Intercreditor Agreement (2015)Full Document 

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INTERCREDITOR AGREEMENT

dated as of May 1, 2015 between

JPMORGAN CHASE BANK, N.A.,

as Priority Lien Agent,

and

U.S. Bank National Association,

as Second Lien Collateral Trustee


THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE INDENTURE DATED AS OF MAY 1, 2015, AMONG HALCÓN RESOURCES CORPORATION, CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY THERETO AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, (B) THE SENIOR REVOLVING CREDIT AGREEMENT DATED AS OF FEBRUARY 8, 2012, AS AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG HALCÓN RESOURCES CORPORATION, THE LENDERS PARTY THERETO FROM TIME TO TIME AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, (C) THE OTHER NOTE DOCUMENTS REFERRED TO IN SUCH INDENTURE AND (D) THE OTHER LOAN DOCUMENTS REFERRED TO IN SUCH CREDIT AGREEMENT.



TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

Section 1.01

Construction; Certain Defined Terms

1

ARTICLE II

LIEN PRIORITIES

Section 2.01

Relative Priorities

16

Section 2.02

Prohibition on Marshalling, Etc.

17

Section 2.03

No New Liens

17

Section 2.04

Similar Collateral and Agreements

18

Section 2.05

No Duties of Priority Lien Agent

18

Section 2.06

No Duties of Second Lien Collateral Trustee

19

ARTICLE III

ENFORCEMENT RIGHTS; PURCHASE OPTION

Section 3.01

Limitation on Enforcement Action

20

Section 3.02

Standstill Periods; Permitted Enforcement Action

21

Section 3.03

Insurance

23

Section 3.04

Notification of Release of Collateral

24

Section 3.05

No Interference; Payment Over

24

Section 3.06

Purchase Option

27

ARTICLE IV

OTHER AGREEMENTS

Section 4.01

Release of Liens; Automatic Release of Second Liens and Third Liens

29

Section 4.02

Certain Agreements With Respect to Insolvency or Liquidation Proceedings

30

Section 4.03

Reinstatement

37

Section 4.04

Refinancings; Additional Second Lien Debt; Initial Third Lien Indebtedness; Additional Third Lien Debt

37

Section 4.05

Amendments to Second Lien Documents and Third Lien Documents

39

Section 4.06

Legends

40

Section 4.07

Second Lien Secured Parties and Third Lien Secured Parties Rights as Unsecured Creditors; Judgment Lien Creditor

40

Section 4.08

Postponement of Subrogation

40

Section 4.09

Acknowledgment by the Secured Debt Representatives

41

ARTICLE V

GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS

Section 5.01

General

41

Section 5.02

Deposit Accounts

42

ARTICLE VI

APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS

Section 6.01

Application of Proceeds

43

Section 6.02

Determination of Amounts

44

i



ARTICLE VII

NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;

CONSENT OF GRANTORS; ETC.

Section 7.01

No Reliance; Information

44

Section 7.02

No Warranties or Liability

44

Section 7.03

Obligations Absolute

46

Section 7.04

Grantors Consent

46

ARTICLE VIII

REPRESENTATIONS AND WARRANTIES

Section 8.01

Representations and Warranties of Each Party

46

Section 8.02

Representations and Warranties of Each Representative

47

ARTICLE IX

MISCELLANEOUS

Section 9.01

Notices

47

Section 9.02

Waivers; Amendment

47

Section 9.03

Actions Upon Breach; Specific Performance

48

Section 9.04

Parties in Interest

49

Section 9.05

Survival of Agreement

49

Section 9.06

Counterparts

49

Section 9.07

Severability

49

Section 9.08

Governing Law; Jurisdiction; Consent to Service of Process

49

Section 9.09

WAIVER OF JURY TRIAL

50

Section 9.10

Headings

50

Section 9.11

Conflicts

50

Section 9.12

Provisions Solely to Define Relative Rights

50

Section 9.13

Certain Terms Concerning the Second Lien Collateral Trustee and the Third Lien Collateral Trustee

50

Section 9.14

Certain Terms Concerning the Priority Lien Agent, the Second Lien Collateral Trustee and the Third Lien Collateral Trustee

51

Section 9.15

Authorization of Secured Agents

51

Section 9.16

Further Assurances

52

Section 9.17

Relationship of Secured Parties

52

Section 9.18

Third Lien Provisions

52

Annex and Exhibits

Annex I

Exhibit A

Form of Priority Confirmation Joinder

Exhibit B

Security Documents

ii



INTERCREDITOR AGREEMENT, dated as of May 1, 2015 (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof, this "Agreement"), between JPMORGAN CHASE BANK, N.A., as administrative agent for the Priority Lien Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the "Original Priority Lien Agent") and U.S. Bank National Association, as collateral trustee for the Second Lien Secured Parties referred to herein (in such capacity, and together with its successors in such capacity, the "Original Second Lien Collateral Trustee").

Reference is made to (a) the Priority Credit Agreement (defined below) and (b) the Second Lien Indenture (defined below) governing the Second Lien Indenture Notes (defined below).

From time to time following the date hereof, HALCÓN RESOURCES CORPORATION, a Delaware corporation (together with its successors and assigns, "Halcón") may (i) incur Additional Notes and Additional Second Lien Obligations (each defined below) to the extent permitted by the Secured Debt Documents (as defined below); in connection with the Second Lien Indenture and any Additional Notes or Additional Second Lien Obligations, Halcón and certain Grantors (defined below), the Second Lien Trustee (defined below) and the Second Lien Collateral Trustee (defined below) have entered into the Second Lien Collateral Trust Agreement (defined below) and (ii) incur Initial Third Lien Obligations and Additional Third Lien Obligations (each as defined below) to the extent permitted by the Secured Debt Documents (as defined below); in connection with the Initial Third Lien Obligations, Halcón and certain of its subsidiaries and the Third Lien Collateral Trustee (defined below) shall, concurrently with the incurrence of such Additional Third Lien Obligations, enter into a Third Lien Collateral Trust Agreement (defined below).

In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Priority Lien Agent (for itself and on behalf of the Priority Lien Secured Parties) and the Second Lien Collateral Trustee (for itself and on behalf of the Second Lien Secured Parties) agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01                             Construction; Certain Defined Terms.  (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."  The word "will" shall be construed to have the same meaning and effect as the word "shall."  Unless the context requires otherwise, (i) any reference herein to any agreement, instrument, other document, statute or regulation shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words "herein," "hereof and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) the term "or" is not exclusive.

(b)                                 All terms used in this Agreement that are defined in Article 1, 8 or 9 of the New York UCC (whether capitalized herein or not) and not otherwise defined herein have the meanings



assigned to them in Article 1, 8 or 9 of the New York UCC.  If a term is defined in Article 9 of the New York UCC and another Article of the UCC, such term shall have the meaning assigned to it in Article 9 of the New York UCC.

(c)                                  Unless otherwise set forth herein, all references herein to (i) the Second Lien Collateral Trustee shall be deemed to refer to the Second Lien Collateral Trustee in its capacity as collateral trustee under the Second Lien Collateral Trust Agreement and (ii) the Third Lien Collateral Trustee shall be deemed to refer to the Third Lien Collateral Trustee in its capacity as collateral trustee under the Third Lien Collateral Trust Agreement.

(d)                                 As used in this Agreement, the following terms have the meanings specified below:

"Accounts" has the meaning assigned to such term in Section 3.01(a).

"Additional Notes" has the meaning given to the term "Additional Securities" in the Second Lien Indenture as in effect on the date hereof.

"Additional Second Lien Debt Facility" means any Indebtedness for which the requirements of Section 4.04(b) of this Agreement have been satisfied, as amended, restated, modified, renewed, refunded, restated, restructured, increased, supplemented, replaced or refinanced in whole or in part from time to time in accordance with each applicable Secured Debt Document; provided that neither the Second Lien Indenture nor any Second Lien Substitute Facility shall constitute an Additional Second Lien Debt Facility at any time.

"Additional Second Lien Documents" means the Additional Second Lien Debt Facility and the Additional Second Lien Security Documents.

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