Item 1.01. Entry into a
Material Definitive Agreement
The Offers and Consent Solicitations
As previously disclosed, on August 3, 2016, in connection with the Merger, Range commenced offers to certain eligible holders (1) to either (a)
exchange any and all outstanding 5.875% Senior Notes due 2022 issued by Memorial (the
Memorial Senior Notes
) for up to $600 million aggregate principal amount of new senior notes issued by Range or (b) purchase for cash any and
all outstanding Memorial Senior Notes, and (2) to exchange any and all outstanding Senior Subordinated Notes (as defined below) issued by Range for up to $1.85 billion aggregate principal amount of new senior notes issued by Range. The Senior
Subordinated Notes consist of, collectively, Ranges 5.75% Senior Subordinated Notes due 2021, Ranges 5.00% Senior Subordinated Notes due 2022, and Ranges 5.00% Senior Subordinated Notes due 2023. Range also announced a
concurrent cash offer to those holders of Memorial Senior Notes who are not eligible to receive new senior notes issued by Range pursuant to the exchange offer.
Concurrently with these offers, Range also solicited consents from the holders of the Existing Notes (as defined below) to amend the indentures governing the
Existing Notes to eliminate certain of the covenants, reporting requirements, restrictive provisions and events of default pursuant to the terms and subject to the conditions set forth in the applicable offering materials. Those proposed
amendments were to be effected pursuant to the Supplemental Indentures (as defined below).
The offers expired at 6:00 a.m., New York City time, on
September 16, 2016. At the expiration of the offers, the following aggregate principal amount of notes had been validly tendered and not validly withdrawn: $598,910,000 of the Memorial Senior Notes, $477,786,000 of the 5.75% Senior Subordinated
Notes due 2021, $580,946,000 of the 5.00% Senior Subordinated Notes due 2022 and $742,291,000 of the 5.00% Senior Subordinated Notes due 2023.
Of the
approximately $598.9 million in principal amount of Memorial Senior Notes that were tendered in the offers, approximately $269.7 million participated in the cash tender offer, resulting in a total payment (including early tender premiums and accrued
interest) of approximately $276.3 million to the holders of those notes. Range funded this cash payment from its existing revolving credit facility.
The following table shows the aggregate principal amount of each series of notes prior to and after the offers:
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Issuer
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Title of Series
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Aggregate Principal
Amount Outstanding
Prior to Offers
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Aggregate Principal
Amount Outstanding
After Offers
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Existing Notes:
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Range
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5.75% Senior Subordinated Notes due 2021
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$500,000,000
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$22,214,000
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Range
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5.00% Senior Subordinated Notes due 2022
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$600,000,000
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$19,054,000
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Range
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5.00% Senior Subordinated Notes due 2023
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$750,000,000
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$7,712,000
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Memorial
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5.875% Senior Notes due 2022
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$600,000,000
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$1,090,000
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New Range Notes:
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Range
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5.75% Senior Notes due 2021
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N/A
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$475,952,000
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Range
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5.00% Senior Notes due 2022
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N/A
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$580,032,000
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Range
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5.00% Senior Notes due 2023
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N/A
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$741,514,000
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Range
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5.875% Senior Notes due 2022
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N/A
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$329,244,000
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The foregoing description of the offers, the related consent solicitations and the proposed amendments to the related
indentures is only a summary, does not purport to be complete, and is qualified in its entirety by reference to Ranges Current Reports on
Form 8-K
filed with the Securities and Exchange Commission
(the
SEC
) on August 3, 2016, August 17, 2016, August 25, 2016 and August 31, 2016, and to Memorials Current Report on Form 8-K filed with the SEC on August 26, 2016, all of which are
incorporated by reference herein.
The Supplemental Indentures
In connection with the foregoing, the Supplemental Indentures listed below were executed on August 23, 2016 by Range or Memorial, as applicable, the
guarantors of the applicable Existing Notes, and the applicable trustee. The operativeness of each of these Supplemental Indentures was conditioned upon, among other things, the consummation of the Merger. As a result of the
consummation of the Merger on September 16, 2016, each of these Supplemental Indentures is now operative.
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Memorial (a wholly-owned subsidiary of Range as a result of the Merger) entered into a supplemental indenture (the
Memorial Supplemental Indenture
) to the Indenture (as supplemented prior to the
Memorial Supplemental Indenture, the
Memorial Indenture
), dated as of July 10, 2014, by and among Memorial, the guarantors party thereto, and U.S. National Banking Association, as trustee, governing the Memorial Senior
Notes. Memorial entered into the Memorial Supplemental Indenture after the receipt of consents from the requisite holders of the Memorial Senior Notes in accordance with the terms and conditions of the applicable offering materials to
incorporate the proposed amendments described above, as reflected in the Memorial Supplemental Indenture.
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Range entered into a supplemental indenture (the
2021 Supplemental Indenture
) to the Indenture (as supplemented prior to the 2021 Supplemental Indenture, the
2021 Indenture
), dated
as of May 25, 2011, by and among Range, the guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee, governing Ranges 5.75% senior subordinated notes due 2021 (the
2021
Notes
). Range entered into the 2021 Supplemental Indenture after the receipt of consents from the requisite holders of the 2021 Notes in accordance with the terms and conditions of the applicable offering materials to incorporate the
proposed amendments described above, as reflected in the 2021 Supplemental Indenture.
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Range entered into a supplemental indenture (the
2022 Supplemental Indenture
) to the Indenture (as supplemented prior to the 2022 Supplemental Indenture, the
2022 Range Indenture
),
dated as of March 9, 2012, by and among Range, the guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee, governing Ranges 5.00% senior subordinated notes due 2022 (the
2022
Notes
). Range entered into the 2022 Supplemental Indenture after the receipt of consents from the requisite holders of the 2022 Notes in accordance with the terms and conditions of the applicable offering materials to incorporate the
proposed amendments described above, as reflected in the 2022 Supplemental Indenture.
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Range entered into a supplemental indenture (the
2023 Supplemental Indenture
and, together with the 2022 Supplemental Indenture, the 2021 Supplemental Indenture and the Memorial Supplemental
Indenture, the
Supplemental Indentures
) to the Indenture (as supplemented prior to the 2023 Supplemental Indenture, the
2023 Range Indenture
), dated as of March 18, 2013, by and among Range, the guarantors
party thereto, and U.S. Bank National Association, as trustee, governing Ranges 5.00% senior subordinated notes due 2023 (the
2023 Notes
and, together with the Memorial Senior Notes, the 2021 Notes and the 2022 Notes, the
Existing Notes
). Range entered into the 2023 Supplemental Indenture after the receipt of consents from the requisite holders of the 2023 Notes in accordance with the terms and conditions of the applicable offering materials
to incorporate the proposed amendments described above, as reflected in the 2023 Supplemental Indenture.
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The Indentures
In connection with the foregoing, on September 16, 2016, Range entered into the following agreements:
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an Indenture (the
New 2021 Indenture
) by and among Range, the guarantors party thereto, and U.S. National Bank Association, as trustee, governing the newly-issued 5.75% senior notes due 2021 (the
New 2021 Notes
), pursuant to which Range issued $475,952,000 aggregate principal amount of New 2021 Notes;
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an Indenture (the
New 2022 Indenture
) by and among Range, the guarantors party thereto, and U.S. National Bank Association, as trustee, governing the newly-issued 5.00% senior notes due 2022 (the
New 2022 Notes
), pursuant to which Range issued $580,032,000 aggregate principal amount of New 2022 Notes;
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an Indenture (the
New 2023 Indenture
) by and among Range, the guarantors party thereto, and U.S. National Bank Association, as trustee, governing the newly-issued 5.00% senior notes due 2023 (the
New 2023 Notes
), pursuant to which Range issued $741,514,000 aggregate principal amount of New 2023 Notes; and
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an Indenture (the
Memorial Exchange Offer Indenture
and, together with the New 2021 Indenture, the New 2022 Indenture and the New 2023 Indenture, the
New Range Indentures
), by and
among Range, the guarantors party thereto, and U.S. National Bank Association, as trustee, governing the newly-issued 5.875% senior notes due 2022 (the
Memorial Exchange Offer Notes
and, together with the New 2021 Notes, the New
2022 Notes, and the New 2023 Notes, the
New Range Notes
), pursuant to which Range issued $329,244,000 aggregate principal amount of Memorial Exchange Offer Notes.
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The New Range Notes are unsecured senior obligations of Range and are guaranteed on a senior basis by the following subsidiaries of Range (collectively, the
Guarantors
and all such guarantees, the
Guarantees
):
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Energy Assets Operating Company, LLC
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Range Energy Services Company, LLC
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Range Production Company, LLC
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Range ResourcesAppalachia, LLC
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Range ResourcesMidcontinent, LLC
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Range ResourcesPine Mountain, Inc.
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Memorial (now known as Range Resources Louisiana, Inc.)
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Range Louisiana Operating, LLC (formerly MRD Operating LLC)
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The interest rate and maturity date of the New 2021 Notes are identical to the interest
rate and maturity date of the 2021 Notes. The interest rate and maturity date of the New 2022 Notes are identical to the interest rate and maturity date of the 2022 Notes. The interest rate and maturity date of the New 2023 Notes are
identical to the interest rate and maturity date of the 2023 Notes. The interest rate and maturity date of the Memorial Exchange Offer Notes issued by Range are identical to the interest rate and maturity date of the Memorial Senior Notes.
The New Range Notes and the Guarantees rank equal in right of payment with all senior indebtedness of Range and the Guarantors, respectively. The New
Range Notes and the Guarantees effectively rank junior to any secured indebtedness of Range or the Guarantors, respectively, including under Ranges credit facility, to the extent of the value of the collateral for such secured
indebtedness. The New Range Notes and the Guarantees rank senior in right of payment to any subordinated indebtedness issued by Range or the Guarantors.
The Registration Rights Agreements
In connection with
the foregoing, on September 16, 2016, Range entered into the following agreements:
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a registration rights agreement (the
New 2021 Registration Rights Agreement
) by and among Range, the Guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets
Inc. and J.P. Morgan Securities LLC, the dealer managers for the offers (the
Dealer Managers
), relating to the New 2021 Notes;
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a registration rights agreement (the
New 2022 Registration Rights Agreement
) by and among Range, the Guarantors and the Dealer Managers, relating to the New 2022 Notes;
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a registration rights agreement (the
New 2023 Registration Rights Agreement
) by and among Range, the Guarantors and the Dealer Managers, relating to the New 2023 Notes; and
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a registration rights agreement (the
Memorial Exchange Offer Registration Rights Agreement
and, together with the New 2021 Registration Rights Agreement, the New 2022 Registration Rights Agreement and
the New 2023 Registration Rights Agreements, the
Registration Rights Agreements
), by and among Range, the Guarantors and the Dealer Managers, relating to the Memorial Exchange Offer Notes.
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Each of the Registration Rights Agreement provides that, if, on the fifth business day following September 16, 2017, (i) New Range Notes of the
applicable series are not freely transferable without volume restrictions by holders that are not affiliates of Range in accordance with Rule 144 (or any similar provision then in force) under the Securities Act of 1933, as amended, or
otherwise, (ii) New Range Notes of the applicable series bear a restrictive Securities Act legend or (iii) New Range Notes of the applicable series bear a restricted CUSIP number (any New Range Notes of the applicable series as to which
any of these restrictions apply
Registrable Notes
), Range and the Guarantors will use commercially reasonable efforts to file with the SEC and cause to become effective a registration statement relating to an offer (the
New Notes Exchange Offer
) to exchange Registrable Notes of the applicable series (and related guarantees) for new notes of such series (and related guarantees) with terms substantially identical to the New Range Notes of the
applicable series except that such new notes will not be subject to restrictions on transfer in the United States or the interest rate increases referred to below.
Under each of the Registration Rights Agreements, Range and the Guarantors have also agreed to use commercially reasonable efforts to make available an
effective shelf registration statement for resales of the Registrable Notes of the applicable series under certain circumstances, including if SEC interpretations do not permit Range and the Guarantors to effect the New Notes Exchange Offer or if
the New Notes Exchange Offer is not completed within 45 days after the registration statement for the New Notes Exchange Offer becomes effective.
The
interest rate on the New Range Notes of the applicable series will increase if Range and the Guarantors do not comply with their obligations under the applicable Registration Rights Agreement.
The foregoing descriptions of the Supplemental Indentures, the New Range Indentures and the Registration Rights
Agreements are only summaries, do not purport to be complete, and are qualified in their entirety by reference to the respective Supplemental Indentures, New Range Indentures and Registration Rights Agreements themselves, which are incorporated by
reference herein and are filed as follows: (i) the Memorial Supplemental Indenture was filed as Exhibit 4.1 to Memorials Current Report on Form 8-K filed with the SEC on August 26, 2016, (ii) the 2021 Supplemental Indenture was filed as
Exhibit 4.1 to Ranges Current Report on
Form 8-K
filed with the SEC on August 25, 2016, (iii) the 2022 Supplemental Indenture was filed as Exhibit 4.2 to Ranges Current Report on Form 8-K
filed with the SEC on August 25, 2016, (iv) the 2023 Supplemental Indenture was filed as Exhibit 4.3 to Ranges Current Report on Form 8-K filed with the SEC on August 25, 2016, (v) the New 2021 Indenture is filed herewith as
Exhibit 4.1, (vi) the New 2022 Indenture is filed herewith as Exhibit 4.2, (vii) the New 2023 Indenture is filed herewith as Exhibit 4.3, (viii) the Memorial Exchange Offer Indenture is filed herewith as Exhibit 4.4, (ix) the New 2021
Registration Rights Agreement is filed herewith as Exhibit 4.5, (x) the New 2022 Registration Rights Agreement is filed herewith as Exhibit 4.6, (xi) the New 2023 Registration Rights Agreement is filed herewith as Exhibit 4.7 and (xii) the
Memorial Exchange Offer Registration Rights Agreement is filed herewith as Exhibit 4.8.