Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement.
As previously disclosed, on January 28, 2020, Sanchez Energy Corporation (the
"Company"), the financial institutions or other entities from time to time
parties thereto as lenders (the "DIP Lenders"), and Wilmington Savings Fund
Society, FSB, as administrative agent and collateral agent (the "Agent"),
entered into an Amended and Restated Senior Secured Debtor-in-Possession Term
Loan Credit Agreement (the "Loan Agreement"), which, among other things,
provided for certain milestone dates, including a deadline for filing by the
Company of a plan of reorganization meeting the requirements of the Loan
Agreement (the "Plan"), which deadline was previously extended to March 26, 2020
in accordance with the Loan Agreement. The Company did not file the Plan by the
extended deadline and, as a result, an "Event of Default" under, and as defined
in, the Loan Agreement occurred. Under the Loan Agreement, on March 27, 2020,
the Agent provided five business days' notice (the "Enforcement and Default
Notice") of the acceleration of all outstanding obligations under the Loan
Agreement; as a result, the $150 million in borrowings under the Loan Agreement
and accrued and unpaid interest and fees thereon would become immediately due
and payable on April 3, 2020 (the "Remedies Notice Period").
During the Remedies Notice Period, the Company, the Agent and the lenders have
consented to a hearing on an expedited basis for the sole purpose of (x)
contesting whether a termination event has occurred and is continuing and (y)
arguing for continued imposition of the automatic stay. However, if a hearing
to consider the foregoing is requested to be heard before the end of the
Remedies Notice Period but is scheduled for a later date by the bankruptcy
court, the Remedies Notice Period will be automatically extended to the date of
the conclusion of such hearing. During the Remedies Notice Period, the lenders
have no obligation to provide and the Company has no right to request any
additional borrowings under the Loan Agreement.
On March 30, 2020, based upon an agreement in principle between the DIP Lenders
and the Company and its subsidiary debtors regarding the terms of a plan of
reorganization, the DIP Lenders agreed, and instructed the Agent, to abate the
Enforcement and Default Notice.
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