Item 1.01 – Entry into a Material Definitive Agreement
On July 1, 2019, Denbury Resources Inc. (the “Company”) issued additional 7¾% Senior Secured Second Lien Notes due 2024 (the “New Second Lien Notes”) in final settlement (the “Final Second Lien Note Exchanges”) of its offer to exchange New Second Lien Notes for outstanding 7½% Senior Secured Second Lien Notes due 2024 (the “Old Second Lien Notes”). The Company accepted approximately $4.0 million aggregate principal amount of its Old Second Lien Notes in exchange for issuing approximately $3.8 million aggregate principal amount of New Second Lien Notes.
The Final Second Lien Note Exchanges took place in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
The newly issued New Second Lien Notes were issued pursuant to the Indenture dated June 19, 2019 (the “Indenture”) among the Company, the Company’s subsidiaries that are guarantors of the New Second Lien Notes and Wilmington Trust, National Association, as trustee and collateral trustee (the “Collateral Trustee”), the same Indenture covering early participation exchanges of the Company’s second lien notes on June 19, 2019. The Indenture and the New Second Lien Notes are attached as Exhibits 4.1 and 4.2 to the Company’s Current Report on Form 8-K filed on June 24, 2019 (the “Early Participation Form 8-K”), which contains a brief description of their terms.
Collateral Joinders
In connection with the Final Second Lien Note Exchanges, (i) Wilmington Trust, National Association, as representative of the holders of the New Second Lien Notes, and the Collateral Trustee, entered into a collateral trust joinder (the “Collateral Trust Joinder”) pursuant to that certain Collateral Trust Agreement, dated as of May 10, 2016 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time), pursuant to which the Collateral Trustee will receive, hold, administer, maintain, enforce and distribute the proceeds of all liens upon substantially all of the assets (the “Collateral”) that secure the Company’s senior secured bank credit facility (the “Bank Credit Facility”) for the benefit of the holders of the newly issued New Second Lien Notes and other parity lien obligations and (ii) pursuant to the Intercreditor Agreement, dated as of May 10, 2016 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Intercreditor Agreement”), Wilmington Trust, National Association, as representative of the holders of the newly issued New Second Lien Notes, entered into a priority confirmation joinder to the Intercreditor Agreement, as acknowledged by JPMorgan Chase Bank, N.A., as “Priority Lien Agent” and by Wilmington Trust, National Association, as “Second Lien Collateral Trustee,” and as acknowledged and agreed to by the Company (the “Priority Confirmation Joinder”), governing the relationship with respect to the Collateral among holders of the newly issued New Second Lien Notes, holders of other parity lien debt, the lenders under the Bank Credit Facility and holders of other priority lien debt, if any, and holders of the Company’s junior lien debt, if any.
The foregoing descriptions of the Collateral Trust Joinder and Priority Confirmation Joinder are qualified in their entirety by reference to the full text of the joinders attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.