Document:

arex-ex101_6.htm

Exhibit 10.1

 

SEVENTH AMENDMENT
TO LIMITED FORBEARANCE AGREEMENT

SEVENTH AMENDMENT TO LIMITED FORBEARANCE AGREEMENT (this “Amendment”), dated as of October 3, 2019 (the “Amendment Effective Date”), to the Limited Forbearance Agreement, dated as of May 9, 2019 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Forbearance Agreement”), among APPROACH RESOURCES INC., a Delaware corporation, as the Borrower (the “Borrower”), each Guarantor (as such term is defined in the Credit Agreement referenced below) (the Borrower, together with each Guarantor, collectively, the “Credit Parties”), the lenders party to this Amendment (collectively, the “Consenting Lenders”), the Issuing Bank and JPMORGAN CHASE BANK, N.A., a national banking association, as administrative agent for itself and the other Secured Parties (in such capacity, the “Administrative Agent”).

WHEREAS, the Credit Parties, the Administrative Agent and the financial institutions named therein as lenders (the “Lenders”) are parties to that certain Amended and Restated Credit Agreement, dated as of May 7, 2014 (as heretofore amended, restated, amended and restated, or otherwise modified, the “Credit Agreement”), pursuant to which the Lenders agreed to make Loans and provide certain other financial accommodations to the Borrower;

WHEREAS, the Credit Parties have requested that the Administrative Agent and the Lenders amend the Forbearance Agreement as set forth herein; and

WHEREAS, the Administrative Agent and the Consenting Lenders, which constitute at least the Majority Lenders, are willing to amend the Forbearance Agreement on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Definitions.  All terms used herein that are defined in the Forbearance Agreement and not otherwise defined herein shall have the meanings assigned to them in the Forbearance Agreement.

2.Amendments to Forbearance Agreement.  

(a)The Forbearance Agreement is hereby amended by replacing the date “October 3, 2019” contained in the definition of “Forbearance Termination Date” set forth in Section 1 of the Forbearance Agreement with “October 15, 2019”.

(b)The Forbearance Agreement is hereby amended by amending and restating Recital Paragraph C thereof to read in its entirety as follows:

C.The Credit Parties acknowledge that (i) an Event of Default under Section 10.01(d) of the Credit Agreement has occurred and is continuing on account of the failure by the Borrower to maintain a ratio of EBITDAX for the four fiscal quarter period ending March 31, 2019 to Interest Expense for such period of not less than 2.25 to 1.00 as required 

by Section 9.01(a) of the Credit Agreement, (ii) an Event of Default under Section 10.01(d) of the Credit Agreement has occurred and is continuing on account of the failure by the Borrower to maintain a Total Leverage Ratio for the fiscal quarter ended March 31, 2019 of less than 5.00 to 1.00 as required by Section 9.01(c) of the Credit Agreement, (iii) an Event of Default under Section 10.01(d) of the Credit Agreement has occurred on account of the failure by the Borrower to maintain a ratio of EBITDAX for the four fiscal quarter period ending June 30, 2019 to Interest Expense for such period of not less than 2.25 to 1.00 as required by Section 9.01(a) of the Credit Agreement, (iv) an Event of Default under Section 10.01(d) of the Credit Agreement has occurred on account of the failure by the Borrower to maintain a Total Leverage Ratio for the fiscal quarter ended June 30, 2019 of less than 5.00 to 1.00 as required by Section 9.01(c) of the Credit Agreement, (v) an Event of Default under Section 10.01(d) of the Credit Agreement may occur on account of the failure by the Borrower to maintain a ratio of EBITDAX for the four fiscal quarter period ending September 30, 2019 to Interest Expense for such period of not less than 2.25 to 1.00 as required by Section 9.01(a) of the Credit Agreement, (vi) an Event of Default under Section 10.01(d) of the Credit Agreement may occur on account of the failure by the Borrower to maintain a Total Leverage Ratio for the fiscal quarter ended September 30, 2019 of less than 4.75 to 1.00 as required by Section 9.01(c) of the Credit Agreement, (vii) an Event of Default under Section 10.01(d) of the Credit Agreement may occur on account of the failure by the Borrower to maintain, as of the last day of the fiscal quarter ended September 30, 2019, its ratio of (x) consolidated current assets of the Borrower and its Consolidated Restricted Subsidiaries to (y) consolidated current liabilities of the Borrower and its Consolidated Restricted Subsidiaries of not less than 1.0 to 1.0 as required by Section 9.01(b) of the Credit Agreement, (viii) an Event of Default under Section 10.01(b) has occurred on account of the failure by the Borrower to make the interest payment due on September 16, 2019, (ix) an Event of Default under Section 10.01(b) has occurred on account of the failure by the Borrower to make the interest payment due on September 30, 2019,  and (x) an Event of Default under Section 10.01(d) may occur on account of the failure by the Borrower to deliver notice as required by Section 8.02(a) of the Credit Agreement with respect to the Events of Default described in the foregoing clauses (i), (ii), (iii), (iv), (v), (vi), (vii) (viii), (ix) and (x) (clauses (i), (ii), (iii), (iv), (v) (vi), (vii), (viii), (ix) and (x) collectively, the “Specified Defaults”).

3.Condition to Effectiveness.  This Amendment shall become effective upon receipt by the Administrative Agent of counterparts to this Amendment duly executed by the Administrative Agent, the Credit Parties, the Issuing Bank and Lenders constituting Majority Lenders.

4.Amendment.  The provisions of this Amendment may be amended or waived only by an instrument in writing signed by the Credit Parties, the Administrative Agent and the Majority Lenders.

5.Lender Direction.  Each Consenting Lender hereby directs and authorizes the Administrative Agent to enter into this Amendment.

6.NO CLAIMS; RELEASE; COVENANT NOT TO SUE.  EACH CREDIT PARTY (IN ITS OWN RIGHT AND ON BEHALF OF ITS PREDECESSORS, SUCCESSORS AND 

2

ASSIGNS) HEREBY EXPRESSLY AND UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT, AS OF THE DATE HEREOF, IT HAS NO SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, DEFENSES, CLAIMS, CAUSES OF ACTION, ACTIONS OR DAMAGES OF ANY CHARACTER OR NATURE, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT, OR INDIRECT, AGAINST ADMINISTRATIVE Agent, any lender, THE ISSUING BANK, ANY OF their AFFILIATES OR ANY OF their OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS, consultants to attorneys OR REPRESENTATIVES OR ANY OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS OR ASSIGNS (COLLECTIVELY, THE “LENDER-RELATED PARTIES”), in each case which existed, arose or occurred at any time prior to the DATE HEREOF OR ANY GROUNDS OR CAUSE FOR REDUCTION, MODIFICATION, SET ASIDE OR SUBORDINATION OF THE SECURED Indebtedness OR ANY LIENS OR SECURITY INTERESTS OF ADMINISTRATIVE AGENT.  IN PARTIAL CONSIDERATION FOR THE AGREEMENT OF THE ADMINISTRATIVE AGENT, the CONSENTING LENDERs AND THE ISSUING BANK TO ENTER INTO THIS AMENDMENT, EACH CREDIT PARTY HEREBY KNOWINGLY AND UNCONDITIONALLY WAIVES AND FULLY AND FINALLY RELEASES AND FOREVER DISCHARGES THE LENDER-RELATED PARTIES FROM, and covenants not to sue the Lender-related parties for, ANY AND ALL SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, CLAIMS, DEMANDS, CAUSES OF ACTION, ACTIONS, GROUNDS, CAUSES, DAMAGES, REMEDIES, COSTS AND EXPENSES OF EVERY NATURE AND CHARACTER, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT OR INDIRECT, ARISING OUT OF OR FROM OR RELATED TO ANY LAW, STATUTE, RULE, REGULATION, OR ANY OF THE LOAN DOCUMENTS, WHETHER AT LAW, IN EQUITY, OR OTHERWISE, WHICH any CREDIT PArTY OWNS AND HOLDS as of the date hereof, OR HAS AT ANY TIME prior to the date hereof OWNED OR HELD, SUCH WAIVER, RELEASE, DISCHARGE, AND COVENANT NOT TO SUE IS BEING MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE CIRCUMSTANCES AND EFFECTS OF SUCH WAIVER, RELEASE AND DISCHARGE AND AFTER HAVING CONSULTED LEGAL COUNSEL OF ITS OWN CHOOSING WITH RESPECT THERETO.  THIS SECTION IS IN ADDITION TO ANY OTHER RELEASE, INDEMNITY, COVENANT NOT TO SUE AND WAIVER OF ANY OF THE LENDER-RELATED PARTIES BY ANY CREDIT PARTY AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, INDEMNITY, COVENANT NOT TO SUE, OR WAIVER BY ANY CREDIT PARTY IN FAVOR OF ANY OF THE LENDER-RELATED PARTIES, IT BEING THE INTENT OF THE CREDIT PARTIES THAT THIS RELEASE, COVENANT NOT TO SUE AND WAIVER BE AS BROAD AND INCLUSIVE AS PERMITTED BY APPLICABLE LAW.

7.Miscellaneous.  The provisions of Sections 12, 14, 15, 17 and 19 through 26 of the Forbearance Agreement are hereby incorporated into this Amendment by reference, mutatis 

3

mutandis.  Except as amended herein, the Forbearance Agreement shall remain in full force and effect on a cumulative basis in accordance with its terms.  

[Remainder of page intentionally left blank.]

 

 

 

 

4

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

 

	
BORROWER:
	
APPROACH RESOURCES INC.,

a Delaware corporation

 

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

	

	

 

 

	
GUARANTORS:
	
APPROACH OPERATING, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

	

	
 

	

	
APPROACH RESOURCES I, LP,

a Texas limited partnership

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

	

	
APPROACH OIL & GAS INC.,

a Delaware corporation

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

	

	
 

	

	
APPROACH DELAWARE, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

	

	
APPROACH SERVICES, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

	

	
 

	

	
APPROACH MIDSTREAM HOLDINGS LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

 

	
ADMINISTRATIVE AGENT:
	
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, an Issuing Bank, and a Lender 

 

 

By:/s/ David Morris

Name:David Morris

Title:Authorized Officer

 

 

	
CONSENTING LENDERS:
	
COMERICA BANK,

as a Lender

By:/s/ Cynthia B. Jones

Name:Cynthia B. Jones

Title:Vice President

 

 

FROST BANK,

as a Lender

By:/s/ Teresa Woods

Name:Teresa Woods

Title:Senior Vice President

 

 

CAPITAL ONE, NATIONAL ASSOCIATION,

as a Lender

By:/s/ Christopher Kuna

Name:Christopher Kuna

Title:Director

 

 

 

ROYAL BANK OF CANADA,

as a Lender

By:/s/ Amy G. Josephson

Name:Amy G. Josephson

Title:Authorized SignatoryWELLS FARGO & COMPANY 8-K

 

Exhibit 4.1

[Face of Note]

 

Unless this certificate
is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP NO. 95001HBD2	FACE AMOUNT:  $_____________
	REGISTERED NO. __	 

 

 

WELLS FARGO FINANCE LLC

 

MEDIUM-TERM NOTE, SERIES A

Fully and Unconditionally Guaranteed by Wells
Fargo & Company

 

Principal at Risk Securities Linked to the
Lowest Performing of the S&P 500® Index

and the Russell 2000® Index
due October 8, 2021

 

WELLS FARGO FINANCE
LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company,”
which term includes any successor corporation under and as defined in the Indenture hereinafter referred to), for value received,
hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the Maturity Payment Amount (as defined
below), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public
and private debts, on the Stated Maturity Date, unless this Security is automatically called as provided below under “Automatic
Call.” The “Initial Stated Maturity Date” shall be October 8, 2021. If the Final Calculation Day
(as defined below) is not postponed, the Initial Stated Maturity Date will be the “Stated Maturity Date.” If
the Final Calculation Day is postponed, the “Stated Maturity Date” shall be the later of (i) the Initial
Stated Maturity Date and (ii) three Business Days (as defined below) after the last Final Calculation Day as postponed. This
Security shall not bear any interest.

Any payments on
this Security at Maturity will be made against presentation of this Security at the office or agency of the Company maintained
for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company for such purpose.

“Face Amount”
shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its “Face Amount.”

    	 	 	 

    	 

    

Automatic Call

If the Closing Level
(as defined below) of the Lowest Performing Index (as defined below) on any of the Call Dates (as defined in the table below) is
greater than or equal to its Starting Level (as defined below), this Security will be automatically called, and on the related
Call Settlement Date (as defined below) the Holder hereof will receive the Face Amount of this Security plus the Call Premium (as
defined in the table below) applicable to the relevant Call Date (together, the “Call Price”). Unless the Company defaults
in the payment of the Call Price, this Security will cease to be outstanding on such Call Settlement Date, and the Holder hereof
will have no further rights under this Security after such Call Settlement Date. The Holder hereof will not receive any notice
from the Company in the event this Security is automatically called pursuant to the terms hereof.

The Call Dates and
the related Call Premiums are as follows:

	 	Call Date	Call Premium
	 	 	 
	 	October 5, 2020	9.15% of the Face Amount of this Security
	 	April 5, 2021	13.725% of the Face Amount of this Security
	 	October 5, 2021	18.30% of the Face Amount of this Security

The Call Dates are subject to postponement
for non-Trading Days and the occurrence of a Market Disruption Event. See the definition of “Calculation Days” below.

The “Call
Settlement Date” for a Call Date shall be three Business Days after such Call Date, as such Call Date may be postponed
as provided herein; provided that the Call Settlement Date for the last Call Date shall be the Stated Maturity Date.

Payment of the Call
Price, if any, will be made in such coin or currency of the United States of America as at the time is legal tender for payment
of public and private debts.

Determination of Maturity Payment
Amount and Certain Definitions

If this Security is not
automatically called as provided above under “Automatic Call,” the “Maturity Payment Amount” of
this Security will equal:

 

		•	if the Ending Level of the Lowest Performing Index on the Final Calculation Day is less than its Starting Level but greater
than or equal to its Threshold Level: the Face Amount; or

		•	if the Ending Level of the Lowest Performing Index on the Final Calculation Day is less than its Threshold Level:

 

	Face Amount	

        x
	
        Performance Factor of the Lowest Performing

        Index on the Final Calculation Day
	
         

        x
	Multiplier

 

    	 	2	 

    	 

    

All calculations with respect to the Maturity
Payment Amount or Call Price, as applicable, will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded
upward (e.g., 0.000005 would be rounded to 0.00001); and the Maturity Payment Amount or Call Price, as applicable, will be rounded
to the nearest cent, with one-half cent rounded upward.

 

“Index”
shall mean each of the S&P 500 Index and the Russell 2000 Index.

 

The “Pricing Date”
shall mean October 1, 2019.

 

The “Lowest
Performing Index” on any Call Date will be the Index with the lowest Performance Factor on that date (as such date may
be postponed for one or both Indices pursuant to “Calculation Days” below, if applicable).

The “Performance
Factor” with respect to an Index on any Call Date, is its Closing Level on such date divided by its Starting Level (expressed
as a percentage).

The “Starting
Level” with respect to the S&P 500 Index is 2940.25, its Closing Level on the Pricing Date, and with respect to the
Russell 2000 Index is 1493.432, its Closing Level on the Pricing Date.

The “Ending
Level” of an Index will be its Closing Level on the Final Calculation Day.

The “Threshold
Level” with respect to the S&P 500 Index is 2352.20, which is equal to 80% of its Starting Level, and with respect
to the Russell 2000 Index is 1194.7456, which is equal to 80% of its Starting Level.

“Multiplier”
is 1.25.

The “Closing Level”
with respect to each Index on any Trading Day means the official closing level of that Index reported by the relevant Index Sponsor
(as defined below) on such Trading Day, as obtained by the Calculation Agent on such Trading Day from the licensed third-party
market data vendor contracted by the Calculation Agent at such time; in particular, taking into account the decimal precision and/or
rounding convention employed by such licensed third-party market data vendor on such date, subject to the provisions set forth
below under “Market Disruption Events,” “Adjustments to an Index” and “Discontinuance of an Index.”

 

“Business Day”
shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in New York, New York.

 

A “Trading Day”
with respect to an Index means a day, as determined by the Calculation Agent, on which (i) the Relevant Stock Exchanges with
respect to each security underlying such Index are scheduled to be open for trading for their respective regular trading sessions
and (ii) each Related Futures or Options Exchange with respect to such Index is scheduled to be open for trading for its regular
trading session.

 

    	 	3	 

    	 

    

The “Relevant
Stock Exchange” for any security underlying an Index means the primary exchange or quotation system on which such security
is traded, as determined by the Calculation Agent.

 

The “Related Futures
or Options Exchange” for an Index means an exchange or quotation system where trading has a material effect (as determined
by the Calculation Agent) on the overall market for futures or options contracts relating to such Index.

 

The “Calculation
Days” shall mean each of the Call Dates. If any Calculation Day is not a Trading Day with respect to either Index, such
Calculation Day for each Index will be postponed to the next succeeding day that is a Trading Day with respect to each Index. A
Calculation Day for an Index is also subject to postponement due to the occurrence of a Market Disruption Event (as defined below)
with respect to such Index on such Calculation Day. If a Market Disruption Event occurs or is continuing with respect to an Index
on any Calculation Day, then such Calculation Day for such Index will be postponed to the first succeeding Trading Day for such
Index on which a Market Disruption Event for such Index has not occurred and is not continuing; however, if such first succeeding
Trading Day has not occurred as of the eighth Trading Day for such Index after the originally scheduled Calculation Day, that eighth
Trading Day shall be deemed to be the Calculation Day for such Index. If a Calculation Day has been postponed eight Trading Days
for an Index after the originally scheduled Calculation Day and a Market Disruption Event occurs or is continuing with respect
to such Index on such eighth Trading Day, the Calculation Agent will determine the Closing Level of such Index on such eighth Trading
Day in accordance with the formula for and method of calculating the Closing Level of such Index last in effect prior to commencement
of the Market Disruption Event, using the closing price (or, with respect to any relevant security, if a Market Disruption Event
has occurred with respect to such security, its good faith estimate of the value of such security at the Scheduled Closing Time
of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular trading session of such
Relevant Stock Exchange) on such date of each security included in such Index. As used herein, “closing price”
means, with respect to any security on any date, the Relevant Stock Exchange traded or quoted price of such security as of the
Scheduled Closing Time of the Relevant Stock Exchange for such security or, if earlier, the actual closing time of the regular
trading session of such Relevant Stock Exchange. Notwithstanding the postponement of a Calculation Day for one Index due to a Market
Disruption Event with respect to such Index on such Calculation Day, the originally scheduled Calculation Day will remain the Calculation
Day for the other Index if such other Index is not affected by a Market Disruption Event on such day.

 

The “Final Calculation
Day” is October 5, 2021, subject to postponement as provided herein.

 

“Calculation Agent
Agreement” shall mean the Calculation Agent Agreement dated as of May 18, 2018 between the Company and the Calculation
Agent, as amended from time to time.

 

“Calculation Agent”
shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among other things,
the determination of whether this Security will be automatically called on any of the Call Dates, the Call Price, if any, the

    	 	4	 

    	 

    

Ending Levels and the Maturity Payment Amount,
which term shall, unless the context otherwise requires, include its successors under such Calculation Agent Agreement. The initial
Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a
different Calculation Agent from time to time after the initial issuance of this Security without the consent of the Holder of
this Security and without notifying the Holder of this Security.

 

Adjustments to an Index

If at any time the
method of calculating an Index or a Successor Equity Index, or the closing level thereof, is changed in a material respect, or
if an Index or a Successor Equity Index is in any other way modified so that such index does not, in the opinion of the Calculation
Agent, fairly represent the level of such index had those changes or modifications not been made, then the Calculation Agent will,
at the close of business in New York, New York, on each date that the closing level of such index is to be calculated, make such
calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a
level of an index comparable to such Index or Successor Equity Index as if those changes or modifications had not been made, and
the Calculation Agent will calculate the closing level of such Index or Successor Equity Index with reference to such index, as
so adjusted. Accordingly, if the method of calculating an Index or Successor Equity Index is modified so that the level of such
index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to a split or reverse
split in such equity index), then the Calculation Agent will adjust such Index or Successor Equity Index in order to arrive at
a level of such index as if it had not been modified (e.g., as if the split or reverse split had not occurred).

Discontinuance of an Index

If the sponsor or
publisher of an Index (each, an “Index Sponsor”) discontinues publication of an Index, and such Index Sponsor or another
entity publishes a successor or substitute equity index that the Calculation Agent determines, in its sole discretion, to be comparable
to such Index (a “Successor Equity Index”), then, upon the Calculation Agent’s notification of that determination
to the Trustee and the Company, the Calculation Agent will substitute the Successor Equity Index as calculated by the relevant
Index Sponsor or any other entity for purposes of calculating the Closing Level of such Index on any date of determination. Upon
any selection by the Calculation Agent of a Successor Equity Index, the Company will cause notice to be given to the Holder of
this Security.

In the event that
an Index Sponsor discontinues publication of an Index prior to, and the discontinuance is continuing on, a Calculation Day and
the Calculation Agent determines that no Successor Equity Index is available at such time, the Calculation Agent will calculate
a substitute Closing Level for such Index in accordance with the formula for and method of calculating such Index last in effect
prior to the discontinuance, but using only those securities that comprised such Index immediately prior to that discontinuance.
If a Successor Equity Index is selected or the Calculation Agent calculates a level as a substitute for such Index, the Successor
Equity Index or level will be used as a substitute for such Index for all purposes, including the purpose of determining whether
a Market Disruption Event exists.

    	 	5	 

    	 

    

If on a Calculation
Day an Index Sponsor fails to calculate and announce the level of an Index, the Calculation Agent will calculate a substitute Closing
Level of such Index in accordance with the formula for and method of calculating such Index last in effect prior to the failure,
but using only those securities that comprised such Index immediately prior to that failure; provided that, if a Market
Disruption Event occurs or is continuing on such day with respect to such Index, then the provisions set forth above under the
definition of “Calculation Days” shall apply in lieu of the foregoing.

Market Disruption Events 

A “Market Disruption
Event” with respect to an Index means any of the following events as determined by the Calculation Agent in its sole
discretion:

 

		(A)	The occurrence or existence of a material suspension of or limitation imposed on trading by the
Relevant Stock Exchanges or otherwise relating to securities which then comprise 20% or more of the level of such Index or any
Successor Equity Index at any time during the one-hour period that ends at the Close of Trading on that day, whether by reason
of movements in price exceeding limits permitted by those Relevant Stock Exchanges or otherwise.

		(B)	The occurrence or existence of a material suspension of or limitation imposed on trading by any
Related Futures or Options Exchange or otherwise in futures or options contracts relating to such Index or any Successor Equity
Index on any Related Futures or Options Exchange at any time during the one-hour period that ends at the Close of Trading on that
day, whether by reason of movements in price exceeding limits permitted by the Related Futures or Options Exchange or otherwise.

		(C)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, securities that
then comprise 20% or more of the level of such Index or any Successor Equity Index on their Relevant Stock Exchanges at any time
during the one-hour period that ends at the Close of Trading on that day.

		(D)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options
contracts relating to such Index or any Successor Equity Index on any Related Futures or Options Exchange at any time during the
one-hour period that ends at the Close of Trading on that day.

		(E)	The closure on any Exchange Business Day of the Relevant Stock Exchanges on which securities that
then comprise 20% or more of the level of such Index or any Successor Equity Index are traded or any Related Futures or Options
Exchange with respect to such Index or any Successor Equity Index prior to its Scheduled Closing Time unless the earlier closing
time is announced by the Relevant Stock

    	 	6	 

    	 

    

Exchange or Related Futures or
Options Exchange, as applicable, at least one hour prior to the earlier of (1) the actual closing time for the regular trading
session on such Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, and (2) the submission deadline
for orders to be entered into the Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, system for execution
at such actual closing time on that day.

		(F)	The Relevant Stock Exchange for any security underlying such Index or Successor Equity Index or
any Related Futures or Options Exchange with respect to such Index or Successor Equity Index fails to open for trading during its
regular trading session.

For purposes of
determining whether a Market Disruption Event has occurred with respect to an Index:

		(1)	the relevant percentage contribution of a security to the level of such Index or any Successor
Equity Index will be based on a comparison of (x) the portion of the level of such index attributable to that security and
(y) the overall level of such Index or Successor Equity Index, in each case immediately before the occurrence of the Market
Disruption Event;

		(2)	the “Close of Trading” on any Trading Day for such Index or any Successor Equity
Index means the Scheduled Closing Time of the Relevant Stock Exchanges with respect to the securities underlying such Index or
Successor Equity Index on such Trading Day; provided that, if the actual closing time of the regular trading session of
any such Relevant Stock Exchange is earlier than its Scheduled Closing Time on such Trading Day, then (x) for purposes of clauses
(A) and (C) of the definition of “Market Disruption Event” above, with respect to any security underlying such Index
or Successor Equity Index for which such Relevant Stock Exchange is its Relevant Stock Exchange, the “Close of Trading”
means such actual closing time and (y) for purposes of clauses (B) and (D) of the definition of “Market Disruption Event”
above, with respect to any futures or options contract relating to such Index or Successor Equity Index, the “Close of Trading”
means the latest actual closing time of the regular trading session of any of the Relevant Stock Exchanges, but in no event later
than the Scheduled Closing Time of the Relevant Stock Exchanges;

		(3)	the “Scheduled Closing Time” of any Relevant Stock Exchange or Related Futures
or Options Exchange on any Trading Day for such Index or any Successor Equity Index means the scheduled weekday closing time of
such Relevant Stock Exchange or Related Futures or Options Exchange on such Trading Day, without regard to after hours or any other
trading outside the regular trading session hours; and

		(4)	an “Exchange Business Day” means any Trading Day for such Index or any Successor
Equity Index on which each Relevant Stock Exchange for the securities underlying such Index or any Successor Equity Index and each
Related

    	 	7	 

    	 

    

Futures or Options Exchange with
respect to such Index or any Successor Equity Index are open for trading during their respective regular trading sessions, notwithstanding
any such Relevant Stock Exchange or Related Futures or Options Exchange closing prior to its Scheduled Closing Time.

Calculation Agent

The Calculation
Agent will determine whether this Security will be automatically called on any of the Call Dates, the Call Price, if any, the Maturity
Payment Amount and the Ending Levels. In addition, the Calculation Agent will (i) determine if adjustments are required to the
Closing Level of an Index under the circumstances described in this Security, (ii) if publication of an Index is discontinued,
select a Successor Equity Index or, if no Successor Equity Index is available, determine the Closing Level of that Index under
the circumstances described in this Security, (iii) determine the Closing Levels of the Indices under various circumstances,
and (iv) determine whether a Market Disruption Event or non-Trading Day has occurred.

The Company covenants
that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall be a broker-dealer,
bank or other financial institution) with respect to this Security.

All determinations
made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent and, in the
absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Tax Considerations

The Company agrees,
and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed to have agreed
(in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States federal income
tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

Redemption and Repayment

This Security is
not subject to repayment at the option of the Holder hereof prior to October 8, 2021. Except as set forth above under “Automatic
Call,” this Security is not subject to redemption prior to October 8, 2021. This Security is not entitled to any sinking
fund.

Acceleration

If an Event of Default,
as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment Amount (calculated
as set forth in the next sentence) of this Security may be declared due and payable in the manner and with the effect provided
in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to
the Maturity Payment Amount hereof calculated as provided herein as though the date of acceleration was the Final Calculation Day;
provided that if the Closing Level of the Lowest Performing Index on the date of acceleration is equal to or greater than its Starting

    	 	8	 

    	 

    

Level, the amount payable on this Security
will be calculated using a Call Premium that is prorated to the date of acceleration.

__________________

Reference is hereby
made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or its duly authorized
agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

 

 

[The remainder of this page has
been left intentionally blank]

    	 	9	 

    	 

    

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

DATED: 

	
 

	
 

	
 

	
 

	 

	WELLS
                                         FARGO FINANCE LLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
    Its:

	
 

	
 

	
 

	
 

	
Attest:

	
 

	
 

	
 

	
 

	
 

	
 

	
Its:

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

This is one of the Securities of the

series designated therein described

in the within-mentioned Indenture.

 

	
CITIBANK, N.A.,

	
 

	
 

	
as Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

	
 

	
 

	
 

	
 

	
OR

	
 

	
 

	
 

	
 

	
WELLS FARGO BANK, N.A.,

	
 

	
 

	
as Authenticating Agent for the Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Signature

	
 

 

    	 	10	 

    	 

    

[Reverse of Note]

 

 

WELLS FARGO FINANCE LLC

 

MEDIUM-TERM NOTE, SERIES A

Fully and Unconditionally Guaranteed by Wells
Fargo & Company

 

Principal at Risk Securities Linked to the
Lowest Performing of the S&P 500® Index

and the Russell 2000® Index
due October 8, 2021

 

This Security is
one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to
be issued in one or more series under an indenture dated as of April 25, 2018, as amended or supplemented from time to time
(herein called the “Indenture”), among the Company, as issuer, Wells Fargo & Company, as guarantor
(the “Guarantor”) and Citibank, N.A., as trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series A, of the Company.
The amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-, commodity-
or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures of economic or financial
performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest at a fixed
rate or a floating rate. The Securities of this series may mature at different times, be redeemable at different times or not at
all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies.

The Securities are
issuable only in registered form without coupons and will be either (a) book-entry securities represented by one or more
Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued to and
registered in the names of, the beneficial owners or their nominees.

The Company agrees,
to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of interest against
a Holder of this Security.

Guarantee 

The Securities of
this series are fully and unconditionally guaranteed by the Guarantor as and to the extent set forth in the Indenture.

Modification and Waivers 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time
by the

    	 	11	 

    	 

    

Company, the Guarantor and the Trustee
with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be
affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority in principal
amount of the Securities of all series at the time Outstanding affected by certain provisions of the Indenture, acting together
as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company or the Guarantor with
those provisions of the Indenture. Certain past defaults under the Indenture and their consequences may be waived under the Indenture
by the Holders of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders
of all Securities of such series. Solely for the purpose of determining whether any consent, waiver, notice or other action or
Act to be taken or given by the Holders of Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding
Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to be equal to the
amount set forth on the face hereof as the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company or the Guarantor with certain conditions set forth therein, shall not apply to this Security. The remaining
provisions of Section 401 of the Indenture shall apply to this Security.

Authorized Denominations

This Security is
issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.

Registration of Transfer

Upon due presentment
for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis, Minnesota, a new
Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate
Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject to the limitations provided
therein and to the limitations described below, without charge except for any tax or other governmental charge imposed in connection
therewith.

This Security is
exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days after the
Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that
this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect

    	 	12	 

    	 

    

to the Securities represented hereby
has occurred and is continuing. If this Security is exchangeable pursuant to the preceding sentence, it shall be exchangeable for
definitive Securities in registered form, having the same date of issuance, Stated Maturity Date and other terms and of authorized
denominations aggregating a like amount.

This Security may
not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a
nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior to due presentment
of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor
or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or
not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall be affected by notice
to the contrary.

Obligation of the Company Absolute

No reference herein
to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Maturity Payment Amount or the Call Price, as applicable, at the times, place and rate,
and in the coin or currency, herein prescribed, except as otherwise provided in this Security.

No Personal Recourse

No recourse shall
be had for the payment of the Maturity Payment Amount or the Call Price, as applicable, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation or of the Guarantor
or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

Defined Terms

All terms used in
this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise defined
in this Security.

Governing Law

This Security shall
be governed by and construed in accordance with the law of the State of New York, without regard to principles of conflicts of
laws.

    	 	13	 

    	 

    

ABBREVIATIONS

 

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
 

	
 

	
 

	
TEN COM

	
--

	
as tenants in common

	
 

	
 

	
 

	
TEN ENT

	
--

	
as tenants by the entireties

	
 

	
 

	
 

	
JT TEN

	
--

	
as joint tenants with right

	
 

	
 

	
of survivorship and not

	
 

	
 

	
as tenants in common

 

	
UNIF GIFT MIN ACT

	
--

	
 

	
 

	
Custodian

	
 

	
 

	
 

	
(Cust)

	
 

	
(Minor)

 

	
Under Uniform Gifts to Minors Act

	 
	
 

	
(State)

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

 

	
Please Insert Social Security or

	
Other Identifying Number of Assignee

	
 

	
 

 

	
 

	
 

	
 

	
(Please
print or type name and address including postal zip code of Assignee)

 

    	 	14	 

    	 

    

the within Security of WELLS FARGO FINANCE
LLC and does hereby irrevocably constitute and appoint __________________ attorney to transfer the said Security on the books of
the Company, with full power of substitution in the premises.

 

 

Dated: _________________________

 

	 	 
	 	 
	 	 
	 	 

 

 

 

NOTICE: The signature to this assignment must
correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement
or any change whatever.

 

 

 

    	 	15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00300-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00300-of-00352.parquet"}]]