HPK HighPeak Energy Inc

 

 

On March 14, 2023 (the “Eighth Amendment Effective Date”), HighPeak Energy, Inc. (the “Company”), as borrower, Wells Fargo Bank, National Association, as administrative agent, the guarantors party thereto and the lenders party thereto entered into that certain Eighth Amendment to Credit Agreement (the “Credit Agreement Amendment”), which upon effectiveness, amended that certain Credit Agreement, dated as of December 17, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified by that certain (i) First Amendment to Credit Agreement, dated as of June 23, 2021, (ii) Second Amendment to Credit Agreement, dated as of October 1, 2021, (iii) Third Amendment to Credit Agreement, dated as of February 9, 2022, (iv) Fourth Amendment to Credit Agreement, dated as of June 27, 2022 (v) Fifth Amendment to Credit Agreement, dated as of October 14, 2022, (vi) Sixth Amendment to Credit Agreement, dated as of October 31, 2022, (vii) Seventh Amendment to Credit Agreement, dated as of December 9, 2022 and (viii) the Credit Agreement Amendment, (the “Credit Agreement”)), by and among the Company, Wells Fargo Bank, National Association, as administrative agent, the guarantors party thereto and the lenders party thereto to, among other things, (a) increase the borrowing base to $700 million, (b) add an aggregate elected commitments concept at an initial amount of $575 million, (c) provide that the applicable margin shall be determined in reference to such aggregate elected commitments (as opposed to being determined in reference to the borrowing base before giving effect to the Credit Agreement Amendment), (d) modify the permitted dividends and distributions conditions such that minimum availability under the credit facility must be 25% of such aggregate elected commitments (as opposed to the borrowing base before giving effect to the Credit Agreement Amendment), (e) permit quarterly dividends and distributions in an amount not to exceed $4.0 million provided that there is no default and that after giving effect thereto and any concurrent borrowing, the Company is in pro forma compliance with its financial covenants, (f) require the Company, on or before June 30, 2023, to redeem or refinance the 2024 Senior Notes (as defined in the Credit Agreement), allocate a portion of its cash flow that will retire the 2024 Senior Notes on or before November 30, 2023 or amend the terms of the 2024 Senior Notes to extend the scheduled repayment thereof to no earlier than February 15, 2025, (g) permit the redemption of Specified Additional Debt (as defined in the Credit Agreement) with the proceeds of Loans if pre-approved by all Lenders provided that there is no default and that after giving effect thereto, the Company is in pro forma compliance with its financial covenants and (h) add Texas Capital Bank as a Lender.

 

The foregoing description of the Credit Agreement Amendment is qualified in its entirety by reference to the Credit Agreement Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference.