Document:

EXHIBIT 10.1

 

 

AMENDMENT NO. 2

TO SIXTH AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT

 

THIS AMENDMENT NO.
2 TO SIXTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (the “Amendment”), dated as of March 16, 2016, is
made and entered into by and among ROYAL GOLD, INC., a corporation organized and existing under the laws of the State of Delaware,
as the borrower (“Royal Gold” or the “Borrower”), HIGH DESERT MINERAL RESOURCES, INC., a
corporation organized and existing under the laws of the State of Delaware, as a guarantor (“High Desert”),
RG EXCHANGECO INC., an amalgamated corporation validly existing under the Canada Business Corporations Act, as a guarantor (“RG
Exchangeco”), RG MEXICO, INC., a corporation organized and existing under the laws of the State of Delaware, as a guarantor
(“RG Mexico”), those additional guarantors identified as a “Guarantor” on the signature pages hereto
and such additional guarantors from time to time party hereto, as guarantors (collectively, the “Additional Guarantors”)
(with each of High Desert, RG Exchangeco, RG Mexico and the Additional Guarantors being individually referred to herein as a “Guarantor”
and collectively referred to herein as the “Guarantors”), those banks and financial institutions identified
as a “Lender” on the signature pages hereto and such other banks or financial institutions as may from time to time
become parties to this Agreement as a lender (individually, each a “Lender” and collectively, the “Lenders”),
and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States (in its individual
capacity, “HSBC Bank”), as administrative agent (in such capacity, the “Administrative Agent”)
for the Lenders.

 

RECITALS

 

A.            The Borrower, the Guarantors, the Lenders, the Administrative Agent, and the other parties thereto entered into that certain
Sixth Amended and Restated Revolving Credit Agreement dated as of January 29, 2014 (as amended by that certain Amendment No. 1
to Sixth Amended and Restated Revolving Credit Agreement dated as of April 29, 2015 and as further amended, modified, supplemented,
continued or restated prior to the date hereof, the “Credit Agreement”).

 

B.             The Borrower, the Guarantors, the Lenders and the Administrative Agent now desire to: (i) extend the scheduled maturity
date from January 29, 2019 to March 16, 2021, and (ii) otherwise amend, ratify, confirm and continue the Credit Agreement as set
forth herein and to ratify and confirm the other Credit Documents.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements, representations and warranties herein set forth and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Defined Terms. Capitalized terms used
but not defined in this Amendment shall have the meanings given thereto in the Credit Agreement.

 

2.             Agreements and Amendments to the Credit Agreement.

 

a.              Subject to the terms and conditions set forth herein and pursuant to the requirements of the
Credit Agreement, including Section 10.1 thereof, the Credit Agreement is hereby amended to the extent necessary to give effect
to the provisions of this Amendment and to incorporate the provisions of this Amendment into the Credit Agreement. The Credit Agreement,
together with this Amendment (upon its effectiveness), shall be read together and have effect so far as practicable as though the
provisions thereof and the relevant provisions hereof are contained in one document.

 

    	 

     

    

 

 

b.              The Credit Agreement is hereby amended by deleting the defined term “Maturity Date”
therefrom and substituting the following therefor:

 

“Maturity
Date” shall mean the first to occur of (a) March 16, 2021 or (b) any date on which the due date of the Loans is accelerated
by reason of an Event of Default pursuant to Section 8.2.

 

c.              The Borrower, the Guarantors, the Lenders and the Administrative Agent hereby agree that the
Credit Agreement, as amended hereby, is continued, ratified and confirmed, and shall remain in full force and effect in accordance
with its terms.

 

d.              As a condition to the Administrative Agent and the Lenders entering into this Amendment, the
Borrower and the Guarantors hereby irrevocably confirm and agree that each Guaranty, Security Agreement, Pledge Agreement, Mortgage,
the Quebec Security Documents and the other Security Documents and the other Credit Documents executed by the Borrower and/or any
other Credit Party, and all guaranties, grants of security, debentures, mortgages, liens, deeds, pledges and rights thereunder,
are hereby continued, ratified and confirmed, remain in full force and effect, remain fully perfected, and apply to the Credit
Agreement as amended and extended hereby.

 

e.              This Amendment and all other Instruments executed and delivered by the Borrower, the Guarantors
or any other Credit Party in connection with this Amendment are and shall be deemed to be “Credit Documents” for all
purposes. 

 

3.             Representations and Warranties.

 

a.              Each Credit Party hereby remakes and restates each of its representations and warranties in
the Credit Agreement and the other Credit Documents, effective as of the date of this Amendment, which representations and warranties
are incorporated herein by reference as if fully set forth herein. 

 

b.              Each Credit Party hereby further represents and warrants that (i) it has the corporate
power and authority, and the legal right, to execute, deliver and perform this Amendment, (ii) this Amendment has been duly authorized,
executed and delivered by each Credit Party, (iii) no consent or authorization of any Governmental Authority or other Person
is required in connection with this Amendment, (iv) this Amendment constitutes a legal, valid and binding obligation of each Credit
Party, enforceable against each Credit Party in accordance with its terms (except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws or equitable principles affecting enforcement of creditors’ rights generally
at the time in effect), (v) no Default or Event of Default has occurred and is continuing or will occur as a result of the
consummation of the transactions contemplated hereby or as a result of the continuation of the Credit Agreement, and (vi) the Recitals
set forth above are true and correct in all respects.

 

4.             Conditions Precedent. This Amendment
shall become effective as of the date hereof upon (and only upon) satisfaction of the following conditions precedent:

 

a.              The Administrative Agent shall have received the following Credit Documents, each of even
date herewith and duly executed by the Borrower and the applicable Credit Parties: (i) this Amendment; (ii) a Ratification; (iii)
a Canadian Ratification; (iv) amendments to each of the Mortgages, in form and content satisfactory to the Administrative Agent;
(v) an Officer’s Certificate; (vi) a Secretary’s Certificate; and (vii) a certificate demonstrating compliance with
the financial covenants contained in Section 6.17 of the Credit Agreement by calculation thereof as of the end of the most recently
completed fiscal quarter. 

 

    	 -2-

     

    

 

b.              The Administrative Agent shall have received: (i) current good standing certificates for each
Credit Party; (ii) with respect to Liens and the Collateral, (x) searches of all Lien filings, registrations and records deemed
necessary by the Administrative Agent, and copies of any documents, filings and Instruments on file in such jurisdictions, with
results satisfactory to the Administrative Agent, (y) all financing statements, registrations, filings or other Instruments for
each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect, or maintain the
perfection of, the Administrative Agent’s security interest in the Collateral, and (z) all stock or membership certificates
evidencing the Capital Stock pledged to the Administrative Agent pursuant to the Pledge Agreements, together with duly executed
in blank, undated stock or transfer powers attached thereto to the extent not previously delivered to Administrative Agent; and
(iii) opinions of legal counsel for the Credit Parties, dated the date hereof and addressed to the Administrative Agent and the
Lenders in form and substance reasonably acceptable to the Administrative Agent.

 

c.              The Borrower shall have paid to the Administrative Agent an upfront fee equal to Sixteen (16)
basis points (0.16%) on the Committed Amount (the “Amendment Upfront Fee”), which will be distributed by the
Administrative Agent to the Lenders on a pro rata basis. The Amendment Upfront Fee will be fully earned and payable on and as of
the date of this Amendment. No portion of the Amendment Upfront Fee is refundable to the Borrower, in whole or in part, under any
circumstances.

 

d.              The Administrative Agent shall have received such other Instruments, certificates, information
and opinions as the Administrative Agent may reasonably request, in each case, in form and substance reasonably satisfactory to
the Administrative Agent.

 

5.             Miscellaneous Provisions.

 

a.              This Amendment is a Credit Document. The Credit Agreement, as amended by this Amendment, is
hereby ratified, approved, confirmed, extended and continued in each and every respect, and the parties hereto agree that the Credit
Agreement remains in full force and effect in accordance with its terms. Nothing contained herein shall be construed to release,
terminate or act as a novation of, in whole or in part, any Credit Document or any guaranty, lien, mortgage, deed, debenture, indenture,
pledge or security interest granted pursuant thereto. All references to the Credit Agreement in each of the Credit Documents and
in any other document or instrument shall hereafter be deemed to refer to the Credit Agreement as amended hereby. The Credit Documents
shall remain unchanged and in full force and effect, except as provided in this Amendment or any other Instrument entered into
and delivered in connection herewith, and the Credit Documents are hereby ratified, confirmed, extended and continued in full force
and effect in all respects. This Amendment shall not be construed as a waiver or amendment of any other provision of the Credit
Agreement or the other Credit Documents or for any purpose, except as expressly set forth herein, or a consent to any other, further
or future action on the part of the Borrower or the other Credit Parties that would require the waiver or consent of the Administrative
Agent or any Lender. The parties hereto hereby agree that the terms and conditions of Article 10 of the Credit Agreement
shall apply hereto as if fully set forth herein.

 

b.              This Amendment shall be governed by and construed in accordance with the laws of the State
of New York, excluding that body of law relating to conflict of laws.

 

    	 -3-

     

    

 

c.              This Amendment may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. This Amendment may be validly executed and delivered by facsimile, portable document format
(.pdf) or other electronic transmission, and a signature by facsimile, portable document format (.pdf) or other electronic transmission
shall be as effective and binding as delivery of a manually executed original signature.

 

d.              Neither the Administrative Agent nor any Lender has waived, and none of them does hereby waive,
any Default or Event of Default under the Credit Agreement or any other Credit Document, whether known or unknown, as to which
the rights of the Administrative Agent and the Lenders shall remain reserved in all respects. There are no verbal agreements or
informal understandings between the Administrative Agent and/or any Lender, on the one hand, and the Credit Parties, on the other
hand, nor will any such verbal agreements or understandings be entered into or deemed to exist. The execution, delivery and effectiveness
of this Amendment shall not operate or be deemed to operate as a waiver of any rights, powers or remedies of the Administrative
Agent or any Lender under the Credit Agreement or any other Credit Document or constitute a waiver of any provision thereof (except
as expressly set forth herein). The Administrative Agent and the Lenders hereby expressly reserve and retain all rights, remedies,
privileges, powers, claims and actions under the Credit Agreement, the Credit Documents and applicable law. The Administrative
Agent and the Lenders reserve the right to take all additional and further action available under the Credit Agreement, the Credit
Documents and applicable law, at any time and from time to time.

 

e.              This Amendment shall be binding upon and inure to the benefit of the Administrative Agent,
the Lenders, the Borrower, each other Credit Party, and their respective successors and assigns permitted by the Credit Agreement.

 

f.               The Borrower and the other Credit Parties agree and confirm that (i) they have been advised
by counsel in the negotiation, execution and delivery of the Amendment, (ii) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower or any other Credit Party arising out of or in connection with this Amendment
or the Credit Agreement and the relationship between the Administrative Agent and Lenders, on one hand, and the Borrower and the
other Credit Parties, on the other hand, in connection herewith is solely that of debtor and creditor and (iii) no joint venture
or partnership exists among the Borrower or the other Credit Parties and the Lenders or the Administrative Agent.

 

g.              The Credit Parties agree and confirm that they are engaged in related businesses and integrated
to such an extent that the financial strength and flexibility of each Credit Party has a direct, tangible and immediate impact
on the success of the other Credit Parties. Each Guarantor agrees and confirms (i) that it will derive substantial direct and indirect
benefit from the extension of the scheduled maturity date of the Credit Agreement and the continuation of the Credit Agreement
and (ii) that it entered into the Guaranty and will continue such Guaranty in contemplation of such benefits. 

 

h.              The Borrower shall pay all reasonable costs, fees and expenses paid or incurred by the Administrative
Agent incident to this Amendment, the Credit Agreement and the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and expenses of the Administrative Agent’s counsel in connection with the negotiation, preparation,
delivery and execution of this Amendment and any related documents and instruments.

 

* * * * * * * *

remainder of this page intentionally blank

 

    	 -4-

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date
first above written.

 

	BORROWER:	ROYAL GOLD, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Stefan Wenger
	 	Name:	Stefan Wenger
	 	Title:	Chief Financial Officer and Treasurer
	 	 	 
	GUARANTORS:	 	 
	 	HIGH DESERT MINERAL RESOURCES, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Bruce C. Kirchhoff
	 	Name:	Bruce C. Kirchhoff
	 	Title:	Vice President and Secretary
	 	 	 
	 	 	 
	 	RG MEXICO, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Bruce C. Kirchhoff
	 	Name:	Bruce C. Kirchhoff
	 	Title:	Vice President and Secretary
	 	 	 
	 	 	 
	 	RG EXCHANGECO INC.,
	 	an amalgamated corporation validly existing under the   Canada Business Corporations Act
	 	 	 
	 	By:	/s/ Bruce C. Kirchhoff
	 	Name:	Bruce C. Kirchhoff
	 	Title:	Vice President and Secretary
	 	 	 
	 	 	 
	ADMINISTRATIVE AGENT:	HSBC BANK USA, NATIONAL ASSOCIATION,
	 	as Administrative Agent
	 	 	 
	 	By:	/s/ Joseph Lloret
	 	Name:	Joseph Lloret
	 	Title:	Vice President
	 	 	 
	 	 	 
	LENDER:	HSBC BANK USA, NATIONAL ASSOCIATION,
	 	as a Lender
	 	By:	/s/ Alexandra Barrows
	 	Name:	Alexandra Barrows
	 	Title:	Vice President

 

    	 

     

    

 

	LENDER:	THE BANK OF NOVA SCOTIA,
	 	as a Lender
	 	 	 
	 	By:	/s/ Ray Clarke
	 	Name:	Ray Clarke
	 	Title:	Managing Director
	 	 	 
	 	By:	/s/ Asif Rafiq
	 	Name:	Asif Rafiz 
	 	Title:	Associate Director
	 	 	 
	 	 	 
	LENDER:	CANADIAN IMPERIAL BANK OF COMMERCE,
	 	as a Lender
	 	 	 
	 	By:	/s/ Jens Paterson
	 	Name:	Jens Paterson
	 	Title:	Executive Director
	 	 	 
	 	By:	/s/ Peter Rawlins
	 	Name:	Peter Rawlins
	 	Title:	Executive Director
	 	 	 
	 	 	 
	LENDER:	GOLDMAN SACHS BANK USA,
	 	as a Lender
	 	 	 
	 	By:	/s/ Rebecca Kratz
	 	Name:	Rebecca Kratz
	 	Title:	Authorized Signatory
	 	 	 
	 	 	 
	LENDER:	BANK OF AMERICA, N.A.,
	 	as a Lender
	 	 	 
	 	By:	/s/ Satish S. Chander
	 	Name:	Satish S. Chander
	 	Title:	SVPExhibit 10.1

 

EXECUTION

 

SEVENTH AMENDMENT TO SECOND AMENDED

AND RESTATED CREDIT AGREEMENT

 

THIS SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Seventh Amendment”), dated as of March 18, 2016, is entered into by and among SANCHEZ ENERGY CORPORATION, a Delaware corporation (“Borrower”), each of SN PALMETTO, LLC, a Delaware limited liability company f/k/a SEP Holdings III, LLC (“SN Palmetto”), SN MARQUIS LLC, a Delaware limited liability company (“SN Marquis”), SN COTULLA ASSETS, LLC, a Texas limited liability company (“SN Cotulla”), SN OPERATING, LLC, a Texas limited liability company (“SN Operating”), SN TMS, LLC, a Delaware limited liability company (“SN TMS”), and SN CATARINA, LLC, a Delaware limited liability company (“SN Catarina; together with SN Palemetto, SN Marquis, SN Cotulla, SN Operating and SN TMS collectively, the “Guarantors” and each, a “Guarantor”), the Required Lenders party hereto, and ROYAL BANK OF CANADA, as Administrative Agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

RECITALS

 

A.                                    The Borrower, the Guarantors, the Lenders, RBC, as Issuing Bank, and the Administrative Agent previously entered into that certain Second Amended and Restated Credit Agreement dated as of June 30, 2014 (as amended by that certain First Amendment to Second Amended and Restated Credit Agreement dated as of September 9, 2014, that certain Second Amendment to Second Amended and Restated Credit Agreement dated as of March 31, 2015, that certain Third Amendment to Second Amended and Restated Credit Agreement dated as of July 20, 2015, that certain Fourth Amendment to Second Amended and Restated Credit Agreement dated as of September 29, 2015, that certain Fifth Amendment to Second Amended and Restated Credit Agreement dated as of October 30, 2015, that certain Sixth Amendment to Second Amended and Restated Credit Agreement dated as of January 22, 2016 and as it may be further amended, restated, supplemented or modified from time to time, the “Credit Agreement”) and certain other Loan Documents (as defined in the Credit Agreement) in connection therewith.

 

B.                                    The Borrower has requested that the Administrative Agent and the Lenders amend the Credit Agreement as set forth herein to (i) increase the existing limit for Investments in Senior Unsecured Notes and Equity Interests issued by the Borrower, (ii) provide for Investments in an Unrestricted Subsidiary to purchase Senior Unsecured Notes and Equity Interests issued by the Borrower and (iii) make certain amendments as set forth herein. The Administrative Agent and the Required Lenders are willing to amend the Credit Agreement on the terms and conditions contained in this Seventh Amendment.

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Seventh Amendment and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties hereto, the Borrower, the Guarantors, the Required Lenders, the Issuing Bank and the Administrative Agent agree as follows:

 

1.                                      Defined Terms. Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.

 

2.                                      Specific Amendments to Credit Agreement.      The Credit Agreement is hereby amended as follows:

 

(i)                                     The following defined terms are hereby added to Section 1.02 of the Credit Agreement in the proper alphabetical order:

 

“Available Cash” means as of the date of determination thereof, the aggregate amount of cash held by the Borrower, its Restricted Subsidiaries and Unrestricted Subsidiaries; provided that, except for any cash that is held in a Deposit Account subject to a Deposit Account Control Agreement in favor of the Administrative Agent, such cash (i) is not held in a dedicated cash collateral account and (ii) is not subject to any restriction against access (other than restrictions set forth by regulations promulgated by the Board) by the Borrower, Restricted Subsidiary or Unrestricted Subsidiary, as applicable, that is the depositor under the Deposit Account in which such cash is held.

 

“Buyback Availability” means at any time of determination thereof, an amount equal to the excess of (i) Loan Party Cash over (ii) the sum of the Credit Exposures of the Lenders at such time.

 

“Commodity Account” has the meaning specified in the Security Agreement.

 

“Commodity Account Control Agreement” has the meaning specified in the Security Agreement.

 

“Deposit Account” has the meaning specified in the Security Agreement.

 

“Deposit Account Control Agreement” has the meaning specified in the Security Agreement.

 

“First Lien Debt” means as of the date of determination, the total Credit Exposure of the Lenders on such date.

 

“Loan Party Cash” means as of the date of determination thereof, the aggregate amount of cash held by the Borrower and the Restricted Subsidiaries; provided that, except for any cash that is held in a Deposit Account subject to a 

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

2

 

Deposit Account Control Agreement in favor of the Administrative Agent, such cash (i) is not held in a dedicated cash collateral account and (ii) is not subject to any restriction against access (other than restrictions set forth by regulations promulgated by the Board) by the Borrower or Restricted Subsidiary, as applicable, that is the depositor under the Deposit Account in which such cash is held.

 

“Securities Account” has the meaning specified in the Security Agreement.

 

“Securities  Account Control Agreement” has the meaning specified in the Security Agreement.

 

“Seventh Amendment” means that certain Seventh Amendment to Second Amended and Restated Credit Agreement dated the Seventh Amendment Effective Date among the Borrower, the Guarantors, the Required Lenders, RBC, as Issuing Bank, and the Administrative Agent.

 

“Seventh Amendment Effective Date” means March 18, 2016.

 

“SN Palmetto” means SN Palmetto, LLC, a Delaware limited liability company, known prior to its name change on March 14, 2016 as SEP Holdings III, LLC.

 

“Special Purpose Unrestricted Subsidiary” means SN Capital, LLC, a Delaware limited liability company whose immediate parent is either the Borrower or a Restricted Subsidiary and whose organizational documents provide that its only permitted business activities are (i) receiving cash Investments from its immediate parent, which will be either the Borrower or a Restricted Subsidiary, (ii) holding cash received as an Investment from its immediate parent in a Deposit Account maintained with a Lender, (iii) purchasing, holding and disposing, including by way of distribution to its immediate parent, of Senior Unsecured Notes and Equity Interests issued by Borrower and (iv) distributing cash to its immediate parent.

 

(ii)                                  The defined term “Aggregate Elected Commitment Amount” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

“Aggregate Elected Commitment Amount” at any time shall equal the sum of the Elected Commitments, as the same may be increased, reduced or terminated pursuant to Section 2.06(c). As of the Seventh Amendment Effective Date, the Aggregate Elected Commitment Amount is $300,000,000.

 

(iii)                               The defined term “Agreement” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

3

 

“Agreement” means this Second Amended and Restated Credit Agreement, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment and as the same may from time to time be amended, modified, supplemented or restated.

 

(iv)                              The defined term “Annualized Consolidated EBITDA” in Section 1.02 of the Credit Agreement is hereby deleted.

 

(v)                                 The defined term “Applicable Margin” is Section 1.02 of the Credit Agreement is hereby deleted and the following substituted therefor:

 

“Applicable Margin” means, for any day with respect to any ABR Loan or Eurodollar Loan, or with respect to the Letter of Credit Fee Rate, as the case may be, the rate per annum set forth in the Borrowing Base Utilization Grid below based upon the Borrowing Base Utilization Percentage then in effect:

 

Borrowing Base Utilization Grid

 

	
Borrowing Base Utilization Percentage
    	
 
    	
<25%
    	
 
    	
>25%   and <50%
    	
 
    	
>50%   and <75%
    	
 
    	
>75%   and <90%
    	
 
    	
>90%
    
	
ABR Loans
    	
 
    	
1.00%
    	
 
    	
1.25%
    	
 
    	
1.50%
    	
 
    	
1.75%
    	
 
    	
2.00%
    
	
Eurodollar Loans
    	
 
    	
2.00%
    	
 
    	
2.25%
    	
 
    	
2.50%
    	
 
    	
2.75%
    	
 
    	
3.00%
    
	
Letter of Credit   Fee Rate
    	
 
    	
2.00%
    	
 
    	
2.25%
    	
 
    	
2.50%
    	
 
    	
2.75%
    	
 
    	
3.00%
    

 

For any day, “Applicable Margin” means, with respect to the Commitment Fee Rate, the rate per annum set forth in the Elected Commitment Utilization Grid below based upon the Elected Commitment Utilization Percentage then in effect:

 

Elected Commitment Utilization Grid

 

	
Elected Commitment Utilization Percentage
    	
 
    	
<25%
    	
 
    	
>25%   and <50%
    	
 
    	
>50%   and <75%
    	
 
    	
>75%   and <90%
    	
 
    	
>90%
    
	
Commitment Fee   Rate
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    

 

Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change; provided, however, that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then the “Applicable Margin” means the rate per annum set forth on the then applicable grid above when it is at its highest level; provided further that the Applicable Margin shall be the Applicable Margin determined without regard to the preceding proviso upon the Borrower’s delivery of such Reserve Report.

 

(vi)                              Clause (e) of the defined term “Consolidated EBITDA” in Section 1.02 of the Credit Agreement is hereby deleted and the following substituted therefor:

 

(e) fees and expenses expensed and paid in cash in connection with (1) the public offering of Borrower’s Equity Interests, (2) the 2012 Credit Agreement, (3) 

 

4

 

the 2013 Credit Agreement, (4) the Senior Unsecured Notes, (5) any Permitted Second Lien Debt and (6) this Agreement; and

 

(vii)                           The defined term “Intercreditor Agreement” in Section 1.02 of the Credit Agreement is hereby deleted and the following substituted therefor:

 

“Intercreditor Agreement” means (a) an Intercreditor Agreement (in form approved by the Administrative Agent and the Required Lenders) among the Borrower, the other Loan Parties, the Administrative Agent and the trustee, administrative agent or other relevant representative of the holders of Permitted Second Lien Debt under the Permitted  Second  Lien  Documents, and (b) if the Permitted Second Lien Debt is refinanced or replaced in accordance with the terms of such Intercreditor Agreement, any successor agreement entered into in accordance with such terms, in each case as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms of the then effective Intercreditor Agreement.

 

(viii)                        So much of clause (a) of the defined term “Permitted Second Lien Debt” in Section 1.02 of the Credit Agreement as precedes the proviso to such clause (a) is hereby deleted and the following substituted therefor:

 

(a) Debt incurred on or after the Sixth Amendment Effective Date by the Borrower pursuant to a second lien indenture or credit facility;

 

(ix)                              The defined term “Permitted Second Lien Documents” in Section 1.02 of the Credit Agreement is hereby deleted and the following substituted therefor:

 

“Permitted Second Lien Documents” means each indenture, credit or other loan agreement governing Permitted Second Lien Debt, all guarantees thereof and all other agreements, documents or instruments executed and delivered by any Loan Party in connection with, or pursuant to, the incurrence of Permitted Second Lien Debt.

 

(x)                                 The defined term “Security Agreement” in Section 1.02 of the Credit Agreement is hereby deleted and the following substituted therefor:

 

“Security Agreement” means the Amended and Restated Security and Pledge Agreement dated as of June 30, 2014 among the Borrower and the Restricted Subsidiaries, as grantors, and the Administrative Agent, as amended by the First Amendment to Security and Pledge Agreement dated as of the Seventh Amendment Effective Date and as it may be further amended, restated, supplemented or modified from time to time.

 

(xi)                              The defined term “Senior Secured Debt” in Section 1.02 of the Credit Agreement is hereby deleted.

 

5

 

(xii)                           The defined term “SEP” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

“SEP” has the meaning given in Recital A; from and after the date on which SEP Holdings III, LLC changes its name to SN Palmetto, LLC all references in the Loan Documents to SEP shall be deemed to be references to SN Palmetto.

 

(xiii)                        The introductory clause of the defined term “Unrestricted Subsidiary” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

“Unrestricted Subsidiary” means SN Midstream, SN Services, SN UR Holdings, SN Terminal, the Special Purpose Unrestricted Subsidiary and each other Subsidiary of the Borrower that is designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors of Borrower (in each case for so long as such Person remains a Subsidiary), but only to the extent that such Subsidiary:

 

(xiv)                       Section 2.06(c)(ii) of the Credit Agreement is hereby amended by deleting the word “and” at the end of Section 2.06(c)(6), deleting the period at the end of Section 2.06(c)(7) and inserting a semicolon followed by the word “and” and adding a new Section 2.06(c)(8) to read in its entirety as follows:

 

“(8)                           notwithstanding anything in this Section 2.06 to the contrary, without the written consent of each Lender, the Borrower will not increase the $300,000,000 Elected Commitment in effect on the Seventh Amendment Effective Date until the first Scheduled Redetermination Date following the Seventh Amendment Effective Date.”

 

(xv)                          The first sentence of Section 3.04(c)(iii) is hereby amended by deleting the words “then the Borrower shall, within ten (10) days” and substituting therefor the words “then the Borrower shall, subject to the provisions of the next sentence, within ten (10) days” and adding a new second sentence at the end thereof to read in its entirety as follows:

 

“Notwithstanding the foregoing, if at the time the Borrower is notified in writing by the Administrative Agent that a Borrowing Base Deficiency exists and  Available Cash exceeds $35,000,000 (such excess, “Excess Available Cash”), the Borrower will, within one Business Day of receiving written notice from the Administrative Agent of such Borrowing Base Deficiency, use Excess Available Cash to (A) prepay the Borrowings to eliminate the Borrowing Base Deficiency to the extent of the Excess Available Cash and (B) if, as a result of LC Exposure, any Borrowing Base Deficiency remains after prepaying all of the Borrowings, deposit with the Administrative Agent on behalf of the Lenders an amount equal  to the remaining Borrowing Base Deficiency to the extent of the remaining Excess Available Cash to be held as cash collateral as provided in Section 2.08(j); provided, if any Borrowing Base Deficiency remains after the prepayments and 

 

6

 

deposits described in clauses (A) and (B) of this Section 3.04(c)(iv), the provisions of the preceding sentence will apply to the remaining Borrowing Base Deficiency.”

 

(xvi)                       Section 8.01(n) of the Credit Agreement is hereby designated as Section 8.01(o) and the following Section 8.01(n) is added to read in its entirety as follows:

 

“(n)                           Deposit Account and Other Information.  Promptly, but in any event within two (2) Business Days after receipt of a request from Administrative Agent therefor made, a report on the current cash balances or securities and/or commodity contracts credited to the account of the Borrower and its Subsidiaries held for the benefit of the Borrower or any Subsidiary in any Deposit Account, Securities Account or Commodity Account, in such detail as reasonably requested by Administrative Agent; provided if the aggregate Lenders’ Credit Exposure is less than fifty percent (50%) of the total Commitment at the time such request is made, such request shall be made no more frequently than once every 30 calendar days and if the Lenders’ Credit Exposure is more than fifty percent (50%) of the total Commitment at the time such request is made, such request shall be made no more frequently than once every 7 calendar days.”

 

(xvii)                    Each reference to “eighty percent (80%)” in Section 8.12, Section 8.13 and Section 8.14 of the Credit Agreement is hereby deleted and “ninety percent (90%)” is substituted therefor.

 

(xviii)                 Section 8.16(b) of the Credit Agreement is hereby amended by adding the following proviso at the end thereof to read in its entirety as follows:

 

“; provided, the Equity Interest in the Special Purpose Unrestricted Subsidiary is to be subject to a Lien securing the Obligations within a reasonable period of time after the formation of the Special Purpose Unrestricted Subsidiary.”

 

(xix)                       A new Section 8.17 is hereby added to the Credit Agreement to read in its entirety to read as follows:

 

“Section 8.17   Accounts With Lenders; Control Agreements.

 

“(a)                           No later than 30 days after the Seventh Amendment Effective Date, each Loan Party shall close all Deposit Accounts maintained with any Person not a Lender and cause all of its Deposit Accounts, whether then existing or thereafter created, including all operating, collections, payroll, trust, and other depository or disbursement accounts, to be maintained with a Person who is a Lender.  No later than 30 days after the Seventh Amendment Effective Date, in the case of any Deposit Account maintained by a Loan Party with a Lender as of the Seventh Amendment Effective Date, such Loan Party shall deliver to the Administrative Agent a Deposit Account Control Agreement with respect to such Deposit Account executed by the applicable Loan Party and the Lender maintaining such Deposit Account.  If a Loan Party establishes a Deposit Account with a Lender after the Seventh Amendment Effective Date, such Loan Party shall 

 

7

 

enter into a Deposit Account Control Agreement contemporaneously with the establishment of such Deposit Account and promptly thereafter deliver to the Administrative Agent a Deposit Account Control Agreement with respect to such Deposit Account executed by the applicable Loan Party and the Lender maintaining such Deposit Account. If any Lender maintaining a Deposit Account for any Loan Party ceases to be a Lender, then within 30 days of such Person ceasing to be a Lender the Loan Party whose Deposit Accounts were maintained by such Person shall close all Deposit Accounts maintained with that Person.

 

(b)                                 No later than 10 Business Days after the Seventh Amendment Effective Date, each Loan Party shall close all Securities Accounts and Commodity Accounts maintained with any Person not a Lender or an Affiliate of a Lender and cause all of its Securities Accounts and Commodity Accounts, whether then existing or thereafter created, to be maintained with a Person who is a Lender or an Affiliate of a Lender.  If a Loan Party establishes a Securities Account or Commodity Account with a Lender or an Affiliate of a Lender after the Seventh Amendment Effective Date, such Loan Party shall enter into a Securities Account Control Agreement or Commodity Account Control Agreement, as applicable, contemporaneously with the establishment of such Securities Account or Commodity Account and promptly thereafter deliver to the Administrative Agent a copy of such control agreement with respect to such Securities Account or Commodity Account executed by the applicable Loan Party and the Lender or Lender Affiliate maintaining such Securities Account or Commodity Account.  If any Lender or Affiliate of a Lender maintaining a Securities Account or Commodity Account for any Loan Party ceases to be a Lender (or an Affiliate of a Lender), then within 30 days of such Person ceasing to be a Lender (or Affiliate of a Lender) the Loan Party whose Securities Accounts or Commodity Account were maintained by such Person shall close all securities accounts, securities entitlements and commodity accounts maintained with that Person.”

 

(xix)                       A new Section 8.18 is hereby added to the Credit Agreement to read in its entirety as follows:

 

“Section 8.18  Remittance of Cash by Special Purpose Unrestricted Subsidiary.  The Borrower shall cause the Special Purpose Unrestricted Subsidiary to remit to the Borrower or another Restricted Subsidiary all cash held by or in the name of the Special Purpose Subsidiary as of the close of business on December 31, 2016, such remittance to be made no later than noon on Tuesday, January 3, 2017, with evidence of such remittance to be provided, in form and substance satisfactory to the Administrative Agent.”

 

(xx)                          Section 9.01(b) of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

8

 

“(b)                           Net First Lien Leverage Ratio.  The Borrower will not permit, as of the last day of any fiscal quarter, commencing with the fiscal quarter ending March 31, 2016, the ratio of (i) the excess of (A) First Lien Debt as of such date over (B) Loan Party Cash as of such date to (ii) Consolidated EBITDA of the Borrower and the Restricted Subsidiaries for the Rolling Period ending on such day to exceed 2.00 to 1.0;”

 

(xxi)                       Section 9.04 of the Credit Agreement is hereby amended by deleting Section 9.04(f) and the provisos following such Section and substituting therefor the following:

 

“(f) so long as at the time of and after giving effect to any such repurchase, there is Buyback Availability (i) repurchases for aggregate cash consideration not to exceed $50,000,000 (less the amount of the Sixth Amendment Effective Date Replenishment Amount attributable to Equity Interests other than Preferred Stock issued by Borrower) of Equity Interests other than Preferred Stock issued by Borrower and (ii) repurchases for aggregate cash consideration not to exceed $100,000,000 (less the amount of the Sixth Amendment Effective Date Replenishment Amount attributable to Preferred Stock issued by Borrower) of Preferred Stock issued by Borrower; provided, that the sum of repurchases pursuant to clause (i) and (ii) of this Section 9.04(f) together with the purchase or other acquisition of Equity Interests issued by the Borrower pursuant to Section 9.05(r) and Section 9.05(s) shall not exceed $100,000,000 in the aggregate; provided, further, Restricted Payments made under this Section 9.04, other than (x) pursuant to clauses (c) and (e) above and (y) Permitted Preferred Stock Distributions comprised of common stock of Borrower and cash payments in lieu of the issuance of fractional shares in connection therewith, may be made only so long as no Default or Event of Default exists or will exist after giving effect to such Restricted Payment.”

 

(xxii)                    Section 9.05 of the Credit Agreement is hereby amended by deleting Section 9.05(f) and substituting therefor the following:

 

“(f)                             deposits maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender;”

 

(xxiii)                 Section 9.05 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of Section 9.05(q), and (ii) replacing Section 9.05(r) with the following amended Section 9.05(r) and adding a new Section 9.05(s) to read in their entirety as follows:

 

“(r)                              Investments consisting of the purchase or other acquisition of Senior Unsecured Notes and Equity Interests issued by the Borrower; provided, that at the time of such Investment, Buyback Availability exists; and provided further, that the aggregate cash consideration paid by the Borrower and the Restricted Subsidiaries to purchase Senior Unsecured Notes and Equity Interests issued by the Borrower is not greater than the remainder of (i) $300,000,000 minus (ii) the Sixth Amendment Effective Date Replenishment Amount minus (iii) the 

 

9

 

outstanding amount of Investments made pursuant to Section 9.05(s); and provided further, purchases or other acquisitions of Equity Interests issued by the Borrower are subject to the limitation set forth in the first proviso in Section 9.04(f); and provided, further, for the sake of clarity that the limitation in the foregoing proviso shall not apply to the issuance of Permitted Second Lien Debt in exchange for Senior Unsecured Notes and/or Equity Interests issued by the Borrower;

 

(s)                                   Investments of up to $150,000,000 in the Special Purpose Unrestricted Subsidiary for the sole purpose of financing the purchase or other acquisition by the Special Purpose Unrestricted Subsidiary, at such time or times as the Special Purpose Unrestricted Subsidiary elects, of Senior Unsecured Notes and Equity Interests issued by the Borrower; provided, that at the time of such Investment, Buyback Availability exists and availability remains under Section 9.05(r) sufficient to make such Investment; and provided further, purchases or other acquisitions of Equity Interests issued by the Borrower are subject to the limitation set forth in the first proviso in Section 9.04(f); and provided further, that (i) all Deposit Accounts of the Special Purpose Unrestricted Subsidiary are maintained with a Lender (it being agreed, for the avoidance of doubt, that no Deposit Account Control Agreement shall be required relating to Deposit Accounts of such Special Purpose Unrestricted Subsidiary), and (ii) no Default or Event of Default exists or will exist after giving effect to such Investment; and”.

 

(xxiii)                 The heading of Section 9.20 of the Credit Agreement is hereby deleted and the following is substituted therefore:

 

“Section 9.20     Change in Business; Unrestricted Subsidiaries.”

 

(xxiv)                The proviso in the last sentence of Section 9.20(a) of the Credit Agreement is hereby deleted and the following is substituted therefore:

 

“provided, that Borrower may not permit any Unrestricted Subsidiary other than the Special Purpose Unrestricted Subsidiary to acquire any Debt of or Equity Interests in Borrower on or after the Sixth Amendment Effective Date.”

 

(xxv)                   Section 9.20 of the Credit Agreement is hereby amended by adding the following new Section 9.20(d) thereto to read in its entirety as follows:

 

“(d)                           The Borrower shall not, and shall not permit the Special Purpose Unrestricted Subsidiary to, alter, amend or modify in any manner the organizational documents of the Special Purpose Unrestricted Subsidiary.”

 

(xxvi)                A new Schedule 7.01 to the Credit Agreement, “Corporate Organizational Chart” in the form attached as Schedule 7.01 to this Seventh Amendment is hereby added to the Credit Agreement in substitution for the prior Schedule 7.01.

 

10

 

(xxvii)             A new Schedule 7.14 to the Credit Agreement, “Subsidiaries” in the form attached as Schedule 7.14 to this Seventh Amendment is hereby added to the Credit Agreement in substitution for the prior Schedule 7.14.

 

(xxviii)          The Financial Covenant Calculation Worksheet attached to Exhibit D Form of Compliance Certificate is hereby deleted and the Financial Covenant Calculation Worksheet attached as Exhibit D to this Seventh Amendment is substituted therefor.

 

3.                                      Loan Parties’ Ratification. Subject to the conditions set out in Section 5, Borrower (and each Loan Party by its execution in the space provided below under “ACKNOWLEDGED for purposes of Sections 3 and 4”) hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party (other than the Guaranty which is specifically addressed in Section 4), and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party (other than the Guaranty which is specifically addressed in Section 4) are and shall continue to be in full force and effect. Nothing in this Seventh Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of any of the Lenders, any Issuing Bank or the Administrative Agent created by or contained in any of such documents nor is any Loan Party released from any covenant, warranty or obligation created by or contained herein or therein.  Each Loan Party (other than the Borrower) agrees that its execution and delivery of this Seventh Amendment does not indicate or establish an approval or consent requirement by any such Loan Party under the Credit Agreement in connection with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the other Loan Documents (other than any Loan Document to which such a Loan Party is a party).

 

4.                                      Guarantors’ Ratification. Each Guarantor by its execution in the space provided below under “ACKNOWLEDGED for purposes of Sections 3 and 4” hereby ratifies, confirms, acknowledges and agrees that its obligations under the Guaranty are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of the Obligations, and its execution and delivery of this Seventh Amendment does not indicate or establish an approval or consent requirement by any Guarantor under the Guaranty in connection with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the other Loan Documents (other than the Guaranty or any other Loan Document to which a Guarantor is a party).

 

5.                                      Conditions to Effectiveness of Seventh Amendment. This Seventh Amendment shall be effective upon the satisfaction, in the Administrative Agent’s sole discretion, of the following conditions precedent:

 

(i)                                    The Administrative Agent shall have executed, and shall have received from the Borrower and the Required Lenders duly executed signature pages to, this Seventh Amendment, and shall have received a duly executed acknowledgement of Sections 3 and 4 of this Seventh Amendment from each Guarantor;

 

11

 

(ii)                                 The Administrative Agent shall have executed, and shall have received from the Borrower and the Guarantors duly executed signature pages to, the First Amendment to Security and Pledge Agreement in the form attached hereto as Exhibit A;

 

(iii)                              the Administrative Agent shall have received such other documents as the Administrative Agent or its counsel may reasonably request;

 

(iv)                             the Administrative Agent shall have notified the Borrower and the Lenders in a New Borrowing Base Notice of the redetermined Borrowing Base of $350,000,000 which shall be effective as of the next Business Day following delivery of such New Borrowing Base Notice; and

 

(v)                                the Borrower shall have paid the Administrative Agent the agreed upon fee.

 

6.                                      No Implied Amendment, Waiver or Consent. This Seventh Amendment shall not constitute an amendment or waiver of any provision not expressly referred to herein and shall not be construed as a consent to any action on the part of the Borrower that would require a waiver or consent of the Lenders or Required Lenders, as applicable, or an amendment or modification to any term of the Loan Documents except as expressly stated herein.

 

7.                                      Miscellaneous. This Seventh Amendment is a Loan Document. Except as affected by this Seventh Amendment, the Loan Documents are unchanged and continue in full force and effect. However, in the event of any inconsistency between the terms of the Credit Agreement, as amended by this Seventh Amendment, and any other Loan Document, the terms of the Credit Agreement will control and the other document will be deemed to be amended to conform to the terms of the Credit Agreement. All references to the Credit Agreement will refer to the Credit Agreement as amended by this Seventh Amendment and any other amendments properly executed among the parties. Borrower agrees that all Loan Documents to which it is a party (whether as an original signatory or by assumption of the Obligations) remain in full force and effect and continue to evidence its legal, valid and binding obligations enforceable in accordance with their terms (as the same are affected by this Seventh Amendment or are amended in connection with this Seventh Amendment). AS A MATERIAL INDUCEMENT TO THE ADMINISTRATIVE AGENT, THE ISSUING BANKS AND LENDERS PARTY HERETO TO ENTER INTO THIS SEVENTH AMENDMENT, BORROWER RELEASES THE ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE LENDERS AND THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, TRUSTEES, AGENTS AND ATTORNEYS FROM ANY LIABILITY FOR ACTIONS OR FAILURES TO ACT IN CONNECTION WITH THE LOAN DOCUMENTS PRIOR TO THE SEVENTH AMENDMENT EFFECTIVE DATE. NO COURSE OF DEALING BETWEEN BORROWER OR ANY OTHER PERSON, ON THE ONE HAND, AND THE ADMINISTRATIVE AGENT, ISSUING BANKS AND THE LENDERS, ON THE OTHER, WILL BE DEEMED TO HAVE ALTERED OR AMENDED THE CREDIT AGREEMENT OR AFFECTED BORROWER’S, THE ADMINISTRATIVE AGENT’S, THE ISSUING BANKS’ OR THE LENDERS’ RIGHT TO ENFORCE THE CREDIT AGREEMENT 

 

12

 

AS WRITTEN. This Seventh Amendment will be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns.

 

8.                                      Form. Each agreement, document, instrument or other writing to be furnished to the Administrative Agent and/or the Lenders under any provision of this instrument must be in form and substance satisfactory to the Administrative Agent and its counsel.

 

9.                                      Headings. The headings and captions used in this Seventh Amendment are for convenience only and will not be deemed to limit, amplify or modify the terms of this Seventh Amendment, the Credit Agreement, or the other Loan Documents.

 

10.                               Interpretation. Wherever possible each provision of this Seventh Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Seventh Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Seventh Amendment.

 

11.                               Multiple Counterparts. This Seventh Amendment may be separately executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same agreement. This Seventh Amendment may be transmitted and/or signed by facsimile, telecopy or electronic mail. The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, all Lenders, the Administrative Agent and the Issuing Banks. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

 

12.                               Governing Law. THIS SEVENTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.

 

[Signature Pages Follow]

 

13

 

IN WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Garrick A. Hill
    
	
 
    	
 
    	
Garrick   A. Hill
    
	
 
    	
 
    	
Interim   Co-Chief Financial Officer
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 1

 

	
 
    	
ACKNOWLEDGED   for the purposes stated in Sections 3 and 4:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SN   PALMETTO, LLC,
    
	
 
    	
a   Delaware limited liability company, f/k/a
    
	
 
    	
SEP   Holdings III, LLC
    
	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
SN   COTULLA ASSETS, LLC,
    
	
 
    	
a   Texas limited liability company
    
	
 
    	
 
    
	
 
    	
SN   OPERATING, LLC,
    
	
 
    	
a   Texas limited liability company
    
	
 
    	
 
    
	
 
    	
SN   TMS, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
SN   CATARINA, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Garrick A. Hill
    
	
 
    	
 
    	
Garrick   A. Hill
    
	
 
    	
 
    	
Interim   Co-Chief Financial Officer
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 2

 

	
 
    	
ADMINISTRATIVE AGENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROYAL   BANK OF CANADA, as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Yvonne Brazier
    
	
 
    	
Name:
    	
Yvonne   Brazier
    
	
 
    	
Title:
    	
Manager,   Agency
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 3

 

	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
ISSUING BANK AND LENDER:
    
	
 
    	
 
    
	
 
    	
ROYAL BANK OF CANADA
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Evans Swann Jr.
    
	
 
    	
Name:
    	
Evans   Swann Jr.
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 4

 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Matthew Brice
    
	
 
    	
Name:
    	
Matthew   Brice
    
	
 
    	
Title:
    	
Vice   President
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 5

 

	
 
    	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Nupur Kumar
    
	
 
    	
Name:
    	
Nupur   Kumar
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Warren Van Heyst
    
	
 
    	
Name:
    	
Warren   Van Heyst
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 6

 

	
 
    	
COMPASS   BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Les Werme
    
	
 
    	
Name:
    	
Les   Werme
    
	
 
    	
Title:
    	
Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 7

 

	
 
    	
SUNTRUST BANK
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William S. Krueger
    
	
 
    	
Name:
    	
William   S. Krueger
    
	
 
    	
Title:
    	
First   Vice President
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 8

 

	
 
    	
ING   CAPITAL LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Josh Strong
    
	
 
    	
Name:
    	
Josh   Strong
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Juli Bieser
    
	
 
    	
Name:
    	
Juli   Bieser
    
	
 
    	
Title:
    	
Managing   Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 9

 

	
 
    	
BRANCH BANKING AND TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
Lender   did not sign the seventh amendment
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 10

 

	
 
    	
IBERIABANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler S. Thoer
    
	
 
    	
Name:
    	
Tyler   S. Thoer
    
	
 
    	
Title:
    	
Sr.   Vice President
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 11

 

	
 
    	
MUFG UNION BANK, N.A., f/k/a Union Bank, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
Lender   did not sign the seventh amendment
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 12

 

	
 
    	
SOCIÉTÉ   GENÉRALÉ
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Lender   did not sign the seventh amendment
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 13

 

	
 
    	
BMO   HARRIS BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James V. Ducote
    
	
 
    	
Name:
    	
James   V. Ducote
    
	
 
    	
Title:
    	
Managing   Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 14

 

	
 
    	
CREDIT   AGRICOLE CORPORATE AND INVESTMENT BANK
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Willis
    
	
 
    	
Name:
    	
Michael   Willis
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark Roche
    
	
 
    	
Name:
    	
Mark   Roche
    
	
 
    	
Title:
    	
Managing   Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 15

 

	
 
    	
SUMITOMO   MITSUI BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James D. Weinstein
    
	
 
    	
Name:
    	
James   D. Weinstein
    
	
 
    	
Title:
    	
Managing   Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 16

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Lender   did not sign the seventh amendment
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 17

 

	
 
    	
COMERICA   BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason Klesel
    
	
 
    	
Name:
    	
Jason   Klesel
    
	
 
    	
Title:
    	
Commercial   Banking Officer
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 18

 

	
 
    	
FIFTH   THIRD BANK
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Justin Bellamy
    
	
 
    	
Name:
    	
Justin   Bellamy
    
	
 
    	
Title:
    	
Director
    

 

Seventh Amendment to Sanchez

Second Amended and Restated Credit Agreement

 

Signature Page 19

 

SCHEDULE 7.01

 

CORPORATE ORGANIZATIONAL CHART

 

 

All of the membership interests in each of SN Catarina, LLC, SN Palmetto, LLC (f/k/a SEP Holdings III, LLC), SN Marquis LLC, SN Cotulla Assets, LLC, SN Operating, LLC, SN TMS, LLC, SN Capital, LLC, and SN UR Holdings, LLC are owned by Sanchez Energy Corporation.

 

 

SCHEDULE 7.14

 

SUBSIDIARIES

 

	
Name of Subsidiary
    	
 
    	
Jurisdiction of
   Organization
    	
 
    	
Federal Taxpayer ID
    	
 
    	
Ownership Interest
    
	
SN Palmetto, LLC (f/k/a SEP Holdings III, LLC)
    	
 
    	
Delaware
    	
 
    	
45-3193696
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Catarina, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Cotulla Assets, LLC
    	
 
    	
Texas
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Marquis LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Operating, LLC
    	
 
    	
Texas
    	
 
    	
38-3902143
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Midstream, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by SN UR Holdings, LLC
    
	
SN Services, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by SN UR Holdings, LLC
    
	
SN Terminal, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by SN UR Holdings, LLC
    
	
SN TMS, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN UR Holdings, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    
	
SN Capital, LLC
    	
 
    	
Delaware
    	
 
    	
45-3090102
    	
 
    	
100% Membership Interest held by Borrower
    

 

 

Exhibit D

 

FINANCIAL COVENANT CALCULATION WORKSHEET

 

Summary of Financial Ratios

Section 9.01 Financial Covenants

 

	
 
    	
 
    	
 
    	
In Compliance?
    	
 
    
	
Current Ratio
    	
min. 1.0 to 1.0
    	
 
    	
 
    	
 
    
	
Net First Lien Leverage Ratio
    	
max. [2.00] to 1.0
    	
 
    	
 
    	
 
    

 

	
Current Ratio
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consolidated Current Assets (including unused   Commitments to the extent that the Borrower is permitted to borrow such   amount under the terms of the Agreement, but excluding non-cash assets under   FAS 133)
    	
 
    	
=
    	
 
    	
$
    	
 
    	
 
    
	
Consolidated Current Liabilities (excluding outstanding   Obligations to the extent included in consolidated current liabilities,   non-cash obligations under FAS 133 and any accrual related to non-cash   compensation arising from any grant of stock, stock options or other equity   based awards)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net First Lien Leverage Ratio
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
First Lien Debt minus Loan Party Cash 
    	
 
    	
=
    	
 
    	
$
    	
 
    	
 
    
	
Consolidated EBITDA 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    

 

Section 8.13(a)

[Provide details of compliance/non-compliance]

 

1

 

Current Ratio

Section 9.01 Financial Covenants

 

	
Consolidated   Current Assets
    	
 
    	
$
    	
 
    	
 
    
	
(+)   Unused Commitments to the extent that the Borrower is permitted to borrow   such amount under the terms of the Agreement
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Non-cash assets under FAS 133
    	
 
    	
$
    	
 
    	
 
    
	
Total   Consolidated Current Assets
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Consolidated   Current Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Outstanding Obligations to the extent included in consolidated current   liabilities
    	
 
    	
$
    	
 
    	
 
    
	
(-)Non-cash   obligations under FAS 133
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Accrual related to non-cash compensation arising from any grant of stock, stock   options or other equity based awards
    	
 
    	
$
    	
 
    	
 
    
	
Total   Consolidated Current Liabilities
    	
 
    	
$
    	
 
    	
 
    

 

Current Ratio is     to 1.00.

 

2

 

Net First Lien Leverage Ratio 

Section 9.01 Financial Covenants

 

	
First Lien Debt at end of
    	
 
    	
Q    201 
    	
 
    
	
(-) Loan Party   Cash
    	
 
    	
$
    	
 
    	
 
    
	
Net First Lien Debt
    	
 
    	
 
    	
 
    
	
Consolidated   EBITDA for [•] Quarters ended[•] /1[•]
    	
 
    	
 
    	
 
    
	
Consolidated Net   Income (the following to be added, without duplication and to the extent   deducted (and not added back) in calculating such Consolidated Net Income)
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated   Net Interest Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated   Income Tax Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated   depletion, depreciation and amortization expense of the Borrower and its Restricted   Subsidiaries
    	
 
    	
$
    	
 
    	
 
    
	
(+) Other   non-cash charges to the extent not included in the foregoing
    	
 
    	
$
    	
 
    	
 
    
	
(+) Fees and   expenses expensed and paid in cash in connection with (1) the public   offering of Borrower’s Equity Interests, (2) the 2012 Credit Agreement,   (3) the 2013 Credit Agreement, (4) the Senior Unsecured Notes and   (5) the Agreement, including any amendments to date
    	
 
    	
$
    	
 
    	
 
    
	
(+) Unrestricted   Person Cash Dividends
    	
 
    	
$
    	
 
    	
 
    
	
(-) All-non-cash   income to the extent included in determining Consolidated Net Income
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Consolidated   EBITDA for prior 4 quarters
    	
 
    	
$
    	
 
    	
 
    

 

Net First Lien Leverage Ratio is    to 1.00.

 

3

 

Exhibit A

 

FIRST AMENDMENT TO SECURITY AND PLEDGE AGREEMENT

 

(Sanchez Energy Corporation)

(SN Palmetto, LLC)

(SN Marquis LLC)

(SN Cotulla Assets, LLC)

(SN Operating, LLC)

(SN TMS, LLC)

(SN Catarina LLC)

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED SECURITY AND PLEDGE AGREEMENT dated as of March 18, 2016 (this “First Security Agreement Amendment”) is among Sanchez Energy Corporation, a Delaware corporation (“Borrower”), the Guarantors party hereto including SN Palmetto, LLC, a Delaware limited liability company f/k/a SEP Holdings III, LLC, (“Palmetto”), SN Marquis LLC, a Delaware limited liability company (“Marquis”), SN Cotulla Assets, LLC, a Texas limited liability company (“Cotulla”), SN TMS, LLC, a Delaware limited liability company (“TMS”), SN OPERATING, LLC, a Texas limited liability company (“Operating”), and SN Catarina LLC, a Delaware limited liability company (“Catarina”; and together with Palmetto, Marquis, Cotulla, TMS and Operating the “Guarantors”, and each individually, “Guarantor”; the Guarantors party hereto together with the Borrower, each a “Debtor” and collectively, the “Debtors”), and Royal Bank of Canada, as Administrative Agent under the Credit Agreement (as herein defined), not in its individual capacity, but solely as collateral agent for the Lenders and other Secured Parties (as such terms are defined herein) (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

RECITALS:

 

A.            Pursuant to the Second Amended and Restated Credit Agreement, dated as of June 30, 2014 (as amended, supplemented, and otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the lenders from time to time party thereto (the “Lenders”) and the Administrative Agent, the Lenders agreed to make loans to and other extensions of credit on behalf of the Borrower.

 

B.            The Debtors entered into that certain Amended and Restated Security and Pledge Agreement dated as of June 30, 2014 in favor of the Administrative Agent as collateral agent for the benefit of the Lenders and other Secured Parties (the “Security Agreement”) pursuant to which the Debtors granted a security interest in the Collateral (as defined in the Security Agreement) to secure the Secured Obligations (as defined in the Security Agreement, the “Secured Obligations”).

 

First Amendment to Pledge

and Security Agreement

 

 

C.                                    The Borrower has requested certain amendments to the Credit Agreement.

 

D.            The Debtors and Administrative Agent are entering into this First Security Agreement Amendment to amend the Security Agreement as set forth herein.

 

E.            The Debtors have duly authorized the execution, delivery and performance of this First Security Agreement Amendment.

 

F.             This First Security Agreement Amendment is integral to the transactions contemplated by the Credit Agreement, and the execution and delivery of this First Security Agreement Amendment is a condition precedent to the Lenders’ obligations to extend credit under the Credit Agreement.

 

ACCORDINGLY, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtors and Administrative Agent hereby agree as follows:

 

1.             REFERENCE TO CREDIT AGREEMENT. The terms, conditions, and provisions of the Credit Agreement are incorporated herein by reference, the same as if set forth herein verbatim, which terms, conditions, and provisions shall continue to be in full force and effect hereunder so long as the Lenders are obligated to lend under the Credit Agreement and thereafter until the Secured Obligations are paid and performed in full.  Capitalized terms used but not defined in this First Security Agreement Amendment have the meanings given such terms in the Credit Agreement.

 

2.                                      AMENDMENTS TO SECURITY AGREEMENT.

 

a.             Section 1.01 of the Security Agreement is hereby amended to add the following definitions in alphabetical order therein:

 

“Commodity Accounts” means, collectively, with respect to each Debtor, (i) all “commodity accounts” as such term is defined in the UCC and (ii) all cash and “commodity contracts” as such term is defined in the UCC therein.

 

“Commodity Account Control Agreement” means a commodity account control agreement in a form reasonably satisfactory to the Administrative Agent.

 

“Securities Accounts” means, collectively, with respect to each Debtor, (i) all “securities accounts” as such term is defined in the UCC and (ii) all cash and “financial assets” as such term is defined in the UCC therein.

 

2

 

“Securities Account Control Agreement” means a securities account control agreement in a form reasonably satisfactory to the Administrative Agent.

 

b.             Section 3.01 of the Security Agreement is hereby amended by deleting the words “other than any Deposit Account maintained by the Administrative Agent” therefrom.

 

c.             Section 3.02(e) of the Security Agreement is hereby deleted and the following is substituted therefor:

 

“(e)         as and when required in accordance with Section 8.17 of the Credit Agreement, deliver to the Administrative Agent a Deposit Account Control Agreement with respect to any Deposit Account of such Debtor, executed by such Debtor and the Lender maintaining such Deposit Account;”.

 

d.             Section 3.02(f) of the Security Agreement is hereby deleted and the following is substituted therefor:

 

“(f)          as and when required in accordance with Section 8.17 of the Credit Agreement, deliver to the Administrative Agent a Securities Account Control Agreement with respect to any Securities Account of such Debtor, executed by such Debtor and the Lender or Lender Affiliate maintaining such Securities Account; and”.

 

e.             A new Section 3.02(g) is hereby added to the Security Agreement to read as follows:

 

“(g)         as and when required in accordance with Section 8.17 of the Credit Agreement, deliver to the Administrative Agent a Commodities Account Control Agreement with respect to any Commodities Account of such Debtor, executed by such Debtor and the Lender or Lender Affiliate maintaining such Commodities Account.”

 

f.             A new Section 3.03 is hereby added to the Security Agreement to read as follows:

 

“3.03      Deposit, Securities and Commodity Accounts.

 

(a)           Each Debtor shall (i) close any Deposit Account maintained by such Debtor with a Person not a Lender within 30 days after the Seventh Amendment Effective Date in accordance with Section

 

3

 

8.17 of the Credit Agreement, (ii) on and after the Seventh Amendment Effective Date, not open any Deposit Account with any Person not a Lender, (iii) from and after the date on which any Deposit Account with a Person not a Lender has been closed, not maintain a Deposit Account with a Person not a Lender, and (iv) deliver Deposit Account Control Agreements to the Administrative Agent by the time specified in Section 8.17 of the Credit Agreement.

 

(b) Each Debtor shall (i) close any Securities Account or Commodity Account maintained by such Debtor with a Person not a Lender or an Affiliate of a Lender, within 10 Business Days after the Seventh Amendment Effective Date in accordance with Section 8.17 of the Credit Agreement, (ii) on and after the Seventh Amendment Effective Date, not open any Securities Account or Commodity Account with any Person not a Lender or an Affiliate of a Lender, (iii) from and after the date on which any Securities Account or Commodity Account with a Person Not a Lender or an Affiliate of a Lender has been closed, not maintain a Securities Account or Commodity Account with a Person Not a Lender or an Affiliate of a Lender, and (iv) deliver Securities Account Control Agreements and Commodity Account Control Agreements to the Administrative Agent by the times specified in Section 8.17 of the Credit Agreement.”

 

g.             The first sentence of Section 4.11 of the Security Agreement is hereby deleted and the following is substituted therefor:

 

“As of the Seventh Amendment Effective Date, no Debtor maintains any Deposit Accounts other than the Deposit Accounts listed in Annex 10.”

 

h.             Section 4.12 of the Security Agreement is hereby deleted and the following is substituted therefor:

 

“4.12 Investment Property.  As of the Seventh Amendment Effective Date, (i) no Debtor maintains any Securities Accounts or Commodity Accounts other than the Securities Accounts and Commodity Accounts listed in Annex 11, and the Administrative Agent has a perfected first priority security interest in such securities accounts and commodity accounts as a result of filing the applicable UCC financing statements, in each case subject to Excepted Liens, and (ii) does not hold, own or have any interest in any Investment Property other than Investment Property maintained in securities accounts or commodity accounts listed in Annex 11.  The Securities Accounts and Commodity Accounts listed in Annex 11 shall be closed by the Borrower within 10 Business Days after the Seventh

 

4

 

Amendment Effective Date in accordance with Section 8.17 of the Credit Agreement.”

 

i.              Section 5.12(b) is hereby deleted and the following is substituted therefor:

 

“(b)         Commodity Accounts.  From and after the Seventh Amendment Effective Date, no Debtor shall establish and maintain any Commodity Account unless (i) the applicable Debtor shall have given the Administrative Agent 5 days’ prior written notice of its intention to establish such new Commodity Account, (ii) such new Commodity Account is to be established and maintained with a Lender or an Affiliate of a Lender, and (iii) contemporaneously with opening any Commodity Account, such Lender or Lender Affiliate and such Debtor shall have duly executed and delivered to the Administrative Agent a Commodity Account Control Agreement with respect to such Commodity Account.  No Debtor shall grant Control of any commodity contracts carried in a Commodity Account to any Person other than the Administrative Agent.

 

j.              Section 5.12(c) of the Security Agreement is hereby deleted and the following is substituted therefor:

 

“(c)         Deposit Accounts, From and after the Seventh Amendment Effective Date, no Debtor shall establish and maintain any Deposit Account unless (i) the applicable Debtor shall have given the Administrative Agent 5 days’ prior written notice of its intention to establish such new Deposit Account, (ii) such new Deposit Account is to be established and maintained with a Lender, and (iii) such Lender and such Debtor shall have duly executed and delivered to the Administrative Agent a Deposit Account Control Agreement with respect to such Deposit Account.  No Debtor shall grant Control of any Deposit Account to any person other than the Administrative Agent.”

 

k.             A new Section 5.12(f)(iv) is hereby added to the Security Agreement to read as follows:

 

“(iv)        From and after the Seventh Amendment Effective Date, no Debtor shall establish and maintain any Securities Account unless (i) the applicable Debtor shall have given the Administrative Agent 5 days’ prior written notice of its intention to establish such new Securities Account, (ii) such new Securities Account is to be established and maintained with a Lender or an Affiliate of a Lender, and (iii) contemporaneously with opening any Securities Account, such Lender or Lender Affiliate and such Debtor shall have duly executed and delivered to the Administrative Agent

 

5

 

a Securities Account Control Agreement with respect to such Securities Account.  No Debtor shall grant Control of any security entitlement carried in a Securities Account to any Person other than the Administrative Agent.”

 

l.              Annexes 3, 5, 6, 7, 8, 9, 10 and 11  attached to the Security Agreement are hereby replaced and Annexes 3, 5, 6, 7, 8, 9, 10 and 11 attached hereto are substituted therefor.

 

3.                                      MISCELLANEOUS

 

a.             THIS FIRST SECURITY AGREEMENT AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

b.             THIS FIRST SECURITY AGREEMENT AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.

 

[Remainder of Page Intentionally Blank]

 

6

 

IN WITNESS WHEREOF, the each Debtor has caused this First Security Agreement Amendment to be duly executed and delivered by an officer duly authorized as of the date first above written.

 

	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
a   Delaware corporation
    
	
 
    	
SN   PALMETTO, LLC,
    
	
 
    	
f/k/a   SEP Holdings III, LLC
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
SN   COTULLA ASSETS, LLC,
    
	
 
    	
a   Texas limited liability company
    
	
 
    	
SN   OPERATING, LLC,
    
	
 
    	
a   Texas limited liability company
    
	
 
    	
SN   TMS, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
SN   CATARINA, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Garrick   A. Hill
    
	
 
    	
 
    	
Interim   Co — Chief Financial Officer
    

 

First Amendment to Pledge

and Security Agreement

 

Signature Page 1

 

IN WITNESS WHEREOF, the Administrative Agent has executed this First Security Agreement Amendment to agree to and acknowledge same as of the date first above written.

 

	
 
    	
ROYAL   BANK OF CANADA,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

First Amendment to Pledge

and Security Agreement

 

Signature Page 2

 

ANNEX 3

 

SECURITIES COLLATERAL

 

	
Debtor
    	
 
    	
Issuer
    	
 
    	
Tax ID of
   Issuer
    	
 
    	
Ownership
    	
 
    	
Certificate
    
	
Sanchez Energy Corporation
    	
 
    	
SN Palmetto, LLC
    	
 
    	
45-3193696
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    
	
Sanchez Energy Corporation
    	
 
    	
SN Marquis LLC
    	
 
    	
45-3090102(1)
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    
	
Sanchez Energy Corporation
    	
 
    	
SN Cotulla Assets, LLC
    	
 
    	
45-3090102(2)
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    
	
Sanchez Energy Corporation
    	
 
    	
SN Operating, LLC
    	
 
    	
38-3902143
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    
	
Sanchez Energy Corporation
    	
 
    	
SN TMS, LLC
    	
 
    	
45-3090102(3)
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    
	
Sanchez Energy Corporation
    	
 
    	
SN Catarina, LLC
    	
 
    	
45-3090102(4)
    	
 
    	
100% of the Membership   Interests
    	
 
    	
No
    

 

(1)  SN Marquis LLC is a disregarded entity for tax purposes and files under the Tax ID of Sanchez Energy Corporation.

 

(2)  SN Cotulla Assets, LLC is a disregarded entity for tax purposes and files under the Tax ID of Sanchez Energy Corporation.

 

(3)  SN TMS, LLC is a disregarded entity for tax purposes and files under the Tax ID  of Sanchez Energy Corporation

 

(4)  SN Catarina, LLC is a disregarded entity for tax purposes and files under the Tax ID of Sanchez Energy Corporation.

 

 

ANNEX 5

 

FILING OFFICES

 

UCC FILINGS

 

	
Entity
    	
 
    	
Type of Filing
    	
 
    	
Filing Offices
    
	
SN Palmetto, LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Delaware Secretary of   State
    
	
SN Marquis LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Delaware Secretary of   State
    
	
Sanchez Energy Corporation
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Delaware Secretary of   State
    
	
SN Cotulla Assets, LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Texas Secretary of   State
    
	
SN Operating, LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Texas Secretary of   State
    
	
SN TMS, LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Delaware Secretary of   State
    
	
SN Catarina, LLC
    	
 
    	
UCC-1 (Standard)
    	
 
    	
Delaware Secretary of   State
    

 

REAL PROPERTY FILINGS

 

	
Entity
    	
 
    	
Type of Filing
    	
 
    	
Filing Offices
    
	
SN Palmetto, LLC
    	
 
    	
Deed of Trust /   Mortgage / Financing Statement
    	
 
    	
Natchitoches Parish, LA
   Cascade County, MT
   Lewis and Clark County, MT Meagher County, MT
   Frio County, TX
   Gonzales County, TX*
   Zavala County, TX*
    
	
SN Marquis LLC
    	
 
    	
Deed of Trust /   Mortgage / Financing Statement
    	
 
    	
Atascosa County, TX*
   DeWitt County, TX
   Fayette County, TX*
   Lavaca County, TX*
   Webb County, TX
    
	
SN Cotulla Assets, LLC
    	
 
    	
Deed of Trust /   Mortgage / Financing Statement
    	
 
    	
Dimmit County, TX
   Frio County, TX
   LaSalle County, TX
   Zavala County, TX
    
	
SN Catarina, LLC
    	
 
    	
Deed of Trust /   Mortgage / Financing Statement
    	
 
    	
Dimmit County, TX
   Webb County, TX
   LaSalle County, TX
    

 

*Only counties where filings are necessary to satisfy the 90% of Engineered Value requirements of the Credit Agreement as of the Effective Date.

 

 

ANNEX 6

 

DEBTOR INFORMATION

 

	
Name/Address
    	
 
    	
Type/Jurisdiction
    	
 
    	
FEIN
    	
 
    	
Organization ID
    
	
SN Palmetto, LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Delaware LLC
    	
 
    	
45-3193696
    	
 
    	
5027789
    
	
SN Marquis LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Delaware LLC
    	
 
    	
45-3090102
    	
 
    	
5061848
    
	
Sanchez Energy Corporation
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Delaware Corporation
    	
 
    	
45-3090102
    	
 
    	
5027889
    
	
SN Cotulla Assets, LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Texas LLC
    	
 
    	
45-3090102
    	
 
    	
801757040
    
	
SN Operating, LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Texas LLC
    	
 
    	
45-3090102
    	
 
    	
801757045
    
	
SN TMS, LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Delaware LLC
    	
 
    	
45-3090102
    	
 
    	
5383007
    
	
SN Catarina, LLC
   (1000 Main Street, Suite 3000
   Houston, Texas 77002)
    	
 
    	
Delaware LLC
    	
 
    	
45-3090102
    	
 
    	
5518394
    

 

 

ANNEX 7

 

PREVIOUS NAMES AND TRANSACTIONS

 

All Other Corporate or Fictitious Names Used Within Last Five Years:

 

1.                                      SEP Holdings III, LLC

 

All Merger or Consolidation Transactions Within Last Five Years:

 

1.                                      Sanchez Energy Corporation acquired SN Marquis LLC from Ross Exploration, Inc. in December 2011.

 

2.                                      Sanchez Energy Corporation acquired SEP Holdings III, LLC from Sanchez Energy Partners I, LP in December 2011.

 

 

ANNEX 8

 

OFFICES AND LOCATIONS OF RECORDS

 

Chief Executive Offices:

 

The chief executive office of each Debtor is:

 

1000 Main Street, Suite 3000
 Houston, Texas 77002

 

Additional offices:

 

1920 Sandman

Laredo, TX 78044-2986

 

 

ANNEX 9

 

LOCATION OF INVENTORY AND EQUIPMENT

 

Additional Locations:

 

1000 Main Street, Suite 3000
 Houston, Texas 77002

 

1920 Sandman

Laredo, TX 78044-2986

 

Additional lease and well equipment is on locations.

 

 

ANNEX 10

 

DEPOSIT ACCOUNTS

 

	
Entity
    	
 
    	
Institution
    	
 
    	
Account
   Number
    	
 
    	
Type
    	
 
    	
Tax ID
    	
 
    	
State
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

ANNEX 11

 

SECURITIES ACCOUNTS

 

	
Entity
    	
 
    	
Institution
    	
 
    	
Account Number
    	
 
    	
Type
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

COMMODITY ACCOUNTS

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