Exhibit 10.4

 

 

TENTH AMENDMENT

 

TO

 

SENIOR REVOLVING CREDIT AGREEMENT

 

DATED AS OF MAY 1, 2015

 

AMONG

 

HALCÓN RESOURCES CORPORATION,
AS BORROWER,

 

THE GUARANTORS,

 

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

 

AND

 

THE LENDERS PARTY HERETO

 

 

J. P. MORGAN SECURITIES LLC,

AS SOLE LEAD ARRANGER

 

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

AS JOINT BOOKRUNNERS

 

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TENTH AMENDMENT
TO SENIOR REVOLVING CREDIT AGREEMENT

 

THIS TENTH AMENDMENT TO SENIOR REVOLVING CREDIT AGREEMENT (this “Tenth
Amendment”) dated as of May 1, 2015 is among HALCÓN RESOURCES CORPORATION, a
corporation duly formed and existing under the laws of the State of Delaware
(the “Borrower”), each of the undersigned guarantors (the “Guarantors”, and
together with the Borrower, the “Obligors”), each of the undersigned Lenders
party to the Credit Agreement, and JPMORGAN CHASE BANK, N.A., as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.                                    Reference is made to that certain Senior
Revolving Credit Agreement dated as of February 8, 2012 (as amended, modified or
otherwise supplemented prior to the date hereof, the “Credit Agreement”; as
amended by this Tenth Amendment, and as may be further amended, modified or
supplemented the “Amended Credit Agreement”) among the Borrower, each of the
Lenders party thereto and the Administrative Agent, pursuant to which the
Lenders have made certain credit and other financial accommodations available to
and on behalf of the Borrower and its Subsidiaries.

 

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

 

C.                                    NOW, THEREFORE, to induce the
Administrative Agent and each of the Lenders to enter into this Tenth Amendment
and in consideration of the premises and the mutual covenants herein contained,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

Section 1.                                           Defined Terms.  Each
capitalized term used herein but not otherwise defined herein has the meaning
given such term in the Amended Credit Agreement.  Unless otherwise indicated,
all section references in this Tenth Amendment refer to sections of the Amended
Credit Agreement.

 

Section 2.                                                                  
Amendments to Credit Agreement.

 

2.1                               Amendments to Section 1.02.  Section 1.02 is
hereby amended by:

 

(a)                                 deleting and replacing, or adding, as
applicable, the following terms in the appropriate alphabetical order:

 

“‘Additional Second Lien Notes’ means additional senior secured notes permitted
pursuant to Section 9.02(k) which may be issued from time to time.

 

‘Applicable Margin’ means, for any day, with respect to any ABR Loan or
Eurodollar Loan or the Commitment Fee Rate, as the case may be, the rate per
annum set forth in the Borrowing Base Utilization Percentage grid below based
upon the Borrowing Base Utilization Percentage then in effect:

 

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Borrowing Base

 

<25%

 

³25%

 

³50%

 

³75%

 

³90%

 

Utilization Percentage

 

 

 

<50%

 

<75%

 

<90%

 

 

 

LIBOR Margin

 

1.75%

 

2.00%

 

2.25%

 

2.50%

 

2.75%

 

ABR Margin

 

0.75%

 

1.00%

 

1.25%

 

1.50%

 

1.75%

 

Commitment Fee Rate

 

0.375%

 

0.375%

 

0.50%

 

0.50%

 

0.50%

 

 

Each change in the Applicable Margin or Commitment Fee Rate shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change, provided,
however, that if at any time the Borrower fails to deliver a Reserve Report
pursuant to Section 8.12(a), then the “Applicable Margin” and “Commitment Fee
Rate” mean the rate per annum set forth on the grid when the Borrowing Base
Utilization Percentage is at its highest level.

 

‘Anti-Corruption Laws’ means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries from time to
time concerning or relating to bribery or corruption.

 

‘Borrowing Base Cap’ means an amount equal to 65% of the discounted future net
revenue before state or federal income taxes from Proved Reserves of the
Borrower and its Restricted Subsidiaries calculated using Modified ACNTA Prices
(after giving effect to commodity derivatives contracts in effect as of the date
of determination) but otherwise calculated in accordance with SEC guidelines, as
estimated in the most recent Reserve Report after giving effect to exploration
and production activities, acquisitions, dispositions and production since the
date of such Reserve Report in the same manner as would be given in calculating
Modified ACNTA.

 

‘Initial Second Lien Indenture’ means that certain Indenture dated as of May 1,
2015, among the Borrower, the Guarantors (as defined therein) and the Trustee,
pursuant to which the Initial Second Lien Notes are issued.

 

‘Initial Second Lien Notes’ means the 8.625% senior secured notes due 2020
issued pursuant to the Initial Second Lien Indenture.

 

‘Intercreditor Agreement’ means that certain intercreditor agreement dated as of
May 1, 2015 among the Administrative Agent, the Trustee and the Borrower as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time..

 

‘Maturity Date’ means August 1, 2019.

 

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‘Modified ACNTA has the meaning assigned such term in the Second Lien Indenture
as in effect on the date hereof, and any component definition used therein has
the meaning set forth in the Second Lien Indenture as of the date hereof.

 

‘Modified ACNTA Prices has the meaning assigned such term in the Second Lien
Indenture as in effect on the date hereof, and any component definition used
therein has the meaning set forth in the Second Lien Indenture as of the date
hereof.

 

‘Permitted Refinancing Debt’ means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or proceeds of which are used to refinance, all
or any Senior Notes or Second Lien Notes (the “Refinanced Debt”); provided that
(a) such new Debt is in an aggregate principal amount not in excess of (i) the
aggregate principal amount then outstanding of the Refinanced Debt (or, if the
Refinanced Debt is exchanged or acquired for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration thereof,
such lesser amount) plus (ii) an amount necessary to pay any fees and expenses,
including premiums, related to such exchange or refinancing; (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 materially more
onerous to the Borrower and its Restricted Subsidiaries than those imposed by
the Refinanced Debt and (d) such new Debt (and any guarantees thereof) is
subordinated in right of payment to the Secured Obligations (or, if applicable,
the Guaranty Agreement) to at least the same extent as the Refinanced Debt.  For
the avoidance of doubt, if any Senior Notes are exchanged for Second Lien Notes,
the sum of such Refinanced Debt and any outstanding Second Lien Notes at such
time may not exceed the amount of Second Lien Notes permitted pursuant to
Section 9.02(k).

 

‘Sanctions’ means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, any European Union member state or
Her Majesty’s Treasury of the United Kingdom.

 

‘Sanctioned Country’ means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

‘Sanctioned Person’ means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State or by the United Nations Security Council, the European Union or any
European Union member state, (b) any Person operating, organized or resident in
a Sanctioned Country or (c) any Person owned or controlled by any such Person or

 

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Persons described in the foregoing clauses (a) or (b).

 

‘Second Lien Indenture’ means (a) the Initial Second Lien Indenture, (b) any
indenture or supplemental indenture pursuant to which Additional Second Lien
Notes are issued, and (c) any indenture, note purchase agreement or other
agreement pursuant to which any Permitted Refinancing Debt is issued in exchange
for, or the proceeds of which are used to refinance, all or any Second Lien
Notes, in each case, and as amended from time to time, in compliance with this
Agreement and the Intercreditor Agreement.

 

‘Second Lien Notes’ means (a) the Initial Second Lien Notes and (b) the
Additional Second Lien Notes.

 

‘Tenth Amendment’ means that certain Tenth Amendment to the Credit Agreement
dated as of May 1, 2015 among the Borrower, the Guarantors, the Administrative
Agent and the Lenders.

 

‘Tenth Amendment Effective Date’ has the meaning assigned to such term in the
Tenth Amendment.

 

‘Total Secured Debt’ means (i) debt described in clause (a) of the definition of
Secured Obligations and all renewals, extensions and/or rearrangements thereof,
(ii) the Second Lien Notes and (iii) without duplication of clauses (i) and
(ii), all funded Debt of the Borrower and the Restricted Subsidiaries of the
types described in clauses (a), (b) (net of any cash collateral securing Letters
of Credit), (f) and (l) of the definition of Debt, in each case that is secured
by a Lien on any Property of the Borrower and the Restricted Subsidiaries.

 

‘Trustee’ means U.S. Bank National Association in its capacity as Trustee under
the Initial Second Lien Indenture.”

 

2.2                               Amendment to Section 2.03.  Section 2.03 is
hereby amended by deleting the last sentence in the first paragraph following
Section 2.03(vi) and replacing it with the following:

 

“Each Borrowing Request shall constitute a representation that the amount of the
requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed (A) the total Commitments (i.e., the lesser of the Aggregate Maximum
Credit Amounts and the then effective Borrowing Base), and (B) at any time the
Borrowing Base is in excess of $950, 000,000 and as long as the Intercreditor
Agreement is in place, the greatest of (I) $950,000,000, (II) the then effective
Borrowing Base Cap or (III) 30% of Modified ACNTA as of the date of incurrence
of such Borrowing.”

 

2.3                               Amendment to Section 2.07(e). 
Section 2.07(e) is hereby amended by deleting such Section in its entirety and
replacing it with the following:

 

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“(e)                            Reduction of Borrowing Base Upon Issuance of
Senior Notes and Second Lien Notes.  Notwithstanding anything to the contrary
contained herein, upon the issuance of any (i) Senior Notes in accordance with
Section 9.02(h), the Borrowing Base then in effect shall be reduced by an amount
equal to the product of 0.25 multiplied by the stated principal amount of such
Senior Notes (without regard to any initial issue discount), and (ii) Second
Lien Notes in accordance with Section 9.02(k) after the Tenth Amendment
Effective Date, the Borrowing Base then in effect shall be reduced by an amount
equal to the product of 0.20 multiplied by the stated principal amount of such
Second Lien Notes (without regard to any initial issue discount); provided that
the Borrower may issue Second Lien Notes, which together with any Second Lien
Notes previously issued does not exceed $750,000,000 in the aggregate during the
period after the Tenth Amendment Effective Date and on or before the October 1,
2015 Redetermination without such reduction, in each instance of (i) and
(ii) above, the Borrowing Base as so reduced shall become the new Borrowing Base
immediately upon the date of such issuance, effective and applicable to the
Borrower, the Agents, the Issuing Bank and the Lenders on such date until the
next redetermination or modification thereof hereunder.”

 

(b)                                 deleting the defined term “Second Lien Term
Loan” in each instance of its use.

 

2.4                               Amendment to Section 3.04(c)(iii). 
Section 3.04(c)(iii) is hereby amended by deleting such Section in its entirety
and replacing it with the following:

 

“(iii)                         Upon any adjustments to the Borrowing Base
pursuant to Section 2.07(e), and Section 2.07(f) if the total Revolving Credit
Exposures exceeds the Borrowing Base as adjusted, then the Borrower shall
(A) prepay the Borrowings in an aggregate principal amount equal to such excess,
and (B) if, as a result of an LC Exposure, any excess remains after prepaying
all of the Borrowings pay to the Administrative Agent on behalf of the Lenders
an amount equal to such excess to be held as cash collateral as provided in
Section 2.08(j).  The Borrower shall be obligated to make such prepayment and/or
deposit of cash collateral on the date it or any Subsidiary receives cash
proceeds as a result of the incurrence of such Senior Notes or Second Lien Notes
or the termination of such Swap Agreement, as applicable.

 

2.5                               Amendment to Article VII.  Article VII is
hereby amended by adding a new Section 7.25 as follows:

 

“Section 7.25                                               Anti-Corruption Laws
and Sanctions.  The Borrower has implemented and maintains in effect policies
and procedures regarding compliance by the Borrower, its Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws
and applicable Sanctions, and the Borrower, its Subsidiaries and their
respective officers and employees and to the knowledge of the Borrower its
directors and agents, are in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects and are not knowingly engaged in any activity
that would

 

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reasonably be expected to result in the Borrower being designated as a
Sanctioned Person.  None of (a) the Borrower, any Subsidiary or to the knowledge
of the Borrower or such Subsidiary any of their respective directors, officers
or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower
or any Subsidiary that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person.   No
Borrowing or Letter of Credit, use of proceeds or other transaction contemplated
by this Agreement will violate any Anti-Corruption Law or Sanctions.”

 

2.6                               Amendment to Section 8.01.  Section 8.01 is
hereby amended by renumbering Sections 8.01(q) and (r) as Sections 8.01(t) and
(u), respectively, and adding a new Sections 8.01(q), (r) and (s) as follows:

 

“(q)                           Issuance of Additional Second Lien
Notes/Permitted Refinancing.  In the event the Borrower intends to issue
Additional Second Lien Notes or refinance the Second Lien Notes with the
proceeds of Permitted Refinancing Debt as contemplated by Section 9.02(k), prior
written notice of such intended offering therefor, the amount thereof and the
anticipated date of closing and the Borrower will furnish a copy of the
preliminary offering memorandum (if any) and the final offering memorandum (if
any).

 

(r)                                    Calculation of Modified ACNTA.  The
Borrower shall provide a certificate of a Responsible Officer to the
Administrative Agent with the delivery of each Reserve Report certifying as to
the Modified ACNTA and containing a copy of the calculation for such and
certifying that the Borrower has not granted Liens to secure Debt in excess of
the amount permitted under each Senior Indenture or in excess of the Priority
Lien Cap (as such term is defined in each Senior Indenture).

 

(s)                                   Amount of Borrowing Base Cap, Second Lien
Notes and Parity Lien Debt The Borrower shall deliver a certificate of a
Responsible Officer with the delivery of each Reserve Report pursuant to
Section 8.12(a) and (b) certifying as to the Borrowing Base Cap as of such date,
including a copy of the calculation for such and setting forth as of such date
the outstanding principal amount of Second Lien Notes and Parity Lien Debt (as
such term is defined in the Senior Indenture).”

 

2.7                               Amendment to Section 8.09.  Section 8.09 is
hereby amended by renumbering the existing language as Section 8.09(a) and
adding the following Section 8.09(b):

 

“(b)                           The Borrower will maintain in effect and enforce
policies and procedures regarding compliance by the Borrower, its Subsidiaries
and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.”

 

2.8                               Amendment to Section 8.14.  Section 8.14 is
hereby amended by adding the following Section 8.14(d):

 

“(d)                           The Borrower will not, and will not permit any
Restricted

 

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Subsidiary to, grant a Lien on any Property to secure the Second Lien Notes
without first (i) giving ten (10) days’ prior written notice to the
Administrative Agent thereof and (ii) granting to the Administrative Agent to
secure the Secured Obligations a first-priority, perfected Lien on the same
Property pursuant to Security Instruments in form and substance satisfactory to
the Administrative Agent (provided that Excepted Liens identified in clauses
(a) to (f) of the definition thereof, but subject to the provisions at the end
of such definition, may exists).  In connection therewith, the Borrower shall,
or shall cause its Restricted Subsidiaries to, execute and deliver such other
additional closing documents, certificates and legal opinions of the type
typically given with regard to such matters as shall reasonably be requested by
the Administrative Agent.”

 

2.9                               Amendment to Section 9.01(a). 
Section 9.01(a) is hereby amended by deleting such Section in its entirety and
replacing it with the following:

 

“(a)                           Ratio of Total Secured Debt to EBITDA.  The
Borrower will not, as of the last day of any fiscal quarter, permit its ratio of
Total Secured Debt to EBITDA for the four fiscal quarters most recently ended to
be greater than 2.75 to 1.00.”

 

2.10                        Amendment to Section 9.02.  Section 9.02 is hereby
amended by (a) replacing the phrase “one year” in each instance of its
occurrence in Section 9.02(h) with the phrase “six months” and (b) renumbering
Section 9.02(k) as Section 9.02(l) and adding the following as Section 9.02(k):

 

“(k)                           Debt under the Second Lien Notes and any
guarantees thereof, the principal amount of which does not exceed $850,000,000
in the aggregate; provided that, with respect to the Additional Second Lien
Notes (i) at the time of incurring such Debt (A) no Default has occurred and is
then continuing and (B) no Default would result from the incurrence of such Debt
after giving effect to the incurrence of such Debt (and any application of the
proceeds of such incurrence), (ii) such Debt does not have any scheduled
amortization prior to six months after the Maturity Date, (iii) such Debt does
not mature sooner than six months after the Maturity Date, (iv) the terms of
such Debt are not materially more onerous, taken as a whole, than the terms of
this Agreement and the other Loan Documents, (v) such Debt and any guarantees
thereof are on prevailing market terms for similarly situated companies, and
(vi) the Borrowing Base is adjusted as contemplated by Section 2.07(e) and the
Borrower makes any prepayment required under Section 3.04(c)(iii); and any
Permitted Refinancing Debt with respect to any such Second Lien Notes provided
that for the purposes of Section 2.07(e), any increase in the aggregate amount
of Second Lien Notes then outstanding shall result in a reduction of the
Borrowing Base as contemplated by Section 2.07(e).”

 

2.11                        Amendment to Section 9.03.  Section 9.03 is hereby
amended by adding the following as Section 9.03(f):

 

“(f)                             Liens securing Second Lien Notes permitted by
Section 9.02(k).

 

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2.12                        Amendment to Section 9.04.  Section 9.04 is hereby
amended by adding the phrase “and Second Lien Notes” in the title and adding the
following Section 9.04(d):

 

“(d)                           Redemption of Second Lien Notes; Amendment of
Second Lien Indenture.  The Borrower will not, and will not permit any
Restricted Subsidiary to, prior to the date that is ninety-one (91) days after
the Maturity Date: (i) call, make or offer to make any optional or voluntary
Redemption of or otherwise optionally or voluntarily Redeem (whether in whole or
in part) the Second Lien Notes; provided that the Borrower may Redeem any Second
Lien Notes in a principal amount not exceeding the Net Cash Proceeds of any sale
of Equity Interests (other than Disqualified Capital Stock) of the Borrower or
with the aggregate principal amount of Permitted Refinancing Debt or (ii) amend,
modify, waive or otherwise change, consent or agree to any amendment,
supplement, modification, waiver or other change to, any of the terms of the
Second Lien Notes or the Second Lien Indenture if the effect thereof would be to
shorten its maturity or average life or increase the amount of any payment of
principal thereof or increase the rate or shorten any period for payment of
interest thereon, provided that the foregoing shall not prohibit the execution
of supplemental indentures to add guarantors if required by the terms of the
Second Lien Indenture provided such Person complies with Section 8.14(d).”

 

2.13                        Amendment to Section 9.09.  Section 9.09 is hereby
amended by renumbering the existing language as Section 9.09(a) and adding the
following Section 9.09(b):

 

“(b)                           The Borrower will not request any Borrowing or
Letter of Credit, and the Borrower shall not use, and shall procure that its
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that would
result in the violation of  any Sanctions applicable to any party hereto.”

 

2.14                        Amendment to Section 9.17(h).  Section 9.17(h) is
hereby amended by adding the phrase “or Second Lien Notes permitted by
Section 9.02(k)” after the reference to Section 9.02(j) therein.

 

2.15                        Amendment to Section 10.01.  Section 10.01 is hereby
amended by adding the following Section 10.01(n):

 

“(n)                           the Intercreditor Agreement shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with its terms
against Borrower or any party thereto or any holder of any Second Lien Notes or
shall be repudiated by any of them, or cause the Liens of the Second Lien Notes
to be senior or pari passu in right

 

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to the Liens of this Agreement, or any payment by Borrower or any Guarantor in
violation of the terms of the Intercreditor Agreement.”

 

2.16                        Amendment to Exhibit B.  Exhibit B is hereby amended
by replacing such Exhibit in its entirety with Exhibit B attached hereto.

 

Section 3.                                                                  
Borrowing Base.  As of the Tenth Amendment Effective Date, and after giving
effect to Section 2.07(e) with respect to the reduction of the Borrowing Base
attributable to the issuance of the Initial Second Lien Notes, each of the
Lenders and the Borrower agree that the amount of the Borrowing Base shall be
$900,000,000 and such Borrowing Base shall remain in effect until the Borrowing
Base is otherwise redetermined or adjusted in accordance with the Credit
Agreement.  This provision does not limit the right of the parties to initiate
interim redeterminations of the Borrowing Base in accordance with
Section 2.07(b) or further adjustments pursuant to Section 2.07(e),
Section 2.07(f), Section 8.13(c) or Section 9.13.  The parties hereto
acknowledge and agree that the Borrowing Base redetermination set forth in this
Section 3 shall be deemed to be the Scheduled Redetermination scheduled for
May 1, 2015 as provided in Section 2.07(b).  This Section 3 constitutes the New
Borrowing Base Notice in accordance with Section 2.07(d).

 

Section 4.                                                                  
Assignments and Reallocations.  The Lenders have agreed among themselves, in
consultation with the Borrower, to reallocate their respective Commitments and
to, among other things, add Credit Suisse Loan Funding, LLC as a “Lender” under
the Credit Agreement (the  “New Lender”) and each of Credit Agricole Corporate
and Investment Bank, Deutsche Bank Trust Company Americas, KeyBank National
Association, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia and
The Royal Bank of Scotland plc has decided to exit as a Lender (each, an
“Exiting Lender” and, collectively, the “Exiting Lenders”).  The Administrative
Agent and the Borrower hereby consent to such reallocation and the Lenders’ and
Exiting Lenders’ assignments of their Commitments, including assignments to the
New Lender.  On the Tenth Amendment Effective Date and after giving effect to
such reallocations, the Commitment of each Lender shall be as set forth on
Schedule 1 of this Tenth Amendment which Annex I supersedes and replaces the
Annex I to the Credit Agreement.  With respect to such reallocation, each Lender
shall be deemed to have acquired the Commitment allocated to it from each of the
other Lenders and the Exiting Lenders pursuant to the terms of the Assignment
and Assumption Agreement attached as Exhibit F to the Credit Agreement as if
each such Lender and Exiting Lender had executed an Assignment and Assumption
Agreement with respect to such allocation.  In connection with this Assignment
and for purposes of this Assignment only, the Lenders, the New Lender, the
Exiting Lenders, the Administrative Agent and the Borrower waive the processing
and recordation fee under Section 12.04(b)(ii)(C). After giving effect to this
Section 4 and any Borrowings made on the Tenth Amendment Effective Date,
(a) each Lender who holds Loans in an aggregate amount less than its Applicable
Percentage (after giving effect to this Section 4) of all Loans shall advance
new Loans which shall be disbursed to the Administrative Agent and used to repay
Loans outstanding to each Lender who holds Loans in an aggregate amount greater
than its Applicable Percentage of all Loans, (b) each Lender’s participation in
each Letter of Credit, if any, shall be automatically adjusted to equal its
Applicable Percentage (after giving effect to this Section 4), (c) such other
adjustments shall be made as the Administrative Agent shall specify so that the
Revolving Credit Exposure applicable to each Lender equals its Applicable
Percentage (after giving effect to this Section 4) of the aggregate Revolving
Credit Exposure of all Lenders and (d) the Borrower shall

 

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not be required to make any break-funding payments required under Section 5.02
of the Credit Agreement resulting from the Loans and adjustments described in
this Section 4. Each Lender that executes and delivers a signature page hereto
that identifies it as a Exiting Lender shall constitute a Exiting Lender as of
the Tenth Amendment Effective Date. No Exiting Lender shall have a Commitment on
and after the Tenth Amendment Effective Date. Each Exiting Lender shall cease to
be a party to the Credit Agreement as of the date hereof, and no Exiting Lender
shall have any rights, duties or obligations thereunder. All amounts owing to an
Exiting Lender under the Loan Documents that are not otherwise paid through the
reallocation procedure set forth herein shall be paid by the Borrower to such
Exiting Lender as of the Tenth Amendment Effective Date.

 

Section 5.                                                                  
Conditions Precedent.  This Tenth Amendment shall become effective on the date
when each of the following conditions is satisfied (or waived in accordance with
Section 12.02 of the Credit Agreement) (such date, the “Tenth Amendment
Effective Date”):

 

5.1                               Tenth Amendment.  The Administrative Agent
shall have received a counterpart of this Tenth Amendment signed by the
Borrower, the Guarantors, and Lenders constituting all of the Lenders.

 

5.2                               Mortgage Amendments.  The Administrative Agent
shall have received counterparts of the amendments to the mortgages extending
the Maturity Date.

 

5.3                               Intercreditor Agreement.  The Administrative
Agent shall have received a counterpart of the Intercreditor Agreement signed by
the Borrower and the Trustee.

 

5.4                               Legal Opinion.  The Administrative Agent shall
have received a non-contravention legal opinion of counsel to the Borrower in
form and substance reasonably acceptable to the Administrative Agent.

 

5.5                               Responsible Officer Certificate.  The
Administrative Agent shall have received a certificate from a Responsible
Officer of the Borrower stating that the incurrence of Debt and granting of
Liens pursuant to the Second Lien Notes does not violate any Senior Indenture.

 

5.6                               Initial Second Lien Notes.  The Initial Second
Lien Indenture shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Administrative Agent shall be reasonably satisfied
that (a) the Borrower has issued the Initial Second Lien Notes pursuant to the
Initial Second Lien Indenture in a principal amount of not less than
$700,000,000 and (b) all Property constituting security for the Initial Second
Lien Notes is subject to a Lien in favor of Administrative Agent under the
Security Instruments.

 

5.7                               Fees.  The Administrative Agent, the Arranger
and the Lenders shall have received all fees and other amounts due and payable
on or prior to the Tenth Amendment Effective Date, including, to the extent
invoiced, reimbursement or payment in full of all out of pocket expenses
required to be reimbursed or paid by the Borrower under the Amended Credit
Agreement.

 

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

 

10

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The Administrative Agent is hereby authorized and directed to declare this Tenth
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with the
conditions set forth in this Section 5 or the waiver of such conditions as
permitted in Section 12.02 of the Credit Agreement.  Such declaration shall be
final, conclusive and binding upon all parties to the Credit Agreement for all
purposes.

 

Section 6.                                           Miscellaneous.

 

6.1                               Confirmation.  The provisions of the Amended
Credit Agreement shall remain in full force and effect following the
effectiveness of this Tenth Amendment.

 

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

 

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

 

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

 

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

 

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

 

6.7                               Severability.  Any provision of this Tenth
Amendment which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such

 

11

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

 

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

 

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

 

12

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

 

BORROWER:

HALCÓN RESOURCES CORPORATION

 

 

 

By:

/s/ Mark J. Mize

 

 

Name:

Mark J. Mize

 

 

Title:

Executive Vice President, Chief Financial Officer and Treasurer

 

 

GUARANTORS:

HALCÓN HOLDINGS, INC.

 

HALCÓN RESOURCES OPERATING, INC.

 

HALCÓN ENERGY PROPERTIES, INC.

 

HALCÓN ENERGY HOLDINGS, LLC

 

HALCÓN GULF STATES, LLC

 

HALCÓN OPERATING CO., INC.

 

HRC ENERGY RESOURCES (WV), INC.

 

HRC ENERGY LOUISIANA, LLC

 

HRC PRODUCTION COMPANY

 

HALCÓN FIELD SERVICES, LLC

 

HALCÓN LOUISIANA OPERATING, L.P.

 

HRC ENERGY, LLC

 

HRC OPERATING, LLC

 

HK ENERGY, LLC

 

HK ENERGY OPERATING, LLC

 

HK LOUISIANA OPERATING, LLC

 

HK OIL & GAS, LLC

 

HALCÓN WILLISTON I, LLC

 

HALCÓN WILLISTON II, LLC

 

HK RESOURCES, LLC

 

THE 7711 CORPORATION

 

 

 

By:

/s/ Mark J. Mize

 

 

Name:

Mark J. Mize

 

 

Title:

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

 

SIGNATURE PAGE — TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

ADMINISTRATIVE AGENT AND LENDER:

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent and Lender

 

 

 

By:

/s/ Darren Vanek

 

 

Name: Darren Vanek

 

 

Title: Authorized Officer

 

SIGNATURE PAGE — TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

WELLS FARGO BANK, N.A.,

 

as Lender

 

 

 

By:

/s/ Todd Fogle

 

 

Name: Todd Fogle

 

 

Title: Vice President

 

SIGNATURE PAGE — TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

BMO HARRIS FINANCING, INC.,

 

as Lender

 

 

 

By:

/s/ James V. Ducote

 

 

Name: James V. Ducote

 

 

Title: Managing Director

 

SIGNATURE PAGE — TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

BARCLAYS BANK PLC,

 

as Lender

 

 

 

By:

/s/ Marguerite Sutton

 

 

Name: Marguerite Sutton

 

 

Title: Vice President

 

SIGNATURE PAGE — TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

SUNTRUST BANK,

 

as Lender

 

 

 

By:

/s/ Shannon Juhan

 

 

Name: Shannon Juhan

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

CAPITAL ONE, NATIONAL ASSOCIATION,

 

as Lender

 

 

 

By:

/s/ Victor Ponce de Leon

 

 

Name: Victor Ponce de Leon

 

 

Title: Senior Vice President

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

GOLDMAN SACHS BANK USA,

 

as Lender

 

 

 

By:

/s/ Rebecca Kratz

 

 

Name: Rebecca Kratz

 

 

Title: Authorized Signatory

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

ROYAL BANK OF CANADA,

 

as Lender

 

 

 

By:

/s/ Jay T. Sartain

 

 

Name: Jay T. Sartain

 

 

Title: Authorized Signatory

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

BANK OF AMERICA, N.A.,

 

as Lender

 

 

 

By:

/s/ Bryan Heller

 

 

Name: Bryan Heller

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

THE ROYAL BANK OF SCOTLAND PLC,

 

solely for purposes of Section 4 as an Exiting Lender

 

 

 

By:

/s/ James L. Moyes

 

 

Name: James L. Moyes

 

 

Title: Managing Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as Lender

 

 

 

By:

/s/ Nupur Kumar

 

 

Name: Nupur Kumar

 

 

Title: Authorized Signatory

 

 

 

 

By:

/s/ Vipul Dhadda

 

 

Name: Vipul Dhadda

 

 

Title: Authorized Signatory

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, solely for purposes of Section 4
as an Exiting Lender

 

 

 

By:

/s/ Michael Willis

 

 

Name: Michael Willis

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Ting Lee

 

 

Name: Ting Lee

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

NATIXIS,

 

as Lender

 

 

 

By:

/s/ Stuart Murray

 

 

Name: Stuart Murray

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Vikram Nath

 

 

Name: Vikram Nath

 

 

Title: Vice President

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

ING CAPITAL LLC,

 

as Lender

 

 

 

By:

/s/ Juli Bieser

 

 

Name: Juli Bieser

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Scott Lamoreaux

 

 

Name: Scott Lamoreaux

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

COMERICA BANK,

 

as Lender

 

 

 

 

By:

/s/ William Robinson

 

 

Name: William Robinson

 

 

Title: Senior Vice President

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

DEUTSCHE BANK AG NEW YORK BRANCH,

 

solely for purposes of Section 4 as an Exiting Lender

 

 

 

 

By:

/s/ Peter Cucchiara

 

 

Name: Peter Cucchiara

 

 

Title: Vice President

 

 

 

 

By:

/s/ Kirk L. Tashjian

 

 

Name: Kirk L. Tashjian

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

SUMITOMO MITSUI BANKING CORPORATION,

 

solely for purposes of Section 4 as an Exiting Lender

 

 

 

 

By:

/s/ Ryo Suzuki

 

 

Name: Ryo Suzuki

 

 

Title: General Manager

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

THE BANK OF NOVA SCOTIA,

 

solely for purposes of Section 4 as an Exiting Lender

 

 

 

 

By:

/s/ Alan Dawson

 

 

Name: Alan Dawson

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

KEYBANK NATIONAL ASSOCIATION

 

solely for purposes of Section 4 as an Exiting Lender

 

 

 

 

By:

/s/ George E. McKean

 

 

Name: George E. McKean

 

 

Title: Senior Vice President

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

BNP PARIBAS

 

as Lender

 

 

 

 

By:

/s/ Scott Joyce

 

 

Name: Scott Joyce

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Juan Carlos Sandoval

 

 

Name: Juan Carlos Sandoval

 

 

Title: Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

LENDER:

CREDIT SUISSE LOAN FUNDING, LLC,

 

as Lender

 

 

 

 

By:

/s/ Kenneth Hoffman

 

 

Name: Kenneth Hoffman

 

 

Title: Managing Director

 

SIGNATURE PAGE – TENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

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

 

EXHIBIT B
FORM OF BORROWING REQUEST

 

[                   ], 201[ ]

 

HALCON RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), pursuant
to Section 2.03 of the Senior Revolving Credit Agreement dated as of February 8,
2012 (together with all amendments, restatements, supplements or other
modifications thereto, the “Credit Agreement”) among the Borrower, JPMorgan
Chase Bank, N.A., as Administrative Agent and the other agents and lenders (the
“Lenders”) which are or become parties thereto (unless otherwise defined herein,
each capitalized term used herein is defined in the Credit Agreement), hereby
requests a Borrowing as follows:

 

(i)                Aggregate amount of the requested Borrowing is
$[                   ];

 

(ii)               Date of such Borrowing is [                   ], 201[   ];

 

(iii)              Requested Borrowing is to be [an ABR Borrowing] [a Eurodollar
Borrowing];

 

(iv)             In the case of a Eurodollar Borrowing, the initial Interest
Period applicable thereto is [                   ];

 

(v)              Amount of Borrowing Base in effect on the date hereof is
$[                   ];

 

(vi)             Total Revolving Credit Exposures on the date hereof (i.e.,
outstanding principal amount of Loans and total LC Exposure) is
$[                   ];

 

(vii)            Pro forma total Revolving Credit Exposures (giving effect to
the requested Borrowing) is $[                   ]; [and]

 

[(viii)          Amount of Borrowing Base Cap on the date hereof is
$[                   ];(1)

 

(ix)             Amount of 30% of Modified ACNTA on the date hereof is
$[                   ]; and](2)

 

([viii/x])     Location and number of the Borrower’s account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.05 of the
Credit Agreement, is as follows:

 

[                                                       ]

[                                                       ]

[                                                       ]

[                                                       ]

[                                                       ]

 

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

(1)  Only used when clause (vii) exceeds $950,000,000 and the Intercreditor
Agreement is in place.

(2)  Only used when clause (vii) exceeds $950,000,000 and the Intercreditor
Agreement is in place.

 

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

 

The undersigned certifies that he/she is the [                ] of the Borrower,
and that as such he/she is authorized to execute this certificate on behalf of
the Borrower.  The undersigned further certifies, represents and warrants on
behalf of the Borrower that the Borrower is entitled to receive the requested
Borrowing under the terms and conditions of the Credit Agreement.

 

 

HALCON RESOURCES CORPORATION

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

ANNEX I

 

LIST OF MAXIMUM CREDIT AMOUNTS

 

Lender

 

Applicable
Percentage

 

Maximum Credit
Amount

 

JPMorgan Chase Bank, N.A.

 

10.07

%

$

90,630,719.50

 

Wells Fargo Bank, N.A.

 

10.07

%

$

90,630,719.50

 

BMO Harris Financing, Inc.

 

9.44

%

$

85,000,000.00

 

Capital One, National Association

 

6.74

%

$

60,620,915.00

 

SunTrust Bank

 

6.74

%

$

60,620,915.00

 

Royal Bank of Canada

 

6.74

%

$

60,620,915.00

 

Bank of America, N.A.

 

6.74

%

$

60,620,915.00

 

Natixis

 

6.74

%

$

60,620,915.00

 

ING Capital LLC

 

5.77

%

$

51,960,784.00

 

BNP Paribas

 

5.77

%

$

51,960,784.00

 

Barclays Bank PLC

 

9.44

%

$

85,000,000.00

 

Goldman Sachs Bank USA

 

5.64

%

$

50,738,562.00

 

Credit Suisse AG, Cayman Islands Branch

 

5.09

%

$

45,797,385.63

 

Comerica Bank

 

3.44

%

$

30,973,856.00

 

Credit Suisse Loan Funding, LLC

 

1.58

%

$

14,202,614.37

 

TOTAL

 

100.00

%

$

900,000,000.00

 

 

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