Item 1.01 Entry into a Material Definitive Agreement
On
The DIP Credit Agreement contemplates a junior convertible secured
debtor-in-possession delayed-draw term loan facility in the aggregate principal
amount of
The DIP Credit Agreement includes conditions precedent, representations and warranties, affirmative and negative covenants, and events of default customary for financings of this type and size.
The Obligations (as defined in the DIP Credit Agreement), will mature on the date which is the earliest of (i) 180 days after the Petition Date, (ii) the consummation of the Plan (as defined below), (iii) the consummation of any sale of all or substantially all of the equity or assets of the Company and Rosehill Operating pursuant to section 363 of Title 11 of the United States Code (the "Bankruptcy Code") (unless done pursuant to the Plan), (iv) the date of payment in full of the Obligations in accordance with the terms of the DIP Credit Agreement or (v) the acceleration of the Loans and the termination of the Commitments (as defined in the DIP Credit Agreement) pursuant to an event of default under the DIP Credit Agreement.
Upon the consummation of the Plan, each Holder (as defined in the DIP Credit Agreement), except to the extent that such Holder agrees to a less favorable treatment, will receive its pro rata share of (i) its allocated share under the DIP Credit Agreement of 1.69% of the common equity of the reorganized Rosehill Operating (the "New Rosehill Equity") on account of the backstop fee payable to the lenders under the DIP Credit Agreement and (ii) 24.15% of the New Rosehill Equity on account of the outstanding principal amount of Obligations under the DIP Facility.
The terms of the DIP Credit Agreement are subject to approval by the
Item 1.03 Bankruptcy or Receivership
On the Petition Date, the Company and Rosehill Operating filed voluntary
petitions with the
For more information regarding the RSA, please read the Company's Current Report
on Form 8-K filed on
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement
The Chapter 11 Cases
The commencement of the Chapter 11 Case described in Item 1.03 above constitutes an event of default under the following debt instruments (the "Debt Instruments"):
• Amended and Restated Credit Agreement, dated as ofMarch 28, 2018 , as amended, restated, supplemented or otherwise modified, among the Company, Rosehill Operating,JPMorgan Chase Bank, N.A ., as administrative agent, and the lenders party thereto.
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• Note Purchase Agreement, dated as ofDecember 8, 2017 , as amended, restated, supplemented or otherwise modified, among the Company,Rosehill Ope rating andU.S. Bank National Association , as agent, and the Holders from time to time party thereto.
As a result of the filing of the Chapter 11 Cases, all commitments under the Debt Instruments automatically terminated and all obligations of Rosehill Operating under the Debt Instruments became immediately due and payable.
Additionally, the consummation of the Plan will constitute a change of control under the Certificate of Designations (the "Series B Certificate of Designation") for the Company's 10.000% Series B Redeemable Preferred Stock (the "Series B Preferred Stock"). As a result, the Company would be required to redeem in cash all of the outstanding shares of Series B Preferred Stock upon the consummation of the Plan.
Any efforts to enforce such payment obligations under the Debt Instruments or the Series B Certificate of Designation are automatically stayed as a result of the Chapter 11 Cases, and the creditors' rights of enforcement in respect of the Debt Instruments and the Series B Certificate of Designation are subject to the applicable provisions of the Bankruptcy Code.
DIP Facility
The information set forth above in Item 1.01 of this Form 8-K is incorporated herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
In connection with the Plan and the Chapter 11 Cases, on
Promptly following the termination of the listing of the
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, the Company's executive officers, including named
executive officers
In connection with the Chapter 11 Cases and pursuant to the terms of the Plan,
unless otherwise agreed to between the applicable executive, the Company and the
Required Secured Noteholders (as defined in the RSA), each of Messrs. French and
Owen's employment with Rosehill Operating will be terminated effective as of the
date that the Plan becomes effective (the "Effective Date") and the Executive
Employment Agreements and the Performance Awards will be rejected as of the
Effective Date. In exchange for the rejection of such agreements, each of
Messrs. French and Owen will receive payments consisting of the following: (1)
12 months' base salary; (2) 12 months' COBRA premiums; (3) an amount equal to
the remaining payments under the Performance Awards assuming target achievement
of applicable performance goals for each remaining quarter, (4) a
to-be-determined portion of
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Furthermore, to the extent requested by the reorganized Company in connection with emergence from the Chapter 11 Cases, each of Messrs. French and Owen have agreed to enter into consulting agreements to assist with transition efforts following such emergence.
Item 7.01 Regulation FD. Press Release
On
Additional Information on the Chapter 11 Cases
Court filings and information about the Chapter 11 Cases can be found at a website maintained by the Company's claim agent, Epiq, at https://dm.epiq11.com/rosehill, or by calling 1-866-897-6433 (Domestic) or 1-646-282-2500 (International).
The information included in this Form 8-K under Item 7.01 and Exhibit 99.2 attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that Section, unless the registrant specifically states that the information is to be considered "filed" under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.
Item 8.01 Other Events.
Cautionary Note Regarding the Company's
The Company cautions that trading in its securities during the pendency of the
Chapter 11 Cases is highly speculative and poses substantial risks. The
Company's Class A Common Stock, Class A Common Stock Public Warrants, and Class
A Common Stock Public Units are expected to be delisted from Nasdaq on or about
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Exhibit No. Description Form of Junior Convertible Secured Debtor-In-Possession Credit 10.1 Agreement (Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Exchange Act of 1934, as amended) Disclosure Statement for Joint Prepackaged Chapter 11 Plan of 99.1 Reorganization ofRosehill Resources Inc. , et al. (including the Plan) 99.2 Press release, datedJuly 27, 2020 , issued by the Company
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