Document:

Exhibit 10.5

 

AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (this “Amendment”), effective January 1, 2013, is made between Kodiak Oil & Gas (USA) Inc., a Colorado corporation (“Employer”), Kodiak Oil & Gas Corp., a Yukon Territory corporation (“Company”) and Russ D. Cunningham (“Executive”).

 

RECITALS

 

WHEREAS, Employer, Company and Executive entered into an executive employment agreement, effective January 1, 2011, as amended by Amendment No. 1 thereto effective June 13, 2012 (the “Employment Agreement”), pursuant to which Employer and Company provided continued employment of Executive, and Executive committed himself to continue to serve Employer and Company on the terms and conditions provided in the Employment Agreement; and

 

WHEREAS, Employer, Company and Executive now wish to amend the Employment Agreement, as set out below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

 

1.             The first sentence of Section 5.2(d) of the Employment Agreement is hereby deleted and replaced with the following:

 

“Upon any termination of Executive’s employment on account of death or disability, all unvested stock options and restricted stock, if any, that were previously granted to Executive under the Plan will immediately become fully vested and no longer subject to any restrictions on ownership or exercise, unless otherwise provided in the applicable award agreement governing the terms of the award.”

 

2.             Section 6.2 of the Employment Agreement is hereby deleted and replaced with the following:

 

“a)          For purposes of this Agreement, a “Change of Control” shall mean any of the following:

 

i)              Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Company representing more than 50% of the total voting power represented by Company’s then outstanding voting securities;

 

(ii)           A merger or consolidation of Company whether or not approved by the Board of Directors of Company, other than a merger or consolidation that would result in the voting securities of Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted or into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of Company or such surviving entity (or the parent of any such surviving entity) outstanding immediately after such merger or consolidation, or a change in the ownership of all or substantially all of Company’s assets to a person not related (within the meaning of income tax Regulations Section 1.409A-3(i)(5)(vii)(b)) to the Company; or

 

 

(iii)          The replacement during any 12-month period of a majority of the members of the Board of Directors of Company with directors whose appointment or election was not endorsed by a majority of the members before the date of the appointment or election.

 

b)            If Executive’s employment is terminated by Employer or Company without Cause or if Executive terminates his employment for Good Reason during the 12-month  period following a Change of Control, then:

 

i)              Employer shall pay Executive, on the date that is sixty (60) days following the date of such termination, but subject to Section 4.4(f) of this Agreement, a lump sum payment equal to (a) Executive’s Base Salary at the rate in effect on the termination date for a period of 24 months  plus (b) an amount equal to the most recent annual Cash Bonus paid to Executive pursuant to Section 3.2 of this Agreement or the average Cash Bonus paid to Executive under this Agreement and prior employment agreements, whichever is greater, subject only to withholdings and deductions required by law and Executive’s execution of a Release not more than 45 days following the termination of Executive’s employment; and

 

ii)             in the event Executive elects continuance of applicable group health insurance within the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and state law on a timely basis, and makes the premium payments therefore, the Employer (or the applicable successor or surviving entity in the Change of Control (the “Survivor”)) shall cause Executive to be reimbursed for such premiums for Executive and Executive’s immediate family and/or eligible dependents for a period of twenty-four (24) months after such termination date.  Employer (or the Survivor) will provide payment within 15 days of receiving proof of payment from the Executive, provided that the Executive shall provide proof of payment within 15 days of making such payment.  If, under a change of law or regulations, these payments would have adverse tax consequences to either the Employer or the Company (or the Survivor) or the Executive, these payments shall be cancelled.  This Section 6.2(b)(ii) does not create a requirement that the Employer or the Company (or the Survivor) provide health care coverage beyond what it is required to provide within the provisions of COBRA.

 

c)             If Executive’s employment is terminated by Company as a result of Executive’s disability during the 12 month period following a Change of Control, Employer shall pay Executive in a lump sum payment on the date that is sixty (60) days following the date of such termination, the amount of Severance Pay calculated under Section 5.2 hereof, subject only to withholdings and deductions required by law and Executive’s execution of a Release not more than 45 days following the termination of Executive’s employment.

 

d)            Immediately upon the occurrence of a Change of Control, all of Executive’s equity-based incentive compensation shall immediately vest irrespective of whether Executive’s employment continues or is terminated thereafter, except to the extent that such compensation is subject to Section 409A and such acceleration would violate Section 409A or subject Executive to additional taxes or interest under Section 409A.”

 

2. Except as modified herein, Employer, Company and Executive confirm that the Employment Agreement remains unmodified and in full force and effect. The Employment Agreement, as modified by this Amendment, constitutes the entire agreement between the parties relating to the subject matter hereof.

 

3. This Amendment may be executed by the parties in separate counterparts, including by electronic transmission via facsimile or e-mail, each of which such counterparts when so executed and delivered shall be deemed to constitute one and the same instrument.

 

[signature page follows]

 

2

 

IN WITNESS WHEREOF, the parties have duly signed and delivered this Amendment as of the day and year first above written.

 

	
 
    	
EMPLOYER:   
    
	
 
    	
KODIAK   OIL & GAS (USA) INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lynn A. Peterson
    
	
 
    	
 
    
	
 
    	
Name:   Lynn A. Peterson
    
	
 
    	
 
    
	
 
    	
Title:   Chief Executive Officer & President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
COMPANY:   
    
	
 
    	
KODIAK   OIL & GAS CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lynn A. Peterson
    
	
 
    	
 
    
	
 
    	
Name:   Lynn A. Peterson
    
	
 
    	
 
    
	
 
    	
Title:   Chief Executive Officer & President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Russ D. Cunningham
    
	
 
    	
 
    
	
 
    	
Name:   Russ D. Cunningham
    

 

3Exhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 6 TO 
 LOAN AND SERVICING AGREEMENT

 

THIS AMENDMENT NO. 6 TO LOAN AND SERVICING AGREEMENT, dated as of January 25, 2013, (this “Amendment”) is entered into by and among Ares Capital CP Funding LLC, as the borrower (in such capacity, the “Borrower”), Ares Capital Corporation, as the servicer (in such capacity, the “Servicer”), Wells Fargo Bank, National Association, as the swingline lender (in such capacity, the “Swingline Lender”) and as a lender (in such capacity, a “Lender”), Royal Bank of Canada, as a lender (in such capacity, a “Lender”), Fifth Third Bank, as a lender (in such capacity, a “Lender”), and Wells Fargo Securities, LLC, as the agent (in such capacity, the “Agent”). Capitalized terms used but not defined herein have the meanings provided in the Agreement (as defined below).

 

R  E  C  I  T  A  L  S

 

WHEREAS, reference is made to the Loan and Servicing Agreement, dated as of January 22, 2010 (as further amended, modified, waived, supplemented or restated from time to time, the “Agreement”), by and among the Borrower, the Servicer, the Transferor, the Lenders, the Agent, the Trustee, the Collateral Custodian and the Bank; and

 

WHEREAS, the parties hereto desire to further amend the Agreement in certain respects as specified herein, pursuant to and in accordance with Section 11.01 of the Agreement;

 

NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

SECTION 1.                         AMENDMENT.

 

Section 1.01 of the Loan and Servicing Agreement is hereby amended as follows:

 

(a)                                 by amending and restating the definition of “Applicable Spread” in its entirety as follows:

 

“Applicable Spread” means, for any date of determination, in the event that the Yield Rate is calculated utilizing LIBOR, the Blended Rate, and in the event that the Yield Rate is calculated utilizing the Base Rate, a spread equal to the Blended Rate minus 1.00% per annum.

 

(b)                                 by adding the following defined terms in the appropriate alphabetical order:

 

“Average Adjusted Borrowing Value” means for any Loan Asset, determined on the first day of each Monthly Period, the average of the Adjusted Borrowing Values with respect to such Loan Asset on the last day of the prior two Monthly Periods; provided that the “Average Adjusted Borrowing Value” for any Loan Asset with respect to the Monthly Period beginning on January 1, 2013 shall be the Adjusted Borrowing Value with respect to such Loan Asset on the last day of the prior Monthly Period.

 

 

“Average Advances Outstanding” means, determined on the first day of each Monthly Period, the average of the Advances Outstanding less  the amount on deposit in the Principal Collection Account on the last day of the prior two Monthly Periods; provided that the “Average Advances Outstanding” with respect to the Monthly Period beginning on January 1, 2013 shall be the Advances Outstanding less  the amount on deposit in the Principal Collection Account on the last day of the prior Monthly Period.

 

“Blended Rate” means, for any date of determination, a spread  determined as of the first day of the related Monthly Period as follows:

 

(a)                                 if the sum of (i) the product of (A) the Applicable Percentage for First Lien Loan Assets and (B) the aggregate Average Adjusted Borrowing Value of First Lien Loan Assets as of such date plus (ii) the product of (A) the Applicable Percentage for First Lien Last Out Loan Assets and (B) the aggregate Average Adjusted Borrowing Value of First Lien Last Out Loan Assets as of such date is equal to or greater than the Average Advances Outstanding as of such date, the “Blended Rate” will be 2.25% per annum; otherwise,

 

(b)                                 the “Blended Rate” will be a spread equal to the quotient (expressed as a percentage and rounded to two decimal places) determined by dividing:

 

(i)                                     the aggregate sum of:

 

(A)                               (1) the sum of (x) the product of (I) the Applicable Percentage for First Lien Loan Assets and (II) the aggregate Average Adjusted Borrowing Value of First Lien Loan Assets  as of such date plus (y) the product of (I) the Applicable Percentage for First Lien Last Out Loan Assets and (II) the aggregate Average Adjusted Borrowing Value of First Lien Last Out Loan Assets  as of such date, multiplied by (2) 2.25%; plus

 

(B)                               (1) Average Advances Outstanding less the sum of (x) the product of (I) the Applicable Percentage for First Lien Loan Assets and (II) the aggregate Average Adjusted Borrowing Value of First Lien Loan Assets as of such date plus (y) the product of (I) the Applicable Percentage for First Lien Last Out Loan Assets as of such date and (II) the aggregate Average Adjusted Borrowing Value of First Lien Last Out Loan Assets, multiplied by (2) 2.50%; by

 

(ii)                                  the Average Advances Outstanding as of such date.

 

“Monthly Period” means, for any date of determination, the period from but excluding the immediately preceding Determination Date to and including the immediately succeeding Determination Date.

 

(c)                                  by amending the definition of “Minimum Weighted Average Coupon” by replacing the percentage “9.00%” with the percentage “8.00%”; and

 

(d)                                 by amending the definition of “Minimum Weighted Average Spread” by replacing the percentage “5.00%” with the percentage “4.00%”.

 

2

 

SECTION 2.                         AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED.

 

Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect.  After this Amendment becomes effective, all references to the Agreement and corresponding references thereto or therein such as “hereof”, “herein”, or words of similar effect referring to the Agreement shall be deemed to mean the Agreement as amended hereby.  This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as expressly set forth herein.

 

SECTION 3.                         REPRESENTATIONS.

 

Each of the Borrower and the Servicer, severally for itself only, represents and warrants as of the date of this Amendment as follows:

 

(i)                                     it is duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;

 

(ii)                                  the execution, delivery and performance by it of this Amendment and the Agreement as amended hereby are within its powers, have been duly authorized, and do not contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law;

 

(iii)                               no consent, license, permit, approval or authorization of, or registration, filing or declaration with any governmental authority, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment and the Agreement as amended hereby by or against it;

 

(iv)                              this Amendment has been duly executed and delivered by it;

 

(v)                                 each of this Amendment and the Agreement as amended hereby constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; and

 

(vi)                              there is no Unmatured Event of Default, Event of Default or Servicer Termination Event.

 

SECTION 4.                         Conditions to Effectiveness.

 

The effectiveness of this Amendment is conditioned upon: (i) payment of the invoiced outstanding fees and disbursements of the Lenders; (ii) payment of the invoiced outstanding fees and disbursements of Dechert LLP, as counsel to the Agent and the Lenders and (iii) delivery of executed signature pages by all parties hereto to the Agent.

 

3

 

SECTION 5.                         MISCELLANEOUS.

 

(a)                                 The Borrower, by its execution of this Amendment (a) re-pledges and re-grants to the Trustee, for the benefit of the Secured Parties, a security interest in the Collateral Portfolio (as defined in the Agreement) to secure the Obligations (as defined in the Agreement) and (b) confirms and ratifies that all of its obligations and the security interests granted by it under each of the Transaction Documents to which it is a party shall continue in full force and effect in favor of the Trustee, for the benefit of the Secured Parties.

 

(b)                                 This Amendment may be executed in any number of counterparts (including by facsimile or e-mail), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.

 

(c)                                  The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

(d)                                 This Amendment may not be amended or otherwise modified except as provided in the Agreement.

 

(e)                                  The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment.

 

(f)                                   Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural number, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.

 

(g)                                  This Amendment and the Agreement represent the final agreement among the parties with respect to the matters set forth therein and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements among the parties.  There are no unwritten oral agreements among the parties with respect to such matters.

 

(h)                                 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

4

 

IN WITNESS WHEREOF, the parties have caused this Amendment No. 6 to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	
 
    	
ARES CAPITAL CP FUNDING LLC,
    
	
 
    	
as the Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Penni F. Roll
    
	
 
    	
 
    	
Name: Penni F. Roll
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

 

 

	
 
    	
ARES CAPITAL CORPORATION,
    
	
 
    	
as the Servicer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Penni F. Roll
    
	
 
    	
 
    	
Name: Penni F. Roll
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to   Wachovia Bank, National Association),
    
	
 
    	
as the Swingline Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kevin Sunday
    
	
 
    	
 
    	
Name: Kevin Sunday
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to   Wachovia Bank, National Association),
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kevin Sunday
    
	
 
    	
 
    	
Name: Kevin Sunday
    
	
 
    	
 
    	
Title:   Director
    

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

 

 

	
 
    	
ROYAL BANK OF CANADA,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tim Stephens
    
	
 
    	
 
    	
Name: Tim Stephens
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

 

 

	
 
    	
FIFTH THIRD BANK,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Gardner
    
	
 
    	
 
    	
Name: Brian Gardner
    
	
 
    	
 
    	
Title:   Vice   President
    

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

 

 

	
 
    	
WELLS FARGO SECURITIES, LLC,
    
	
 
    	
as the Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Allan Schmitt
    
	
 
    	
 
    	
Name: Allan Schmitt
    
	
 
    	
 
    	
Title:   Vice   President
    

 

Ares Capital CP Funding LLC

Amendment No. 6 to LSA

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