UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 14, 2018
Legacy Reserves LP
(Exact name of registrant as specified in its charter)
| Delaware | 1-33249 | 16-1751069 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 303 W. Wall, Suite 1800 Midland, Texas |
79701 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (432) 689-5200
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 14, 2018, Legacy Reserves LP (“Legacy”) entered into the Tenth Amendment (the “Credit Agreement Amendment”) to the Third Amended and Restated Credit Agreement, dated as of April 1, 2014 among Legacy, the guarantors named therein, Wells Fargo Bank, National Association, as administrative agent and the lenders signatory thereto (the “Credit Agreement”) and entered into the Fifth Amendment (the “Term Loan Amendment”) to the Term Loan Credit Agreement, dated as of October 30, 2017, among Legacy, the guarantors named therein, Cortland Capital Market Services LLC, as administrative agent, and the lenders party thereto (the “Term Loan Credit Agreement”).
The Credit Agreement Amendment and the Term Loan Amendment amend certain provisions set forth in the Credit Agreement and the Term Loan Amendment, respectively, to, among other items, permit the issuance and terms of the New Notes (as defined below) and provide that the New Notes constitute debt that is permitted refinancing debt.
The foregoing descriptions of the Credit Agreement Amendment and the Term Loan Amendment do not purport to be complete and are qualified in their entirety by reference to the Tenth Amendment and the Fifth Amendment, which are filed as Exhibit 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information in Item 8.01 is incorporated into this Item 3.02.
| Item 8.01 | Other Events. |
On September 14, 2018, Legacy, Legacy Reserves Finance Corporation (together with Legacy, the “Issuers”) and Legacy Reserves Inc. (“New Legacy”) entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of the Issuers’ 8.000% Senior Notes due 2020 (the “2020 Senior Notes”) and 6.625% Senior Notes due 2021 (the “2021 Senior Notes”), pursuant to which the Issuers will exchange (i) $21.004 million aggregate principal amount of the 2020 Senior Notes for $21.004 million aggregate principal amount of the Issuers’ new 8% Convertible Senior Notes due 2023 (the “New Notes”) and 105,020 shares (the “Exchange Shares”) of common stock, par value $0.01, of New Legacy (“Common Stock”) and (ii) $109 million aggregate principal amount of the 2021 Senior Notes for $109 million aggregate principal amount of New Notes (collectively, the “Exchange Transactions”). The Exchange Transaction is being conducted in private placements in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.
Legacy expects that the Exchange Transaction will close on September 20, 2018. The closing of the Exchange Transaction is subject to certain closing conditions, including the closing of the corporate reorganization pursuant to which Legacy will become a wholly owned subsidiary of New Legacy. The issuance of the Exchange Shares is subject to the receipt of any required consents under the Credit Agreement and the Term Loan Credit Agreement.
The New Notes will be convertible into shares of Common Stock at an initial conversion rate of 166.6667 shares per $1,000 principal amount of New Notes, which is equal to an initial conversion price of $6.00 per share of Common Stock. The New Notes may be converted in whole or in part prior to maturity, at the option of the holder.
The New Notes will be convertible, at the option of the holders, into shares of Common Stock at any time from the date of issuance up until the close of business on the earlier of (i) the business day prior to the date of a mandatory conversion notice, (ii) with respect to a New Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, assuming the Exchange Transaction closes on September 20, 2018, if a holder exercises its right to convert on or prior to September 19, 2019, such holder will receive an early conversion payment, in cash, as follows:
| Early Conversion Date |
Early Conversion Payment | |||
| September 20, 2018 through November 30, 2018 |
$ | 80.00 | ||
| December 1, 2018 through May 31, 2019 |
$ | 64.22 | ||
| June 1, 2019 through September 19, 2019 |
$ | 24.22 | ||
Subject to compliance with certain conditions, the Issuers have the right to mandatorily convert all of the New Notes if the volume weighted average price of the Common Stock equals or exceeds the conversion price for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days commencing on or after the initial issuance date.
The New Notes will be guaranteed by New Legacy, Legacy Reserves GP, LLC, the general partner of Legacy, and certain subsidiaries of Legacy.
In connection with the Exchange Transaction, the Issuers and New Legacy have agreed to provide certain registration rights, with respect to the New Notes and Exchange Shares received in the Exchange Transaction, to GSO Capital Partners LP.
On September 14, 2018, Legacy issued a press release announcing the Exchange Transaction, a copy of which is filed as Exhibit 99.1 and incorporated herein by reference.
Additional Information for Holders of Legacy Units and Where to Find It
This press release relates to the proposed corporate reorganization between Legacy and New Legacy (the “Transaction”). In connection with the Transaction, New Legacy has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (“Registration Statement”), which includes a preliminary proxy statement of Legacy and a preliminary prospectus of New Legacy (the “proxy statement/prospectus”). The Registration Statement was declared effective by the SEC on August 3, 2018 and Legacy commenced mailing the proxy statement to its unitholders on or about August 3, 2018.
INVESTORS AND UNITHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LEGACY AND NEW LEGACY, AS WELL AS THE PROPOSED TRANSACTION AND RELATED MATTERS.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection with the Transaction shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
A free copy of the proxy statement/prospectus and other filings containing information about Legacy and New Legacy may be obtained at the SEC’s Internet site at www.sec.gov. In addition, the documents filed with the SEC by Legacy and New Legacy may be obtained free of charge by directing such request to: Legacy Reserves LP, Attention: Investor Relations, at 303 W. Wall, Suite 1800, Midland, Texas 79701 or emailing IR@legacylp.com or calling 855-534-5200. These documents may also be obtained for free from Legacy’s investor relations website at https://www.legacylp.com/investor-relations.
Legacy and its general partner’s directors, executive officers, other members of management and employees may be deemed to be participants in the solicitation of proxies from Legacy’s unitholders in respect of the Transaction described in the proxy statement/prospectus. Information regarding the directors and executive officers of Legacy’s general partner is contained in Legacy’s public filings with the SEC, including its definitive proxy statement on Form DEF 14A filed with the SEC on April 6, 2018.
A more complete description is available in the registration statement and the proxy statement/prospectus.
Cautionary Statement Relevant to Forward-Looking Information
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the expected closing of the Exchange Transaction, the expected benefits of the Transaction to Legacy and its unitholders, final court approval of the Stipulation and Agreement of Settlement dated as of July 6, 2018, the anticipated completion of the Transaction or the timing thereof, the expected future growth, dividends, distributions of the reorganized company, and plans and objectives of management for future operations.
All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Legacy expects, believes or anticipates will or may occur in the future, are forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimated,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the control of Legacy, which could cause results to differ materially from those expected by management of Legacy. Such risks and uncertainties include, but are not limited to, realized oil and natural gas prices; production volumes, lease operating expenses, general and administrative costs and finding and development costs; future operating results; and the factors set forth under the heading “Risk Factors” in Legacy’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Legacy undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LEGACY RESERVES LP | ||||||||
| By: | Legacy Reserves GP, LLC, | |||||||
| its general partner | ||||||||
| Dated: September 14, 2018 | By: | /s/ James Daniel Westcott | ||||||
| Name: | James Daniel Westcott | |||||||
| Title: | President and Chief Financial Officer | |||||||
Exhibit 10.1
Execution Version
TENTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
LEGACY RESERVES LP,
as Borrower,
THE GUARANTORS,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
and
THE LENDERS SIGNATORY HERETO
DATED AS OF SEPTEMBER 14, 2018
Sole Lead Arranger and Sole Book Runner
Wells Fargo Securities, LLC
Syndication Agent
Compass Bank
Co-Documentation Agents
UBS Securities LLC
and
U.S. Bank National Association
TENTH AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Tenth Amendment”) dated as of September 14, 2018, among LEGACY RESERVES LP, a limited partnership duly formed under the laws of the State of Delaware (the “Borrower”); each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”); WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”); and the Lenders signatory hereto.
Recitals
A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Third Amended and Restated Credit Agreement dated as of April 1, 2014 (as amended by the First Amendment to Third Amended and Restated Credit Agreement dated as of April 17, 2014, that certain Second Amendment to Third Amended and Restated Credit Agreement dated as of May 22, 2014, that certain Third Amendment to Third Amended and Restated Credit Agreement dated as of December 29, 2014, that certain Fourth Amendment to Third Amended and Restated Credit Agreement dated as of February 23, 2015, that certain Fifth Amendment to Third Amended and Restated Credit Agreement dated as of August 5, 2015, that certain Sixth Amendment to Third Amended and Restated Credit Agreement dated as of November 13, 2015, that certain Seventh Amendment to Third Amended and Restated Credit Agreement dated as of February 19, 2016, that certain Eighth Amendment to Third Amended and Restated Credit Agreement dated as of October 25, 2016 and that certain Ninth Amendment to Third Amended and Restated Credit Agreement dated as of March 23, 2018 (as so amended prior to the date hereof, the “Existing Credit Agreement”, and the Existing Credit Agreement, as amended by this Tenth Amendment, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.
B. The Guarantors are parties to that certain Third Amended and Restated Guaranty Agreement dated as of April 1, 2014 made by each of the Guarantors (as defined therein) in favor of the Administrative Agent (the “Guaranty”).
C. The Borrower, the Guarantors, the Administrative Agent and the Lenders have agreed to amend certain provisions of the Existing Credit Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Tenth Amendment, shall have the meaning ascribed such term in the Credit Agreement. Unless otherwise indicated, all article, section and exhibit references in this Tenth Amendment refer to articles, sections and exhibits of the Credit Agreement.
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Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The following definitions are hereby amended and restated in their entirety to read as follows:
“Agreement” means this Third Amended and Restated Credit Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth Amendment and the Tenth Amendment, as the same may from time to time be amended, modified, supplemented or restated.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest (other than, prior to conversion into common Equity Interests, the Convertible Senior Notes).
“Redemption” means with respect to any Debt (including, without limitation, the Convertible Senior Notes), the repurchase, redemption, prepayment, repayment or defeasance or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of any such Debt, but excluding, for the avoidance of doubt, the cashless conversion of the Convertible Senior Notes into common Equity Interests in accordance with the terms of the Senior Indenture governing the Convertible Senior Notes. For the avoidance of doubt, the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Redemption of the Convertible Senior Notes. “Redeem” has the correlative meaning thereto.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, Redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or such Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or such Subsidiary. For the avoidance of doubt, (i) any payment on Equity Interests (including any payment on Debt that exists due to conversion or exchange of any Equity Interests into Debt) in connection with an asset sale, change of control or any redemption requirements pursuant to the terms of such Equity Interest shall constitute a Restricted Payment, (ii) any Permitted Convertible Note Cash Payment shall not constitute a Restricted Payment, (iii) the cashless conversion pursuant to its terms of any Convertible
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Senior Note into common Equity Interests shall not constitute a Restricted Payment and (iv) the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Restricted Payment.
“Senior Indentures” means, collectively or individually, as the context requires, any indenture or other agreement pursuant to which (i) any Senior Notes are issued and (ii) any Permitted Refinancing Debt with respect to any Senior Notes, including the Convertible Senior Notes, are issued, in each case, as the same may be amended, restated or supplemented, subject to the terms of Section 9.04(c).
(b) The following definitions are hereby added where alphabetically appropriate to read as follows:
“Convertible Senior Notes” means the Borrower’s 8.00% Convertible Senior Notes due 2023 and any Permitted Refinancing Debt in respect thereof.
“Permitted Convertible Note Cash Payments” means (a) any payment in cash of a conversion incentive in an amount not to exceed one year’s interest that would otherwise be payable pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the early cashless conversion of such Convertible Senior Notes into common Equity Interests and (b) any cash payment in lieu of the issuance of fractional shares pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the cashless conversion of the Convertible Senior Notes into common Equity Interests.
“Tenth Amendment” means that certain Tenth Amendment to Third Amended and Restated Credit Agreement, dated as of September 14, 2018, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
(c) The definition of “Permitted Refinancing Debt” is hereby amended by adding the following sentence at the end thereof: “For the avoidance of doubt, the Convertible Senior Notes constitute Debt that is Permitted Refinancing Debt in respect of a portion of the Borrower’s 8.00% Senior Notes due 2020 and a portion of the Borrower’s 6.625% Senior Notes due 2021.”.
2.2 Amendment to Section 9.04(b). Section 9.04(b) is hereby amended by adding a new clause (iii) at the end thereof:
(iii) Notwithstanding anything to the contrary contained herein, the Borrower will not, and will not permit any Subsidiary to, elect to settle in cash, or settle in cash, all or any portion of the Borrower’s conversion obligations under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior
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Indenture governing the Convertible Senior Notes or otherwise); provided that the Borrower may make Permitted Convertible Note Cash Payments. The Borrower will not permit any Convertible Senior Note to contain any term that requires the cash settlement of all or any portion of the Borrower’s conversion obligations thereunder (other than terms permitting the Permitted Convertible Note Cash Payments).
2.3 Amendment to Section 9.04(c). Section 9.04(c) is hereby amended by adding the following sentence at the end thereof: “Notwithstanding anything to the contrary set forth herein, this Section 9.04(c) shall not prohibit the issuance of Convertible Senior Notes as Permitted Refinancing Debt with respect to the Borrower’s 8.00% Senior Notes due 2020 or 6.625% Senior Notes due 2021 solely because the stated interest rate of the Convertible Senior Notes is greater than 6.625% per annum (so long as such interest rate does not exceed 10.00% per annum).”.
Section 3. Conditions Precedent. This Tenth Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (the “Tenth Amendment Effective Date”):
3.1 The Administrative Agent shall have received from the Majority Lenders, the Borrower and the Guarantors, counterparts (in such number as may be requested by the Administrative Agent) of this Tenth Amendment signed on behalf of such Person.
3.2 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.5) of a Responsible Officer of the Borrower certifying that attached thereto is a true, correct and complete copy of the Fifth Amendment to the Second Lien Credit Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, and shall in any event amend the Second Lien Credit Agreement in the same manner as the Credit Agreement is to be amended by this Tenth Amendment (the “Second Lien Amendment”). The “Fifth Amendment Effective Date” under and as defined in the Second Lien Credit Agreement shall have occurred (or shall occur substantially concurrently with the Tenth Amendment Effective Date).
3.3 The Ninth Amendment Effective Date shall have occurred.
3.4 The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable pursuant to the Credit Agreement on or prior to the Tenth Amendment Effective Date, including (a) fees and expenses invoiced by Paul Hastings LLP prior to the Tenth Amendment Effective Date and (b) an amendment fee payable to the Administrative Agent, for the account of each Lender that has executed this Tenth Amendment (each such Lender, a “Consenting Lender”), in an amount equal to the product of such Consenting Lender’s Commitment on the Tenth Amendment Effective Date multiplied by 0.05%.
3.5 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.2) of a Responsible Officer of the Borrower certifying (a) that the Borrower has consummated (or substantially concurrently with the Tenth Amendment Effective Date, will consummate) the exchange of a portion of its 8.00% Senior Notes due 2020 and a portion of its 6.625% Senior Notes due 2021 for the Convertible Senior Notes, (b) that
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attached thereto is a true and complete copy of the Senior Indentures (or amendment to existing Senior Indentures) with respect to such Convertible Senior Notes and (c) as to the aggregate principal amount of such Convertible Senior Notes issued.
3.6 No Default shall have occurred and be continuing as of the Tenth Amendment Effective Date.
3.7 The Administrative Agent shall have received such other documents as the Administrative Agent or its counsel may reasonably require.
The Administrative Agent is hereby authorized and directed to declare this Tenth Amendment to be effective and to declare the occurrence of the Tenth Amendment Effective Date when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted in Section 12.02 of the Credit Agreement. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 4. Miscellaneous.
4.1 Confirmation. The provisions of the Credit Agreement, as amended by this Tenth Amendment, shall remain in full force and effect following the effectiveness of this Tenth Amendment.
4.2 Ratification and Affirmation; Representations and Warranties. Each Obligor hereby (a) acknowledges the terms of this Tenth Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby; (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Tenth Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect; and (d) agrees that from and after the Tenth Amendment Effective Date each reference to the Credit Agreement in the other Loan Documents shall be deemed to be a reference to the Credit Agreement, as amended by this Tenth Amendment.
4.3 Counterparts. This Tenth Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Tenth Amendment by telecopy, facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart hereof.
4.4 No Oral Agreement. This Tenth Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties. There are no subsequent oral agreements between the parties.
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4.5 GOVERNING LAW. THIS TENTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
4.6 Payment of Expenses. In accordance with Section 12.03 of the Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and reasonable expenses incurred in connection with this Tenth Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
4.7 Severability. Any provision of this Tenth Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
4.8 Successors and Assigns. This Tenth Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
4.9 Loan Document. This Tenth Amendment is a “Loan Document” as defined and described in the Credit Agreement, and all of the terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto.
4.10 RELEASE. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BORROWER AND EACH OTHER OBLIGOR HEREBY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, RELEASES AND FOREVER DISCHARGES EACH LENDER, EACH AGENT, THE ARRANGER, THE ISSUING BANK, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, TRUSTEES, ATTORNEYS, AGENTS, ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS AND EXPERTS) AND AFFILIATES (COLLECTIVELY THE “RELEASED PARTIES” AND INDIVIDUALLY A “RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS, DEBTS, LIABILITIES, COSTS, DAMAGES, EXPENSES OR OTHER OBLIGATIONS OF ANY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), FOR OR BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO BE DONE, OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON OR PRIOR TO THE DATE HEREOF AND ARE IN ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO
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ANY OF THIS TENTH AMENDMENT, THE CREDIT AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (COLLECTIVELY, THE “RELEASED MATTERS”). THE BORROWER AND EACH OTHER OBLIGOR, BY EXECUTION HEREOF, HEREBY ACKNOWLEDGES AND AGREES THAT THE AGREEMENTS IN THIS SECTION 5.10 ARE INTENDED TO COVER AND BE IN FULL SATISFACTION FOR ALL OR ANY ALLEGED INJURIES OR DAMAGES ARISING IN CONNECTION WITH THE RELEASED MATTERS.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Tenth Amendment to be duly executed as of the date first written above.
| BORROWER: | LEGACY RESERVES LP | |||||
| By: | Legacy Reserves GP, LLC, | |||||
| its general partner | ||||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| GUARANTORS: | LEGACY RESERVES OPERATING LP | |||||
| By: | Legacy Reserves Operating GP LLC, its general partner | |||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| LEGACY RESERVES OPERATING GP LLC | ||||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| LEGACY RESERVES SERVICES, INC. | ||
| DEW GATHERING LLC | ||
| PINNACLE GAS TREATING LLC | ||
| LEGACY RESERVES ENERGY SERVICES LLC | ||
| LEGACY RESERVES GP, LLC | ||
| LEGACY RESERVES INC. | ||
| By: | /s/ James Daniel Westcott | |
| James Daniel Westcott | ||
| President and Chief Financial Officer | ||
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| ADMINISTRATIVE AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and a Lender | |||||
| By: | /s/ Brett Steele | |||||
| Name: | Brett Steele | |||||
| Title: | Director | |||||
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| LENDERS: | COMPASS BANK | |||||
| By: | /s/ Rachel Festervand | |||||
| Name: Rachel Festervand | ||||||
| Title: Sr. Vice President | ||||||
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| BANC OF AMERICA CREDIT PRODUCTS INC. | ||
| By: | /s/ Margaret Sang | |
| Name: | Margaret Sang | |
| Title: | Vice President |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| ROYAL BANK OF CANADA | ||
| By: | /s/ Jay T. Sartain | |
| Name: | Jay T. Sartain | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| THE BANK OF NOVA SCOTIA | ||
| By: | /s/ Terry Donovan | |
| Name: | Terry Donovan | |
| Title: | Managing Director |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| KEYBANK NATIONAL ASSOCIATION | ||
| By: | /s/ Quinn Kelly | |
| Name: | Quinn Kelly | |
| Title: | Vice President |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| JPMORGAN CHASE BANK, N.A. | ||
| By: | /s/ William Lafore | |
| Name: | William Lafore | |
| Title: | Authorized Officer |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| BMO HARRIS FINANCING, INC. | ||
| By: | /s/ Melissa Guzman | |
| Name: | Melissa Guzman | |
| Title: | Director |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| BARCLAYS BANK PLC | ||
| By: | /s/ Jake Lam | |
| Name: | Jake Lam | |
| Title: | Assistant Vice President |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK | ||
| By: | /s/ Michael Willis | |
| Name: | Michael Willis | |
| Title: | Managing Director |
| By: | /s/ Darrell Stanley | |
| Name: | Darrell Stanley | |
| Title: | Managing Director |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| CITIBANK, N.A. | ||
| By: | /s/ Cliff Vaz | |
| Name: | Cliff Vaz | |
| Title: | Vice President |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| SOCIETE GENERALE | ||
| By: | /s/ Elena Robeivc | |
| Name: | Elena Robeivc | |
| Title: | Managing Director |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| WEST TEXAS NATIONAL BANK | ||
| By: | /s/ Mark D. McKinney | |
| Name: | Mark D. McKinney | |
| Title: | Executive Vice President |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| FIFTH THIRD BANK | ||
| By: | /s/ Justin Bellamy | |
| Name: | Justin Bellamy | |
| Title: | Director |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
| BP ENERGY COMPANY | ||
| By: | /s/ Michael Thomas | |
| Name: | Michael Thomas | |
| Title: | VP |
SIGNATURE PAGE
TENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.2
Execution Version
FIFTH AMENDMENT TO
TERM LOAN CREDIT AGREEMENT
This FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Fifth Amendment”) dated as of September 14, 2018, among LEGACY RESERVES LP, a limited partnership duly formed under the laws of the State of Delaware (the “Borrower”), each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”), CORTLAND CAPITAL MARKET SERVICES LLC, as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”), the Lenders under the Term Loan Credit Agreement (the “Lenders”).
Recitals
A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Term Loan Credit Agreement dated as of October 24, 2016, as amended by the First Amendment and Waiver to the Term Loan Credit Agreement, dated July 31, 2017, as further amended by the Second Amendment to the Term Loan Credit Agreement, dated October 30, 2017, as further amended by the Third Amendment to the Term Loan Credit Agreement, dated December 31, 2017, and as further amended by the Fourth Amendment to the Term Loan Credit Agreement, dated as of March 23, 2018 (as so amended prior to the date hereof, the “Existing Credit Agreement,” and the Existing Credit Agreement as amended by this Fifth Amendment, the “Term Loan Credit Agreement”).
B. The Guarantors are parties to that certain Term Loan Guaranty Agreement dated as of October 25, 2016 made by each of the Guarantors (as defined therein) in favor of the Administrative Agent (the “Term Loan Guaranty Agreement”).
C. The Borrower, the Guarantors, the Administrative Agent and the Lenders have agreed to amend certain provisions of the Term Loan Credit Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Each capitalized term which is defined in the Term Loan Credit Agreement, but which is not defined in this Fifth Amendment, shall have the meaning ascribed to such term in the Term Loan Credit Agreement. Unless otherwise indicated, all article, section and exhibit references in this Fifth Amendment refer to articles, sections and exhibits of the Term Loan Credit Agreement.
Section 2. Amendments to Term Loan Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The following definitions are hereby amended and restated in their entirety to read as follows:
“Agreement” means this Term Loan Credit Agreement, as amended by the First Amendment and Waiver to the Term Loan Credit Agreement, dated July 31, 2017, as further amended by the Second Amendment to the Term Loan Credit Agreement, dated October 30, 2017, as further amended by the Third Amendment to the Term Loan Credit Agreement, dated December 31, 2017, the Fourth Amendment, dated as of March 23, 2018, and the Fifth Amendment, dated as of September 14, 2018, as the same may from time to time be amended, modified, supplemented or restated.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest (other than, prior to conversion into common Equity Interests, the Convertible Senior Notes).
“Redemption” means with respect to any Debt (including, without limitation, the Convertible Senior Notes), the repurchase, redemption, prepayment, repayment or defeasance or any other acquisition or retirement for value (or the segregation of funds with respect to any of the foregoing) of any such Debt, but excluding, for the avoidance of doubt, the cashless conversion of the Convertible Senior Notes into common Equity Interests in accordance with the terms of the Senior Indenture governing the Convertible Senior Notes. For the avoidance of doubt, the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Redemption of the Convertible Senior Notes. “Redeem” has the correlative meaning thereto.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, Redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or such Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or such Subsidiary. For the avoidance of doubt, (i) any payment on Equity Interests (including any payment on Debt that exists due to conversion or exchange of any Equity Interests into Debt) in connection with an asset sale, change of control or any redemption requirements pursuant to the terms of such Equity Interest shall constitute a Restricted Payment, (ii) any Permitted Convertible Note Cash Payment shall not constitute a Restricted Payment, (iii) the cashless conversion pursuant to its terms of any Convertible Senior Note into common Equity Interests shall not constitute a Restricted Payment and (iv) the cash settlement or any other payment in cash of any conversion obligation under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Notes or otherwise, but excluding any Permitted Convertible Note Cash Payments) shall constitute a Restricted Payment.
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“Senior Indentures” means, collectively or individually, as the context requires, any indenture or other agreement pursuant to which (i) any Senior Notes are issued and (ii) any Permitted Refinancing Debt with respect to any Senior Notes, including the Convertible Senior Notes, are issued, in each case, as the same may be amended, restated or supplemented, subject to the terms of Section 9.04(c).
The following definitions are hereby added where alphabetically appropriate to read as follows:
“Convertible Senior Notes” means the Borrower’s 8.00% Convertible Senior Notes due 2023 and any Permitted Refinancing Debt in respect thereof.
“Permitted Convertible Note Cash Payments” means (a) any payment in cash of a conversion incentive in an amount not to exceed one year’s interest that would otherwise be payable pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the early cashless conversion of such Convertible Senior Notes into common Equity Interests and (b) any cash payment in lieu of the issuance of fractional shares pursuant to and in accordance with the Senior Indenture governing the Convertible Senior Notes in connection with the cashless conversion of the Convertible Senior Notes into common Equity Interests.
“Tenth Amendment” means that certain Tenth Amendment to Third Amended and Restated Credit Agreement, dated as of September 14, 2018, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
The definition of “Permitted Refinancing Debt” is hereby amended by adding the following sentence at the end thereof:
“For the avoidance of doubt, the Convertible Senior Notes constitute Debt that is Permitted Refinancing Debt in respect of a portion of the Borrower’s 8.00% Senior Notes due 2020 and a portion of the Borrower’s 6.625% Senior Notes due 2021.”.
2.2 Amendment to Section 9.04(b). Section 9.04(b) is hereby amended by adding a new clause (iii) at the end thereof:
(iii) Notwithstanding anything to the contrary contained herein, the Borrower will not, and will not permit any Subsidiary to, elect to settle in cash, or settle in cash, all or any portion of the Borrower’s conversion obligations under the Convertible Senior Notes (whether pursuant to Section 11.02(b) of the Senior Indenture governing the Convertible Senior Notes or
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otherwise); provided that the Borrower may make Permitted Convertible Note Cash Payments. The Borrower will not permit any Convertible Senior Note to contain any term that requires the cash settlement of all or any portion of the Borrower’s conversion obligations thereunder (other than terms permitting the Permitted Convertible Note Cash Payments).
2.3 Amendment to Section 9.04(c). Section 9.04(c) is hereby amended by adding the following sentence at the end thereof: “Notwithstanding anything to the contrary set forth herein, this Section 9.04(c) shall not prohibit the issuance of Convertible Senior Notes as Permitted Refinancing Debt with respect to the Borrower’s 8.00% Senior Notes due 2020 or 6.625% Senior Notes due 2021 solely because the stated interest rate of the Convertible Senior Notes is greater than 6.625% per annum (so long as such interest rate does not exceed 10.00% per annum).”.
Section 3. Conditions Precedent. This Fifth Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in writing in accordance with Section 12.02 of the Term Loan Credit Agreement) (the “Fifth Amendment Effective Date”):
3.1 The Administrative Agent shall have received from each Lender party to the Term Loan Credit Agreement, the Borrower and the Guarantors, counterparts (in such number as may be requested by the Administrative Agent) of this Fifth Amendment signed on behalf of such Person.
3.2 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.4) of a Responsible Officer of the Borrower certifying (a) that attached thereto is a true, correct and complete copy of the Tenth Amendment to the RBL Credit Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, and shall in any event amend the RBL Credit Agreement in the same manner as the Term Loan Credit Agreement is to be amended by this Fifth Amendment (the “First Lien Amendment”) and (b) as to the aggregate amount of all consent, amendment and other fees payable to the holders of the RBL Facility in connection with the First Lien Amendment and/or the Reorganization Transactions. The “Tenth Amendment Effective Date” under and as defined in the RBL Credit Agreement shall have occurred (or shall occur substantially concurrently with the Fifth Amendment Effective Date).
3.3 The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable pursuant to the Credit Agreement on or prior to the Fifth Amendment Effective Date, including fees and expenses invoiced by Arnold & Porter Kaye Scholer LLP and Latham & Watkins LLP prior to the Fifth Amendment Effective Date.
3.4 The Administrative Agent shall have received a certificate (which may be the same certificate delivered pursuant to Section 3.2) of a Responsible Officer of the Borrower certifying (a) that the Borrower has consummated (or substantially concurrently with the Fifth Amendment Effective Date, will consummate) the exchange of a portion of its 8.00% Senior Notes due 2020 and a portion of its 6.625% Senior Notes due 2021 for the Convertible Senior Notes, (b) that attached thereto is a true and complete copy of the Senior Indentures (or amendment to existing Senior Indentures) with respect to such Convertible Senior Notes and (c) as to the aggregate principal amount of such Convertible Senior Notes issued.
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3.5 No Default shall have occurred and be continuing as of the Fifth Amendment Effective Date.
3.6 The Fourth Amendment Effective Date shall have occurred.
3.7 The Administrative Agent shall have received such other documents as the Administrative Agent or its counsel may reasonably require.
Section 4. Miscellaneous.
4.1 Confirmation. The provisions of the Term Loan Credit Agreement, as amended by this Fifth Amendment, shall remain in full force and effect following the effectiveness of this Fifth Amendment.
4.2 Ratification and Affirmation; Representations and Warranties. Each Obligor hereby (a) acknowledges the terms of this Fifth Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Term Loan Document to which it is a party and agrees that each Term Loan Document to which it is a party remains in full force and effect as expressly amended hereby; (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Fifth Amendment: (i) all of the representations and warranties contained in each Term Loan Document to which it is a party are true and correct, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect; and (d) agrees that from and after the Fifth Amendment Effective Date each reference to the Term Loan Credit Agreement in the other Term Loan Documents shall be deemed to be a reference to the Term Loan Credit Agreement, as amended by this Fifth Amendment.
4.3 Counterparts. This Fifth Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Fifth Amendment by telecopy, facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart hereof.
4.4 No Oral Agreement. This Fifth Amendment, the Term Loan Credit Agreement and the other Term Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties. There are no subsequent oral agreements between the parties.
4.5 GOVERNING LAW. The provisions of Section 12.09 of the Term Loan Credit Agreement are incorporated herein mutatis mutandis.
4.6 Payment of Expenses. In accordance with Section 12.03 of the Term Loan Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent and the Lenders for all of their reasonable out-of-pocket costs and reasonable expenses incurred in connection with this Fifth Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and the Lenders.
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4.7 Severability. Any provision of this Fifth Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
4.8 Successors and Assigns. This Fifth Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
4.9 Term Loan Document. This Fifth Amendment is a “Term Loan Document” as defined and described in the Term Loan Credit Agreement, and all of the terms and provisions of the Term Loan Credit Agreement relating to Term Loan Documents shall apply hereto.
4.10 RELEASE. FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BORROWER AND EACH OTHER OBLIGOR HEREBY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, RELEASES AND FOREVER DISCHARGES EACH LENDER, EACH AGENT AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, TRUSTEES, ATTORNEYS, AGENTS, ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS AND EXPERTS) AND AFFILIATES (COLLECTIVELY THE “RELEASED PARTIES” AND INDIVIDUALLY A “RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS, DEBTS, LIABILITIES, COSTS, DAMAGES, EXPENSES OR OTHER OBLIGATIONS OF ANY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), FOR OR BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO BE DONE, OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON OR PRIOR TO THE DATE OF THE FIFTH AMENDMENT AND ARE IN ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO ANY OF THIS FIFTH AMENDMENT, THE TERM LOAN CREDIT AGREEMENT, ANY OTHER TERM LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (COLLECTIVELY, THE “RELEASED MATTERS”). THE BORROWER AND EACH OTHER OBLIGOR, BY EXECUTION HEREOF, HEREBY ACKNOWLEDGES AND AGREES THAT THE AGREEMENTS IN THIS SECTION 4.10 ARE INTENDED TO COVER AND BE IN FULL SATISFACTION FOR ALL OR ANY ALLEGED INJURIES OR DAMAGES ARISING IN CONNECTION WITH THE RELEASED MATTERS.
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4.11 Administrative Agent Direction. Each undersigned Lender (collectively constituting all Lenders party to the Term Loan Credit Agreement) hereby directs the Administrative Agent to execute and deliver this Fifth Amendment.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be duly executed as of the date first written above.
| BORROWER: | LEGACY RESERVES LP | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| GUARANTORS: | LEGACY RESERVES OPERATING LP | |||||
| By: | Legacy Reserves Operating GP LLC, its general partner | |||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
| LEGACY RESERVES OPERATING GP LLC | ||||||
| By: | Legacy Reserves LP, its sole member | |||||
| By: | Legacy Reserves GP, LLC, its general partner | |||||
| By: | /s/ James Daniel Westcott | |||||
| James Daniel Westcott | ||||||
| President and Chief Financial Officer | ||||||
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| LEGACY RESERVES SERVICES, INC. | ||
| DEW GATHERING LLC | ||
| PINNACLE GAS TREATING LLC | ||
| LEGACY RESERVES ENERGY SERVICES LLC | ||
| LEGACY RESERVES GP, LLC | ||
| LEGACY RESERVES INC. | ||
| By: | /s/ James Daniel Westcott | |
| James Daniel Westcott | ||
| President and Chief Financial Officer | ||
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent | ||
| By: | /s/ Matthew Trybula | |
| Name: | Matthew Trybula | |
| Title: | Associate Counsel |
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| GSO ENERGY SELECT OPPORTUNITIES FUND LP By: GSO Energy Select Opportunities Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
| GSO ENERGY PARTNERS-A LP By: GSO Energy Partners-A Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
| GSO ENERGY PARTNERS-B LP By: GSO Energy Partners-B Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
| GSO ENERGY PARTNERS-C LP By: GSO Energy Partners-C Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
| GSO ENERGY PARTNERS-C II LP By: GSO Energy Partners-C Associates II LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| GSO ENERGY PARTNERS-D LP By: GSO Energy Partners-D Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
| GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNERS LP By: GSO Palmetto Opportunistic Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| GSO CSF III HOLDCO LP By: GSO Capital Solutions Associates III LP, its general partner By: GSO Capital Solutions Associates III (Delaware) LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
| GSO AIGUILLE DES GRAND MONTETS FUND II LP By: GSO Aiguille des Grand Montets Associates LLC, its general partner | ||
| By: | /s/ Marisa J. Beeney | |
| Name: | Marisa J. Beeney | |
| Title: | Authorized Signatory |
SIGNATURE PAGE
FIFTH AMENDMENT TO TERM LOAN CREDIT AGREEMENT
Exhibit 99.1
Legacy Reserves LP Announces Exchange of
$130 Million of Senior Notes for New Convertible Senior Notes
MIDLAND, Texas, September 14, 2018 / PRNewswire / — Legacy Reserves LP (“Legacy”) (NASDAQ:LGCY) today announces that Legacy, Legacy Reserves Finance Corporation (together with Legacy, the “Issuers”) and Legacy Reserves Inc. (“New Legacy”) entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of the Issuers’ 8.000% Senior Notes due 2020 (the “2020 Senior Notes”) and 6.625% Senior Notes due 2021 (the “2021 Senior Notes”), pursuant to which the Issuers will exchange (i) approximately $21 million aggregate principal amount of the 2020 Senior Notes for approximately $21 million aggregate principal amount of the Issuers’ new 8% Convertible Senior Notes due 2023 (the “New Notes”) and approximately 105,000 shares (the “Exchange Shares”) of common stock, par value $0.01, of New Legacy (“Common Stock”) and (ii) $109 million aggregate principal amount of the 2021 Senior Notes for $109 million aggregate principal amount of New Notes (collectively, the “Exchange Transactions”).
Legacy expects that the Exchange Transaction will close on September 20, 2018. The closing of the Exchange Transaction is subject to certain closing conditions, including the closing of the corporate reorganization pursuant to which Legacy will become a wholly owned subsidiary of New Legacy. The issuance of the Exchange Shares is subject to the receipt of any required consents under Legacy’s credit agreement and term loan credit agreement.
The New Notes will be convertible into shares of Common Stock of New Legacy at an initial conversion rate of 166.6667 shares per $1,000 principal amount of New Notes, which is equal to an initial conversion price of $6.00 per share of Common Stock. The New Notes may be converted in whole or in part prior to maturity, at the option of the holder.
The New Notes will be convertible, at the option of the holders, into shares of Common Stock at any time from the date of issuance up until the close of business on the earlier of (i) the business day prior to the date of a mandatory conversion notice, (ii) with respect to a New Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, if a holder exercises its right to convert on or prior to September 19, 2019, such holder will receive an early conversion payment in an amount of cash equal to the remaining scheduled payments of interest and accrued interest that would have been made on the New Notes being converted from the date of early conversion until September 19, 2019.
Subject to compliance with certain conditions, the Issuers have the right to mandatorily convert all of the New Notes if the volume weighted average price of the Common Stock equals or exceeds the conversion price for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days commencing on or after the initial issuance date.
The New Notes will be guaranteed by New Legacy, Legacy Reserves GP, LLC, the general partner of Legacy, and certain subsidiaries of Legacy.
The New Notes and the shares of New Legacy’s common stock issuable upon conversion of the New Notes, if any, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Legacy Reserves LP
Legacy Reserves LP is a master limited partnership headquartered in Midland, Texas, focused on the development of oil and natural gas properties primarily located in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions of the United States. Additional information is available at www.LegacyLP.com.
Additional Information for Holders of Legacy Units and Where to Find It
This press release relates to the proposed corporate reorganization between Legacy and New Legacy (the “Transaction”). In connection with the Transaction, New Legacy has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (“Registration Statement”), which includes a preliminary proxy statement of Legacy and a preliminary prospectus of New Legacy (the “proxy statement/prospectus”). The Registration Statement was declared effective by the SEC on August 3, 2018 and Legacy commenced mailing the proxy statement to its unitholders on or about August 3, 2018.
INVESTORS AND UNITHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LEGACY AND NEW LEGACY, AS WELL AS THE PROPOSED TRANSACTION AND RELATED MATTERS.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection with the Transaction shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
A free copy of the proxy statement/prospectus and other filings containing information about Legacy and New Legacy may be obtained at the SEC’s Internet site at www.sec.gov. In addition, the documents filed with the SEC by Legacy and New Legacy may be obtained free of charge by directing such request to: Legacy Reserves LP, Attention: Investor Relations, at 303 W. Wall, Suite 1800, Midland, Texas 79701 or emailing IR@legacylp.com or calling 855-534-5200. These documents may also be obtained for free from Legacy’s investor relations website at https://www.legacylp.com/investor-relations.
Legacy and its general partner’s directors, executive officers, other members of management and employees may be deemed to be participants in the solicitation of proxies from Legacy’s unitholders in respect of the Transaction described in the proxy statement/prospectus. Information regarding the directors and executive officers of Legacy’s general partner is contained in Legacy’s public filings with the SEC, including its definitive proxy statement on Form DEF 14A filed with the SEC on April 6, 2018.
A more complete description is available in the registration statement and the proxy statement/prospectus.
Cautionary Statement Relevant to Forward-Looking Information
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the expected closing of the Exchange Transaction, the expected benefits of the Transaction to Legacy and its unitholders, final court approval of the Stipulation and Agreement of Settlement dated as of July 6, 2018, the anticipated completion of the Transaction or the timing thereof, the expected future growth, dividends, distributions of the reorganized company, and plans and objectives of management for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Legacy expects, believes or anticipates will or may occur in the future, are forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimated,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the control of Legacy, which could cause results to differ materially from those expected by management of Legacy. Such risks and uncertainties include, but are not limited to, realized oil and natural gas prices; production volumes, lease operating expenses, general and administrative costs and finding and development costs; future operating results; and the factors set forth under the heading “Risk Factors” in Legacy’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Legacy undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT:
Legacy Reserves LP
Dan Westcott
President and Chief Financial Officer
432-689-5200