Document:

Exhibit 10.2

 

FIRST AMENDMENT TO SECOND LIEN SECURITY AGREEMENT

 

This First Amendment to Second Lien Security Agreement (this “Security Amendment”), dated December 21, 2015, amends that certain Second Lien Security Agreement dated as of May 1, 2015, made by HALCÓN RESOURCES CORPORATION, a corporation duly formed and existing under the laws of the State of Delaware and each of the other Grantors party thereto, in favor of U.S. BANK NATIONAL ASSOCIATION, as collateral trustee (the “Collateral Trustee”) for the Secured Parties (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”; each capitalized term used and not defined herein has the meaning assigned to such term in the Security Agreement). Notwithstanding anything to the contrary contained in the Security Agreement, the undersigned hereby agree that this Security Amendment may be attached to the Security Agreement.

 

For and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the undersigned Grantors and the Collateral Trustee hereby agree as follows:

 

SECTION 1.                         Amendments to Security Agreement.  In reliance on the representations, warranties, covenants and agreements contained in this Security Amendment, the Security Agreement shall be amended in the manner provided in this Section 1.

 

1.1                               Amended Definition.  The definition of the defined term “Secured Obligation” shall be and hereby is amended and restated in its entirety to read as follows:

 

“Secured Obligation” means (i) any and all Obligations now or hereafter existing under this Agreement, the Indenture or any other Note Document, whether for principal, interest, costs, fees, expenses or otherwise, howsoever created, arising or evidenced, whether direct or indirect, primary or secondary, fixed or absolute or contingent, joint or several, nor now or hereafter existing under this Agreement and each other Note Document and (ii) any other Parity Lien Obligations (as defined in the Collateral Trust Agreement).

 

SECTION 2.                         Miscellaneous.

 

2.1                               Reaffirmation of Security Agreement and Liens.  Any and all of the terms and provisions of the Security Agreement shall, except as amended and modified hereby, remain in full force and effect and are hereby in all respects ratified and confirmed by each Grantor.  Each Grantor hereby agrees that the amendments and modifications herein contained shall in no manner affect or impair the liabilities, duties and obligations of any Grantor under the Security Agreement securing the payment and performance thereof.

 

2.2                               Counterparts, Effectiveness.  This Security Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Security Amendment by facsimile or other electronic means including portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Security Amendment. This Security Amendment shall become

 

 

effective on the date when counterparts hereof executed on behalf of the Grantors and the Collateral Trustee shall have been received by the Collateral Trustee.

 

2.3                               Amendments in Writing.  None of the terms or provisions of this Security Amendment may be waived, amended, supplemented or otherwise modified except in accordance with the Collateral Trust Agreement.

 

2.4                               Invalidity.  In the event that any one or more of the provisions contained in this Security Amendment or in any of the Note Documents to which a Grantor is a party shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or such other Note Document.

 

2.5                               Captions.  Captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Security Amendment.

 

2.6                               Governing Law. This Security Amendment shall be governed by, and construed in accordance with, the laws of the state of New York.

 

2.7                               Acceptance.  Each Grantor hereby expressly waives notice of acceptance of this Security Amendment, acceptance on the part of the Collateral Trustee and the other Secured Parties being conclusively presumed by their request for this Security Amendment and delivery of the same to the Collateral Trustee.

 

[Signature Pages Follow]

 

 

	
COMPANY:
    	
HALCÓN RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark J. Mize
    
	
 
    	
 
    	
Name:
    	
Mark J. Mize
    
	
 
    	
 
    	
Title:
    	
Executive Vice President, Chief
    
	
 
    	
 
    	
Financial Officer and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SUBSIDIARY   GRANTORS:
    	
HALCÓN ENERGY PROPERTIES, INC.
    
	
 
    	
HALCÓN FIELD SERVICES, LLC
    
	
 
    	
HALCÓN HOLDINGS, INC.
    
	
 
    	
HALCÓN OPERATING CO., INC.
    
	
 
    	
HALCÓN RESOURCES OPERATING, INC.
    
	
 
    	
HALCÓN LOUISIANA OPERATING, L.P.
    
	
 
    	
By:   HALCÓN GULF STATES, LLC,
    
	
 
    	
its   General Partner
    
	
 
    	
HALCÓN GULF STATES, LLC
    
	
 
    	
HRC ENERGY LOUISIANA, LLC
    
	
 
    	
HRC ENERGY, LLC
    
	
 
    	
HRC OPERATING, LLC
    
	
 
    	
HRC ENERGY RESOURCES (WV), INC.
    
	
 
    	
HALCÓN ENERGY HOLDINGS, LLC
    
	
 
    	
HALCÓN WILLISTON I, LLC
    
	
 
    	
HALCÓN WILLISTON II, LLC
    
	
 
    	
HRC PRODUCTION COMPANY
    
	
 
    	
HK OIL & GAS, LLC
    
	
 
    	
HK ENERGY OPERATING, LLC
    
	
 
    	
HK LOUISIANA OPERATING, LLC
    
	
 
    	
HK ENERGY, LLC
    
	
 
    	
HK RESOURCES, LLC
    
	
 
    	
THE 7711 CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark J. Mize
    
	
 
    	
 
    	
Name: 
    	
Mark J. Mize
    
	
 
    	
 
    	
Title:
    	
Executive Vice President, Chief
    
	
 
    	
 
    	
Financial Officer and Treasurer
    

 

 

	
 
    	
Acknowledged and Agreed to as of the date   hereof by:
    
	
 
    	
 
    
	
 
    	
 
    
	
COLLATERAL TRUSTEE:
    	
U.S. BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Steven A. Finklea
    
	
 
    	
 
    	
Name: Steven A. Finklea
    
	
 
    	
 
    	
Title: Vice PresidentExhibit 10.3

 

PRIORITY CONFIRMATION JOINDER

 

Reference is made to the Intercreditor Agreement, dated as of May 1, 2015 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Intercreditor Agreement”) between JPMORGAN CHASE BANK, N.A., as Priority Lien Agent for the Priority Lien Secured Parties (as defined therein), U.S. BANK NATIONAL ASSOCIATION, as Second Lien Collateral Trustee for the Second Lien Secured Parties (as defined therein) and U.S. BANK NATIONAL ASSOCIATION, as Third Lien Collateral Trustee for the Third Lien Secured Parties (as defined therein).

 

Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Intercreditor Agreement.  This Priority Confirmation Joinder is being executed and delivered pursuant to Section 4.04(b) of the Intercreditor Agreement as a condition precedent to the debt for which the undersigned is acting as representative being entitled to the rights and obligations of being Additional Second Lien Obligations under the Intercreditor Agreement.

 

1.  Joinder.  The undersigned, U.S. BANK NATIONAL ASSOCIATION, a national banking association, (the “New Representative”), as trustee under that certain Indenture dated as of the date hereof among Halcón, the guarantors party thereto and the New Representative, as trustee hereby:

 

(a)                                 represents that the New Representative has been authorized to become a party to the Intercreditor Agreement on behalf of the Additional Second Lien Secured Parties under the Additional Second Lien Debt Facility as Second Lien Representative under the Intercreditor Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Intercreditor Agreement as fully as if the undersigned had executed and delivered the Intercreditor Agreement as of the date thereof; and

 

(b)                                 agrees that its address for receiving notices pursuant to the Intercreditor Agreement shall be as follows:

 

5555 San Felipe, Suite 1150

Houston, Texas 77057

Fax: (713) 235-9213

Attention: Steven Finklea

 

2.                                      Priority Confirmation.

 

The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Second Lien Debt for which the undersigned is acting as Second Lien Representative hereby agrees, for the benefit of all Secured Parties and each future Secured Debt Representative, and as a condition to being treated as Second Lien Debt under the Intercreditor Agreement, that:

 

(a)                                 all Second Lien Obligations will be and are secured equally and ratably by all Second Liens at any time granted by Halcón or any other Grantor to secure any Obligations in respect of such Series of Second Lien Debt, whether or not upon property otherwise constituting Collateral for such Series of Second Lien Debt, and that all such Second Liens will be enforceable by the Second Lien Collateral Trustee with respect to such Series of Second Lien Debt for the benefit of all Second Lien Secured Parties equally and ratably;

 

 

(b)                                 the New Representative and each holder of Obligations in respect of the Series of Second Lien Debt for which the undersigned is acting as Second Lien Representative are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens, Second Liens and Third Liens and the order of application of proceeds from enforcement of Priority Liens, Second Liens and Third Liens; and

 

(c)                                  the New Representative and each holder of Obligations in respect of the Series of Second Lien Debt for which the undersigned is acting as Second Lien Representative appoints the Second Lien Collateral Trustee and consents to the terms of the Intercreditor Agreement and the performance by the Second Lien Collateral Trustee of, and directs the Second Lien Collateral Trustee to perform, its obligations under the Intercreditor Agreement and the Second Lien Collateral Trust Agreement, together with all such powers as are reasonably incidental thereto.

 

3.                                      Full Force and Effect of Intercreditor Agreement.  Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.

 

4.                                      Governing Law and Miscellaneous Provisions.  The provisions of Article IX of the Intercreditor Agreement will apply with like effect to this Priority Confirmation Joinder.

 

5.                                      Expenses.  Halcón agrees to reimburse each Secured Debt Representative for its reasonable out of pocket expenses in connection with this Priority Confirmation Joinder, including the reasonable fees, other charges and disbursements of counsel.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Priority Confirmation Joinder to be executed by their respective officers or representatives as of December 21, 2015.

 

	
 
    	
U.S. BANK   NATIONAL ASSOCIATION
   as New Representative
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven A Finklea
    
	
 
    	
Name:
    	
Steven A.   Finklea
    
	
 
    	
Title:
    	
Vice   President
    
				

 

The Priority Lien Agent hereby acknowledges receipt of this Priority Confirmation Joinder:

 

	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
as   Priority Lien Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darren Vanek
    
	
 
    	
Name:
    	
Darren   Vanek
    
	
 
    	
Title:
    	
Executive   Director
    
				

 

The Second Lien Collateral Trustee hereby acknowledges receipt of this Priority Confirmation Joinder and agrees to act as Second Lien Collateral Trustee for the New Representative and the holders of the Obligations represented thereby:

 

	
 
    	
U.S. BANK   NATIONAL ASSOCIATION
    
	
 
    	
as Second   Lien Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven A Finklea
    
	
 
    	
Name:
    	
Steven A.   Finklea
    
	
 
    	
Title:
    	
Vice   President
    
				

 

The Third Lien Collateral Trustee hereby acknowledges receipt of this Priority Confirmation Joinder:

 

	
 
    	
U.S. BANK   NATIONAL ASSOCIATION
    
	
 
    	
as Third   Lien Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven A Finklea
    
	
 
    	
Name:
    	
Steven A.   Finklea
    
	
 
    	
Title:
    	
Vice   President
    
				

 

 

	
 
    	
Acknowledged   and Agreed to by:
    
	
 
    	
 
    
	
 
    	
HALCÓN RESOURCES   CORPORATION, as   Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark   J. Mize
    
	
 
    	
Name:
    	
Mark J.   Mize
    
	
 
    	
Title:
    	
Executive   Vice President, Chief Financial Officer and Treasurer

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