Document:

Exhibit 10.11

 

Execution Version

 

CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT

 

This Consent, Amendment No. 10 and Joinder to Credit Agreement (this “Agreement”) dated as of September 14, 2016 (the “Effective Date”), is among Extraction Oil & Gas Holdings, LLC, a Delaware limited liability company (the “Borrower”), Extraction Finance Corp., a Delaware corporation, Extraction Oil & Gas, LLC, a Delaware limited liability company, XTR Midstream, LLC, a Delaware limited liability company, 7N, LLC, a Delaware limited liability company, Mountaintop Minerals, LLC, a Delaware limited liability company, 8 North, LLC, a Delaware limited liability company, Elevation Midstream, LLC, a Delaware limited liability company, XOG Services, LLC, a Delaware limited liability company, and XOG Services, Inc., a Colorado corporation (collectively, the “Guarantors”), the undersigned Existing Lenders (as defined below), Citibank, N.A. (the “New Lender”), and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”) and as Issuing Lender (the “Issuing Lender”).

 

INTRODUCTION

 

A.                                    The Borrower, the financial institutions party thereto as Lenders (the “Existing Lenders”, and together with the New Lender (as defined below), collectively, the “Lenders”), the Issuing Lender, and the Administrative Agent have entered into the Credit Agreement dated as of September 4, 2014, as amended by the Amendment No. 1 dated as of September 24, 2014, the Amendment No. 2 and Joinder dated as of November 10, 2014, the Amendment No. 3 dated as of December 30, 2014, the Waiver dated as of February 12, 2015, the Consent Agreement dated as of February 27, 2015, the Consent Agreement dated as of March 25, 2015, the Waiver dated as of April 28, 2015, the Amendment No. 4 and Joinder dated as of May 27, 2015, the Amendment No. 5 dated as of September 1, 2015, the Amendment No. 6 dated as of September 10, 2015, the Amendment No. 7 and Joinder dated as of December 15, 2015, the Amendment No. 8 and Joinder dated as of June 13, 2016, and the Amendment No. 9 dated as of August 12, 2016 (as so amended and modified and as may be otherwise amended, restated, or modified from time to time, the “Credit Agreement”).

 

B.                                    The Guarantors have entered into the Guaranty Agreement dated as of September 4, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) in favor of the Administrative Agent for the benefit of the Secured Parties (as defined in the Credit Agreement).

 

C.                                    The Borrower desires to merge with and into Extraction Oil & Gas, LLC, a Delaware limited liability company (the “Company”), with the Company being the surviving entity (the “Proposed Merger”).  The Proposed Merger will cause the Borrower not to be in compliance with the limitations set forth in Section 6.7(a) of the Credit Agreement.

 

D.                                    Contemporaneously with the Proposed Merger, the Company will convert from a Delaware limited liability company to a Delaware corporation (the “Proposed Conversion”; and the Company, as converted, the “Converted Company”), and the Converted Company will assume the rights and obligations of the Borrower as the borrower under the Credit Agreement and conduct an initial public offering of the Equity Interests of the Converted Company that will

 

 

be registered with the Securities Exchange Commission under the Securities Act of 1933 (the “Proposed IPO”).  The Proposed Conversion will cause the Borrower to not be in compliance with the limitations set forth in Section 6.7(b) and (c) of the Credit Agreement.

 

E.                                     The Lenders agree to increase the Borrowing Base to $350,000,000 as an interim redetermination of the Borrowing Base requested by the Borrower.

 

F.                                      In connection with the Borrowing Base redetermination provided for in the annex attached hereto, the New Lender desires to become party to the Credit Agreement as a Lender and the Commitments of the Existing Lenders and the New Lender shall be adjusted to the amounts set forth on Schedule I attached hereto.

 

G.                                    The Borrower has requested that the Lenders and the Administrative Agent, subject to the terms and conditions hereof (i) consent to the Proposed Merger and Proposed Conversion for purposes of Section 6.7 of the Credit Agreement and (ii) amend the Credit Agreement as set forth herein.

 

THEREFORE, in fulfillment of the foregoing, the Borrower, the Guarantors, the Administrative Agent, the Issuing Lender, and the undersigned Lenders hereby agree as follows:

 

Section 1.                                           Definitions; References.  Unless otherwise defined in this Agreement, each term used in this Agreement which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.

 

Section 2.                                           Joinder of New Lender.  In lieu of executing and delivering an Assignment and Assumption, each Existing Lender whose Pro Rata Share of the Commitments is decreasing in connection herewith (each an “Assignor” and, collectively, the “Assignors”) and the New Lender and each Existing Lender whose Pro Rata Share of the Commitments is increasing in connection herewith (each an “Increasing Lender”; and together with the New Lender, each an “Assignee” and, collectively, the “Assignees”) hereby agree to, and the Borrower hereby accepts, the following:

 

(a)                                      For an agreed consideration, each Assignor hereby irrevocably sells and assigns to the respective Assignees, and each Assignee hereby irrevocably purchases and assumes from the respective Assignors, subject to and in accordance with the terms hereof and the Credit Agreement, as of the Effective Date, (i) such percentage in and to all of the respective Assignors’ rights and obligations in their respective capacities as Lenders under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount identified in Schedule I hereto that would result in the Existing Lenders and Assignees having the respective Commitments set forth in Schedule I attached hereto (including without limitation any letters of credit and guaranties provided in connection with the Credit Agreement) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the respective Assignors (in their respective capacities as Lenders) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory

 

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claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by any Assignor to any Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as an “Assigned Interest”).  Each such sale and assignment is without recourse to any Assignor and, except as expressly provided in this Agreement, without representation or warranty by any Assignor.

 

(b)                                      Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements referred to in Section 5.2 of the Credit Agreement and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to agree to the various matters set forth herein.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement.

 

(c)                                       From and after the Effective Date, Administrative Agent shall make all payments in respect of each Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignees whether such amounts have accrued prior to, on or after the Effective Date.  The Assignors and Assignees shall make all appropriate adjustments in payments by Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

 

(d)                                      Administrative Agent, Issuing Lender and Borrower hereby consent to the Assignors’ assignment of the Assigned Interests to the Assignees, waive any other conditions to the effectiveness of such assignment that are not expressly set forth in this Agreement, and agree that the terms of this Agreement shall constitute an Assignment and Assumption.  Administrative Agent hereby consents to an one-time waiver of the $3,500 processing and recordation fee that would otherwise be payable by New Lender pursuant to Section 9.7(b)(iv) of the Credit Agreement as a result of the assignment provided for herein.

 

Section 3.                                           Consent.

 

(a)                                      Notwithstanding the limitations contained in Section 6.7 of the Credit Agreement, subject to the terms and conditions of this Agreement, the Lenders and the Administrative Agent hereby consent to the Borrower’s entry into the Proposed Merger and the Proposed Conversion.  The consent by the Lenders and the Administrative Agent described in this Section 3 as to the Proposed Merger and the Proposed Conversion is contingent upon the satisfaction of the conditions precedent set forth in clause (b) of this Section 3.  The consent by the Lenders and the Administrative Agent contained in this Section 3 is limited to the Proposed Merger and the Proposed Conversion, and shall not be construed to be a consent to any Loan Party taking any other corporate actions not otherwise permitted under the terms of the Credit Agreement, after giving effect to this Agreement, or a permanent waiver of Section 6.7 of the Credit Agreement (except as to the Proposed Merger and the Proposed Conversion, as limited above) or any other terms, provisions, covenants, warranties or agreements contained in any Loan Document.  The Lenders and the Administrative Agent reserve the right to exercise any rights and remedies available to them in connection with any future defaults or non-compliance

 

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with respect to Section 6.7 of the Credit Agreement and any other provision of any other Loan Document.

 

(b)                                      The consent by the Lenders and the Administrative Agent described in this Section 3 shall become effective on the date on which the IPO occurs (the “IPO Effective Date”) upon the Administrative Agent’s receipt of the following, duly executed by all the parties thereto, in form and substance reasonably satisfactory to the Administrative Agent:

 

(1)                                 an assignment and assumption agreement and any other documents, agreements, or instruments necessary or desired by the Administrative Agent to evidence the Converted Company’s assumption of Borrower’s rights and obligations as the borrower under the Loan Documents;

 

(2)                                 a reaffirmation of the Guaranty executed by all Subsidiaries of the Converted Company existing on the IPO Effective Date;

 

(3)                                 amendments and/or reaffirmations of the Security Documents, together with appropriate UCC-1 and/or UCC-3 financing statements, if any, necessary or reasonably desirable for filing with the appropriate authorities and any other documents, agreements, or instruments necessary to create, perfect or maintain an Acceptable Security Interest in the Collateral described in the Security Documents, and together with any pledged stock or membership interest certificates and pledged notes or instruments, in each case with instruments of transfer, granting the Administrative Agent an Acceptable Security Interest in such Equity Interests, notes or instruments, as applicable;

 

(4)                                 a certificate from a Responsible Officer of the Converted Company dated as of the IPO Effective Date stating that as of such date (A) the representations and warranties made by any Loan Party or any officer or employee of any Loan Party contained in the Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on such date, except that any representation and warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date, (B) no Default has occurred and is continuing; and (C) all conditions precedent set forth in this Section 3(b) have been met;

 

(5)                                 a certificate from a Responsible Officer of the Converted Company certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions, (C) organizational documents, and (D) governmental approvals, if any, with respect to the Loan Documents to which such Person is a party;

 

(6)                                 certificates of good standing for the Converted Company in each state in which each such Person is organized or qualified to do business, which certificate shall be (A) dated a date not earlier than 30 days prior to IPO Effective Date or (B) otherwise effective on the IPO Effective Date;

 

(7)                                 a legal opinion of Vinson & Elkins L.L.P. as outside counsel to the Loan Parties; and

 

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(8)                                 a legal opinion of Dill Dill Carr Stonbraker & Hutchings, P.C. as Colorado counsel to the Loan Parties.

 

If the conditions set forth in this Section 3(b) have not been satisfied on or before December 31, 2016, the consent by the Lenders and the Administrative Agent described in this Section 3 as to the Proposed Merger and the Proposed Conversion shall not be effected and the Proposed Merger and Proposed Conversion shall not be permitted under the Credit Agreement.  If the conditions set forth in this Section 3(b) are satisfied on or before December 31, 2016, and the Proposed Merger, the Proposed Conversion, and the Proposed IPO occur, all references to “Borrower” in any Loan Document shall be deemed to be references to the Converted Company.

 

Section 4.                                           Amendments to Credit Agreement.  Upon the satisfaction of the conditions specified in Section 8 of this Agreement, and effective as of the date set forth above:

 

(a)                                      Exhibit C to the Credit Agreement (Form of Compliance Certificate) is amended to read in its entirety as set forth on Exhibit C attached hereto;

 

(b)                                      Exhibit E to the Credit Agreement (Form of Notice of Borrowing) is amended to read in its entirety as set forth on Exhibit E attached hereto;

 

(c)                                       the Credit Agreement is hereby amended as reflected in Annex A attached hereto; and

 

(d)                                      Schedule I to the Credit Agreement (Commitments, Contact Information) is amended to read in its entirety as set forth in Schedule I attached to Annex A.

 

Section 5.                                           Reaffirmation of Liens.

 

(a)                                      Each of the Borrower and each Guarantor (i) is party to certain Security Documents securing and supporting the Borrower’s and Guarantors’ obligations under the Loan Documents, (ii) represents and warrants that it has no defenses to the enforcement of the Security Documents and that according to their terms the Security Documents will continue in full force and effect to secure the Borrower’s and Guarantors’ obligations under the Loan Documents, as the same may be amended, supplemented, or otherwise modified, and (iii) acknowledges, represents, and warrants that the liens and security interests created by the Security Documents are valid and subsisting and create a first and prior Lien (subject only to Permitted Liens) in the Collateral to secure the Secured Obligations.

 

(b)                                      The delivery of this Agreement does not indicate or establish a requirement that any Loan Document requires any Guarantor’s approval of amendments to the Credit Agreement.

 

Section 6.                                           Reaffirmation of Guaranty.  Each Guarantor hereby ratifies, confirms, and acknowledges that its obligations under the Guaranty and the other Loan Documents 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 all of the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed Obligations may have been amended by this Agreement.  Each Guarantor hereby acknowledges

 

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that its execution and delivery of this Agreement do not indicate or establish an approval or consent requirement by such Guarantor under the Credit Agreement in connection with the execution and delivery of amendments, modifications or waivers to the Credit Agreement, the Notes or any of the other Loan Documents.

 

Section 7.                                           Representations and Warranties.  Each of the Borrower and each Guarantor represents and warrants to the Administrative Agent and the Lenders  that:

 

(a)                                      the representations and warranties set forth in the Credit Agreement and in the other Loan Documents are true and correct in all material respects as of the date of this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply if such representation or warranty is already subject to a materiality qualifier in the Credit Agreement or such other Loan Document;

 

(b)                                      (i) the execution, delivery, and performance of this Agreement are within the corporate, limited partnership or limited liability company power, as appropriate, and authority of the Borrower and Guarantors and have been duly authorized by appropriate proceedings and (ii) this Agreement constitutes a legal, valid, and binding obligation of the Borrower and Guarantors, enforceable against the Borrower and Guarantors in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; and

 

(c)                                       as of the effectiveness of this Agreement and after giving effect thereto, no Default or Event of Default has occurred and is continuing.

 

Section 8.                                           Effectiveness.  This Agreement shall become effective as of the date hereof upon the occurrence of all of the following:

 

(a)                                      Documentation. The Administrative Agent shall have received:

 

(1)                                 this Agreement, duly and validly executed by the Borrower, the Guarantors, the Administrative Agent, the Issuing Bank each Existing Lender and the New Lender, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders;

 

(2)                                 a Note payable to the New Lender in the amount of such New Lender’s Commitment (after giving effect to this Agreement), duly and validly executed by the Borrower;

 

(3)                                 a Note payable to each Increasing Lender in the amount of such Increasing Lender’s Commitment (after giving effect to this Agreement), duly and validly executed by the Borrower;

 

(4)                                 a certified, fully executed, correct and complete copy of the Bayswater Acquisition Agreement as in effect on the Effective Date;

 

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(5)                                 a certificate from a Responsible Officer of each Loan Party certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions, (C) organizational documents, and (D) governmental approvals, if any, with respect to the Loan Documents to which such Person is a party; or if applicable, as to each Loan Party, certifying that there has been no change thereto since the Responsible Officer’s certificate of such Loan Party most recently delivered in connection with the Credit Agreement or any amendment thereto; and

 

(6)                                 duly and validly executed reaffirmations and amendments to existing Mortgages in form and substance satisfactory to the Administrative Agent and as requested by the Administrative Agent.

 

(b)                                      Representations and Warranties.  The representations and warranties in this Agreement being true and correct in all material respects before and after giving effect to this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply if such representation or warranty is already subject to a materiality qualifier in the Credit Agreement or such other Loan Document.

 

(c)                                       No Default or Event of Default. There being no Default or Event of Default which has occurred and is continuing.

 

(d)                                      Expenses.  The Borrower’s having paid (1) all costs, expenses, and fees which have been invoiced and are payable pursuant to Section 9.1 of the Credit Agreement or any other agreement, (2) the upfront fees required under Section 9 below, and (3) all fees required under that certain Fee Letter dated as of September 14, 2016, among Arranger, Wells Fargo and Borrower.

 

Section 9.                                           Upfront Fees.

 

(a)                                      In consideration of the agreements of the Lenders hereunder, the Borrower agrees to pay to the Administrative Agent, (i) for each Group A Lender (as defined below), an increase upfront fee in an amount equal to 0.28% of such Group A Lender’s New Money Amount (as defined below)(collectively the “Group A Upfront Fees”) and (ii) for each Group B Lender (as defined below), an increase upfront fee in an amount equal to 0.34% of such Group B Lender’s New Money Amount (collectively and together with the Group A Upfront Fees, the “Upfront Fees”).

 

(b)                                      Each Lender’s Upfront Fee (i) is payable in U.S. dollars in immediately available funds, free and clear of, and without deduction for, any and all present or future applicable taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto (with appropriate gross-up for withholding taxes), (ii) is not refundable under any circumstances, (iii) will not be subject to counterclaim, defense, setoff or otherwise affected, (iv) is deemed fully earned by such Lender once the Effective Date has occurred, and (v) is due and payable on the Effective Date.

 

(c)                                       “Group A Lender” means each Lender with an “X” next to its name under the “Group A Lender” column of Schedule 9 attached hereto and incorporated herein.

 

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(d)                                      “Group B Lender” means each Lender with an “X” next to its name under the “Group B Lender” column of Schedule 9.

 

(e)                                       “New Money Amount” means, as to any Lender, the positive amount, if any, equal to (i) such Lender’s Pro Rata Share of the $350,000,000 Borrowing Base in effect under the Credit Agreement, after giving effect to this Agreement, minus (y) such Lender’s Pro Rata Share of the $285,000,000 Borrowing Base in effect under the Credit Agreement immediately prior to the issuance of the July 2021 7.875% Senior Notes, in each case, as set forth on Schedule 9.  Each Lender’s New Money Amount is set forth on Schedule 9.

 

Section 10.                                    Effect on Loan Documents.  Except as amended herein, the Credit Agreement and the Loan Documents remain in full force and effect as originally executed and are hereby ratified and confirmed, and nothing herein shall act as a waiver of any of the Administrative Agent’s or Lenders’ rights under the Loan Documents.  This Agreement is a Loan Document for the purposes of the provisions of the other Loan Documents.  Without limiting the foregoing, any breach of representations, warranties, and covenants under this Agreement is a Default or Event of Default under other Loan Documents.

 

Section 11.                                    Choice of Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York).

 

Section 12.                                    Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original.

 

THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of page intentionally left blank; Signature pages follow.]

 

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EXECUTED as of the date first set forth above.

 

	
BORROWER:
    
	
 
    	
 
    
	
 
    	
EXTRACTION   OIL & GAS HOLDINGS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Rusty Kelley
    
	
 
    	
Name:
    	
Rusty Kelley
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    
	
 
    
	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
7N, LLC
    
	
 
    	
8 NORTH, LLC
    
	
 
    	
ELEVATION MIDSTREAM, LLC
    
	
 
    	
EXTRACTION OIL & GAS,   LLC
    
	
 
    	
EXTRACTION FINANCE CORP.
    
	
 
    	
MOUNTAINTOP MINERALS, LLC
    
	
 
    	
XOG SERVICES, INC.
    
	
 
    	
XOG SERVICES, LLC
    
	
 
    	
XTR MIDSTREAM, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Each By:
    	
/s/ Rusty Kelley
    
	
 
    	
Name:
    	
Rusty Kelley
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
ADMINISTRATIVE   AGENT/ISSUING LENDER/LENDER:
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   Administrative Agent, Issuing Lender, and an Existing Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph T. Rottinghaus
    
	
 
    	
Name:
    	
Joseph   T. Rottinghaus
    
	
 
    	
Title:
    	
Director
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
LENDERS:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ROYAL   BANK OF CANADA,
    	
 
    
	
 
    	
as   an Existing Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark Lumpkin, Jr.
    
	
 
    	
Name:
    	
Mark   Lumpkin, Jr.
    
	
 
    	
Title:
    	
Authorized   Signatory
    
				

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
BOKF, NA,
    	
 
    
	
 
    	
as   an Existing Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Benjamin H. Adler
    
	
 
    	
Name:
    	
Benjamin   H. Adler
    
	
 
    	
Title:
    	
Vice   President
    
				

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
GOLDMAN   SACHS BANK USA,
    	
 
    
	
 
    	
as   an Existing Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Josh Rosenthal
    
	
 
    	
Name:
    	
Josh   Rosenthal
    
	
 
    	
Title:
    	
Authorized   Signatory
    
				

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
FIFTH   THIRD BANK,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jonathan H Lee
    
	
 
    	
Name:
    	
Jonathan   H Lee
    
	
 
    	
Title:
    	
Director
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
SUNTRUST   BANK,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shannon Juhan
    
	
 
    	
Name:
    	
Shannon   Juhan
    
	
 
    	
Title:
    	
Director
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
MUFG   UNION BANK, N.A.
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kevin Sparks
    
	
 
    	
Name:
    	
Kevin   Sparks
    
	
 
    	
Title:
    	
Director
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
KEYBANK   NATIONAL ASSOCIATION,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   George McKean
    
	
 
    	
Name:
    	
George   McKean
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
BARCLAYS   BANK PLC,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher M. Aitkin
    
	
 
    	
Name:
    	
Christopher   M. Aitkin
    
	
 
    	
Title:
    	
Assistant   Vice President
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
ABN AMRO CAPITAL USA LLC,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darrell Holley
    
	
 
    	
Name:
    	
Darrell   Holley
    
	
 
    	
Title:
    	
Managing   Director
    

 

 

	
 
    	
By:
    	
/s/   David Montgomery
    
	
 
    	
Name:
    	
David   Montgomery
    
	
 
    	
Title:
    	
Executive   Director
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
CREDIT   SUISSE AG,
    
	
 
    	
CAYMAN   ISLANDS BRANCH,
    
	
 
    	
as   an Existing Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nupur Kumar
    
	
 
    	
Name:
    	
Nupur   Kumar
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lorenz Meier
    
	
 
    	
Name:
    	
Lorenz   Meier
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

	
 
    	
CITIBANK,   N.A.,
    
	
 
    	
as   the New Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Cliff Vaz
    
	
 
    	
Name:
    	
Cliff   Vaz
    
	
 
    	
Title:
    	
Vice   President
    

 

[SIGNATURE PAGE TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]

 

 

SCHEDULE 9

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Column A
    	
 
    	
Column B
    	
 
    	
Column A —
   Column B
    	
 
    
	
Lender
    	
 
    	
Group A
   Lender
    	
 
    	
Group B
   Lender
    	
 
    	
Pro Rata Share of $350,000,000 Borrowing
   Base
    	
 
    	
Pro Rata Share of $285,000,000 Borrowing
   Base
    	
 
    	
New Money
   Amount
    	
 
    
	
Wells Fargo Bank, National   Association
    	
 
    	
 
    	
 
    	
X
    	
 
    	
$
    	
58,333,333.33
    	
 
    	
$
    	
65,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    
	
Royal Bank of Canada
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
29,555,555.56
    	
 
    	
$
    	
39,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    
	
BOKF, NA
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
19,444,444.44
    	
 
    	
$
    	
24,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    
	
Barclays Bank PLC
    	
 
    	
 
    	
 
    	
X
    	
 
    	
$
    	
36,944,444.44
    	
 
    	
$
    	
24,000,000.00
    	
 
    	
$
    	
12,944,444.44
    	
 
    
	
KeyBank National   Association
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
29,555,555.56
    	
 
    	
$
    	
24,000,000.00
    	
 
    	
$
    	
5,555,555.56
    	
 
    
	
SunTrust Bank
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
29,555,555.56
    	
 
    	
$
    	
24,000,000.00
    	
 
    	
$
    	
5,555,555.56
    	
 
    
	
Fifth Third Bank
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
19,444,444.44
    	
 
    	
$
    	
17,000,000.00
    	
 
    	
$
    	
2,444,444.44
    	
 
    
	
MUFG Union Bank, N.A.
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
11,666,666.67
    	
 
    	
$
    	
17,000,000.00
    	
 
    	
$
    	
0.00
    	
 
    
	
ABN AMRO Capital USA LLC
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
19,444,444.44
    	
 
    	
$
    	
17,000,000.00
    	
 
    	
$
    	
2,444,444.44
    	
 
    
	
Goldman Sachs Bank USA
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
29,555,555.56
    	
 
    	
$
    	
17,000,000.00
    	
 
    	
$
    	
12,555,555.56
    	
 
    
	
Credit Suisse AG, Cayman   Islands Branch
    	
 
    	
 
    	
 
    	
X
    	
 
    	
$
    	
36,944,444.44
    	
 
    	
$
    	
17,000,000.00
    	
 
    	
$
    	
19,944,444.00
    	
 
    
	
Citibank, N.A.
    	
 
    	
X
    	
 
    	
 
    	
 
    	
$
    	
29,555,555.56
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
29,555,555.56
    	
 
    

 

[SCHEDULE 9 TO CONSENT, AMENDMENT NO. 10 AND JOINDER TO CREDIT AGREEMENT — EXTRACTION]Exhibit 10.12

 

FORM OF

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of                   , by and between Extraction Oil & Gas, Inc., a Delaware corporation (the “Corporation”), and                              (“Indemnitee”).

 

RECITALS:

 

WHEREAS, directors, officers and other persons in service to corporations or business enterprises are subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Corporation or business enterprise itself;

 

WHEREAS, highly competent persons have become more reluctant to serve as directors, officers or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Corporation (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, (i) the Amended and Restated Bylaws of the Corporation (as may be amended, the “Bylaws”) require indemnification of the officers and directors of the Corporation, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Corporation and members of the Board, officers and other persons with respect to indemnification;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and the Amended and Restated Certificate of Incorporation of the Corporation (as may be amended, the “Certificate of Incorporation”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

WHEREAS, (i) Indemnitee does not regard the protection available under the Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as a director or officer of the Corporation without adequate protection, (iii) the Corporation desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Corporation on the condition that he be so indemnified.

 

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

Section 1                                              Definitions.  (a) As used in this Agreement:

 

“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such specified Person.

 

“Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of (i) the Corporation or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Corporation.

 

“Disinterested Director” shall mean a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

“Enterprise” shall mean the Corporation and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Expenses” shall mean all reasonable costs, expenses, fees and charges, including, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, or in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 12(d) hereof only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing.  “Expenses” shall not include “Liabilities.”

 

“Indemnity Obligations” shall mean all obligations of the Corporation to Indemnitee under this Agreement, including the Corporation’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

 

“Independent Counsel” shall mean a law firm of fifty (50) or more attorneys, or a member of a law firm of fifty (50) or more attorneys, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to

 

2

 

represent: (i) the Corporation or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

“Liabilities” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

 

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

 

“Proceeding” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought in the right of the Corporation or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Corporation, by reason of any actual or alleged action taken by Indemnitee or of any action on Indemnitee’s part while acting as director or officer of the Corporation, or by reason of the fact that he is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement can be provided under this Agreement

 

(b)                                 For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

 

Section 2                                              Indemnity in Third-Party Proceedings.  The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or reasonably incurred (and, in the case of retainers,

 

3

 

reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor), or any claim, issue or matter therein.

 

Section 3                                              Indemnity in Proceedings by or in the Right of the Corporation.  The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor, or any claim, issue or matter therein.  No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to such indemnification.

 

Section 4                                              Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, including any rights to indemnification pursuant to Sections 2 or 3 hereof, to the fullest extent permitted by applicable law, to the extent that Indemnitee is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved Proceeding, claim, issue or matter.  For purposes of this Section 4 and without limitation, the termination of any Proceeding or claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 5                                              Indemnification For Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise a participant in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses suffered or incurred (or, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

Section 6                                              Additional Indemnification.  Notwithstanding any limitation in Sections 2, 3 or 4 hereof, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Corporation to procure a judgment in its favor) against all Liabilities and Expenses suffered or reasonably incurred by Indemnitee in connection with such Proceeding, including but not limited to:

 

(a)                                 the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

 

4

 

(b)                                 the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

Section 7                                              Exclusions.  Notwithstanding any provision in this Agreement, the Corporation shall not be obligated under this Agreement to indemnify or hold harmless Indemnitee:

 

(a)                                 for which payment has actually been made to or on behalf of Indemnitee under any insurance policy obtained by the Corporation except with respect to any excess beyond the amount paid under such insurance policy;

 

(b)                                 for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;

 

(c)                                  except as provided in Section 12(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Corporation or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the Corporation under applicable law; or

 

(d)                                 if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

 

Section 8                                              Advancement.  In accordance with the pre-existing requirements of the Bylaws, and notwithstanding any provision of this Agreement to the contrary, the Corporation shall advance, to the extent not prohibited by applicable law, the Expenses reasonably incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Corporation of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  Advances shall include any and all Expenses reasonably incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Corporation to support the advances claimed.  Indemnitee shall qualify for advances upon the execution and delivery to the Corporation of this Agreement, which shall constitute an undertaking providing that Indemnitee undertakes to repay the amounts advanced to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation.  This Section 8 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 7 hereof.

 

5

 

Section 9                                              Procedure for Notification and Defense of Claim.

 

(a)                                 Indemnitee shall promptly notify the Corporation in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement hereunder following the receipt by Indemnitee of written notice thereof.  The written notification to the Corporation shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding.  Any delay or failure by Indemnitee to notify the Corporation hereunder will not relieve the Corporation from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

(b)                                 In the event Indemnitee is entitled to indemnification and/or advancement with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Corporation to defend Indemnitee in such Proceeding, at the sole expense of the Corporation (which approval shall not be unreasonably withheld, conditioned or delayed), or (ii) have the Corporation assume the defense of Indemnitee in such Proceeding, in which case the Corporation shall assume the defense of such Proceeding with counsel selected by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Corporation’s receipt of written notice of Indemnitee’s election to cause the Corporation to do so.  If the Corporation is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Corporation shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense.  Such legal counsel may represent both Indemnitee and the Corporation (and any other party or parties entitled to be indemnified by the Corporation with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Corporation (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Corporation (or any such other party or parties).  Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense.  The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence relating to the Proceeding.  Indemnitee and the Corporation shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Corporation or Indemnitee assumes the defense thereof.  Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Corporation, which consent shall not be unreasonably withheld, conditioned or delayed.  The Corporation may not settle or compromise any Proceeding without the prior written consent of Indemnitee.

 

6

 

Section 10                                       Procedure Upon Application for Indemnification.

 

(a)                                 Upon written request by Indemnitee for indemnification pursuant to Section 9(a) hereof, if any determination by the Corporation is required by applicable law with respect to Indemnitee’s entitlement thereto, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (D) if so directed by the Board, by the stockholders of the Corporation; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Corporation (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Corporation will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 10(a) has been made.  The Corporation agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Liabilities and Expenses arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(b)                                 In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a) hereof, (i) the Independent Counsel shall be selected by the Corporation within ten (10) days of the Submission Date (the cost of such Independent Counsel to be paid by the Corporation), (ii) the Corporation shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Corporation Indemnitee’s written objection to such selection.  Such objection by Indemnitee may be asserted only on the ground that the Independent Counsel selected does not meet the requirements of “Independent Counsel” as defined in this Agreement.  If such written objection is made and substantiated, the Independent Counsel selected shall not serve as Independent Counsel unless and until Indemnitee withdraws the objection or a court has determined that such objection is without merit.  Absent a timely objection, the person so selected shall act as Independent Counsel.  If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 10(a) hereof (the “Submission Date”) and (ii) ten (10) days after the final disposition of the Proceeding, each of the Corporation and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall

 

7

 

select the Independent Counsel.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

Section 11                                       Presumptions and Effect of Certain Proceedings.

 

(a)                                 In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall, to the fullest extent not prohibited by applicable law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Corporation shall, to the fullest extent not prohibited by applicable law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Corporation (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)                                 Subject to Section 12(e) hereof, if the person, persons or entity empowered or selected under Section 10 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Corporation of the request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by applicable law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Corporation’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation or information relating thereto; provided further, however, that such 60-day period may also be extended for a reasonable time, not to exceed an additional sixty (60) days, if the determination of entitlement to indemnification is to be made by the stockholders of the Corporation.

 

(c)                                  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(d)                                 Reliance as Safe Harbor.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the

 

8

 

records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise.  The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(e)                                  Actions of Others.  The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 12                                       Remedies of Indemnitee.

 

(a)                                 Subject to Section 12(e) hereof, in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within ninety (90) days after receipt by the Corporation of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 4 or 5 or the last sentence of Section 10(a) of this Agreement within ten (10) days after receipt by the Corporation of a written request therefor, (v) payment of indemnification pursuant to Sections 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Corporation or any other Person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Corporation shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 12 the Corporation shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

 

(c)                                  If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a prohibition of such indemnification under applicable law.

 

9

 

(d)                                 The Corporation shall, to the fullest extent not prohibited by applicable law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement.  It is the intent of the Corporation that Indemnitee not be required to incur Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder.  The Corporation shall indemnify Indemnitee against any and all such Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written request therefore) advance, to the extent not prohibited by applicable law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Corporation under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Corporation, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement or insurance recovery, as the case may be.

 

(e)                                  Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that, in absence of any such determination with respect to such Proceeding, the Corporation shall advance Expenses with respect to such Proceeding.

 

Section 13                                       Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)                                 The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                 The Corporation hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated.  The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Corporation shall be primarily liable for all Indemnity Obligations and any indemnification

 

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afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated to indemnify Indemnitee or advance Expenses or Liabilities to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the Corporation shall be required to indemnify Indemnitee and advance Expenses or Liabilities to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated or insurer of any such Person and (v) the Corporation irrevocably waives, relinquishes and releases any other Person with whom or which Indemnitee may be associated from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Corporation hereunder.  In the event any other Person with whom or which Indemnitee may be associated or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Corporation or payable under any Corporation insurance policy, the payor shall have a right of subrogation against the Corporation or its insurer or insurers for all amounts so paid which would otherwise be payable by the Corporation or its insurer or insurers under this Agreement.  In no event will payment of an Indemnity Obligation by any other Person with whom or which Indemnitee may be associated or their insurers affect the obligations of the Corporation hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated.  Any indemnification, insurance or advancement provided by any other Person with whom or which Indemnitee may be associated with respect to any Liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Corporation or any collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Corporation under this Agreement.

 

(c)                                  To the extent that the Corporation maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Corporation or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies and such policies shall provide for and recognize that the insurance policies are primary to any rights to indemnification, advancement or insurance proceeds to which Indemnitee may be entitled from one or more Persons with whom or which Indemnitee may be associated to the same extent as the Corporation’s indemnification and advancement obligations set forth in this Agreement.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation has director and officer liability insurance in effect, the Corporation shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(d)                                 In the event of any payment under this Agreement, the Corporation shall not be subrogated to the rights of recovery of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated; provided, however, that the Corporation shall be subrogated to the extent of any such

 

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payment of all rights of recovery of Indemnitee under insurance policies of the Corporation or any of its subsidiaries.

 

(e)                                  The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

 

Section 14                                       Duration of Agreement; Not Employment Contract.  This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Corporation or any other Enterprise and (ii) the date of final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto.  This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.  This Agreement shall not be deemed an employment contract between the Corporation (or any of its subsidiaries or any other Enterprise) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Corporation (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Corporation (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Corporation, by the Certificate of Incorporation, the Bylaws or the DGCL.

 

Section 15                                       Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by applicable law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 16                                       Enforcement.

 

(a)                                 The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer, employee or agent of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee or agent of the Corporation.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and

 

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understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor diminish or abrogate any rights of Indemnitee thereunder.

 

Section 17                                       Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto.  No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement nor shall any waiver constitute a continuing waiver.

 

Section 18                                       Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

	
(i)
    	
If   to Indemnitee, at such address as Indemnitee shall provide to the   Corporation.
    
	
 
    	
 
    
	
(ii)
    	
If   to the Corporation to:
    
	
 
    	
 
    
	
 
    	
Extraction   Oil & Gas, Inc.
    
	
 
    	
370 17th Street, Suite 5300
    
	
 
    	
Denver,   CO 80202
    
	
 
    	
Attention:   Board of Directors
    

 

or to any other address as may have been furnished to Indemnitee by the Corporation.

 

Section 19                                       Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Liabilities or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (a) the relative benefits received by the Corporation and Indemnitee as a result of the event(s) and transaction(s) giving cause to such Proceeding; and (b) the relative fault of the Corporation (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and transaction(s).

 

Section 20                                       Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules.  Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Corporation and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be

 

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brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 21                                       Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 22                                       Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

	
EXTRACTION OIL &   GAS, INC.
    	
 
    	
INDEMNITEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    

 

Signature Page to Indemnification Agreement

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