Document:

Exhibit 10.25

 

MARKETO, INC.

 

MANAGEMENT RETENTION AGREEMENT

 

This Management Retention Agreement (the “Agreement”) is made and entered into by and between Steve Winter (the “Executive”) and Marketo, Inc. (the “Company”), effective as of the Effective Date.  Initially capitalized terms herein shall have the meanings set forth in Section 5 of this Agreement or in such other section as they are defined.

 

1.                                      Term of Agreement.  This Agreement will commence on the Effective Date and will remain in effect for one year following the Effective Date; provided, however that the term of this Agreement shall automatically be extended for one year thereafter and shall automatically be extended for one year on each anniversary of the Effective Date thereafter unless either party notifies the other in writing or by e-mail that the term shall not be extended, with such notice provided at least one month prior to the expiration of the term of this Agreement, including any extensions; provided, further, that if prior to the expiration of the term of this Agreement, the Company enters into a definitive agreement (a “Definitive Agreement”) with a third party (or third parties), the consummation of which would result in a Change in Control (as defined in this Agreement), then the term of this Agreement shall automatically be extended to twenty-four months following the resulting Change in Control, unless the Definitive Agreement terminates or is cancelled without resulting in a Change in Control, in which case such extension shall not be effective.  Moreover, this Agreement shall survive the lapse of the term of this Agreement and shall be binding on both parties with respect to any termination of Executive’s employment that triggers severance benefits under Section 3 hereof that occurs prior to the lapsing of the term of this Agreement.

 

2.                                      At-Will Employment.  The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law.  If the Executive’s employment terminates for any reason, the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided under this Agreement.

 

3.                                      Change in Control Severance Benefits.

 

(a)                                 Involuntary Termination Other than for Cause, Voluntary Termination for Good Reason During the Change in Control Period.  If, during the Change in Control Period, the Executive’s employment with the Company (i) is terminated involuntarily by the Company without Cause and other than pursuant to Executive’s death or Disability, or (ii) voluntarily by Executive for Good Reason, then subject to the Executive signing and not revoking a release of claims in favor of the Company substantially in the form attached as Exhibit A to this Agreement (a “Release”), the Company shall provide severance pay and benefits, subject to certain conditions, as follows:

 

(i)                                     Severance Payment.  The Executive shall be entitled to receive an immediate cash lump-sum severance payment equal to one-hundred percent of the Executive’s annual base salary (as in effect immediately prior to (A) the Change in Control, or (B) the Executive’s termination, whichever is greater) plus, an amount equal to the greater or (A) one-

 

 

hundred percent of the Executive’s annual target bonus or (B) one-hundred percent of the most recent annual bonus paid by the Company to Executive.

 

(ii)                                  Equity Compensation Acceleration.  One hundred percent of the shares subject Executive’s then outstanding stock options, stock appreciation rights, restricted stock units and other Company equity compensation awards, including performance-based vesting full-value awards where the payout is either a fixed number of shares or zero shares depending on whether the performance metric is obtained, shall immediately accelerate vesting.  With respect to performance-based vesting full-value awards in which the performance period has not been completed prior to the Executive’s termination date and where the number of shares earned is variable based upon the extent to which performance milestones are reached (i.e., where the number of shares earned based upon achieving performance milestones can be more than one positive number), each such award shall immediately accelerate vesting as to one hundred percent of the target performance level. With respect to performance-based vesting full-value awards where the performance period has been completed prior to the Executive’s termination date and that remain subject to additional service-based vesting, such awards shall accelerate as to one hundred percent of the total shares earned by virtue of attaining the performance metrics during the performance period.  Any Company stock options and stock appreciation rights shall thereafter remain exercisable following the Executive’s employment termination for the period prescribed in the respective option and stock appreciation right agreements.

 

(iii)                               Pay in Lieu of Continued Employee Benefits.  In lieu of continued employee benefits (other than as statutorily required, such as COBRA continuation coverage as required by law), Executive shall receive payments of three thousand dollars ($3,000) per month for twelve months from the date of employment termination in accordance with the payroll schedule applicable to active officers of the Company (subject to the timing provisions of Sections 3(g) and 8 of this Agreement).

 

(b)                                 Voluntary Resignation Other than for Good Reason, Termination for Cause; Termination due to Death or Disability within the Change in Control Period; Terminations Outside of Change in Control Period.  If the Executive’s employment with the Company terminates (i) voluntarily by the Executive other than for Good Reason during the Change in Control Period, (ii) for Cause by the Company during the Change in Control Period, (iii) pursuant to Executive’s death or Disability during the Change in Control period, or (iv) for any reason outside of the Change in Control Period, then the Executive shall not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

(c)                                  Terminations Triggering Severance.  In the event severance benefits are triggered under Section 3 of this Agreement, Executive shall only receive severance payments and benefits under this Agreement and not pursuant to the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

(d)                                 No Mitigation.  The Executive shall not be required to mitigate the amount of any severance payments or benefits provided for under this Agreement by seeking other employment

 

 

nor shall any amounts to be received by the Executive under this Agreement be reduced by any other compensation earned.

 

(e)                                  Tax Withholding.  The Company shall be entitled to withhold from any payments made to Executive under this Section 3 any amounts required to be withheld by applicable federal, state or local tax law.

 

(f)                                   Release of Claims.  Receipt of the severance payments and vesting acceleration specified in Section 3(a) shall be contingent on Executive’s execution of the Release, and the lapse of any statutory period for revocation, and such Release becoming effective in accordance with its terms within fifty-two (52) days following Executive’s termination date.  Any severance payment or vesting acceleration to which Executive otherwise would have been entitled during such fifty-two (52) day period shall be paid or made by the Company in full on the fifty-third (53d) day following Executive’s employment termination date or such later date as is required to avoid the imposition of additional taxes under Internal Revenue Section 409A (“Section 409A”).

 

4.                                      Code Section 280G Best Results.  If any payment or benefit Executive would receive pursuant to this Agreement or otherwise, including accelerated vesting of any equity compensation (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: (A) cash payments shall be reduced first and in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash payment to be reduced; and (B) accelerated vesting of stock awards shall be cancelled/reduced next and in the reverse order of the date of grant for such stock awards (i.e., the vesting of the most recently granted stock awards will be reduced first), with full-value awards reversed before any stock option or stock appreciation rights are reduced.

 

The Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder and perform the foregoing calculations.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

 

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.

 

 

Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

5.                                      Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

 

(a)                                 Beneficial Owner. “Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange Act.

 

(b)                                 Cause.  “Cause” means (i) an unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company; (ii) a deliberate material failure to comply with any of the Company’s written policies or rules; (iii) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof; (iv) gross misconduct; (v) following a Change in Control only, a continued failure to perform assigned duties after receiving written notification of such failure from the Board of Directors, provided that such duties are those customarily performed by a person holding the position that Executive holds immediately prior to the Change in Control of a corporation of similar size as the Company engaged in a similar line of business as the Company; or (vi) failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested Executive’s cooperation

 

(c)                                  Change in Control.  “Change in Control” means the occurrence of any of the following events:

 

(i)                                     any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company other than securities acquired by virtue of the exercise of a conversion or similar privilege or right unless the security being so converted or pursuant to which such right was exercised was itself acquired directly from the Company) representing 50% or more of (A) the then outstanding shares of common stock of the Company or (B) the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

 

(ii)                                  the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board (the “Incumbent Board”): individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, without limitation, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

 

(iii)                               a merger or consolidation of the Company or any direct or indirect subsidiary of the Company is consummated with any other corporation, other than a merger or consolidation pursuant to which (A) the voting securities of the Company outstanding immediately

 

 

prior to such merger or consolidation will continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) more than 50% of the outstanding shares of common stock and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; (B) no Person will become the Beneficial Owner, directly or indirectly, of securities of the Company or such surviving entity or any parent thereof representing 50% or more of the outstanding shares of common stock or the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to such merger or consolidation); and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation (or any parent thereof) resulting from such merger or consolidation; or

 

(iv)                              the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, (A) more than 50% of the outstanding shares of common stock and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of which (or of any parent of such entity) is owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale; (B) in which (or in any parent of such entity) no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the outstanding shares of common stock resulting from such sale or disposition or the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to such sale or disposition); and (C) in which (or in any parent of such entity) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors.

 

(d)                                 Change in Control Period.  “Change in Control Period” means the period commencing three months prior to a Change in Control and ending twelve months after the Change in Control.

 

(e)                                  Disability.  “Disability” means Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees.

 

(f)                                   Effective Date.  “Effective Date” means the date upon which the Company’s Board of Directors or a committee thereof approves the Company entering into this Agreement, which is October 30, 2014.

 

 

(g)                                  Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(h)                                 Good Reason.  “Good Reason” means, without the Executive’s consent, (a) a material reduction in the Executive’s level of responsibility and/or scope of authority, (b) a material reduction in base salary (other than a reduction generally applicable to executive officers of the Company and in generally the same proportion as for the optionee or purchaser), or (c) relocation of the Executive’s principal workplace by more than 35 miles.  In addition, upon any such voluntary termination for Good Reason the Executive must provide written notice to the Company of the existence of the one or more of the above conditions within 60 days of its initial existence, the Company must be provided written or e-mailed notice with 30 days to remedy the condition and the resignation must be effective no later than 31 days following the provision of such written or e-mailed notice to the Company.

 

(i)             Person.  “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

6.                                      Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or other, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will of the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

 

7.                                      Notices.  All notices, requests, demands and other communications called for under this Agreement shall be in writing and shall be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successor at the following addresses, or at such other addresses as the parties may later designate in writing:

 

 

If to the Company:

 

Marketo, Inc.

901 Mariners Island Blvd.

San Mateo, CA 94404

Attn:  General Counsel

 

If to Executive:

At the last residential address known to the Company

 

8.                                      Section 409A.

 

(a)                                 Notwithstanding anything to the contrary in this Agreement, no Deferred Compensation Separation Benefits payable under this Agreement will be considered due or payable until and unless Executive has a “separation from service” within the meaning of Section 409A. Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s “separation from service” other than due to Executive’s death, then any severance benefits payable pursuant to this Agreement and any other severance payments or separation benefits, that in each case when considered together may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) and are otherwise due to Executive on or within the six (6) month period following Executive’s “separation from service” will accrue during such six (6) month period and will instead become payable in a lump sum payment on the date six (6) months and one (1) day following the date of Executive’s “separation from service.”  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, if Executive dies following Executive’s “separation from service” but prior to the six (6) month anniversary of the date of Executive’s “separation from service,” then any Deferred Compensation Separation Benefits delayed in accordance with this Section will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death, but not later than ninety (90) days after the date of Executive’s death, and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

 

(c)                                  It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided under this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities in this Agreement will be interpreted to so comply.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to Executive.

 

 

9.                                      Miscellaneous Provisions.

 

(a)                                 Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(b)                                 Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

(c)                                  Entire Agreement.  This Agreement, the Proprietary Information and Inventions Agreement and Executive’s written equity compensation agreements with the Company constitute the entire agreement of the parties hereto and supersede in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof; provided, however, that this Agreement, while in effect, supersedes in its entirety the Company’s Change in Control Acceleration Policy with respect to Executive, including as to any equity awards made prior to the Effective Date.

 

(d)                                 Choice of Law.  This Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

 

(e)                                  Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

 

(f)                                   Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Management Retention Agreement on the respective dates set forth below.

 

 

	
 
    	
 
    	
Marketo, Inc.
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
/s/   Phillip M. Fernandez
    
	
 
    	
 
    	
Name:   Phillip M. Fernandez
    
	
 
    	
 
    	
Title:   CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Steve Winter
    
	
Dated:
    	
 
    	
 
    	
Steve   Winter, an individual
    

 

 

EXHIBIT A

 

MARKETO, INC.

 

RELEASE OF CLAIMS

 

This Release of Claims (“Agreement”) is made by and between Marketo, Inc. (the “Company”) and Steve Winter (“Executive”).

 

WHEREAS, Executive has agreed to enter into a release of claims in favor of the Company upon certain events specified in the management retention agreement by and between Company and Executive (the “Management Retention Agreement”).

 

NOW THEREFORE, in consideration of the mutual promises made in this Agreement, the parties hereby agree as follows:

 

1.                                      Termination.  Executive’s employment from the Company terminated on                                  (the “Termination Date”).

 

2.                                      Confidential Information.  Executive shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Proprietary Information and Inventions Agreement.  Executive shall return all the Company property and confidential and proprietary information in Executive’s possession to the Company on the Effective Date of this Agreement.

 

3.                                      Payment of Salary.  Executive acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Executive.

 

4.                                      Release of Claims.  Executive agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Executive by the Company.  Executive, on behalf of Executive, and Executive’s respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Executive may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation,

 

(a)                                 any and all claims relating to or arising from Executive’s employment relationship with the Company and the termination of that relationship;

 

 

(b)                                 any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

 

(c)                                  any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

 

(d)                                 any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and all amendments to each such Act as well as the regulations issued under each such Act;

 

(e)                                  any and all claims for violation of the federal, or any state, constitution;

 

(f)                                   any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

 

(g)                                  any and all claims for attorneys’ fees and costs.

 

Executive agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any severance obligations due Executive under the Management Retention Agreement.  Nothing in this Agreement waives Executive’s rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance.

 

5.                                      Acknowledgment of Waiver of Claims under ADEA.  Executive acknowledges that Executive is waiving and releasing any rights Executive may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary.  Executive and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Executive acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Executive was already entitled.  Executive further acknowledges that Executive has been advised by this writing that (a) Executive should consult with an attorney prior to executing this Agreement; (b) Executive has at least twenty-one (21) days within which to consider this Agreement; (c) Executive has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective until the revocation period 

 

 

has expired; and (e) nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.  Any revocation should be in writing and delivered to the Vice-President of Human Resources at the Company by close of business on the seventh day from the date that Executive signs this Agreement.

 

6.                                      Civil Code Section 1542.  Executive represents that Executive is not aware of any claims against the Company other than the claims that are released by this Agreement.  Executive acknowledges that Executive has been advised by legal counsel and is familiar with the provisions of California Civil Code 1542, below, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Executive, being aware of said code section, agrees to expressly waive any rights Executive may have under such code section, as well as under any statute or common law principles of similar effect.

 

7.                                      No Pending or Future Lawsuits.  Executive represents that Executive has no lawsuits, claims, or actions pending in Executive’s name, or on behalf of any other person or entity, against the Company or any other person or entity referred to in this Agreement.  Executive also represents that Executive does not intend to bring any claims on Executive’s own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein.

 

8.                                      Application for Employment.  Executive understands and agrees that, as a condition of this Agreement, Executive shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Executive hereby waives any right, or alleged right, of employment or re-employment with the Company.

 

9.                                      No Cooperation.  Executive agrees that Executive will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so.

 

10.                               No Admission of Liability.  Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of disputed claims.  No action taken by the Company, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Executive or to any third party.

 

 

11.                               Costs.  The parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.

 

12.                               Authority.  Executive represents and warrants that Executive has the capacity to act on Executive’s own behalf and on behalf of all who might claim through Executive to bind them to the terms and conditions of this Agreement.

 

13.                               No Representations.  Executive represents that Executive has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Neither party has relied upon any representations or statements made by the other party which are not specifically set forth in this Agreement.

 

14.                               Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

 

15.                               Entire Agreement.  This Agreement, along with the Proprietary Information and Inventions Agreement and Executive’s written equity compensation agreements with the Company, represents the entire agreement and understanding between the Company and Executive concerning Executive’s separation from the Company.

 

16.                               No Oral Modification.  This Agreement may only be amended in writing signed by Executive and the Chairman of the Board of Directors of the Company.

 

17.                               Governing Law.  This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California.

 

18.                               Effective Date.  This Agreement is effective eight (8) days after it has been signed by both parties.

 

19.                               Counterparts.  This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 

20.                               Voluntary Execution of Agreement.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties to this Agreement, with the full intent of releasing all claims.  The parties acknowledge that:

 

(a)                                 They have read this Agreement;

 

(b)                                 They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

 

(c)                                  They understand the terms and consequences of this Agreement and of the releases it contains;

 

 

(d)                                 They are fully aware of the legal and binding effect of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth below.

 

 

	
 
    	
 
    	
Marketo, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Steve   Winter, an individualEx. 10.1 2015.03.11

Execution Version

Waiver and Fourth Amendment to Credit Agreement
and 
Second Amendment to Guarantee and Collateral Agreement
dated as of March 11, 2015
among
Miller Energy Resources, Inc.,
as Borrower,
the Guarantors party hereto,
KeyBank National Association,
as Administrative Agent,
and
the Lenders Party Hereto
                    

KeyBank National Association
Lead Arranger and Book Runner

[WAIVER AND Fourth AMENDMENT TO CREDIT AGREEMENT
AND SECOND AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT]
001955-0001-16872396.13

Waiver and Fourth Amendment to Credit Agreement and 
Second Amendment to Guarantee and Collateral Agreement
 
This Waiver and Fourth Amendment to Credit Agreement and Second Amendment to Guarantee and Collateral Agreement (this “Amendment”) dated as of March 11, 2015, is among MILLER ENERGY RESOURCES, INC., a corporation duly formed and existing under the laws of the State of Tennessee, the Guarantors party hereto, each of the Lenders party hereto, and KEYBANK NATIONAL ASSOCIATION, as Administrative Agent.
R E C I T A L S
A.    The Borrower, the Administrative Agent and the Lenders are parties to that certain Credit Agreement dated as of June 2, 2014 (amended by that certain First Amendment to Credit Agreement dated as of August 11, 2014, that certain Second Amendment to Credit Agreement dated as of August 19, 2014, that certain Waiver and Third Amendment to Credit Agreement dated as of December 10, 2014 (the “Third Amendment”), and as otherwise amended, restated, supplemented or modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.
B.    At the Borrower’s request, the Administrative Agent and each of the Lenders party hereto have agreed, subject to the terms and conditions herein, to (i) amend certain terms and provisions of the Credit Agreement and the Guarantee and Collateral Agreement as herein set forth and (ii) waive (A) any Event of Default that has occurred and is continuing under Section 10.01(d) of the Credit Agreement resulting from the Loan Parties’ failure to maintain a ratio of (a) the NYMEX Value of the total Proved Developed Reserves of the Loan Parties as shown on the most recently delivered Reserve Report, to (b) Total Debt, equal to or in excess of 1.10 to 1.00 in accordance with Section 9.01(f) of the Credit Agreement (the “Asset Coverage Event of Default”), (B) the Event of Default that has occurred and is continuing under Section 10.01(d) of the Credit Agreement resulting from the Borrower’s issuance of preferred Equity Interests with a stated liquidation preference in excess of $50,000,000 in violation of Section 9.20(c) of the Credit Agreement (the “Preferred Issuance Event of Default”), (C) the Event of Default that has occurred and is continuing under Section 10.01(d) of the Credit Agreement resulting from the Borrower’s permitting to exist Debt that is not otherwise permitted by Section 9.02 of the Credit Agreement in respect of accounts payable that are greater than 90 days past due and not otherwise being contested in good faith by appropriate proceedings (the “Indebtedness Event of Default”), (D) any Event of Default that has occurred and is continuing under Section 6 of the Third Amendment as a result of the Borrower’s or its Subsidiaries’ failure to provide the Administrative Agent with a Mortgage sufficient to create a first priority, perfected Lien (subject only to Specified Liens) in favor of the Secured Parties in the North Fork Pipeline and to deliver certain legal opinions in connection therewith on or before January 9, 2015 (the “North Fork Documentation Event of Default”), (E) the Event of Default that has occurred and is continuing under Section 10.01(d) of the Credit Agreement resulting from the payment by the Borrower of Series C Preferred Dividends and Series D Preferred Dividends on March 2, 2015 in violation of Section 9.04(a) of the Credit Agreement, since the Events of Default specified in this paragraph had occurred and were continuing as of the date of such payment (the “Restricted Payment Event of Default”) and (F) any Event of Default that has occurred and is continuing under Section 10.01(g) of the Credit Agreement with respect to the Events of Default specified in this paragraph, to the extent they also constitute Events of Default under the Second Lien Term Loan Agreement, which constitutes Material Indebtedness (the “Second Lien Cross Defaults”, and together with the Asset Coverage Event of Default, the 

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Preferred Issuance Event of Default, the Indebtedness Event of Default, the North Fork Documentation Event of Default, and the Restricted Payment Event of Default, collectively, the “Specified Events of Default”).
C.    Now, therefore, to induce the Administrative Agent and the Lenders to enter into this Amendment and 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:

A G R E E M E N T S
Section 1.Defined Terms. Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Amendment. Unless otherwise indicated, all section references in this Amendment refer to sections of the Credit Agreement.

Section 2.Amendments to Credit Agreement. 

2.1Amendments to Section 1.02 of the Credit Agreement.  

(a)The definitions of “Borrowing Base Adjustment Provisions” and “Liquidity” in Section 1.02 of the Credit Agreement are hereby restated in their entirety to read as follows:

“Borrowing Base Adjustment Provisions” means Section 2.07(e), Section 3.04(c)(iv), Section 8.13(c), Section 9.12(d) and Section 9.20(c) and any other provisions hereunder which adjust the amount of the Borrowing Base.
“Liquidity” means, at any time, the amount of the Loans that are then available for borrowing.

(b)The Borrowing Base Utilization Grid contained in the definition of “Applicable Margin” in Section 1.02 of the Credit Agreement is hereby restated in its entirety to read as follows: 

	
						
	Borrowing Base Utilization Grid

	Borrowing Base Utilization Percentage
	<25%
	≥ 25%, but <50%
	≥ 50%, but <75%
	≥ 75%, but <90%
	≥ 90%, but ≤100%

	ABR Loans
	3.00%
	3.25%
	3.50%
	3.75%
	4.00%

	Eurodollar Loans
	4.00%
	4.25%
	4.50%
	4.75%
	5.00%

	Commitment Fee Rate
	0.50%
	0.50%
	0.75%
	0.75%
	0.75%

(c)The following new defined terms shall be inserted in Section 1.02 of the Credit Agreement in the proper alphabetical order to read as follows:

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“Capex Conditions” means the Administrative Agent and the Majority Lenders have received evidence reasonably satisfactory to them that (a) each well located in the North Fork Field described in APOD A and drilled after the Third Amendment Effective Date has a daily average of gross production of Hydrocarbons (calculated at the wellhead) of at least 2,200 mcf per day for a minimum of 30 consecutive days, and (b) the aggregate Capital Expenditures made in respect of each such well do not exceed the Budgeted Gross Capital Expenditures (including any permitted variance) reflected in APOD A (as amended hereby) for such wells.

“Designated Tax Credit Certificate Payments” means each of the March Tax Credit Certificate Payments and the July Tax Credit Certificate Payments.

“Field Audit” means a field examination conducted by a Field Auditor of the
Borrower’s and its Subsidiaries’ accounts payable and books and records related thereto, and any other items deemed necessary by the Administrative Agent. 

“Field Auditor” means any auditors, appraisers or other advisors who may be retained by the Administrative Agent and Majority Lenders with the consent of the Borrower (not to be unreasonably withheld or delayed).

“Fourth Amendment” means that certain Waiver and Fourth Amendment to Credit Agreement dated as of March 11, 2015 among the Borrower, the Lenders party thereto and the Administrative Agent.

“Fourth Amendment Effective Date” means the date on which the conditions specified in Section 5 of the Fourth Amendment are satisfied (or waived in accordance with Section 12.02 of the Credit Agreement).

“March Tax Credit Certificate Payments” means the Tax Credit Certificate Payments submitted on October 30, 2014 and expected to be received in March 2015 in an approximate amount of $20,615,893.

“July Tax Credit Certificate Payments” means the Tax Credit Certificate Payments submitted on January 31, 2015, and resubmitted on March 6, 2015, and expected to be received in July 2015 in an approximate amount of $33,046,103.

“Subject Preferred Equity Interests” means any preferred Equity Interests issued by the Borrower with a stated liquidation preference, in the aggregate with all other preferred Equity Interests issued by the Borrower on or after the Closing Date, in excess of $63,704,550.

2.2Amendments to Section 3.04(c) of the Credit Agreement.  A new Section 3.04(c)(vii) is hereby added to the Credit Agreement to read as follows:

(vii)    Upon Issuance of Subject Preferred Equity Interests.  Upon any adjustments to the Borrowing Base pursuant to Section 9.20(c), if a Borrowing Base Deficiency results from such adjustment, then the Borrower shall prepay the Borrowings in an aggregate principal amount equal to such Borrowing Base Deficiency.  If a Borrowing Base Deficiency remains after prepaying all of the Borrowings as a result of an LC Exposure, the Borrower shall Cash Collateralize such remaining deficiency as provided in Section 2.08(j).  The Borrower shall 

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be obligated to make such prepayment and/or deposit of Cash Collateral on the date it or any Subsidiary receives proceeds as a result of the issuance of Subject Preferred Equity Interests.

2.3Amendment to Section 8.16 of the Credit Agreement. Section 8.16 of the Credit Agreement is hereby amended to add the following sections to read as follows:

(f)    On or prior to the date that is 60 days after the Fourth Amendment Effective Date (or such later date that is approved by the Administrative Agent in its sole discretion), the Borrower shall deliver evidence satisfactory to the Administrative Agent that a Mortgage from Anchor Point Energy, LLC, encumbering the North Fork Pipeline, has been duly recorded and is effective to create first priority, perfected Liens (subject only to Specified Liens) in favor of the Administrative Agent for the benefit of the Secured Parties.
(g)    On or before April 30, 2015, the Borrower shall have received at least $10,000,000 of net cash proceeds from the issuance of preferred Equity Interests in compliance with Section 9.20(c) and otherwise in accordance with this Agreement. 
(h)     On or before March 31, 2015, the Field Auditor shall have begun (and the Borrower and its Subsidiaries shall be cooperating with) a Field Audit of accounts payable of the Borrower and its Subsidiaries, such Field Audit to be completed no later than April 17, 2015 and the procedures and results of such Field Audit shall be reasonably satisfactory to the Majority Lenders in all respects.

(i)    On or prior to the date that is 30 days after the Fourth Amendment Effective Date (or such later date that is approved by the Administrative Agent in its sole discretion), the Borrower shall deliver evidence satisfactory to the Administrative Agent that a Mortgage from Savant Alaska, LLC encumbering the Oil and Gas Properties acquired pursuant to the Savant Acquisition, has been duly recorded and is effective to create first priority, perfected Liens (subject only to Specified Liens) in favor of the Administrative Agent for the benefit of the Secured Parties.

(j)    On or before May 1, 2015, the Borrower shall deliver to the Administrative Agent an Engineering Report prepared by or under the supervision of the chief engineer of the Borrower dated as of April 15, 2015, which Engineering Report will serve as the basis for an Interim Redetermination (which Interim Redetermination shall be in addition to any other Interim Redetermination which may be elected by the Required Lenders pursuant to Section 2.07) with such Interim Redetermination to be completed on or before June 1, 2015.

(k)    Contemporaneously with the delivery of the Mortgages required by Section 8.16(f) and Section 8.16(i), the Borrower shall cause to be delivered to the Administrative Agent an opinion of (i) Davis Wright Tremaine LLP, Alaska counsel for the Administrative Agent, and/or (ii) local counsel in each other jurisdiction requested by the Administrative Agent, in each case, in form and substance satisfactory to the Administrative Agent in its sole discretion.
for.

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2.4Amendment to Section 9.01(e) of the Credit Agreement. Section 9.01(e) of the Credit Agreement is hereby restated in its entirety to read as follows:

(e)    The Borrower will not permit, at any time (i) prior to the date of receipt by the Borrower or any Subsidiary of the March Tax Credit Certificate Payments, its Liquidity to be less than $5,000,000 and (ii) on and after such date (and, in any event, on and after March 30, 2015), its Liquidity to be less than $10,000,000.
ow: 

2.5Amendment to Section 9.04(a) of the Credit Agreement.  Section 9.04(a)(iv) of the Credit Agreement is hereby restated in its entirety to read as follows:

(iv) the Borrower may declare or make, or agree to pay or make, payments of the Series B Preferred Dividend, the Series C Preferred Dividend, and the Series D Preferred Dividend so long as, in each case, immediately prior to and after giving effect to each such declaration, payment, or agreement to pay or make, as applicable, (A) no Default or Event of Default shall have occurred and be continuing, (B) the Borrower is in pro forma compliance with Section 9.01 and (C) the amount of the Loans that are then available for borrowing is equal to or greater than $10,000,000

2.6Amendment to Section 9.01 of the Credit Agreement.  A new Section 9.10(c) is hereby added to the Credit Agreement to read as follows:

(c)    Notwithstanding the foregoing, the Borrower and any of its Subsidiaries may sell, transfer, discount or otherwise Dispose of any Designated Tax Credit Certificate Payment so long as (i) the Majority Lenders shall, in their sole discretion, be satisfied with the net cash proceeds received by the Borrower or any of its Subsidiaries in respect of such Disposition and (ii) the proceeds of such Disposition are applied as required by Section 9.27(a) of this Agreement.  

2.7Amendment to Section 9.12 of the Credit Agreement. Section 9.12 of the Credit Agreement is hereby amended to (i) move the word “and” from the end of clause (k) to the end of clause (l) and (ii) to add a new clause (m) to read as follows:

(m)    Dispositions of hedging positions in respect of Swap Agreements with an aggregate Swap Agreement PV of all such hedge positions Disposed of pursuant to this clause (m) not to exceed the lesser of (A) $5,000,000 or (B) 15% of the aggregate Swap Agreement PV at the time of the first such Disposition of hedging positions; provided that notwithstanding anything herein to the contrary, so long as no Designated Tax Credit Certificate Payments have been received or been Disposed of pursuant to Section 9.10(c), the Borrowing Base shall not be adjusted in connection with any Disposition permitted by this clause (m); provided further, that if any Designated Tax Credit Certificate Payments have been received or been Disposed of pursuant to Section 9.10(c) then (i) the Borrowing Base shall be adjusted to remove the Borrowing Base value of such hedge positions so Disposed of to the extent required by Section 2.07(e) and (ii) the proceeds of such Disposition of hedging positions shall be applied as required by Section 3.04(c)(iii), to the extent required, and thereafter to repay Borrowings (or Cash Collateralize any LC Exposure, if all Borrowing have been repaid).

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2.8Amendments to Section 9.20(c) of the Credit Agreement. The proviso to Section 9.20(c) of the Credit Agreement is hereby restated in its entirety to read as follows:

provided that, the Borrower may issue additional preferred Equity Interests so long as (i) the aggregate stated liquidation preference of all such preferred Equity Interests issued after the Effective Date shall not exceed $100,000,000 on the date of issuance, (ii) the terms and conditions of any such preferred Equity Interest are no more onerous to the Borrower than those contained in either the Series C Preferred Stock or the Series D Preferred Stock, and (iii) upon the issuance of additional preferred Equity Interests (A) the Borrower will furnish to the Administrative Agent prompt written notice of such issuance and (B) to the extent that the Borrower issues Subject Preferred Equity Interests, the Borrowing Base then in effect shall be reduced by an amount equal to the product of 0.25 multiplied by the stated liquidation preference of such Subject Preferred Equity Interests, and the Borrowing Base as so reduced shall become the new Borrowing Base immediately upon the date of such issuance, effective and applicable to the Borrower, the Agents, the Issuing Banks and the Lenders on such date until the next redetermination or modification thereof pursuant to the Borrowing Base Adjustment Provisions.

2.9Amendment to Section 9.24 of the Credit Agreement.  Section 9.24 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 9.24.  Permitted Capital Expenditures.  The Borrower will not, and will not permit any Subsidiary or Miller 2009 Partnership to, use funds from any source (including proceeds of the Second Lien Loans and amounts on deposit in the Collections Account) to make any Capital Expenditures, other than (a) from and including the Fourth Amendment Effective Date and through and including the date on which the Capex Conditions are satisfied, Mandatory Capital Expenditures, and (b) thereafter until the completion of APOD A and APOD B, Permitted Capital Expenditures.  For the avoidance of doubt, the restrictions in this Section 9.24 do not apply to Capital Expenditures made on behalf of the Borrower or any of its Subsidiaries by a third party in connection with any joint venture or other transaction in which the Borrower or such Subsidiary has a carried interest.

2.10Amendments to Article IX of the Credit Agreement.  Article IX of the Credit Agreement is hereby amended to add a new Section 9.27 in the correct numerical order as follows:

Section 9.27    Additional 2015 Tax Credit Certificate Payments.  

(a)    Immediately upon receipt by the Borrower or any Subsidiary of the March Tax Credit Certificate Payments (or any net cash proceeds from the Disposition thereof permitted by Section 9.10(b)), (i) the Borrower will repay Borrowings (and Cash Collateralize any LC Exposure, if all Borrowings have been repaid) in an amount equal to such March Tax Credit Certificate Payments (or the net cash proceeds from the Disposition thereof) and (ii) the Borrowing Base in effect immediately prior to receipt of the March Tax Credit Certificate Payments will be automatically reduced by $5,000,000.

(b)    Immediately upon receipt by the Borrower or any Subsidiary of the July Tax Credit Certificate Payments (or any net cash proceeds from the Disposition thereof 

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permitted by Section 9.10(b)) the Borrower will repay Borrowings (and Cash Collateralize any LC Exposure, if all Borrowings have been repaid) in an amount equal to such July Tax Credit Certificate Payments (or the net cash proceeds from the Disposition thereof) and, if the Borrower or any Subsidiary receives any such July Tax Credit Certificate Payments prior to the effective date of the August 1, 2015 Scheduled Redetermination (such date, the “August Redetermination Effective Date”), then, during the period beginning on the date such July Tax Credit Certificate Payments are received and ending on the August Redetermination Effective Date, the Borrower will not permit the sum of the Revolving Credit Exposures of the Lenders to exceed an amount equal to the difference of (A) $20,000,000 minus (B) the amount, if any,by which the Borrowing Base has been reduced pursuant clause (i) of the second proviso to Section 9.12(m).

2.11Amendment to APOD A.  Exhibit A to the Third Amendment shall be amended and restated in its entirety as set forth on Exhibit A hereto.

2.12Amendment to Guarantee and Collateral Agreement.  Schedule 2 to the Guarantee and Collateral Agreement shall be amended and restated in its entirety as set forth on Exhibit B hereto.

Section 3.Borrowing Base.  For the period from and including the Fourth Amendment Effective Date to but excluding the next Redetermination Date, the amount of the Borrowing Base shall be $45,000,000.  Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time pursuant to the Borrowing Base Adjustment Provisions.

Section 4.Waiver and Consent.  

4.1Waiver of Specified Events of Default.  The Lenders hereby agree, subject to the terms and conditions of this Amendment, to waive (a) the Indebtedness Event of Default to the extent such Event of Default occurred prior to the Fourth Amendment Effective Date, (b) the Preferred Issuance Event of Default, (c) the Asset Coverage Ratio Event of Default, but only with respect to each Asset Coverage Test Date occurring during the period from the Fourth Amendment Effective Date through (but excluding) the April 30, 2015 Asset Coverage Test Date, (d) without limiting the obligations of the Borrower under Section 8.16(f) of the Credit Agreement, as amended hereby, the North Fork Documentation Event of Default, (e) the Restricted Payment Event of Default, and (f) the Second Lien Cross Defaults.  

4.2No Other Waivers.  Except for the limited waivers set forth in Section 4.1 above, nothing contained in this Amendment shall be construed as a waiver by the Administrative Agent or any Lender of any covenant or provision of the Credit Agreement or any other Loan Document, and the failure of the Administrative Agent or any Lender at any time or times hereafter to require strict performance by any Loan Party of any provision hereof or thereof shall not waive, affect or diminish any right of the Administrative Agent or any Lender to thereafter demand strict compliance therewith.  The Administrative Agent and each Lender hereby reserves all rights granted under the Credit Agreement and the other Loan Documents with respect to any Default or Event of Default that has occurred and is continuing or may hereafter occur (other than the Specified Events of Default to the extent set forth in Section 4.1 above).

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Section 5.Conditions Precedent.  This Amendment shall become effective on the date (such date, the “Fourth Amendment Effective Date”) when each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement):

(a)The Administrative Agent shall have received from the Majority Lenders, the Administrative Agent, the Borrower and each Guarantor, counterparts (in such number as may be reasonably requested by the Administrative Agent) of this Amendment signed on behalf of such Person.

(b)The Borrower shall have executed and delivered the Fourth Amendment Fee Letter dated as of March 11, 2015 (the “Fourth Amendment Fee Letter”) to the Administrative Agent.

(c)The Administrative Agent shall be reasonably satisfied that, substantially contemporaneously with the effectiveness of this Amendment, that the terms of the Second Lien Term Loan Agreement will be amended in form and substance reasonably acceptable to the Administrative Agent.

(d)No Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of, and the transactions contemplated by, this Amendment and the contemporaneous amendment to the Second Lien Term Loan Agreement.

(e)The Borrower shall have paid to the Administrative Agent all costs, fees and expenses due and payable pursuant to the Credit Agreement, including (a) all fees payable under the Fourth Amendment Fee Letter, payable on the Fourth Amendment Effective Date, including upfront fees for the account of each Lender equal to 0.40% of the amount of each Lender’s allocated share of the Borrowing Base after giving effect to Section 3 of this Amendment, and (b) to the extent invoiced, all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement, including all invoiced costs, fees, and expenses due and payable to Simpson Thacher & Bartlett LLP and McAfee & Taft, a Professional Corporation.

(f)The Administrative Agent shall have received such other documents and information as the Administrative Agent or its counsel shall have reasonably requested.

Section 6.Miscellaneous.

6.1Confirmation. The provisions of the Credit Agreement, as amended by this Amendment, remain in full force and effect following the effectiveness of this Amendment.

6.2Release.  In consideration of the Administrative Agent’s and the Lenders’ willingness to enter into this Amendment, each Loan Party hereby releases and forever discharges the Administrative Agent and each Lender and each of their respective Related Parties (all of the foregoing, collectively, the “Lender Group”), from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action of any nature whatsoever, including, without limitation, all claims, demands and causes of action for contribution and indemnity, whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted (all 

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of the above, collectively, “Claims”), that existed, arose or occurred at any time on or before the date of this Amendment, which any Loan Party may have or claim to have against any of the Lender Group in any way related to or connected with the Loan Documents or the transactions contemplated thereby.

6.3Ratification and Affirmation; Representations and Warranties.  Each of the Borrower and each Guarantor hereby:
(a)acknowledges the terms of this Amendment; 

(b)ratifies and affirms their respective obligations, and acknowledges their respective continued liability, under each Loan Document to which it is a party (including with respect to all of the Liens securing the payment and performance of the Secured Obligations) and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby;
 
(c)represents and warrants to the Lenders that the resolutions and governing documents certified to the Administrative Agent and the Lenders by such Loan Party on the date of the Credit Agreement remain in full force and effect and have not been amended or otherwise modified; and

(d)represents and warrants to the Lenders that as of the date hereof, immediately after giving effect to the terms of this Amendment, (i) the representations and warranties of the Borrower and the Guarantors set forth in the Credit Agreement, as amended hereby, and in the other Loan Documents are true and correct in all material respects (unless such representation and warranty is already qualified by materiality, in which case such representation or warranty is simply true and correct) on and as of the date hereof, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties continue to be true and correct as aforesaid as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing, and (iii) no event, development or circumstance has occurred or exists that has resulted in, or could reasonably be expected to have, a Material Adverse Effect.

6.4Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page to this Amendment by facsimile transmission or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed counterpart hereof.

6.5NO ORAL AGREEMENT.  THIS 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.

6.6GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

6.7Payment 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 out‐of-pocket 

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costs and reasonable expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees, charges and disbursements of counsel.

6.8Severability. Any provision of this 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.

6.9Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties to the Credit Agreement and their respective successors and permitted assigns.

6.10Loan Document. Each of this Amendment and the Third Amendment Fee Letter is a Loan Document.

[SIGNATURES BEGIN NEXT PAGE]

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

	
							
	BORROWER:
	 
	MILLER ENERGY RESOURCES, INC.

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	Chief Executive Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	GUARANTORS:
	 
	MILLER DRILLING, TN LLC

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	MILLER ENERGY RESOURCES, INC.,

	 
	 
	 
	 
	its Sole Member

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	MILLER ENERGY SERVICES, LLC
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	MILLER ENERGY RESOURCES, INC.,

	 
	 
	 
	 
	its Sole Manager

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	MILLER ENERGY GP, LLC
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	MILLER ENERGY RESOURCES, INC.,

	 
	 
	 
	 
	its Sole Manager

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	MILLER RIG & EQUIPMENT, LLC

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	MILLER ENERGY RESOURCES, INC.,

	 
	 
	 
	 
	its Sole Manager

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

	
							
	 
	 
	 
	COOK INLET ENERGY, LLC

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ David M. Hall
	 

	 
	 
	 
	 
	David M. Hall

	 
	 
	 
	 
	Manager and Chief Executive Officer

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	EAST TENNESSEE CONSULTANTS, INC.

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ David M. Hall
	 

	 
	 
	 
	 
	David M. Hall

	 
	 
	 
	 
	Chief Operating Officer

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	EAST TENNESSEE CONSULTANTS II, L.L.C.

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ David M. Hall
	 

	 
	 
	 
	 
	David M. Hall

	 
	 
	 
	 
	Chief Operating Officer

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	ANCHOR POINT ENERGY, LLC

	 
	 
	 
	By:
	Cook Inlet Energy, LLC, its Manager

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ David M. Hall
	 

	 
	 
	 
	 
	 
	David M. Hall
	 

	 
	 
	 
	 
	 
	Chief Operating Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	SAVANT ALASKA, LLC

	 
	 
	 
	By:
	Miller Energy Resources, Inc., its sole member

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	NUTAAQ OPERATING, LLC

	 
	 
	 
	By:
	Savant Alaska, LLC, its sole member

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	/s/ Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Carl F. Giesler, Jr.
	 

	 
	 
	 
	 
	 
	Chief Executive Officer
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

	
					
	 
	 
	KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, as Issuing Bank and as a Lender

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ George E. McKean
	 

	 
	 
	Name:
	George E. McKean
	 

	 
	 
	Title:
	Senior Vice President
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

	
					
	 
	 
	CIT FINANCE LLC, as a Lender

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ John Feeley
	 

	 
	 
	Name:
	John Feeley
	 

	 
	 
	Title:
	Director
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

	
					
	 
	 
	MUTUAL OF OMAHA BANK, as a Lender

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Keith Miller
	 

	 
	 
	Name:
	Keith Miller
	 

	 
	 
	Title:
	Senior Energy Lender
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

	
					
	 
	 
	ONEWEST BANK N.A., as a Lender

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Sean Murphy
	 

	 
	 
	Name:
	Sean Murphy
	 

	 
	 
	Title:
	Executive Vice President
	 

Signature Page to Waiver and Fourth Amendment to Credit Agreement
and Second Amendment to Guarantee and Collateral Agreement
(Miller Energy Resources, Inc.)

Exhibit A

APOD A

	
				
	Field
	Well ID
	Budgeted Gross Capital Expenditures
	Permitted Variance

	REDOUBT
	 
	 
	 

	 
	RU-7
	$7,000,000
	10%

	 
	 
	 
	 

	Following RU-7, any three of the following 
four wells in the Redoubt Unit, as determined 
by Borrower:

	 
	RU-3
	$7,000,000
	10%

	 
	RU-4
	$7,000,000
	10%

	 
	RU-5
	$4,000,000
	10%

	 
	RU-6
	$4,000,000
	10%

	 
	 
	 
	 

	NORTH FORK:
	 
	 
	 

	Any four of the following six wells, 
as determined by Borrower:

	 
	NF-24-26
	$9,000,000
	10%

	 
	NF-42-36
	$9,000,000
	10%

	 
	NF-9
	$5,000,000
	10%

	 
	NF-10
	$5,000,000
	10%

	 
	NF-11
	$5,000,000
	10%

	 
	NF-12
	$5,000,000
	10%

Notwithstanding the permitted individual well variance, the aggregate variance on all wells shall not exceed 10%.

Exhibit A
[WAIVER AND Fourth AMENDMENT TO CREDIT AGREEMENT
AND SECOND AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT]
001955-0001-16872396.13

Exhibit B

Schedule 2

DESCRIPTION OF PLEDGED SECURITIES
Pledged Securities:
	
					
	Owner
	Issuer
	Class of Stock or other Equity Interest
	Ownership Interest/No. of Shares/Units
	Certificated or Uncertificated

	Miller Energy Resources, Inc.
	Cook Inlet Energy, LLC
	Membership interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	East Tennessee Consultants, Inc.
	Common Stock
	1000 shares
100%
	Certificated (Certificate No. 005)

	Miller Energy Resources, Inc.
	East Tennessee Consultants II, L.L.C.
	Membership Interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	Miller Drilling, TN LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	Miller Energy Services, LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	Miller Energy GP, LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	Miller Rig & Equipment, LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Cook Inlet Energy, LLC
	Anchor Point Energy, LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Miller Energy Resources, Inc.
	Savant Alaska, LLC
	Membership Interest in LLC
	100%
	Uncertificated

	Savant Alaska, LLC
	Nutaaq Operating LLC
	Membership Interest in LLC
	100%
	Uncertificated

Pledged Notes:
NONE.

Exhibit B
[WAIVER AND Fourth AMENDMENT TO CREDIT AGREEMENT
AND SECOND AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT]
001955-0001-16872396.13

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