Document:

Exhibit 10.1

 

FIFTH AMENDMENT TO CREDIT
AGREEMENT

 

This Fifth Amendment to Credit Agreement (this “Fifth
Amendment”) is made as of this 18th day of August, 2010 by and among:

 

THE CHILDREN’S PLACE RETAIL STORES, INC., a
Delaware corporation, for itself and as agent (in such capacity, the “Lead
Borrower”) for the other Borrowers party hereto;

 

the BORROWERS party hereto;

 

the GUARANTORS party hereto;

 

the LENDERS party hereto; and

 

WELLS FARGO RETAIL FINANCE, LLC, as Administrative
Agent, Collateral Agent, and Swing Line Lender.

 

BACKGROUND:

 

Reference is made to that certain Credit Agreement
(as amended, modified, supplemented or restated and in effect from time to
time, the “Credit Agreement”) dated as of July 31, 2008 by and among (i)
the Borrowers, (ii) the Guarantors, (iii) the Lenders, and (iv) Wells Fargo
Retail Finance, LLC, as Administrative Agent, Collateral Agent, and Swing Line
Lender.  The Loan Parties, the Agents,
and the Lenders desire to amend certain terms and conditions of the Credit Agreement
as set forth herein.  Accordingly, it is
hereby agreed as follows:

 

1.                                       Definitions.  All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the Credit
Agreement.

 

2.                                       Amendments to Article I.  The provisions of Article I of the Credit
Agreement are hereby amended as follows:

 

(a)                                  The definition of “Payment Conditions” in Article I of the Credit
Agreement is deleted in its entirety and replaced with the following:

 

“Payment Conditions” means:

 

(a)           at the time of determination with
respect to any payment or prepayment of Indebtedness, that (i) no Default or
Event of Default has occurred and is continuing or would arise as a result of
making such payment or prepayment, and (ii) at least five (5) days prior to making
such payment or prepayment, the Lead Borrower shall have provided to the
Administrative Agent a certificate signed by a Responsible Officer of the Lead
Borrower, in form and substance reasonably satisfactory to the Administrative
Agent, certifying that (A) 

 

1

 

in the case of any payment or prepayment of
Indebtedness in an aggregate amount not to exceed $20,000,000 in any Fiscal
Year, Excess Availability immediately prior to, and projected pro forma Excess
Availability (measured as of the end of each Fiscal Month) for the six Fiscal
Months immediately following, and after giving effect to, such payment or
prepayment shall be equal to or greater than $50,000,000, (B) in the case of
any payment or prepayment of Indebtedness in an aggregate amount in excess of
$20,000,000 in any Fiscal Year, the sum of Excess Availability plus Cash
on Hand immediately prior to, and the sum of projected pro forma Excess
Availability plus projected pro forma Cash on Hand (in each case,
measured as of the end of each Fiscal Month) for the twelve Fiscal Months
immediately following, and after giving effect to, such payment or prepayment
shall be equal to or greater than $75,000,000, and (C) the Loan Parties, on a
Consolidated basis, are, and will continue to be, Solvent after giving effect
to such payment or prepayment; and

 

(b)           at the time of determination with
respect to any Stock Repurchase Transaction, that (i) no Default or Event of
Default has occurred and is continuing or would arise as a result of entering
into such Stock Repurchase Transaction, and (ii) at least five (5) days prior
to entering into such Stock Repurchase Transaction (or, in the case of a Stock
Repurchase Transaction consisting of a series of related transactions, at least
five (5) days prior to the commencement of the first in the series of such
transactions), the Lead Borrower shall have provided to the Administrative
Agent a certificate signed by a Responsible Officer of the Lead Borrower, in
form and substance reasonably satisfactory to the Administrative Agent,
certifying that (A) Excess Availability immediately prior to, and projected pro
forma Excess Availability (measured as of the end of each Fiscal Month) for the
twelve Fiscal Months immediately following, and after giving effect to, such
Stock Repurchase Transaction shall be equal to or greater than twenty-five
percent (25%) of the Revolving Credit Ceiling, and (B) the Consolidated Fixed
Charge Coverage Ratio immediately prior to, and the projected pro forma
Consolidated Fixed Charge Coverage Ratio (measured as of the end of each Fiscal
Month) for the twelve Fiscal Months immediately following, and after giving
effect to, such Stock Repurchase Transaction, shall be equal to or greater than
1.00:1.0.  Prior to undertaking any Stock
Repurchase Transaction, the Lead Borrower shall have delivered to the
Administrative Agent forecasts prepared in good faith by management of the Lead
Borrower of Consolidated balance sheets, statements of income or operations and
cash flows, and Excess Availability projections on a Fiscal Month basis for the
immediately following twelve Fiscal Months, which projected financial
information shall give due consideration to results for prior Fiscal Months,
shall give effect to the proposed Stock Repurchase Transaction and shall be in
a form and based upon assumptions reasonably satisfactory to the Administrative
Agent.

 

2

 

(b)                                 The following new definitions are hereby added to Article I of the
Credit Agreement in appropriate alphabetical order:

 

(i)                                     “Consolidated EBITDA” means, at any date of determination, an
amount equal to Consolidated Net Income of the Lead Borrower and its
Subsidiaries on a Consolidated basis for the most recently completed
Measurement Period, plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Charges,
(ii) the provision for federal, state, local and foreign income Taxes, (iii)
depreciation and amortization expense, (iv) non-cash stock-based compensation
expense and (v) other non-recurring expenses reducing such Consolidated Net
Income which do not represent a cash item in such period or any future period
(in each case of or by Lead Borrower and its Subsidiaries for such Measurement
Period), minus (b) the following to the extent included in calculating
such Consolidated Net Income: (i) federal, state, local and foreign income tax
credits and (ii) all non-cash items increasing Consolidated Net Income (in each
case of or by the Lead Borrower and its Subsidiaries for such Measurement
Period), all as determined on a Consolidated basis in accordance with GAAP.

 

(ii)                                  “Consolidated Fixed Charge Coverage Ratio” means, at any date of
determination, the ratio of (a) (i) Consolidated EBITDA minus (ii)
Capital Expenditures, minus (iii) the aggregate amount of federal,
state, local and foreign income Taxes paid in cash to (b) the sum of (i) Debt
Service Charges plus (ii) the aggregate amount of all Restricted
Payments made in cash, in each case, of or by the Lead Borrower and its
Subsidiaries for the most recently completed Measurement Period, all as
determined on a Consolidated basis in accordance with GAAP.

 

(iii)                               “Consolidated Group” means the Lead Borrower and its Subsidiaries
which are Consolidated for financial reporting purposes in accordance with
GAAP.

 

(iv)                              “Consolidated Interest Charges” means, for any Measurement
Period, the sum of (a) all interest, premium payments, debt discount, fees,
charges and related expenses in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Swap Contracts, but excluding any non-cash or
deferred interest financing costs, and (b) the portion of Capital Lease
Obligations with respect to such period that is treated as interest in
accordance with GAAP, in each case of or by the Lead 

 

3

 

Borrower
and its Subsidiaries for the most recently completed Measurement Period, all as
determined on a Consolidated basis in accordance with GAAP.

 

(v)                                 “Consolidated Net Income” means, as of any date of determination,
the net income of the Lead Borrower and its Subsidiaries for the most recently
completed Measurement Period, all as determined on a Consolidated basis in
accordance with GAAP; provided, however, that there shall be
excluded (a) extraordinary gains and extraordinary losses for such Measurement
Period, (b) any income (or loss) included in the Consolidated net income of the
Lead Borrower during such Measurement Period in which any other Person has a
joint interest, except to the extent actually paid in cash to the Lead Borrower
or any of its Subsidiaries during such period, (c) with respect to any Person
which was not a member of the Consolidated Group throughout such Measurement
Period, the income (or loss) of such Person accrued prior to the date it became
a member of the Consolidated Group, and (d) the income of any Subsidiary of the
Lead Borrower during such Measurement Period to the extent that such Subsidiary
is prohibited by its Organization Documents or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Subsidiary from making a Restricted Payment in cash during such
Measurement Period, except that the Lead Borrower’s equity in any net loss of
any such Subsidiary for such Measurement Period shall be included in
determining Consolidated Net Income.

 

(vi)                              “Debt Service Charges” means, for any Measurement Period, the sum
of (a) Consolidated Interest Charges paid or required to be paid for such
Measurement Period, plus (b) principal payments made or required to be
made on account of Indebtedness (excluding the Obligations but including,
without limitation, Capital Lease Obligations) for such Measurement Period, in
each case of or by the Lead Borrower and its Subsidiaries for such Measurement
Period, all as determined on a Consolidated basis in accordance with GAAP.

 

(vii)                           “Measurement Period” means, at any date of determination, the
most recently completed trailing twelve (12) Fiscal Months.

 

(viii)                        “Stock Repurchase Transaction” has the meaning provided in Section
7.06(c).

 

3.                                       Amendment to Article VII.  The provisions of Section 7.06, “Restricted Payments”, are hereby amended by deleting
subparagraph (c) in its entirety and inserting the following in its place:

 

4

 

“(c)         the Lead Borrower may repurchase its
capital stock in any transaction or series of related transactions which are
part of a common plan completed on or at any time within sixty (60) days after
the commencement thereof (each, a “Stock Repurchase Transaction”) so
long as the Payment Conditions are satisfied;”

 

4.                                       Ratification of Loan Documents; Waiver of Claims.

 

(a)                                  Except as otherwise expressly provided herein, all terms and conditions
of the Credit Agreement and the other Loan Documents remain in full force and
effect.  The Loan Parties hereby ratify,
confirm, and reaffirm that all representations and warranties of the Loan
Parties contained in the Credit Agreement or any other Loan Document are true
and correct in all material respects on and as of the date hereof, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects
as of such earlier date.

 

(b)                                 Each of the Loan Parties hereby acknowledges and agrees that there is no
basis or set of facts on the basis of which any amount (or any portion thereof)
owed by the Loan Parties under the Loan Documents could be reduced, offset,
waived, or forgiven, by rescission or otherwise; nor is there any claim,
counterclaim, offset, or defense (or other right, remedy, or basis having a
similar effect) available to the Loan Parties with regard thereto; nor is there
any basis on which the terms and conditions of any of the Obligations could be
claimed to be other than as stated on the written instruments which evidence
such Obligations.

 

(c)                                  Each of the Loan Parties hereby acknowledges and agrees that it has no
offsets, defenses, claims, or counterclaims against the Agents or any Lender,
or any of their respective affiliates, predecessors, successors, or assigns, or
any of their respective officers, directors, employees, attorneys, or
representatives, with respect to the Obligations, or otherwise, and that if the
any Loan Party now has, or ever did have, any offsets, defenses, claims, or
counterclaims against the Agents or any Lender, or their respective affiliates,
predecessors, successors, or assigns, or their respective officers, directors,
employees, attorneys, or representatives, whether known or unknown, at law or
in equity, from the beginning of the world through this date and through the
time of execution of this Fifth Amendment, all of them are hereby expressly WAIVED, and the each of the Loan Parties
hereby RELEASES the Agents and
each Lender and their respective officers, directors, employees, attorneys,
representatives, affiliates, predecessors, successors, and assigns from any
liability therefor.

 

5.                                       Conditions to Effectiveness.  This Fifth Amendment shall not be effective
until each of the following conditions precedent has been fulfilled to the
reasonable satisfaction of the Administrative Agent:

 

5

 

(a)                                  The Administrative Agent shall have received counterparts of this Fifth
Amendment duly executed and delivered by each of the parties hereto.

 

(b)                                 All corporate and shareholder action on the part of the Loan Parties
necessary for the valid execution, delivery and performance by the Loan Parties
of this Fifth Amendment shall have been duly and effectively taken and evidence
thereof reasonably satisfactory to the Administrative Agent shall have been
provided to the Administrative Agent.

 

(c)                                  After giving effect to this Fifth Amendment, no Default or Event of
Default shall have occurred and be continuing.

 

6.                                       Miscellaneous.

 

(a)                                  This Fifth Amendment may be executed in several counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page to this Fifth Amendment by telecopy or other
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Fifth Amendment.

 

(b)                                 This Fifth Amendment expresses the entire understanding of the parties
with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall
limit, modify, or otherwise affect the provisions hereof.

 

(c)                                  Any determination that any provision of this Fifth Amendment or any
application hereof is invalid, illegal or unenforceable in any respect and in
any instance shall not affect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality, or enforceability
of any other provisions of this Fifth Amendment.

 

(d)                                 The Loan Parties represent and warrant that they have consulted with
independent legal counsel of their selection in connection with this Fifth
Amendment and are not relying on any representations or warranties of the
Agents or the Lenders or their counsel in entering into this Fifth Amendment.

 

(e)                                  The Loan Parties shall pay all reasonable costs and expenses of the
Agents (including, without limitation, reasonable attorneys’ fees) in
connection with the preparation, negotiation, execution, and delivery of this
Fifth Amendment and related documents. 
The Loan Parties hereby acknowledge and agree that the Administrative
Agent may charge the Loan Account to pay such costs and expenses.

 

6

 

(f)                                    THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

[Signature Pages Follow]

 

7

 

IN WITNESS WHEREOF, the parties have hereunto
caused this Fifth Amendment to be executed and their seals to be hereto affixed
as of the date first above written.

 

	
   

  	
  THE CHILDREN’S PLACE RETAIL STORES, INC., as Lead Borrower and as a Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Susan J. Riley

  
	
   

  	
  Name:

  	
  Susan J. Riley

  
	
   

  	
  Title: 

  	
  Executive Vice President, Finance &
  Administration

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CHILDREN’S PLACE SERVICES COMPANY, LLC, as a Borrower

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Susan J. Riley

  
	
   

  	
  Name:

  	
  Susan J. Riley

  
	
   

  	
  Title: 

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CHILDRENSPLACE.COM, INC., as a Guarantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Adrienne Urban

  
	
   

  	
  Name:

  	
  Adrienne Urban

  
	
   

  	
  Title: 

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CHILDREN’S PLACE (VIRGINIA),
  LLC, as a Guarantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Susan J. Riley

  
	
   

  	
  Name:

  	
  Susan J. Riley

  
	
   

  	
  Title: 

  	
  President

  

 

S-1

 

	
   

  	
  THE CHILDREN’S PLACE CANADA
  HOLDINGS, INC., as a Guarantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Susan J. Riley

  
	
   

  	
  Name:

  	
  Susan J. Riley

  
	
   

  	
  Title: 

  	
  President

  

 

S-2

 

	
   

  	
  WELLS FARGO RETAIL FINANCE, LLC,

  
	
   

  	
  as Administrative Agent, Collateral Agent,
  Swingline Lender and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Michele Ayou

  
	
   

  	
  Name: 

  	
  Michele
  Ayou

  
	
   

  	
  Title: 

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Kathleen Dimock

  
	
   

  	
  Name: 

  	
  Kathleen
  Dimock

  
	
   

  	
  Title: 

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BUSINESS CREDIT (USA) INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Kysha A. Pierre-Louis

  
	
   

  	
  Name: 

  	
  Kysha
  A. Pierre-Louis

  
	
   

  	
  Title: 

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Nisha Gupta

  
	
   

  	
  Name: 

  	
  Nisha Gupta

  
	
   

  	
  Title: 

  	
  Account
  Executive

  

 

S-3Exhibit 10.1

 

Execution Version

 

FIRST AMENDMENT

 

TO

 

CREDIT AGREEMENT

 

Among

 

KODIAK OIL & GAS (USA) INC.

as Borrower,

 

WELLS FARGO BANK, N.A.,

as Administrative Agent,

 

and

 

The Lenders Signatory Hereto

 

Effective as of November 30, 2010

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This
First Amendment to Credit Agreement (this “First Amendment”) executed
effective as of November 30, 2010 (the “First Amendment Effective Date”)
is among Kodiak Oil & Gas (USA) Inc., a Colorado corporation (the “Borrower”),
each of the Lenders that is a signatory hereto and Wells Fargo Bank, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors, the “Administrative Agent”).

 

Recitals

 

A.            The Borrower, the Administrative
Agent and the Lenders are parties to that certain Credit Agreement dated as of May 24,
2010 (as amended, the “Credit Agreement”), pursuant to which the Lenders
have made certain credit available to and on behalf of the Borrower.

 

B.            The Borrower has informed the
Administrative Agent that it will not be able to comply with the terms of Section 8.13(a) with
respect to the Reserve Report delivered as of September 1, 2010 and has
requested a waiver from such Section.

 

C.            The Administrative Agent and the
Majority Lenders have agreed to waive such Section with respect to the September 30,
2010 Reserve Report.

 

D.            The Administrative Agent, the
Borrower and the Majority Lenders have agreed to amend certain provisions of
the Credit Agreement.

 

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

 

Section 1.        Defined Terms.  Each capitalized term which is defined in the
Credit Agreement, but which is not defined in this First Amendment, shall have
the meaning ascribed such term in the Credit Agreement.  Unless otherwise indicated, all section
references in this First Amendment refer to the Credit Agreement.

 

Section 2.        Amendments
to Credit Agreement.

 

2.1           Definitions.

 

(a)           Section 1.02 is hereby amended
by amending and restating the following definitions:

 

“‘Agreement’ means this Credit Agreement, as
amended by that certain First Amendment to Credit Agreement, dated as of November 30,
2010 as the same may from time to time be further amended, modified,
supplemented or restated.

 

 

‘Excluded Taxes’ means, with respect to the
Administrative Agent, any Lender or any other recipient of any payment to be
made by or on account of any obligation of the Borrower or any Guarantor
hereunder or under any other Loan Document, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America or
such other jurisdiction under the laws of which such recipient is organized or
in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower or any Guarantor is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 5.04(a)), (i) any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender’s failure to comply with Section 5.03(d),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts with respect to such withholding tax pursuant to Section 5.03(a) or
Section 5.03(b) and (ii) any Taxes imposed on any “withholdable
payment” payable to such recipient as a result of the failure of such recipient
to satisfy the requirements set forth in FATCA after December 31, 2012.

 

‘Subordinated Parent Debt’ means
intercompany Debt between the Borrower and the Parent that by its terms does
not allow the Parent to ask for, sue for, take, demand or accept from the
Borrower by set-off or in any other manner any payment of principal or interest
until the termination of the Commitments, no Letter of Credit is outstanding and
all Swap Agreements secured by the Loan Documents shall be terminated and which
is subject to a subordination agreement among the Parent, the Borrower, the
Administrative Agent and the Second Lien Agent.”

 

(b)           Section 1.02 is hereby amended
by adding the following defined terms in the appropriate alphabetical order:

 

“‘FATCA’ means Sections 1471 through 1474 of
the Code and any regulations promulgated thereunder or official interpretations
thereof.

 

‘FCPA’ means the Foreign Corrupt Practices
Act, 15 U.S.C. §§ 78dd-1, et seq.

 

‘Intercreditor Agreement’ means that certain
Intercreditor Agreement dated as of November 30, 2010 among the Borrower,
the Administrative Agent and the Second Lien Agent as the same may from time to
time be amended, modified, supplemented or restated as permitted therein.

 

2

 

‘Loan Documents’ means this Agreement, the
Notes, the Letter of Credit Agreements, the Letters of Credit, the
Intercreditor Agreement and the Security Instruments.

 

‘Money Laundering Laws’ means any
Governmental Requirement related to terrorism financing or money laundering
including the USA PATRIOT Act, The Currency and Foreign Transactions Reporting
Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C.
§§ 1818(s), 1820(b) and 1951-1959), the Trading With the Enemy Act (50
U.S.C. § 1 et seq., as amended) and Executive Order 13224 (effective September 24,
2001).

 

‘OFAC’ means the U.S. Treasury Department’s
Office of Foreign Assets Control.

 

‘Permitted Refinancing Debt’ means Debt (for
purposes of this definition, “new Debt”) incurred in exchange for, or
proceeds of which are used to refinance, all or any Second Lien Notes (the “Refinanced
Debt”); provided that (a) such new Debt is in an aggregate principal
amount not in excess of $75,000,000; (b) such new Debt has a stated
maturity no earlier than the stated maturity of the Refinanced Debt and an
average life no shorter than the average life of the Refinanced Debt and (c) such
new Debt does not contain any covenants which are materially more onerous to
the Borrower and its Subsidiaries than those imposed by the Refinanced Debt.

 

‘Second Lien Agent’ means Wells Fargo Energy
Capital, Inc. as Administrative Agent under the Second Lien Term Loan Agreement.

 

‘Second Lien Notes’ means the Notes from
time to time issued pursuant to the Second Lien Term Loan Agreement, together
with all amendments, modifications and supplements thereto permitted by Section 9.04(b).

 

‘Second Lien Term Loan Agreement” means that
certain Second Lien Credit Agreement dated as of November 30, 2010 among
the Borrower, the Second Lien Agent and the lenders party thereto from time to
time and together with all amendments, modifications and supplements thereto
permitted by Section 9.04(b).

 

‘Second Lien Term Loan Documents’ means the
Second Lien Term Loan Agreement, the Second Lien Notes and any other “Loan
Documents” (as defined therein), in each case, together with all amendments,
modifications and supplements thereto permitted by Section 9.04(b).

 

‘Term Lender’ means each “Lender” as defined
in the Second Lien Term Loan Agreement (or such corresponding term in the event
the Second Lien Term Loan Agreement is refinanced as permitted by the
Intercreditor Agreement).”

 

3

 

2.2           Section 5.03.  Section 5.03 is hereby amended by adding
the following Section 5.03(f):

 

“(f)          FATCA.  If a payment made to a Lender under any Loan
Document would be subject to federal withholding Tax imposed by FATCA if such
Lender failed to comply with the applicable reporting requirements of FATCA
(including those in § 1471(b) or 1472(b) of the Code, as applicable),
such Lender shall deliver to the Administrative Agent and the Borrower (i) a
certification signed by the chief financial officer, principal accounting
officer, treasurer, or controller, and (ii) other documentation reasonably
requested by the Administrative Agent or the Borrower, in each case sufficient
for the Administrative Agent and the Borrower to comply with their obligations
under FATCA and to determine that such Lender has complied with such applicable
reporting requirements.”

 

2.3           Section 8.14(c).  Section 8.14(c) is hereby amended
and restated as follows:

 

“(c)         The
Borrower will at all times cause the other material tangible and intangible
assets of the Borrower and each Subsidiary to be subject to a Lien of the
Security Instruments in accordance with the terms thereof.”

 

2.4           Section 8.14.  Section 8.14 is hereby amended by adding
the following Section 8.14(d):

 

“(d)         The
Borrower will not, and will not permit any Subsidiary to, grant a Lien on any
Property to secure the Second Lien Notes not already subject to a
first-priority Lien in favor of the Administrative Agent for the benefit of the
Lenders without first (i) giving fifteen (15) days’ prior written notice
to the Administrative Agent thereof and (ii) granting to the
Administrative Agent to secure the Indebtedness a first-priority, perfected
Lien on the same Property pursuant to Security Instruments in form and
substance satisfactory to the Administrative Agent (provided that Excepted
Liens of the type described in clauses (a) to (d) and (f) of the
definition thereof may exist, but subject to the provisos at the end of such
definition).  In connection therewith,
the Borrower shall, or shall cause its Subsidiaries to, execute and deliver
such other additional closing documents, certificates and legal opinions as
shall reasonably be requested by the Administrative Agent.”

 

2.5           Section 9.01(a) and (b).  Sections 9.01(a) and (b) are hereby
amended and restated as follows:

 

“(a)         Ratio
of Total Debt to EBITDAX.  The
Borrower will not, at any time, permit its ratio of Total Debt as of such time
to EBITDAX for the four fiscal quarters ending on the last day of the fiscal
quarter immediately preceding the date of determination for which financial
statements are available to be greater than (i) 4.0 to 1.0 for any quarter
ending on or before December 31, 2010 and (ii)

 

4

 

3.75
to 1.0 for each quarter thereafter. 
Notwithstanding the foregoing, for the purpose of determining EBITDAX of
the Borrower and its Subsidiaries for this Section 9.01(a) for the
four fiscal quarters ending (i) December 31, 2010, EBITDAX shall be
equal to the EBITDAX of the Borrower and its Subsidiaries for the fiscal
quarter ending on such date multiplied by 4, (ii) March 31, 2011,
EBITDAX shall be equal to the EBITDAX of the Borrower and its Subsidiaries for
the two fiscal quarters ending on such date multiplied by 2 and (ii) June 30,
2011, EBITDAX shall be equal to the EBITDAX of the Borrower and its
Subsidiaries for the three fiscal quarters ending on such date multiplied by
4/3.

 

(b)             Current
Ratio.  The Borrower will not permit,
as of the last day of any fiscal quarter, its ratio of (i) consolidated
current assets (including the unused amount of the total Commitments, but
excluding non-cash current assets under FAS 133) to (ii) consolidated
current liabilities (excluding non-cash current obligations under FAS 133 and
current maturities under this Agreement and the Second Lien term Loan
Agreement) to be less than 1.0 to 1.0.”

 

2.6            Section 9.01.  Section 9.01 is hereby amended by adding
the following Section 9.01(c):

 

“(c)         Interest
Coverage Ratio.  The Borrower will
not, as of the last day of any fiscal quarter, permit its ratio of EBITDAX to
Interest Expense, each for the four fiscal quarters ending on such date, to be
less than 3.0 to 1.0.  Notwithstanding
the foregoing, for the purpose of determining EBITDAX and Interest Expense of
the Borrower and its Subsidiaries for this Section 9.01(d) for the
four fiscal quarters ending (i) March 31, 2011, EBITDAX and Interest
Expense shall be equal to the EBITDAX and Interest Expense of the Borrower and
its Subsidiaries for the fiscal quarter ending on such date multiplied by 4, (ii) June 30,
2011, EBITDAX and Interest Expense shall be equal to the EBITDAX and Interest
Expense of the Borrower and its Subsidiaries for the two fiscal quarters ending
on such date multiplied by 2 and (iii) September 30, 2011, EBITDAX
and Interest Expense shall be equal to the EBITDAX and Interest Expense of the
Borrower and its Subsidiaries for the three fiscal quarters ending on such date
multiplied by 4/3.

 

2.7           Section 9.02.  Section 9.02 is hereby amended by
renumbering Section 9.02(i) as Section 9.02(j) and adding a
new Section 9.02(i) as follows:

 

“(i)          Debt
under the Second Lien Term Loan Agreement and any guarantees thereof, the
principal amount of which Debt does not exceed $75,000,000 in the aggregate and
any Permitted Refinancing Debt in respect thereof.

 

2.8           Section 9.03.  Section 9.03 is hereby amended by
renumbering Section 9.03(e) as Section 9.03(f) and adding a
new Section 9.03(e) as follows:

 

5

 

“(e)         Liens
created pursuant to the Second Lien Term Loan Documents.”

 

2.9           Section 9.04.  Section 9.04 is hereby amended by
deleting such Section in its entirety and replacing it with the following:

 

“Section 9.04         Dividends,
Distributions, Redemptions, Restricted Payments and Second Lien Notes.

 

(a)           Dividends,
Distributions, Redemptions and Restricted Payments.  The Borrower will not, and will not permit
any of its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, return any capital to its stockholders
or make any distribution of its Property to its Equity Interest holders, except
(i) the Borrower may declare and pay dividends with respect to its Equity
Interests payable solely in additional shares of its Equity Interests (other
than Disqualified Capital Stock), (ii) Subsidiaries may declare and pay
dividends ratably with respect to their Equity Interests, (iii) the
Borrower may make cash distributions to the Parent with respect to the payment
of reasonable fees and expenses incurred in the ordinary course of business in
connection with the maintenance of its corporate existence, reporting
obligations, tax and accounting preparation and other similar fees and expenses
and (iv) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries.

 

(b)           Second
Lien Notes.  The Borrower will not,
and will not permit any Subsidiary to: (i) amend, modify, waive or
otherwise change, consent or agree to any amendment, modification, waiver or
other change to, any of the terms of any Second Lien Term Loan Document except
as permitted by the Intercreditor Agreement, provided that the foregoing shall
not prohibit the execution of supplemental agreements to add guarantors if
required by the terms thereof provided that any such guarantor also guarantees
the Indebtedness pursuant to the Guaranty Agreement and each of the Borrower
and such guarantor otherwise complies with Section 8.14(b) and (ii) Redeem
(whether in whole or in part) the Second Lien Notes; provided that the Borrower
may Redeem any Second Lien Notes in a principal amount not exceeding the
aggregate principal amount of Permitted Refinancing Debt.”

 

2.10         Section 10.01.  Section 10.01 is hereby amended by
adding the following Sections 10.01(n) and (o):

 

“(n)         an
Event of Default under the Second Lien Term Loan Agreement (as such term is
defined therein).

 

(o)           the
Intercreditor Agreement, after delivery thereof shall for any reason, except (i) to
the extent permitted by the terms thereof or (ii) solely

 

6

 

attributable
to the actions (or failure to act) of the Administrative Agent, cease to be in
full force and effect and valid, binding and enforceable in accordance with its
terms against the Borrower or any party thereto or holder of the Debt subject
thereto or shall be repudiated by any of them, or cause the payment of the obligations
of the Second Lien Notes to be senior in right to the payment or obligations of
this Agreement or any payment by the Borrower or any Guarantor in violation of
the terms of the Intercreditor Agreement.”

 

2.11         Article XI.  Article XI is hereby amended by adding
the following Section 11.12:

 

“Section 11.12       Intercreditor
Agreement.  Each of the Lenders
hereby acknowledges that it has received and reviewed the Intercreditor
Agreement and agrees to be bound by the terms thereof as if such Lender was a signatory
thereto.  Each Lender (and each person
that becomes a Lender hereunder pursuant to Section 12.04(b)) hereby (i) acknowledges
that the Administrative Agent is acting under the Intercreditor Agreement as
the First Lien Administrative Agent, and that the Second Lien Agent is acting
under the Intercreditor Agreement as the Second Lien Administrative Agent and
that the Administrative Agent and the Second Lien Agent are Affiliates and (ii) waives
any conflict of interest, now contemplated or arising hereafter, in connection
therewith and agrees not to assert against the Administrative Agent or the
Second Lien Agent any claims, cause of action, damages or liabilities of
whatever kind or nature relating thereto. 
Each Lender (and each Person that becomes a Lender hereunder pursuant to
Section 12.04(b)) hereby authorizes and directs the Administrative Agent
to enter into the Intercreditor Agreement on behalf of such Lender and agrees
that each of the Administrative Agent and the Second Lien Agent, in its various
capacities thereunder, may take such actions on its behalf as is contemplated
by the terms of the Intercreditor Agreement.”

 

Section 3.       Borrowing
Base.  For the period from and
including the First Amendment Effective Date to but excluding the next Redetermination
Date, the amount of the Borrowing Base shall be equal to $50,000,000.  Notwithstanding the foregoing, the Borrowing
Base may be subject to further adjustments from time to time pursuant to Section 2.07(e),
Section 8.13(c) or Section 9.12 of the Credit Agreement.

 

Section 4.       Waiver

 

4.1           Limited Waiver.  In reliance on the representations and
warranties set forth in Section 6 below and subject to the satisfaction of
the conditions set forth in Section 4.2 below, the Administrative Agent
and the Majority Lenders hereby waive the provisions of Section 8.13(a) with
respect to the September 30, 2010 Reserve Report.

 

4.2           Conditions to Limited Waiver.  The waiver provided in Section 4.1 of
this First Amendment is conditioned upon the Borrower delivering title
information in form and substance acceptable to the Administrative Agent
covering enough of the Oil and Gas Properties evaluated by the internal Reserve
Report of the Borrower as audited and certified by Netherland, Sewell &

 

7

 

Associates, Inc.
as of October 29, 2010, with respect to certain Oil and Gas Properties of
the Borrower and its Subsidiaries as of September 30, 2010 that were not
included in the immediately preceding Reserve Report, so that the
Administrative Agent shall have received together with title information
previously delivered to the Administrative Agent, satisfactory title
information on at least 80% of the total value of the Oil and Gas Properties
evaluated by such Reserve Report, including evidence that (a) at least 90%
of the total value of the Borrower’s Oil and Gas Properties evaluated by such
Reserve Report, with respect to certain Oil and Gas Properties of the Borrower
and its Subsidiaries as of September 30, 2010 and (b) 95% of the
total value of the Borrower’s Oil and Gas Properties evaluated by each such
Reserve Report delivered on or after March 1, 2011, in each case, are on
Federal leases, State leases, allotted lands or fee simple.

 

Section 5.       Conditions
Precedent.  The effectiveness of this
First Amendment is subject to the receipt by the Administrative Agent of the
following documents and satisfaction of the other conditions provided in this Section 5,
each of which shall be reasonably satisfactory to the Administrative Agent in
form and substance (or waived in accordance with Section 12.02 of the
Credit Agreement):

 

5.1           First Amendment and Mortgage
Supplement.  The Administrative Agent
shall have received multiple counterparts of this First Amendment as requested
from the Borrower and each Lender and the mortgage supplement for McKenzie and
Dunn Counties North Dakota from the Borrower. 
In connection with the execution and delivery of the mortgage
supplement, the Administrative Agent shall be reasonably satisfied that the mortgage
supplement, together with existing Security Instruments, create first priority,
perfected Liens (subject only to Excepted Liens identified in clauses (a) to
(d) and (f) of the definition thereof, but subject to the provisos at
the end of such definition) on at least 80% of the total value of the Oil and
Gas Properties evaluated in the most recently delivered Reserve Report and
after giving effect to the acquisition of the Peak Properties (as such term is
defined below).

 

5.2           No Default.  No Default or Event of Default shall have
occurred and be continuing as of the First Amendment Effective Date.

 

5.3           Fees.  The Administrative Agent and the Lenders
shall have received all fees and other amounts due and payable on or prior to
the date hereof.

 

5.4           Secretary’s Certificate.  The Administrative Agent shall have received
a certificate of the Secretary or an Assistant Secretary of the Borrower and
each Guarantor setting forth (a) resolutions of its board of directors
with respect to the authorization of the Borrower or such Guarantor to execute
and deliver the First Amendment and the other Loan Documents being entered into
on the First Amendment Effective Date to which it is a party and to enter into
the transactions contemplated in those documents and (b) the officers of
the Borrower or such Guarantor (i) who are authorized to sign the Loan
Documents to which the Borrower or such Guarantor is a party and (ii) who
will, until replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing documents and
giving notices and other communications in connection with this Agreement and
the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and (iv) the articles or

 

8

 

certificate
of incorporation and bylaws of the Borrower and such Guarantor, certified as
being true and complete.  The
Administrative Agent and the Lenders may conclusively rely on such certificate
until the Administrative Agent receives notice in writing from the Borrower to
the contrary.

 

5.5           Legal Opinion.  The Administrative Agent shall have received
an opinion of (a) Dorsey & Whitney, LLP, special counsel to the
Borrower and (b) Lathrop & Gage, LLP with regard to the Oil and
Gas Properties of the Borrower located on the Fort Berthold Indian Reservation
which opinion shall, among other things, conclude that (i) at least 90% of
the total value of the Borrower’s Oil and Gas Properties after taking into effect
the acquisition of the Peak Properties, are on Federal leases, State leases,
allotted lands or fee simple, (ii) the Credit Agreement, the Loan
Documents, the Peak Acquisition Documents (as such term is defined below) and
the performance of the Borrower and its Subsidiaries of their obligations
thereunder do not violate the provisions of any Governmental Requirement or
tribal law, rule, regulation , or order, (iii) all consents and approvals
have been received by the Borrower and its Subsidiaries by applicable
Governmental Authorities and tribal authorities, (iv) the proposed
mortgage supplement is in proper form and creates a valid Lien and security
interest in the Property mortgaged thereunder and (v) it is most probable
that proper venue for any suit regarding any of the Borrower’s Oil and Gas
Properties (including the Peak Properties) thereon would be the Federal Courts
and not any tribal court.

 

5.6           Title.  The Administrative Agent shall have received
title information as the Administrative Agent may reasonably require
satisfactory to the Administrative Agent setting forth the status of title to
at least 80% of the total value of (a) the Oil and Gas Properties
evaluated in the most recently delivered Reserve Report and (b) the Peak
Properties.

 

5.7           Environmental.  The Administrative Agent shall be reasonably
satisfied with the environmental condition of the Peak Properties.

 

5.8           Material Contracts.  The Administrative Agent shall have received
and reviewed all material contracts of the Borrower and its Subsidiaries
related to the Peak Properties and such material contracts shall be in form and
substance reasonably satisfactory to the Administrative Agent.

 

5.9           Peak Acquisition.  The consummation of the acquisition of
certain real and personal property assets including certain Oil and Gas
Properties (the “Peak Properties”) from Peak Grasslands, LLC (“Peak”)
pursuant to the terms of that certain Asset Purchase Agreement among Peak, the
Parent and the Borrower dated as of October 19, 2010 (together with such
assignments and other documents related thereto, the “Peak Acquisition
Documents”) on terms and conditions reasonably acceptable to the
Administrative Agent.

 

5.10         Peak Acquisition Documents.  The Administrative Agent shall have received
(a) a true and complete copy of the Peak Acquisition Documents, certified
as such by the Borrower, and (ii) evidence of all consents and approvals
received pursuant to the Peak Acquisition Documents.

 

9

 

5.11         Second Lien Term Loan.  The Administrative Agent shall have received
evidence that the Second Lien Term Loan Agreement has been entered into by the
Borrower, the Second Lien Agent and the Term Lender.

 

5.12         Intercreditor Agreement.  The Administrative Agent shall have received
multiple counterparts of the Intercreditor Agreement from the Borrower and the
Second Lien Agent.

 

5.13         Swap Agreements.  The Administrative Agent shall have received
evidence that the Borrower has maintained the Swap Agreements which were in
place when the Administrative Agent conducted its due diligence with respect to
the Peak Acquisition.

 

5.14         Other.  The Administrative Agent shall have received
such other documents as the Administrative Agent or special counsel to the
Administrative Agent may reasonably request in advance in writing.

 

The
Administrative Agent is hereby authorized and directed to declare this First
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with
the conditions set forth in this Section 5 or the waiver of such
conditions as permitted by Section 12.02 of the Credit Agreement.  Such declaration shall be final, conclusive
and binding upon all parties to the Credit Agreement for all purposes.

 

Section 6.        Ratification
and Affirmation; Representations and Warranties; Etc.  The Borrower hereby (a) acknowledges the
terms of this First Amendment; (b) ratifies and affirms its obligations
under, and acknowledges its continued liability under, each Loan Document to
which it is a party and agrees that each Loan Document to which it is a party
remains in full force and effect as expressly amended hereby; and (c) represents
and warrants to the Lenders that, as of the date hereof, after giving effect to
the terms of this First Amendment: (i) all of the representations and
warranties contained in each Loan Document to which the Borrower is a party are
true and correct in all material respects as though made on and as of the First
Amendment Effective Date (unless made as of a specific earlier date, in which
case, was true as of such date); (ii) no Default or Event of Default has
occurred and is continuing; and (iii) no event or events have occurred
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.

 

Section 7.        Miscellaneous.

 

7.1           Confirmation.  The provisions of the Credit Agreement (as
amended by this First Amendment) shall remain in full force and effect in
accordance with its terms following the effectiveness of this First
Amendment.  This First Amendment shall
constitute a Loan Document, as such term is defined in the Credit Agreement.

 

7.2           No Waiver.  Neither the execution by the Administrative
Agent or the Lenders of this First Amendment, nor any other act or omission by
the Administrative Agent or the Lenders or their officers in connection
herewith, shall be deemed a waiver by the Administrative Agent or the Lenders
of any Defaults or Events of Default which may exist, which may have occurred 

 

10

 

prior
to the date of the effectiveness of this First Amendment or which may occur in
the future under the Credit Agreement and/or the other Loan Documents.  Similarly, nothing contained in this First
Amendment shall directly or indirectly in any way whatsoever either: (a) impair,
prejudice or otherwise adversely affect the Administrative Agent’s or the
Lenders’ right at any time to exercise any right, privilege or remedy in
connection with the Loan Documents with respect to any Default or Event of
Default, (b) amend or alter any provision of the Credit Agreement (other
than the amendments provided for in Section 2 of the First Amendment), the
other Loan Documents, or any other contract or instrument, or (c) constitute
any course of dealing or other basis for altering any obligation of the
Borrower or any right, privilege or remedy of the Administrative Agent or the
Lenders under the Credit Agreement, the other Loan Documents, or any other
contract or instrument.  Nothing in this
First Amendment shall be construed to be a consent by the Administrative Agent
or the Lenders to any Default or Event of Default.  Each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby, and each reference in any other Loan Document to the Credit Agreement
or any word or words of similar import shall be and mean a reference to the
Credit Agreement as amended hereby.

 

7.3           Counterparts.  This First Amendment may be executed by one
or more of the parties hereto in any number of separate counterparts, and all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.  Delivery of this First
Amendment by facsimile or electronic transmission shall be effective as
delivery of a manually executed counterpart hereof.

 

7.4           Successors and Assigns.  This First Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

7.5           Payment of Expenses.  In accordance with Section 12.03 of the
Credit Agreement, the Borrower agrees to pay or reimburse the Administrative
Agent for all of its reasonable and documented out-of-pocket costs and
reasonable expenses incurred in connection with this First Amendment, any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable and documented fees and
disbursements of counsel to the Administrative Agent.

 

7.6           Severability.  Any provision of this First Amendment which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

7.7           No Oral Agreement.  THIS WRITTEN FIRST AMENDMENT, THE CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND
THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

 

11

 

7.8           Governing Law.  THIS FIRST AMENDMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO.

 

12

 

IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly
executed effective as of the date first written above.

 

 

	
  BORROWER:

  	
  KODIAK OIL & GAS (USA) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James P. Henderson

  
	
   

  	
  Name:

  	
  James P. Henderson

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

First Amendment

Signature Page - 1

 

 

	
  ADMINISTRATIVE AGENT:

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
  as
  Administrative Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oleg Kogan

  
	
   

  	
  Name:
  

  	
  Oleg
  Kogan

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oleg Kogan

  
	
   

  	
  Name:
  

  	
  Oleg
  Kogan

  
	
   

  	
  Title:

  	
  Vice President

  

 

First Amendment

Signature Page - 2

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