Exhibit 10.2

 

EXECUTION VERSION

 

CONSENT AND AMENDMENT

TO RESTRUCTURING SUPPORT AGREEMENT

 

THIS CONSENT AND AMENDMENT dated as of July 22, 2016 (this “Amendment”) is
entered into by and among (i) Halcón Resources Corporation (“Holdings” and,
together with certain of its subsidiaries that are parties hereto and listed on
Schedule 1 hereto, the “Company”) and (ii) the undersigned Consenting Creditors
comprising the Requisite Creditors. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the RSA (as defined below).

 

WHEREAS, the Parties entered into a certain Restructuring Support Agreement
dated as of June 9, 2016 (the “RSA”).

 

AND WHEREAS, the Parties wish to amend certain provisions of the RSA and consent
to certain matters with respect to the Second Lien Notes.

 

AND WHEREAS, the Parties wish to take such actions necessary to give effect to
the foregoing.

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and in the RSA, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the Parties agree as follows:

 

Section 1.       Amendment to Term Sheet.  With respect to the Term Sheet, the
first sentence of the last paragraph under the heading “Restructuring Summary”
is hereby amended and restated in its entirety as follows:

 

“No later than two (2) business days prior to the Commencement Date, the Company
will pay via wire transfer cash interest with respect to the (i) Third Lien
Noteholders through the later of May 15, 2016 and the date on which interest
and/or dividends are paid on the Unsecured Notes, the Convertible Note or the
Preferred Stock and (ii) Unsecured Noteholders through the later of May 15, 2016
and the date on which interest and/or dividends are paid on the Third Lien
Notes, the Convertible Note or the Preferred Stock, and on the date of such
interest payments, the Company will notify the respective advisors to the
Requisite Third Lien Noteholders and the Requisite Unsecured Noteholders of the
making of such payments.”

 

Section 2.       Amendment to RSA.  Section 4 of the RSA is hereby amended by
adding the following paragraph at the end of such section:

 

“(c)       The Plan shall not specify how distributions will be allocated
between principal and interest, and the Company shall amend the Plan dated as of
June 20, 2016 to remove any references to distributions being allocated to
principal or

 

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interest, including by removing Section 6.11, no later than three (3) business
days before the Confirmation Hearing.”

 

Section 3.        Consent. The Company and the undersigned Consenting Creditors
hereby agree to the treatment of the Second Lien Notes, including without
limitation, the related amendment to the Second Lien Notes and Second Lien
Indentures, as set forth on the term sheet attached hereto as Exhibit A.

 

Section 4.        Miscellaneous.

 

4.1       This Amendment shall become effective and binding upon each Party upon
the execution and delivery by such Party of an executed signature page hereto
and shall become effective and binding on all Parties upon receipt by the
Company of executed signature pages from each of (i) the Requisite Third Lien
Noteholders, (ii) the Requisite Unsecured Noteholders, (iii) the Convertible
Noteholder and (iv) the Requisite Preferred Holders.

 

4.2       Except as specifically set forth herein, the terms of the RSA shall
remain in full force and effect and are hereby ratified and confirmed.

 

4.3       This Amendment may be executed in several counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to
be one and the same agreement.  Execution copies of this Amendment delivered by
facsimile or PDF shall be deemed to be an original for the purposes of this
paragraph.

 

[Signature Page Follows]

 

2

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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first written above.

 

 

HALĆON PARTIES

 

 

 

HALĆON RESOURCES CORPORATION

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

 Floyd Wilson

 

 

Title:

Chairman of the Board and Chief

 

 

 

Executive Officer

 

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HK RESOURCES, LLC

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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THE 7711 CORPORATION

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN GULF STATES, LLC

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN LOUISIANA OPERATING, L.P.

 

 

 

 

 

[g154221km01i001.gif]By:

Halcón Gulf States, LLC,

 

 

its general partner

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN FIELD SERVICES, LLC

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

President and Chief Executive Officer

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN ENERGY PROPERTIES, INC.

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN OPERATING CO., INC.

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN WILLISTON I, LLC

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN WILLISTON II, LLC

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN RESOURCES OPERATING, INC.

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HRC ENERGY LOUISIANA, LLC

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HRC ENERGY RESOURCES (WV), INC.

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HRC PRODUCTION COMPANY

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HALCÓN ENERGY HOLDINGS, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HRC ENERGY, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HK ENERGY, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HK LOUISIANA OPERATING, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HK OIL & GAS, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HK ENERGY OPERATING, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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HRC OPERATING, LLC

 

 

 

 

 

 

 

By:

/s/ Floyd C. Wilson

 

 

Name:

Floyd Wilson

 

 

Title:

Chief Executive Officer

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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CONSENTING CREDITOR

 

[Consenting Creditor Signature Pages Omitted]

 

 

SIGNATURE PAGE TO CONSENT AND AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT

 

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EXHIBIT A

 

Second Lien Note Amendment Term Sheet

 

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HALCÓN RESOURCES CORPORATION

TERM SHEET

 

JULY 22, 2016

 

This term sheet sets forth the principal terms of a proposed amendment
(“Amendment”) to the Second Lien Note Indentures (as defined below) to be
implemented pursuant to a consent solicitation, consistent with the terms set
forth herein. Reference is hereby made to that certain restructuring support
agreement dated June 9, 2016, by and among the Company and the Consenting
Creditors (the “Restructuring Support Agreement”). (1)

 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH
RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO
ANY PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF
ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF SECURITIES,
BANKRUPTCY AND/OR OTHER APPLICABLE LAWS. THIS TERM SHEET HAS BEEN PRODUCED FOR
DISCUSSION AND SETTLEMENT PURPOSES ONLY AND IS SUBJECT TO THE PROVISIONS OF RULE
408 OF THE FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR APPLICABLE STATE AND
FEDERAL RULES. THIS TERM SHEET AND THE INFORMATION CONTAINED HEREIN IS STRICTLY
CONFIDENTIAL AND SHALL NOT BE SHARED WITH ANY OTHER PARTY ABSENT THE PRIOR
WRITTEN CONSENT OF THE COMPANY.

 

THE TERMS SET FORTH HEREIN ARE FOR DISCUSSION PURPOSES ONLY AND REMAIN SUBJECT
TO APPROVAL BY THE LENDERS UNDER THE REVOLVING CREDIT AGREEMENT, THE REQUISITE
CREDITORS UNDER THE RESTRUCTURING SUPPORT AGREEMENT, AND THE BOARD OF DIRECTORS
OF THE COMPANY.

 

Transaction Overview

 

Notes and Indentures to be Amended:

The Company is prepared to enter into the Amendment, consistent with the terms
set forth herein, to: (a) the 8.625% Senior Secured Notes (the “8.625% Second
Lien Notes”) issued under that certain indenture, dated as of May 1, 2015, by
and among Holdings, as issuer, each of the guarantors named therein, and U.S.
Bank National Association, as trustee (as amended, modified, or otherwise
supplemented from time to time, the “8.625% Second Lien Note Indenture”) and
(b) the 12.0% Senior Secured Notes (the “12.0% Second Lien Notes” and, together
with the 8.625% Second Lien Notes, the “Second Lien Notes” and the holders of
such Second Lien Notes, the “Second Lien Noteholders”) issued under that certain
indenture, dated as of December 21, 2015, by and among Holdings, as issuer, each
of the guarantors named therein, and U.S. Bank National Association, as trustee
(as amended, modified or otherwise supplemented from time to time, the “12.0%
Second Lien Note Indenture” and, together with the 8.625% Second Lien Note
Indenture, the “Second Lien Note Indentures”).

 

 

Proposed Amendments:

On or as soon as reasonably practicable following the Effective Date of the
Plan, the Second Lien Note Indentures and any the other applicable Note
Documents (as defined in the Second Lien Note Indenture) will be amended as
follows:

 

Incurrence of Indebtedness/Lien Covenants

 

·                  Section 4.3(b)(1): Section 4.3(b)(1)(a)(i) to be amended and
restated as $900.0 million. The remaining provisions of Section 4.3(b)(1) shall
remain unchanged.

 

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(1) Capitalized terms used but not otherwise herein defined have the meanings
ascribed to them in the Restructuring Support Agreement or the Second Lien Note
Indentures, as applicable.

 

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·                  Section 4.3(b)(3): $150 million Parity Lien Debt basket to be
deleted.

 

·                  Section 4.5: Subsection (14) of the definition of Permitted
Liens to be amended to delete any references to other Parity Lien Debt.

 

Restricted Payments Covenant

 

·                  Section 4.4(b)(3): Amend Section 4.4(b)(3) to adjust the
start date for measuring the Consolidated Net Income builder basket period from
April 1, 2015, to the beginning of the fiscal quarter after the Effective Date
of the Plan.

 

·                  Subsection 4.4: Amend the definition of Restricted Payment to
include any prepayments of Junior Lien Debt or unsecured Indebtedness incurred
under Credit Facilities.

 

·                  Section 4.4(c)(14): $250 million basket for prepayments of
unsecured notes to be deleted.

 

 

Noteholder Professionals:

Prior to the Petition Date, but subject to the occurrence of the Support
Effective Date, the Company agrees to pay the reasonable fees and expenses
incurred through and including the Support Effective Date of each of Centerview
Partners LLC, as financial advisor to the ad hoc group of Second Lien
Noteholders (the “Ad Hoc Group”), and O’Melveny & Myers LLP, as counsel to the
Ad Hoc Group (collectively, the “Noteholder Advisors”); provided, however, that
the reasonable fees and expenses of the Noteholder Advisors shall not exceed
$500,000.00 in the aggregate.

 

 

Consent Fee:

In addition to the Amendment, in consideration for the Consenting Noteholder
Obligations set forth below, the Company agrees to pay:

 

(a)         to each holder of 8.625% Second Lien Notes that agrees to the
Amendment and is either party to the Lock-up Agreement (as defined below) or
does not object or take any action in contravention to the Plan, a fee equal to
1.25% of the aggregate principal amount of such holder’s outstanding 8.625%
Second Lien Notes, subject to the occurrence of the Effective Date of the Plan
and the effectiveness of the Amendment (the “8.625% Note Consent Fee”); and

 

(b)         to each holder of 12.0% Second Lien Notes that agrees to the
Amendment and is either party to the Lock-up Agreement or does not object or
take any action in contravention to the Plan, a fee equal to 1.25% of the
aggregate principal amount of such holder’s outstanding 12.0% Second Lien Notes,
subject to the occurrence of the Effective Date of the Plan (the “12.0% Note
Consent Fee” and, together with the 8.625% Note Consent Fee, the “Consent
Fees”);

 

provided, however, that the Consent Fees shall only be paid if the Effective
Date occurs within the milestones set forth in the Restructuring Support
Agreement as in effect on the date hereof and without regard to any amendments
of such milestones although the balance of this Term Sheet shall remain in
effect.

 

 

Agreements of the Consenting Second Lien Noteholders:

Subject to the occurrence of the Support Effective Date (as herein defined),
each holder of Second Lien Notes that agrees to the Amendment agrees to:

 

·                  timely submit its consent to the Amendment;

·                  support and take such commercially reasonable actions
necessary or reasonably requested by the Company to obtain approval of the
Disclosure Statement, and confirmation and consummation of the Plan and the
Restructuring, including any debtor-in-possession financing for the Company that
includes a “roll up” of the Revolving Credit Agreement Claims and any other
transactions contemplated by the Plan;

 

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·                  not directly or indirectly, seek, solicit, propose, support,
assist, engage in negotiations in connection with or participate in the
formulation, preparation, filing or prosecution of any Alternative Restructuring
or take any other action that is inconsistent with or that would reasonably be
expected to prevent, interfere with, delay or impede the Solicitation, approval
of the Disclosure Statement, and the confirmation and consummation of the Plan
and the Restructuring, including any debtor-in-possession financing that
includes a “roll up” of the Revolving Credit Agreement Claims and any other
transactions contemplated by the Plan; and

·                  not transfer any of its Second Lien Note Claims unless such
transferee agrees to be bound by the terms set forth herein and notifies the
Company within two (2) business days of such transfer (collectively, the
“Consenting Noteholder Obligations”).

 

 

Support Effective Date:

The date by which the Company and holders of not less than 51% of the
outstanding principal amount of the Second Lien Notes execute the Lock-up
Agreement (the “Support Effective Date”). For purposes of this Term Sheet,
“Lock-up Agreement” means a lock-up or similar agreement consistent with the
terms set forth herein.

 

 

Implementation:

To be implemented through a consent solicitation to be commenced by the Company
on or as soon as reasonably practicable following the Effective Date of the Plan
but in no event later than thirty (30) days following the Effective Date.

 

 

Disclosure:

The terms of the Amendment, including the Company’s obligation to solicit
consents for the Amendment from holders of the Second Lien Notes on or as soon
as reasonably practicable following the Effective Date, shall be described in
the solicitation procedures motion filed in the Chapter 11 Cases.

 

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