SOUTHWESTERN ENERGY CO false 0000007332 0000007332 2020-08-18 2020-08-18

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 18, 2020

 

 

SOUTHWESTERN ENERGY COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-08246   71-0205415

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

10000 Energy Drive

Spring, TX 77389

(Address of principal executive office)(Zip Code)

(832) 796-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange
on which registered

Common Stock, Par Value $0.01   SWN   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01

Entry into a Material Definitive Agreement.

Underwriting Agreement

On August 18, 2020, Southwestern Energy Company (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) between the Company, the subsidiary guarantors party thereto (the “Guarantors”), and Citigroup Global Markets Inc., BofA Securities, Inc. and Wells Fargo Securities, LLC, as representatives of the underwriters named therein (the “Underwriters”), with respect to the offer and sale (the “Notes Offering”) of $350,000,000 aggregate principal amount of 8.375% senior notes due 2028 (the “Notes”). The Notes will be guaranteed by the Guarantors party to the Underwriting Agreement. The Notes will be sold in a registered offering under the Company’s registration statement on Form S-3, as amended (File No. 333-238633). The Notes Offering is expected to close on August 27, 2020, subject to customary closing conditions. As previously disclosed, on August 18, 2020, the Company closed its offering of 63.25 million shares of its common stock where it received aggregate net proceeds of approximately $152 million (the “Stock Offering”). The Company expects to receive net proceeds from the Notes Offering of approximately $345 million after deducting the underwriting discounts and estimated offering expenses. The Company intends to use the net proceeds from the Notes Offering, together with the net proceeds received from the Stock Offering and borrowings under its credit agreement, to fund a redemption of Montage Resource Corporation’s (“Montage”) issued and outstanding senior notes that the Company will assume upon the closing of its recently announced merger with Montage.

The Underwriting Agreement includes customary representations, warranties and covenants by the Company and the Guarantors. It also provides for customary indemnification by each of the Company, the Guarantors and the respective Underwriters against certain liabilities arising out of or in connection with sale of the Notes and for customary contribution provisions in respect of those liabilities.

The foregoing summary of the material terms of the Underwriting Agreement and the transaction contemplated thereby is subject to, and qualified in its entirety by, the full text of the Underwriting Agreement, which is attached hereto as Exhibit 1.1 and incorporated herein by reference.

The Underwriting Agreement has been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding its terms and is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Underwriting Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Underwriting Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

The Underwriters and their affiliates have provided and in the future may continue to provide various financial advisory, cash management, investment banking, commercial banking and other financial services, including the provision of credit facilities, to the Company in the ordinary course of business for which they have received and will continue to receive customary compensation.

Amendment to Credit Agreement

On August 18, 2020, the Company, several banks and other financial institutions (collectively, the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders (the “Administrative Agent”), entered into Amendment No. 7 (the “Amendment”) to that certain Credit Agreement dated as of April 26, 2018, by and among the Company, the Lenders from time to time party thereto and the Administrative Agent (the “Credit Agreement”). The Amendment amended the Credit Agreement to, among other matters:

(i) permit the assumption of Montage’s senior notes by the Company upon the closing of its recently announced merger with Montage;

(ii) permit the redemption of Montage’s senior notes with the proceeds of the Stock Offering, the Notes Offering and loans made under the Credit Agreement subject to certain other conditions; and

(iii) add a springing maturity trigger 91 days prior to the maturity date of Montage’s senior notes (which is currently July 15, 2023) unless at least $450 million of such notes have been redeemed, refinanced or amended such that their maturity date is extended to a date at least 91 days after the Credit Agreement’s April 24, 2024, maturity date.

The disclosure contained in this Item 1.01 does not purport to be a complete description of the Amendment and is qualified in its entirety by reference to the Amendment that is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

 

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information set forth in Item 1.01 under the heading “Amendment to Credit Agreement” is incorporated into this Item 2.03 by reference.

 

Item 9.01

Financial Statements and Exhibits.

EXHIBIT INDEX

 

Exhibit

No.

   Description
  1.1    Underwriting Agreement, dated August 18, 2020, between Southwestern Energy Company, the subsidiary guarantors party thereto and Citigroup Global Markets Inc., BofA Securities, Inc. and Wells Fargo Securities, LLC, as representatives of the underwriters named therein
10.1    Amendment No. 7 to Credit Agreement, dated as of August 18, 2020, among Southwestern Energy Corporation, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent for the lenders
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SOUTHWESTERN ENERGY COMPANY
Dated: August 20, 2020   By:  

/s/ Christopher W. Lacy

  Name:   Christopher W. Lacy
  Title:  

Vice President, General Counsel and

Corporate Secretary

Exhibit 1.1

$350,000,000 8.375% Senior Notes due 2028

SOUTHWESTERN ENERGY COMPANY

UNDERWRITING AGREEMENT

August 18, 2020

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

BofA Securities, Inc.

One Bryant Park

New York, New York 10036

Wells Fargo Securities, LLC

550 South Tryon Street, 5th Floor

Charlotte, North Carolina 28202

as Representatives of the several Underwriters named in Schedule A hereto

Ladies and Gentlemen:

Southwestern Energy Company, a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters named in Schedule A (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), acting severally and not jointly, the respective principal amounts set forth in such Schedule A of the Company’s 8.375% Senior Notes due 2028 (the “Notes”). Citigroup Global Markets Inc. (“Citigroup”), BofA Securities, Inc. and Wells Fargo Securities, LLC have agreed to act as representatives (in such capacity, the “Representatives”) in connection with the offering and sale of the Securities (as defined below).

The Notes will be issued as a new series of debt securities under an indenture dated September 25, 2017 between the Company and U.S. Bank National Association, as trustee (the “Trustee”) (as amended and supplemented to the date hereof, the “Base Indenture”). The Notes will be initially guaranteed on an unsecured senior basis (the “Guarantees” and, together with the Notes, the “Securities”) by each of the Guarantors (as defined below). Certain terms of the Notes will be established pursuant to a fourth supplemental indenture to be dated as of the Closing Time (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The Notes will be issued in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), pursuant to a Letter of Representations, to be dated on or before the Closing Time, among the Company, the Trustee and DTC.

Prior to the date hereof, the Company and Montage Resources Corporation, a Delaware corporation (“Montage Resources”), entered into that certain Agreement and Plan of Merger, dated as of August 12, 2020, between the Company and Montage Resources (together with all exhibits,

 

1


schedules and other disclosure letters thereto, collectively, as may be amended, the “Merger Agreement”) in connection with the proposed merger (the “Merger”) of the Company and Montage Resources.

In connection with the offering of the Securities, the Company is entering into an amendment to its Credit Agreement, among the Company, the guarantors thereunder, the lenders and agents party thereto, and JPMorgan Chase Bank, N.A., as administrative agent to provide for, among other things, the items described in the General Disclosure Package (the “Credit Agreement Amendment”).

The Company hereby confirms its engagement of Goldman Sachs & Co. LLC as, and Goldman Sachs & Co. LLC hereby confirms its agreement with the Company Parties (as defined below) to render services as, the “qualified independent underwriter” within the meaning of Rule 5121(f)(12) of the Financial Industry Regulatory Authority, Inc. (“FINRA”) with respect to the offering and sale of the Securities. Goldman Sachs & Co. LLC, solely in its capacity as the qualified independent underwriter and not otherwise, is referred to herein as the “QIU.”

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement,” as defined under Rule 405 (“Rule 405”) under the Securities Act of 1933, as amended (the “Securities Act”), on Form S-3 (File No. 333-238633) covering the public offering and sale of certain securities of the Company, including the Securities, under the Securities Act and the rules and regulations promulgated thereunder (the “Securities Act Regulations”), which automatic shelf registration statement became effective under Rule 462(e) of the Securities Act Regulations (“Rule 462(e)”). Such registration statement, as of any time, means such registration statement as amended by any post-effective amendments thereto at such time, including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B of the Securities Act Regulations (“Rule 430B”), and is referred to herein as the “Registration Statement”; provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of such registration statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as of such time, the documents incorporated or deemed incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to be a part thereof as of such time pursuant to the Rule 430B. Each preliminary prospectus supplement and the base prospectus used in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, are collectively referred to herein as a “preliminary prospectus.” Promptly after execution and delivery of this underwriting agreement (this “Agreement”), the Company will prepare and file a final prospectus supplement relating to the Securities in accordance with the provisions of Rule 424(b) of the Securities Act Regulations (“Rule 424(b)”). The final prospectus supplement and the base prospectus, in the form first furnished or made available to the Underwriters for use in connection with the offering and sale of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act immediately prior to

 

2


the Applicable Time, are collectively referred to herein as the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus or the Prospectus or any amendment or supplement thereto shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (or any successor system) (“EDGAR”).

As used in this Agreement:

Applicable Time” means 4:35 P.M., New York City time, on August 18, 2020 or such other time as agreed by the Company and the Representatives.

General Disclosure Package” means each Issuer General Use Free Writing Prospectus and the most recent preliminary prospectus furnished to the Underwriters for general distribution to investors prior to the Applicable Time, all considered together.

Guarantors” means, collectively, A.W. Realty company, LLC, a Texas limited liability company; Angelina Gathering Company L.L.C., a Texas limited liability company; SWN Drilling Company, LLC, a Texas limited liability company; SWN E & P Services, LLC, a Texas limited liability company; SWN Energy Services Company, LLC, a Texas limited liability company; SWN International, LLC, a Delaware limited liability company; SWN Midstream Services Company, LLC, a Texas limited liability company; SWN Producer Services, LLC, a Texas limited liability company; SWN Production Company, LLC, a Texas limited liability company; SWN Water Resources Company, LLC, a Texas limited liability company; and SWN Well Services, LLC, a Texas limited liability company.

Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule 433”), including, without limitation, any “free writing prospectus” (as defined in Rule 405) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering thereof that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433), as evidenced by its being specified in Schedule B hereto, which specified items are not bona fide electronic road shows.

Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” (or other references of like import) in the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include all such financial statements and schedules and other information incorporated or deemed to be incorporated by reference in the Registration Statement, any preliminary prospectus or the

 

3


Prospectus, as the case may be, prior to the Applicable Time; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include the filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder (the “Exchange Act Regulations”) incorporated or deemed to be incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, at or after the Applicable Time.

Each of the Company and the Guarantors (together, the “Company Parties”) hereby confirms its agreements with the Underwriters as follows:

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. Each of the Company Parties, jointly and severally, represents and warrants to each Underwriter at the date hereof, the Applicable Time and the Closing Time, and agrees with each Underwriter, as follows:

(i) Compliance of the Registration Statement, the Prospectus and Incorporated Documents. The Company meets the requirements for use of Form S-3 under the Securities Act. The Registration Statement is an “automatic shelf registration statement” under Rule 405 that has been filed with the Commission not earlier than three years prior to the date hereof and the Securities have been and remain eligible for registration by the Company on such automatic shelf registration statement. Each of the Registration Statement and any post-effective amendment thereto has become effective under the Securities Act and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering has been initiated or threatened by the Commission. Additionally, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company Parties’ knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information. In addition, the Base Indenture has been, and the Supplemental Indenture will be at the Closing Time, duly qualified under the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated thereunder (the “Trust Indenture Act”).

Each of the Registration Statement and any post-effective amendment thereto, at the time of its effectiveness and at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) under the Securities Act Regulations, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations and the Trust Indenture Act. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations and the Trust Indenture Act, and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

4


The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, at the time they were or hereafter are filed with the Commission, complied or will comply in all material respects with the requirements of the Exchange Act and the Exchange Act Regulations.

(ii) Accurate Disclosure. Neither the Registration Statement nor any amendment thereto, at its effective time or at the Closing Time, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the Applicable Time, neither (A) the General Disclosure Package nor (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto (including any prospectus supplement), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b) or at the Closing Time, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, at the time the Registration Statement became effective or when such incorporated documents were filed with the Commission, as the case may be, when read together with the other information in the Registration Statement, the General Disclosure Package or the Prospectus, as the case may be, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or any post-effective amendment thereto, the General Disclosure Package or the Prospectus or any amendments or supplements thereto made in reliance upon and in conformity with written information furnished to the Company by any of the Underwriters through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter through the Representatives consists of (A) the names of such Underwriter as presented on the front and back cover of the preliminary prospectus and the Prospectus and (B) the concession figures appearing in the fifth paragraph under the caption “Underwriting (Conflicts of Interest),” the information concerning market making by the Underwriters in the eighth paragraph under the caption “Underwriting (Conflicts of Interest)” and the information concerning short sales, stabilizing transactions and purchases to cover positions created by short sales by the Underwriters contained in the ninth paragraph under the caption “Underwriting (Conflicts of Interest),” each as set forth in the preliminary prospectus and the Prospectus (the “Underwriter Information”).

(iii) Issuer Free Writing Prospectuses. No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement, any

 

5


preliminary prospectus or the Prospectus, including any document incorporated by reference therein, that has not been superseded or modified. Any offer that is a written communication relating to the Securities made prior to the initial filing of the Registration Statement by the Company or any person acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c) of the Securities Act Regulations) has been filed with the Commission in accordance with the exemption provided by Rule 163 under the Securities Act Regulations (“Rule 163”) and otherwise complied with the requirements of Rule 163, including without limitation the legending requirement, to qualify such offer for the exemption from Section 5(c) of the Securities Act provided by Rule 163.

(iv) Well-Known Seasoned Issuer. (A) At the original effectiveness of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Securities Act) made any offer relating to the Securities in reliance on the exemption of Rule 163, and (D) at the Applicable Time, the Company was and is a “well-known seasoned issuer,” as defined in Rule 405.

(v) Company Not Ineligible Issuer. (A) At the time of filing the Registration Statement and any post-effective amendment thereto, (B) at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Securities and (C) at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

(vi) Independent Accountants. PricewaterhouseCoopers LLP, accountants to the Company, who certified the financial statements of the Company and related supporting schedules included in or incorporated by reference into the Registration Statement, the General Disclosure Package and the Prospectus is an independent registered public accounting firm with respect to the Company as required by the Securities Act, the Securities Act Regulations, the Exchange Act, the Exchange Act Regulations and the rules and regulations of the Public Company Accounting Oversight Board. To the knowledge of the Company Parties, Grant Thornton LLP, who have reported upon the audited financial statements of Montage Resources and any related supporting schedules included in or incorporated by reference into the Registration Statement, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm with respect to Montage Resources as required by the Securities Act, the Securities Act Regulations, the Exchange Act, the Exchange Act Regulations and the rules and regulations of the Public Company Accounting Oversight Board.

(vii) Independent Petroleum Engineers. Netherland, Sewell & Associates, Inc., dated as of February 7, 2020, is referenced in the Registration Statement, the General Disclosure Package and the Prospectus, was as of December 31, 2020, and is, as of the date hereof, an independent petroleum engineer with respect to the Company. The information underlying the estimates of reserves of the Company, which was supplied by the Company to Netherland, Sewell & Associates, Inc. for purposes of reviewing the reserve reports and estimates of the Company and

 

6


preparing the letter (the “Netherland Reserve Report Letter”) of Netherland, Sewell & Associates, Inc., including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true and correct in all material respects on the dates as of which such estimates were made and such information was supplied and was prepared in accordance with customary industry practices; estimates of such reserves and present values as described in the Registration Statement, the General Disclosure Package and the Prospectus and reflected in the Netherland Reserve Report Letter comply in all material respects with the applicable requirements of Regulation S-X and Industry Guide 2 under the Securities Act. To the knowledge of the Company Parties, the information underlying the estimates of reserves of Montage Resources, including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true and correct in all material respects on the dates as of which such estimates were made; estimates of such reserves and present values as described in the General Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of Regulation S-X and Industry Guide 2 under the Securities Act.

(viii) Financial Statements; Non-GAAP Financial Measures. The financial statements of the Company included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statements of operations, comprehensive income (loss), cash flows and changes in equity of the Company and its consolidated subsidiaries for the periods specified; and said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved, except as disclosed therein. The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information of the Company required to be stated therein. The selected financial data and the summary financial information of the Company included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements of the Company included or incorporated by reference therein. To the knowledge of the Company Parties, the financial statements of Montage Resources included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of Montage Resources and its consolidated subsidiaries at the dates indicated and the balance sheets and statements of operations and comprehensive income (loss), stockholders’ equity and cash flows of Montage Resources and its consolidated subsidiaries for the periods specified. To the knowledge of the Company Parties, the selected financial data and the summary financial information of Montage Resources included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements of Montage Resources included or incorporated by reference therein. Except as included or incorporated by reference therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. All disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus, or incorporated by reference therein,

 

7


regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language of the Company incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly present the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(ix) No Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, (A) (i) with respect to the Company and its subsidiaries, there has been no change that has had or is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and (ii) with respect to Montage Resources, there has been no change that has had or is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries and Montage Resources and its subsidiaries considered as one enterprise pro forma for the Merger, whether or not arising in the ordinary course of business (as applicable, a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise after giving effect to the Merger, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class or series of its capital stock.

(x) Good Standing of the Company and Montage Resources. Each of the Company and, to the knowledge of the Company Parties, Montage Resources has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement. Each of the Company and, to the knowledge of the Company Parties, Montage Resources is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not reasonably be expected to result in a Material Adverse Effect.

(xi) Good Standing of Subsidiaries. Each entity that is a “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each, a “Significant Subsidiary” and, collectively, the “Significant Subsidiaries”) and each Guarantor (i) has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and (ii) is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where

 

8


the failure to so qualify or to be in good standing with respect to (ii) would not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, all of the issued and outstanding shares of capital stock of or other equity interests in each Significant Subsidiary and Guarantor have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding shares of capital stock of or other equity interests in any Significant Subsidiary or Guarantor were issued in violation of the preemptive or similar rights of any securityholder of such Significant Subsidiary or Guarantor.

(xii) Capitalization. The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the Registration Statement, the General Disclosure Package and the Prospectus (except for subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to in the Registration Statement, the General Disclosure Package and the Prospectus or pursuant to in-kind distributions of, or the exercise of, convertible securities or options referred to in the Registration Statement, the General Disclosure Package and the Prospectus). The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company and, to the knowledge of the Company Parties, of Montage Resources were issued in violation of the preemptive or other similar rights of any securityholder of the Company.

(xiii) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company Parties.

(xiv) Authorization of the Base Indenture. The Base Indenture has been duly authorized, executed and delivered by the Company Parties and constitutes a valid and binding agreement of the Company Parties, enforceable against the Company Parties in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors generally (the “Enforceability Exceptions”) or by general equitable principles.

(xv) Authorization of the Supplemental Indenture. The Supplemental Indenture has been duly authorized, and, at the Closing Time, will be duly executed and delivered by the Company Parties and, assuming due authorization, execution and delivery by the Trustee, will constitute a valid and binding agreement of the Company Parties, enforceable against the Company Parties in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions or by general equitable principles.

(xvi) Authorization of the Notes and Description of the Securities. The Notes to be purchased by the Underwriters from the Company have been duly authorized by the Company for issuance and sale pursuant to this Agreement and the Indenture, and, at the Closing Time, the Notes will be in the form contemplated by the Indenture, will have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the

 

9


enforcement thereof may be limited by the Enforceability Exceptions or by general equitable principles, and will be entitled to the benefits of the Indenture. At the Closing Time, the Securities and the Indenture will conform in all material respects to the descriptions thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(xvii) Valid Issuance of the Guarantees. The Guarantees have been duly authorized by the Guarantors; the Guarantees will be in the form contemplated by the Indenture; when the Notes have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, and assuming due authorization, execution and delivery of the Supplemental Indenture by the Trustee, the Guarantees will constitute the valid and legally binding obligations of the Guarantors entitled to the benefits of the Indenture and will be enforceable against the Guarantors in accordance with their terms, except as the enforceability thereof may be limited by the Enforceability Exceptions or by general equitable principles.

(xviii) Registration Rights. There are no persons with registration rights or other similar rights to have any securities registered for sale pursuant to the Registration Statement or otherwise registered for sale or sold by the Company under the Securities Act pursuant to this Agreement.

(xix) Absence of Violations, Defaults and Conflicts. None of the Company, its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries is (A) in violation of its charter, by-laws or similar organizational document, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company, any subsidiary or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries or any of their respective properties or assets (each, a “Governmental Entity”), except for such violations that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The execution, delivery and performance of this Agreement, the Indenture, the Notes and the Credit Agreement Amendment, the authorization and performance of the Guarantees, and, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the consummation of the transactions contemplated herein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described therein under the caption “Use of Proceeds”) have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company, any subsidiary or, to the knowledge of the Company

 

10


Parties, Montage Resources pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the (i) charter, by-laws or similar organizational document of the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries or (ii) any law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity (except, in the case of clause (ii) above, for any such violation that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect). As used herein, a “Repayment Event” means any event or condition that gives the holder of any note, debenture or other financing instrument (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of the related financing by the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or its subsidiaries.

(xx) Absence of Labor Dispute. No labor dispute with the employees of the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries exists or, to the knowledge of the Company Parties, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary’s or Montage Resources’ or its subsidiaries’ principal suppliers, manufacturers, customers or contractors, which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(xxi) Absence of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge of the Company Parties, threatened, against or affecting the Company, any of its subsidiaries or Montage Resources or any of its subsidiaries, which would reasonably be expected to result in a Material Adverse Effect, or that might materially and adversely affect their respective properties or assets, the consummation of the transactions contemplated in this Agreement, the Indenture or the Securities, or the performance by the Company of its obligations under this Agreement, the Indenture or the Securities. The aggregate of all pending legal or governmental proceedings to which the Company, any such subsidiary or, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries is a party or of which any of their respective properties or assets are the subject that are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.

(xxii) Accuracy of Exhibits. There are no contracts or documents that are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement that have not been so described and filed as required.

(xxiii) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by any of the Company Parties of its obligations under this Agreement, the Indenture, the Securities, the Credit Agreement Amendment or the Merger Agreement, in connection with the offering, issuance or sale of the Securities hereunder and the

 

11


consummation of the transactions contemplated by this Agreement, the Indenture, the Securities, the Credit Agreement Amendment and the Merger Agreement, except (i) such as have been already obtained or as may be required under the Securities Act, the Securities Act Regulations, securities laws of any state or non-U.S. jurisdiction or the rules of Financial Industry Regulatory Authority, Inc. (“FINRA”) or (ii) with respect to the Merger Agreement, such consents as set forth in Sections 6.1 and 6.2 thereof.

(xxiv) Possession of Licenses and Permits. The Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries possess such permits, licenses, approvals, consents, franchises, clearances and other regulatory authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them and to own, lease and operate their respective properties, except where the failure so to possess such Governmental Licenses would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All of the Governmental Licenses of the Company and its subsidiaries are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Company, any of its subsidiaries or, to the knowledge of the Company Parties, Montage Resources and any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses, which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a Material Adverse Effect.

(xxv) Title to Property. Except as described in the General Disclosure Package and the Prospectus, each of the Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries has (i) satisfactory or good and defensible title to substantially all of its interests in its oil and gas properties, title investigations having been carried out by or on behalf of such person in accordance with standards generally accepted in the oil and gas industry in the areas in which the Company and its subsidiaries or Montage Resources and its subsidiaries, as applicable, operate, (ii) good and defensible title to all other real property and other material properties and assets owned by the Company, such subsidiary or Montage Resources and its subsidiaries, as applicable, and (iii) valid, subsisting and enforceable leases for all of the properties and assets, real or personal, leased by them, except as the enforceability thereof may limited by the Enforceability Exceptions, in each case, free and clear of all mortgages, pledges, liens, security interests, restrictions, encumbrances or charges of any kind except such as (A) are described in the Registration Statement, the General Disclosure Package and the Prospectus or (B) would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except for matters that would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect, all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries and under which the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and any of its subsidiaries holds properties described in the Registration Statement, the

 

12


General Disclosure Package or the Prospectus, are in full force and effect, and none of the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries has any notice of any material claim of any sort that has been asserted by anyone adverse to its rights under any of the leases or subleases mentioned above or affecting or questioning its rights to the continued possession of the leased or subleased premises under any such lease or sublease.

(xxvi) Possession of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate rights to use the patents, patent rights, licenses, inventions, copyrights, know-how (including seismic data, trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively and together with any applications or registrations for the foregoing, the “Intellectual Property”) necessary to carry on the business now operated by them as described in the Registration Statement, the General Disclosure Package and the Prospectus, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property, which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

(xxvii) Environmental Laws. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus or as would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (A) none of the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, permit requirement, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the use, handling, treatment, disposal, generation, transportation or release or threatened release of chemicals, pollutants, contaminants, wastes, hazardous substances, toxic substances, petroleum or petroleum products, asbestos-containing materials, mold or radioactive or biological materials (collectively, “Environmental Laws”) and (B) none of the Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or its subsidiaries own, lease or operate any real property contaminated with any substance that is subject to or regulated by any Environmental Laws, is liable for any off-site disposal or contamination at current, former or third-party sites pursuant to any Environmental Laws, or is subject to any pending or threatened claim, action, demand, demand letter, lien, notice of noncompliance or violation, investigation or proceeding relating to any Environmental Laws, and, to the knowledge of the Company Parties, there are no events or circumstances that might give rise to any of the foregoing.

(xxviii) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure

 

13


of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review and the amount of its established reserves, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(xxix) Accounting Controls and Disclosure Controls. The Company and each of its subsidiaries maintain systems of internal control over financial reporting (as defined under Rule 13-a15 and 15d-15 of the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company and each of its subsidiaries also maintain systems of internal accounting controls sufficient to provide reasonable assurances that: (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (E) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly present the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company and each of its subsidiaries maintain required disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 of the Exchange Act Regulations) that are designed to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

(xxx) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

(xxxi) Payment of Taxes. Each of the Company and its subsidiaries and, to the knowledge of the Company Parties, each of Montage Resources and its subsidiaries, has timely filed all United States federal income tax returns required by law to be filed by it and has paid all

 

14


taxes shown as due on such returns or otherwise due and payable, except for any such taxes currently being contested in good faith and for which adequate reserves have been established by the Company or Montage Resources, as applicable, in accordance with GAAP. Each of the Company and its subsidiaries and, to the knowledge of the Company Parties, each of Montage Resources and its subsidiaries, has timely filed all other tax returns required to have been filed by it pursuant to applicable foreign, U.S. state or local, or other law, except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, and has paid all taxes shown as due on such returns or otherwise due and payable, except for any taxes currently being contested in good faith and for which adequate reserves have been established by the Company or Montage Resources, as applicable, in accordance with GAAP. No tax deficiency has been determined adversely to the Company or any of its subsidiaries and, to the knowledge of the Company Parties, any of Montage Resources or any of its subsidiaries, which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and none of the Company or any of its subsidiaries and, to the knowledge of the Company Parties, none of Montage Resources or any of its subsidiaries, has any notice or knowledge of any tax deficiencies which could reasonably be expected to be determined adversely to the relevant entity and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and, to the knowledge of the Company Parties, Montage Resources, in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(xxxii) Insurance. The Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, all such insurance is in full force and effect and the Company and its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries are in compliance with the terms of such policies in all material respects. There are no material claims by the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries under any such policy or instrument as to which an insurance company is denying liability or defending under a reservation of rights clause. None of the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries has been denied any insurance coverage that it has sought or applied for.

(xxxiii) Investment Company Act. None of the Company or any of the Guarantors is required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and the Prospectus will be required, to register as an “investment company” under the Investment Company Act of 1940, as amended.

(xxxiv) Absence of Manipulation. Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action that is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or to result in a violation of Regulation M under the Exchange Act.

 

15


(xxxv) No Unlawful Payments. Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company Parties, Montage Resources nor any of its subsidiaries, any director, officer or employee of the Company or any of its subsidiaries or any agent, affiliate or other person associated with or acting on behalf of the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or its subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries have instituted, maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.

(xxxvi) Compliance with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or its subsidiaries, as applicable, conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any Governmental Entity involving the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company Parties, threatened.

(xxxvii) No Conflicts with Sanctions Laws. Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company Parties, Montage Resources, any of its subsidiaries, any director, officer or employee of the Company, any of its subsidiaries or Montage Resources or any of its subsidiaries or any agent, affiliate or other person associated with or acting on behalf of the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State

 

16


and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company, any of its subsidiaries and, to the knowledge of the Company Parties, Montage Resources or any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise) of Sanctions. For the past five years, the Company, its subsidiaries and, to the knowledge of the Company Parties, Montage Resources and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

(xxxviii) Lending Relationships. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (A) does not have any material lending or other relationship with any Underwriter or lending affiliate of any Underwriter and (B) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to the Underwriter or affiliate of any Underwriter.

(xxxix) Statistical and Market-Related Data. Any statistical and market-related data included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.

(xl) No Restrictions on Subsidiaries. No subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock or similar ownership interest, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company, except for any such restrictions that will be permitted by the Indenture, as disclosed in the Registration Statement, the General Disclosure Package or the Prospectus or for such prohibitions mandated by the laws of each subsidiary’s state of formation.

(xli) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) included or incorporated by reference in any of the Registration Statement, the General Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

17


(xlii) Cybersecurity. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus or except as would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect (a) the Company Parties are not aware of any security breach or incident, unauthorized access or disclosure of the Company’s and its subsidiaries’ information technology and computer systems, networks, hardware, software, data or databases (including the data and information of their respective customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company and its subsidiaries in such databases) (collectively, “IT Systems and Data”); (b) neither the Company and its subsidiaries have been notified of a security breach or incident, unauthorized access or disclosure or other compromise of any data processed or stored by third parties on behalf of the Company and its subsidiaries; and (c) the Company and its subsidiaries are materially in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification. Each of the Company Parties has a security program that addresses the management of security and the security controls employed by the Company that includes: (a) documented policies that the Company internally publishes and communicates to appropriate personnel; and (b) policies and procedures that address and implement measures for (i) information classification and handling; (ii) physical security; and (iii) network and application security. Each of the Company Parties has an information security incident management program that addresses management of information security incidents.

(xliii) Compliance with ERISA. Except, in each case, for any such matter as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and as disclosed in the Registration Statement, General Disclosure Package or the Prospectus, (i) each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the “Code”) the “Controlled Group”) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules and regulations including ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) with respect to each Plan subject to Title IV of ERISA, (A) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, excluding any reportable event for which a waiver could apply, (B) no Plan is or is reasonably expected to be in “at-risk status” (within the meaning of Section 430 of the Code or Section 303(i) of ERISA), (C) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, there has been no filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan or the receipt by the Company or any member of the Controlled Group from the Pension Benefit Guaranty Corporation or the plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (D) no conditions contained in Section 303(k)(1)(A) of ERISA for imposition of a lien shall have been met with respect to any Plan and (E) neither the Company nor any member of its Controlled Group has

 

18


incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan,” within the meaning of Section 4001(c)(3) of ERISA (a “Multiemployer Plan”)); (iv) no Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA), or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 304 of ERISA); and (v) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, that could reasonably be expected to cause the loss of such qualification.

(xliv) Authorization of Merger Agreement. The Merger Agreement has been duly authorized, executed and delivered by the Company. To the knowledge of the Company Parties, no event or condition has occurred or exists that has terminated or would permit termination of the Merger Agreement.

(xlv) Credit Agreement Amendment. The Credit Agreement Amendment has been duly authorized by the Company; at or before the Closing Time, the Credit Agreement Amendment will have been duly executed and delivered by the Company; and assuming due authorization, execution and delivery of the Credit Agreement Amendment by the other parties thereto, at the Closing Time, the Credit Agreement Amendment will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions or by general equitable principles. The Credit Agreement Amendment will conform in all material respects to the description thereof in the General Disclosure Package and the Prospectus.

(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby.

SECTION 2. Sale and Delivery to Underwriters; Closing.

(a) The Notes. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to the several Underwriters, and each Underwriter, severally and not jointly, agrees to purchase from the Company the respective principal amount of Notes set forth opposite the name of such Underwriter in Schedule A hereto at a purchase price of 98.75% of the principal amount of the Notes, plus accrued interest, if any, from August 18, 2020 to the Closing Time.

(b) The Closing Time. Delivery of certificates for the Notes in global form to be purchased by the Underwriters and payment therefor shall be made at the offices of Vinson & Elkins L.L.P., 1001 Fannin Street, Suite 2500, Houston, Texas 77002, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City time) on August 27, 2020 (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as the Representatives and the Company shall mutually agree (such time and date of payment and delivery being herein called the “Closing Time”).

 

19


(c) Public Offering of the Securities. The Representatives hereby advise the Company that the Underwriters intend to offer for sale to the public, as described in the General Disclosure Package and the Prospectus, their respective portions of the Securities as soon after the Applicable Time as the Representatives, in their sole judgment, have determined is advisable and practicable.

(d) Payment for the Notes. Payment for the Notes shall be made to the Company at the Closing Time by wire transfer of immediately available funds to a bank account designated by the Company.

It is understood that each Underwriter has authorized Citigroup, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Notes that it has agreed to purchase. Citigroup, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Notes to be purchased by any Underwriter whose funds have not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.

(e) Delivery of the Notes. The Company shall deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters certificates for the Notes at the Closing Time through the facilities of DTC, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates for the Notes shall be in such denominations and registered in such names and denominations as the Representatives shall have requested at least two full business days prior to the Closing Time and shall be made available for inspection on the business day preceding the Closing Time at a location in New York City, as the Representatives may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters.

SECTION 3. Covenants of the Company. Each of the Company Parties, jointly and severally, covenants and agrees with each Underwriter as follows:

(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b) hereof, will comply with the requirements of Rule 430B, and will notify the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement or any new registration statement relating to the Securities shall become effective or any amendment or supplement to the General Disclosure Package or the Prospectus shall have been used or filed, as the case may be, including any document incorporated by reference therein, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the General Disclosure Package or the Prospectus, including any document incorporated by reference therein, or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or any notice of objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) or of the issuance of any order preventing or suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the

 

20


Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop, prevention or suspension order and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment. The Company shall pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1)(i) of the Securities Act Regulations without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Securities Act Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).

(b) Continued Compliance with Securities Laws. The Company will comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”), would be) required by the Securities Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, including, without limitation, any document incorporated therein by reference, in order to comply with the requirements of the Securities Act, the Securities Act Regulations, the Exchange Act or the Exchange Act Regulations, the Company will promptly (A) give the Representatives written notice of such event or condition, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.

(c) Filing or Use of Amendments or Supplements. The Company has given the Representatives notice of any filings made pursuant to the Exchange Act or Exchange Act

 

21


Regulations within 48 hours prior to the Applicable Time and will give the Representatives notice of its intention to file or use any amendment to the Registration Statement or any amendment or supplement to the General Disclosure Package or the Prospectus, whether pursuant to the Securities Act, the Securities Act Regulations, the Exchange Act or the Exchange Act Regulations or otherwise, from the Applicable Time to the later of (i) the time when a prospectus relating to the Securities is no longer required by the Securities Act (without giving effect to Rule 172) to be delivered in connection with sales of the Securities and (ii) the Closing Time, and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall reasonably object.

(d) Delivery of Registration Statements. The Company has furnished or will deliver to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(e) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required by the Securities Act to be delivered in connection with sales of the Securities, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(f) Blue Sky Qualifications. The Company will use commercially reasonable efforts, in cooperation with the Underwriters, to qualify or register the Securities for offering and sale under (or obtain exemptions from the application of) the applicable securities laws of such states and non-U.S. jurisdictions as the Representatives may designate and the Company consent to, and to maintain such qualifications in effect in all material respects so long as required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

(g) Earnings Statement. The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act.

 

22


(h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Notes in the manner specified in the Registration Statement, the General Disclosure Package and the Prospectus under “Use of Proceeds.”

(i) Restriction on Sale of Securities. During the period commencing on the date hereof and ending at the Closing Time, the Company Parties will not, without the prior written consent of Citigroup (such consent may be withheld at Citigroup’s discretion), (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or lend or otherwise transfer or dispose of, the Securities or any other securities that are substantially similar to the Securities, whether owned as of the date hereof or hereafter acquired or with respect to which such person has or hereafter acquires the power of disposition, or file, or cause to be filed, any registration statement under the Securities Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Securities or such other securities, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of any Securities or such other securities, in cash or otherwise. The foregoing sentence shall not apply to the Securities to be sold hereunder.

(j) Final Term Sheet. The Company will prepare a final term sheet (the “Final Term Sheet”) containing only a description of the final terms of the Securities and their offering, in forms approved by the Underwriters and attached as Schedule C hereto, and acknowledges that the Final Term Sheet is an Issuer Free Writing Prospectus. The Company will furnish to each Underwriter, without charge, copies of the Final Term Sheet promptly upon its completion.

(k) Issuer Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer General Use Free Writing Prospectuses listed on Schedule B hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an Issuer Free Writing Prospectus and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

23


(l) No Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Notes.

(m) DTC. The Company will cooperate with the Underwriters and use commercially reasonable efforts to permit the Notes to be eligible for clearance, settlement and trading through the facilities of DTC.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company Parties, jointly and severally, will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including without limitation (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation, issuance and delivery of the Securities to the Underwriters, including any stock transfer taxes, stamp duties, or other taxes or duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company Parties’ counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the blue sky survey and any supplement thereto, (vi) the costs and expenses of the Company Parties relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, and travel and lodging expenses of the representatives and officers of the Company Parties and any such consultants (of which one-half the cost of any aircraft chartered in connection with the road show shall be paid by the Underwriters), (vii) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA, if required, of the terms of the sale of the Securities, (viii) any fees payable in connection with the rating of the Securities by the rating agencies, (ix) the fees and expenses of the Trustee, including the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (x) the fees and expenses of making the Securities eligible for clearance, settlement and trading through the facilities of DTC, (xi) the reasonable, out-of-pocket fees and expenses of the QIU acting in its capacity as such and (xii) the costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the second sentence of Section 1(a)(ii). Except as provided in this Section 4 and Sections 6, 7 and 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of their counsel.

 

24


(b) Termination of Agreement. If this Agreement is terminated by the Representatives pursuant to Section 5(t), 9(a)(i) or (iii) or 10 hereof, the Company Parties, jointly and severally, shall reimburse the Underwriters, severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Underwriters in connection with the proposed purchase and the offering and sale of the Securities, including the reasonable fees and disbursements of counsel for the Underwriters.

(c) Allocation of Expenses. The provisions of this Section shall not affect any agreement that the Company Parties may make for the sharing of such costs and expenses.

SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company Parties contained herein at the date hereof and at the Closing Time, as applicable, or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by each of the Company Parties of its covenants and other obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration Statement has become effective and, at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act, shall be pending before or threatened by the Commission; no order preventing or suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company Parties’ knowledge, contemplated. Each of the Company Parties has complied with each request (if any) from the Commission for additional information. The Company shall have paid the required Commission filing fees relating to the Securities within the time period required by Rule 456(b)(1)(i) of the Securities Act Regulations without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Securities Act Regulations and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).

(b) Opinion of Counsel for the Company Parties. At the Closing Time, the Representatives shall have received the favorable opinions, dated the Closing Time, of Latham & Watkins LLP, counsel for the Company Parties, in form and substance reasonably satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in Exhibits A-1 through A-3 hereto and to such further effect as the Representatives may reasonably request.

(c) Opinion of In-House Counsel for the Company. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Christopher W. Lacy, Vice President, General Counsel and Secretary of the Company, in form and substance reasonably satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit B hereto and to such further effect as the Representatives may reasonably request.

 

25


(d) Opinion of Counsel for Underwriters. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Vinson & Elkins L.L.P., counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the matters reasonably requested by the Representatives.

(e) Officers Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the Chief Executive Officer or the President of each of the Company Parties and of the chief financial or chief accounting officer of each of the Company Parties, dated the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company Parties have complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement under the Securities Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, contemplated.

(f) Accountants Comfort Letter for the Company. At the time of the execution of this Agreement, the Representatives shall have received from PricewaterhouseCoopers LLP, accountants to the Company, a letter, dated such date, in form and substance reasonably satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the Company’s financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(g) Bring-down Comfort Letter for the Company. At the Closing Time, the Representatives shall have received from PricewaterhouseCoopers LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

(h) Accountants Comfort Letter for Montage Resources. At the time of the execution of this Agreement, the Representatives shall have received from Grant Thornton LLP, accountants to Montage Resources, a letter, dated such date, in form and substance reasonably satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to Montage Resources’ financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.

 

26


(i) Bring-down Comfort Letter for Montage Resources. At the Closing Time, the Representatives shall have received from Grant Thornton LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (h) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

(j) Engineers Comfort Letter for the Company. At the time of the execution of this Agreement, the Representatives shall have received from Netherland, Sewell & Associates, Inc. a letter with respect to the Netherland Reserve Report Letter, dated such date, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect as counsel to the Underwriters may reasonably request.

(k) Bring-down Engineers Comfort Letter for the Company. At the Closing Time, the Representatives shall have received from Netherland, Sewell & Associates, Inc. a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (h) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

(l) Chief Financial Officers Certificate. At the date of this Agreement and the Closing Time, the Representatives shall have received an officer’s certificate from Julian M. Bott, Executive Vice President and Chief Financial Officer of the Company, dated such date, substantially to the effect set forth in Exhibit D hereto.

(m) Chief Operating Officers Certificate. At the date of this Agreement and the Closing Time, the Representatives shall have received an officer’s certificate from Clay A. Carrell, Executive Vice President and Chief Operating Officer of the Company, dated such date, substantially to the effect set forth in Exhibit E hereto.

(n) Maintenance of Rating. Since the execution of this Agreement, there shall not have been any decrease in or withdrawal of the rating of any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange Act) or any notice given of any intended or potential decrease in or withdrawal of any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.

(o) Ratings Letters. At the time of execution of this Agreement, the Company shall have delivered to the Representatives correspondence from Moody’s Investors Services, Inc. and Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., assigning a rating to the Securities of Ba3 and BB-, respectively.

(p) Supplemental Indenture. The Company Parties and the Trustee shall have executed and delivered the Securities and the Supplemental Indenture.

(q) Credit Agreement Amendment. The Company and other parties to the Credit Agreement Amendment shall have, on or prior to the Closing Time, executed and delivered the Credit Agreement Amendment

 

27


(r) Clearance, Settlement and Trading. Prior to the Closing Time, the Company and DTC shall have executed and delivered the Letter of Representations, dated the Closing Time, and the Securities shall be eligible for clearance, settlement and trading through the facilities of DTC.

(s) Additional Documents. At the Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company Parties in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters.

(t) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, or if any of the Company Parties shall fail at the Closing Time to sell the principal amount of Securities that it is obligated to sell hereunder, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Closing Time and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 4, 6, 7, 8, 14, 15 and 16 shall survive any such termination and remain in full force and effect. No action taken pursuant to this Section shall relieve the Company Parties from liability, if any, in respect of such default.

SECTION 6. Indemnification.

(a) Indemnification of Underwriters. Each of the Company Parties, jointly and severally, agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) of the Securities Act Regulations (each, an “Affiliate”)), selling agents, directors, officers and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included (A) in any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) or (B) in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities (“Marketing Materials”), including any roadshow or investor presentations made to investors by the Company (whether in person or electronically), or the omission or alleged omission in any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus (or any amendment or supplement thereto) or in any Marketing Materials of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

28


(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any Governmental Entity, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) hereof) any such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any Governmental Entity, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, or in any preliminary prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

(b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company Parties, each of their directors, each of their officers who signed the Registration Statement, and each person, if any, who controls any of the Company Parties within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 6(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B, or in the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information provided by such Underwriter.

(c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability that it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) hereof, counsel to the indemnified parties shall be selected by the Representatives, and, in the case of parties indemnified pursuant to Section 6(b) hereof, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the prior written consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar

 

29


or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any Governmental Entity, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

(e) Indemnification of the QIU. Without limitation and in addition to its obligation under the other subsections of this Section 6, the Company Parties agree to indemnify and hold harmless the QIU, its officers and employees and each person, if any, who controls the QIU within the meaning of Section 15 and Section 20 of the Exchange Act against any and all losses, claims, damages or liabilities arising out of or based upon the QIU’s acting as a “qualified independent underwriter” (within the meaning of Rule 5121(f)(12) of FINRA) in connection with the offering contemplated by this Agreement, and agrees to reimburse each such indemnified person for any legal or other expense reasonably incurred by them in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not the QIU is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the Company Parties shall not be liable in any such case to the extent that any such loss, claim, damage or liability results from the gross negligence or willful misconduct of the QIU as determined in a final non-appealable judgment of a court of competent jurisdiction.

(f) Other Agreements with Respect to Indemnification. The provisions of this Section shall not affect any other agreement between or among any of the Company Parties and any Underwriter with respect to indemnification.

SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company Parties, on the one hand, and the Underwriters, on

 

30


the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company Parties, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions that resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company Parties, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Notes as set forth on the cover of the Prospectus.

The relative fault of the Company Parties, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company Parties or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any Governmental Entity, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Securities underwritten by it and distributed to the public.

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each Underwriter’s Affiliates, selling agents, directors and officers shall have the same rights to contribution as such Underwriter, and each director of any of the Company Parties, each officer any of the Company Parties who signed the Registration Statement, and each person, if any, who controls the Company Parties within the meaning of Section 15 of the Securities Act or Section 20

 

31


of the Exchange Act shall have the same rights to contribution as the Company. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the aggregate principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.

The provisions of this Section shall not affect any other agreement between or among any of the Company Parties and any Underwriter with respect to contribution.

SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates, selling agents, directors and officers or any person controlling any Underwriter, any Company Parties’ officers or directors or any person controlling any of the Company Parties and (ii) delivery of and payment for the Securities.

SECTION 9. Termination of Agreement.

(a) Termination. The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, in the judgment of the Representatives, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the completion of the offering or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or (iv) if trading generally on the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other Governmental Entity, or (v) if a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by either Federal or New York authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 14, 15 and 16 shall survive such termination and remain in full force and effect.

SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time to purchase the Notes that it or they are obligated to purchase under

 

32


this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

(i) if the aggregate principal amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of Notes to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

(ii) if the aggregate principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of Notes to be purchased on such date, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of this Agreement, either the (i) Representatives or (ii) the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at Citigroup Global Markets Inc., 388 Greenwich Street, New York, NY 10013 (Attention: General Counsel), BofA Securities, Inc., One Bryant Park New York, New York 10036 (Attention: High Yield Legal Department), facsimile: +1-212-901-7897, Wells Fargo Securities, LLC 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202 (Attention: Transaction Management), facsimile: +1-704-410-0326 e-mail: [email protected]; notices to the Company Parties shall be directed to Southwestern Energy Company, 10000 Energy Drive, Spring, Texas 77389, attention of Christopher W. Lacy, Vice President, General Counsel and Secretary (facsimile: (832) 796-4820).

SECTION 12. No Advisory or Fiduciary Relationship. Each of the Company Parties acknowledges and agrees that (a) the purchase and sale of the Notes pursuant to this Agreement, including the determination of the public offering price of the Notes and any related discounts and commissions, is an arm’s-length commercial transaction between the Company Parties, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company Parties, any of its subsidiaries or its stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company Parties with respect to the

 

33


offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company Parties with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company Parties, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company Parties and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Underwriter referred to in Section 6 hereof. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company Parties and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company Parties and their respective successors, and said controlling persons, and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 14. Trial by Jury. Each of the Company Parties (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

SECTION 15. GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 16. Consent to Jurisdiction. Each of the parties hereto agrees that any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby shall be instituted in (i) the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

34


SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.

SECTION 19. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 20. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

SECTION 21. Research Analyst Independence. Each of the Company Parties acknowledges that the Underwriters’ research analysts and research departments are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company, its subsidiaries and/or the offering of the Securities that differ from the views of their respective investment banking divisions. Each of the Company Parties hereby waives and releases, to the fullest extent permitted by law, any claims that the Company Parties may have against the Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company Parties by such Underwriters’ investment banking divisions. Each of the Company Parties acknowledges that each of the Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this Agreement.

SECTION 22. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement shall not become effective until the execution of this Agreement by the parties hereto.

 

35


This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.

Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 6 and the contribution provisions of Section 7, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 6 and 7 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company Parties, their affairs and their businesses in order to assure that adequate disclosure has been made in the Registration Statement, the General Disclosure Package and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

SECTION 23. Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company Parties, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

SECTION 24. Recognition of the U.S. Special Resolution Regimes.

(a) In the event that any Underwriter is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that any Underwriter is a Covered Entity or a BHC Act Affiliate and becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

(c) For the purposes of this Section 24:

(i) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841 (k);

(ii) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b);

 

36


(iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and

(iv) “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

[Signature Page Follows]

 

37


If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters and the Company Parties in accordance with its terms.

 

Very truly yours,
SOUTHWESTERN ENERGY COMPANY
By:  

/s/ Julian M. Bott

Title:  

Executive Vice President and Chief

Financial Officer

A.W. REALTY COMPANY, LLC
ANGELINA GATHERING COMPANY, L.L.C.
SWN DRILLING COMPANY, LLC
SWN E & P SERVICES, LLC
SWN ENERGY SERVICES COMPANY, LLC
SWN INTERNATIONAL, LLC
SWN MIDSTREAM SERVICES COMPANY, LLC
SWN PRODUCER SERVICES, LLC
SWN PRODUCTION COMPANY, LLC
SWN WATER RESOURCES COMPANY, LLC
SWN WELL SERVICES, LLC
By:  

/s/ Julian M. Bott

Title:  

Executive Vice President and Chief

Financial Officer

 

[Signature Page to Underwriting Agreement]


CONFIRMED AND ACCEPTED,

as of the date first above written:

 

By:   CITIGROUP GLOBAL MARKETS INC.
By:  

/s/ Mohammed Baabde

  Name:   Mohammed Baabde
  Title:   Managing Director
By:   BOFA SECURITIES, INC.
By:  

/s/ Carla Ruiz-Ney

  Name:   Carla Ruiz-Ney
  Title:   Director
By:   WELLS FARGO SECURITIES, LLC
By:  

/s/ Jeffrey Scott Gore

  Name:   Jeffrey Scott Gore
  Title:   Authorized Signatory

as Representatives of the other

Underwriters named in Schedule A hereto.

 

[Signature Page to Underwriting Agreement]


SCHEDULE A

 

Name of Underwriter

   Aggregate Principal
Amount of Notes to be

Purchased
 

Citigroup Global Markets Inc.

   $ 70,000,000  

BofA Securities, Inc.

     29,925,000  

Wells Fargo Securities, LLC

     29,925,000  

Goldman Sachs & Co. LLC

     20,125,000  

J.P. Morgan Securities LLC

     20,125,000  

Mizuho Securities USA LLC

     20,125,000  

MUFG Securities Americas Inc.

     20,125,000  

RBC Capital Markets, LLC

     20,125,000  

Truist Securities, Inc.

     20,125,000  

BMO Capital Markets Corp.

     11,200,000  

Credit Agricole Securities (USA) Inc.

     11,200,000  

PNC Capital Markets LLC

     11,200,000  

SMBC Nikko Securities America, Inc.

     11,200,000  

CIBC World Markets Corp.

     8,750,000  

HSBC Securities (USA) Inc.

     8,750,000  

KeyBanc Capital Markets Inc.

     8,750,000  

Regions Securities LLC

     8,750,000  

BBVA Securities Inc.

     4,900,000  

Citizens Capital Markets, Inc.

     4,900,000  

Credit Suisse Securities (USA) LLC

     4,900,000  

Fifth Third Securities, Inc.

     4,900,000  
  

 

 

 

Total

   $ 350,000,000  
  

 

 

 

 

Schedule A


SCHEDULE B

Issuer Free Writing Prospectuses

 

  1.

Final Term Sheet for the Notes.

 

Schedule B


SCHEDULE C

Form of Final Term Sheet

Southwestern Energy Company

Pricing Term Sheet

August 18, 2020

$350,000,000 8.375% Senior Notes due 2028

The information in this pricing supplement supplements the preliminary prospectus supplement, dated August 18, 2020 (the “Preliminary Prospectus Supplement”), and supersedes the information in the Preliminary Prospectus Supplement to the extent it is inconsistent with the information in the Preliminary Prospectus Supplement. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Prospectus Supplement.

 

Issuer:    Southwestern Energy Company
Guarantees:    The notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Issuer’s direct and indirect, wholly owned subsidiaries that guarantee its revolving credit facility
Distribution:    SEC registered
Trade Date:    August 18, 2020
Settlement Date:    T+7; August 27, 2020
Denominations:    $2,000 x $1,000

Aggregate Net Proceeds (After Underwriting Discount and approximately $600,000 of Offering Expenses):

   $345,025,000
Principal Amount:    $350,000,000
Security Type:    Senior Note
Ratings*:    [Intentionally omitted]
Maturity:    September 15, 2028
Coupon (Interest Rate):    8.375%
Price to Public:    100.000%
Yield to Maturity:    8.375%

Spread to Benchmark Treasury:

   +791 basis points
Benchmark Treasury:    UST 0.375% due July 31, 2028
Interest Payment Dates:    March 15 and September 15, commencing on March 15, 2021
Make-Whole Redemption:    T + 50 basis points at any time prior September 15, 2023

Option Redemption:

   Redeemable at the prices set forth below plus accrued and unpaid interest if redeemed during the 12 months beginning on September 15 in the specified year:
    

Year

  

Percentage

  

2023

   104.188%
  

2024

   102.792%
  

2025

   101.396%
  

2026 and thereafter

   100.000%

Change of Control Event:

   Offer to purchase at 101% plus accrued and unpaid interest

 

C-1


Special Mandatory Redemption:    Subject to special mandatory redemption at par plus accrued and unpaid interest as provided in the Preliminary Prospectus Supplement if (i) the Merger does not close on or prior to February 12, 2021 or (ii) prior thereto, (a) the Issuer determines that the Merger cannot be consummated or (b) the Issuer determines in its sole discretion that the consummation of the Merger cannot or is not reasonably likely to be satisfied by February 12, 2021
CUSIP Number:    845467AP4
ISIN Number:    US845467AP47
Book-Running Managers:   

Citigroup Global Markets Inc.

BofA Securities, Inc.

Wells Fargo Securities, LLC

Goldman Sachs & Co. LLC

J.P. Morgan Securities LLC

Mizuho Securities USA LLC

MUFG Securities Americas Inc.

RBC Capital Markets, LLC

Truist Securities, Inc.

Senior Co-Managers:   

BMO Capital Markets Corp.

CIBC World Markets Corp.

Credit Agricole Securities (USA) Inc.

HSBC Securities (USA) Inc.

KeyBanc Capital Markets Inc.

PNC Capital Markets LLC

Regions Securities LLC

SMBC Nikko Securities America, Inc.

Co-Managers:   

BBVA Securities Inc.

Citizens Capital Markets, Inc.

Credit Suisse Securities (USA) LLC

Fifth Third Securities, Inc.

*Note: A securities rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.

Delivery of the notes is expected to be made against payment therefor on or about August 27, 2020, which is the seventh business day following the date of pricing of the notes (such settlement being referred to as “T+7”). Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), trades in the secondary market generally are required to settle in two business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes prior to the second trading day preceding the date on which we deliver the notes to the underwriters for the offering will be required, by virtue of the fact that the notes initially will settle in T+7, to specify an alternate settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisers.

The issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, any underwriter or any dealer participating in the

 

C-2


offering will arrange to send you the Preliminary Prospectus Supplement and the accompanying prospectus if you request it by calling or emailing Citigroup Global Markets Inc. toll-free at 1-800-831-9146, BofA Securities, Inc. toll-free at 1-800-294-1322 or [email protected] or Wells Fargo Securities, LLC at 1-704-410-4874 (with such fax to be confirmed by telephone to 1-704-410-4885) or [email protected]

Any disclaimers or notices that may appear on this Pricing Term Sheet below the text of this legend are not applicable to this Pricing Term Sheet and should be disregarded. Such disclaimers may have been electronically generated as a result of this Pricing Term Sheet having been sent via, or posted on, Bloomberg or another electronic mail system.

 

C-3


Exhibit A-1

FORM OF OPINION OF LATHAM & WATKINS LLP

TO BE DELIVERED PURSUANT TO SECTION 5(b)

[Provided to Underwriters.]


Exhibit A-2

FORM OF NEGATIVE ASSURANCE LETTER OF LATHAM & WATKINS LLP

TO BE DELIVERED PURSUANT TO SECTION 5(b)

[Provided to Underwriters.]


Exhibit A-3

FORM OF TAX OPINION OF LATHAM & WATKINS LLP TO BE DELIVERED PURSUANT TO SECTION 5(b)

[Provided to Underwriters.]


Exhibit B

FORM OF OPINION OF CHRISTOPHER W. LACY

TO BE DELIVERED PURSUANT TO SECTION 5(c)

[Provided to Underwriters.]


Exhibit C

FORM OF CHIEF FINANCIAL OFFICER’S CERTIFICATE

TO BE DELIVERED PURSUANT TO SECTION 5(l)

[Provided to Underwriters.]


Exhibit D

FORM OF CHIEF OPERATING OFFICER’S CERTIFICATE

TO BE DELIVERED PURSUANT TO SECTION 5(m)

[Provided to Underwriters.]

Exhibit 10.1

AMENDMENT NO. 7 TO CREDIT AGREEMENT

THIS AMENDMENT NO. 7 TO CREDIT AGREEMENT (this “Amendment”) is entered into as of August 18, 2020 by and among SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (the “Borrower”), the Lenders signatory hereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

RECITALS:

WHEREAS, reference is made to that certain Credit Agreement dated as of April 26, 2018, by and among the Borrower, the Lenders from time to time party thereto and the Administrative Agent (as amended by that certain Amendment No. 1 to Credit Agreement dated as of October 23, 2018, that certain Amendment No. 2 to Credit Agreement dated as of October 8, 2019, that certain Amendment No. 3 to Credit Agreement dated as of November 1, 2019, that certain Amendment No. 4 to Credit Agreement dated as of December 20, 2019, that certain Amendment No. 5 to Credit Agreement dated as of January 31, 2020, and that certain Amendment No. 6 to Credit Agreement dated as of July 31, 2020, the “Credit Agreement”);

WHEREAS, the Borrower and Montage Resources Corporation, a Delaware corporation (“Montage”), have entered into an Agreement and Plan of Merger, dated as of August 12, 2020 pursuant to which, inter alia, Montage will merge with and into the Borrower (the “Merger”); and

WHEREAS, in connection with the Merger, the Borrower has requested that the Lenders agree to amend certain provisions of the Credit Agreement, and the Lenders party hereto, which constitute the Majority Lenders, have agreed to amend the Credit Agreement as hereinafter set forth.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.    Defined Terms. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement, as amended hereby.

Section 2.    Amendments to Credit Agreement.

(a)    Section 1.01 of the Credit Agreement is amended by amending and restating the following defined terms:

Consolidated EBITDAX” means, for any period, Consolidated Net Income for such period, plus

(a)    the following (without duplication), in each case only to the extent (and in the same proportion) deducted (and not added back or excluded) in determining Consolidated Net Income for such period:

(i)    Consolidated Interest Expense for such period,

 

1


(ii)    depletion, depreciation and amortization expense for such period,

(iii)    consolidated income tax expense for such period,

(iv)    any non-cash losses or charges resulting from any hedging arrangements resulting from the requirements of FASB ASC 815 for such period,

(v)    (A) fees and expenses of third party advisors (including legal counsel, investment bankers, accountants, consultants, engineers and similar professionals) incurred during such period or any amortization thereof for such period, in connection with any acquisition, investment, asset disposition, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction undertaken but not completed) and (B) any costs, charges or expenses relating to severance, cost savings (including reductions in general and administrative expenses), operating expense reductions, facilities closing, consolidations and integration costs, and other restructuring charges or reserves (provided that (x) amounts added back pursuant to this clause (v) shall not exceed $100,000,000 in the aggregate for the period from the Effective Date through June 30, 2020 and (y) the amount that may be added back pursuant to this clause (v) for any Fiscal Quarter ending on or after September 30, 2020 (any such Fiscal Quarter for which the maximum addback pursuant to this clause (y) is being calculated, a “Subject Fiscal Quarter”) shall not exceed (1) the greater of (X) $100,000,000 and (Y) 10.0% of Consolidated EBITDAX for the period of four consecutive Fiscal Quarters ending on the last day of such Subject Fiscal Quarter (calculated in accordance with this definition but prior to giving effect to any addback pursuant to this clause (v)) minus (2) the aggregate of all amounts added back pursuant to this clause (v) for each Fiscal Quarter ending on or after September 30, 2020 but prior to the commencement of such Subject Fiscal Quarter; provided further that, for the avoidance of doubt, (I) any addback to EBITDAX for any Fiscal Quarter made pursuant to this clause (v) in reliance on the limitation set forth in clause (1)(Y) above may be included in the calculation of EBITDAX for any subsequent period of four consecutive Fiscal Quarters that includes such Fiscal Quarter, notwithstanding any decline in the amount set forth in clause (1)(Y) for such subsequent period and (II) correspondingly, any such decline in the amount set forth in clause (1)(Y) for any subsequent period shall not result in any amounts previously added back pursuant to this clause (v) in reliance on the limitation set forth in clause (1)(Y) above ceasing to be permitted to be added back pursuant to this clause (v)).

(vi)    oil and gas exploration expenses (including all drilling, completion, geological and geophysical costs) for such period,

(vii)    non-cash losses from Dispositions of assets and any other extraordinary, unusual or non-recurring expenses, losses or charges,

 

2


(viii)    costs, fees and expenses incurred in connection with the Transactions (provided that the amounts added back pursuant to this clause (viii) shall not exceed $10,000,000 in the aggregate since the Effective Date), and

(ix)     any other non-cash charges, including (A) any write-offs or write-downs reducing Consolidated Net Income for such period and (B) any non-cash compensation charge or expense, including any such charge or expense arising from the grants of stock appreciation or similar rights, stock options, restricted stock, profits interests or other equity-based incentive awards or any other equity-based compensation;

provided that (y) in the case of each of the foregoing non-cash charges described in this clause (a), if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDAX to such extent and (z) amortization of a prepaid cash item that was paid in a prior period shall be excluded from this clause (a); minus

(b)    the following (without duplication), in each case only to the extent included in determining Consolidated Net Income for such period:

(i)    non-cash gains on any hedging arrangements resulting from the requirements of FASB ASC 815 for such period,

(ii)    non-cash gains or adjustments (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDAX in any prior period) and all other non-cash items of income for such period, and

(iii)    any extraordinary, unusual or non-recurring non-cash gains,

in each case as determined on a consolidated basis for the Borrower and its Restricted Subsidiaries in accordance with GAAP; provided that, if at any time during such period the Borrower or any Subsidiary shall have made a Material Disposition or a Material Acquisition, Consolidated EBITDAX for such period shall be calculated giving pro forma effect thereto as if such Material Disposition or Material Acquisition had occurred on the first day of such period, and such pro forma effect shall be determined in good faith by a Financial Officer in a manner reasonably acceptable to the Administrative Agent and with supporting documentation reasonably acceptable to the Administrative Agent.

Maturity Date” means the Scheduled Maturity Date; provided that if the Borrower has not (a) amended the terms of the Required 2023 Senior Notes to extend the scheduled repayment thereof to no earlier than the date that is 91 days after the Scheduled Maturity Date, (b) Redeemed the Required 2023 Senior Notes (in each case in compliance with Section 6.10) or (c) refinanced the Required 2023 Senior Notes with Permitted Refinancing Indebtedness or with the proceeds from Permitted Unsecured Notes or Montage Refinancing Loans, in each case on or before 91 days prior to the 2023 Senior Notes Scheduled Maturity Date, the Maturity Date shall be the date that is 91 days prior to the 2023 Senior Notes Scheduled Maturity Date.

 

3


(b)    The last sentence of the definition of “Indebtedness” in Section 1.01 of the Credit Agreement is amended in its entirety as follows:

The Indebtedness of any Person (i) shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor, and (ii) shall not include (A) endorsements of checks, bills of exchange and other instruments for deposit or collection in the ordinary course of business, (B) any Indebtedness that has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or United States government bonds (in an amount sufficient to satisfy all obligations relating to such Indebtedness at maturity or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness (and subject to no other Liens) in accordance with the applicable terms of the instrument governing such Indebtedness, but only to the extent that such defeasance has been made in a manner not prohibited by this Agreement or (C) prior to the consummation of the Montage Merger, the aggregate principal amount of the Montage Refinancing Senior Notes, but only to the extent that the net cash proceeds thereof are held in a segregated escrow account and have not been released to the account of the Borrower or any of its Restricted Subsidiaries or for the benefit of the Borrower or any of its Restricted Subsidiaries.

(c)    Section 1.01 of the Credit Agreement is amended by adding the following defined terms in appropriate alphabetical order:

2015 Montage Indenture” means that certain Indenture, dated as of July 6, 2015, between Montage (as successor in interest to Eclipse Resources Corporation), the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (as in effect on the Amendment No. 7 Effective Date and as amended, supplemented or otherwise modified from time to time thereafter, but without giving effect to any amendment, supplement or other modification that would reasonably be expected to be adverse in any material respect to the Lenders (unless the Majority Lenders have otherwise consented thereto)).

2023 Senior Notes” means the 8.875% Senior Notes due 2023 issued by Montage (as successor in interest to Eclipse Resources Corporation) pursuant to the 2015 Montage Indenture and to be assumed by the Borrower in connection with the Montage Merger (as in effect on the Amendment No. 7 Effective Date and as amended, supplemented or otherwise modified from time to time thereafter, but without giving effect to any amendment, supplement or other modification that would reasonably be expected to be adverse in any material respect to the Lenders (unless the Majority Lenders have otherwise consented thereto)).

 

4


2023 Senior Notes Assumption” means assumption by the Borrower of the 2023 Senior Notes in connection with the Montage Merger.

2023 Senior Notes Scheduled Maturity Date” means July 15, 2023.

Amendment No. 7” means that certain Amendment No. 7 to Credit Agreement, entered into as of the Amendment No. 7 Effective Date, by and among the Borrower, the Lenders signatory thereto and the Administrative Agent.

Amendment No. 7 Effective Date” means August 18, 2020.

Ancillary Document” has the meaning specified in Section 9.06(b).

Called 2023 Senior Notes” means the 2023 Senior Notes called for Redemption pursuant to the Montage Refinancing Transactions.

Designated Senior Notes” means, collectively, the Existing Senior Notes, the Permitted Unsecured Notes, the Montage Refinancing Senior Notes and, from and after the consummation of the Montage Merger and the 2023 Senior Notes Assumption, the 2023 Senior Notes.

Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

Liquidity” means, on any day, the aggregate sum of (a) Availability on such day and (b) cash on deposit in Controlled Accounts on such day.

Montage” means Montage Resources Corporation, a Delaware corporation.

Montage Merger” means the merger of Montage with and into the Borrower pursuant to the Montage Merger Agreement.

Montage Merger Agreement” means that certain Agreement and Plan of Merger, by and between the Borrower and Montage, as in effect on the Amendment No. 7 Effective Date and as amended, supplemented or otherwise modified from time to time thereafter, but without giving effect to any amendment, supplement or other modification that would reasonably be expected to be adverse in any material respect to the Lenders (unless the Majority Lenders have otherwise consented thereto).

Montage Refinancing Deadline” means the date that is twelve (12) months after the earlier to occur of (a) the Amendment No. 7 Effective Date and (b) the closing of the Montage Merger.

Montage Refinancing Loans” means the aggregate Loans made to the Borrower pursuant to clause (d) of Schedule I to Amendment No. 7, as part of the Montage Refinancing Transactions.

 

5


Montage Refinancing Senior Notes” means unsecured Indebtedness in the form of unsecured senior or senior subordinated notes issued by the Borrower or any Subsidiary Guarantor on or after the Amendment No. 7 Effective Date and prior to the date on which the Montage Merger is consummated, provided that (a) after giving pro forma effect to the incurrence of such Indebtedness, the Borrower shall be in Pro Forma Financial Covenant Compliance, (b) at the time of and immediately after giving effect to the incurrence of such Indebtedness, no Default or Event of Default has occurred and is continuing or would result therefrom, (c) such Indebtedness (i) has a stated maturity that is no earlier than 91 days after the Scheduled Maturity Date and (ii) does not have any scheduled prepayment, amortization, redemption, sinking fund or similar obligations prior to the date that is 91 days after the Scheduled Maturity Date (except for customary offers to purchase with proceeds of asset sales or upon the occurrence of a change of control), (d) such Indebtedness does not contain any financial maintenance covenants that are more restrictive than any financial maintenance covenant set forth in this Agreement, (e) such Indebtedness is on terms, taken as a whole, not materially less favorable to the Borrower and its Restricted Subsidiaries than market terms for issuers of similar size and credit quality given the then prevailing market conditions, as reasonably determined by the Borrower and (f) the Borrower is irrevocably obligated to redeem such Indebtedness if the Montage Merger is not consummated prior to the Montage Refinancing Deadline.

Montage Refinancing Transactions” means, collectively, the transactions described on Schedule I to Amendment No. 7.

Permitted Acquisition Outside Date” has the meaning specified in Section 6.10(i).

Required 2023 Senior Notes” means 2023 Senior Notes in an aggregate principal amount of not less than $450,000,000.

Substantially Concurrent Issuance” means any issuance of equity interests (other than Disqualified Stock) made at any time between (a) (i) in the case of any Redemption of Existing Senior Notes or Permitted Unsecured Notes, the date that is 180 days prior to the date of such Redemption and (ii) in the case of any Redemption of Montage Refinancing Senior Notes or 2023 Senior Notes, the date that is 270 days prior to the date of such Redemption and (b) the date of such Redemption (inclusive of such dates).

(d)    Section 1.01 of the Credit Agreement is amended by deleting the definition of “Required 2022 Senior Notes” in its entirety.

(e)    Section 6.03 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (h), replacing the period at the end of clause (i) with “;” and adding the following new clauses (j) and (k) as follows:

(j)    during the period from the Amendment No. 7 Effective Date until the Montage Refinancing Deadline, the Montage Refinancing Senior Notes and any Permitted Refinancing Indebtedness in respect thereof; and

 

6


(k)    from and after the consummation of the Montage Merger, the 2023 Senior Notes and any Permitted Refinancing Indebtedness in respect thereof; provided that, at the time the 2023 Senior Notes are assumed by the Borrower, (i) after giving pro forma effect to the assumption of such Indebtedness, the Borrower shall be in Pro Forma Financial Covenant Compliance and (ii) immediately after giving effect to such assumption of the 2023 Senior Notes, no Default or Event of Default shall have occurred and be continuing or would result therefrom; provided further that, notwithstanding anything to the contrary in the definition of “Permitted Refinancing Indebtedness”, if the Montage Refinancing Senior Notes otherwise fulfill the requirements of clauses (a) through (g) of the definition of “Permitted Refinancing Indebtedness” (with the 2023 Senior Notes deemed to be the “Refinanced Indebtedness” and the Montage Refinancing Senior Notes deemed to be the “New Indebtedness” for purposes of such definition), the Montage Refinancing Senior Notes shall be deemed to be Permitted Refinancing Indebtedness in respect of the 2023 Senior Notes (notwithstanding that the proceeds of the Montage Refinancing Senior Notes are not directly used to effect the Redemption of the 2023 Senior Notes) so long as the Borrower Redeems the Called 2023 Senior Notes with the proceeds of the Montage Refinancing Loans prior to the Montage Refinancing Deadline.

(f)    Section 6.10 of the Credit Agreement is hereby amended and restated as follows:

SECTION 6.10    Limitations on Redemptions of Indebtedness. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, voluntarily Redeem any Designated Senior Notes prior to their stated maturity, except:

(a)    in the case of any Designated Senior Notes with maturity dates on or after the Scheduled Maturity Date, the Borrower and its Restricted Subsidiaries may Redeem such Designated Senior Notes with payments (which payments may include cash consideration to effect an exchange of any of the Designated Senior Notes as part of a permitted refinancing) made with the proceeds of Permitted Refinancing Indebtedness;

(b)    the Borrower and its Restricted Subsidiaries may Redeem 2022 Senior Notes and, from and after the consummation of the Montage Merger and the 2023 Senior Notes Assumption, 2023 Senior Notes, in each case, with payments made with the proceeds of Permitted Refinancing Indebtedness; provided that (i) in the case of the 2023 Senior Notes, such Redemption is made at least 91 days prior to the 2023 Senior Notes Scheduled Maturity Date and (ii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing;

(c)    the Borrower and its Restricted Subsidiaries may Redeem any Designated Senior Notes so long as, after giving pro forma effect to any such Redemption, the Payment Conditions are satisfied;

(d)    the Borrower and its Restricted Subsidiaries may Redeem any Existing Senior Notes or Permitted Unsecured Notes from the Net Cash Proceeds received by the Borrower or such Restricted Subsidiary from one or more Fayetteville Transactions so long

 

7


as (i) no Loans are outstanding immediately before and after giving effect to such Redemption, (ii) such Redemption is made prior to the Fayetteville Proceeds Deadline and (iii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing;

(e)    the Borrower or any Restricted Subsidiary may Redeem any Designated Senior Notes with the net cash proceeds from any Substantially Concurrent Issuance of any equity securities (other than Disqualified Stock) (it being understood that the Borrower may use of all or a portion of the net cash proceeds of any such equity issuance to temporarily reduce Borrowings under this Agreement pending such Redemption and may reborrow under this Agreement in an amount not to exceed the amount of prepayments previously made with the proceeds of such equity issuance in order to effect such Redemption pursuant to this clause (e));

(f)    from and after the consummation of the Montage Merger and the 2023 Senior Notes Assumption, the Borrower and its Restricted Subsidiaries may Redeem any 2022 Senior Notes or 2023 Senior Notes with the proceeds of any Montage Refinancing Loans so long as (i) such Redemption is made prior to the Montage Refinancing Deadline, and (ii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing;

(g)    from and after the consummation of the Montage Merger and the 2023 Senior Notes Assumption, the Borrower and its Restricted Subsidiaries may Redeem any 2023 Senior Notes with the proceeds of Loans made pursuant to this Agreement so long as (i) such Redemption is made prior to the Montage Refinancing Deadline, (ii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing, and (iii) the aggregate principal amount of Redemptions of 2023 Senior Notes made pursuant to this Section 6.10(g) shall not exceed $25,000,000;

(h)    the Borrower and its Restricted Subsidiaries may Redeem any Montage Refinancing Senior Notes if (i) the Borrower is irrevocably obligated to Redeem such Montage Refinancing Senior Notes if the Montage Merger is not consummated prior to the Montage Refinancing Deadline, (ii) the Borrower or any Restricted Subsidiary becomes obligated to effect the Redemption of such Montage Refinancing Senior Notes as a result of the Montage Merger not being consummated prior to the Montage Refinancing Deadline, (iii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing and (iv) either (1) (x) the cash proceeds from the issuance of such Montage Refinancing Senior Notes shall have been escrowed and separated from the other cash of the Borrower and its Restricted Subsidiaries and held for purposes of such Redemption and (y) the Borrower and its Restricted Subsidiaries use only the cash proceeds that have been so escrowed in order to effect such Redemption or (2) to the extent the cash proceeds from the issuance of such Montage Refinancing Senior Notes are not escrowed as described in clause (1)(x), at all times from the date the Montage Refinancing Senior Notes are issued until such Redemption, Liquidity shall be greater than or equal to the sum of (i) the aggregate principal amount of the Montage Refinancing Senior Notes issued and (ii) 20% of the Credit Limit then in effect; and

 

8


(i)    the Borrower and its Restricted Subsidiaries may Redeem any Permitted Unsecured Notes issued by the Borrower in anticipation of a Permitted Acquisition permitted hereunder if (i) the Borrower is irrevocably obligated to Redeem such Permitted Unsecured Notes if such Permitted Acquisition is not consummated prior to the earlier of (A) the date that is 180 days after the issuance of such Permitted Unsecured Notes and (B) the date on which either party has the right to terminate the related acquisition agreement if such Permitted Acquisition has not been consummated by such date (such earlier date, the “Permitted Acquisition Outside Date”), (ii) the Borrower or any Restricted Subsidiary becomes obligated to effect the Redemption of such Permitted Unsecured Notes as a result of such Permitted Acquisition not being consummated prior to the Permitted Acquisition Outside Date, (iii) at the time of and immediately after giving pro forma effect to such Redemption, no Default or Event of Default shall have occurred and be continuing and (iv) either (1) (x) the cash proceeds from the issuance of such Permitted Unsecured Notes shall have been escrowed and separated from the other cash of the Borrower and its Restricted Subsidiaries and held for purposes of such Redemption and (y) the Borrower and its Restricted Subsidiaries use only the cash proceeds that have been so escrowed in order to effect such Redemption or (2) to the extent the cash proceeds from the issuance of such Permitted Unsecured Notes are not escrowed as described in clause (1)(x), at the time of and immediately after giving pro forma effect to such Redemption, Availability shall be greater than or equal to the sum of (i) the aggregate principal amount of the Permitted Unsecured Notes issued and (ii) 20% of the Credit Limit then in effect.

(g)    Section 9.06 of the Credit Agreement is hereby amended and restated in its entirety as follows:

SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.

(a)    This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)    Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related

 

9


to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrower or any other Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Borrower and each Loan Party hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Borrower and the Loan Parties, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against any Related Parties of any Lender for any Liabilities arising solely from the Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of the Borrower and/or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

 

10


Section 3.    Amendment No. 7 Effective Date; Conditions Precedent. This Amendment shall become effective on the date (the “Amendment No. 7 Effective Date”) on which the following conditions have been satisfied:

(a)    the Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, a counterpart of this Amendment executed by the Borrower, the Administrative Agent and Lenders constituting the Majority Lenders;

(b)    the Borrower shall have paid to the extent invoiced at or before 1:00 p.m., New York City time, on the Business Day immediately prior to the Amendment No. 7 Effective Date, all out-of-pocket expenses required to be reimbursed or paid by the Borrower pursuant to Section 9.03 of the Credit Agreement or any other Loan Document;

(c)    the Administrative Agent shall have received all fees required to be paid pursuant to that certain Fee Letter, dated as of the date hereof, by and between the Borrower and the Administrative Agent;

(d)    the representations and warranties contained in Section 4 hereof shall be true and correct; and

(e)    no Default or Event of Default shall have occurred and be continuing.

The Administrative Agent shall notify the Borrower and the Lenders of the Amendment No. 7 Effective Date, and such notice shall be conclusive and binding.

Section 4.    Representations and Warranties. To induce the other parties hereto to enter into this Amendment, the Borrower represents and warrants that, before and after giving effect to each of the amendments set forth in this Amendment:

(a)    the representations and warranties set forth in Article III of the Credit Agreement and in the other Loan Documents are true and correct in all material respects (or, in the case of any such representations and warranties that are qualified as to materiality or Material Adverse Effect in the text thereof, such representations and warranties are true and correct in all respects) on and as of the Amendment No. 7 Effective Date, except to the extent made as of a specific date, which representations and warranties shall have been true and correct in all material respects as of such specific date (or, in the case of any such representation and warranties that are qualified as to materiality or Material Adverse Effect in the text thereof, such representations and warranties shall have been true and correct in all respects as of such specific date); and

(b)    no Default or Event of Default has occurred and is continuing on the Amendment No. 7 Effective Date.

Section 5.    Confirmation of Montage Merger. The Lenders and the Borrower hereby agree that the Montage Merger is permitted under Section 6.05 of the Credit Agreement if such merger meets all the requirements of the definition of “Permitted Acquisition” in the Credit Agreement.

 

11


Section 6.    Confirmation of Loan Documents. Except as expressly contemplated hereby, the terms, provisions, conditions and covenants of the Credit Agreement, as amended by this Amendment, and the other Loan Documents remain in full force and effect and are hereby ratified and confirmed, and the execution, delivery and performance of this Amendment shall not, except as expressly set forth in this Amendment, operate as a waiver of, consent to or amendment of any term, provision, condition or covenant thereof. Without limiting the generality of the foregoing, except pursuant hereto or as expressly contemplated or amended hereby, nothing contained herein shall be deemed: (a) to constitute a waiver of compliance or consent to noncompliance by any Loan Party with respect to any term, provision, condition or covenant of the Credit Agreement or any other Loan Document; (b) to prejudice any right or remedy that the Administrative Agent or any Lender may now have or may have in the future under or in connection with the Credit Agreement or any other Loan Document; or (c) to constitute a waiver of compliance or consent to noncompliance by the Borrower with respect to the terms, provisions, conditions and covenants of the Credit Agreement and the other Loan Documents made the subject hereof.

Section 7.    Ratification of Collateral Documents. The Borrower hereby acknowledges and ratifies, on behalf of itself and each other Loan Party, the existence and priority of the Liens granted by the Loan Parties in and to the Collateral in favor of the Secured Parties and represents and warrants, on behalf of itself and each other Loan Party, that such Liens and security interests are valid, existing and in full force and effect. The Borrower hereby ratifies and confirms, on behalf of itself and each other Loan Party, each Loan Party’s obligations under the Collateral Documents to which such Loan Party is a party and hereby represents and acknowledges, on behalf of itself and each other Loan Party, that the Loan Parties have no claims, counterclaims, offsets, credits or defenses to the Loan Documents or the performance of their obligations thereunder. Furthermore, the Borrower agrees, on behalf of itself and each other Loan Party, that nothing contained in this Amendment shall adversely affect any right or remedy of the Administrative Agent or the Lenders under the Collateral Documents or any of the other Loan Documents. Finally, the Borrower hereby represents and warrants, on behalf of itself and each other Loan Party, that the execution and delivery of this Amendment and the other documents executed in connection herewith shall in no way change or modify its or any other Loan Party’s obligations as a debtor, pledgor, assignor, obligor, grantor, mortgagor and/or chargor under any Collateral Document and the other Loan Documents and shall not constitute a waiver by the Administrative Agent or the Lenders of any of their rights against any Loan Party.

Section 8.    Effect of Amendment. From and after the Amendment No. 7 Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereof”, or “hereunder” or words of like import, and all references to the Credit Agreement in the Loan Documents and any and all other agreements, instruments, documents, notes, certificates, guaranties and other writings of every kind and nature shall be deemed to mean the Credit Agreement as modified by this Amendment. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

Section 9.    Costs and Expenses. Pursuant to the terms of Section 9.03 of the Credit Agreement, the Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates in connection with the preparation, execution and enforcement of this Amendment.

 

12


Section 10.    Choice of Law. This Amendment and all other documents executed in connection herewith and the rights and obligations of the parties hereto and thereto, shall be construed in accordance with and governed by the law of the State of New York.

Section 11.    Counterparts; Integration; Effectiveness. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment, the Credit Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Amendment shall become effective on the Amendment No. 7 Effective Date, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this Amendment by facsimile, e-mailed .pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 12.    Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

[Remainder of page intentionally left blank; signature pages follow.]

 

13


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

 

SOUTHWESTERN ENERGY COMPANY,

a Delaware corporation

By:  

/s/ Julian Bott

Name:   Julian Bott
Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender
By:  

/s/ Arina Mavilian

Name:   Arina Mavilian
Title:   Executive Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


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

/s/ Raza Jafferi

Name:   Raza Jafferi
Title:   Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


WELLS FARGO BANK, N.A., as a Lender
By:  

/s/ Edward Pak

Name:   Edward Pak
Title:   Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


CITIBANK, N.A., as a Lender
By:  

/s/ Ivan Davey

Name:   Ivan Davey
Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


MUFG BANK, LTD.,

as a Lender

By:  

/s/ Traci Bankston

Name:   Traci Bankston
Title:   Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


MIZUHO BANK, LTD., as a Lender
By:  

/s/ Edward Sacks

Name:   Edward Sacks
Title:   Authorized Signatory

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


ROYAL BANK OF CANADA,
as a Lender
By:  

/s/ Kristan Spivey

Name:   Kristan Spivey
Title:   Authorized Signatory

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


BANK OF MONTREAL,
as a Lender
By:  

/s/ Hill Taylor

Name:   Hill Taylor
Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


SUMITOMO MITSUI BANKING CORPORATION,
as a Lender
By:  

/s/ Michael Maguire

Name:   Michael Maguire
Title:   Managing Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


BBVA USA,
as a Lender
By:  

/s/ Daniel Ferreyra

Name:   Daniel Ferreyra
Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as a Lender
By:  

/s/ Michael Willis

Name:   Michael Willis
Title:   Managing Director
By:  

/s/ Ting Lee

Name:   Ting Lee
Title:   Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
as a Lender
By:  

/s/ Trudy Nelson

Name:   Trudy Nelson
Title:   Authorized Signatory
By:  

/s/ Scott W. Danvers

Name:   Scott W. Danvers
Title:   Authorized Signatory

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


TRUIST BANK, formerly known as BRANCH BANKING AND TRUST COMPANY,
as a Lender
By:  

/s/ James Giordano

Name:   James Giordano
Title:   Senior Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


FIFTH THIRD BANK,
as a Lender
By:  

/s/ Larry Hayes

Name:   Larry Hayes
Title:   Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as a Lender
By:  

/s/ Nupur Kumar

Name:   Nupur Kumar
Title:   Authorized Signatory
By:  

/s/ Christopher Zybrick

Name:   Christopher Zybrick
Title:   Authorized Signatory

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


HSBC BANK USA, N.A., as a Lender
By:  

/s/ Shaun R. Kleinman

Name:   Shaun R. Kleinman
Title:   Senior Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


REGIONS BANK,

as a Lender

By:  

/s/ Cody Chance

Name:

 

Cody Chance

Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:  

/s/ John Engel

Name:   John Engel
Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


CITIZENS BANK, N.A.,
as a Lender
By:  

/s/ Scott Donaldson

Name:   Scott Donaldson
Title:   Senior Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


ABN AMRO Capital USA LLC,
as a Lender
By:  

/s/ David Montgomery

Name:   David Montgomery
Title:   Managing Director
By:  

/s/ Darrell Holley

Name:   Darrell Holley
Title:   Managing Director

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


KEYBANK NATIONAL ASSOCIATION,
as a Lender
By:  

/s/ George E. McKean

Name:   George E. McKean
Title:   Senior Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender
By:  

/s/ Jamie Minieri

Name:   Jamie Minieri
Title:   Authorized Signatory

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


MORGAN STANLEY SENIOR FUNDING, INC.,
as a Lender
By:  

/s/ Jake Dowden

Name:   Jake Dowden
Title:   Vice President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


SHELL TRADING RISK MANAGEMENT, LLC,
as a Lender
By:  

/s/ Carla E Vincitore

Name:   Carla E Vincitore
Title:   President

 

Signature Page to Amendment No. 7 to Credit Agreement

(Southwestern Energy Company)


Schedule I

Montage Refinancing Transactions

[Omitted.]

Tags:

Legal Notice