Exhibit 10.1

 

EXECUTION

 

FIFTH AMENDMENT TO SECOND AMENDED

AND RESTATED CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Fifth Amendment”), dated as of October 30, 2015, is entered into by and among
SANCHEZ ENERGY CORPORATION, a Delaware corporation (“Borrower”), each of SEP
HOLDINGS III, LLC, a Delaware limited liability company (“SEP”), SN MARQUIS LLC,
a Delaware limited liability company (“SN Marquis”), SN COTULLA ASSETS, LLC, a
Texas limited liability company (“SN Cotulla”), SN OPERATING, LLC, a Texas
limited liability company (“SN Operating”), SN TMS, LLC, a Delaware limited
liability company (“SN TMS”), and SN CATARINA, LLC, a Delaware limited liability
company (“SN Catarina; together with SEP, SN Marquis, SN Cotulla, SN Operating
and SN TMS collectively, the “Guarantors” and each, a “Guarantor”), the Required
Lenders party hereto, and ROYAL BANK OF CANADA, as Administrative Agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Administrative Agent”) and as Issuing Bank.

 

RECITALS

 

A.                                    The Borrower, the Guarantors, the Lenders,
RBC, as Issuing Bank, and the Administrative Agent previously entered into that
certain Second Amended and Restated Credit Agreement dated as of June 30, 2014
(as amended by that certain First Amendment to Second Amended and Restated
Credit Agreement dated as of September 9, 2014, that certain Second Amendment to
Second Amended and Restated Credit Agreement dated as of March 31, 2015, that
certain Third Amendment to Second Amended and Restated Credit Agreement dated as
of July 20, 2015, that certain Fourth Amendment to Second Amended and Restated
Credit Agreement dated as of September 29, 2015 and as it may be further
amended, restated, supplemented or modified from time to time, the “Credit
Agreement”) and certain other Loan Documents (as defined in the Credit
Agreement) in connection therewith.

 

B.                                    The Borrower has requested that the
Administrative Agent, RBC, as Issuing Bank, and the Lenders amend the Credit
Agreement as set forth herein. The Administrative Agent, RBC, as Issuing Bank,
and the Required Lenders are willing to amend the Credit Agreement on the terms
and conditions contained in this Fifth Amendment.

 

C.                                    The Borrower (i) has entered into certain
leases that may have caused or could cause it to be in breach of its covenant in
Section 9.07 of the Credit Agreement, (ii) has not been providing fourth quarter
financial statements within 45 days after the end of such fiscal quarter, which
failure so to provide fourth quarter financial statements may have caused it to
be in breach of its covenant in Section 8.01(b) of the Credit Agreement and
(iii) has not provided certain loss payable clauses or provisions and
endorsements with respect to certain property insurance maintained by the Loan
Parties, which failure to provide such loss payable clauses or provisions and
endorsements may have caused the Borrower to be in breach of its covenants in
the last sentence of Section 8.07 of the Credit Agreement and the Borrower has
requested, and the Required Lenders are willing to grant on the terms and
conditions contained in this Fifth

 

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Amendment, a waiver (effective as of the date such leases were entered into and
effective for all prior periods in the case of failure to deliver such financial
statements and insurance policy loss payable clauses or provisions and
endorsements) of any Default or Event of Default arising out of the Borrower
entering into such leases, failing to provide such fourth quarter financial
statements within 45 days after the end of such fiscal quarter and failing to
provide such insurance policy loss payable clauses or provisions and
endorsements.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth in this Fifth Amendment and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the parties hereto, the
Borrower, the Guarantors, the Required Lenders, RBC, as the Issuing Bank and the
Administrative Agent agree as follows:

 

1.                                      Defined Terms. Unless otherwise defined
herein, capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.

 

2.                                      Specific Amendments to Credit
Agreement.      The Credit Agreement is hereby amended as follows:

 

(i)                                     The following defined terms are hereby
added to Section 1.02 of the Credit Agreement in the proper alphabetical order:

 

“Eagle Ford Midstream Gathering JV” means Carnero Gathering, LLC, which entity
is initially owned, directly or indirectly, 50% by the Eagle Ford Midstream JV
Sanchez Party and 50% by the Eagle Ford Midstream JV Counterparty.

 

“Eagle Ford Midstream Processing JV” means Carnero Processing, LLC, which entity
is initially owned, directly or indirectly, 50% by the Eagle Ford Midstream JV
Sanchez Party and 50% by the Eagle Ford Midstream JV Counterparty.

 

“Eagle Ford Midstream Gathering JV LLC Agreement” means the limited liability
company agreement of the Eagle Ford Midstream  Gathering JV, the terms of which
limited liability company agreement are acceptable to the Administrative Agent,
as confirmed by the Administrative Agent when such agreement was entered into.

 

“Eagle Ford Midstream Processing JV LLC Agreement” means the limited liability
company agreement of the Eagle Ford Midstream Processing JV, the terms of which
limited liability company agreement are acceptable to the Administrative Agent,
as confirmed by the Administrative Agent when such agreement was entered into.

 

“Eagle Ford Midstream Gathering JV Transaction Guaranty” means the guaranty made
by Borrower in favor of the Eagle Ford Midstream Gathering JV

 

Fifth Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

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in respect of the obligations of the Eagle Ford Midstream JV Sanchez Party under
the Eagle Ford Midstream Gathering JV LLC Agreement, which guaranty is
acceptable to Administrative Agent, as confirmed by the Administrative Agent in
writing when such guaranty was entered into, and in any event includes a maximum
aggregate liability of Borrower of $33,376,575.

 

“Eagle Ford Midstream Processing JV Transaction Guaranty” means the guaranty
made by Borrower in favor of the Eagle Ford Midstream Processing JV in respect
of the obligations of the Eagle Ford Midstream JV Sanchez Party under the Eagle
Ford Midstream Processing JV LLC Agreement, which guaranty is acceptable to
Administrative Agent, as confirmed by the Administrative Agent in writing when
such guaranty is or was entered into, and in any event includes a maximum
aggregate liability of Borrower of $80,000,000.

 

“Fifth Amendment” means that certain Fifth Amendment to Second Amended and
Restated Credit Agreement dated the Fifth Amendment Effective Date among the
Borrower, the Guarantors, the Required Lenders, RBC, as Issuing Bank, and the
Administrative Agent.

 

“Fifth Amendment Effective Date” means October 30, 2015.

 

(ii)                                  The defined term “Agreement” in
Section 1.02 of the Credit Agreement is hereby deleted and the following is
substituted therefor:

 

“Agreement” means this Second Amended and Restated Credit Agreement, as amended
by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment,
Fifth Amendment and as the same may from time to time be amended, modified,
supplemented or restated.

 

(iii)                               The defined term “Eagle Ford Midstream JV”
in Section 1.02 of the Credit Agreement is hereby deleted and the following is
substituted therefor:

 

“Eagle Ford Midstream JV” means either the Eagle Ford Midstream Gathering JV or
the Eagle Ford Midstream Processing JV and “Eagle Ford Midstream JVs” means the
collective reference to both such Persons.

 

(iv)                              The defined term “Eagle Ford Midstream JV
Counterparty” in Section 1.02 of the Credit Agreement is hereby deleted and the
following is substituted therefor:

 

“Eagle Ford Midstream JV Counterparty” means TPL South Texas Processing Company
LP, a Texas limited partnership.

 

(v)                                 The defined term “Eagle Ford Midstream JV
Sanchez Party” in Section 1.02 of the Credit Agreement is hereby deleted and the
following is substituted therefor:

 

“Eagle Ford Midstream JV Sanchez Party” means SN Midstream.

 

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(vi)                              The defined term “ Eagle Ford Midstream JV
Transaction” in Section 1.02 of the Credit Agreement is hereby deleted and the
following is substituted therefor:

 

“Eagle Ford Midstream JV Transaction” collectively means (a) the acquisition by
SN Catarina of the Bee County Gas Processing Property, (b) direct or indirect
Investments by any Loan Party in the Eagle Ford Midstream JV Sanchez Party, any
Unrestricted Subsidiary parent entity thereof, and/or the Eagle Ford Midstream
JVs in an aggregate amount, without duplication, not to exceed $115,000,000,
comprised of (i) cash contributions to the Eagle Ford Midstream JV Sanchez Party
(including cash contributions made indirectly through the Eagle Ford Midstream
JV Sanchez Party’s Unrestricted Subsidiary parent(s), if any), (ii)  Eagle Ford
Midstream JV Transaction Additional Fees, (iii) net amounts paid pursuant to the
Eagle Ford Midstream JV Transaction Netting Agreement to the extent not
reimbursed pursuant to the Eagle Ford Midstream JV Transaction Reimbursement
Agreement, (iv) amounts paid pursuant to the Eagle Ford Midstream Gathering JV
Transaction Guaranty and amounts paid pursuant to the Eagle Ford Midstream 
Processing JV Transaction Guaranty, in each case, to the extent not reimbursed
pursuant to the Eagle Ford Midstream JV Transaction Reimbursement Agreement,
(v) Letters of Credit issued to support obligations of the Eagle Ford Midstream
JV Sanchez Party under or in connection with the Eagle Ford Midstream Gathering
JV Transaction LLC Agreement and/or the Eagle Ford Midstream Processing JV
Transaction LLC Agreement (less any amounts drawn under any thereof and
reimbursed pursuant to the Eagle Ford Midstream JV Transaction Reimbursement
Agreement) and (vi) amounts realized upon the enforcement, if any, of the Eagle
Ford Midstream JV Transaction Pledge Agreement, (c) any Loan Party entering into
and performing its obligations under the Eagle Ford Midstream Gathering JV
Transaction Guaranty, the Eagle Ford Midstream Processing JV Transaction
Guaranty, the Eagle Ford Midstream JV Transaction Netting Agreement, the Eagle
Ford Midstream JV Transaction Pledge Agreement, the Eagle Ford Midstream JV
Transaction Agreements and the Eagle Ford Midstream JV Transaction Reimbursement
Agreement, in the case of any such performance which constitutes a direct or
indirect Investment by a Loan Party in the Eagle Ford Midstream JV Sanchez
Party, any Unrestricted Subsidiary parent entity thereof, and/or either of the
Eagle Ford Midstream JVs, to the extent described in clause (b) of this
definition, (d) if SN Catarina so elects, the exchange of some or all of the Bee
County Gas Processing Property for the Initial Eagle Ford Midstream Processing
JV Units and SN Catarina becoming a party to the Eagle Ford Midstream Processing
JV LLC Agreement in connection therewith and (e) the grant by SN Catarina of a
security interest in the Bee County Gas Processing Property, the Bee County Gas
Processing Property Ownership and Operating Agreement and in any Eagle Ford
Midstream Processing JV Units and rights in the Eagle Ford Midstream Processing
JV LLC Agreement so acquired, and certain related property and any proceeds
thereof pursuant to the Eagle Ford Midstream JV Transaction Pledge Agreement
and, in the case of any Eagle Ford Midstream Processing JV Units and rights in
the Eagle Ford Midstream

 

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Processing JV LLC Agreement so acquired, the Eagle Ford Midstream Processing JV
LLC Agreement.  For the sake of clarity, the purchase price of the Bee County
Gas Processing Property will count against the $115,000,000 amount in this
definition but the value of so much of the Bee County Gas Processing Property as
is exchanged for the Initial Eagle Ford Midstream Processing JV Units, and fees
and other amounts paid by the Loan Parties under the Eagle Ford Midstream JV
Transaction Agreements on arms’ length terms, as determined by the Borrower in
good faith, shall not constitute Investments and shall not count against the
$115,000,000 amount in this definition.

 

(vii)                           The defined term “Eagle Ford Midstream JV
Transaction Netting Agreement” in Section 1.02 of the Credit Agreement is hereby
deleted and the following is substituted therefor:

 

“Eagle Ford Midstream JV Transaction Netting Agreement” means the netting
agreement between Borrower, SN Catarina, the Eagle Ford Midstream JV Sanchez
Party (collectively for purposes of this definition, the “Sanchez Parties”) on
the one hand and the Eagle Ford Midstream JV Counterparty on the other hand,
which agreement is acceptable to Administrative Agent, as confirmed by the
Administrative Agent in writing when such agreement was entered into and
provides for the netting of amounts owed by the Sanchez Parties to the Eagle
Ford Midstream JV Counterparty under certain of the Eagle Ford Midstream JV
Transaction Agreements against amounts owed by the Eagle Ford Midstream JV
Counterparty to the Sanchez Parties under certain of the Eagle Ford Midstream JV
Transaction Agreements.

 

(viii)                        The defined term “Eagle Ford Midstream JV
Transaction Pledge Agreement” in Section 1.02 of the Credit Agreement is hereby
deleted and the following is substituted therefor:

 

“Eagle Ford Midstream JV Transaction Pledge Agreement” means the pledge
agreement made by SN Catarina and the Eagle Ford Midstream JV Sanchez Party in
favor of the Eagle Ford Midstream JV Counterparty, which pledge agreement is
acceptable to Administrative Agent, as confirmed by the Administrative Agent in
writing when such pledge agreement was entered into.

 

(ix)                              The defined term “Eagle Ford Midstream JV
Transaction Reimbursement Agreement” in Section 1.02 of the Credit Agreement is
hereby deleted and the following is substituted therefor:

 

“Eagle Ford Midstream JV Transaction Reimbursement Agreement” means the
agreement, if any, among the Loan Parties a party to certain of the Eagle Ford
Midstream JV Transaction Agreements and the Eagle Ford Midstream JV Sanchez
Party providing for reimbursement by the relevant party of certain amounts due
such Loan Party or the Eagle Ford Midstream JV Sanchez Party, as applicable,
from the Eagle Ford Midstream JV Counterparty and set off against certain
amounts owed to the Eagle Ford Midstream JV Counterparty by a Loan Party or the
Eagle Ford Midstream JV Sanchez Party, as applicable, which

 

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agreement is acceptable to Administrative Agent, as confirmed by the
Administrative Agent in writing when such agreement is or was entered into.

 

(x)                                 The defined term “Eagle Ford Midstream JV
Units” in Section 1.02 of the Credit Agreement is hereby deleted and the
following is substituted therefor:

 

“Eagle Ford Midstream Processing JV Units” means the Initial Eagle Ford
Midstream Processing JV Units and any Equity Interests constituting “proceeds”
(within the meaning of such term under Section 9-102(64) of the UCC) thereof
resulting from any unit split, reorganization, distribution or other similar
entity event at the Eagle Ford Midstream Processing JV, including any Equity
Interest constituting proceeds of any such proceeds.

 

(xi)                              The defined term “Initial Eagle Ford Midstream
JV Units” in Section 1.02 of the Credit Agreement is hereby deleted and the
following is substituted therefor:

 

“Initial Eagle Ford Midstream Processing JV Units” means Equity Interests in the
Eagle Ford Midstream Processing JV in an amount equal to the lesser of (i) 2% of
the issued and outstanding Equity Interests in the Eagle Ford Midstream
Processing JV at the time of acquisition by a Loan Party thereof and (ii) such
amount of the issued and outstanding Equity Interests in the Eagle Ford
Midstream Processing JV at the time of acquisition by a Loan Party thereof as
has a value of $5,000,000, as determined by the Borrower in good faith at such
time. For the sake of clarity, SN Catarina may receive more than the foregoing
amounts pursuant to the exchange contemplated by clause (d) of the definition of
the Eagle Ford Midstream JV Transaction; provided that any excess over and above
such amounts is distributed by SN Catarina substantially concurrently to
Borrower and Borrower substantially concurrently after receipt of such excess
amount contributes such excess amount to SN Midstream.

 

(xii)                           The defined term “Material Adverse Effect” in
Section 1.02 of the Credit Agreement is hereby deleted and the following is
substituted therefor:

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, Property or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Loan Parties to perform
their obligations under the Loan Documents, (c) the validity or enforceability
of the Loan Documents or (d) the rights and remedies of or benefits available to
the Administrative Agent, any Issuing Bank or any Lender under the Loan
Documents; provided, that general market or industry conditions, which do not
affect the Borrower in a disproportionately adverse manner, shall not constitute
or be taken into account in determining whether there has been a Material
Adverse Effect.

 

(xiii)                        The defined term “Synthetic Leases” in
Section 1.02 of the Credit Agreement is hereby deleted and the following is
substituted therefor:

 

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“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
obligations for borrowed money for purposes of U.S. federal income taxes, if the
lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, eighty percent
(80%) of the residual value of the Property subject to such operating lease upon
expiration or early termination of such lease; provided, however, that none of
the transactions described in the definition of “Eagle Ford Midstream JV
Transaction” will be deemed to constitute a Synthetic Lease.

 

(xiv)                       The following terms defined in Section 1.02 of the
Credit Agreement are hereby deleted in their entirety:

 

“Eagle Ford Midstream JV LLC Agreement”

 

“Eagle Ford Midstream JV Transaction Guaranty”

 

(xv)                          The last sentence of Section 7.01 of the Credit
Agreement is hereby deleted and the following is substituted therefor:

 

“As of the Fifth Amendment Effective Date, Schedule 7.01 is an accurate
corporate organizational chart of Borrower and its Subsidiaries and shows the
ownership of all Equity Interests in such Persons.”

 

(xvi)                       Section 7.04(b) of the Credit Agreement is hereby
deleted and the following is substituted therefor:

 

“(b) Since the “as of” date of the financial statements of Borrower most
recently delivered, or deemed delivered, pursuant to Section 8.01(a) or
Section 8.01(b), (i) there has been no event, development or circumstance that
has had or could be reasonably expected to have a Material Adverse Effect and
(ii) the business of the Borrower and its Subsidiaries has been conducted only
in the ordinary course of business consistent with past practices.”

 

(xvii)                    Section 7.05(a) of the Credit Agreement is hereby
amended by inserting the phrase “or as notified to the Administrative Agent
pursuant to Section 8.02” after “Except as set forth on Schedule 7.05”

 

(xviii)                 Section 7.05(b) of the Credit Agreement is hereby
amended by inserting the phrase “, except as notified to the Administrative
Agent pursuant to Section 8.02,” after “Since the date of this Agreement”.

 

(xix)                       The last sentence of Section 7.09 of the Credit
Agreement is hereby amended by restating the phrase “No Tax Lien” to read
“Except as notified to the Administrative Agent pursuant to Section 8.02, no Tax
Lien”.

 

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(xx)                          Section 7.14 of the Credit Agreement is hereby
deleted and the following is substituted therefor:

 

“Section 7.14  Subsidiaries. Schedule 7.14 sets forth the name of, and the
ownership interest of Borrower in, each Subsidiary of Borrower as of the Fifth
Amendment Effective Date.  As of the Fifth Amendment Effective Date there are no
Unrestricted Subsidiaries other than SN Midstream and SN Services.”

 

(xxi)                       Section 7.19 of the Credit Agreement is hereby
amended by restating the phrase “Except for contracts listed and in effect on
the date hereof” to read “Except for contracts listed and in effect on the Fifth
Amendment Effective Date”.

 

(xxii)                    Section 7.20 of the Credit Agreement is hereby amended
by restating the phrase “Schedule 7.20, as of date hereof, and after the date
hereof,” to read “Schedule 7.20, as of the Fifth Amendment Effective Date, and
after the Fifth Amendment Effective Date,”.

 

(xxiii)                 Clause (b) of Section 8.01 of the Credit Agreement is
hereby deleted and the following is substituted therefor:

 

“(b)                           Quarterly Financial Statements.  As soon as
available, but in any event in accordance with then applicable law and not later
than forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of Borrower, its consolidated (and, if there are
any Unrestricted Subsidiaries, consolidating) balance sheet as of the end of
such fiscal quarter, setting forth in comparative form the figures for the end
of the previous fiscal year, and related statements of (i) operations for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
comparative form the figures for the corresponding period or periods of the
previous fiscal year, (ii) stockholders’ equity as of the end of such fiscal
quarter and the end of the previous fiscal year, together with changes thereto
in the then elapsed portion of the fiscal year and (iii) cash flows for the then
elapsed portion of the fiscal year, setting forth in comparative form the
figures for the corresponding period or periods of the previous fiscal year, in
each case, certified by one of its Financial Officers as presenting fairly in
all material respects the financial condition and results of operations of
Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes.”

 

(xxiv)                The following paragraph is added as an unlettered
paragraph at the end of Section 8.01 of the Credit Agreement:

 

“To the extent any documents which are required to be delivered pursuant to
Section 8.01 are included in materials otherwise filed with the SEC, such
documents may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (i) on which Borrower posts such documents,
or provides a link thereto on Borrower’s website on the Internet at the
following website address:

 

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www.sanchezenergycorp.com; or (ii) on which such documents are posted on
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests in writing that Borrower deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender.  Notwithstanding anything contained herein,
in every instance Borrower shall be required to provide portable document format
(.pdf) or other electronic communication copies of the compliance certificates
required by Section 8.01(c) to the Administrative Agent.  Except for such
compliance certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by Borrower
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.”

 

(xxv)                   The last sentence of Section 8.07 of the Credit
Agreement is hereby deleted and the following substituted therefor:

 

“The loss payable clauses or provisions in the Borrower’s building and personal
property insurance policy or policies, including but not limited to the
Borrower’s building and personal property policy #BD-CJP-579 issued by
Underwriters at Lloyd’s, or any successor or replacement policy to it, insuring
any of the Collateral for the Loans shall (no later than November 10, 2015, in
the case of such policy #BD-CJP-579) be endorsed in favor of and made payable to
the Administrative Agent as its interests may appear, and Borrower’s commercial
general liability and excess liability policies currently in effect and any
successor or replacement policies shall name the Administrative Agent and the
Lenders as “additional insureds” on a primary and non-contributory basis and
provide that the insurer will endeavor to give at least 30 days prior notice of
any cancellation to the Administrative Agent.  For the sake of clarity, (i) no
Loan Party shall be required to have endorsed in favor of the Administrative
Agent, or have the Administrative Agent or the Lenders named as “additional
insureds” on any business interruption, commercial auto, control of well, D&O or
employee practices liability policy and (ii) it is understood and agreed that
the endorsement of such policy #BD-CJP-579 in favor of and payable to the
Administrative Agent as its interest may appear shall be limited to the portion
thereof with respect to the assets in the Barnhart and Cotulla area and shall
not extend to any assets that have been transferred by the Borrower or relevant
Subsidiary to SPP.”

 

(xxvi)                The last two sentences of Section 8.11(d) of the Credit
Agreement are hereby amended by restating the phrase “Third Amendment Effective
Date” to read “Fifth Amendment Effective Date” and by restating the phrase
“Eagle Ford Midstream JV Units” to read “Eagle Ford Midstream Processing JV
Units”.

 

(xxvii)             Section 9.02(d) of the Credit Agreement is hereby amended by
restating clause (iv) thereof to read as follows:

 

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“(iv) obligations under the Eagle Ford Midstream Gathering JV Transaction
Guaranty, the Eagle Ford Midstream Processing JV Transaction Guaranty, the Eagle
Ford Midstream JV Transaction Netting Agreement, the Eagle Ford Midstream JV
Transaction Pledge Agreement (including the security interests thereunder), the
Eagle Ford Midstream JV Transaction Reimbursement Agreement and, if SN Catarina
becomes a party to the Eagle Ford Midstream Processing JV LLC Agreement as
contemplated by clause (d) of the definition of Eagle Ford Midstream JV
Transaction, the Eagle Ford Midstream Processing JV LLC Agreement;”.

 

(xxviii)          Section 9.03(b) of the Credit Agreement is hereby deleted and
the following is substituted therefor:

 

“(b)                           Liens arising under the Eagle Ford Midstream JV
Transaction Pledge Agreement, Liens arising under the Eagle Ford Midstream
Processing JV LLC Agreement (if SN Catarina becomes a party thereto as
contemplated by clause (d) of the definition of Eagle Ford Midstream JV
Transaction) and Excepted Liens;”

 

(xxix)                Section 9.05(m) of the Credit Agreement is hereby amended
by deleting the phrase “Catarina Midstream,”.

 

(xxx)                   Section 9.05(q) of the Credit Agreement is hereby
amended by restating the phrase “Eagle Ford Midstream JV Units” to read “Eagle
Ford Midstream Processing JV Units”.

 

(xxxi)                Section 9.07 of the Credit Agreement is hereby deleted and
the following is substituted therefor:

 

“Section 9.07                      Limitation on Leases.  Except for those
leases described in Schedule 9.07 and such other leases to which the
Administrative Agent has consented in writing, the Borrower will not, and will
not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any obligation for the payment of rent or hire of Property of any kind
whatsoever (real or personal but excluding Capital Leases and leases of
Hydrocarbon Interests), under leases or lease agreements which would cause the
aggregate amount of all payments made by Borrower and the Restricted
Subsidiaries pursuant to all such leases or lease agreements, including, without
limitation, any residual payments at the end of any lease, to exceed $1,000,000
in any period of twelve (12) consecutive calendar months during the life of such
leases.”

 

(xxxii)             Clause (ii) of the preamble to Section 9.11 of the Credit
Agreement is hereby amended by restating the phrase “Eagle Ford Midstream JV
Units” to read “Eagle Ford Midstream Processing JV Units”.

 

(xxxiii)          Clauses (a) and (b) of Section 9.20 of the Credit Agreement
are hereby deleted and the following are substituted therefor:

 

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“(a) The Borrower and each of the Guarantors shall not, and shall not permit any
Restricted Subsidiary to, engage in any business or activity other than (i) the
business of the exploration for, and development, acquisition, and the
production of, Hydrocarbons produced from its Oil and Gas Properties; (ii) the
business of marketing, processing, treating, gathering, and upstream
transportation of such Hydrocarbons produced by the Borrower and its
Subsidiaries; (iii) developing raw land acquired or leased by the Borrower or
its Subsidiaries in conjunction with the activities described in clause (i) or
(ii) above, and remediating such land for resale; (iv) the business of providing
services to support any of the Borrower’s or its Subsidiaries’ activities
described in clause (i), (ii) or (iii) above; and (v) making and owning
Investments as permitted under Section 9.05, including Investments in Persons
that are in the business of marketing, processing, treating, gathering or
transporting Hydrocarbons without limitation as to who produced such
Hydrocarbons. Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to engage in any activity or business, or acquire or make any other
expenditure (whether such expenditure is capital, operating or otherwise) in or
related to, any Oil and Gas Properties or businesses, in any event, which are
not located within the geographical boundaries of the U.S. or the offshore area
in the Gulf of Mexico over which the U.S. asserts jurisdiction.  The Borrower
shall not permit any Unrestricted Subsidiary to engage in any business or
activity other than the oil and gas industry and businesses and activities
ancillary thereto or in furtherance thereof. Without limitation of the preceding
sentence, (i) SN Services may own and operate aircraft, (ii) any Unrestricted
Subsidiary may engage in the business of marketing, processing, treating,
gathering, and transporting Hydrocarbons without limitation as to who produced
such Hydrocarbons, and (iii) any Unrestricted Subsidiary may make direct or
indirect investments in Oil and Gas Properties and other assets used or useful
in the conduct of the oil and gas business and Persons in the oil and gas
industry (including acquisitions of Debt of and Equity Interests in other
Persons in the oil and gas industry), including Oil and Gas Properties and other
assets and Persons which are not located within the geographical boundaries of
the U.S. or the offshore area in the Gulf of Mexico over which the U.S. asserts
jurisdiction.

 

(b) The Borrower and each of the Guarantors shall not, and shall not permit any
Restricted Subsidiary to, alter, amend or modify in any manner materially
adverse to the Lenders any of its organizational documents. In any event, the
Borrower shall not permit any of its Restricted Subsidiaries to (i) if such
Subsidiary is a limited liability company, amend its limited liability company
agreement to “opt in” to “security” status in accordance with Section 8.103 of
the UCC or (ii) evidence its Equity Interests with a certificate without, in
each case, the prior consent of the Administrative Agent.”

 

(xxxiv)         Clause (i) of the second sentence of Section 11.09 of the Credit
Agreement is hereby deleted and the following is substituted therefor:

 

“(i) until such time as the security interests in the right, title and interest
of SN Catarina in the Bee County Gas Processing Property, the Bee County Gas
Processing Property Ownership and Operating Agreement, the Eagle Ford Midstream
Processing JV Units and the Eagle Ford Midstream Processing JV

 

11

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

 

LLC Agreement and any proceeds of any thereof are released in accordance with
the Eagle Ford Midstream JV Transaction Pledge Agreement and the Eagle Ford
Midstream Processing JV LLC Agreement, none of such right, title and interest
shall be subject to any security interest or other Lien to secure the
Obligations and”.

 

(xxxv)            Section 12.01(a)(i)  of the Credit Agreement is hereby deleted
and the following is substituted therefor:

 

“(i)  if to the Borrower, to it at Sanchez Energy Corporation, 1000 Main Street,
Suite 3000, Houston, Texas 77002, Attention: Alfredo Gutierrez (Telecopy
No. (713) 756-2784), with a copy to Akin Gump Strauss Hauer & Feld LLP, 1111
Louisiana Street, 44th Floor, Houston, Texas 77002, Attention: David Elder
(Telecopy No. (713) 236-0822);”.

 

(xxxvi)         A new Exhibit D of the Credit Agreement, “Form of Compliance
Certificate” in the form attached as Exhibit D to this Fifth Amendment is hereby
added to the Credit Agreement in substitution for the prior Exhibit D.

 

(xxxvii)      A new Schedule 7.01 to the Credit Agreement, “Corporate
Organizational Chart” in the form attached as Schedule 7.01 to this Fifth
Amendment is hereby added to the Credit Agreement in substitution for the prior
Schedule 7.01.

 

(xxxviii)   A new Schedule 7.14 to the Credit Agreement, “Subsidiaries” in the
form attached as Schedule 7.14 to this Fifth Amendment is hereby added to the
Credit Agreement in substitution for the prior Schedule 7.14.

 

(xxxix)         A new Schedule 7.19 to the Credit Agreement, “Marketing
Contracts” in the form attached as Schedule 7.19 to this Fifth Amendment is
hereby added to the Credit Agreement in substitution for the prior Schedule
7.19.

 

(xl)                              A new Schedule 7.20 to the Credit Agreement,
“Swap Agreements” in the form attached as Schedule 7.20 to this Fifth Amendment
is hereby added to the Credit Agreement in substitution for the prior Schedule
7.20.

 

(xli)                           A new Schedule 9.07 to the Credit Agreement,
“Leases” in the form attached as Schedule 9.07 to this Fifth Amendment is hereby
added to the Credit Agreement.

 

3.                                      Waiver.

 

(a)                                 To the extent that the Borrower entering
into or performing its obligations under the leases set forth on Schedule 9.07
to this Fifth Amendment constituted a breach of Section 9.07 of the Credit
Agreement on or prior to the date hereof, such breach and any Default or Event
of Default arising out of such breach, including any Default or Event of Default
arising out of any breach of Section 8.02(a) of the Credit Agreement or any
misrepresentation or warranty as a result of either such breach, are hereby
waived, effective as of the date of such breach, Default or Event of Default.
For the sake of clarity, the foregoing waiver shall not constitute a

 

12

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

 

waiver of Section 9.07 of the Credit Agreement or any Default or Event of
Default resulting from the breach thereof as to any lease other than the leases
set forth on Schedule 9.07 or as to any breach of Section 9.07 of the Credit
Agreement after the Fifth Amendment Effective Date.

 

(b)                                 To the extent that the failure of the
Borrower to provide fourth quarter financial statements within 45 days after the
end of such fiscal quarter has caused it to be in breach of its covenant in
Section 8.01(b) of the Credit Agreement on or prior to the date hereof, such
breach and any Default or Event of Default arising out of such breach, including
any Default or Event of Default arising out of any breach of Section 8.02(a) of
the Credit Agreement or any misrepresentation or warranty as a result of either
such breach, are hereby waived, effective as of the date of such breach, Default
or Event of Default. For the sake of clarity, the foregoing waiver shall not
constitute a waiver of Section 8.01(b) of the Credit Agreement or any Default or
Event of Default resulting from the breach thereof as to any other failure to
observe or perform its obligations under Section 8.01(b) of the Credit Agreement
or as to any breach of Section 8.01(b) of the Credit Agreement after the Fifth
Amendment Effective Date.

 

(c)                                  To the extent that the failure of the
Borrower to provide certain loss payable clauses or provisions and endorsements
with respect to certain property insurance maintained by the Loan Parties have
caused the Borrower to be in breach of its covenants in the last sentence of
Section 8.07 of the Credit Agreement on or prior to the date hereof, such breach
and any Default or Event of Default arising out of such breach, including any
Default or Event of Default arising out of any breach of Section 8.02(a) of the
Credit Agreement or any misrepresentation or warranty as a result of either such
breach, are hereby waived, effective as of the date of such breach, Default or
Event of Default. For the sake of clarity, the foregoing waiver shall not
constitute a waiver of Section 8.07 of the Credit Agreement or any Default or
Event of Default resulting from the breach thereof as to any other failure to
observe or perform its obligations under Section 8.07 of the Credit Agreement or
as to any breach of Section 8.07 of the Credit Agreement after the Fifth
Amendment Effective Date

 

4.                                      Loan Parties’ Ratification. Subject to
the conditions set out in Section 6, Borrower (and each Loan Party by its
execution in the space provided below under “ACKNOWLEDGED for purposes of
Sections 4 and 5”) hereby ratifies all of its Obligations under the Credit
Agreement and each of the Loan Documents to which it is a party (other than the
Guaranty which is specifically addressed in Section 5), and agrees and
acknowledges that the Credit Agreement and each of the Loan Documents to which
it is a party (other than the Guaranty which is specifically addressed in
Section 5) are and shall continue to be in full force and effect. Nothing in
this Fifth Amendment extinguishes, novates or releases any right, claim, Lien,
security interest or entitlement of any of the Lenders, any Issuing Bank or the
Administrative Agent created by or contained in any of such documents nor is any
Loan Party released from any covenant, warranty or obligation created by or
contained herein or therein.  Each Loan Party (other than the Borrower) agrees
that its execution and delivery of this Fifth Amendment does not indicate or
establish an approval or consent requirement by any such Loan Party under the
Credit Agreement in connection with the execution and delivery of amendments to
the Credit Agreement, the Notes or any of the other Loan Documents (other than
any Loan Document to which such a Loan Party is a party).

 

13

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

 

5.                                      Guarantors’ Ratification. Each Guarantor
by its execution in the space provided below under “ACKNOWLEDGED for purposes of
Sections 4 and 5” hereby ratifies, confirms, acknowledges and agrees that its
obligations under the Guaranty are in full force and effect and that such
Guarantor continues to unconditionally and irrevocably guarantee the full and
punctual payment, when due, whether at stated maturity or earlier by
acceleration or otherwise, of the Obligations, and its execution and delivery of
this Fifth Amendment does not indicate or establish an approval or consent
requirement by any Guarantor under the Guaranty in connection with the execution
and delivery of amendments to the Credit Agreement, the Notes or any of the
other Loan Documents (other than the Guaranty or any other Loan Document to
which a Guarantor is a party).

 

6.                                      Conditions to Effectiveness of Fifth
Amendment. This Fifth Amendment shall be effective upon the satisfaction, in the
Administrative Agent’s sole discretion, of the following conditions precedent:

 

(i)                                     The Administrative Agent shall have
executed, and shall have received from the Borrower, RBC, as Issuing Bank, and
the Required Lenders duly executed signature pages to, this Fifth Amendment, and
shall have received a duly executed acknowledgement of Sections 4 and 5 of this
Fifth Amendment from each Guarantor; and

 

(ii)                                  the Administrative Agent shall have
received such other documents as the Administrative Agent or its counsel may
reasonably request.

 

7.                                      No Implied Amendment, Waiver or Consent.
This Fifth Amendment shall not constitute an amendment or waiver of any
provision not expressly referred to herein and shall not be construed as a
consent to any action on the part of the Borrower that would require a waiver or
consent of the Lenders or Required Lenders, as applicable, or an amendment or
modification to any term of the Loan Documents except as expressly stated
herein.

 

8.                                      Miscellaneous. This Fifth Amendment is a
Loan Document. Except as affected by this Fifth  Amendment, the Loan Documents
are unchanged and continue in full force and effect. However, in the event of
any inconsistency between the terms of the Credit Agreement, as amended by this
Fifth Amendment, and any other Loan Document, the terms of the Credit Agreement
will control and the other document will be deemed to be amended to conform to
the terms of the Credit Agreement. All references to the Credit Agreement will
refer to the Credit Agreement as amended by this Fifth Amendment and any other
amendments properly executed among the parties. Borrower agrees that all Loan
Documents to which it is a party (whether as an original signatory or by
assumption of the Obligations) remain in full force and effect and continue to
evidence its legal, valid and binding obligations enforceable in accordance with
their terms (as the same are affected by this Fifth Amendment or are amended in
connection with this Fifth Amendment). AS A MATERIAL INDUCEMENT TO THE
ADMINISTRATIVE AGENT AND LENDERS PARTY HERETO TO ENTER INTO THIS FIFTH
AMENDMENT, BORROWER RELEASES THE ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE
LENDERS AND THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS,
OFFICERS, EMPLOYEES, TRUSTEES, AGENTS AND ATTORNEYS FROM

 

14

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

 

ANY LIABILITY FOR ACTIONS OR FAILURES TO ACT IN CONNECTION WITH THE LOAN
DOCUMENTS PRIOR TO THE FIFTH AMENDMENT EFFECTIVE DATE. NO COURSE OF DEALING
BETWEEN BORROWER OR ANY OTHER PERSON, ON THE ONE HAND, AND THE ADMINISTRATIVE
AGENT, ISSUING BANKS AND THE LENDERS, ON THE OTHER, WILL BE DEEMED TO HAVE
ALTERED OR AMENDED THE CREDIT AGREEMENT OR AFFECTED BORROWER’S, THE
ADMINISTRATIVE AGENT’S, THE ISSUING BANKS’ OR THE LENDERS’ RIGHT TO ENFORCE THE
CREDIT AGREEMENT AS WRITTEN. This Fifth Amendment will be binding upon and inure
to the benefit of each of the undersigned and their respective successors and
permitted assigns.

 

9.                                      Form. Each agreement, document,
instrument or other writing to be furnished to the Administrative Agent and/or
the Lenders under any provision of this instrument must be in form and substance
satisfactory to the Administrative Agent and its counsel.

 

10.                               Headings. The headings and captions used in
this Fifth Amendment are for convenience only and will not be deemed to limit,
amplify or modify the terms of this Fifth Amendment, the Credit Agreement, or
the other Loan Documents.

 

11.                               Interpretation. Wherever possible each
provision of this Fifth Amendment shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Fifth
Amendment shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Fifth Amendment.

 

12.                               Multiple Counterparts. This Fifth Amendment
may be separately executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to constitute one and the same agreement. This Fifth Amendment may be
transmitted and/or signed by facsimile, telecopy or electronic mail. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on all Loan Parties, all Lenders, the Administrative Agent and the
Issuing Banks. The Administrative Agent may also require that any such documents
and signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

 

13.                               Governing Law. THIS FIFTH AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION. EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS FIFTH AMENDMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

[Signature Pages Follow]

 

15

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

 

 

BORROWER:

 

 

 

SANCHEZ ENERGY CORPORATION,

 

a Delaware corporation

 

 

 

By:

/s/ G. Gleeson Van Riet

 

 

G. Gleeson Van Riet

 

 

Senior Vice President – Chief Financial

 

 

Officer

 

1

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

 

 

ACKNOWLEDGED for the purposes stated in
Sections 4 and 5:

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

SEP HOLDINGS III, LLC,

 

a Delaware limited liability company

 

 

 

SN MARQUIS LLC,

 

a Delaware limited liability company

 

 

 

SN COTULLA ASSETS, LLC,

 

a Texas limited liability company

 

 

 

SN OPERATING, LLC,

 

a Texas limited liability company

 

 

 

SN TMS, LLC,

 

a Delaware limited liability company

 

 

 

SN CATARINA, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ G. Gleeson Van Riet

 

 

G. Gleeson Van Riet

 

 

Senior Vice President – Chief Financial

 

 

Officer

 

2

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

 

 

ADMINISTRATIVE AGENT:

 

 

 

 

 

ROYAL BANK OF CANADA, as
Administrative Agent

 

 

 

 

 

By:

/s/ Yvonne Brazier

 

Name:

Yvonne Brazier

 

Title:

Manager, Agency

 

3

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

 

 

ISSUING BANK AND LENDER:

 

 

 

ROYAL BANK OF CANADA

 

 

 

By:

/s/ Evans Swann, Jr.

 

Name:

Evans Swann, Jr.

 

Title:

Authorized Signatory

 

4

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

 

 

LENDERS:

 

 

 

CAPITAL ONE, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Michael Higgins

 

Name:

Michael Higgins

 

Title:

Director

 

5

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

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH

 

 

 

By:

/s/ Nupur Kumar

 

Name:

Nupur Kumar

 

Title:

Authorized Signatory

 

 

 

By:

/s/ Warren Van Heyst

 

Name:

Warren Van Heyest

 

Title:

Authorized Signatory

 

6

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

 

 

COMPASS BANK

 

 

 

 

 

By:

/s/ Les Werme

 

Name:

Les Werme

 

Title:

Director

 

7

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

 

 

SUNTRUST BANK

 

 

 

By:

/s/ Chulley Bogle

 

Name:

Chulley Bogle

 

Title:

Vice President

 

8

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

 

 

ING CAPITAL LLC

 

 

 

By:

/s/ Charles Hall

 

Name:

Charles Hall

 

Title:

Managing Director

 

 

 

By:

/s/ Scott Lamoreaux

 

Name:

Scott Lamoreaux

 

Title:

Director

 

9

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

 

 

BRANCH BANKING AND TRUST COMPANY

 

 

 

By:

/s/ Robert Kret

 

Name:

Robert Kret

 

Title:

AVP

 

10

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

 

 

IBERIABANK

 

 

 

 

 

By:

/s/ Stacy Goldstein

 

Name:

Stacy Goldstein

 

Title:

Senior Vice President

 

11

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

 

 

MUFG UNION BANK, N.A., f/k/a Union Bank,

 

N.A.

 

 

 

By:

/s/ Michael Dombroski

 

Name:

Michael Dombroski

 

Title:

Vice President

 

12

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

 

 

SOCIÉTÉ GENÉRALÉ

 

 

 

 

 

By:

/s/ David M. Bornstein

 

Name:

David M. Bornstein

 

Title:

Director

 

13

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

 

 

BMO HARRIS BANK, N.A.

 

 

 

 

 

By:

/s/ James V. Ducote

 

Name:

James V. Ducote

 

Title:

Managing Director

 

14

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

 

 

CREDIT AGRICOLE CORPORATE AND
INVESTMENT BANK

 

 

 

 

 

By:

/s/ Michael Willis

 

Name:

Michael Willis

 

Title:

Managing Director

 

 

 

 

 

By:

/s/ Mark Roche

 

Name:

Mark Roche

 

Title:

Managing Director

 

15

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

 

 

SUMITOMO MITSUI BANKING
CORPORATION

 

 

 

 

 

By:

/s/ James D. Weinstein

 

Name:

James D. Weinstein

 

Title:

Managing Director

 

16

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

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Ben J. Leonard

 

Name:

Ben J. Leonard

 

Title:

Vice President

 

17

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

 

 

COMERICA BANK

 

 

 

 

 

By:

/s/ Chad Stephenson

 

Name:

Chad Stephenson

 

Title:

Vice President

 

18

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

 

 

FIFTH THIRD BANK

 

 

 

 

 

By:

/s/ Justin Bellamy

 

Name:

Justin Bellamy

 

Title:

Director

 

19

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

 

EXHIBIT D

 

FORM OF
COMPLIANCE CERTIFICATE

 

The undersigned hereby certifies that he/she is the [            ] of SANCHEZ
ENERGY CORPORATION, a Delaware corporation (the “Borrower”), and that as such
he/she is authorized to execute this certificate on behalf of the Borrower. 
With reference to the Second Amended and Restated Credit Agreement dated as of
June 30, 2014 (together with all amendments, restatements, supplements or other
modifications thereto being the “Agreement”), among the Borrower, Royal Bank of
Canada, as Administrative Agent and the lenders (the “Lenders”) which are or
become a party thereto, the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in the
Agreement unless otherwise specified), to my knowledge after reasonable
investigation:

 

(a)                                 The representations and warranties of the
Borrower contained in ARTICLE VII of the Agreement and in the Loan Documents and
otherwise made in writing by or on behalf of the Borrower pursuant to the
Agreement and the Loan Documents were true and correct when made, and are
repeated at and as of the time of delivery hereof and are true and correct in
all material respects at and as of the time of delivery hereof, except to the
extent such representations and warranties are expressly limited to an earlier
date or the Required Lenders have expressly consented in writing to the contrary
[and except to the extent attributable to [the breach[es] or non-compliance[s]
described under clause (b) below][,][and][the event described in clause
(c) below][and][the Default[s] or Event[s] of Default described in clause
(d) below].

 

(b)                                 The Borrower has performed and complied with
all agreements and conditions contained in the Agreement and in the Loan
Documents required to be performed or complied with by the Borrower prior to or
at the time of delivery hereof [or specify default and describe].

 

(c)                                  Since the “as of” date of the financial
statements of Borrower most recently delivered, or deemed delivered, pursuant to
Section 8.01(a) or Section 8.01(b) of the Agreement, no change has occurred,
either in any case or in the aggregate, in the condition, financial or
otherwise, of the Borrower or any Subsidiary which could reasonably be expected
to have a Material Adverse Effect [or specify event].

 

(d)                                 There exists no Default or Event of Default
[or specify Default and describe].

 

(e)                                  Borrower has timely paid all royalties and
complied with the terms of the HIL Lease, or caused SN Catarina (or any
Affiliate successor thereto as lessee under the HIL Lease) to timely pay all
royalties and comply with the terms of the HIL Lease [or describe any
exception].

 

(f)                                   Attached hereto as Exhibit A are the
detailed computations necessary to determine whether the Borrower is in
compliance with Section 8.13(a) and Section 9.01 of the Agreement as of the end
of the [fiscal quarter][fiscal year] ending [            ].

 

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

 

EXECUTED AND DELIVERED this [         ] day of [                        ],
20[   ].

 

 

SANCHEZ ENERGY CORPORATION,

 

a Delaware corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

FINANCIAL COVENANT CALCULATION WORKSHEET

 

Summary of Financial Ratios

 

 

 

 

 

Section 9.01 Financial Covenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Compliance?

 

Current Ratio

min. 1.0 to 1.0

 

 

 

 

 

Senior Secured Leverage Ratio

max. 2.25 to 1.0

 

 

 

 

 

 

 

 

 

 

 

Current Ratio

 

 

 

 

 

Consolidated Current Assets (including unused Commitments to the extent that the
Borrower is permitted to borrow such amount under the terms of the Agreement,
but excluding non-cash assets under FAS 133)

 

 

 

$

 

Consolidated Current Liabilities (excluding outstanding Obligations to the
extent included in consolidated current liabilities, non-cash obligations under
FAS 133 and any accrual related to non-cash compensation arising from any grant
of stock, stock options or other equity based awards)

 

=

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Leverage Ratio

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Debt

 

=

 

$

 

Consolidated EBITDA

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 8.13(a)

 

 

 

 

 

[Provide details of compliance/non-compliance]

 

 

 

 

 

 

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

 

Current Ratio

 

 

 

 

Section 9.01 Financial Covenants

 

 

 

 

 

 

 

 

 

Consolidated Current Assets

 

$

 

 

(+) Unused Commitments to the extent that the Borrower is permitted to borrow
such amount under the terms of the Agreement

 

$

 

 

(-) Non-cash assets under FAS 133

 

$

 

 

Total Consolidated Current Assets

 

$

 

 

 

 

 

 

 

Consolidated Current Liabilities

 

$

 

 

(-) Outstanding Obligations to the extent included in consolidated current
liabilities

 

$

 

 

(-)Non-cash obligations under FAS 133

 

$

 

 

(-) Accrual related to non-cash compensation arising from any grant of stock,
stock options or other equity based awards

 

$

 

 

Total Consolidated Current Liabilities

 

$

 

 

 

 

 

 

 

Current Ratio is     to 1.00.

 

 

 

 

 

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

 

Senior Secured Leverage Ratio

Section 9.01 Financial Covenants

 

Senior Secured Debt (without duplication) at end of

 

Q   201

 

Total Credit Exposure (outstanding principal amount of Loans plus aggregate LC
Exposure)

 

$

 

(+) All secured obligations of Borrower and its Restricted Subsidiaries for
borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or
other similar instruments

 

$

 

(+) All secured Capital Lease Obligations of Borrower and its Restricted
Subsidiaries (excluding any office lease of the Borrower or any Restricted
Subsidiary constituting a Capital Lease Obligation)

 

$

 

(+) All secured obligations of Borrower and its Restricted Subsidiaries under
Synthetic Leases

 

$

 

(+) All secured Debt of others secured by a Lien on any Property of Borrower or
any Restricted Subsidiary, whether or not such Debt is assumed by such Person

 

$

 

Total Senior Secured Debt

 

 

 

 

 

 

 

Consolidated EBITDA for [·] Quarters ended[·] /1[·]

 

 

 

Consolidated Net Income (the following to be added, without duplication and to
the extent deducted (and not added back) in calculating such Consolidated Net
Income)

 

$

 

(+) Consolidated Net Interest Expense

 

$

 

(+) Consolidated Income Tax Expense

 

$

 

(+) Consolidated depletion, depreciation and amortization expense of the
Borrower and its Restricted Subsidiaries

 

$

 

(+) Other non-cash charges to the extent not included in the foregoing

 

$

 

(+) Fees and expenses expensed and paid in cash in connection with (1) the
public offering of Borrower’s Equity Interests, (2) the 2012 Credit Agreement,
(3) the 2013 Credit Agreement, (4) the Senior Unsecured Notes and (5) the
Agreement, including any amendments to date

 

$

 

(+) Unrestricted Person Cash Dividends

 

$

 

(-) All-non-cash income to the extent included in determining Consolidated Net
Income

 

$

 

 

 

 

 

 

 

 

 

Consolidated EBITDA for prior 4 quarters

 

$

 

 

 

 

 

Senior Secured Leverage Ratio is    to 1.00.

 

 

 

 

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

 

SCHEDULE 7.01

 

CORPORATE ORGANIZATIONAL CHART

 

[g223161kg11i001.gif]

 

All of the membership interests in each of SEP Holdings III, LLC, SN Marquis
LLC, SN Cotulla Assets, LLC, SN Operating, LLC, SN Midstream, LLC, SN TMS, LLC,
SN Services, LLC, and SN Catarina, LLC are owned by Sanchez Energy Corporation.

 

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

 

SCHEDULE 7.14

 

SUBSIDIARIES

 

Name of Subsidiary

 

Jurisdiction of
Organization

 

Federal Taxpayer ID

 

Ownership Interest

 

 

 

 

 

 

 

SEP Holdings III, LLC

 

Delaware

 

45-3193696

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Marquis LLC

 

Delaware

 

45-3090102

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Cotulla Assets, LLC

 

Texas

 

45-3090102

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Operating, LLC

 

Texas

 

38-3902143

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Midstream, LLC

 

Delaware

 

45-3090102

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN TMS, LLC

 

Delaware

 

45-3090102

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Catarina, LLC

 

Delaware

 

45-3090102

 

100% Membership Interest held by Borrower

 

 

 

 

 

 

 

SN Services, LLC

 

Delaware

 

45-3090102

 

100% Membership Interest held by Borrower

 

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SCHEDULE 7.19

 

MARKETING CONTRACTS

 

Gathering and Processing Agreement between SWEPI LP and ETC Texas Pipeline, Ltd.
effective October 1, 2012.

 

Gathering and Natural Gas Services Agreement between SWEPI LP and ETC Texas
Pipeline, Ltd. effective December 1, 2010.

 

Gas Processing Agreement between SWEPI LP and ExxonMobil Gas & Power Marketing
Co. effective February 28, 2011.

 

Gas Gathering and Processing Agreement between SWEPI LP and Frio LaSalle
Pipeline, LP effective November 1, 2012.

 

Raw Make Purchase Agreement between SWEPI LP and Frio LaSalle Pipeline, LP
effective October 15, 2012.

 

Gibson Energy Marketing-Trucking NGL Mix Agreement between SN and Gibson Energy
Marketing, LLC effective August 1, 2014.

 

Gas Transmission Agreement-Humble 311 Interruptible Agreement between SWEPI LP
and Humble Gas Pipeline Company effective March 1, 2011.

 

Gas Transmission Agreement-Humble 311 Intra Interruptible Agreement between
SWEPI LP and Humble Gas Pipeline Company effective March 1, 2011.

 

Gas Services Agreement between SWEPI LP and Kinder Morgan (Eagle Ford Gathering
LLC) effective November 1, 2011.

 

Oil Gathering Agreement between SWEPI LP and Plains All American Pipeline, L.P.
(Velocity Midstream Partners, LLC) effective April 18, 2011.

 

Purchase and Sale Agreement between SWEPI LP and Gazelle Transportation Inc.,
effective March 6, 2012.

 

Intrastate Natural Gas Transportation Service Agreement between SWEPI LP and
Houston Pipe Line Company LP effective December 1, 2010.

 

Camino Real Gas Gathering Agreement Dated April 7, 2011 (Kinder Morgan)

 

Camino Real Gas Gathering Agreement Dated April 7, 2011 (Kinder Morgan)

 

Eagle Ford Gathering LLC (“EFG”) Gas Services Agreement Dated January, 1, 2012

 

Plains Pipeline, L.P. Oil Gathering Agreement Dated May 2, 2012

 

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Amended and Restated Facility Agreement Frio LaSalle Pipeline, LP effective
April 1, 2012

 

Frio LaSalle Pipeline L.P. Gas Gathering Agreement dated February 1, 2012

 

Frio LaSalle Pipeline, LP Gas Gathering and Processing Agreement dated May 1,
2012

 

Frio LaSalle Pipeline, LP Natural Gas Purchase & Sales Contract (mo. to mo.)

 

Warrior Gas Company Gas Purchase Contract dated January 1, 2012

 

DCP Midstream, LP Gas Purchase Contract dated December 1, 2011

 

Regency Field Services LLC Gas Gathering Agreement Dated March 1, 2012

 

American Midstream L.P. Gas Gathering Agreement Dated August 25, 2014

 

TPL SouthTex Processing L.P. Firm Gas Gathering Agreement Dated October 2, 2015

 

TPL SouthTex Processing L.P. Firm Gas Processing Agreement (SOII) Dated
October 2, 2015

 

TPL SouthTex Processing L.P. Firm Gas Processing Agreement (Raptor) Dated
October 2, 2015

 

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SCHEDULE 7.20

 

SWAP AGREEMENTS

 

Master Agreement dated as of June 8, 2012 between Shell Energy North America
(US), L.P. and SEP Holdings III, LLC.

 

Master Agreement dated October 4, 2013 between BP Energy Company and Sanchez
Energy Corporation.

 

Master Agreement dated as of August 21, 2013 between ING Capital Markets LLC and
Sanchez Energy Corporation.

 

Master Agreement dated as of August 26, 2013 between Credit Suisse International
and Sanchez Energy Corporation.

 

Master Agreement dated as of August 27, 2013 between Royal Bank of Canada and
Sanchez Energy Corporation.

 

Master Agreement dated as of July 3, 2013 between Societe Generale and Sanchez
Energy Corporation.

 

Master Agreement dated as of September 8, 2014 between Bank of Montreal and
Sanchez Energy Corporation.

 

Master Agreement dated as of January 22, 2015 between Capital One, National
Association and Sanchez Energy Corporation.

 

Master Agreement dated as of November 17, 2014 between Fifth Third Bank, an Ohio
banking corporation and Sanchez Energy Corporation.

 

Master Agreement dated as of November 13, 2014 between MUFG Union Bank, NA and
Sanchez Energy Corporation.

 

All other information as set forth in the certificate of a Financial Officer of
Borrower most recently delivered pursuant to Section 8.01(d) of the Credit
Agreement.

 

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SCHEDULE 9.07

 

LEASES

 

1.                                      Corporate office lease between the
Borrower and 1000 Main, LLC dated May 5, 2014, which lease commenced in the
fourth quarter of 2014 and has an expiration date in March 2025 for the office
premises located at 1000 Main Street, Suite 3000, Houston, Texas 77002, as
amended, restated, supplemented or otherwise modified from time to time.

 

2.                                      Acreage lease agreement between SOG and
The John G. and Maria Stella Kenedy Memorial Foundation dated December 7, 2012,
to which the Borrower signed a participation agreement in January 2014, that
commenced in the first quarter of 2014 and has an expiration date in
February 2024 and one or more options to extend in increments of 10 years for a
promotional ranch in Kenedy County, Texas, as amended, restated, supplemented or
otherwise modified from time to time

 

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