Document:

Unassociated Document

 

Exhibit 10.2

 

FIRST AMENDMENT TO

SECOND LIEN TERM LOAN CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO SECOND LIEN TERM LOAN CREDIT AGREEMENT (this “Amendment”), effective as of the 6th day of December, 2011 (the “First Amendment Effective Date”), is entered into by and among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), the Guarantors party hereto (the
“Guarantors”), the Lenders party hereto (the “Lenders”) and CAPITAL ONE, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into that certain Second Lien Term Loan Credit Agreement dated September 28, 2011 (as amended or restated from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement; and

 

WHEREAS, said parties are willing to so amend the Credit Agreement subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, the Borrower, the Guarantors, the Lenders 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. Amendments to Section 1.01.

 

	
(a)  

	
Section 1.01 of the Credit Agreement is hereby amended to delete the definition of “EBITDAX” in its entirety and substitute the following therefor:

 

“EBITDAX” means, for any period, the sum of Consolidated Net Income for such period calculated on a trailing four quarter basis plus the following expenses or charges to the extent deducted from Consolidated Net Income in such period: interest, income Taxes, depreciation, depletion, amortization, expenses associated with the exploration of Oil and Gas Properties, all non-cash charges and adjustments (including stock-based compensation, impairment of asset values, non-cash adjustments to derivative carrying values, non-cash adjustments to asset retirement obligations and other similar items as from time to time
required under GAAP) and all non-recurring expenses, minus all non-cash income added to Consolidated Net Income.  Notwithstanding the foregoing, EBITDAX shall be Consolidated Net Income plus the aforementioned expenses or charges (i) for the most recently ended quarter multiplied by four (4) with respect to the quarter ending December 31, 2011, (ii) for the most recently ended two (2) quarters multiplied by two (2) with respect to the quarter ending March 31, 2012, and (iii) for the most recently ended three (3) quarters multiplied by four-thirds (4/3) with respect to the quarter ending June 30, 2012.  With respect to any acquisitions completed in any fiscal quarter, EBITDAX shall be calculated on a pro forma basis as if such acquisitions had taken place as of the beginning of the quarter during which such acquisitions take place.

 

  

 

  

 

	
(b)  

	
Section 1.01 of the Credit Agreement is hereby amended to add the following new definition in proper alphabetical order:

 

“First Amendment Effective Date” means December 6, 2011.

 

3. Amendment to Section 8.01.  Section 8.01 of the Credit Agreement is hereby amended to restate in their entirety subsections (d) and (m) thereof as follows:

 

“(d)           Certificate of Financial Officer - Swap Agreements.  Concurrently with the delivery of each Reserve Report hereunder and concurrently with any delivery of financial statements under Section 8.01(b), a certificate of a Financial Officer, in form and substance reasonably satisfactory to the Administrative Agent, setting forth as of a recent date, a true and complete list of all Swap Agreements of the Borrower and each Restricted Subsidiary, the material terms thereof (including the
type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value therefor, any new credit support agreements relating thereto, any margin required or supplied under any credit support document, and the counterparty to each such agreement; provided that each such certificate furnished concurrently with the delivery of financial statements under Section 8.01(b) shall also include the calculations described in Section 9.18(a)(i).

 

(m)           Production Report and Lease Operating Statements.  Within 45 days after the end of each calendar month, a report setting forth, for each calendar month during the then current fiscal year to date, the volume of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting forth the related ad valorem, severance and production taxes and lease operating expenses attributable thereto and incurred for each such
calendar month.”

 

  

2

  

 

4. Amendment to Section 9.01.  Section 9.01 of the Credit Agreement is hereby amended to restate in its entirety subsection (c) thereof as follows:

 

“(c)           Total Debt to EBITDAX.  The Borrower will not permit, as of the last day of any fiscal quarter, its ratio of (i) total Debt of the Borrower and the Restricted Subsidiaries as of such date to (ii) EBITDAX of the Borrower and the Restricted Subsidiaries for the trailing four quarter period then ended to exceed (A) 5.25 to 1.00 commencing with the fiscal quarter ending June 30, 2011 through the fiscal quarter ending September 30, 2011, (B) 5.00 to 1.00 for the fiscal quarter ending December 31, 2011 and (C) 4.75 to 1.00 commencing with the fiscal
quarter ending March 31, 2012 and for each fiscal quarter thereafter.”

 

5. Amendment to Section 9.04.  Section 9.04 of the Credit Agreement is hereby amended to restate in its entirety clause (c) thereof as follows:

 

“(c)           without limiting the dividends permitted by Section 9.04(b), the Borrower may declare and pay cash dividends on preferred stock permitted hereunder so long as (i) no Event of Default exists at the time of, or is caused by, such payment, (ii) after giving effect to such payment, Liquidity is equal to or greater than the greater of (x) two and one-half percent (2.5%) of the Borrowing Base (as determined under the First Lien Credit Agreement) then in effect and (y) $5,000,000, and (iii) such dividends do not exceed $20,000,000 in any calendar
year;”.

 

6. Amendment to Section 9.18.  Section 9.18 of the Credit Agreement is hereby amended to restate in its entirety clause (a)(i) thereof as follows:

 

“(i)           Swap Agreements in respect of commodities (A) with an Approved Counterparty and (B) the notional volumes for which (when aggregated with other commodity Swap Agreements in effect for the same periods as such Swap Agreement, other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, for each of crude oil (including natural gas liquids) and natural gas, calculated separately, (1) 80% of the reasonably anticipated production of its Total Proved Reserves for each month during the period in which such Swap Agreement is in
effect, and (2) (x) 100% of the most recent production as provided in the report most recently delivered by the Borrower pursuant to Section 8.01(m) for any succeeding twenty-four month period; provided that, for any Swap Agreement executed during the last quarter of any calendar year, such period shall be extended to December 31st of the second calendar year following execution of such Swap Agreement and (y) 75% of the most recent production as provided in the report most recently delivered by the Borrower pursuant to Section 8.01(m) for any period beyond such twenty-four month period (or such extended period as provided in the foregoing proviso);”.

 

  

3

  

 

7. Ratification.  Each of the Borrower and the Guarantors hereby ratifies all of its respective obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party are and shall continue to be in full force and effect as amended and modified by this Amendment.  Nothing in this Amendment extinguishes, novates or releases any right, claim, lien, security interest or entitlement of
any of the Lenders or the Administrative Agent created by or contained in any of such documents nor is the Borrower nor any Guarantor released from any covenant, warranty or obligation created by or contained herein or therein.

 

8. Representations and Warranties.  The Borrower and Guarantors hereby represent and warrant to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower and Guarantors, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower and Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (c) the representations and warranties contained in the Credit Agreement and the Loan Documents are true and correct on and as of the date hereof in all material respects as though made as of the date hereof (except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date), (d) no Default or Event of Default exists under the Credit Agreement or under any Loan Document as of the First Amendment Effective Date and (e) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower and Guarantors.

 

9. Conditions to Effectiveness.  This Amendment shall be effective on the First Amendment Effective Date upon satisfaction of the following conditions:

 

	
(a)  

	
the Borrower, the Guarantors and Required Lenders shall have executed and delivered to the Administrative Agent counterparts of this Amendment; and

 

	
(b)  

	
the Borrower shall have paid to the Administrative Agent and the Lenders all fees and expenses that are required pursuant to Section 13 of this Amendment or otherwise due in connection with this Amendment.

 

10. Counterparts.  This Amendment may be signed in any number of counterparts, which may be delivered in original, electronic or facsimile form each of which shall be construed as an original, but all of which together shall constitute one and the same instrument.

 

11. Governing Law.  This Amendment, all Notes, the other Loan Documents and all other documents executed in connection herewith shall be deemed to be contracts and agreements under the laws of the State of New York and of the United States of America and for all purposes shall be construed in accordance with, and governed by, the laws of New York and of the United States.

 

  

4

  

 

12. Final Agreement of the Parties.  Any previous agreement among the parties with respect to the subject matter hereof is superseded by the Credit Agreement, as amended by this Amendment.  Nothing in this Amendment, express or implied is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Amendment.

 

13. Payment of Fees and Expenses.  The Borrower also agrees to pay to each Lender which consents to this Amendment (by delivering to the Administrative Agent an executed counterpart hereof) by the specified consent deadline an amendment fee equal to 0.08% of such Lender’s outstanding Loans, which amendment fee shall be payable on the First Amendment Amendment Effective Date.

 

[Signature Pages Follow]

 

  

5

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the First Amendment Effective Date.

 

 

	 	BORROWER: 

MAGNUM HUNTER RESOURCES

CORPORATION, a Delaware corporation

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Chief Financial Officer

GUARANTORS:

PRC WILLISTON, LLC,

a Delaware limited liability company

By:           Magnum Hunter Resources Corporation,

                 its sole member

 

                By:           /s/ Ronald D. Ormand                                                      

                                 Ronald D. Ormand

 
                                Chief Financial Officer

MAGNUM HUNTER RESOURCES LP,

a Delaware limited partnership

By:           Magnum Hunter Resources GP, LLC,

                 its general partner

 
                By:       Magnum Hunter Resources Corporation,

 
                             its sole member

 

                             By:           /s/ Ronald D. Ormand 

                                             Ronald D. Ormand

 
                                            Chief Financial Officer

 

 

 

 

 

 

 

 

  

6

  

 

 

	 	MAGNUM HUNTER RESOURCES GP, LLC, 
a Delaware limited liability company

By:     Magnum Hunter Resources Corporation,

           its sole member

   

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

 
Chief Financial Officer

TRIAD HUNTER, LLC,

a Delaware limited liability company

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Vice President

EAGLE FORD HUNTER, INC.,

a Colorado corporation

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Secretary

MAGNUM HUNTER PRODUCTION INC.,

a Kentucky corporation

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Chief Financial Officer

NGAS HUNTER, LLC

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Vice President and Treasurer

 

 

 

  

  

  

 

	 	 
MHR CALLCO CORPORATION,

a corporation existing under the laws of the Province of Alberta

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Vice President

MHR EXCHANGECO CORPORATION,

a corporation existing under the laws of the Province of Alberta

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

 
Vice President

WILLISTON HUNTER CANADA, INC.,

a corporation existing under the laws of the Province of Alberta

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

 
Executive Vice President and Chief Financial Officer

WILLISTON HUNTER INC.,

a Delaware corporation

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

 
Executive Vice President and Chief Financial Officer

 

 

 

  

7

  

 

	 	WILLISTON HUNTER ND, LLC, 
a Delaware limited liability company

By:     /s/ Ronald D. Ormand

Ronald D. Ormand

Vice President and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

8

  

 

	 	ADMINISTRATIVE AGENT AND LENDER: 

CAPITAL ONE, NATIONAL ASSOCIATION

By:     /s/ Nancy M. Mak

Nancy M. Mak

    Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

9

  

 

 

	 	 
LENDER:

BMO HARRIS FINANCING, INC.

By:      /s/ Gumaro Tijerina

Gumaro Tijerina

Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

10

  

 
 

	 	LENDER: 

CITIBANK, N.A.

By:       /s/ Don Dimitrievich

Don Dimitrievich

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

11

  

 

	 	 
LENDER:

DEUTSCHE BANK TRUST COMPANY AMERICAS

By:     /s/ Michael Getz

Michael Getz

Vice President

By:     /s/ Carin Keegan

Carin Keegan

Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

12

  

 

	 	LENDER: 

UNIONBANCAL EQUITIES, INC.

By:     /s/ John W. Schmidt

John W. Schmidt

Vice President

By:     /s/ Margaret Elower

Margaret Elower

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

13

  

 

	 	LENDER: 

SUNTRUST BANK, N.A.

By:     /s/ Gregory C. Magnuson

Gregory C. Magnuson

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14peregrine_s8-ex0420.htm

EXHIBIT 4.20

FORM OF STOCK OPTION AWARD AGREEMENT

UNDER THE PEREGRINE PHARMACEUTICALS, INC.

2011 STOCK INCENTIVE PLAN

This Stock Option Award Agreement (“Agreement”) is between Peregrine Pharmaceuticals, Inc. (“Company”) and ________________________ (the “Optionee”), and is effective as of the ____ day of _____________, 20__ (“Grant Date”).

 

RECITALS

 

A. The Board of Directors of the Company (“Board”) has adopted the Plan to promote the interests and long-term success of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the continued growth and profitability of the Company.

 

B. To the extent not specifically defined in this Agreement, all capitalized terms used in this Agreement shall have the meaning set forth in the Plan.

 

AGREEMENT

 

In consideration of the mutual covenants and conditions hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Optionee agree as follows:

 

1. Grant of Option.  Subject to the terms of this Agreement and Article 6 of the Plan, the Company grants to the Optionee the right and option to purchase from the Company all or any part of an aggregate of _________ shares of Stock (“Option”).  The delivery of any document evidencing the Option is subject to the provisions of Section 6.1(d) of the Plan.  The Option granted under this Agreement  ̈is   ̈is not intended to be an “Incentive Stock Option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2. Purchase Price.  The purchase price under this Agreement is $_________ per share of Stock, as determined by the Committee, which shall not be less than the Fair Market Value of a share of Stock on the Grant Date.

 

3. Vesting of Option.  The Option shall vest and be exercisable according to the following schedule:

 

[INSERT VESTING SCHEDULE HERE]

 

4. Exercise of Option.  This Option may be exercised, to the extent vested (under Section 3 above), in whole or in part at anytime before the Option expires by delivery of a written or electronic notice of exercise (pursuant to Section 5 below) and payment of the purchase price.  The purchase price may be paid in cash or such other method permitted by the Committee under Section 6.1(c) of the Plan and communicated to the Optionee before the date the Optionee exercises the Option.

 

5. Method of Exercising Option.  Subject to the terms of this Agreement, the Option may be exercised by timely delivery to the Company of written or electronic notice, which notice shall be effective on the date received by the Company.  The notice shall state the Optionee’s election to exercise the Option and the number of underlying shares in respect of which an election to exercise has been made.  Such notice shall be signed by the Optionee, or if the Option is exercised by a person or persons other than the Optionee because of the Optionee’s death, such notice must be signed by such other person or persons and shall be accompanied by proof acceptable to the Company of the legal right of such person or persons to exercise the Option.

 

6. Term of Option.  The Option granted under this Agreement expires, unless sooner terminated, ten (10) years from the Grant Date, through and including the normal close of business of the Company on the tenth (10th) anniversary of the Grant Date (“Expiration Date”).

 

  

  

  

 

7. Termination of Employment.

 

(a)           If the Optionee Terminates Employment for any reason other than death or Disability, the Optionee may at any time within the ninety (90) day period after the date of his or her Termination of Employment exercise the Option to the extent that the Optionee was entitled to exercise the Option at the date of termination, provided that in no event shall the Option be exercisable after the Expiration Date.

 

(b)           If the Optionee Terminates Employment by reason of his death or Disability the Option will lapse on the earlier of (i) the Option’s expiration date, or (ii) Twelve (12) months after the date the Optionee Terminates Employment on account of Disability or death.  The Option may be exercised following the death or Disability of Option only if the Option was exercisable by Option immediately prior to his or her death or Disability.  In no event shall the Option be exercisable after the Expiration Date.

 

8. Nontransferability.  The Options granted by this Agreement shall not be transferable by the Optionee or any other person claiming through the Optionee, either voluntarily or involuntarily, except by will or the laws of descent and distribution or as otherwise provided by the Plan’s Committee, in accordance with Article 13 of the Plan.

 

9. Continuation of Employment.  This Agreement shall not be construed to confer upon the Optionee any right to continue employment with the Company and shall not limit the right of the Company, in its sole and absolute discretion, to terminate Optionee’s employment at any time.

 

10. Administration.  This Agreement shall at all times be subject to the terms and conditions of the Plan and the Plan shall in all respects be administered by the Committee in accordance with the terms of and as provided in the Plan.  The Committee shall have the sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the majority of the Committee with respect thereto and to this Agreement shall be final and binding upon the Optionee and the Company. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.

 

11. Waiver and Modification.  The provisions of this Agreement may not be waived or modified unless such waiver or modification is in writing and signed by a representative of the Committee.

 

12. Adjustments.  The number of shares of Stock issued to Optionee pursuant to this Agreement shall be adjusted by the Committee pursuant to Section 5.3 of the Plan, in its discretion, in the event of a change in the Company’s capital structure.

 

13. Securities Act.  The Company shall not be required to deliver any shares of Stock pursuant to the vesting of Options if, in the opinion of counsel for the Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations.

 

14. Voting and Other Shareholder Related Rights.  The Optionee will have no voting rights or any other rights as a shareholder of the Company with respect to any Options until exercised by the Optionee.

 

15. Copy of Plan.  By the execution of this Agreement, the Optionee acknowledges receipt of a copy of the Plan.

 

16. Governing Law.  This Agreement shall be interpreted and administered under the laws of the State of California.

 

17. Amendments.  This Agreement may be amended only by a written agreement executed by the Company and the Optionee.

 

18. Tax Withholding for Non-Qualified Stock Options.  Unless otherwise provided by the Committee prior to the vesting of Options, the Optionee shall satisfy any federal, state, local or foreign employment or income taxes due upon the vesting of Options (or otherwise) by having the Company withhold from those shares of Stock that the Optionee would otherwise be entitled to receive, a number of shares having a Fair Market Value equal to the minimum statutory amount necessary to satisfy the Company’s applicable federal, state, local and foreign income and employment tax withholding obligations.  Any such withholding shall be subject to the provisions of applicable law and to any conditions the Committee may determine to be necessary to comply with Rule 16b-3 or its successors under the Exchange Act.  In lieu of, and subject to, the above, the Committee may permit the Optionee to satisfy any federal, state, local, or foreign employment or income taxes due upon the vesting of Options (or otherwise) though the other withholding methods permitted by the Committee under Section 17.2 of the Plan.

 

  

  

  

 

19. Tax upon Disposition of Shares Subject to Section 422 Restrictions. If the Optionee sells, or makes a disposition (whether by exchange, gift, or other disposition within the meaning of Section 422 of the Code) of any shares of Stock intended to be eligible for treatment as an Incentive Stock Option prior to the later of (i) one (1) year from the date of acquisition of such shares of Stock or (ii) two (2) years of the Grant Date of the related Option, the Optionee will notify the Company of such disposition no later than fifteen (15) days following the date of the disposition.  Such notification shall include the date or dates of the disposition, the number of shares of Stock of which the Optionee disposed, and the consideration received, if any, for such shares of Stock.  If the Company so requests, the Optionee shall forward to the Company any amount requested by the Company for the purpose of satisfying its liability, if any, to withhold federal, state or local income or earnings tax or any other applicable tax or assessment (plus interest or penalties thereon, if any, caused by delay in making such payment) incurred by reason of such disposition.

 

MANY OF THE PROVISION OF THIS AWARD AGREEMENT ARE SUMMARIES OF SIMILAR PERTINENT PROVISIONS OF THE PLAN.  TO THE EXTENT THAT THIS AGREEMENT IS SILENT ON AN ISSUE OR THERE IS A CONFLICT BETWEEN THE PLAN AND THIS AGREEMENT, THE PLAN PROVISIONS SHALL CONTROL.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and Optionee has signed this Agreement, and this Agreement shall be effective as of the day and year first written above.

 

	
 

 

	 	
Peregrine Pharmaceuticals, Inc.

	 	 	
By:

	 
	 	 	
Name:

	 
	Date	 	
Title:

	 
	 	 	 	 
	 	 	 	 
	 	 	
Optionee

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