Item 1.01 Entry into a Material Definitive Agreement.
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As set forth in the RSA, including in the exhibits attached thereto (the "Exhibits"), the parties to the RSA have agreed to the principal terms of a proposed financial restructuring (the "Transaction") of the Company. The Transaction is contemplated to be implemented through a joint prepackaged chapter 11 plan of reorganization (the "Plan") to be implemented through voluntary cases (the "Cases") to be commenced by the Company under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). Capitalized terms used herein but not defined have the meaning given to such terms in the RSA.
The RSA and the Exhibits provide, among other things, as follows:
· DIP Facility and Cash Collateral. The Cases shall be funded with cash-on-hand
and a new junior priority debtor-in-possession credit facility (the "DIP
Facility"), with
agent, and the Consenting Term Lenders, having a principal amount of
million, subject to increase by a maximum of
certain case extension draws permitted thereunder.
· Exit Facilities. On the effective date of the Plan, the
shall enter into the following exit facilities:
(a) Exit RBL Facility:
Facility that elects to participate in the Exit RBL Facility shall enter into a new reserve-based revolving credit facility (the "Exit RBL Facility") having a borrowing base of$107.5 million (inclusive of a$20.0 million letter of credit subfacility) minus the Initial Third Out Term Loan Amount (as defined below);
(b)
participate in the Exit RBL Facility shall enter into a new first lien second out term loan facility (the "Exit Second Out Term Loan Facility") having a principal amount of$30.0 million ; and
(c)
not to participate in the Exit RBL Facility or otherwise votes to reject the Plan or abstains from voting on the Plan (each such lender, a "Non-Participating RBL Lender"), if any, shall be deemed to enter into a new first lien third out term loan facility (the "Exit Third Out Term Loan Facility") having a principal amount equal to the amount allowed RBL Claims (as defined below) held by Non-Participating RBL Lenders (the "Initial Third Out Term Loan Amount").
· Distributions to Holders of Claims and Equity Interests. The Plan shall provide
for the following distributions to holders of claims and equity interests:
(a) All allowed administrative expense claims, priority tax claims, other
priority claims, and other secured claims shall be paid in full (or will receive such other treatment rendering such claims unimpaired).
(b) DIP Facility Claims: On the effective date of the Plan, each holder of an
allowed claim under the DIP Facility shall receive its pro rata share of 38.0338% of the shares of common stock of the reorganized Parent authorized to be issued pursuant to the Plan and the new or amended organizational documents of the reorganized Parent (the "New Common Equity Interests") issued on the effective date of the Plan, prior to dilution by the MIP Equity (as defined below) (the "New Common Equity Interests DIP Pool "); provided that in the discretion of the Required Consenting Term Lenders, theNew Common Equity Interests DIP Pool shall be increased to include equity to be issued in exchange for Case Extension Loans (if any) (as defined in the DIP Facility loan documents), which will be subject to dilution by the MIP Equity.
(c) RBL Claims: On the effective date of the Plan, with respect to the holders of
claims under the RBL Facility (the "RBL Claims"):
(i) each holder of an allowed RBL Claim that votes to accept the Plan that is not
otherwise a Non-Participating RBL Lender shall receive: (1) its pro rata share (determined in accordance with the Plan) of the loans under the Exit RBL Facility; (2) its pro rata share (determined in accordance with the Plan) of the loans under the Exit Second Out Term Loan Facility; and (3) its pro rata share (determined in accordance with the Plan) of an amount equal to the payment in full in cash of the portion of allowed RBL Claims equal to the difference between (x) the amount of allowed RBL Claims minus (y)$122.5 million (the "Cash Paydown").
(ii) each Non-Participating RBL Lender shall receive: (1) loans under the Exit
Third Out Term Loan Facility in a principal amount equal to the amount of such holder's allowed RBL Claim, minus the amount of Cash Paydown received by such holder; and (2) its pro rata share (determined in accordance with the Plan) of the Cash Paydown.
(d) Term Loan Claims: On the effective date of the Plan, each holder of an . . .
Item 1.03 Bankruptcy or Receivership.
On
The Company also filed with the
The Cases were filed in order to effectuate the Company's Plan. Copies of the Plan and further information about the Cases can be found at https://cases.primeclerk.com/sundanceenergy.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Cases described above in Item 1.03 constitutes an event of default under the following debt instruments (the "Debt Instruments"). Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the filing of the Petitions and the holders' rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.
· Credit Agreement, dated
Energy, Inc. , as borrower, the guarantors party thereto from time to time,Toronto Dominion (Texas) LLC , as successor administrative agent to Natixis,New York Branch, and the lenders party thereto from time to time (as amended, restated, supplemented, replaced or otherwise modified from time to time).
· Credit Agreement, dated as of
Energy, Inc. , as borrower, the guarantors party thereto from time to time,Morgan Stanley Capital Administrators Inc. , in its capacity as administrative agent, and the lenders party thereto from time to time (as amended, supplemented or otherwise modified from time to time). Item 7.01 Regulation FD.
On
This information contained in this Item 7.01, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Act of 1934, as amended (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 Parent's filing 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.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Such statements reflect management's current expectations based on
currently available information, but are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from those
anticipated in or implied by the forward-looking statements. These
forward-looking statements are identified by the use of the words "project,"
"believe," "estimate," "expect," "anticipate," "intend," "contemplate,"
"foresee," "would," or other similar words. Risks, uncertainties and assumptions
that could affect our forward-looking statements include, among other things the
risk related to the impact of the COVID-19 pandemic in geographic regions or
markets served by us, or where our operations are located, including the risk of
global recession and the other risk factors that have been listed from time to
time in the Parent's
You should also understand that it is not possible to predict or identify all
such factors and should not consider the risk factors in our reports filed with
the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description
10.1 Restructuring Support Agreement, datedMarch 9, 2021 by and among the Parent, each direct and indirect subsidiary of the Parent, the administrative agent under the RBL Facility, the Consenting RBL Lenders, the administrative agent under the Term Loan Facility, and the Consenting Term Lenders. 99.1 Press Release, datedMarch 9, 2021 . 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
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