Exhibit 10.1

 

Execution Version

 

 [tv514889_10-1img1.jpg]

 

February 24, 2019

 

Ring Energy, Inc.

901 West Wall Street

Midland, TX 79701

 

Attention:William R. Broaddrick
Vice President and Chief Financial Officer

 

Re:$1,000,000,000 Amended and Restated Senior Secured Revolving Credit Facility
for Ring Energy, Inc., subject to an initial Borrowing Base of $425,000,000

 

Gentlemen:

 

Ring Energy, Inc. (the “Company”) has advised SunTrust Bank and SunTrust
Robinson Humphrey, Inc. (the “Lead Arranger” and, together with SunTrust Bank,
“SunTrust”) that the Company intends to acquire (the “Acquisition”) the oil and
gas properties and related assets in Coke, Gaines, Yoakum and Runnels Counties,
Texas and Lea County, New Mexico (the “Acquired Assets”) of Wishbone Energy
Partners, LLC, Wishbone Texas Operating Company LLC and WB Waterworks, LLC
(collectively, the “Seller”) pursuant to a purchase and sale agreement between
the Company and the Seller (the “Acquisition Agreement”). You have further
advised SunTrust that, in connection with the Acquisition, the Company seeks to
amend and restate its existing senior credit facility (the “Existing Senior
Credit Facility”), which amendment and restatement will increase the maximum
facility amount from $500,000,000 to $1,000,000,000 and increase the total
borrowing base to $425,000,000, add additional lenders, extend the maturity date
and make other modifications on the terms set forth in the Summary of Principal
Terms and Conditions attached hereto as Annex I (the “Term Sheet”). As used in
this letter, the “Amended and Restated Credit Agreement” means the proposed
amended and restated credit agreement described in this letter and the Term
Sheet and the “Amended and Restated Senior Credit Facility” means the Existing
Senior Credit Facility as amended and restated by such proposed Amended and
Restated Credit Agreement. All transactions described above, together with the
financing contemplated hereby, are sometimes referred to herein as the
“Transactions”. Capitalized terms used in this letter but not defined herein
shall have the meanings given to them in the Term Sheet.

 

SunTrust Bank is pleased to commit to provide the full amount of the
$425,000,000 initial increased Borrowing Base, subject to the terms and
conditions set forth in this letter and the Term Sheet (collectively, this
“Commitment Letter”). You hereby appoint SunTrust Robinson Humphrey, Inc. to
act, and the Lead Arranger agrees to act, as sole lead arranger and book manager
for the Amended and Restated Senior Credit Facility, subject to the terms and
conditions of this Commitment Letter. No other agents, co-agents or arrangers
will be appointed, or other titles conferred, without the prior written consent
of the Lead Arranger.

 

 

 

 

Ring Energy, Inc.

Page 2

 

A.Syndication

 

The Lead Arranger reserves the right, before or after the execution of the
Financing Documentation, to syndicate all or a portion of SunTrust Bank’s
commitment to one or more other financial institutions that will become parties
to the Financing Documentation (such financial institutions, the “Lenders”) and
the commitment of SunTrust Bank hereunder shall be reduced dollar-for dollar as
and when the corresponding commitments are received. The Company understands
that the Lead Arranger intends to commence such syndication efforts promptly.
The Company agrees to actively assist the Lead Arranger in achieving a
Successful Syndication (as defined in the Fee Letter) and take such action as
the Lead Arranger may reasonably request related thereto. The Company’s
assistance shall include (but not be limited to) (i) making senior management,
representatives and advisors of the Company and its affiliates available to
participate in meetings and to provide information to potential lenders under
the Amended and Restated Senior Credit Facility at such times and places as the
Lead Arranger may reasonably request; (ii) using the Company’s existing lending
relationships to assist in the syndication process; and (iii) assisting in the
preparation of an information memorandum regarding the Company, the Acquired
Assets, the Amended and Restated Credit Agreement and the Amended and Restated
Senior Credit Facility and other customary marketing materials to be used in
connection with the syndication, in form and substance reasonably acceptable to
the Lead Arranger, at least 25 days prior to the Closing Date; and (iv)
preparing and providing promptly to the Lead Arranger all information with
respect to the Company, its subsidiaries, the Acquired Assets and the
Transactions, including without limitation all financial information and
projections (the “Projections”), reasonably requested by the Lead Arranger in
connection with the syndication of the Amended and Restated Credit Agreement.

 

The Lead Arranger will manage all aspects of the syndication of the Amended and
Restated Senior Credit Facility in consultation with SunTrust Bank and the
Company, including the timing of all offers to potential Lenders, the
determination of all amounts offered to potential Lenders, the selection of
Lenders, the allocation of commitments, and the determination of compensation
and titles (such as co-agent, managing agent, etc.) given, if any, to such
Lenders. The Company agrees that no other agents, co-agents or arrangers will be
appointed, or other titles conferred, without the prior written consent of the
Lead Arranger, and that no Lender will receive any compensation for its
commitment to, or participation in, the Amended and Restated Senior Credit
Facility except as expressly set forth in the Term Sheet or the Fee Letter (as
defined below), or as otherwise agreed to and offered by the Lead Arranger.

 

To ensure an orderly and effective syndication of the Amended and Restated
Senior Credit Facility, the Company further agrees that until the earlier of
termination of this Commitment Letter and a Successful Syndication (as defined
in the Fee Letter), the Company will not, and will not cause or permit any of
its affiliates or agents to, arrange, sell, syndicate or issue, attempt to
arrange, sell, syndicate or issue, announce or authorize the announcement of the
arrangement, sale, syndication or issuance of, or engage in discussions
concerning the arrangement, sale, syndication or issuance of, any credit
facility or debt security (including any renewals thereof) except with the prior
written consent of the Lead Arranger.

 

B.Conditions Precedent

 

The undertakings and obligations of SunTrust under this Commitment Letter are
subject to: (i) the preparation, execution and delivery of loan documentation
substantially consistent with the Term Sheet, including an amendment and
restatement of the Existing Credit Agreement incorporating substantially the
terms and conditions outlined in this Commitment Letter; (ii) the accuracy of
all fundamental representations that the Company makes to SunTrust (including
those in Section D below) and all information that the Company furnishes to
SunTrust, and the absence of any information or other matter being disclosed
after the date hereof that is inconsistent in a material and adverse manner with
any information or other material disclosed to SunTrust; (iii) the payment in
full of all fees, expenses and other amounts payable hereunder and under the Fee
Letter; (iv) the compliance with the provisions of this Commitment Letter; (v)
the Closing Date on or prior to May 15, 2019; and (vi) the satisfaction of the
other conditions set forth in the Term Sheet.

 

 

 

 

Ring Energy, Inc.

Page 3

 

C.Representations

 

The Company represents and warrants to SunTrust that all information, other than
the Projections, that has been or will be made available to SunTrust or any of
the Lenders by the Company or any of the Company’s representatives (or on your
or their behalf) in connection with the transactions contemplated by this
Commitment Letter (the “Information”) is or will be, when furnished, complete
and correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading and
(ii) the Projections have been or will be prepared in good faith based upon
reasonable assumptions. The Company agrees to supplement the Information and the
Projections from time to time so that the representation and warranty contained
in this paragraph remains correct. In issuing the commitments and undertakings
hereunder and in arranging and syndicating the Amended and Restated Senior
Credit Facility, SunTrust Bank and the Lead Arranger are relying on the accuracy
of the Information and the Projections without independent verification thereof.

 

The Company authorizes the Lead Arranger and its affiliates, including SunTrust
Bank, to share with each other, and to use, credit and other confidential or
non-public information regarding the Company to the extent permitted by
applicable laws and regulations and for the purpose of performing their
obligations under this Commitment Letter and the Amended and Restated Senior
Credit Facility.

 

D.Indemnities, Expenses, Fees Etc.

 

1.       Indemnification.  The Company agrees to indemnify and hold harmless the
Lead Arranger, SunTrust Bank, each other Lender, their respective affiliates and
their respective directors, officers, employees, agents, representatives, legal
counsel, and consultants (each, an “Indemnified Person”) against, and to
reimburse each Indemnified Person upon its demand for, any losses, claims,
damages, liabilities or other expenses (“Losses”) incurred by such Indemnified
Person or asserted against such Indemnified Person by any third party or by the
Company or any of its affiliates, arising out of or in connection with this
Commitment Letter, the Fee Letter, the financing and other Transactions or the
use of the proceeds of the Amended and Restated Senior Credit Facility, or any
claim, litigation, investigation or proceeding relating to any of the foregoing
(whether or not such Indemnified Person is a party thereto), and to reimburse
each Indemnified Person upon demand for any legal or other expenses incurred in
connection with investigating or defending any of the foregoing, whether or not
such Indemnified Person is a party to any such proceeding, in all cases, whether
or not caused by or arising in whole or in part out of the comparative,
contributory or sole negligence of any indemnified person; provided that the
Company shall not be liable pursuant to this indemnity for any Losses to the
extent that a court having competent jurisdiction shall have determined by a
final judgment (not subject to further appeal) that such Loss resulted from the
gross negligence or willful misconduct of such Indemnified Person. The Company
shall not, without the prior written consent of any Indemnified Person, effect
any settlement of any pending or threatened proceeding in respect of which such
Indemnified Person is a party and indemnity has been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such indemnity. No Indemnified Person shall be responsible or liable to the
Company or any other person or entity for any damages arising from the use by
others of the Information or other materials obtained through electronic,
telecommunications or other information transmission systems or for any special,
punitive, indirect, exemplary or consequential damages in connection with the
Amended and Restated Credit Agreement or the Amended and Restated Senior Credit
Facility.

 

 

 

 

Ring Energy, Inc.

Page 4

 

2.       Fees and Expenses. In addition to the fees described in the Term Sheet,
the Company will pay (or cause to be paid) the fees set forth in that certain
letter agreement dated as of the date hereof, executed by SunTrust Bank and the
Lead Arranger and acknowledged and agreed to by the Company relating to this
Commitment Letter (the “Fee Letter”). The Company also agrees to pay, or to
reimburse SunTrust on demand for, all reasonable costs and expenses incurred by
SunTrust (whether incurred before or after the date hereof) in connection with
the Amended and Restated Credit Agreement, the Amended and Restated Senior
Credit Facility, the syndication thereof, the preparation of the Financing
Documentation and the other Transactions, including, without limitation, bank
meeting expenses and fees and disbursements of its counsel, regardless of
whether the Closing Date occurs. The Company also agrees to pay all costs and
expenses of SunTrust (including, without limitation, fees and disbursements of
its counsel) incurred in connection with the enforcement of any of its rights
and remedies hereunder.

 

E.Miscellaneous

 

1.       Termination. This Commitment Letter and all commitment and undertakings
of SunTrust hereunder shall expire at 5:00 p.m., Atlanta, Georgia time, on
February 28, 2019, unless by such time the Company executes and delivers to
SunTrust this Commitment Letter and the Fee Letter. Thereafter, all commitments
and obligations of SunTrust under this Commitment Letter will terminate upon the
earliest to occur of (i) consummation of the Acquisition (with or without the
use of the Amended and Restated Senior Credit Facility), (ii) termination of the
Acquisition Agreement, either by its terms or by a court of competent
jurisdiction, or (iii) at 5:00 p.m. Atlanta, Georgia time on May 15, 20191
unless the Closing Date occurs on or prior to such date. In addition to the
foregoing, this Commitment Letter may be terminated at any time by mutual
agreement, and all commitments and undertakings of SunTrust hereunder may be
terminated by SunTrust if the Company fails to perform its obligations under
this Commitment Letter or the Fee Letter on a timely basis.

 

2.       No Third-Party Beneficiaries. This Commitment Letter is solely for the
benefit of the Company, SunTrust and the Indemnified Persons; no provision
hereof shall be deemed to confer rights on any other person or entity.

 

3.       No Assignment; Amendment. This Commitment Letter and the Fee Letter may
not be assigned by the Company to any other person or entity, but all of the
obligations of the Company hereunder and under the Fee Letter shall be binding
upon the successors and assigns of the Company. This Commitment Letter and the
Fee Letter may be not be amended or modified except in writing executed by each
of the parties hereto.

 

4.       Use of Name and Information. The Company agrees that any references to
SunTrust or any of its affiliates made in connection with the Amended and
Restated Senior Credit Facility are subject to the prior approval of SunTrust,
which approval shall not be unreasonably withheld. SunTrust shall be permitted
to use information related to the syndication and arrangement of the Amended and
Restated Senior Credit Facility in connection with marketing, press releases or
other transactional announcements or updates provided to investor or trade
publications; including, but not limited to, the placement of “tombstone”
advertisements in publications of its choice at its own expense.

 

 

1 NTD: To be same date as Section B.(vi)

 

 

 

 

Ring Energy, Inc.

Page 5

 

5.       Governing Law; Waiver of Jury Trial. This Commitment Letter and the Fee
Letter will be governed by and construed in accordance with the laws of the
state of Texas without regard to the principles of conflicts of laws thereof.
EACH OF THE COMPANY AND SUNTRUST IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATED TO THIS COMMITMENT LETTER, THE FEE LETTER
OR ANY OF THE TRANSACTIONS OR THE ACTIONS OF SUNTRUST IN THE NEGOTIATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

 

THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE COURT IN THE STATE OF GEORGIA OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA FOR THE PURPOSE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, THE
FEE LETTER, AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY AND
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY AND
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. A FINAL JUDGMENT IN ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER
COURTS TO WHOSE JURISDICTION THE COMPANY OR SUNTRUST ARE OR MAY BE SUBJECT, BY
SUIT UPON JUDGMENT. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT ON THE
COMPANY MAY BE MADE BY REGISTERED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS
APPEARING AT THE BEGINNING OF THIS LETTER FOR ANY SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT PURSUANT TO THIS COMMITMENT LETTER.

 

6.       Survival. The obligations of the Company under the expense
reimbursement, indemnification, confidentiality, and governing law, submission
to jurisdiction, jury trial waiver and related provisions of this Commitment
Letter shall survive the expiration and termination of this Commitment Letter.

 

7.       Confidentiality. The Company will not disclose or permit disclosure of
this Commitment Letter, the Fee Letter nor the contents of the foregoing to any
person or entity (including, without limitation, any Lender other than
SunTrust), either directly or indirectly, orally or in writing, except (i) to
the Company’s officers, directors, agents and legal counsel who are directly
involved in the transactions contemplated hereby, in each case on a confidential
basis, (ii) with respect to this Commitment Letter (but not the Fee Letter), to
the Seller and its officers, directors, agents and legal counsel on a
confidential basis or (iii) as required by law (in which case the Company agrees
to inform SunTrust promptly thereof).

 

 

 

 

Ring Energy, Inc.

Page 6

 

8.       No fiduciary duty. The Company acknowledges and agrees that (i) the
commitment to and syndication of the Amended and Restated Senior Credit Facility
pursuant to this Commitment Letter is an arm's-length commercial transaction
between the Company, on the one hand, and SunTrust, on the other, and the
Company is capable of evaluating and understanding, and does understand and
accept, the terms, risks and conditions of the transactions contemplated by this
Commitment Letter, (ii) in connection with the transactions contemplated hereby
and the process leading to such transactions, SunTrust is and has been acting
solely as a principal and is not the agent or fiduciary of the Company or its
stockholders, creditors, employees or any other party, (iii) SunTrust has not
assumed an advisory responsibility or fiduciary duty in favor of the Company
with respect to the transactions contemplated hereby or the process leading
thereto (irrespective of whether SunTrust has advised or is currently advising
the Company on other matters) or any other obligation to the Company except the
obligations expressly set forth in this Commitment Letter, (iv) SunTrust and its
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company and its affiliates, and SunTrust
has no obligation to disclose any of such interests by virtue of any fiduciary
or advisory or other relationship as a consequence of this Commitment Letter,
and (v) SunTrust has not provided any legal, accounting, regulatory or tax
advice with respect to any transactions contemplated hereby and the Company has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate. The Company waives and releases, to the fullest extent
permitted by law, any claims that it may have against SunTrust with respect to
any breach or alleged breach of fiduciary duty as a consequence of this
Commitment Letter.

 

9.       Counterparts. This Commitment Letter and the Fee Letter may be executed
in any number of separate counterparts, all of which together constitute one
original. Delivery of an executed counterpart of a signature page to this
Commitment Letter or the Fee Letter by facsimile transmission or electronic
transmission (in pdf form) shall be as effective as delivery of a manually
executed counterpart hereof.

 

10.       Entire Agreement; Swap Disclaimer. (a) This Commitment Letter and the
Fee Letter embody the entire agreement and understanding among SunTrust, the
Company and their affiliates with respect to the Amended and Restated Senior
Credit Facility and any transactions related thereto, and supersede all prior
understandings and agreements among the parties relating to the subject matter
hereof. However, the terms and conditions of the commitments of SunTrust Bank
and the undertakings of the Lead Arranger hereunder are not limited to those set
forth herein, in the Term Sheet or in the Fee Letter; those matters not covered
or made clear herein or in the Term Sheet are subject to mutual agreement of the
parties.

 

(b)       Nothing herein constitutes an offer or recommendation to enter into
any “swap” or trading strategy involving a “swap” within the meaning of Section
1a(47) of the Commodity Exchange Act. Any such offer or recommendation, if any,
will only occur after we have received appropriate documentation from you
regarding whether you are qualified to enter into a swap under applicable law.

 

11.       Patriot Act. SunTrust hereby notifies the Company that pursuant to the
requirements of the USA Patriot Improvement and Reauthorization Act of 2005,
Title III of Pub. L. 109-177 (signed into law March 9, 2006) (the “Patriot Act”)
and the requirements of 31 C.F.R. § 1010.230 (the “Beneficial Ownership
Regulation”), it and its affiliates are required to obtain, verify and record
information that identifies the Company and certain of its affiliates, which
information includes their names, addresses, tax identification numbers and
other information that will allow SunTrust to identify the Company and certain
of its affiliates in accordance with the Patriot Act or the Beneficial Ownership
Regulation, as applicable. This notice is given in accordance with the
requirements of the Patriot Act and is effective for SunTrust and its
affiliates.

 

[Remainder of this page is intentionally blank]

 

 

 

 

We look forward to working with you on this important transaction.

 

  Very truly yours,       SUNTRUST BANK       By:     Name:     Title:  

 

  SunTrust Robinson Humphrey, Inc.         By:     Name:     Title:  

 

Signature Page to Commitment Letter

 

 

 

 

ACCEPTED AND AGREED

this ____ day of February, 2019:

 

RING ENERGY, INC.

 

By:       William R. Broaddrick     Vice President and Chief Financial Officer  

 

Signature Page to Commitment Letter