| Item 1.01 | Entry into a Material Definitive Agreement |
Common Stock Subscription Agreement
On June 19, 2019, the Company entered into a commitment letter for a $100 million term loan facility with affiliates of certain significant shareholders of the Company. In connection with the commitment, on June 26, 2019, the Company entered into a Common Stock Subscription Agreement with the affiliates of certain significant shareholders of the Company, pursuant to which in exchange for the commitments and $0.001 per share of Class A common stock of the Company (the “Common Stock”), the Company issued 1,525,395 shares of Common Stock on June 26, 2019 for an aggregate price of $1,525.40 (the “Issuance”). The Issuance is exempt from registration under Section 4(a)(2) of the Securities Act of 1933. The terms of the commitment letter and Common Stock Subscription Agreement were evaluated and negotiated by an independent committee of the Board of Directors of the Company comprised of board members unaffiliated with the lending parties with the assistance of financial and legal advisors.
A copy of the Common Stock Subscription Agreement is filed as Exhibit 10.1 to this Current Report on Form8-K and is incorporated herein by reference, and the foregoing description of the Common Stock Subscription Agreement is qualified in its entirety by references thereto.
Amendment to the Registration Rights Agreement
On June 26, 2019, in connection with the Common Stock Subscription Agreement, the Company entered into an amendment (the “RRA Amendment”) to its Registration Rights Agreement, dated as of September 24, 2018, by and among the Company and each of the other parties listed on the signature pages thereto (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Registration Rights Agreement”). Pursuant to, and subject to the limitations set forth in, the RRA Amendment, the Company has agreed to register under federal securities laws the public offer and resale of the shares of Common Stock held by the purchasers or certain of their affiliates or permitted transferees, including the shares of Common Stock issued pursuant to the Common Stock Subscription Agreement, on a shelf registration statement as soon as reasonably practicable following the issuance thereof.
A copy of the RRA Amendment is filed as Exhibit 4.1 to this Current Report on Form8-K and is incorporated herein by reference, and the foregoing description of the RRA Amendment is qualified in its entirety by references thereto.
Entry Into Term Loan Credit Facility
On June 27, 2019, the Company entered into a Credit Agreement (the “Term Loan Facility”) between the Company, as borrower, Cortland Capital Market Services LLC, as administrative agent, and the lenders party thereto.
The loans under the Term Loan Facility were funded at 97.5% of the original principal amount of such loans and the proceeds of those loans will be used (a) to purchase certain assets from Roan Resources LLC (the “Curlin Assets”) or to make contributions to Roan Resources LLC concurrently with the assignment and distribution of the Curlin Assets to the Company, (b) to fund operations of the Company and its subsidiaries, (c) after transfer to Roan Resources LLC on terms acceptable to the lenders under the Term Loan Facility, to pay outstanding borrowings under Roan Resources LLC’s credit facility, and (d) to pay fees and expenses related to the transactions. Subsequent borrowings under the Term Loan Facility are subject to customary conditions precedent for transactions of this nature.
The Term Loan Facility contains customary representations, warranties, affirmative and negative covenants, and events of default for transactions of this nature. In addition, the Term Loan Facility contains customary prepayment provisions; provided that the Term Loan Facility contains a requirement to pay a prepayment premium equal to the sum of (x) 1.0% of the aggregate amount of any loans prepaid or repaid plus (y) the amount of interest that would have accrued on such loans had they remained outstanding for a minimum of one year.
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