DENBURY INC. Item 1.01 - Entry into a Material Definitive Agreement
Reserve Based Revolving Credit Facility
On the Effective Date, pursuant to the terms of the Plan, Denbury, as borrower,
the lenders party thereto (the "Lenders"), and
The Exit Credit Facility provides for a
Denbury is required to pay a commitment fee of 0.50% per annum on the average daily unused portion of the current aggregate commitments under the Exit Credit Facility. Denbury is also required to pay customary letter of credit and fronting fees.
The Exit Credit Facility requires Denbury to maintain (i) a consolidated total leverage ratio of less than or equal to 3.50 to 1.00 and (ii) a consolidated current ratio of greater than or equal to 1.00 to 1.00.
The Exit Credit Facility also contains customary affirmative and negative covenants, including, among other things, as to compliance with laws (including environmental laws and anti-corruption laws), delivery of quarterly and annual financial statements, conduct of business, maintenance of property, maintenance of insurance, restrictions on the incurrence of liens,
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indebtedness, investments, asset dispositions, fundamental changes, restricted payments, transactions with affiliates, and other customary covenants.
Additionally, the Exit Credit Facility contains customary events of default and remedies for credit facilities of this nature. If Denbury does not comply with the financial and other covenants in the Exit Credit Facility, the Lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Exit Credit Facility and any outstanding unfunded commitments may be terminated.
This summary is qualified in its entirety by reference to the full text of the Exit Credit Facility, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Guarantee and Security of the Exit Credit Facility
The obligations under the Exit Credit Facility are guaranteed by certain of . . .
Item 1.02 - Termination of a Material Definitive Agreement
Equity Interests
In accordance with the Plan, all agreements, instruments and other documents
evidencing, relating to or otherwise connected with any of Legacy Denbury's
equity interests outstanding prior to the Effective Date were cancelled and all
such equity interests have no further force or effect after the Effective Date.
Pursuant to the Plan, the holders of Legacy Denbury's existing common stock, par
value
In accordance with the Plan, on the Effective Date, all outstanding obligations under the following notes issued by Legacy Denbury and the related registration rights were cancelled and the indentures governing such obligations were cancelled, except to the limited extent expressly set forth in the Plan:
• 9% Senior Secured Second Lien Notes due 2021 (the "2021 Notes"), issued
under the Indenture, dated as of May 10, 2016 , as supplemented by that
First Supplemental Indenture, dated as of September 8, 2017 and as further
supplemented by that Second Supplemental Indenture, dated as of July 27,
2018 .
• 9¼% Senior Secured Second Lien Notes due 2022 (the "2022 Notes"), issued
under the Indenture, dated as of December 6, 2017 , as supplemented by that
First Supplemental Indenture, dated as of July 27, 2018 .
• 7½% Senior Secured Second Lien Notes due 2024 (the "2024 Notes"), issued
under the Indenture, dated as of August 21, 2018 .
• 7¾% Senior Secured Second Lien Notes due 2024 (together with the 2021
Notes, the 2022 Notes and the 2024 Notes, the "Second Lien Notes"), issued
under the Indenture, dated as of June 19, 2019 .
• 6?% Convertible Senior Notes due 2024 (the "Convertible Notes"), issued
under the Indenture, dated as of June 19, 2019 .
• 6?% Senior Subordinated Notes due 2021 (the "Subordinated 2021 Notes"),
issued under the Indenture, dated as of February 17, 2011 , as supplemented
by that First Supplemental Indenture, dated as of December 31, 2014 , as
further supplemented by that Second Supplemental Indenture, dated as of
September 8, 2017 and as further supplemented by that Third Supplemental
Indenture, dated as of July 27, 2018 .
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• 5½% Senior Subordinated Notes due 2022 (the "Subordinated 2022 Notes"),
issued under the Indenture, dated as of April 30, 2014 , as supplemented by
that First Supplemental Indenture, dated as of December 31, 2014 , as
further supplemented by that Second Supplemental Indenture, dated as of
September 8, 2017 and as further supplemented by that Third Supplemental
Indenture, dated as of July 27, 2018 .
• 4?% Senior Subordinated Notes due 2023 (together with the Subordinated
2021 Notes and the Subordinated 2022 Notes, the "Subordinated Notes"),
. . .
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On the Effective Date, the Company entered into certain direct financial obligations under the Exit Credit Facility. The description of the Exit Credit Facility set forth in Item 1.01 of this Current Report is incorporated herein by reference.
Item 3.02 - Unregistered Sales of
On the Effective Date, pursuant to the Plan:
• 47,499,999 shares of New Common Stock were issued pro rata to holders of
the Second Lien Notes;
• 2,500,000 shares of New Common Stock and 2,631,579 Series A Warrants to
purchase 2,631,579 shares of New Common Stock were issued to the holders
of the Convertible Notes;
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• 1,578,947 Series B Warrants to purchase 1,578,947 shares of New Common
Stock were issued pro rata to holders of the Subordinated Notes; and
• 1,315,793 Series B Warrants to purchase 1,315,793 shares of New Common
Stock were issued pro rata to holders of the Existing Equity Interests.
Shares of the Existing Equity Interests were converted into Series B
Warrants at an effective exchange ratio of 0.00259485 per existing common
share.
As of the Effective Date, there were 49,999,999 shares of New Common Stock issued and outstanding.
The New Common Stock and Warrants were issued pursuant to the Plan and were issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), under Section 1145 of the Bankruptcy Code.
Item 3.03 - Material Modifications to Rights of Security Holders
As provided in the Plan, all notes, equity, agreements, instruments, certificates and other documents evidencing any claim against or interest in the Company were cancelled on the Effective Date and the obligations of the Company thereunder or in any way related thereto were fully released. The securities to be cancelled on the Effective Date include all of the Second Lien Notes, the Convertible Notes, the Subordinated Notes and the Existing Equity Interests. For further information, see the Explanatory Note and Items 1.02 and 5.03 of this Current Report, which are incorporated herein by reference.
Item 5.01 - Changes in Control of Registrant
As previously disclosed, on the Effective Date, all of the Second Lien Notes, the Convertible Notes, the Subordinated Notes and the Existing Equity Interests were cancelled, and Denbury issued approximately 95% of the New Common Stock to holders of the Second Lien Notes and approximately 5% of the New Common Stock to holders of the Convertible Notes. For further information, see Items 1.02, 3.02 and 5.02 of this Current Report, which are incorporated herein by reference.
Item 5.02 - Departure of Directors; Election of Directors
Departure of Directors
In accordance with the Plan,
Appointment of Directors
As of the Effective Date, by operation of and in accordance with the Plan, the
Denbury board of directors (the "Board") consists of seven members, comprised of
three members of the pre-Effective Date Legacy Denbury Board and four new
members selected in accordance with the Plan. As of the Effective Date, by
operation of and in accordance with the Plan, the following individuals were
appointed to the Board:
The current expected committees of the Board and directors appointed to each committee are as follows:
• Audit Committee:
• Compensation Committee:
• Nominating/Corporate Governance Committee:Mr. Peterson (Chair), Ms. Angoorly andMr. Chapman .
In connection with their appointment,
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summary is qualified in its entirety by reference to the full text of the Company's form of indemnification agreement, which is attached hereto as Exhibit 10.5 and incorporated by reference herein.
There is no other arrangement or understanding between
Management Incentive Plan
In accordance with the Plan, the Board is adopting a Management Incentive Plan
(the "MIP") effective as of the Effective Date. The MIP will be effectuated by
amending and restating the
Item 5.03 - Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On the Effective Date, in accordance with the Plan, Denbury filed the Third
Restated Certificate of Incorporation (the "Certificate of Incorporation") with
the
Pursuant to the Certificate of Incorporation, the authorized capital stock of
Denbury consists of 250,000,000 shares of New Common Stock and 50,000,000 shares
of preferred stock, par value
Each holder of shares of New Common Stock, as such, shall be entitled to one vote for each share of New Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. Except as otherwise required by law or provided in the Certificate of Incorporation, at any annual or special meeting of stockholders, the New Common Stock shall have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders.
Subject to the rights of any then-outstanding shares of preferred stock, the holders of New Common Stock may receive such dividends as the Board may declare in its discretion out of legally available funds at any regular or special meeting. Holders of New Common Stock will share equally in Denbury's assets upon liquidation after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding. Shares of New Common Stock are not subject to any redemption provisions and are not convertible into any of Denbury's other securities.
Preferred Stock
Shares of preferred stock may be issued in one or more series from time to time, with each such series to consist of such number of shares and to have such powers, designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, if any, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the Board.
It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of Denbury's common stock until the Board determines the specific rights of the holders of the preferred stock. However, these effects might include:
• restricting dividends on the common stock;
• diluting the voting power of the common stock;
• impairing the liquidation rights of the common stock; and
• delaying or preventing a change in control of Denbury.
Anti-Takeover Provisions
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Some provisions of
Business Combinations under Delaware Law
Denbury is not governed by Section 203 of the Delaware General Corporation Law (the "DGCL").
Number and Election of Directors
The Board shall consist of not less than three nor more than fifteen members, the exact number of which shall be determined from time to time by resolution adopted by a majority of the Board.
Calling of Special Meeting of Stockholders
The Bylaws provide that special meetings of stockholders may be called only by (i) a majority of the Board or (ii) the secretary of Denbury upon the delivery of a written request to Denbury by the holders who own at least 25% of the aggregate voting power of the then issued and outstanding shares of capital stock of Denbury.
Amendments to the Bylaws
The Bylaws may be altered, amended or repealed or new bylaws may be adopted (i) by action of the majority of the Board or (ii) without action of the Board, (x) at a duly called meeting of the stockholders by the affirmative vote of the holders of a majority of Shares having voting power present in person or represented by proxy at such meeting at which a quorum is present, or (y) by written consent of stockholders holding not less than a majority of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors.
Other Limitations on Stockholder Actions
Advance notice is required for stockholders to nominate directors or to submit proposals for consideration at meetings of stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to the corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice of stockholder proposals relating to an annual meeting must be received at the principal executive offices not less than 90 days nor more than 120 days prior to the date of the one-year anniversary of the immediately preceding annual meeting of stockholders. The Bylaws specify in detail the requirements as to form and content of all stockholder notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting. The Bylaws also describe certain criteria for when stockholder-requested meetings need not be held.
Directors may be removed from office at any time by the affirmative vote of holders of at least a majority of the outstanding shares of capital stock entitled generally to vote in the election of directors.
Newly Created Directorships and Vacancies on the Board
Under the Bylaws, any newly created directorships resulting from any vacancies
on the
No Cumulative Voting
The Certificate of Incorporation provides that there will be no cumulative voting in the election of directors.
Authorized but Unissued Shares
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Under
The Certificate of Incorporation provides that, unless Denbury consents in
writing to the selection of an alternative forum, the
Item 7.01 - Regulation FD Disclosure
On the Effective Date, the Company issued a press release on
The information contained in this Item 7.01, including in Exhibit 99.2, shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
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Item 9.01 - Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are filed in accordance with the provisions of Item 601 of Regulation S-K: Exhibit Number Description 2.1 Joint Chapter 11 Plan of Reorganization ofDenbury Resources Inc. and its Debtor Affiliates (Technical Modifications) (incorporated by reference to Exhibit A of the Order Approving the Debtors' Disclosure Statement For, and Confirming, the Debtors' Joint Chapter 11 Plan of Reorganization ofDenbury Resources Inc. and its Debtor Affiliates, filed as Exhibit 2.1 to Denbury's Current Report on Form 8-K filed onSeptember 4, 2020 ). 3.1* Third Restated Certificate of Incorporation ofDenbury Resources Inc. 3.2* Fourth Amended and Restated Bylaws ofDenbury Inc. 10.1* † Credit Agreement, dated as ofSeptember 18, 2020 , by and amongDenbury Inc. , as borrower, the lenders party thereto, andJPMorgan Chase Bank, N.A ., as administrative agent, swingline lender, and letter of credit issuer. 10.2* Series A Warrant Agreement, dated as ofSeptember 18, 2020 , by and betweenDenbury Inc. , andBroadridge Corporate Issuer Solutions, Inc. 10.3* Series B Warrant Agreement, dated as ofSeptember 18, 2020 , by and betweenDenbury Inc. , andBroadridge Corporate Issuer Solutions, Inc. 10.4* Registration Rights Agreement, dated as ofSeptember 18, 2020 , by and between theDenbury Inc. and the holders party thereto. 10.5* Form of Indemnification Agreement, by and betweenDenbury Inc. and its officers and directors. 99.1 Order Approving the Debtors' Disclosure Statement for, and Confirming, the Debtors' Joint Chapter 11 Plan of Reorganization ofDenbury Resources Inc. and its Debtor Affiliates (incorporated by reference to Exhibit 99.1 toDenbury Resources Inc.'s Current Report on Form 8-K filed onSeptember 4, 2020 ). 99.2* Denbury Press Release, datedSeptember 18, 2020 . 104 The cover page has been formatted in Inline XBRL. * Included herewith. † Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to theSEC upon request. 11
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