Item 1.01. Entry into a Material Definitive Agreement.
Exit Facility Credit Agreement
In connection with the Plan, on the Effective Date the Debtors entered into a
senior secured asset-based revolving credit and security agreement (the "Exit
Facility") with
The Exit Facility is in an amount of up to
The Exit Facility contains various covenants and restrictive provisions and also requires maintenance of certain financial covenants as follows:
† for the fiscal quarter ending
† commencing with the fiscal quarter ending
The Debtors are required to pay fees in relation to the Exit Facility, including the following:
† Unused Commitment Fee: 0.375% per annum on the amount by which availability exceeds the average daily unpaid balance for each day of such quarter; and
† Agent Fees: separately agreed upon between the Debtors and the Exit Administrative Agent;
The Exit Facility will mature on the third anniversary of its effective date.
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Proceeds of the Exit Facility can be used by the Debtors to, among other things, make capital expenditures, to fund the Debtors' general business purposes, including working capital requirements and to pay certain fees and expenses related to the consummation of the Exit Facility and the Plan, in each case subject to certain limitations provided in the Exit Facility.
The foregoing description of the Exit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Exit Facility, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.02. Termination of Material Definitive Agreement.
Equity Interests
On the Effective Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of the Partnership issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no force or effect.
DIP Credit Agreement
On the Effective Date, the senior secured priming and superpriority
debtor-in-possession credit and security agreement (the "DIP Credit Agreement")
the Partnership previously entered into with the Emerge LP Subsidiaries party
thereto,
Senior Notes and Credit Agreement
On the Effective Date, by operation of the Plan, all outstanding obligations under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated.
† Second Amended and Restated Revolving Credit and Security Agreement,
dated as of
† Senior Secured Notes due 2023, issued under that certain Second Lien
Note Purchase Agreement, dated as of
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 in the Introductory Note and Item 1.01 above relating to the Exit Facility is incorporated herein by reference into this Item 2.03.
Item 3.02. Unregistered Sale of
Pursuant to the Plan and following the cancellation of the Partnership's outstanding common units, on the Effective Date the Partnership issued 123,941,380 New Limited Partner Interests and 135,000,000 Preferred Interests for the benefit of (a) holders of claims under the Partnership's Prepetition Credit Agreement in full satisfaction of their allowed prepetition claims, and (b) the holders of claims under the Partnership's Prepetition Notes in partial satisfaction of their allowed prepetition claims. The issuance of the New Limited Partner Interests and the Preferred Interests were exempt from registration under the Securities Act pursuant to section 1145 of the Bankruptcy Code.
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Item 3.03. Material Modification to Rights of Security Holders.
The information set forth under the Introductory Note and Items 1.01, 1.02, 3.02, 5.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.01. Changes in Control of Registrant
On the Effective Date, all previously issued and outstanding equity interests in
the Partnership were cancelled, the general partner interest in the Partnership
held by the Old
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On and effective as of
Pursuant to the Partnership Agreement, holders of the Preferred Interests will
receive annual distributions of 12% in cash, paid quarterly. The Preferred
Interests rank senior to the Common Units with respect to the payment of
distributions and distribution of assets upon liquidation, dissolution and
winding up. The Preferred Interests have no stated maturity and are not subject
to mandatory redemption or nay sinking fund and will remain outstanding
indefinitely unless redeemed by the Partnership. The Preferred Interests may be
redeemed by the Partnership at any time after
The Preferred Interests are not convertible and have no voting rights.
The description of the Partnership Agreement contained in this Item 5.03 is qualified in its entirety by reference to the full text of the Partnership Agreement, which is filed as Exhibit 3.1 hereto and is incorporated by reference herein. The information regarding the Preferred Interests set forth in items 1.03 and 3.03 hereof is incorporated by reference into this Item 5.03.
Item 8.01. Other Events.
A summary of the Plan was previously filed by the Partnership in the Current
Report on Form 8-K filed on
† Holders of claims under the Partnership's DIP Credit Agreement received payment in full in cash on the Effective Date; and
† Holders of claims under the Partnership's Prepetition Credit Agreement received Preferred Interests sufficient to repay in full all claims under the Partnership's Prepetition Credit Agreement on the Effective Date.
Unless otherwise specified, the treatment set forth in the Plan and Confirmation Order, including as modified by consent as described in the preceding paragraph, is in full satisfaction of all claims against and interests in the Partnership, which were discharged on the Effective Date.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 3.1 Second Amended and Restated Agreement of Limited Partnership ofEmerge Energy Services LP , dated as ofDecember 20, 2019 3.2 Limited Liability Company Agreement ofEES GP, LLC , dated as ofDecember 20, 2019 3.3 Certificate of Formation ofEES GP, LLC , dated as ofDecember 18, 2019 10.1 Revolving Credit and Security Agreement, by and amongEmerge Energy Services LP , as Parent Guarantor,Emerge Energy Services Operating LLC ,Superior Silica Sands LLC andEmerge Energy Services Finance Corporation , as Borrowers,HPS Investment Partners, LLC , as Administrative Agent and Collateral Agent and the Lenders party thereto, dated as ofDecember 20, 2019 99.1 Notice of Effective Date. 4
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