Exhibit 10.1

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (hereinafter called this “Amendment”)
is entered into as of March 28, 2014, by and among MIDSTATES PETROLEUM
COMPANY, INC., a Delaware corporation (the “Parent”), MIDSTATES PETROLEUM
COMPANY LLC, a Delaware limited liability company (the “Borrower”), the Lenders
party hereto, and SUNTRUST BANK, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
“Administrative Agent”).

 

WITNESSETH:

 

WHEREAS, Borrower, Administrative Agent, the Issuing Lender, the Swing Line
Lender and the lenders party thereto (the “Lenders”) entered into that certain
Second Amended and Restated Credit Agreement dated as of June 8, 2012 (as
amended, restated, modified or supplemented from time to time prior to the date
hereof, the “Credit Agreement”), whereby the Lenders have agreed to make certain
loans to Borrower upon the terms and conditions set forth therein;

 

WHEREAS, on or after the date hereof, the Borrower and Parent intend to sell,
transfer, convey or otherwise dispose of certain portions of the Borrower’s Oil
and Gas Properties located in the State of Louisiana (each such disposition, a
“Louisiana Disposition”);

 

WHEREAS, in furtherance thereof, the Borrower, as seller, and Tana Exploration
Company LLC, as purchaser, have entered into a certain Purchase and Sale
Agreement dated as of March 5, 2014, pursuant to which Borrower will sell,
transfer, convey or otherwise dispose of certain of its oil and gas properties
in Evangeline Parish, Louisiana (the disposition thereof, the “Pine Prairie
Disposition”);

 

WHEREAS, to provide for additional liquidity for the Borrower and Parent during
the pendency of the Louisiana Dispositions (if any) or in the event no material
Louisiana Disposition is consummated, Borrower and Parent propose to incur
certain additional secured indebtedness pursuant to a new senior secured bridge
credit facility (the “Bridge Facility”) substantially on the terms set forth on
Exhibit A;

 

WHEREAS, the Borrower has requested that, upon (a) the consummation of any
Louisiana Disposition, (b) the Bridge Facility Effective Date, or (c) the Pine
Prairie Disposition, that in the case of (i) clauses (a) or (c), the portion of
the Borrower’s Oil and Gas Properties and any personal property directly related
thereto disposed of thereby and (ii) clause (b), all of the Borrower’s Oil and
Gas Properties located in the State of Louisiana and any personal property
directly related thereto, in each case, be released from the lien and security
interest of the Security Documents and, in regards to the entering into of
definitive documentation for the Bridge Facility, the Borrower be permitted to
grant a first priority mortgage lien on, and securities interest in, such Oil
and Gas Properties to secure the Bridge Facility;

 

WHEREAS, the Administrative Agent and the Lenders party hereto have determined
that, upon the first to occur of (a) the consummation of one or more Louisiana
Dispositions in exchange for an aggregate consideration (including consideration
for prior Louisiana Dispositions, if applicable) of at least $100,000,000,
(b) the Pine Prairie Disposition and (c)

 

--------------------------------------------------------------------------------

 

Bridge Facility Effective Date, the currently effective Conforming Borrowing
Base of $500,000,000 shall be automatically reduced to $475,000,000 until
otherwise redetermined in accordance with the Credit Agreement (which
affirmation of the currently effective Conforming Borrowing Base of
$500,000,000, together with the potential reduction in the Conforming Borrowing
Base, shall constitute the April 1, 2014 Scheduled Borrowing Base
Determination);

 

WHEREAS, Borrower has requested that the Administrative Agent and the Lenders
amend the Credit Agreement as described herein; and

 

WHEREAS, Administrative Agent and the Lenders are willing to amend the Credit
Agreement as requested by Borrower, subject to the terms and conditions set
forth herein;

 

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein contained, the parties to this Amendment hereby agree as follows:

 

Section 1.                                           Terms Defined in Credit
Agreement.  As used in this Amendment, except as may otherwise be provided
herein, all capitalized terms that are defined in the Credit Agreement (as
amended hereby) shall have the same meaning herein as therein defined, all of
such terms and their definitions being incorporated herein by reference.

 

Section 2.                                           Amendments to Credit
Agreement Upon the Fifth Amendment Effective Date.  On the Fifth Amendment
Effective Date, the Credit Agreement is hereby amended as follows:

 

(a)                                 Section 1.01 of the Credit Agreement is
hereby amended by adding the following definitions in the appropriate
alphabetical order:

 

“2021 Senior Notes” means the 9.25% Senior Notes due 2021 issued by Borrower and
Parent pursuant to an Indenture dated as of May 31, 2013 (as amended, restated,
supplemented or otherwise modified from time to time), among Borrower, Parent
and Wells Fargo Bank, National Association, as trustee.

 

“Fifth Amendment” means that certain Fifth Amendment to Credit Agreement, dated
as of March 28, 2014, among Parent, Borrower, the Lenders party thereto, and
Administrative Agent.

 

“Fifth Amendment Effective Date” means the date on which the Fifth Amendment
became effective in accordance with its terms.

 

(b)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the following definitions in their
entirety as follows:

 

“Permitted Refinancing Debt” means Indebtedness (for purposes of this
definition, “New Debt”) incurred in exchange for, or proceeds of which are used
to refinance, all of any other Indebtedness (the “Refinanced Debt”); provided
that (a) such New Debt is in an aggregate principal amount not in excess of 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

 

2

--------------------------------------------------------------------------------

 

upon a declaration of acceleration thereof, such lesser amount) (b) such New
Debt has a stated maturity no earlier than the stated maturity of the Refinanced
Debt and an average life no shorter than the average life of the Refinanced
Debt; (c) such New Debt does not contain any covenants which are more onerous to
Parent, Borrower and their respective Subsidiaries in any material respects than
those imposed by the Refinanced Debt (other than with respect to interest rates)
and (d) such New Debt (and any guarantees thereof) is subordinated in right of
payment to the Loan Obligations (or, if applicable, the Guaranty) to at least
the same extent as the Refinanced Debt and is otherwise subordinated on terms
substantially reasonably satisfactory to Administrative Agent.

 

“Senior Notes” means, collectively, (a) the 2020 Senior Notes and (b) the 2021
Senior Notes.

 

(c)                                  Clause (iii) of Section 2.04(f) of the
Credit Agreement is hereby deleted in its entirety.

 

(d)                                 The introductory clause of Section 8.12 is
hereby amended by deleting the words “or in any manner be liable under” and
clause (a) of Section 8.12 is hereby amended by deleting the words “at all
times” immediately prior to subclause (1) thereof.

 

(e)                                  The Pricing Grid in Section 1.D of Appendix
I to the Credit Agreement is hereby amended and restated in its entirety to
provide:

 

“D.                              Pricing Grid (Section 2.05)

 

 

 

 

 

Applicable 
Margin

 

Applicable
Margin

 

Applicable
Margin

Pricing Level

 

Borrowing Base
Utilization
Percentage

 

LIBOR Rate

 

Base Rate

 

Commitment
Fee

I

 

> 90%

 

300.0 bps

 

200.0 bps

 

50.0 bps

II

 

> 75% but < 90%

 

275.0 bps

 

175.0 bps

 

50.0 bps

III

 

> 50% but < 75%

 

250.0 bps

 

150.0 bps

 

50.0 bps

IV

 

> 25% but < 50%

 

225.0 bps

 

125.0 bps

 

37.5 bps

V

 

< 25%

 

200.0 bps

 

100.0 bps

 

37.5 bps

 

Each change in the Applicable Margin shall apply during the period commencing on
the date of such change in the Borrowing Base Utilization Percentage and ending
on the date immediately preceding the effective date of the next such change in
the Borrowing Base Utilization Percentage.”

 

3

--------------------------------------------------------------------------------

 

(f)                                   Section II.B of Appendix II to the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“B.                              Leverage Ratio.  As of the last day of any
fiscal quarter, Borrower’s ratio of Total Net Indebtedness to EBITDA for the
trailing four fiscal quarter period ending on the last day of such fiscal
quarter shall not exceed (i) 4.75:1.0, for the fiscal quarter ending March 31,
2014, (ii) 4.50:1.0 for the fiscal quarter ending June 30, 2014, (iii) 4.25:1.0,
for the fiscal quarters ending September 30, 2014 and December 31, 2014, and
(iv) 4.00:1.0, for the fiscal quarter ending March 31, 2015 and each fiscal
quarter thereafter; provided, however, that if the Parent, Borrower or their
respective Subsidiaries in one or more transactions sells or otherwise disposes
of Oil and Gas Properties located in the State of Louisiana for an aggregate
consideration equal to or exceeding $100,000,000, the maximum ratio of Total Net
Indebtedness to EBITDA otherwise permitted for the fiscal quarter in which the
sale or disposition that first resulted in such aggregate consideration equaling
or exceeding $100,000,000 was consummated and for each of the two succeeding
fiscal quarters thereafter, shall be increased by 0.50.”

 

Section 3.                                           Amendments to Credit
Agreement Upon Bridge Facility Effective Date.  Effective upon (and concurrently
with) the Bridge Facility Effective Date (as defined in Section 6 below), the
Credit Agreement shall automatically be further amended as follows:

 

(a)                                 Section 1.01 of the Credit Agreement is
hereby amended by adding the following definitions in the appropriate
alphabetical order:

 

“Louisiana Assets” means the Oil and Gas Properties of Parent, Borrower or their
respective Subsidiaries located in the State of Louisiana and any personal
property of Parent, Borrower or their respective Subsidiaries located thereon or
used exclusively in connection with the operation thereof.

 

“Permitted Bridge Refinancing Debt” means any Indebtedness (x) that is unsecured
or is secured by a Lien on Collateral that is subordinated to the Lien securing
the Obligations, and (y) a portion of the proceeds of which are used to
refinance Indebtedness outstanding under the Bridge Facility; provided that
(a) the aggregate principal amount of such Permitted Bridge Refinancing Debt
does not exceed $200,000,000, (b) such Permitted Bridge Refinancing Debt has a
stated maturity no earlier than August 30, 2019, and no scheduled amortization
prior to such stated maturity; (c) such Permitted Bridge Refinancing Debt does
not contain covenants that are, taken as a whole, more onerous to Parent,
Borrower and their respective Subsidiaries in any material respects than those
imposed by the Bridge Facility (other than with respect to interest rates) and
(d) such Permitted Bridge Refinancing Debt (and any guarantees thereof) is
subordinated in right of payment to the Loan Obligations (or, if applicable, the
Guaranty) to at least the same extent as the Bridge Facility.

 

4

--------------------------------------------------------------------------------

 

(b)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the following definitions in their
entirety as follows:

 

“Bridge Facility” means (i) the multiple draw term loan credit facility
evidenced by a senior secured bridge loan agreement by and among Borrower, as
borrower, SunTrust Bank, as administrative agent, and the lenders and other
financial parties thereto, as amended from time to time (to the extent such
amendments do not contravene the Loan Documents) in an aggregate principal
amount not to exceed $125,000,000 and otherwise substantially on the terms set
forth in Exhibit A to the Fifth Amendment, and (ii) any securities issued at the
initial maturity of the credit facility described in the foregoing clause (i),
or any loans or securities into which the credit facility described in
clause (i) is converted, in each case, pursuant to customary arrangements for
bridge financings in place on the date hereof and having a stated maturity no
earlier than August 30, 2019 and no scheduled amortization prior to such stated
maturity; provided that any refinancings of such securities or loans undertaken
at the option or election of the Parent or Borrower shall not constitute the
Bridge Facility.

 

(c)                                  Section 7.06 of the Credit Agreement is
hereby amended by replacing “(with respect to casualty insurance)” with the
phrase “(with respect to any casualty insurance (but at any time that the Bridge
Facility remains in effect, only to the extent it covers assets of the Borrower,
the Parent or their respective Subsidiaries other than the Louisiana Assets))”.

 

(d)                                 The proviso at the end of Section 7.14 of
the Credit Agreement is hereby amended and restated to provide as follows:

 

“provided that, in any event, the Parent and Borrower shall cause each
Subsidiary of the Parent that guaranties the Senior Notes, any Permitted
Additional Debt, the Bridge Facility or any Permitted Bridge Refinancing Debt to
execute and deliver to the Administrative Agent a Guaranty.”

 

(e)                                  Article VII of the Credit Agreement is
hereby amended by inserting the following new Section 7.18 immediately following
the existing Section 7.17.

 

Section 7.18                             Covenants Regarding Effectiveness of
Permitted Bridge Refinancing Debt.  Concurrently with the incurrence of any
Permitted Bridge Refinancing Debt, the Administrative Agent shall have received:

 

(a)                                 a pro forma consolidated balance sheet and
related pro forma consolidated statement of income of Parent as of and for the
fiscal year ending at least 120 days before the incurrence of the Permitted
Bridge Refinancing Debt, and each subsequent fiscal quarter after December 31 of
such fiscal year ending at least 45 days before the incurrence of the Permitted
Bridge Refinancing Debt, prepared after giving effect to the incurrence of the
Permitted Bridge Refinancing Debt as if the incurrence of the Permitted Bridge
Refinancing Debt had occurred as of such date (in the case of such balance
sheet) or at the beginning of such period (in the case of such other statements
of income), which shall reflect adjustments applied in accordance with
Regulation S-X of the Securities Act of 1933, as

 

5

--------------------------------------------------------------------------------

 

amended, including adjustments customary for a Rule 144A transaction and
consistent with the documentation for the 2021 Senior Notes; provided, that no
such pro forma financial statement shall be required to include adjustments for
purchase accounting (including adjustments of the type contemplated by Financial
Accounting Standards Board Accounting Standards Codification 805, Business
Combinations (formerly SFAS 141R));

 

(b)                                 a solvency certificate from a Responsible
Officer of Parent, in a form and substance substantially consistent with the
solvency certificate delivered on June 8, 2012 under the Credit Agreement,
confirming the solvency of Parent, Borrower and their respective Subsidiaries on
a consolidated basis after giving effect to the incurrence of the Permitted
Bridge Refinancing Debt; and

 

(c)                                  satisfactory evidence that, upon the
incurrence of any Permitted Bridge Refinancing Debt, (i) the net cash proceeds
thereof shall first have been applied to refinance or repay existing
Indebtedness outstanding under the Bridge Facility, (ii) all commitments in
respect of the Bridge Facility shall have terminated, and (iii) if all existing
Indebtedness outstanding under the Bridge Facility has been or is being
refinanced or repaid in full (after giving effect to the application of proceeds
in accordance with the foregoing clause (i)), all liens securing the Bridge
Facility shall have been subordinated to liens then existing or thereafter
created under any Security Document or terminated and released, in each case, on
terms reasonably acceptable to the Administrative Agent, as applicable.

 

(f)                                   Section 8.01 of the Credit Agreement is
hereby amended by deleting the word “and” at the end of the existing clause (k),
replacing the period at the end of the existing clause (l) with “;” and
inserting the following new clauses (m) and (n) immediately following
clause (l):

 

“(m)                       Liens on Collateral securing the Bridge Facility
comprising (x) second priority Liens on the Collateral (other than the Louisiana
Assets), and (y) first priority Liens on the Louisiana Assets, all of which
Liens shall be subject to the terms of the intercreditor agreement referenced in
Section 8.05(n); and

 

(n)                                 second priority Liens on the Collateral
securing any Permitted Bridge Refinancing Debt, which Liens shall be subject to
the terms of the intercreditor agreement referenced in Section 8.05(o).”

 

(g)                                  Section 8.02 of the Credit Agreement is
hereby amended by inserting the following new sentence at the end of
Section 8.02:

 

“In addition to the foregoing, each of Parent and Borrower agrees that it shall
not, and shall cause its Subsidiaries to not, at any time that the Bridge
Facility remains in effect, directly or indirectly, sell, assign, convey or
otherwise transfer, or enter into any agreement to sell, assign, convey or
otherwise transfer, any Oil and Gas Property located in the State of Louisiana
having a fair market value equal to or exceeding $5,000,000, unless (x) the
sale, assignment, conveyance or other transfer is permitted in accordance

 

6

--------------------------------------------------------------------------------

 

with the terms of the documents evidencing the Bridge Facility and
(y) concurrently with the consummation of any sale, assignment, conveyance or
other transfer of such Oil and Gas Property, the net cash proceeds thereof are
used to repay or prepay permanently Indebtedness outstanding under the Bridge
Facility.”

 

(h)                                 Clauses (i), (ii) and (iii) of
Section 8.05(k) of the Credit Agreement is hereby amended and restated as
follows:

 

“(i)                               Parent would be in compliance with
Section 9.01 on a pro forma basis after giving effect to the incurrence of such
Indebtedness;

 

(ii)                                  such Indebtedness shall not have a
maturity date (or any scheduled amortization payments) prior to the date that is
one year after the Stated Maturity Date;

 

(iii)                               upon the incurrence of such unsecured
Indebtedness, the Borrowing Base is automatically reduced by an amount equal to
25% of the face value (without giving effect to any original issue discount) of
any such Indebtedness; provided that in the case of the incurrence of such
unsecured Indebtedness a portion of the proceeds of which are used to refinance
Indebtedness outstanding under the Bridge Facility, the Borrowing Base is
automatically reduced by an amount equal to 25% of the face value (without
giving effect to any original issue discount) of any such Indebtedness that is
in excess of $125,000,000; and”

 

(i)                                     Section 8.05 of the Credit Agreement is
hereby amended by deleting the word “and” at the end of the existing clause (l),
replacing the period at the end of the existing clause (m) with “;” and
inserting the following new clauses (n) and (o) immediately following
clause (m):

 

“(n)                           Indebtedness under the Bridge Facility, provided
that (1) prior to or concurrently with the effectiveness of the Bridge Facility,
the Administrative Agent and the administrative agent under the Bridge Facility
shall have entered into an intercreditor agreement substantially on the terms
set forth on Exhibit B to the Fifth Amendment and otherwise in a form reasonably
acceptable to the Administrative Agent, (2) the Parent is in compliance with its
financial covenants set forth in Section 9.01 after giving pro forma effect to
the incurrence of such Indebtedness, and (3) the net cash proceeds from each
incurrence of such Indebtedness are applied to repay Loans and to pay fees and
expenses incurred in connection with the Bridge Facility; and

 

(o)                                 Permitted Bridge Refinancing Debt, provided
that (1) prior to or concurrently with the incurrence of any Permitted Bridge
Refinancing Debt, the Administrative Agent and the collateral agent under the
documents evidencing the Permitted Bridge Refinancing Debt shall have entered
into a senior lien/junior lien intercreditor agreement substantially similar to
the intercreditor agreement referred to in clause (n)

 

7

--------------------------------------------------------------------------------

 

 

above and otherwise in a form reasonably acceptable to the Administrative Agent,
(2) with respect to any Permitted Bridge Refinancing Debt in an aggregate
principal amount greater than the aggregate principal amount of Indebtedness
under the Bridge Facility being refinanced, the Parent is in compliance with its
financial covenants set forth in Section 9.01 after giving pro forma effect to
the incurrence of such Indebtedness, (3) the Borrower shall have satisfied the
conditions set forth in Section 7.18, and (4) the net cash proceeds from the
incurrence of such Permitted Bridge Refinancing Debt are first applied to
redeem, repay or refinance Indebtedness outstanding under the Bridge Facility,
and any Permitted Refinancing Debt in respect thereof.”

 

(j)                                    Section 8.11 of the Credit Agreement is
hereby amended and restated to provide as follows:

 

“8.11                  Prepayment or Redemption of Other Indebtedness.  Parent
and Borrower shall not, and will not permit any of their Subsidiaries to,
optionally prepay, redeem, repurchase or defease all or any portion of any
Capital Debt or Indebtedness permitted under Section 8.05(j), (k), (n) or (o),
except that Parent or Borrower may prepay any such Indebtedness:

 

(a)                                 using proceeds of the Available Amount or
any offering of Equity Interests of Parent;

 

(b)                                 (i) with respect to Indebtedness permitted
under Section 8.05(j), (o), or (k), with the proceeds of Permitted Refinancing
Debt incurred to refinance such Indebtedness and (ii) with respect to
Indebtedness permitted under Section 8.05(n) or (o), with the proceeds of
(x) the sale, assignment, conveyance or other transfer of the Louisiana Assets
in accordance with the final sentence of Section 8.02 or (y) any Senior Notes,
Permitted Additional Debt or Permitted Bridge Refinancing Debt incurred to
refinance such Indebtedness;

 

(c)                                  by converting such Indebtedness into Equity
Interests of Parent; and

 

(d)                                 if, after giving pro forma effect to such
prepayment, redemption, repurchase or defeasance and any concurrent incurrence
of Indebtedness with respect thereto, Parent’s ratio of Total Net Indebtedness
to EBITDA does not exceed 4.00 to 1.00, no Default or Event of Default exists or
would result, and the Available Commitment exceeds the greater of $15,000,000
and ten percent (10%) of the then effective Conforming Borrowing Base.”

 

(k)                                 Section 8.12(a) of the Credit Agreement is
hereby amended by inserting immediately prior to the period at the end of
subclause (6) therein the following proviso:

 

“provided, however, that so long as the Bridge Facility remains in effect, all
of the references in this clause (a) to “Oil and Gas Properties of Parent,
Borrower and their respective Subsidiaries,” “current production” or “total
internally forecasted

 

8

--------------------------------------------------------------------------------

 

production” shall be deemed to exclude Oil and Gas Properties of Parent,
Borrower and their respective Subsidiaries located in the State of Louisiana.

 

(l)                                     Clause (d) of Section 8.16 (and the
general clause following clause (d)) of the Credit Agreement is hereby amended
and restated to provide as follows:

 

“(d) instruments, documents or agreements governing the Senior Notes, any
Permitted Additional Debt, any Permitted Refinancing Debt, the Bridge Facility
or any Permitted Bridge Refinancing Debt, in each case so long as any such
instrument, document or agreement does not prohibit the granting, conveying,
creating or imposition of the Liens required to be granted, conveyed, created or
imposed under the Loan Documents.”

 

Section 4.                                           Scheduled Borrowing Base
Redetermination.

 

(a)                                 Pursuant to Section 2.04(a) of the Credit
Agreement, on and as of the first to occur of (a) the consummation of one or
more Louisiana Dispositions in exchange for an aggregate consideration
(including consideration for prior Louisiana Dispositions, if applicable) of at
least $100,000,000, (b) the Pine Prairie Disposition and (c) the Bridge Facility
Effective Date, the currently effective Conforming Borrowing Base of
$500,000,000 shall be automatically reduced to $475,000,000 until otherwise
redetermined in accordance with the Credit Agreement (and (for the avoidance of
doubt) until such time, the currently effective Conforming Borrowing Base of
$500,000,000 shall remain in effect), which affirmation of the currently
effective Conforming Borrowing Base and reduction of the Conforming Borrowing
Base to $475,000,000 (if applicable) shall together constitute the April 1, 2014
Scheduled Borrowing Base Determination.

 

(b)                                 Both the Parent and the Borrower, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, agree
that the redetermination of the Conforming Borrowing Base pursuant to clause
(a) of this Section 4 shall constitute the regularly scheduled redetermination
of the Conforming Borrowing Base for the spring 2014 (and shall not constitute a
discretionary redetermination of the Conforming Borrowing Base by either the
Borrower, on the one hand, or the Administrative Agent or Lenders, on the other
hand, pursuant to Section 2.04(e) of the Credit Agreement).

 

(c)                                  Both the Parent and the Borrower, on the
one hand, and the Administrative Agent and the Lenders, on the other hand,
further acknowledge and agree that (i) for purposes of the redetermination of
the Borrowing Base pursuant to clause (a) of this Section 4, the Oil and Gas
Properties of the Borrower, the Parent or their respective Subsidiaries located
in the State of Louisiana were not included in the most recently delivered
Reserve Report, or, if included, were not given any value in the determination
of the Conforming Borrowing Base for purposes of the Credit Agreement or other
Loan Documents and (ii) so long as any Indebtedness permitted pursuant to
Section 8.05(n) of the Credit Agreement remains outstanding, the Oil and Gas
Properties of the Borrower, the Parent or their respective Subsidiaries located
in the State of Louisiana shall not be taken into account when redetermining the
Borrowing Base for purposes of the Credit Agreement or other Loan Documents.

 

9

--------------------------------------------------------------------------------

 

Section 5.                                           Conditions of Fifth
Amendment Effective Date.  This Amendment will become effective on the date on
which each of the following conditions precedent are satisfied (or are waived by
Lenders comprising the Required Lenders in their sole discretion (the “Fifth
Amendment Effective Date”):

 

(a)                                 Borrower and Lenders constituting at least
the Required Lenders shall have delivered to Administrative Agent duly executed
counterparts of this Amendment;

 

(b)                                 Borrower shall have made payment of all fees
and expenses then due and payable under the Credit Agreement, including any fees
and expenses then due and payable in connection with this Amendment pursuant to
Section 12.04(a) of the Credit Agreement, in the case of expenses to the extent
invoiced at least three business days prior to the Fifth Amendment Effective
Date (except as otherwise reasonably agreed by Borrower).

 

Section 6.                                           Conditions of Bridge
Facility Effective Date.  Concurrently with the effectiveness of the Bridge
Facility, each of the following conditions shall be (or shall have been)
satisfied (or are waived by Lenders comprising the Required Lenders in their
sole discretion) by the Parent and the Borrower (the first date on which each
such condition is satisfied (or waived), the “Bridge Facility Effective Date”):

 

(a)                                 Bridge Facility Documentation.  The
Administrative Agent shall have received satisfactory evidence that the Bridge
Facility (as defined in the Credit Agreement (as amended hereby)) and any
related loan agreements and documents have been executed and delivered by the
Borrower, the Parent and the agents and lenders thereto substantially on the
terms set forth in the term sheet for the Bridge Facility attached as Exhibit A
and otherwise in a form reasonably acceptable to the Administrative Agent.

 

(b)                                 Financial Statements.  The Administrative
Agent shall have received the financial statements of Parent for the fiscal year
ended December 31, 2013, and for each subsequent fiscal quarter after
December 31, 2013 ended at least 45 days before the effectiveness of the Bridge
Facility, required to be delivered in accordance with Section 7.01 of the Credit
Agreement.

 

(c)                                  Solvency.  The Administrative Agent shall
have received a solvency certificate from a Responsible Officer of Parent in a
form and substance substantially consistent with the solvency certificate
delivered on June 8, 2012 under the Credit Agreement, confirming the solvency of
Parent and its subsidiaries on a consolidated basis after giving effect to the
effectiveness of the Bridge Facility and the incurrence of the maximum amount of
bridge loans contemplated thereunder.

 

(d)                                 Accuracy of Representations.  The Parent and
the Borrower shall have delivered a certificate of a Responsible Officer
confirming that the representations and warranties set forth in the Credit
Agreement and in Section 11 of this Amendment are true and correct in all
material respects on and as of, and

 

10

--------------------------------------------------------------------------------

 

after giving effect to (including the incurrence of the maximum amount of bridge
loans contemplated thereunder) the effectiveness of the Bridge Facility;
provided, that any representation or warranty made as of a prior date shall be
true and correct in all material respects as of such prior date.

 

(e)                                  Intercreditor Agreement. The Administrative
Agent shall have entered into a customary intercreditor agreement substantially
on the terms set forth on Exhibit B and otherwise in a form reasonably
acceptable to the Administrative Agent in accordance with Section 8.05(n) of the
Credit Agreement (as amended hereby) with respect to the Liens contemplated in
Section 8.01(m) of the Credit Agreement (as amended hereby).

 

Section 7.                                           Additional Security
Documents Following the Bridge Facility Effective Date.  By not later than 30
days after the Bridge Facility Effective Date (subject to extension at the
discretion of the Administrative Agent acting reasonably), Borrower shall
deliver to Administrative Agent Mortgages and financing statements covering Oil
and Gas Properties of the Borrower, the Parent or their respective Subsidiaries
located in the State of Louisiana that secure the Bridge Facility, together with
(i) any other documents (including tax affidavits) and (ii) evidence of
arrangements reasonably satisfactory to Administrative Agent, in each case, for
the prompt completion of the recording or filing of such mortgages and other
documents as may be necessary or, in the reasonable opinion of Administrative
Agent, desirable to create a valid first-priority mortgage Lien (subject to
Permitted Liens including the Liens securing the Bridge Facility) on such Oil
and Gas Properties and any personal property of the Borrower, the Parent or
their respective Subsidiaries directly related to such Oil and Gas Properties.

 

Section 8.                                           Authorization to Release
Louisiana Mortgages and Related Personal Property.  Each of the Lenders party
hereto hereby authorizes the Administrative Agent to execute and deliver to the
Borrower (or its designee) concurrently with (a) the consummation of any
Louisiana Disposition, (b) the Pine Prairie Disposition or (c) the Bridge
Facility Effective Date, instruments or other agreements terminating and
releasing the Security Documents covering, in the case of (i) clauses (a) or
(b), the portion of the Borrower’s, Parent’s or their respective Subsidiaries’
Oil and Gas Properties and any personal property directly related thereto
disposed of thereby and (ii) clause (c), all of the Borrower’s, Parent’s or
their respective Subsidiaries’ Oil and Gas Properties located in the State of
Louisiana and any personal property directly related thereto; provided, however,
that to the extent the Bridge Facility Effective Date has occurred, the Borrower
and the Parent shall, and shall cause their respective Subsidiaries to, execute
and deliver, concurrently with the delivery of any security documents securing
the Bridge Facility, junior priority Security Documents encumbering the
Borrower’s, Parent’s or their respective Subsidiaries’ Oil and Gas Properties
located in the State of Louisiana, and any personal property of the Borrower,
the Parent or their respective Subsidiaries directly related to such Oil and Gas
Properties, on which a Lien is granted to secure the Bridge Facility.

 

Section 9.                                           Consent to Enter into
Intercreditor Agreement.  The Lenders party hereto hereby give their consent to
permit the Administrative Agent to enter into a customary intercreditor
agreement substantially on the terms set forth on Exhibit B and otherwise in a
form reasonably acceptable the Administrative Agent upon the incurrence by the
Borrower of Indebtedness permitted under Section 8.05(n) or (o) of the Credit
Agreement (as amended

 

11

--------------------------------------------------------------------------------

 

hereby).  The Lenders party hereto hereby acknowledge that (a) notwithstanding
anything to the contrary in the Security Documents, the rights, obligations and
remedies of the Administrative Agent and the Secured Parties under such Security
Documents will be subject, upon execution, to the provisions of such
intercreditor agreement and (b) in the event of any conflict or inconsistency
between the provisions of such intercreditor agreement and the Credit Agreement,
the provisions of such intercreditor agreement shall control.  The Lenders party
hereto hereby authorize the Administrative Agent, as applicable, to take such
actions, including making filings and entering into agreements and any
amendments or supplements to any Security Document, as may be necessary or
desirable to reflect the intent of this Amendment and such intercreditor
agreement.

 

Section 10.                                    Fees.  Borrower agrees to pay to
the Administrative Agent on the Fifth Amendment Effective Date for the account
of each Lender that has signed and returned a signature page to this Amendment
(whether by transmittal of an original signature page or electronically) on or
prior to March 27, 2014, a one-time fee in an amount of ten (10.0) basis points
on such Lender’s Commitment to be calculated after giving effect to the
Borrowing Base redetermination pursuant to Section 4 of this Amendment.

 

Section 11.                                    Representations and Warranties. 
On the Fifth Amendment Effective Date, each of Parent and Borrower represents
and warrants to Administrative Agent and each of the Lenders that:

 

(a)                                 Each Loan Party: (i) is validly existing and
(ii) has the power and authority to execute, deliver, and perform its
obligations under this Amendment and each other Loan Document to which such it
is a party except where the failure does not constitute a Default and could not
reasonably be expected to have a Material Adverse Effect.

 

(b)                                 The execution, delivery and performance by
each of Parent and Borrower of this Amendment and each other Loan Document to
which such it is a party has been duly authorized by all necessary corporate or
limited liability company action, as applicable, and does not and will not
contravene the terms of any of such Person’s Organization Documents.

 

(c)                                  This Amendment and each other Loan Document
to which each Loan Party is a party constitutes the legal, valid and binding
obligations of such Person to the extent it is a party thereto, enforceable
against such Person in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors’ rights generally or by equitable principles relating
to enforceability.

 

(d)                                 Parent, Borrower and their respective
Subsidiaries are Solvent on a consolidated basis as of the Fifth Amendment
Effective Date.

 

(e)                                  Neither any Loan Party nor any of its
Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act or any enabling legislation or
executive order relating thereto.  Neither any Loan Party nor any or its
Subsidiaries is in violation of (a) the Trading with the Enemy Act, (b) any of
the foreign assets control regulations of the United States Treasury Department
(31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or (c) the Act.  None

 

12

--------------------------------------------------------------------------------

 

of the Loan Parties (i) is a blocked person described in Section 1 of the
Anti-Terrorism Order or (ii) to the best of its knowledge, engages in any
dealings or transactions, or is otherwise associated, with any such blocked
person.

 

(f)                                   Neither any Loan Party nor any of its
Subsidiaries nor, to the knowledge of Parent or Borrower, any Affiliate of any
Loan Party (i) is a Sanctioned Person, (ii) has more than 15% of its assets in
Sanctioned Countries, or (iii) derives more than 15% of its operating income
from investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries.  No part of the proceeds of any Loans hereunder will be used directly
or indirectly to fund any operations in, finance any investments or activities
in or make any payments to a Sanctioned Person or a Sanctioned Country.

 

(g)                                  Borrower is not in the business of
purchasing or selling Margin Stock.

 

(h)                                 None of the Loan Parties is required to
register as an “investment company” under the Investment Company Act of 1940, as
amended.

 

Section 12.                                    Reference to and Effect on the
Credit Agreement.

 

(a)                                 Upon the Fifth Amendment Effective Date and
thereafter, each reference in the 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.

 

(b)                                 Except as specifically amended by this
Amendment, the Credit Agreement shall remain in full force and effect and is
hereby ratified and confirmed.

 

Section 13.                                    Cost and Expenses.  Each of
Parent and Borrower agrees to pay fees and expenses in connection with this
Amendment pursuant to the terms and conditions of Section 12.04(a) of the Credit
Agreement.

 

Section 14.                                    Extent of Amendments.  Except as
specifically set forth in this Amendment, the Credit Agreement and the other
Loan Documents are not amended, modified or affected hereby.  Each of Parent and
Borrower hereby ratifies and confirms that (i) except as specifically set forth
in this Amendment, all of the terms, conditions, covenants, representations,
warranties and all other provisions of the Credit Agreement remain in full force
and effect and (ii) each of the other Loan Documents are and remain in full
force and effect in accordance with their respective terms.

 

Section 15.                                    Execution and Counterparts.  This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.  Delivery of an executed counterpart
of this Amendment by facsimile or other electronic transmission (e.g. .pdf)
shall be equally as effective as delivery of a manually executed counterpart of
this Amendment.

 

Section 16.                                    Governing Law.  This Amendment
shall be governed by, construed and interpreted in accordance with the laws of
the State of New York, except to the extent that federal laws of the United
States of America apply.

 

13

--------------------------------------------------------------------------------

 

Section 17.                                    Headings.  Section headings in
this Amendment are included herein for convenience and reference only and shall
not constitute a part of this Amendment for any other purpose.

 

Section 18.                                    No Waiver.  Borrower hereby
agrees that except as expressly set forth in this Amendment, no Default or Event
of Default has been waived or remedied by the execution of this Amendment by
Administrative Agent, the Swing Line Lender, any Issuing Lender or any Lender,
and any such Default or Event or Default heretofore arising and currently
continuing shall continue after the execution and delivery hereof.  Nothing
contained in this Amendment nor any past indulgence by Administrative Agent, the
Swing Line Lender, any Issuing Lender or any Lender, nor any other action or
inaction on behalf of Administrative Agent, the Swing Line Lender, any Issuing
Lender or any Lender shall constitute or be deemed to constitute an election of
remedies by Administrative Agent, the Swing Line Lender, any Issuing Lender or
any Lender.

 

Section 19.                                    Loan Document.  This Amendment is
a Loan Document.

 

Section 20.                                    NO ORAL AGREEMENTS.  THE RIGHTS
AND OBLIGATIONS OF EACH OF THE PARTIES TO THE LOAN DOCUMENTS SHALL BE DETERMINED
SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL
AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH
WRITINGS.  THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER WRITTEN LOAN
DOCUMENTS EXECUTED BY PARENT, BORROWER, ADMINISTRATIVE AGENT, THE SWING LINE
LENDER, ANY ISSUING LENDER AND/OR LENDERS (TOGETHER WITH THE FEE LETTERS)
REPRESENT THE FINAL AGREEMENT REGARDING THE MATTERS HEREIN BETWEEN SUCH PARTIES,
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS BY SUCH PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
SUCH PARTIES.

 

[Signature Pages Follow]

 

14

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officer(s) as of the
day and year first above written.

 

 

MIDSTATES PETROLEUM COMPANY LLC, a
Delaware limited liability company, as Borrower

 

 

 

 

 

 

 

By:

/s/ Nelson M. Haight

 

 

Name:

Nelson M. Haight

 

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

 

MIDSTATES PETROLEUM COMPANY, INC., a

 

Delaware corporation, as Parent

 

 

 

 

 

 

 

 

By:

/s/ Nelson M. Haight

 

 

Name:

Nelson M. Haight

 

 

Title:

Senior Vice President and Chief Financial Officer

 

A-1

--------------------------------------------------------------------------------

 

 

SUNTRUST BANK, as Administrative Agent,

 

as Swing Line Lender and as an Issuing Lender

 

 

 

 

 

 

 

By:

/s/ John Kovarik

 

 

Name:

John Kovarik

 

 

Title:

Vice President

 

 

 

 

 

 

 

SUNTRUST BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ John Kovarik

 

 

Name:

John Kovarik

 

 

Title:

Vice President

 

A-2

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Joseph Scott

 

 

Name:

Joseph Scott

 

 

Title:

Director

 

A-3

--------------------------------------------------------------------------------

 

 

CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

By:

/s/ Mack Lambert

 

 

Name:

Mack Lambert

 

 

Title:

Vice President

 

A-4

--------------------------------------------------------------------------------

 

 

CITIBANK, N.A., as a Lender

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

A-5

--------------------------------------------------------------------------------

 

 

GOLDMAN SACHS BANK USA, as a Lender

 

 

 

 

 

 

 

By:

/s/ Mark Walton

 

 

Name:

Mark Walton

 

 

Title:

Authorized Signatory

 

A-6

--------------------------------------------------------------------------------

 

 

KEYBANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By:

/s/ John K. Dravenstott

 

 

Name:

John K. Dravenstott

 

 

Title:

Vice President

 

A-7

--------------------------------------------------------------------------------

 

 

MORGAN STANLEY BANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Dmitriy Bariskiy

 

 

Name:

Dmitriy Bariskiy

 

 

Title:

Authorized Signatory

 

A-8

--------------------------------------------------------------------------------

 

 

MORGAN STANLEY SENIOR FUNDING, INC., as a Lender

 

 

 

 

 

 

 

By:

/s/ Dmitriy Bariskiy

 

 

Name:

Dmitriy Bariskiy

 

 

Title:

Authorized Signatory

 

A-9

--------------------------------------------------------------------------------

 

 

NATIXIS, as a Lender

 

 

 

 

 

 

 

By:

/s/ Stuart Murray

 

 

Name:

Stuart Murray

 

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Mary Lou Allen

 

 

Name:

Mary Lou Allen

 

 

Title:

Director

 

A-10

--------------------------------------------------------------------------------

 

 

 

ROYAL BANK OF CANADA, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Mark Lumpkin, Jr

 

 

Name:

Mark Lumpkin, Jr

 

 

Title:

Authorized Signatory

 

A-11

--------------------------------------------------------------------------------

 

 

SOCIÉTÉ GÉNÉRALE, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Elena Robciuc

 

 

Name:

Elena Robciuc

 

 

Title:

Managing Director

 

A-12

--------------------------------------------------------------------------------

 

 

THE ROYAL BANK OF SCOTLAND PLC, as a Lender

 

 

 

 

 

 

 

By:

/s/ Sanjay Remond

 

 

Name:

Sanjay Remond

 

 

Title:

Authorized Signatory

 

A-13

--------------------------------------------------------------------------------

 

 

THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

 

 

By:

/s/ Jay Salitza

 

 

Name:

Jay Salitza

 

 

Title:

Director

 

A-14

--------------------------------------------------------------------------------

 

Exhibit A

 

Bridge Facility Provisions

 

A-15

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Senior Secured Bridge Loan
Summary of Principal Terms and Conditions

 

Borrower:

 

Midstates Petroleum Company LLC (the “Company”).

 

 

 

Lead Arrangers and Joint Bookrunners:

 

SunTrust Robinson Humphrey, Inc. (“STRH”), Morgan Stanley Senior Funding, Inc.,
Goldman Sachs Bank USA and Natixis, New York Branch (each, an “Arranger” and,
together with additional joint lead arrangers appointed pursuant to that certain
Commitment Letter, dated as of March 9, 2014, by and among the Company, the
Arrangers, and the other parties thereto (the “Commitment Letter”),
collectively, the “Arrangers”).

 

 

 

Administrative Agent:

 

SunTrust Bank (in its capacity as administrative agent, the “Administrative
Agent”).

 

 

 

Syndication Agents:

 

Morgan Stanley Senior Funding, Inc. and Natixis, New York Branch (in their
respective capacities as syndication agents, each, a “Syndication Agent” and,
together with any additional syndication agents appointed pursuant to the
Commitment Letter, collectively, the “Syndication Agents”).

 

 

 

Lenders:

 

A syndicate of financial institutions arranged by the Arrangers, and acceptable
(such acceptance not to be unreasonably withheld or delayed) to the Company (the
“Lenders”); provided that no institution appearing on a list to be provided by
the Company prior to the signing of the Commitment Letter (nor any of the known
affiliates of such institutions) (a “Prohibited Lender”) may become a Lender
without the Company’s prior written consent.

 

 

 

Bridge Facility:

 

An aggregate principal amount of up to $125 million (the “Bridge Facility” and
the loans thereunder, the “Bridge Loans”).

 

 

 

Availability

 

The Company may borrow Bridge Loans under the Bridge Facility on any business
day on or after the Closing Date (as defined in the Commitment Letter), but not
later than September 30, 2014 (the “Availability Period”); provided that (i) the
Company may make no

 

A-1

--------------------------------------------------------------------------------

 

 

 

more than three separate borrowings of Bridge Loans during the Availability
Period and (ii) each borrowing of Bridge Loans shall be in an aggregate
principal amount of not less than $50,000,000 (or, if less, the entire amount of
unused commitments remaining under the Bridge Facility at such time).

 

 

 

Uses of Proceeds:

 

The proceeds of the Bridge Loans will be used by the Company solely to repay
debt of the Company under the Amended Revolving CRA Facility (as defined in the
Commitment Letter) and to pay transaction costs and expenses in connection
therewith.

 

 

 

Ranking:

 

The Bridge Facility will be senior secured indebtedness of the Company.

 

 

 

Guarantors:

 

Each existing and future guarantor under the Amended Revolving CRA Facility.

 

Each guarantor of the Bridge Facility is herein referred to as a “Guarantor” and
its guarantee is referred to herein as a “Guarantee”. The Company and the
Guarantors are herein referred to collectively as the “Credit Parties”.

 

 

 

Interest Rates:

 

Interest shall be payable at LIBOR (for interest periods of 1, 2, 3 or 6 months,
as selected by the Company) plus an initial margin of 4.50% per annum; provided
that the initial margin shall automatically increase by 0.50% per annum on each
of September 30, 2014, December 31, 2014 and March 31, 2015.

 

Until a successful syndication has been achieved, the Administrative Agent shall
also be entitled to increase the interest rate by an agreed amount.

 

If the Company shall fail to comply with its securities demand obligations under
the Bridge Fee Letter (as defined in the Commitment Letter) then the per annum
yield on the Bridge Loans shall immediately increase to an amount separately
agreed.

 

 

 

Interest Payments:

 

Interest on the Bridge Loans will be payable in cash, quarterly in arrears.
Calculation of interest shall be on the basis of actual days elapsed in a year
of 360 days.

 

 

 

Default Rate:

 

The applicable interest rate plus 2.00% per annum on overdue amounts.

 

A-2

--------------------------------------------------------------------------------

 

Maturity:

 

The Bridge Loans will mature on the first anniversary of the Closing Date (the
“Maturity Date”). On the Maturity Date, any Bridge Loan that has not been
previously repaid in full will be automatically converted into a senior secured
term loan (each a “Senior Term Loan”) due on September 30, 2019 (the “Extended
Maturity Date”); provided that the Company is not in payment default or subject
to a bankruptcy or other insolvency proceeding. The date on which Bridge Loans
are converted into Senior Term Loans is referred to as the “Conversion Date”. At
any time on or after the Conversion Date, at the option of the applicable
Lender, the Senior Term Loans may be exchanged in whole or in part for senior
secured exchange notes of the Company (the “Senior Exchange Notes” and, together
with the Senior Term Loans, the “Exchange Debt”) having an equal principal
amount; provided that no Senior Exchange Notes shall be issued until the Company
shall have received requests to issue at least $25 million in aggregate
principal amount of Senior Exchange Notes.

 

The Senior Term Loans will be governed by the provisions of the Bridge Loan
Documents (as defined below) and will have the same terms as the Bridge Loans
except as expressly set forth on Annex I hereto. The Senior Exchange Notes will
be issued pursuant to an indenture that will have the terms set forth on Annex
II hereto. The Senior Term Loans and Senior Exchange Notes will be pari passu
for all purposes.

 

 

 

Mandatory Prepayment:

 

The Bridge Loans shall be prepaid at 100% of the outstanding principal amount
thereof with, subject to certain exceptions substantially consistent with the
Existing Revolving CRA (as defined in the Commitment Letter) but revised as
appropriate or necessary to reflect the Collateral for the Bridge Loans, 100% of
(i) the net cash proceeds from the issuance of the Debt Securities (as defined
in that certain Engagement Letter dated as of March 9, 2014 among Morgan
Stanley & Co. LLC, SunTrust Robinson Humphrey, Inc., Goldman, Sachs & Co.,
Natixis Securities Americas LLC, Parent (as defined in the Commitment Letter)
and the Company); (ii) the net cash proceeds from the issuance of any
Refinancing Debt (to be defined) and other indebtedness for borrowed money or
equity securities by the Company (other than

 

A-3

--------------------------------------------------------------------------------

 

 

 

draws under the Amended Revolving CRA Facility, other debt to be agreed, equity
issuances to FRC Founders Corporation (formerly known as First Reserve
Corporation) and its affiliates and in connection with permitted acquisitions,
cash contributions or pursuant to employee benefit plans); (iii) the net
proceeds from any non-ordinary course asset sale by the Company or any of its
restricted subsidiaries in excess of an amount to be agreed subject to
(x) reinvestment (to be permitted on terms substantially consistent with the
Existing Revolving CRA Facility) for assets not constituting first priority
Collateral or (y) such excess being required to be paid to the lenders under the
Amended Revolving CRA Facility for assets not constituting first priority
Collateral; and (iv) the net cash proceeds from any sale of first priority
Collateral; provided that (i) upon the sale of any of the Louisiana Assets, the
Company shall be required to prepay the Bridge Loans in an amount equal to the
net cash proceeds the Company receives from any such sale, and thereafter any
net cash proceeds received by the Company from the sale of any of the Louisiana
Assets shall reduce the unfunded commitments under the Bridge Facility on a
dollar-for-dollar basis and (ii) upon the sale of the “Assets” (as defined
therein) contemplated to be sold pursuant to that certain Purchase and Sale
Agreement, dated as of March 5, 2014, between the Company and Tana Exploration
Company LLC (the “Pine Prairie Assets”), all unfunded commitments under the
Bridge Facility shall terminate. The Company will also be required to prepay the
Bridge Loans following the occurrence of a Change of Control (to be defined in a
manner substantially consistent with the Existing Revolving CRA) at 100% of the
outstanding principal amount thereof.

 

 

 

Optional Prepayment:

 

The Bridge Loans may be prepaid, in whole or in part, at par plus accrued and
unpaid interest upon not less than three days’ prior written notice, at the
option of the Company at any time (including, for the avoidance of doubt, on or
after September 30, 2014).

 

 

 

Collateral:

 

The Bridge Loans shall be secured by (i) a first priority, perfected lien and
security interest on oil and gas properties of the Company and the Guarantors
located in the State of Louisiana (the “Louisiana Assets”) and certain personal
property located thereon or used in

 

A-4

--------------------------------------------------------------------------------

 

 

 

connection with the operation of the Louisiana Assets and (ii) a second
priority, perfected lien and security interest on the assets of the Company and
the Guarantors on which the Revolver Administrative Agent (as defined in the
Commitment Letter) is granted a security interest under the Existing Revolving
CRA (or, in the event the revolver backstop is utilized and the Amended
Revolving CRA Facility is put in place, the Amendment Documentation (as defined
in the Commitment Letter)) (collectively, the “Collateral”).

 

 

 

Company Notes Precedent:

 

For the purposes hereof and throughout the Commitment Letter, each reference to
“Company Notes Precedent” shall mean the documentation with respect to the
Company’s 9.25% senior notes due 2021 (the “9.25% Notes”) issued pursuant to
that certain Indenture dated as of May 31, 2013, by and among Midstates
Petroleum Company, Inc., Midstates Petroleum Company LLC, and Wells Fargo Bank,
National Association, as trustee, including related guarantee agreements and
related closing documentation executed and/or delivered in connection therewith,
in each case, in the form delivered to the Arrangers as in effect on the date
hereof, subject to modifications mutually agreeable to the Company and the
Arrangers.

 

 

 

Company Bank Precedent:

 

For the purposes hereof and throughout the Commitment Letter, each reference to
“Company Bank Precedent” shall mean the Existing Revolving CRA and related
guarantee agreements and related closing documentation executed and/or delivered
in connection therewith, in each case, in the form delivered to the Arrangers as
in effect on the date hereof, subject to modifications negotiated in good faith
and mutually agreeable to the Company and the Arrangers and including, for
avoidance of doubt, (a) those changes contemplated by the Fifth Amendment to the
Existing Revolving CRA and (b) modifications to reflect operational and agency
provisions not specifically set forth in this Exhibit A and not in contravention
of anything specifically set forth in this Exhibit A that are customarily
included in bridge credit agreements with respect to which STRH acts as
administrative agent. “Applicable Precedent” shall mean the Company Notes
Precedent and the Company Bank Precedent.

 

A-5

--------------------------------------------------------------------------------

 

Right to Participate and Resell Bridge Loans:

Each Lender shall have the absolute and unconditional right to participate on
customary terms in, resell or assign the Bridge Loans or commitments held by it
in compliance with applicable law to any third party at any time; provided that,
until the date that is twelve (12) months after the Closing Date, unless a
payment or bankruptcy event of default shall have occurred and be continuing,
the consent of the Company (not to be unreasonably withheld or delayed) shall be
required with respect to any assignment (but not any participation) that would
result in the initial lenders collectively holding less than 50.1% of the
aggregate outstanding principal amount of the Bridge Loans.

 

 

Conditions Precedent to Bridge Loans:

The borrowing of the Bridge Loans will be subject to the applicable conditions
precedent set forth in the Commitment Letter and Annex III hereto only (other
than, for the avoidance of doubt, those items identified as being post-closing
obligations).

 

 

Representations and Warranties:

The definitive documentation relating to the Bridge Loans (the “Bridge Loan
Documents”), which will be consistent with the Applicable Precedent, will
contain the following representations and warranties relating to Parent, the
Company and its restricted subsidiaries with terms substantially consistent with
the Company Bank Precedent (including as to materiality thresholds):

 

 

 

1.                   Corporate existence and power.

2.                   Corporate authorization; no contravention.

3.                   Governmental authorization.

4.                   Binding effect.

5.                   Litigation.

6.                   ERISA.

7.                   Margin regulations.

8.                   Compliance with laws and obligations.

9.                   Relationship of loan parties.

10.            Gas imbalances.

11.            Taxes.

12.            Financial conditions.

13.            Environmental matters.

 

A-6

--------------------------------------------------------------------------------

 

 

14.            Regulated entities.

15.            Solvency on the Closing Date.

16.            Subsidiaries/Investments.

17.            Insurance.

18.            Full disclosure.

19.            No default.

20.            OFAC; FCPA and laws applicable to money-laundering and sanctions
persons.

21.            PATRIOT Act.

22.            Perfection and priority of liens and other matters regarding
collateral.

 

 

Covenants:

The Bridge Loan Documents will contain affirmative and negative covenants
applicable to Parent, the Company and its restricted subsidiaries substantially
consistent with the Company Bank Precedent (but including a covenant that the
consideration received in respect of any disposition of the Pine Prairie Assets
shall be 100% in cash).

 

 

Events of Default:

The Bridge Loan Documents will contain events of default substantially
consistent with the Company Bank Precedent.

 

 

Voting:

Amendments and waivers of the Bridge Loan Documentation will require the
approval of Lenders holding more than 50% of the outstanding Bridge Loans (the
“Required Lenders”), except that (a) the consent of each affected Lender will be
required for (i) reductions of principal, interest rates or the applicable
margin, (ii) extensions of the Maturity Date (except as provided under
“Maturity” above) or the Extended Maturity Date, (iii) additional restrictions
on the right to exchange Senior Term Loans for Senior Exchange Notes or any
amendment of the rate of such exchange, (iv) any amendment to the Senior
Exchange Notes that requires (or would, if any Senior Exchange Notes were
outstanding, require) the approval of all holders of Senior Exchange Notes and
(v) subject to certain exceptions consistent with the Applicable Precedent,
releases of all or substantially all of the value of the Guarantees (other than
in connection with any release or sale of the relevant Guarantor permitted by
the Bridge Loan Documentation)

 

A-7

--------------------------------------------------------------------------------

 

 

or the Collateral (other than in connection with any sale of the Collateral
permitted by the Bridge Loan Documentation and (b) the consent of 100% of the
Lenders will be required with respect to modifications to any of the voting
percentages.

 

 

 

The Bridge Loan Documentation shall contain provisions permitting the Company to
replace non-consenting Lenders in connection with amendments and waivers
requiring the consent of all Lenders or of all Lenders directly affected thereby
so long as the Required Lenders shall have consented thereto.

 

 

Yield Protection, Taxes and Other Deductions, Etc.:

The Bridge Loan Documents will contain yield protection provisions substantially
consistent with Company Bank Precedent, protecting the Lenders in the event of
unavailability of funding, funding losses, reserve and capital adequacy
requirements.  The loan documents will also contain customary provisions
regarding Dodd-Frank and Basel III.

 

 

 

All payments to be free and clear of any present or future taxes, withholdings
or other deductions whatsoever (subject to customary exceptions).  The Lenders
will use reasonable efforts to minimize any applicable taxes and the Company
will, as applicable, indemnify the Lenders and the Administrative Agent for such
taxes paid by the Lenders or the Administrative Agent.

 

 

Expenses and Indemnification:

Provisions regarding expense reimbursement and indemnification by the Credit
Parties consistent with Company Bank Precedent.

 

 

Governing Law and Forum:

New York.

 

 

Counsel to the Administrative Agent and the Commitment Parties:

Baker Botts L.L.P.

 

A-8

--------------------------------------------------------------------------------

 

ANNEX I to

EXHIBIT A

 

Senior Term Loans

 

Maturity:

The Senior Term Loans will mature on September 30, 2019.

 

 

Interest Rate:

The Senior Term Loans will bear interest at an interest rate separately agreed. 
Interest will be paid in cash.

 

 

 

Interest shall be payable on the last day of each fiscal quarter of the Company
and on the maturity date of the Senior Term Loans, in each case payable in
arrears and computed on the basis of a 360 day year.

 

 

Collateral:

Same as Bridge Loans.

 

 

Covenants, Defaults and Mandatory Prepayments:

Upon and after the Conversion Date, the covenants, mandatory prepayments and
defaults which would be applicable to the Senior Exchange Notes, if issued, will
also be applicable to the Senior Term Loans in lieu of the corresponding
provisions of the Bridge Loan Documents.

 

 

Optional Prepayment:

The Senior Term Loans may be prepaid, in whole or in part, at par, plus accrued
and unpaid interest upon not less than three days’ prior written notice, at the
option of the Company at any time.

 

A-9

--------------------------------------------------------------------------------

 

ANNEX II to

EXHIBIT A

 

Senior Exchange Notes

 

Issuer:

The Senior Exchange Notes will be issued by Parent and the Company under an
Indenture capable of being qualified under the Trust Indenture Act of 1939, as
amended.

 

 

Maturity:

The Senior Exchange Notes will mature on September 30, 2019.

 

 

Guarantors:

Same as Bridge Loans.

 

 

Interest Rate:

The Senior Exchange Notes will bear interest payable semi-annually at a rate
separately agreed.

 

 

 

Senior Exchange Notes issued to and held by initial lenders and affiliates
(other than bona fide investment funds and entities that manage assets on behalf
of unaffiliated third-parties (the “Asset Management Affiliates”) and excluding
Senior Exchange Notes acquired pursuant to bona fide open market purchases from
third parties or market making activities (“Repurchased Securities”)) shall be
repayable at par, plus accrued and unpaid interest to the date of repayment on a
non-ratable basis.  Interest will be paid in cash.

 

 

Repurchase upon Change of Control:

Parent and the Company will be required to make an offer to repurchase the
Senior Exchange Notes following the occurrence of a Change of Control (to be
defined in a manner substantially consistent with the Company Notes Precedent)
at a price in cash equal to 101% of the outstanding principal amount thereof,
plus accrued and unpaid interest to the date of repurchase.

 

 

Optional Redemption:

Except as set forth below, Senior Exchange Notes will be non-callable until the
2.5-year anniversary of the Closing Date.  Thereafter, the Senior Exchange Notes
will be callable at par plus accrued interest plus a premium equal to one-half
of the coupon on the Senior Exchange Notes, which premium shall decline to
one-quarter on the 3.5-year anniversary of the Closing Date and to zero on the
4.5 anniversary of the Closing Date.

 

A-10

--------------------------------------------------------------------------------

 

 

Prior to the 2.5-year anniversary of the Closing Date, Parent and the Company
may redeem Senior Exchange Notes at a make-whole price based on U.S. Treasury
notes with a maturity closest to the 2.5-year anniversary of the Closing Date
plus 0.50%.

 

 

 

Prior to the 2.5-year anniversary of the Closing Date, Parent and the Company
may redeem up to 35% of the Senior Exchange Notes with proceeds from an equity
offering at a price equal to par plus the coupon on such Senior Exchange Notes.

 

 

 

The optional redemption provisions will be otherwise substantially consistent
with the Company Notes Precedent.

 

 

Defeasance Provisions:

Substantially consistent with the Company Notes Precedent.

 

 

Modification:

Substantially consistent with the Company Notes Precedent.

 

 

Registration Rights:

Parent and the Company shall use commercially reasonable efforts to file, within
90 days after the first issuance of Senior Exchange Notes (the date of such
issuance, the “Issue Date”), and will use commercially reasonable efforts to
cause to become effective, within 180 days after the first issuance of Senior
Exchange Notes, a shelf registration statement with respect to the Senior
Exchange Notes (such registration statement, a “Shelf Registration Statement”)
which Shelf Registration Statement shall contain all financial statements
required under the Securities Act of 1933, as amended.  If a Shelf Registration
Statement is filed, Parent and the Company will keep such Shelf Registration
Statement effective and available (subject to customary exceptions) until it is
no longer needed to permit unrestricted resales of the Senior Exchange Notes;
provided that in no event shall Parent and the Company be required to keep such
Shelf Registration Statement effective and available for more than two years
after the Issue Date.  Parent and the Company shall take commercially reasonable
efforts to cause the Shelf Registration Statement to be declared effective by
the date (the “Effectiveness Date”) that is 180 days from the Issue Date.  Any
failure on the part of Parent or the Company to cause the Shelf Registration
Statement to be declared effective in accordance with the preceding sentence is
referred to as a “Registration Default”.  In the event of a Registration Default
with respect to any Senior Exchange Note, Parent and the Company will pay
liquidated damages in the form of increased interest of $0.05 per week per
$1,000 principal

 

A-11

--------------------------------------------------------------------------------

 

 

amount of such Senior Exchange Note to the holder of such Senior Exchange Note,
to the extent that such holder is unable to freely transfer such Senior Exchange
Note, from and including the Effectiveness Date to but excluding the effective
date of the Shelf Registration Statement with respect to such Senior Exchange
Note.  On the 90th day after the Effectiveness Date with respect to any such
Senior Exchange Note, the liquidated damages shall increase by an additional
$0.05 per week per $1,000 principal amount and, on each 90 day anniversary of
the Effectiveness Date thereafter, shall increase by an additional $0.05 per
week per $1,000 principal amount to a maximum increase in interest of $0.20 per
week per $1,000 principal amount.  Parent and the Company will also pay such
liquidated damages to the holder of a Senior Exchange Note for any period of
time (subject to customary exceptions) following the effectiveness of the Shelf
Registration Statement with respect to such Senior Exchange Note that such Shelf
Registration Statement is not available for sales thereunder.  All accrued
liquidated damages will be paid in arrears on each semi-annual interest payment
date.

 

 

 

In lieu of a Shelf Registration Statement, Parent and the Company at their
option may file a registration statement (the “Exchange Registration Statement”)
with respect to notes having terms identical to the Senior Exchange Notes (the
“Substitute Notes”) to effect a registered exchange offer (the “Registered
Exchange Offer”) in which Parent and the Company offer to holders of Senior
Exchange Notes registered Substitute Notes in exchange for the Senior Exchange
Notes (it being understood that a Shelf Registration Statement would be required
to be made available in respect of Senior Exchange Notes whose holders could not
receive Substitute Notes through the Registered Exchange Offer that, in the
opinion of counsel, would be freely saleable by such holders without
registration or requirement for delivery of a current prospectus under the
Securities Act of 1933, as amended (other than a prospectus delivery requirement
imposed on a broker-dealer who is exchanging Senior Exchange Notes acquired for
its own account as a result of market making or other trading activities)).  In
such case, if the Exchange Registration Statement has not been declared
effective and an exchange offer for the Senior Exchange Notes pursuant to the
Exchange Registration Statement has not been consummated by the Effectiveness
Date, Parent and the Company will pay liquidated damages in the form of
increased interest for the same periods and at the same rates as described in
the previous paragraph.

 

A-12

--------------------------------------------------------------------------------

 

 

Notwithstanding the immediately preceding two paragraphs, Parent and the Company
may seek to effectuate through DTC an automatic exchange of beneficial interests
in the Senior Exchange Notes held by non-affiliates for beneficial interests in
unrestricted Senior Exchange Notes.  If by the 370th day after the Issue Date,
such automatic exchange has not been effected, Parent and the Company will pay
liquidated damages in the form of increased interest for the same periods and at
the same rates as described in the second preceding paragraph (unless a Shelf
Registration Statement has become effective or a Registered Exchange Offer has
been completed).

 

 

Collateral:

Same as Bridge Loans.

 

 

Covenants:

Substantially consistent with Company Notes Precedent, with appropriate or
necessary modifications to the terms thereof to reflect the secured nature of
the Exchange Notes.

 

 

Events of Default:

Substantially consistent with Company Notes Precedent, with appropriate or
necessary modifications to the terms thereof to reflect the secured nature of
the Exchange Notes.

 

A-13

--------------------------------------------------------------------------------

 

ANNEX III to

EXHIBIT A

 

Conditions Precedent

 

1.                                      Financial Statements.  The Arrangers
shall have received (a) audited financial statements of Parent for the fiscal
years ended December 31, 2013, 2012 and 2011, which financial statements shall
be audited in accordance with GAAP and (b) unaudited financial statements of
Parent for each subsequent fiscal quarter after December 31, 2013 ended at least
45 days before the Closing Date, together with a comparison to the corresponding
fiscal quarter in the preceding fiscal year, which unaudited financial
statements shall be prepared in accordance with GAAP.

 

2.                                      Engagement Letter.  Parent and the
Company shall have engaged one or more investment banks reasonably satisfactory
to the Arrangers to sell or privately place the Debt Securities.

 

3.                                      Guarantees and Personal Property
Collateral Documents.  The guarantees and collateral documents regarding
personal property under the Bridge Facility shall have been executed and
delivered and be in full force and effect.

 

4.                                      Solvency.  The Administrative Agent
shall have received a solvency certificate from a director or an officer of
Parent, in a form and substance substantially consistent with Company Bank
Precedent, confirming the solvency of Parent and its subsidiaries on a
consolidated basis after giving effect to the Transactions.

 

5.                                      Accuracy of Representations.  The
representations and warranties set forth in the Bridge Loan Documents shall be
true and correct in all material respects on and as of the Closing Date.

 

6.                                      Documentation, Opinions and
Certificates.

 

Negotiation, execution and delivery of the Bridge Loan Documents, in each case,
in accordance with the terms of the Commitment Letter and this Exhibit A,
including a bridge loan agreement, notes, documents necessary to create and
perfect the Administrative Agent’s security interest in the Collateral
constituting personal property, an intercreditor agreement with the Revolver
Administrative Agent, reasonably satisfactory legal opinions of the Company’s
counsel (including, without limitation, local counsel in Louisiana), evidence of
authority, officer’s certificates, corporate formation and governing documents,
customary UCC lien searches, borrowing notice and funds flow, in each case in
form and substance substantially consistent with Company Bank Precedent, and
payment of required fees and invoiced expenses.

 

7.                                      PATRIOT Act.  The Administrative Agent
shall have received, at least 3 Business Days in advance of the Closing Date,
all documentation and other information required by regulatory authorities with
respect to the Company and the Guarantors under applicable “know your customer”
and anti-money

 

--------------------------------------------------------------------------------

 

laundering rules and regulations, including without limitation the PATRIOT Act,
that has been reasonably requested by the Administrative Agent at least 10 days
in advance of the Closing Date.

 

8.                                      Releases.  The Administrative Agent
shall have received mortgage releases and UCC-3 partial releases from the
Revolver Administrative Agent and any other releases necessary to release the
Collateral from liens granted in favor of the Revolver Administrative Agent.

 

9.                                      Payment of Fees and Expenses.  Payment
of all fees and expenses due to the Arrangers and/or the Lenders (including the
amounts payable under the Bridge Fee Letter), in the case of expenses to the
extent invoiced at least three business days prior to the Closing Date (except
as otherwise reasonably agreed by the Company), required to be paid on the
Closing Date from the proceeds of the initial fundings under the Bridge
Facility.

 

10.                               Amended Revolving CRA.  The Administrative
Agent shall have received satisfactory evidence that either (i) the Existing
Revolving CRA has been amended in a manner consistent with the terms set forth
in the Revolving CRA Term Sheet to, among other things, (A) reduce the borrowing
base thereunder to not less than $475,000,000 and (B) accommodate the issuance,
incurrence and/or compliance with the terms of the Bridge Facility and any
Securities issued to refinance the Bridge Facility (including, without
limitation, any Second Lien Notes (as defined in the Fee Letter (as defined in
the Commitment Letter))) or (ii) in furtherance of the revolver backstop
commitment provided under the Commitment Letter, the Amended Revolving CRA
Facility and any related Amendment Documentation have been entered into in
accordance with the terms of the Revolver CRA Term Sheet (as defined in the
Commitment Letter).

 

--------------------------------------------------------------------------------

 

Exhibit B

 

Intercreditor Provisions

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Summary of Terms and Conditions of Intercreditor Agreement

 

This Summary of Terms and Conditions outlines certain terms of the intercreditor
agreement (the “Intercreditor Agreement”) referred to in the Fifth Amendment to
Credit Agreement, of which this Exhibit B is a part.  Certain capitalized terms
used herein are defined in the Fifth Amendment (including Exhibit A thereto).

 

Parties:

 

SunTrust Bank, as administrative agent under the Credit Agreement (the “RBL
Agent”), SunTrust Bank, as administrative agent under the Bridge Facility (the
“Bridge Agent”, together with the RBL Agent, the “Agents”), Midstates Petroleum
Company, Inc. (the “Parent”) and Midstates Petroleum Company LLC (the
“Borrower”, and together with the Parent, the “Loan Parties”). All documents
entered into in connection with the Credit Agreement, including collateral
documents, shall be referred to as the “RBL Loan Documents”, and all documents
entered into in connection with the Bridge Facility, including collateral
documents, shall be referred to as the “Bridge Loan Documents”.

 

 

 

Purpose:

 

To establish the relative rights and privileges of the parties with respect to
collateral for the Obligations as defined in and under the Credit Agreement
(including any obligations of the Loan Parties under any refinancing of the
Obligations permitted pursuant to the Intercreditor Agreement, the “RBL
Obligations”) and for the obligations of the Loan Parties under the Bridge
Facility (including any obligations of the Loan Parties under any refinancing
thereof permitted pursuant to the Intercreditor Agreement, the “Bridge
Obligations”, and collectively with the RBL Obligations, the “Obligations”).

 

 

 

Priority of Obligations:

 

So long as any of the Bridge Obligations are outstanding, (i) the liens on Oil
and Gas Properties of the Parent, the Borrower or their respective Subsidiaries
located in the State of Louisiana and any personal property of the Parent, the
Borrower or their respective Subsidiaries located thereon or used exclusively in
connection with the operation thereof, and any proceeds thereof (collectively,
the “Bridge Priority Collateral”) securing the RBL Obligations shall be junior
and subordinated in all respects to the liens on such Bridge Priority Collateral
securing the Bridge Obligations, (ii) the RBL Agent shall not exercise or seek
to exercise any rights or remedies (including setoff) with respect to any of the
Bridge Priority Collateral and shall not institute any action or proceeding with
respect to such rights or

 

--------------------------------------------------------------------------------

 

 

 

remedies and (iii) the RBL Agent will not take or receive any Bridge Priority
Collateral or any proceeds of Bridge Priority Collateral in connection with the
exercise of any right or remedy (including setoff) with respect to any Bridge
Priority Collateral.

 

So long as any of the RBL Obligations are outstanding, (i) the liens on the Loan
Parties’s assets (other than the Bridge Priority Collateral; collectively, the
“RBL Priority Collateral”, and collectively with the Bridge Priority Collateral,
the “Collateral”) securing the Bridge Obligations shall be junior and
subordinated in all respects to the liens on such RBL Priority Collateral
securing the RBL Obligations, (ii) the Bridge Agent shall not exercise or seek
to exercise any rights or remedies (including setoff) with respect to any of the
RBL Priority Collateral and shall not institute any action or proceeding with
respect to such rights or remedies and (iii) the Bridge Agent will not take or
receive any RBL Priority Collateral or any proceeds of RBL Priority Collateral
in connection with the exercise of any right or remedy (including setoff) with
respect to any RBL Priority Collateral.

 

Nothing contained in the Intercreditor Agreement shall be deemed to be a
subordination of payment by the Borrower of the RBL Obligations or the Bridge
Obligations.

 

 

 

Prohibition on Contesting Liens:

 

Each of the Bridge Agent, the RBL Agent, the lenders under the Bridge Facility
and the Lenders and other secured parties under the RBL Loan Documents will
agree not to contest, and not to support any other Person in contesting, the
perfection, priority, validity or enforceability of any lien of the Bridge Agent
or the RBL Agent securing the Collateral or any provision of the Intercreditor
Agreement, and each Agent may take any action not prohibited by the
Intercreditor Agreement to create, perfect, preserve, or protect its liens on
any Collateral.

 

 

 

Turnover Provision:

 

In the event that any Agent (in such capacity, the “Junior Agent”) obtains
possession of any Collateral or shall realize any proceeds or payment in respect
of any Collateral for which the other Agent (in such capacity, the “Senior
Agent”) has priority as described under “Priority of Obligations” above (such
Collateral being the “Priority Collateral” of the Senior Agent), whether by
exercise of rights or remedies available to either Agent under applicable law or
under the applicable Loan Documents or in any insolvency or liquidation
proceeding or otherwise, the Junior Agent shall hold such Collateral or such

 

--------------------------------------------------------------------------------

 

 

 

proceeds or payment in trust for the Senior Agent and the related secured
parties and shall promptly transfer such Collateral, proceeds or payment, as the
case may be, to the Senior Agent to be distributed as contemplated under
“Priority of Obligations” above.

 

 

 

Distributions of Collateral:

 

So long as any of the RBL Obligations are outstanding, any proceeds of RBL
Priority Collateral received in connection with the sale or other disposition
of, or collection on, such Collateral upon the exercise of remedies, shall be
applied by the RBL Agent to the RBL Obligations in such order as specified in
the relevant RBL Loan Documents. Upon the payment in full in cash of the RBL
Obligations, the RBL Collateral Agent shall deliver to the Bridge Agent all
remaining proceeds of RBL Priority Collateral held by it to be applied by the
Bridge Agent to the Bridge Obligations in such order as specified in the Bridge
Loan Documents.

 

So long as any of the Bridge Obligations are outstanding, any proceeds of Bridge
Priority Collateral received in connection with the sale or other disposition
of, or collection on, such Collateral upon the exercise of remedies, shall be
applied by the Bridge Agent to the Bridge Obligations in such order as specified
in the relevant Bridge Loan Documents. Upon the payment in full in cash of the
Bridge Obligations, the Bridge Collateral Agent shall deliver to the RBL Agent
all remaining proceeds of Bridge Priority Collateral held by it to be applied by
the RBL Agent to the RBL Obligations in such order as specified in the RBL Loan
Documents.

 

Proceeds of the Collateral include insurance proceeds and therefor the section
titled “Priority of Obligations” above shall govern the ultimate disposition of
casualty insurance proceeds. The RBL Collateral Agent shall be named as
additional insured or loss payee, as applicable, with respect to all insurance
policies relating to the RBL Priority Collateral and the Bridge Agent shall be
named as additional insured and loss payee, as applicable, with regards to all
insurance policies relating to the Bridge Priority Collateral.

 

 

 

Restrictions on Amendments:

 

The (i) Bridge Loan Documents may be amended, supplemented or otherwise modified
in accordance with their terms and the Bridge Obligations may be refinanced, in
each case, without the consent of the RBL Agent or the Lenders, and (ii) RBL
Loan Documents may be amended, supplemented or otherwise modified in accordance
with their terms and the RBL

 

--------------------------------------------------------------------------------

 

 

 

Obligations may be refinanced, in each case, without the consent of the Bridge
Agent or the lenders under the Bridge Facility; provided, however, that
(a) neither the RBL Loan Documents nor the Bridge Loan Documents may be amended
without the consent of the Bridge Agent or RBL Agent, respectively, to the
extent such amendment would contravene the provisions of the Intercreditor
Agreement, (b) no such amendment, supplement, modification or refinancing of or
to the Bridge Loan Documents shall (I) cause the aggregate principal amount of
Bridge Obligations to exceed $200,000,000, (II) cause the maturity or weighted
average life to maturity thereof to be shortened, (III) increase interest rates
to more than 11.5% per annum (excluding any applicable default rate of interest,
fees or OID), add additional call or prepayment premiums or shorten any period
for payment of interest thereon or (IV) contain terms and provisions more
restrictive, taken as a whole, than those contained in the Bridge Facility and
(c) no such amendment, supplement, modification or refinancing of or to the RBL
Loan Documents shall (I) cause the aggregate principal amount of RBL Obligations
and Bridge Obligations to exceed the maximum amount permitted under
Section 4.09(b)(1)(a) of the Indenture governing the 9.25% Notes, (II) cause the
maturity or weighted average life to maturity thereof to be shortened,
(III) increase interest rate margins applicable thereunder by more than 200
basis points (excluding any applicable default rate of interest), add additional
call or prepayment premiums or shorten any period for payment of interest
thereon or (IV) contain terms and provisions more restrictive, taken as a whole,
than those contained in the Credit Agreement (as in effect on the date of the
Intercreditor Agreement).

 

Any waivers, amendments or consents with respect to any provision of the
collateral documents securing the RBL Obligations or the Bridge Obligations
shall be deemed to automatically apply to any applicable provisions of the
collateral documents securing the Bridge Obligations and the RBL Obligations,
respectively; provided, that no such waiver, amendment or consent shall
(i) remove or release Collateral, except to the extent that a release of such
lien is permitted by the Intercreditor Agreement and there is a corresponding
release of the liens securing the RBL Obligations or Bridge Obligations, as
applicable, (ii) impose duties on either Agent without its consent, (iii) permit
other liens on the Collateral not permitted under the terms of the Bridge Loan
Documents, the RBL Loan Documents or the Intercreditor Agreement or (iv) be

 

--------------------------------------------------------------------------------

 

 

 

prejudicial to the interests of holders of one class of Obligations to a greater
extent than the holders of the other class of Obligations.

 

 

 

Releases:

 

The Intercreditor Agreement will provide (a) the RBL Agent with the ability to
release its lien on all or any portion of the RBL Priority Collateral that is
permitted to be sold pursuant to the RBL Loan Documents, and the Bridge Agent
will be required to release its lien on such RBL Priority Collateral in
connection therewith, and (b) the Bridge Agent with the ability to release its
lien on all or any portion of the Bridge Priority Collateral that is permitted
to be sold pursuant to the Bridge Loan Documents, and the RBL Agent will be
required to release its lien on such Bridge Priority Collateral in connection
therewith.

 

 

 

Bankruptcy:

 

In the event of an insolvency or liquidation proceeding of any Loan Party,
whether voluntary or involuntary, (i) if either Agent shall desire to permit the
use of cash collateral constituting Priority Collateral with respect to such
Agent or to permit the Borrower to obtain debtor-in-possession financing secured
by its Priority Collateral (and not by a senior or pari passu lien on Collateral
which is not Priority Collateral with respect to such Agent) (a “DIP
Financing”), then the Junior Agent agrees that it will raise no objection to
such use of cash collateral or DIP Financing and will not request adequate
protection or any other relief in connection therewith to the extent that the
liens of the Senior Agent with respect to such Priority Collateral are
subordinated to or pari passu with the liens securing such DIP Financing;
provided that (x) in the case of any DIP Financing secured by Bridge Priority
Collateral, the aggregate principal amount of such DIP Financing secured by
senior liens on such Bridge Priority Collateral plus the aggregate outstanding
amount of the Bridge Obligations shall not exceed $200,000,000 and (y) in the
case of any DIP Financing secured by RBL Priority Collateral, the aggregate
principal amount of such DIP Financing secured by senior liens on such RBL
Priority Collateral plus the aggregate outstanding amount of the RBL Obligations
and the Bridge Obligations shall not exceed the maximum amount permitted under
Section 4.09(b)(1)(a) of the Indenture governing the 9.25% Notes. The Junior
Agent will subordinate its liens in the Collateral to the liens securing such
DIP Financing (and all obligations relating thereto) the extent that the liens
of the Senior Agent with respect to such Priority Collateral are subordinated to
or pari passu with the liens securing such DIP Financing (it being understood
that the

 

--------------------------------------------------------------------------------

 

 

 

Obligations will nonetheless retain their relative priorities as set forth in
the Intercreditor Agreement with respect to such Collateral).

 

 

 

Rights As Unsecured Creditors:

 

Except as otherwise expressly set forth in the Intercreditor Agreement, the
Agents and the holders of the Obligations may exercise rights and remedies as
unsecured creditors against the Loan Parties.

 

 

 

Bailee for Perfection:

 

To the extent that the lien of a Senior Agent on its Priority Collateral is
perfected pursuant to the applicable Uniform Commercial Code by the possession
or control thereof by such Senior Agent, such Senior Agent shall hold such
Priority Collateral as gratuitous bailee for the benefit of the Junior Agent
with respect thereto, solely for the purpose of perfecting the security interest
granted to the Junior Agent thereon.

 

 

 

Amendments, Waivers, Additional Collateral Documents:

 

The Intercreditor Agreement may not be amended without the written consent of
the RBL Agent and the Bridge Agent.

 

 

 

Governing Law:

 

The State of New York.

 

The foregoing is intended to summarize certain basic terms of the Intercreditor
Agreement and is not intended to be a definitive list of all of the terms of the
Intercreditor Agreement.

 

--------------------------------------------------------------------------------