Item 1.01. Entry Into Material Definitive Agreement.
DIP Credit Agreement
As previously announced, on
June 14, 2020, Extraction Oil & Gas, Inc.(the "Company") and certain of its wholly-owned subsidiaries (together with the Company, the "Debtors") filed voluntary petitions for relief under chapter 11 of title 11 of the United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of Delaware(the " Bankruptcy Court"). The Debtors' Chapter 11 cases are being jointly administered under the caption In re Extraction Oil & Gas, Inc., et al. (the "Chapter 11 Cases"). On June 16, 2020, in connection with the filing of the Chapter 11 Cases, the Debtors entered into a debtor-in-possession credit agreement on the terms set forth in a Superpriority Senior Secured Debtor-in-Possession Credit Agreement (the "DIP Credit Agreement"), by and among the Company, as Borrower, the Company's Subsidiaries party thereto, as Guarantors, the lenders party thereto (the "DIP Lenders"), and Wells Fargo Bank, National Association, as DIP Agent and Issuing Lender, pursuant to which, having been granted the approval of the Bankruptcy Court, the DIP Lenders have agreed to provide the Company with loans in an aggregate principal amount not to exceed $50.0 millionthat, among other things, will be used to finance the ongoing general corporate needs of the Debtors during the course of the Chapter 11 Cases. The maturity date of the DIP Credit Agreement is the earliest of (i) December 14, 2020, or the date that is six (6) months after the filing of the Chapter 11 Cases; provided, that such date may be extended to March 14, 2021with the prior written approval of certain of the DIP Lenders; (ii) the consummation of a sale of all or substantially all of the assets of the Debtors pursuant to Section 363 of Chapter 11 or otherwise; (iii) the effective date of a plan of reorganization or liquidation in the Chapter 11 Cases; (iv) the entry of an order by the Bankruptcy Courtdismissing any of the Chapter 11 Cases or converting such Chapter 11 Cases to a case under chapter 7 of title 11 of the United StatesBankruptcy Code; and (v) the date of termination of the DIP Lenders' commitments and the acceleration of any outstanding extensions of credit, in each case, as set forth in the DIP Credit Agreement and in accordance with the interim and final orders entered by the Bankruptcy Courtconcerning the DIP Credit Agreement. The DIP Credit Agreement contains events of default customary to debtor-in-possession financings, including events related to the Chapter 11 Cases, the occurrence of which could result in the acceleration of the Debtors' obligation to repay the outstanding indebtedness under the DIP Credit Agreement. The Debtors' obligations under the DIP Credit Agreement will be secured by a security interest in, and lien on, substantially all present and after acquired property (whether tangible, intangible, real, personal or mixed) of the Debtors and will be guaranteed by all of the Company's restricted subsidiaries.
Amendment No. 1 to DIP Credit Agreement
July 20, 2020, the Company, together with its subsidiaries party thereto, certain of the DIP Lendersand Wells Fargo Bank, National Associationentered into an amendment to the DIP Credit Agreement ("Amendment No. 1") to, among other things: (i) extend certain Milestones in the DIP Credit Agreement, (ii) modify the limitation on the amount of undrawn New Money Interim Loans and New Money Final Loans in any borrowing so that the amount permitted to be drawn in accordance with the Approved Budget gives effect to the Permitted Variance, (iii) provide for customary prohibitions against unreasonable withholding of approvals with respect to the Approved Budget and the Plan of Reorganization on the part of the DIP Lenders and the DIP Agent and (iv) reaffirm the Debtors' liens, guaranties and representations and warranties under the DIP Credit Agreement. Capitalized terms used but not specifically defined herein have the meanings specified for such terms in the DIP Credit Agreement. The foregoing descriptions of the DIP Credit Agreement and Amendment No. 1 do not purport to be complete and are subject to and qualified in their entirety by reference to the full texts of the DIP Credit Agreement and Amendment No. 1, as applicable. Copies of the DIP Credit Agreement and Amendment No. 1 are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above in Item 1.01 of this Current Report on Form 8-K regarding the DIP Credit Agreement and Amendment No. 1 thereto is incorporated herein by reference. 1
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Description Number 10.1 Superpriority Senior Secured Debtor-in-Possession
Credit Agreement, dated as of
June 16, 2020, by and among Extraction Oil & Gas,
Inc., the subsidiary guarantors
party thereto, the lenders party thereto and Wells
Association. 10.2 Amendment No. 1 to Superpriority Senior Secured
Agreement, dated as of
July 20, 2020, by and among
subsidiary guarantors party thereto, the lenders party
thereto and Wells Fargo
Bank, National Association. 2
© Edgar Online, source