Exhibit
10.1
 
 
 
 

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SECOND AMENDMENT TO
 
THIRD AMENDED AND RESTATED
 
CREDIT AGREEMENT
 

 
Dated as of September 28, 2012
 
among
 
NORTHERN OIL AND GAS, INC.,
 
as Borrower,
 
ROYAL BANK OF CANADA,
 
as Administrative Agent,
 
and
 
The Lenders Party Hereto
 
 
 
 

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SECOND AMENDMENT TO
 
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of September 28, 2012, is by and among Northern Oil and
Gas, Inc., a Minnesota corporation (the “Borrower”), Royal Bank of Canada (the
“Administrative Agent”), and the Lenders party hereto.
 
Recitals
 
WHEREAS, the Borrower, the Administrative Agent and the other Lenders party
thereto entered into that certain Third Amended and Restated Credit Agreement,
dated as of February 28, 2012 (as previously amended by the First Amendment
dated as of June 29, 2012 and as the same may be further amended, modified,
supplemented or restated from time to time, the “Credit Agreement”);
 
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders amend the Credit Agreement as set forth below; and
 
WHEREAS, the Administrative Agent and the Lenders are willing to (i) amend the
Credit Agreement, (ii) redetermine the Borrowing Base as provided herein, and
(iii) take such other actions as provided herein.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
 
ARTICLE I
 
Definitions
 
Each capitalized term used in this Amendment and not defined herein shall have
the meaning assigned to such term in the Credit Agreement.
 
ARTICLE II
 
Amendments to Credit Agreement
 
Section 2.01 Amendments to Section 1.02 of the Credit Agreement.
 
(a) The following definition is hereby added where alphabetically appropriate:
 
“Undisclosed Administration” means the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official by a supervisory authority or regulator with respect to a
Lender under the Dutch Financial Supervision Act 2007 (as amended from time to
time and including any successor legislation).
 
(b) The following definitions are hereby amended and restated in their entirety
to read as follows:
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied
by the Statutory Reserve Rate; provided that in no event shall the Adjusted LIBO
Rate be less than zero percent per annum.
 

 
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“Defaulting Lender” means, at any time, a Lender as to which the Administrative
Agent has notified the Borrower that such Lender, as reasonably determined by
the Administrative Agent, has (a) failed to fund any portion of its Loans or
participations in Letters of Credit within three Business Days of the date
required to be funded by it hereunder (other than due to a failure of a
condition precedent to be satisfied), (b) notified the Borrower, the
Administrative Agent, the Issuing Bank or any Lender in writing that it does not
intend to comply with its funding obligations under this Agreement or has made a
public statement to the effect that it does not intend to comply with its
funding obligations under this Agreement or under any other agreement in which
it commits to extend credit (other than due to a failure of a condition
precedent to be satisfied), (c) failed, within three Business Days after request
by the Administrative Agent, to confirm that it will comply with the terms of
this Agreement relating to its obligations to fund prospective Loans and
participations in then outstanding Letters of Credit (but such Lender shall
cease to be a Defaulting Lender upon providing this confirmation), (d) otherwise
failed to pay over to the Administrative Agent, the Issuing Bank or any Lender
any other amount required to be paid by it hereunder within three Business Days
of the date when due, unless the subject of a good faith dispute, (e) become or
is insolvent or has a parent company that has become or is insolvent, or (f)
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that no Lender
shall be deemed to be a Defaulting Lender solely by virtue of an Undisclosed
Administration.
 
Section 2.02 Amendment to Section 2.07(d)(i) of the Credit Agreement.  Section
2.07(d)(i) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
 
(i)           in the case of a Scheduled Redetermination, (A) if the
Administrative Agent shall have received the Engineering Reports required to be
delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then on the April 1st or October 1st, as applicable, following
such notice, or (B) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower pursuant to Section
8.12(a) and (c) in a timely and complete manner, then on the Business Day next
succeeding delivery of such notice; and
 
Section 2.03 Amendment to Section 5.01(a)(i) of the Credit Agreement.  Section
5.01(a)(i) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
 
(i)           impose, modify or deem applicable any reserve, liquidity, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
 
Section 2.04 Amendment to Section 9.02(f) of the Credit Agreement.  Section
9.02(f) of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
 

 
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(f)           Permitted Additional Debt incurred after the Effective Date, the
principal amount of which does not exceed $500,000,000 at any time outstanding
and any guarantees thereof; provided that (i) the Borrower shall have furnished
to the Administrative Agent and the Lenders, not less than seven Business Days
prior written notice of its intent to incur such Permitted Additional Debt, the
amount thereof, and the anticipated closing date, together with copies of drafts
of the material definitive documents therefor and, when completed, copies of the
final versions of such material definitive documents, (ii) at the time of
incurring such Permitted Additional Debt (A) no Default has occurred and is then
continuing, (B) no Default would result from the incurrence of such Permitted
Additional Debt after giving effect to the incurrence of such Permitted
Additional Debt (and any concurrent repayment of Debt with the proceeds of such
incurrence), and (C) after giving effect to the incurrence thereof, the Borrower
is in pro forma compliance with the financial covenants contained in Section
9.01, (iii) the incurrence of such Permitted Additional Debt (and any concurrent
repayment of Debt with the proceeds of such incurrence) would not result in the
total Revolving Credit Exposure exceeding the Borrowing Base then in effect and
(iv) concurrently with the incurrence of such Debt, the Borrowing Base is
adjusted pursuant to Section 2.07(e)(iii).
 
Section 2.05 Amendment to Section 9.19 of the Credit Agreement.  Section 9.19 of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:
 
Section 9.19 Swap Agreements.  The Borrower shall neither assign, terminate,
unwind nor sell any Swap Agreements listed on Schedule 7.20. The Borrower shall
not enter into Swap Agreements in respect of commodities if the effect thereof
would be to cause the notional volumes of all Swap Agreements and additional
fixed price physical off take contracts, in the aggregate, to exceed (a) 75% of
the reasonably anticipated projected production from the Borrower’s Proved
Reserves for any month continuing through and including the date that is
twenty-four (24) months following the effective date of each such Swap Agreement
or (b) 50% of the reasonably anticipated projected production from the
Borrower’s Proved Reserves for any month thereafter through and including the
date that is forty-eight (48) months following the effective date of each such
Swap Agreement (it being understood that any put contracts entered into for
non-speculative purposes shall not count against the above limitations).  The
Borrower shall not enter into Swap Agreements converting interest rates (i) from
fixed to floating in excess of 75% of the then outstanding principal amount of
debt for borrowed money which bears interest at a fixed rate or (ii) from
floating to fixed in excess of 100% of the then outstanding principal amount of
debt for borrowed money which bears interest at a floating rate. The Borrower
shall not post any collateral to secure Swap Agreements with a non-Lender.
 
Section 2.06 Amendment to Annex I of the Credit Agreement.  Annex I of the
Credit Agreement is hereby deleted in its entirety and replaced with Annex I
hereto.
 
ARTICLE III
 
Redetermination of the Borrowing Base; Addition of New Lenders
 
Section 3.01 Redetermination of the Borrowing Base. Notwithstanding the
requirements of Section 2.07 of the Credit Agreement, effective as of the Second
Amendment Effective Date, the amount of the Borrowing Base shall be
$350,000,000.00, subject to further adjustments from time to time pursuant to
Section 2.07, Section 8.13(c) or Section 9.12(d) of the Credit Agreement. The
redetermination of the Borrowing Base pursuant to this Section 3.01 of this
Amendment shall constitute the Scheduled Redetermination for October 1, 2012.
 

 
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Section 3.02 Addition of New Lenders.
 
(a) On the Second Amendment Effective Date, (i) The Bank of Nova Scotia and ING
Capital LLC, are each hereby added as a “Lender” for all purposes under the
Credit Agreement (as amended by this Amendment) with a Maximum Credit Amount as
specified in the attached Annex I and (ii) the Maximum Credit Amount of each
Lender (including the new Lenders specified in the preceding clause (i)) shall,
without any further action (including, without the execution of any joinder
agreement or any Assignment and Assumption or the payment of any processing and
recordation fee to the Administrative Agent), be the Maximum Credit Amount
specified for such Lender on the attached Annex I.
 
(b) In connection therewith, to the extent that the Maximum Credit Amounts in
effect immediately prior to the Second Amendment Effective Date are reallocated
(the “Reallocation”), then, on the Second Amendment Effective Date, the Lenders
shall purchase and assume (without recourse or warranty) from the Lenders (i)
Loans, to the extent that there are any Loans then outstanding, and (ii)
undivided participation interests in any outstanding LC Exposure, in each case,
to the extent necessary to ensure that after giving effect to the Reallocation,
each Lender has outstanding Loans and participation interests in outstanding LC
Exposure equal to its Applicable Percentage of the Aggregate Maximum Credit
Amounts.  Each Lender shall make any payment required to be made by it pursuant
to the preceding sentence via wire transfer to the Administrative Agent on the
Second Amendment Effective Date and the Administrative Agent shall remit the
relevant amounts to those Lenders entitled to a portion of the amounts received
by the Administrative Agent pursuant to this Section 3.02.  Each existing Lender
shall be automatically deemed to have assigned any outstanding Loans and
participation interests in outstanding LC Exposure on the Second Amendment
Effective Date necessary to give effect to this paragraph (b) and the existing
Lenders, each new Lender and the Borrower each agree to take any further steps
reasonably requested by the Administrative Agent, in each case to the extent
deemed necessary by the Administrative Agent to effectuate the provisions of the
preceding sentences.  If, on the Second Amendment Effective Date, any Loans that
are Eurodollar Loans have been funded, then the Borrower shall be obligated to
pay any breakage fees or costs that are payable pursuant to Section 5.02 of the
Credit Agreement, as amended by this Second Amendment, in connection with the
reallocation of such outstanding Loans to effectuate the provisions of this
paragraph.
 
ARTICLE IV
 
Conditions Precedent
 
This Amendment shall become effective as of the date first referenced above when
and only when the following conditions are satisfied (the “Second Amendment
Effective Date”):
 
(a) the Administrative Agent shall have received duly executed counterparts of
this Amendment from the Borrower and each Lender, in such numbers as the
Administrative Agent or its counsel may reasonably request; and
 
(b) the Administrative Agent and the Lenders shall have received such upfront
fees as may be agreed to among the Borrower, the Administrative Agent and the
Lenders with respect hereto and all other fees due and payable on or prior to
the effectiveness hereof as provided in any Loan Document, including
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower under the Credit Agreement (including, without
limitation, the reasonable fees and expenses of counsel to the Administrative
Agent).
 

 
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ARTICLE V
 
 
Representations and Warranties
 
The Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:
 
(a)           Each of the representations and warranties made by the Borrower
under the Credit Agreement and each other Loan Document is true and correct on
and as of the actual date of execution of this Amendment by the Borrower, as if
made on and as of such date, except for any representations and warranties made
as of a specified date, which are true and correct as of such specified date.
 
(b)           At the time of, and immediately after giving effect to, this
Amendment, no Default has occurred and is continuing.
 
(c)           The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by the Borrower.
 
(d)           This Amendment constitutes the legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
 
(e)           The execution, delivery and performance by the Borrower of this
Amendment (i) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority or any other third
Person (including the members or any class of directors of the Borrower or any
other Person, whether interested or disinterested), nor is any such consent,
approval, registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except (a) such as have been obtained or made and are in
full force and effect, and (b) the Borrower may need to file a current report on
Form 8-K with the SEC disclosing this Amendment, (ii) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (iii) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or their Properties, or give rise to a right thereunder to require
any payment to be made by the Borrower or such Subsidiary and (iv) will not
result in the creation or imposition of any Lien on any Property of the Borrower
or any of its Subsidiaries (other than the Liens created by the Loan Documents).
 
ARTICLE VI
 
Miscellaneous
 
Section 6.01 Credit Agreement in Full Force and Effect as Amended.  Except as
specifically amended hereby, the Credit Agreement and other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed as so
amended.  Except as expressly set forth herein, this Amendment shall not be
deemed to be a waiver, amendment or modification of any provisions of the Credit
Agreement or any other Loan Document or any right, power or remedy of the
Administrative Agent or the Lenders, or constitute a waiver of any provision of
the Credit Agreement or any other Loan Document, or any other document,
instrument and/or agreement executed or delivered in connection therewith or of
any Default or Event of Default under any of the foregoing, in each case whether
arising before or after the date hereof or as a result of performance hereunder
or thereunder.  This Amendment also shall not preclude the future exercise of
any right, remedy, power, or privilege available to the Administrative Agent
and/or the Lenders whether under the Credit Agreement, the other Loan Documents,
at law or otherwise.  All references to the Credit Agreement shall be deemed to
mean the Credit Agreement as modified hereby.  The parties hereto agree to be
bound by the terms and conditions
 

 
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of the Credit Agreement and Loan Documents as amended by this Amendment, as
though such terms and conditions were set forth herein.  Each reference in the
Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words
of similar import shall mean and be a reference to the Credit Agreement as
amended by this Amendment, and each reference herein or in any other Loan
Documents to the “Credit Agreement” shall mean and be a reference to the Credit
Agreement as amended and modified by this Amendment.
 
Section 6.02 GOVERNING LAW.  THIS AMENDMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
 
Section 6.03 Descriptive Headings, Etc.  The descriptive headings of the
sections of this Amendment are inserted for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions
hereof.  The statements made and the terms defined in the recitals to this
Amendment are hereby incorporated into this Amendment in their entirety.
 
Section 6.04 Entire Agreement.  This Amendment and the documents referred to
herein represent the entire understanding of the parties hereto regarding the
subject matter hereof and supersede all prior and contemporaneous oral and
written agreements of the parties hereto with respect to the subject matter
hereof.
 
Section 6.05 Loan Document.  This Amendment is a Loan Document executed under
the Credit Agreement, and all provisions in the Credit Agreement pertaining to
Loan Documents apply hereto.
 
Section 6.06 Counterparts.  This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one agreement.  Delivery of an executed counterpart of the
signature page of this Amendment by facsimile or other electronic transmission
shall be effective as delivery of a manually executed counterpart thereof.
 
Section 6.07 Successors.  The execution and delivery of this Amendment by any
Lender shall be binding upon each of its successors and assigns.
 

 
[Remainder of page intentionally left blank.]
 

 

 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the date first written
above.
 
NORTHERN OIL AND GAS, INC., as the Borrower
 
By:   /s/ Thomas W. Stoelk        
Name:             Thomas W. Stoelk
Title:                Chief Financial Officer

Signature Page
Second Amendment to Credit Agreement
 
 

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ROYAL BANK OF CANADA, as Administrative Agent

By:           /s/ Ann Hurley                 
Name:    Ann Hurley
Title:      Manager, Agency

ROYAL BANK OF CANADA, as a Lender

By:          /s/ Don J. McKinnerney 
Name:   Don J. McKinnerney
Title:     Authorized Signatory

SUNTRUST BANK, as a Lender

By:           /s/ Yann Pirio                
Name:    Yann Pirio
Title:      Director

BMO HARRIS FINANCING, INC., as a Lender

By:           /s/ James V. Ducote      
Name:   James V. Ducote
Title:     Director

KEYBANK NATIONAL ASSOCIATION, as a Lender

By:           /s/ Chulley Bogle             
Name:    Chulley Bogle
Title:      Vice President

U.S. BANK NATIONAL ASSOCIATION, as a Lender

By:           /s/ Justin M. Alexander   
Name:    Justin M. Alexander
Title:              Senior Vice President

Signature Page
Second Amendment to Credit Agreement
 
 

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BANK OF SCOTLAND plc, as a Lender

By:           /s/ Stephen Giacolone              
Name:    Stephen Giacolone
Title:      Assistant Vice President

CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender

By:           /s/ Matthew Molero              
Name:    Matthew Molero
Title:      Vice President

BOKF, NA dba BANK OF OKLAHOMA, as a Lender

By:           /s/ Guy C. Evangelista           
Name:    Guy C. Evangelista
Title:      Senior Vice President

BRANCH BANKING AND TRUST COMPANY, as a Lender

By:           /s/ Ryan K. Michael             
Name:    Ryan K. Michael
Title:      Senior Vice President

CADENCE BANK, N.A., as a Lender

By:           /s/ Steven Taylor       
Name:    Steven Taylor
Title:      Vice President

Signature Page
Second Amendment to Credit Agreement
 
 

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MACQUARIE BANK LIMITED, as a Lender

By:           /s/ Christian (Ineligible)               
Name:    Christian (Ineligible)
Title:      Division Director

By:           /s/ Joel Outlaw          
Name:    Joel Outlaw
Title:      Associate Director, Legal Risk Management 

THE BANK OF NOVA SCOTIA, as a Lender

By:           /s/ Terry Donovan     
Name:    Terry Donovan
Title:      Managing Director

ING CAPITAL LLC, as a Lender

By:           /s/ Juli Bieser          
Name:    Juli Bieser
Title:      Director

Signature Page
Second Amendment to Credit Agreement
 
 

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ANNEX I

Name of Lender
 
Applicable
Percentage
   
Maximum Credit Amount
   
Amount of Commitment on the Second Amendment Effective Date
 
Royal Bank of Canada
    12.0 %   $ 90,000,000.00     $ 42,000,000.00  
SunTrust Bank
    12.0 %   $ 90,000,000.00     $ 42,000,000.00  
BMO Harris Financing, Inc.
    8.6 %   $ 64,285,714.29     $ 30,000,000.00  
KeyBank, N.A.
    8.6 %   $ 64,285,714.29     $ 30,000,000.00  
U.S. Bank National Association
    8.6 %   $ 64,285,714.29     $ 30,000,000.00  
Capital One, National Association
    7.4 %   $ 55,714,285.71     $ 26,000,000.00  
Bank of Scotland plc
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
BOKF, NA dba Bank of Oklahoma
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
BB&T Capital Markets
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
Cadence Bank, N.A.
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
ING Capital LLC
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
The Bank of Nova Scotia
    6.9 %   $ 51,428,571.43     $ 24,000,000.00  
Macquarie Bank Limited
    1.70 %   $ 12,857,142.86     $ 6,000,000.00                            
TOTAL
    100.00 %   $ 750,000,000.00     $ 350,000,000.00  

Second Amendment to Credit Agreement
 
 

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