SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
Saratoga Resources, Inc.
(Name of Issuer)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
803521103
(CUSIP Number)
Marisa Beeney
GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
(212) 583-5000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
May 18, 2015
(Date of Event which Requires filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 803521103 |
13D | Page 1 of 5 |
Preliminary Note
This Amendment No. 4 to Schedule 13D (“Amendment No. 4”) amends and supplements the Schedule 13D filed with the United States Securities and Exchange Commission (the “SEC”) on December 10, 2014 (as amended and supplemented to date, the “Schedule 13D”) relating to the common stock, $0.001 par value (the “Common Stock”) of Saratoga Resources, Inc., (the “Issuer”) by each of the following (each a “Reporting Person” and together, the “Reporting Persons”): (i) Blackstone / GSO Capital Solutions Fund LP and Blackstone / GSO Capital Solutions Overseas Master Fund L.P. (collectively, the “GSO Funds”); (ii) Blackstone / GSO Capital Solutions Associates LLC, Blackstone / GSO Capital Solutions Overseas Associates LLC, and GSO Holdings I L.L.C. (collectively, the “GSO Entities”); (iii) Blackstone Holdings I L.P., Blackstone Holdings I/II GP Inc., The Blackstone Group L.P., and Blackstone Group Management L.L.C. (collectively, the “Blackstone Entities”); (iv) Stephen A. Schwarzman; and (v) Bennett J. Goodman, J. Albert Smith III and Douglas I. Ostrover (collectively, the “GSO Executives”).
| Item 4. | Purpose of Transaction. |
Item 4 is hereby amended and supplemented by the following:
On May 18, 2015, the Issuer, the GSO Funds, and all of the other holders (together with the GSO Funds, the “First Lien Lenders”) of the Issuer’s 10.0% Senior Secured Notes due 2015 (the “First Lien Notes”) entered into an amendment (the “Fourth Amendment to the First Lien Forbearance Agreement”) to the forbearance agreement dated January 30, 2015 relating to the First Lien Notes (the “First Lien Forbearance Agreement”), pursuant to which the First Lien Lenders have agreed to extend the forbearance period under the First Lien Forbearance Agreement until June 5, 2015.
Also on May 18, 2015, the Issuer, the GSO Funds, and certain of the other holders (together with the GSO Funds, the “Second Lien Lenders”) of the Issuer’s 12.5% Senior Secured Notes due 2016 (the “Second Lien Notes”) entered into an amendment (the “Fourth Amendment to the Second Lien Forbearance Agreement” and, together with the Fourth Amendment to the First Lien Forbearance Agreement, the “Amendments”) to the forbearance agreement relating to the Second Lien Notes (the “Second Lien Forbearance Agreement”), pursuant to which the Second Lien Lenders have agreed to extend the forbearance period under the Second Lien Forbearance Agreement until June 5, 2015.
The foregoing descriptions of the Amendments do not purport to be complete and are qualified in their entirety by reference to the full text of such Amendments filed as exhibits to this Schedule 13D, and incorporated herein by reference.
Except as set forth in this Item 4, the Reporting Persons have no present plans or proposals which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
| CUSIP No. 803521103 |
13D | Page 2 of 5 |
| Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
Item 6 is hereby amended and supplemented by the following:
Item 4 above summarizes certain provisions of the Amendments and is incorporated herein by reference. A copy of each of the Amendments is filed as an exhibit to this Schedule 13D and each is incorporated herein by reference.
Except as set forth herein, none of the Reporting Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including, but not limited to, any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.
| Item 7. | Material to Be Filed as Exhibits. |
Item 7 is hereby amended and supplemented by the following:
| Exhibit |
Description | |
| 1 |
Joint Filing Agreement (incorporated by reference to Exhibit 1 of Schedule 13D, filed by the Reporting Persons on December 10, 2014). | |
| 9 |
Fourth Amendment to Forbearance Agreement to First Lien Indenture, dated May 18, 2015. | |
| 10 |
Fourth Amendment to Forbearance Agreement to Second Lien Indenture, dated May 18, 2015. | |
| CUSIP No. 803521103 |
13D | Page 3 of 5 |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: May 21, 2015
| Blackstone / GSO Capital Solutions Fund LP | ||
| By: | Blackstone / GSO Capital Solutions Associates LLC, its general partner | |
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| Blackstone / GSO Capital Solutions Associates LLC | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| Blackstone / GSO Capital Solutions Overseas Master Fund L.P. | ||
| By: | Blackstone / GSO Capital Solutions Overseas Associates LLC, | |
| its general partner | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| Blackstone / GSO Capital Solutions Overseas Associates LLC | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| CUSIP No. 803521103 |
13D | Page 4 of 5 |
| GSO Holdings I L.L.C. | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| Blackstone Holdings I L.P. | ||
| By: | Blackstone Holdings I/II GP Inc., | |
| its general partner | ||
| By: | /s/ John G. Finley | |
| Name: | John G. Finley | |
| Title: | Chief Legal Officer | |
| Blackstone Holdings I/II GP Inc. | ||
| By: | /s/ John G. Finley | |
| Name: | John G. Finley | |
| Title: | Chief Legal Officer | |
| The Blackstone Group L.P. | ||
| By: | Blackstone Group Management L.L.C., its general partner | |
| By: | /s/ John G. Finley | |
| Name: | John G. Finley | |
| Title: | Chief Legal Officer | |
| Blackstone Group Management L.L.C. | ||
| By: | /s/ John G. Finley | |
| Name: | John G. Finley | |
| Title: | Chief Legal Officer | |
| Stephen A. Schwarzman | ||
| /s/ Stephen A. Schwarzman | ||
| Stephen A. Schwarzman | ||
| CUSIP No. 803521103 |
13D | Page 5 of 5 |
| Bennett J. Goodman | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Attorney-in-Fact | |
| J. Albert Smith III | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Attorney-in-Fact | |
| Douglas I. Ostrover | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Attorney-in-Fact | |
Exhibit 9
Execution Version
FOURTH AMENDMENT TO FORBEARANCE AGREEMENT TO
FIRST LIEN INDENTURE
This FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (this “Fourth Amendment”) is entered into as of May 18, 2015, by and among Saratoga Resources, Inc. (the “Issuer”), the Guarantors party to the First Lien Indenture (collectively, with Issuer, the “Credit Parties”) and the holders of Notes issued under the First Lien Indenture party hereto (each, a “Noteholder” and together, the “Noteholders”). Unless otherwise defined in this Fourth Amendment, capitalized terms used herein shall have the meanings ascribed to them in the First Lien Forbearance Agreement.
RECITALS
A. Issuer, the other Credit Parties and the Noteholders entered into a Forbearance Agreement to First Lien Indenture, dated January 30, 2015, and amended March 2, 2015, March 16, 2015 and April 30, 2015 (the “First Lien Forbearance Agreement”).
B. Issuer has requested that the First Lien Forbearance Agreement be amended to extend the Forbearance Period to up to and including June 5, 2015 on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment.
Section 3(b) of the First Lien Forbearance Agreement is hereby amended to delete “May 22, 2015” in the last sentence thereof and to insert, in place of such date, “June 5, 2015.”
Section 3(b) of the First Lien Forbearance Agreement is hereby amended to insert the following after the last sentence thereof:
“If such independent director resigns or is terminated, Issuer shall appoint another independent director to Issuer’s Board of Directors and its Independent Restructuring Committee, who is acceptable to the Noteholders, pursuant to board resolutions in form and substance acceptable to the Noteholders, within five business days following such resignation or termination.”
SECTION 2. Effectiveness.
This Fourth Amendment shall become effective at the time (the “Fourth Amendment Effective Date”) that all of the following conditions precedent have been met (or waived) as determined by the Noteholders in their sole discretion:
(a) Amendment. The Noteholders shall have received duly executed signature pages for this Fourth Amendment signed by the Noteholders, Issuer and the other Credit Parties.
(b) Second Lien Forbearance Agreement Amendment. The Noteholders, Issuer and the other Credit Parties shall have executed and delivered an amendment to that certain Forbearance Agreement to Second Lien Indenture, dated as of January 30, 2015 and amended as of March 2, 2015, March 16, 2015 and April 30, 2015, pursuant to which the Noteholders shall have agreed to extend the Forbearance Period to up to and including June 5, 2015 on the terms and conditions set forth therein.
SECTION 3. General Release; Indemnity.
(a) In consideration of, among other things, the Noteholders’ execution and delivery of this Fourth Amendment, each of Issuer and the other Credit Parties, on behalf of itself and its agents, representatives, officers, directors, advisors, employees, subsidiaries, affiliates, successors and assigns (collectively, “Releasors”), hereby forever agrees and covenants not to sue or prosecute against any Releasee (as hereinafter defined) for and hereby forever waives, releases and discharges, to the fullest extent permitted by law, each Releasee (as hereinafter defined) from any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off and recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises, warranties, damages and consequential damages, demands, agreements, bonds, bills, specialties, covenants, controversies, variances, trespasses, judgments, executions, costs, expenses or claims whatsoever, that such Releasor now has or hereafter may have, of whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising, whether arising at law or in equity (collectively, the “Claims”), against any or all of the Noteholders and Trustee in any capacity and their respective affiliates, subsidiaries, shareholders and “controlling persons” (within the meaning of the federal securities laws), and their respective successors and assigns and each and all of the officers, directors, employees, agents, attorneys, advisors and other representatives of each of the foregoing (collectively, the “Releasees”), based in whole or in part on facts, whether or not now known, existing on or before the Fourth Amendment Effective Date, that relate to, arise out of or otherwise are in connection with: (i) any or all of the First Lien Documents or transactions contemplated thereby or any actions or omissions in connection therewith or (ii) any aspect of the dealings or relationships between or among Issuer and the other Credit Parties, on the one hand, and any or all of the Noteholders and Trustee, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof. The receipt by Issuer or any other Credit Party of any financial accommodations made by any Noteholder or the Trustee after the date hereof shall constitute a ratification, adoption, and confirmation by such party of the foregoing general release of all Claims against the Releasees that are based in whole or in part on facts, whether or not now known or unknown, existing on or prior to the date of receipt of any such financial accommodations. In entering into this Fourth Amendment, Issuer and each other Credit Party consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity thereof. The provisions of this Section shall survive the termination of this Fourth Amendment, the First Lien Indenture, the other First Lien Documents and payment in full of the Obligations.
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(b) Issuer and the other Credit Parties each hereby agrees that it shall be, jointly and severally, obligated to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by or on behalf of any Person, including, without limitation, the respective officers, directors, agents, trustees, creditors, partners or shareholders of Issuer, any other Credit Party, or any of their respective Subsidiaries, whether threatened or initiated, in respect of any claim for legal or equitable remedy under any statute, regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of the First Lien Indenture, the other First Lien Documents, this Fourth Amendment or any other document executed and/or delivered in connection herewith or therewith; provided, that neither Issuer nor any other Credit Party shall have any obligation to indemnify or hold harmless any Releasee hereunder with respect to liabilities to the extent they result from the gross negligence or willful misconduct of that Releasee as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, Issuer and other Credit Parties each agrees to make the maximum contribution to the payment and satisfaction thereof that is permissible under applicable law. The foregoing indemnity shall survive the termination of this Fourth Amendment, the First Lien Indenture, the other First Lien Documents and the payment in full of the Obligations.
(c) Each of Issuer and the other Credit Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by Issuer or any other Credit Party pursuant to Section 3(a) hereof. If Issuer, any other Credit Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, Issuer and the other Credit Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.
SECTION 4. No Modifications.
Except as amended hereby, the First Lien Forbearance Agreement remains unmodified and in full force and effect, and nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the First Lien Forbearance Agreement or any of the other First Lien Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Noteholders reserve all rights, privileges and remedies under the First Lien Forbearance Agreement. This Amendment shall constitute a First Lien Document.
SECTION 5. Governing Law; Consent to Jurisdiction and Venue.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN ALL MATTERS ARISING OUT OF, IN CONNECTION WITH OR RELATING TO THIS FOURTH AMENDMENT, INCLUDING, WITHOUT LIMITATION, ITS VALIDITY, INTERPRETATION, CONSTRUCTION, PERFORMANCE AND ENFORCEMENT (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY
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DETERMINATIONS WITH RESPECT TO POST-JUDGMENT INTEREST). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS FOURTH AMENDMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS FOURTH AMENDMENT, EACH OF THE NOTEHOLDER AND THE OTHER CREDIT PARTIES HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED THAT NOTHING IN THIS FOURTH AMENDMENT SHALL LIMIT THE RIGHT OF THE NOTEHOLDERS TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT THE NOTEHOLDERS DETERMINE THAT SUCH ACTION IS NECESSARY OR APPROPRIATE TO EXERCISE THEIR RIGHTS OR REMEDIES UNDER THE FIRST LIEN DOCUMENTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS. EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND CONSENTS TO SUCH SERVICE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THIS FOURTH AMENDMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID) TO THE ADDRESS OF THE ISSUER SPECIFIED IN THE FIRST LIEN INDENTURE (AND SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE EFFECTIVE, AS PROVIDED THEREIN). EACH CREDIT PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING CONTAINED IN THIS SECTION 5 SHALL AFFECT THE RIGHT OF THE NOTEHOLDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
SECTION 6. Counterparts.
This Fourth Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart. Any party hereto may execute and deliver a counterpart of this Fourth Amendment by delivering by facsimile or other electronic transmission a signature page of this Fourth Amendment signed by such party, and any such facsimile or other electronic signature shall be treated in all respects as having the same effect as an original signature. Any party delivering by facsimile or other electronic transmission a counterpart executed by it shall promptly thereafter also deliver a manually signed counterpart of this Fourth Amendment; provided that the failure to deliver such manually signed counterpart shall not affect the validity or effectiveness of this Fourth Amendment.
[Signature pages to follow]
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IN WITNESS WHEREOF, this Fourth Amendment to First Lien Forbearance Agreement has been executed by the parties hereto as of the date first written above.
| SARATOGA RESOURCES, INC., as Issuer |
HARVEST OIL & GAS, LLC, as Credit Party | |||||||
| By: | /s/ Thomas F. Cooke |
By: | /s/ Thomas F. Cooke | |||||
| Name: | Thomas F. Cooke | Name: | Thomas F. Cooke | |||||
| Its: | Chairman & CEO | Its: | Operating Manager | |||||
| THE HARVEST GROUP LLC, as Credit Party |
LOBO OPERATING, INC., as Credit Party | |||||||
| By: | /s/ Thomas F. Cooke |
By: | /s/ Thomas F. Cooke | |||||
| Name: | Thomas F. Cooke | Name: | Thomas F. Cooke | |||||
| Its: | Operating Manager | Its: | President | |||||
| LOBO RESOURCES, INC., as Credit Party | ||
| By: | /s/ Thomas F. Cooke | |
| Name: | Thomas F. Cooke | |
| Its: | President | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO FIRST LIEN FORBEARANCE AGREEMENT
| BLACKSTONE / GSO CAPITAL SOLUTIONS FUND LP, as a Noteholder | ||
| By: | Blackstone / GSO Capital Solutions Associates LLC, | |
| its general partner | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| BLACKSTONE / GSO CAPITAL SOLUTIONS OVERSEAS MASTER FUND L.P., as a Noteholder | ||
| By: | Blackstone / GSO Capital Solutions | |
| Overseas Associates LLC, | ||
| its general partner | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO FIRST LIEN FORBEARANCE AGREEMENT
| STONEHILL MASTER FUND LTD., | ||
| as a Noteholder | ||
| By: | /s/ Wayne Teetsel | |
| Name: | Wayne Teetsel | |
| Title: | Partner | |
| STONEHILL INSTITUTIONAL PARTNERS, L.P., as a Noteholder | ||
| By: | /s/ Wayne Teetsel | |
| Name: | Wayne Teetsel | |
| Title: | Partner | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO FIRST LIEN FORBEARANCE AGREEMENT
Exhibit 10
Execution Version
FOURTH AMENDMENT TO FORBEARANCE AGREEMENT TO
SECOND LIEN INDENTURE
This FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (this “Fourth Amendment”) is entered into as of May 18, 2015, by and among Saratoga Resources, Inc. (the “Issuer”), the Guarantors party to the Second Lien Indenture (collectively, with Issuer, the “Credit Parties”) and the holders of Notes issued under the Second Lien Indenture party hereto (each, a “Noteholder” and together, the “Noteholders”). Unless otherwise defined in this Fourth Amendment, capitalized terms used herein shall have the meanings ascribed to them in the Second Lien Forbearance Agreement.
RECITALS
A. Issuer, the other Credit Parties and the Noteholders entered into a Forbearance Agreement to Second Lien Indenture, dated January 30, 2015, and amended March 2, 2015, March 16, 2015 and April 30, 2015 (the “Second Lien Forbearance Agreement”).
B. Issuer has requested that the Second Lien Forbearance Agreement be amended to extend the Forbearance Period to up to and including June 5, 2015 on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment.
Section 3(b) of the Second Lien Forbearance Agreement is hereby amended to delete “May 22, 2015” in the last sentence thereof and to insert, in place of such date, “June 5, 2015.”
Section 3(b) of the Second Lien Forbearance Agreement is hereby amended to insert the following after the last sentence thereof:
“If such independent director resigns or is terminated, Issuer shall appoint another independent director to Issuer’s Board of Directors and its Independent Restructuring Committee, who is acceptable to the Noteholders, pursuant to board resolutions in form and substance acceptable to the Noteholders, within five business days following such resignation or termination.”
SECTION 2. Effectiveness.
This Fourth Amendment shall become effective at the time (the “Fourth Amendment Effective Date”) that all of the following conditions precedent have been met (or waived) as determined by the Noteholders in their sole discretion:
(a) Amendment. The Noteholders shall have received duly executed signature pages for this Fourth Amendment signed by the Noteholders, Issuer and the other Credit Parties.
(b) First Lien Forbearance Agreement Amendment. The Noteholders, Issuer and the other Credit Parties shall have executed and delivered an amendment to that certain Forbearance Agreement to First Lien Indenture, dated as of January 30, 2015 and amended as of March 2, 2015, March 16, 2015 and April 30, 2015, pursuant to which the Noteholders shall have agreed to extend the Forbearance Period to up to and including June 5, 2015 on the terms and conditions set forth therein.
SECTION 3. General Release; Indemnity.
(a) In consideration of, among other things, the Noteholders’ execution and delivery of this Fourth Amendment, each of Issuer and the other Credit Parties, on behalf of itself and its agents, representatives, officers, directors, advisors, employees, subsidiaries, affiliates, successors and assigns (collectively, “Releasors”), hereby forever agrees and covenants not to sue or prosecute against any Releasee (as hereinafter defined) for and hereby forever waives, releases and discharges, to the fullest extent permitted by law, each Releasee (as hereinafter defined) from any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off and recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises, warranties, damages and consequential damages, demands, agreements, bonds, bills, specialties, covenants, controversies, variances, trespasses, judgments, executions, costs, expenses or claims whatsoever, that such Releasor now has or hereafter may have, of whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising, whether arising at law or in equity (collectively, the “Claims”), against any or all of the Noteholders and Trustee in any capacity and their respective affiliates, subsidiaries, shareholders and “controlling persons” (within the meaning of the federal securities laws), and their respective successors and assigns and each and all of the officers, directors, employees, agents, attorneys, advisors and other representatives of each of the foregoing (collectively, the “Releasees”), based in whole or in part on facts, whether or not now known, existing on or before the Fourth Amendment Effective Date, that relate to, arise out of or otherwise are in connection with: (i) any or all of the Second Lien Documents or transactions contemplated thereby or any actions or omissions in connection therewith or (ii) any aspect of the dealings or relationships between or among Issuer and the other Credit Parties, on the one hand, and any or all of the Noteholders and Trustee, on the other hand, relating to any or all of the documents, transactions, actions or omissions referenced in clause (i) hereof. The receipt by Issuer or any other Credit Party of any financial accommodations made by any Noteholder or the Trustee after the date hereof shall constitute a ratification, adoption, and confirmation by such party of the foregoing general release of all Claims against the Releasees that are based in whole or in part on facts, whether or not now known or unknown, existing on or prior to the date of receipt of any such financial accommodations. In entering into this Fourth Amendment, Issuer and each other Credit Party consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth above do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity thereof. The provisions of this Section shall survive the termination of this Fourth Amendment, the Second Lien Indenture, the other Second Lien Documents and payment in full of the Obligations.
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(b) Issuer and the other Credit Parties each hereby agrees that it shall be, jointly and severally, obligated to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by or on behalf of any Person, including, without limitation, the respective officers, directors, agents, trustees, creditors, partners or shareholders of Issuer, any other Credit Party, or any of their respective Subsidiaries, whether threatened or initiated, in respect of any claim for legal or equitable remedy under any statute, regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of the Second Lien Indenture, the other Second Lien Documents, this Fourth Amendment or any other document executed and/or delivered in connection herewith or therewith; provided, that neither Issuer nor any other Credit Party shall have any obligation to indemnify or hold harmless any Releasee hereunder with respect to liabilities to the extent they result from the gross negligence or willful misconduct of that Releasee as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, Issuer and other Credit Parties each agrees to make the maximum contribution to the payment and satisfaction thereof that is permissible under applicable law. The foregoing indemnity shall survive the termination of this Fourth Amendment, the Second Lien Indenture, the other Second Lien Documents and the payment in full of the Obligations.
(c) Each of Issuer and the other Credit Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by Issuer or any other Credit Party pursuant to Section 3(a) hereof. If Issuer, any other Credit Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, Issuer and the other Credit Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.
SECTION 4. No Modifications.
Except as amended hereby, the Second Lien Forbearance Agreement remains unmodified and in full force and effect, and nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Second Lien Forbearance Agreement or any of the other Second Lien Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Noteholders reserve all rights, privileges and remedies under the Second Lien Forbearance Agreement. This Amendment shall constitute a Second Lien Document.
SECTION 5. Governing Law; Consent to Jurisdiction and Venue.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN ALL MATTERS ARISING OUT OF, IN CONNECTION WITH OR RELATING TO THIS FOURTH AMENDMENT, INCLUDING, WITHOUT LIMITATION, ITS VALIDITY, INTERPRETATION, CONSTRUCTION, PERFORMANCE AND ENFORCEMENT (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY
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DETERMINATIONS WITH RESPECT TO POST-JUDGMENT INTEREST). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS FOURTH AMENDMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS FOURTH AMENDMENT, EACH OF THE NOTEHOLDER AND THE OTHER CREDIT PARTIES HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED THAT NOTHING IN THIS FOURTH AMENDMENT SHALL LIMIT THE RIGHT OF THE NOTEHOLDERS TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT THE NOTEHOLDERS DETERMINE THAT SUCH ACTION IS NECESSARY OR APPROPRIATE TO EXERCISE THEIR RIGHTS OR REMEDIES UNDER THE SECOND LIEN DOCUMENTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS. EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND CONSENTS TO SUCH SERVICE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THIS FOURTH AMENDMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID) TO THE ADDRESS OF THE ISSUER SPECIFIED IN THE SECOND LIEN INDENTURE (AND SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE EFFECTIVE, AS PROVIDED THEREIN). EACH CREDIT PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING CONTAINED IN THIS SECTION 5 SHALL AFFECT THE RIGHT OF THE NOTEHOLDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
SECTION 6. Counterparts.
This Fourth Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart. Any party hereto may execute and deliver a counterpart of this Fourth Amendment by delivering by facsimile or other electronic transmission a signature page of this Fourth Amendment signed by such party, and any such facsimile or other electronic signature shall be treated in all respects as having the same effect as an original signature. Any party delivering by facsimile or other electronic transmission a counterpart executed by it shall promptly thereafter also deliver a manually signed counterpart of this Fourth Amendment; provided that the failure to deliver such manually signed counterpart shall not affect the validity or effectiveness of this Fourth Amendment.
[Signature pages to follow]
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IN WITNESS WHEREOF, this Fourth Amendment to Second Lien Forbearance Agreement has been executed by the parties hereto as of the date first written above.
| SARATOGA RESOURCES, INC., as Issuer |
HARVEST OIL & GAS, LLC, as Credit Party | |||||||
| By: | /s/ Thomas F. Cooke |
By: | /s/ Thomas F. Cooke | |||||
| Name: | Thomas F. Cooke | Name: | Thomas F. Cooke | |||||
| Its: | Chairman & CEO | Its: | Operating Manager | |||||
| THE HARVEST GROUP LLC, as Credit Party |
LOBO OPERATING, INC., as Credit Party | |||||||
| By: | /s/ Thomas F. Cooke |
By: | /s/ Thomas F. Cooke | |||||
| Name: | Thomas F. Cooke | Name: | Thomas F. Cooke | |||||
| Its: | Operating Manager | Its: | President | |||||
| LOBO RESOURCES, INC., as Credit Party | ||
| By: | /s/ Thomas F. Cooke | |
| Name: | Thomas F. Cooke | |
| Its: | President | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO SECOND LIEN FORBEARANCE AGREEMENT
| BLACKSTONE / GSO CAPITAL SOLUTIONS FUND LP, | ||
| as a Noteholder | ||
| By: | Blackstone / GSO Capital Solutions Associates LLC, | |
| its general partner | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
| BLACKSTONE / GSO CAPITAL SOLUTIONS OVERSEAS MASTER FUND L.P., as a Noteholder | ||
| By: | Blackstone / GSO Capital Solutions Overseas Associates LLC, | |
| its general partner | ||
| By: | /s/ Marisa Beeney | |
| Name: | Marisa Beeney | |
| Title: | Authorized Signatory | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO SECOND LIEN FORBEARANCE AGREEMENT
| STONEHILL MASTER FUND LTD., | ||
| as a Noteholder | ||
| By: | /s/ Wayne Teetsel | |
| Name: | Wayne Teetsel | |
| Title: | Partner | |
| STONEHILL INSTITUTIONAL PARTNERS, L.P., as a Noteholder | ||
| By: | /s/ Wayne Teetsel | |
| Name: | Wayne Teetsel | |
| Title: | Partner | |
SIGNATURE PAGE TO
FOURTH AMENDMENT TO SECOND LIEN FORBEARANCE AGREEMENT