MILLER ENERGY RESOURCES, INC. |
(Exact name of registrant as specified in its charter) |
Tennessee | 001-34732 | 62-1028629 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
9721 Cogdill Road, Suite 302, Knoxville, TN | 37,932 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (865) 223-6575 |
Not applicable |
(Former name or former address, if changed since last report) |
[ ] | 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)) |
Exhibit No. | Description | |
10.51 | Waiver and Amendment No. 4, dated February 7, 2013 |
MILLER ENERGY RESOURCES, INC. | ||
Date: February 7, 2013 | By: /s/ Scott Mr. Boruff | |
Scott M. Boruff, Chief Executive Officer |
Re: | Waiver and Amendment No. 4 (this “Amendment”) |
1. | Fees. |
2. | Waivers. Subject to the terms and conditions hereof, the Administrative Agent and the Lenders (or at least the required percentage thereof) hereby agree to waive (i) the Specified Defaults to the extent now existing and (ii) with respect to the Second Loan, (A) the fifteen (15) Business Day prior notice of any Loan requested and (B) the delivery of the Borrowing Request in the form of Exhibit C to the Loan Agreement, each as otherwise required by Section 2.2(a) of the Loan Agreement; provided that, in connection with the Second Loan, the Borrower shall be required to deliver an irrevocable request in writing (the “Second Loan Borrowing Request”) to the Administrative Agent in the form of Exhibit A attached hereto. The foregoing waivers are contingent upon the satisfaction of the conditions precedent set forth in Section 6 below and shall not be construed as an amendment, waiver or modification of the Loan Agreement or the other Loan Documents except as expressly provided herein. The Administrative Agent and the Lenders reserve the right to exercise any rights and remedies available to them in connection with any other present or future Defaults or Events of Default under any provision of the Loan Agreement or any provision of any other Loan Document. The description herein of the Specified Defaults is based upon the information provided to the Administrative Agent and the Lenders on or prior to the date hereof and shall not be deemed to exclude the existence of any other Defaults or Events of Default. The failure of the Administrative Agent or the Lenders to give notice to the Borrower of any other Defaults or Events of Default is not intended to be nor shall be a waiver thereof. Borrower hereby agrees and acknowledges that the Administrative Agent and the Lenders require and will require strict performance by the Borrower of all of its obligations, agreements and covenants contained in the Loan Agreement and the other Loan Documents, and no inaction or action regarding any Default or Event of Default is intended to be or shall be a waiver thereof. |
3. | Understanding Concerning the Series B and Series C Offerings. The Borrower hereby represents and warrants that it has reviewed the documents governing the Series B Preferred Stock and the Series C Preferred Stock and that no such document contains any terms that would cause the Series B Preferred Stock or the Series C Preferred Stock to constitute “Indebtedness” as such term is defined in the Loan Agreement. In reliance upon the representation and warranty contained in this Section 3, the parties hereto understand and agree that the Series B Preferred Stock and Series C Preferred Stock are not considered to be Indebtedness for purposes of the definition of “Capital Covenant Compliance Period” and Section 7.17 of the Loan Agreement, notwithstanding that they may be classified as debt or temporary equity for accounting purposes. |
4. | Amendments to the Loan Agreement and APOD. The following amendments to the Loan Agreement and the Approved Plan of Development are hereby adopted |
(a) | New Defined Terms. The following new defined terms are added to Section 1.1, in the appropriate alphabetical order: |
(b) | Amendment to the Existing Definitions |
a. | Capital Covenant Compliance Period. Clauses (i), (ii), (iii) and (iv) of the definition of “Capital Covenant Compliance Date” are hereby deleted and replaced, in their entirety, with the following: |
“(i) | Interest Asset Coverage. As of the end of any Fiscal Quarter of Borrower, the ratio of Consolidated EBITDA for the Interest Coverage Period ending on such date to Interest Expense paid or payable in cash for the Interest Coverage Period ending on such date is at least: |
Fiscal Quarter Ending: | Minimum Level | |
April 30, 2013 | 3.00:1.00 | |
July 31, 2013 | 3.50:1.00 | |
October 31, 2013 | 4.00:1.00 | |
January 31, 2014 | 4.50:1.00 | |
April 30, 2014 | 5.00:1.00 | |
July 31, 2014 | 5.50:1.00 | |
October 31, 2014 | 6.00:1.00 | |
January 31, 2051, and thereafter | 6.50:1.00 |
(ii) | Asset Coverage Ratio. As of the end of any Fiscal Quarter of Borrower, the ratio of (A) the NYMEX Value of the total Proved Developed Producing Reserves of the Loan Parties as shown on the most recently delivered Reserve Report, to (B) Total Debt, is at least: |
Fiscal Quarter Ending: | Minimum Level | |
April 30, 2013 | 1.40:1.00 | |
July 31, 2013 | 1.40:1.00 | |
October 31, 2013 | 1.75:1.00 | |
January 31, 2014 | 1.75:1.00 | |
April 30, 2014 | 2.00:1.00 | |
July 31, 2014 | 2.25:1.00 | |
October 31, 2014 | 2.50:1.00 | |
January 31, 2015, and thereafter | 2.75:1.00 |
(iii) | Minimum Gross Production. As of the end of any Fiscal Quarter of Borrower, the daily average of gross production of Hydrocarbons (calculated at the wellhead on a barrel of oil equivalent basis, where 15 Mcf of natural gas is equal to one barrel of oil) from the Cook Inlet Oil and Gas Properties combined with the Tennessee Oil and Gas Properties during each such Fiscal Quarter is at least: |
Fiscal Quarter Ending: | Minimum Level of Barrels | |
April 30, 2013 | 2,200 | |
July 31, 2013 | 2,400 | |
October 31, 2013 | 2,600 | |
January 31, 2014 | 2,800 | |
April 30, 2014, and thereafter | 3,000." |
(iv) | Leverage Ratio. As of the end of any Fiscal Quarter of Borrower, the ratio of Total Debt to Consolidated EBITDA for the four Fiscal Quarter period ending on such date is less than: |
Fiscal Quarter Ending: | Maximum Level: | |
April 30, 2013, and thereafter | 1.75:1.00" |
a. | Maintenance Covenant Compliance Date. The definition of “Maintenance Covenant Compliance Date” is hereby amended by deleting the date “January 31, 2013” and replacing it with the date “April 30, 2013”. |
b. | Permitted Liens. The definition of “Permitted Liens” is hereby amended by deleting the “and” at the end of (p), by replacing the period at the end of clause (q) with a “, and”, and by adding the following new clause (r) to the end thereof: |
(a) | Amendments to Section 2.8. Article VI of the Loan Agreement is hereby amended by adding the following new Section 6.22 to the end thereof: |
(b) | Amendments to Section 3.2(b). Section 3.2(b) shall be amended by deleting the “and” at the end of clause (iii), by replacing the period at the end of clause (iv) with “; and” and by adding the following new clause (v): |
(c) | Amendments to Section 7.17. Section 7.17 Maintenance Financial Covenants shall be amended to read, as follows: |
Fiscal Quarter Ending: | Minimum Level: | |
April 30, 2013 | 2.50:1.00 | |
July 31, 2013 | 2.75:1.00 | |
October 31, 2013 | 3.00:1.00 | |
January 31, 2014 | 3.25:1.00 | |
April 30, 2014 | 3.50:1.00 | |
July 31, 2014 | 3.75:1.00 | |
October 31, 2014 | 4.00:1.00 | |
January 31, 2015, and thereafter | 4.25:1.00 |
Test Dates: | Minimum Level: | |
February 1, 2013 - April 30, 2013 | 1.25:1.00 | |
May 1, 2013 - July 31, 2013 | 1.50:1.00 | |
August 1, 2013 - October 31, 2013 | 1.75:1.00 | |
November 1, 2013 - January 31, 2014 | 1.75:1.00 | |
February 1, 2014 - April 30, 2014, | ||
and thereafter | 2.00:1.00 |
Fiscal Quarter Ending: | Minimum Level | |
April 30, 2013 | 1,500 | |
July 31, 2013 | 1,900 | |
October 31, 2013 | 2,100 | |
January 31, 2014 | 2,200 | |
April 30, 2014 | 2,300 | |
July 31, 2014 | 2,400 | |
October 31, 2014 | 2,500 | |
January 31, 2015, and thereafter | 2,600" |
(a) | Amendment to Section 7.24. In Section 7.24of the Loan Agreement, the “and” at the end of clause (b) is hereby deleted, the period at the end of clause (c) is hereby replaced with a “; and”, and a new clause (d) is hereby added as follows: |
(b) | Amendment to Section 7.26. Section 7.26 of the Loan Agreement (Consolidated G&A Expenses) is hereby deleted and replaced, in its entirety, with the following: |
(c) | Amendment to the Approved Plan of Development. The Approved Plan of Development is hereby amended as follows: |
a. | RU-3 (Gas) and RU-4 are hereby added to APOD A and removed from APOD B; |
b. | Additional projects in Tennessee may be approved for addition to APOD A, APOD B or APOD C by the Administrative Agent, with the approval of the Majority Lenders, from time to time, with such approval to be evidenced in writing delivered to the Borrower (including, without limitation, in an e-mail approving the addition of such a project to APOD A, APOD B or APOD C, as applicable). |
5. | By its signature below, each Loan Party hereby (a) acknowledges and agrees that, except as expressly provided herein, the Loan Agreement, as amended hereby, and each of the other Loan Documents are hereby ratified and confirmed in all respects and shall remain in full force and effect; (b) ratifies and reaffirms its obligations under, and acknowledges, renews and extends its continued liability under, the Loan Agreement, as amended hereby, and each other Loan Document to which it is a party; (c) ratifies and reaffirms all of the Liens securing the payment and performance of the Obligations; and (d) represents and warrants to the Administrative Agent and the Lenders that, as of the date hereof, (i) after giving effect to this Amendment, all of the representations and warranties contained in the Loan Agreement, as amended hereby, and each other Loan Document to which it is a party are true and correct in all material respects, 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 in all material respects as of such specified earlier date, (ii) after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing, and (iii) the execution, delivery, and performance of this Amendment by such Loan Party have been duly authorized by all necessary action on the part of such Loan Party. This Amendment shall be deemed to constitute a Loan Document for all purposes and in all respects. From and after the date hereof, all references to the Loan Agreement and the Loan Documents shall mean such Loan Agreement and such Loan Documents as amended by this Amendment. |
6. | This Amendment shall become effective as of the date first written above when and only when (a) the Administrative Agent shall have received duly executed counterparts of this Amendment signed by each Loan Party and the Lenders (or at least the required percentage thereof), and (b) the Borrower shall have paid to the Administrative Agent all costs, fees and expenses payable pursuant to Section 17.7 of the Loan Agreement and Section 1(b) hereof. |
7. | Borrower represents and warrants to the Administrative Agent and the Lenders that the resolutions and Governing Documents certified to the Administrative Agent and the Lenders by Borrower on June 29, 2012, remain in full force and effect and have not been amended or otherwise modified, except for the changes to its Charter designating the Series B Preferred Stock and Series C Preferred Stock. By its respective signature below, each of the Loan Parties (other than the Borrower) represents and warrants to the Administrative Agent and the Lenders that its respective resolutions and Governing Documents certified to the Administrative Agent and the Lenders by such Loan Party on June 29, 2012 remain in full force and effect and have not been amended or otherwise modified. |
Very truly yours, | |
APOLLO INVESTMENT CORPORATION, as | |
Administrative Agent for the Lenders and as a Lender | |
By: /s/ Justin Sendak | |
Name: Justin Sendak | |
Title: Authorized Signatory |
Acknowledged, agreed and accepted as of the 7 | |
day of February, 2013 | |
BORROWER: | |
MILLER ENERGY RESOURCES, INC., | |
a Tennessee Corporation | |
By: /s/ Scott M. Boruff | |
Name: Scott M. Boruff | |
Title: Chief Executive Officer | |
GUARANTORS: | |
MILLER DRILLING, TN LLC | |
By: MILLER ENERGY RESOURCES, INC., | |
its Sole Member | |
By: /s/ Scott M. Boruff | |
Name: Scott M. Boruff | |
Title: Chief Executive Officer | |
MILLER ENERGY SERVICES, LLC | |
By: MILLER ENERGY RESOURCES, INC., | |
its Sole Manager | |
By: /s/ Scott M. Boruff | |
Name: Scott M. Boruff | |
Title: Chief Executive Officer | |
MILLER ENERGY GP, LLC | |
By: MILLER ENERGY RESOURCES, INC., | |
its Sole Manager | |
By: /s/ Scott M. Boruff | |
Name: Scott M. Boruff | |
Title: Chief Executive Officer |
MILLER RIG & EQUIPMENT, LLC | |
By: MILLER ENERGY RESOURCES, INC., | |
its Sole Manager | |
By: /s/ Scott M. Boruff | |
Name: Scott M. Boruff | |
Title: Chief Executive Officer | |
COOK INLET ENERGY, LLC | |
By: /s/ David M. Hall | |
Name: David M. Hall | |
Title: Manager and Chief Executive Officer | |
EAST TENNESSEE CONSULTANTS, INC. | |
By: /s/ Douglas G. Melton | |
Name: Douglas G. Melton | |
Title: Vice President and Secretary | |
EAST TENNESSEE CONSULTANTS II, L.L.C. | |
By: /s/ Douglas G. Melton | |
Name: Douglas G. Melton | |
Title: Manager and Secretary |
(a) | The aggregate principal amount of the Requested Borrowing is $5,000,000.00. |
(b) | The Funding Date of the Requested Borrowing is February 7, 2013. |
(a) | The representations and warranties of each of the Loan Parties contained in each Loan Document are true and correct in all material respects, except (i) that where any such representation or warranty is qualified by materiality or material adverse effect or words of similar effect, then such representation and warranty is true and correct in all respects, and (ii) to the extent such representations and warranties relate solely to an earlier date, in which case, such representations and warranties were true and correct in all respects on and as of such earlier date. |
(b) | No Default or Event of Default has occurred and is continuing or will result from the making of the Requested Borrowing. |
(c) | No Material Adverse Change has occurred or will result from the making of the Requested Borrowing. |
(d) | The amount of the Requested Borrowing does not exceed Availability as of the applicable Funding Date. |
(e) | The proceeds of the Requested Borrowing will be used by Borrower for general corporate purposes. |
(f) | The conditions of Section 3.2 of the Loan Agreement are satisfied as of the Funding Date of the Requested Borrowing. |
MILLER ENERGY RESOURCES, INC. | |
By: | |
Name: | |
Title: |