| Item 1.01 | Entry into a Material Definitive Agreement |
Eleventh Amendment to First Amended and Restated Senior Secured Credit Agreement
On November 30, 2023, in connection with the closing of the Transaction (as defined below), SilverBow Resources, Inc. (the “Company”), as borrower, the guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “First Lien Agent”), and the other lenders party thereto entered into the Eleventh Amendment to First Amended and Restated Senior Secured Credit Agreement (the “Eleventh Amendment”). The Eleventh Amendment amends the First Amended and Restated Senior Secured Credit Agreement, dated as of April 19, 2017 (as previously amended and as further amended by the Eleventh Amendment, the “Credit Agreement”), by and among the Company, the First Lien Agent, JPMorgan Chase Bank, N.A., BofA Securities, Inc., Barclays Bank PLC, Canadian Imperial Bank of Commerce, New York Branch, Citigroup Global Markets Inc., Capital One, National Association, KeyBanc Capital Markets Inc., Mizuho Bank, Ltd., PNC Capital Markets LLC, Truist Securities and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners, Fifth Third Bank, National Association, Regions Bank and the other lenders party thereto from time to time.
Among other things, the Eleventh Amendment (i) increased the Borrowing Base (as defined in the Credit Agreement) from $775 million to $1.2 billion; (ii) increased the Aggregate Elected Commitment Amount from $775 million to $1.2 billion; (iii) consented to the issuance of up to $350 million principal amount of additional second lien notes, resulting in an aggregate principal amount of outstanding second lien notes not to exceed $500 million; and (iv) modified certain other terms of the Credit Agreement.
The foregoing is qualified in its entirety by reference to the Eleventh Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Fourth Amendment to the Note Purchase Agreement
On November 30, 2023, in connection with the closing of the Transaction, the Company entered into the Fourth Amendment to the Note Purchase Agreement (the “Fourth Amendment”) among the Company, as issuer, U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as agent and collateral agent, the guarantors party thereto, the note purchasers and other parties that are party thereto. The Fourth Amendment amends the Note Purchase Agreement, dated as of December 15, 2017 (as previously amended and as further amended by the Fourth Amendment, the “Note Purchase Agreement”).
Among other things, the Fourth Amendment (i) issued and sold an additional $350 million principal amount of second lien notes, resulting in $500 million aggregate principal amount of second lien notes outstanding; (ii) extended the maturity date from December 15, 2026 to December 15, 2028; (iii) caused the maximum permitted ratio of Total Net Indebtedness to EBITDA (each as defined in the Note Purchase Agreement) for any fiscal quarter in which the maximum ratio of Total Debt to EBITDA (each as defined in the Credit Agreement) under the Credit Agreement is less than 3.00 to 1.00, to be reduced to a ratio that is 0.25 to 1.00 higher than that set forth in the Credit Agreement; (iv) amended the Minimum Asset Coverage Ratio (as defined in the Note Purchase Agreement) to be no less than (A) 1.10 to 1.00 through the fiscal quarter ending March 31, 2024 and (B) 1.25 to 1.00 thereafter, in each case of clause (A) and clause (B), tested on a quarterly basis; (v) added a financial covenant whereby the Current Ratio (as defined in the Note Purchase Agreement) shall not be less than 1.00 to 1.00; (vi) decreased the mortgage coverage and title requirements from 90% to 85%; and (vii) modified certain other terms of the Note Purchase Agreement.
The foregoing is qualified in its entirety by reference to the Fourth Amendment, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
