Item 1.01 Entry into a Material Definitive Agreement.
Fourth Amendment to Revolving Credit Facility
On January 13, 2020, Sundance Energy, Inc. ("SEINC"), a wholly owned subsidiary
of Sundance Energy Inc., a Delaware corporation and parent company of the
Sundance group of companies (the "Company"), entered into an amendment to its
credit agreement, dated as of April 23, 2018 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
pursuant to the Fourth Amendment to Credit Agreement (the "Fourth Amendment"),
by and among SEINC, as borrower, the Company, as parent guarantor, SEA Eagle
Ford, LLC and Armadillo E&P, Inc., as subsidiary guarantors, the lenders party
thereto (the "Lenders"), KeyBank National Association, Toronto Dominion (Texas)
LLC, as administrative agent ("TD"), Natixis, New York branch, in its individual
capacity and Bank of America N.A., providing for the Company's revolving credit
facility ("Revolving Facility"). The Fourth Amendment implements certain
changes in the Revolving Facility in connection with the Company's recently
completed redomiciliation (the "Redomiciliation"), and to effect the appointment
of TD as the new administrative agent for the Lenders under the Revolving
Facility.
In addition, the Fourth Amendment provides for, among other things, (i) an
increased Borrowing Base (as defined in the Credit Agreement) of $210 million,
(ii) an increase in the maximum credit amount of $500 million, (iii) elected
borrowing commitments of up to $190 million, (iv) the incurrence of unlimited
unsecured subordinated indebtedness (subject to certain conditions, including no
event of default and pro forma covenant compliance), provided that the Borrowing
Base will automatically be reduced by 25% of the aggregate stated amount of such
unsecured subordinated indebtedness, (v) interim Borrowing Base adjustments
following the acquisition of oil and gas properties having a purchase price of
5% of the existing Borrowing Base or $10 million, whichever is greater, (vi) a
revised leverage ratio of 3.5 to 1.0, and a revised minimum interest rate
coverage ratio of 1.5 to 1.0 (for such time as there a similar covenant under
the Company's or SEINC's subordinated indebtedness), (vii) amendments to the
maximum permitted hedging to 85% of proved reserves for a rolling 24 month
period, and 75% for months 25-60, (viii) an amendment to the definition of
"Change of Control", such that a Change of Control may occur when, among other
situations, any person (or group) acquires 35% or more of the Company's voting
securities, or upon the occurrence of a change of control in respect of any
indebtedness under which there is an aggregate of $25 million or more
outstanding, and (ix) a change in the applicable accounting standard in the
Credit Agreement from IFRS to U.S. GAAP.
In connection with the Fourth Amendment, the Company also became party to the
Intercreditor Agreement, dated as of April 23, 2018, among SEINC, the grantors
party thereto, TD and Morgan Stanley Capital Administrators Inc. (f/k/a Morgan
Stanley Energy Capital Inc.), as administrative agent under the Company's Term
Loan Facility (as defined below).
The forgoing summary of the Fourth Amendment is qualified in its entirety by
reference to the full text of such amendment, a copy of which is attached as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by
reference.
Second Amendment to Amended and Restated Term Loan Credit Facility
On January 13, 2020, SEINC entered into an amendment to its amended and restated
credit agreement, dated as of April 23, 2018 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Amended and Restated
Credit Agreement"), pursuant to the Second Amendment to Amended and Restated
Credit Agreement (the "Second Amendment"), by and among SEINC, as borrower, the
Company, as parent guarantor, SEA Eagle Ford, LLC and Armadillo E&P, Inc., as
subsidiary guarantors, the lenders party thereto and Morgan Stanley Capital
Administrators Inc. (f/k/a Morgan Stanley Energy Capital Inc.), providing for
the Company's term loan credit facility ("Term Loan Facility"). The Second
Amendment implements certain changes in the Term Loan Facility in connection
with the Redomiciliation, including changes in the applicable accounting
standard in the Amended and Restated Credit Agreement from IFRS to U.S. GAAP,
and also incorporates customary LIBOR replacement provisions.
2
--------------------------------------------------------------------------------
The forgoing summary of the Second Amendment is qualified in its entirety by
reference to the full text of such amendment, a copy of which is attached as
Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference to this Item 2.03.
Item 7.01 Regulation FD Disclosure.
On January 14, 2020, the Company issued a press release announcing, among other
things, the entry into the Fourth Amendment. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated by reference into this
Item 7.01.
The information furnished in this Item 7.01 shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, regardless of any general incorporation language in such
filing, except as shall be expressly set forth by specific reference in such
filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
10.1 Fourth Amendment to Credit Agreement, dated as of January 13,
2020, among Sundance Energy, Inc, as borrower, Sundance Energy Inc.,
as parent guarantor, SEA Eagle Ford, LLC and Armadillo E&P, Inc., as
subsidiary guarantors, the lenders party thereto, KeyBank National
Association, Toronto Dominion (Texas) LLC, as administrative agent,
Natixis, New York branch, in its own capacity and Bank of America
N.A.
10.2 Second Amendment to Amended and Restated Term Loan Credit
Agreement, dated as of January 13, 2020, among Sundance Energy, Inc.,
as borrower, Sundance Energy Inc., as parent guarantor, SEA Eagle
Ford, LLC and Armadillo E&P, Inc., as subsidiary guarantors, the
lenders party thereto, and Morgan Stanley Capital Administrators Inc.
(f/k/a Morgan Stanley Energy Capital Inc.), as administrative agent
99.1 Press release of Sundance Energy Inc., dated January 14, 2020
3
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses