Legacy Reserves LP (NASDAQ:LGCY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

Amendment to Term Loan Agreement

On December31, 2017 Legacy Reserves LP (“Legacy”) entered into the Third Amendment to the Term Loan Credit Agreement (the “Amendment”) among Legacy, as borrower, Cortland Capital Market Services LLC, as administrative agent and second lien collateral agent, and the lenders party thereto, including GSO Capital Partners LP and certain funds and accounts managed, advised or sub-advised by it (collectively, “GSO”), which amended the Term Loan Credit Agreement, dated as of October25, 2016, among Legacy, as borrower, Cortland Capital Market Services LLC, as administrative agent and second lien collateral agent, and the lenders party thereto (the “Term Loan Credit Agreement”), as amended by the First Amendment and Waiver to Term Loan Credit Agreement, dated as of July31, 2017, (the “First Amendment”) and the Second Amendment to Term Loan Credit Agreement, dated as of October30, 2017 (the “Second Amendment”). The Amendment, among other things, increases the maximum principal amount of term loans under the Term Loan Agreement to $400.0million, extends the availability of borrowings under the Term Loan Credit Agreement to October25, 2019, relaxes the asset coverage ratio financial covenant from 1.0x to 0.85x during 2018 and requires Legacy to mortgage certain additional properties located in the Permian Basin. In connection with the Amendment, Legacy paid GSO a customary consent fee and a yield enhancement fee. In addition, Legacy, Legacy Reserves GP, LLC, a Delaware limited liability company and the general partner of Legacy (the ”General Partner”), and GSO entered into a voting agreement with respect to their positions in Legacy’s 8% Senior Notes due 2020 whereby Legacy has generally agreed to vote its position of such notes consistent with that of GSO.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein. A complete copy of the Term Loan Agreement is incorporated by reference herein from Exhibit 10.1 to Legacy’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October28, 2016. Complete copies of the First Amendment and Second Amendment are incorporated by reference herein from Exhibit 10.1 to each of the Company’s Quarterly Reports on Form 10-Q filed with the SEC on August4, 2017 and November1, 2017, respectively.

Note Purchase Agreement

On December31, 2017, Legacy entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Fir Tree Value Master Fund, L.P., Fir Tree Capital Opportunity Master Fund, L.P., Fir Tree Capital Opportunity Master Fund III, L.P., FT SOF IV Holdings, LLC, FT SOF V Holdings, LLC, and FT SOF VII Holdings, LLC (collectively, the “Fir Tree Sellers”). to the Note Purchase Agreement, Legacy purchased from the Fir Tree Sellers an aggregate of approximately $187.1million in principal amount of Legacy’s 6.625% Senior Notes due 2021 for an aggregate purchase price of approximately $132.1million, inclusive of accrued and unpaid interest, representing $0.70 per $1.00 of principal amount. On January5, 2018, Legacy drew approximately $131million of net borrowings under the Term Loan Credit Agreement to settle the transactions under the Note Purchase Agreement with respect to the purchase price attributable to principal amount. The portion of the purchase price attributable to accrued and unpaid interest was settled with borrowings under Legacy’s revolving credit facility.

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The foregoing description of the Note Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Note Purchase Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.

Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under “Amendment to Term Loan Credit Agreement” in Item 1.01 is hereby incorporated by reference into this Item 1.01.

Item 1.01 Unregistered Sales of Equity Securities.

On January5, 2018, the Partnership issued 3.8million units representing limited partnership interests in Legacy (“Units”) to Fir Tree E&P Holdings XI, LLC (“Fir Tree E&P Holdings”). The issuance of the Units to Fir Tree E&P Holdings was a private placement of equity securities made in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended, to Section4(a)(2) thereof. The Units were issued, together with $2.5million cash, as consideration to the Standstill and Voting Agreement, entered into as of December31, 2017, by and among Legacy, the General Partner and Fir Tree Value Master Fund, L.P., Fir Tree Capital Opportunity Master Fund, L.P., Fir Tree Capital Opportunity Master Fund III, L.P., FT SOF IV Holdings, LLC, FT SOF V Holdings, LLC, and FT SOF VII Holdings, LLC, Fir Tree E&P Holdings and Fir Tree Capital Management LP (f/k/a Fir Tree Inc.) (“Fir Tree Capital” and collectively, the “Fir Tree Parties”), whereby the Fir Tree Parties agreed to, among other things, (i)limit their ability to acquire additional Legacy securities for a period of one year, (ii)limit their ability to transfer the Units for a period of six months, (iii)vote their Units in accordance with the recommendation of the Board for a period of one year and (iv)generally support the actions of the Board for a period of one year.

Item 1.01 Exhibits.

(d) Exhibits

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LEGACY RESERVES LP Exhibit
EX-10.1 2 d509439dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 THIRD AMENDMENT TO TERM LOAN CREDIT AGREEMENT This THIRD AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Third Amendment”) dated as of December 31,…
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About Legacy Reserves LP (NASDAQ:LGCY)

Legacy Reserves LP (Legacy) is a master limited partnership company. The Company is focused on the acquisition and development of oil and natural gas properties located in the Permian Basin, Rocky Mountain and Mid-Continent regions of the United States. The Company has proved reserves of approximately 164.2 million barrels of crude oil equivalent (MMBoe), of which over 73% are natural gas, approximately 27% are oil and natural gas liquids (NGLs) and over 97% are classified as proved developed producing. The Company has completed approximately 140 acquisitions of oil and natural gas properties. It owns interests in producing oil and natural gas properties in over 720 fields in the Permian Basin, East Texas, Piceance Basin of Colorado, Texas Panhandle, Wyoming, North Dakota, Montana, Oklahoma and several other states. Legacy’s fields and regions include East Texas, Spraberry/War San, Piceance Basin, Lea, Texas Panhandle, Deep Rock, Shafter Lake, Jalmat, Winchester and Denton.