C&J Energy Services Ltd. (NASDAQ:C) Files An 8-K Entry into a Material Definitive Agreement

C&J Energy Services Ltd. (NASDAQ:C) Files An 8-K Entry into a Material Definitive Agreement

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Item1.01

Entry into a Material Definitive Agreement

Backstop Commitment Agreement

On December 6, 2016, CJ Energy Services Ltd. (the Company)
entered into a backstop commitment agreement (the Backstop
Commitment Agreement) with the parties thereto (collectively, the
Backstop Parties), to which the Backstop Parties have agreed to
backstop a $200 million new money investment in the Company and
certain of its subsidiaries (collectively, the Debtors) to a
rights offering (the Rights Offering) to be conducted in
accordance with the Second Amended Joint Chapter 11 Plan of
Reorganization of CJ Holding Co., et al., to Chapter 11 of Title
11 of the United States Bankruptcy Code (as amended from time to
time, the Plan).

In accordance with the Plan, the Backstop Commitment Agreement
and the Rights Offering procedures filed in the Debtors Chapter
11 proceedings being administered under the caption In re CJ
Holding Co., et al., Case No. 16-33590 (DRJ)
(the Chapter 11
Cases) in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the Bankruptcy Court), the
Debtors will offer eligible creditors, including the Backstop
Parties, the right to purchase new common stock in the
reorganized Company (the New Common Stock) upon emergence from
the Chapter 11 Cases for an aggregate purchase price of $200
million.

The Rights Offering, which commenced on November 15, 2016 and
will end on December 9, 2016, unless extended to the terms of the
Rights Offering and the Backstop Commitment Agreement, provides
for holders of eligible secured claims under the Credit
Agreement, dated as of March 24, 2015 and as amended and modified
from time to time, by and among the Company, CJ Holding Co., CJ
Lux Holdings S.a.r.l., the other guarantors from time to time
party thereto, Cortland Capital Market Services LLC, as successor
administrative agent, and the lenders from time to time party
thereto, as of the record date set therefor to be granted rights
entitling each such holder to subscribe to purchase an amount of
New Common Stock (such New Common Stock offered for purchase to
the Rights Offering, the Rights Offering Shares) up to such
holders respective pro rata share of such eligible secured
claims. The Rights Offerings Shares, collectively, reflect an
aggregate purchase price of $200 million at the per share price
of $13.58.

Under the Backstop Commitment Agreement, certain Backstop Parties
have agreed to purchase, severally and not jointly, the Rights
Offering Shares that are not duly subscribed to by parties other
than Backstop Parties to the Rights Offering at the same per
share price as the Rights Offering (the Backstop Commitment).

Subject to approval by the Bankruptcy Court, the Debtors will pay
the Backstop Parties on the effective date of the Plan (the
Closing Date) a put option premium equal to 5% of the $200
million committed amount (the Put Option Premium), which, if the
transactions contemplated by the Backstop Commitment Agreement
are consummated, will be paid in the form of New Common Stock at
the same per share price offered in the Rights Offering. The Put
Option Premium shall be fully earned and nonrefundable as of the
date of the Bankruptcy Court order approving the consummation of
the transactions contemplated by the Backstop Commitment
Agreement. The Company will also be required to pay the Put
Option Premium in cash as a termination fee upon the occurance of
certain termination events set forth in the Backstop Commitment
Agreement. All amounts payable to the Backstop Parties in their
capacities as such for the Put Option Premium shall be paid pro
rata based on the amount of their respective Backstop Commitments
on the Closing Date (as compared to the aggregate Backstop
Commitment of all Backstop Parties) except that if a Backstop
Party defaults in its commitment, its portion of the Put Option
Premium may be reallocated to other Backstop Parties that cover
its defaulted commitment. The Company will also be required to
the Backstop Commitment Agreement to

reimburse the Backstop Parties for reasonable and documented fees
and expenses of certain advisors to the Backstop Parties and to
indemnify the Backstop Parties under certain circumstances for
losses arising out of the Backstop Commitment Agreement, the Plan
and the transactions contemplated thereby.

The rights to purchase New Common Stock in the Rights Offering,
any shares issued upon exercise thereof, all shares issued to the
Backstop Parties to the Backstop Commitment Agreement in respect
of their Backstop Commitments and to the Put Option Premium will
be issued in reliance upon the exemption from the registration
requirements under the Securities Act of 1933, as amended (the
Securities Act), provided by Section 1145 of Title 11 of the
United Sates Code, as amended, Section 4(a)(2) of the Securities
Act and/or Regulation D thereunder. As a condition to the closing
of the transactions contemplated by the Backstop Commitment
Agreement, the Company will enter into a registration rights
agreement with certain Backstop Parties entitling such Backstop
Parties to request that the Company register their securities for
sale under the Securities Act at various times and upon the terms
and conditions set forth in the registration rights agreement, a
form of which is set forth as an exhibit to the Backstop
Commitment Agreement.

The Backstop Parties commitments to backstop the Rights Offering,
and the other transactions contemplated by the Backstop
Commitment Agreement, are conditioned upon the satisfaction of
all conditions to the effectiveness of the Plan and other
applicable conditions precedent set forth in the Backstop
Commitment Agreement. The issuances of New Common Stock to the
Rights Offering and the Backstop Commitment Agreement are
conditioned upon, among other things, confirmation of the Plan by
the Bankruptcy Court, and the Plans effectiveness upon the
Companys emergence from its Chapter 11 Cases.

The Backstop Commitment Agreement contains customary
representations, warranties and covenants by each of the Company
and the Backstop Parties, including covenants by the Company
regarding the conduct of the business of the Company prior to the
Closing Date. The Backstop Commitment Agreement also contains
customary termination rights exercisable by certain of the
Backstop Parties including, among other things, if (i) there has
been a material adverse change since December 31, 2015; (ii) the
Bankruptcy Court enters an order confirming a plan of
reorganization other than the Plan or the Company enters into or
seeks Bankruptcy Court authority to enter into an alternative
transaction; (iii) the Debtors breach any representation,
warranty or covenant in the Backstop Commitment Agreement,
subject to certain materiality qualifiers and cure provisions; or
(iv) the Closing Date shall not have occurred by February 28,
2017.

The foregoing description of the Backstop Commitment Agreement is
qualified in its entirety by reference to the full text of such
agreement, a copy of which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.


Item3.02
Unregistered Sale of Equity Securities

On December6, 2016, the Company entered into the Backstop
Commitment Agreement covering the sale, upon the effective date
of the Plan, of New Common Stock. The disclosure under Item 1.01
with respect to the Backstop Commitment Agreement is incorporated
herein by reference.


Item9.01
Financial Statements and Exhibits

(d) Exhibits


ExhibitNo.


Description of Exhibit

10.1 Backstop Commitment Agreement, dated as of December 6, 2016,
by and among the Company and the other parties thereto.


About C&J Energy Services Ltd. (NASDAQ:C)


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