenders and the Administrative Agent.
Section 9.16Subsidiaries. The Borrower will not, and will not permit any Restricted Subsidiary to, create or acquire any additional Restricted Subsidiary unless the Borrower gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 8.14(b) and Section 8.14(c). All Restricted Subsidiaries will be Wholly-Owned Subsidiaries. The Borrower shall not, and shall not permit any other Restricted Subsidiary to, have any Foreign Subsidiaries or Unrestricted Subsidiaries. As of the Fourth Amendment Effective Date, any new Subsidiary shall become a Guarantor and comply with Section 8.14(b).
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The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
Failure to comply with this Section 4 will result in an Event of Default.
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[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Agreement as of the date first written above.
BORROWER: | BATTALION OIL CORPORATION (F/K/A HALCÓN RESOURCES CORPORATION) |
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| By: /s/ R. Xxxxx Xxxxxxx ______ Name:R. Xxxxx Xxxxxxx |
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GUARANTORS: | HALCÓN HOLdings, LLC |
| BATTALION OIL MANAGEMENT, INC. (F/K/A HALCÓN RESOURCES OPERATING, INC.) |
| HALCÓN Energy PROPERTIES, Inc. |
| HALCÓN Permian, LLC |
| HALCÓN Operating CO., Inc. |
| HALCÓN field services, llc |
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| By: /s/ R. Xxxxx Xxxxxxx ______ Name:R. Xxxxx Xxxxxxx |
[Signature Page to Fourth Amendment to Senior Secured Revolving Credit Agreement]
ADMINISTRATIVE AGENT AND LENDER: | BANK OF MONTREAL |
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| By: /s/ Xxxx Xxxxxxxx _______ |
[Signature Page to Fourth Amendment to Senior Secured Revolving Credit Agreement]
LENDER: | BMO XXXXXX FINANCING, INC. |
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| By: /s/ Xxxx Xxxxxxxx _______ |
[Signature Page to Fourth Amendment to Senior Secured Revolving Credit Agreement]
LENDER: | XXXXXXX SACHS LENDING PARTNERS LLC |
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| By: /s/ Xxx Xxxxxx _______ |
[Signature Page to Fourth Amendment to Senior Secured Revolving Credit Agreement]