Item 1.01 Entry into a Material Definitive Agreement.
Note Purchase Agreement
On March 16, 2017, the Partnership, the Issuers and the wholly-owned domestic restricted subsidiaries of the Issuers that will guarantee the New Term Loan (the “
Guarantors
”), entered into a Purchase Agreement (the “
Purchase Agreement
”) with a representative of the initial purchasers named therein (collectively, the “
Initial Purchasers
”). Pursuant to the Purchase Agreement, the Initial Purchasers have agreed to purchase, and the Issuers have agreed to sell, $425.0 million aggregate principal amount of the Issuers’ 11.50% senior secured second lien notes due 2023 (the “
New Notes
”) at an issue price of 99.25%, plus accrued and unpaid interest, if any. The Initial Purchasers intend to resell the New Notes in an offering exempt from registration under the Securities Act of 1933, as amended (the “
Offering
”).
The closing of the Offering is expected to occur on March 28, 2017, and is subject to a number of conditions, including the substantially concurrent closing of the New Term Loan. The Purchase Agreement contains representations and warranties, covenants and closing conditions that are customary for transactions of this type. In addition, the Issuers and the Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities on customary terms.
In the ordinary course of their various business activities, the Initial Purchasers and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the Issuers (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Issuers. The Initial Purchasers and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such
assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.
The New Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “
Securities Act
”), and outside the United States, only to non-U.S. investors pursuant to Regulation S. Any New Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or in a transaction not subject to the registration requirements of the Securities Act or any state securities laws. This Current Report (as defined below) does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.
Letter Agreement Amendment
On March 13, 2017, the Partnership, Foresight Reserves, LP (“
Reserves
”), certain investors in Reserves (together with Reserves, the “
Reserves Investor Group
”) and Murray Energy Corporation (“
Murray
” and, together with the Partnership and the Reserves Investor Group, the “
Parties
”) entered into the Amendment (the “
Amendment
”) to Letter Agreement, dated as of August 30, 2016 (the “
Letter Agreement
”), among the Parties. Reserves and Murray are significant equity holders in the Partnership and in the Partnership’s general partner.
In lieu of the Reserves Investor Group’s notice and certain other rights provided in the Letter Agreement, the Amendment provides that the Reserves Investor Group may participate as a lender or purchaser, as applicable, in the New Term Loan and the New Notes, and such opportunity was provided. A member of the Reserves Investor Group is expected to purchase an aggregate principal amount of up to $20.0 million of the New Notes in the offering and such purchase will be on the same terms and through the same process as other purchasers in respect of the New Notes.
The Partnership and its affiliates may not change the terms of such financing prior to the closing thereof without the consent of the Reserves Investor Group. Furthermore, the Partnership and its affiliates may not amend, replace, refinance, retire, redeem, purchase, sell, incur or issue any debt (other than trade accounts payable, letters of credit, guaranties and similar debt incurred in the ordinary course of business), except (i) in connection with the Refinancing Transactions, (ii) under the Existing Revolving Credit Facility as it exists at the time of the Amendment or (iii) under the Partnership’s accounts receivable financing facility as it exists at the time of the Amendment.
The foregoing description of the Amendment contained within this Current Report on Form 8-K (this “
Current Report
”) is qualified in its entirety by reference to the full text of the Amendment attached hereto as
Exhibit 10.1
, which is incorporated herein by reference to this Current Report.