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HEK > SEC Filings for HEK > Form 8-K on 7-Nov-2012All Recent SEC Filings

Show all filings for HECKMANN CORP

Form 8-K for HECKMANN CORP


7-Nov-2012

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati


Item 1.01 Entry Into a Material Definitive Agreement.

Indenture; Escrow Agreement

On November 5, 2012, Rough Rider Escrow, Inc. (the "Issuer"), a wholly-owned subsidiary of Heckmann Corporation (the "Company"), completed and closed its offering of $150.0 million aggregate principal amount of unsecured 9.875% Senior Notes due 2018 (the "Senior Notes") in a private placement pursuant to Rule 144A and Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"). The Senior Notes were issued pursuant to an indenture (the "Indenture"), dated as of November 5, 2012, by and between the Issuer and The Bank of New York Mellon, N.A., as trustee (the "Trustee").

The net proceeds of the Senior Notes offering, together with capital contributions from the Company, in a total amount sufficient to pay the redemption price in connection with the Special Redemption (as defined below), were placed into escrow pursuant to a security and escrow agreement (the "Escrow Agreement"), dated as of November 5, 2012 by and among the Issuer, The Bank of New York Mellon, N.A., as escrow agent, and the Trustee. Pursuant to the terms of the Escrow Agreement, the proceeds and other amounts held in escrow may be released, subject to certain conditions, in connection with the consummation of the previously announced merger (the "Merger") of Badlands Power Fuels, LLC (formerly Badlands Energy, LLC) ("Power Fuels"), with and into a wholly-owned subsidiary of the Company to finance the Merger, pay related fees and expense and otherwise for any purpose permitted under the Indenture. Upon consummation of the Merger and the release of the escrow, the Issuer will be merged with and into the Company, and the Company will assume all of the Issuer's obligations under the Indenture and the Senior Notes and become the Issuer under the Indenture. The Company, as the Issuer, will then redeem (the "Exchange Redemption") all of the Senior Notes by issuing in exchange therefor its 9.875% Senior Notes due 2018 (the "Company Notes") in an aggregate principal amount equal to the aggregate principal amount of the Senor Notes. The Company Notes so issued will constitute an additional issuance of the Company's 9.875% Senior Notes due 2018 pursuant to an indenture, dated as of April 10, 2012, as amended, among the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, under which the Company previously issued $250.0 million in aggregate principal amount of 9.875% Senior Notes due 2018 (the "Outstanding Company Notes"). The Company's obligations under the Company Notes will be jointly and severally, fully and unconditionally guaranteed (the "Guarantees"), by each of the Company's subsidiaries that guarantees the Outstanding Company Notes (the "Guarantors").

If the Merger is not consummated on or before December 31, 2012 (or is earlier abandoned or terminated) the Issuer will be required to redeem (the "Special Redemption") all of the Senior Notes at a redemption price equal to the issue price of the Senior Notes plus accrued but unpaid interest (including pre-issuance interest) thereon from October 15, 2012, to the date of such redemption.

In addition to the Exchange Redemption and the Special Redemption, the Issuer may, at its option, redeem all or part of the Senior Notes at any time prior to April 15, 2015, at a price equal to 100% of the aggregate principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest and a "make whole" premium, as of the applicable redemption date. On or after April 15, 2015, the Issuer may redeem all or part of the Senior Notes at the redemption prices set forth below, together with accrued and unpaid interest, if any, to the redemption date, if redeemed during the 12-month period beginning April 15 of the years indicated:

                                               Optional
                     Year                  Redemption Price
                     2015                            104.938 %
                     2016                            102.469 %
                     2017 and thereafter             100.000 %


In addition, at any time prior to April 15, 2015, the Issuer, at its option, may redeem up to 35% of the Senior Notes with the net cash proceeds from one or more equity offerings at a redemption price equal to 109.875% of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption, as long as at least 65% of the aggregate principal amount of the Outstanding Company Notes originally issued remains outstanding immediately after giving effect to any such redemption and the redemption occurs not more than 180 days after the date of the closing of the equity offering.

If the Issuer experiences certain kinds of changes of control, holders of the Senior Notes will be entitled to require the Issuer to purchase all or any portion of the Senior Notes for a cash price equal to 101% of the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, to the date of purchase. In addition, the Issuer will be required under certain circumstances to make an offer to repurchase Senior Notes with the proceeds of certain asset sales that are not used to purchase new assets or otherwise applied in accordance with the terms of the Indenture.

If an event of default arises from certain events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable immediately without further action or notice. If other events of default arise, including failure to pay principal or interest on a timely basis, failure to comply with the agreements under the Indenture, default under or acceleration of certain other indebtedness, failure to pay certain judgments, subject to certain limitations including, if applicable, the giving of notice or the expiration of any grace or cure period, or both, the Trustee or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may declare all amounts owing under the Senior Notes to be due and payable.

The Issuer has been designed as an Unrestricted Subsidiary as defined under the indenture governing the Outstanding Company Notes and, accordingly, prior to their assumption by the Company and exchange for Company Notes, the Senior Notes are non-recourse to the Company or any of its subsidiaries, other than the Issuer. Accordingly, holders of the Stage I Notes will have no recourse for repayment against the Company or its subsidiaries (other than the Issuer), or any of their stock or assets. Pursuant to the Escrow Agreement, the Issuer has granted a security interest in the escrow to secure all obligations of the Issuer under the Indenture and the Senior Notes.

. . .



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference in this Item 2.03.



Item 8.01 Other Events.

On November 5, 2012, the Company issued a press release announcing that the Issuer has closed its previously announced offering of the Senior Notes. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.



Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Number                              Description of Exhibit

 4.1        Indenture, dated as of November 5, 2012, by and between Rough Rider
            Escrow, Inc. and The Bank of New York Mellon Trust Company, N.A., as
            trustee.

 4.2        Security and Escrow Agreement, dated as of November 5, 2012, by and
            among Rough Rider Escrow, Inc., The Bank of New York Mellon Trust
            Company, N.A., as escrow agent, and The Bank of New York Mellon Trust
            Company, N.A., as trustee.

 4.3        Registration Rights Agreement, dated as of November 5, 2012, by and
            among Heckmann Corporation, the Guarantors named therein, and
            Jefferies & Company, Inc., Wells Fargo Securities, LLC and Credit
            Suisse Securities (USA) LLC, as Representatives of the various Initial
            Purchasers named therein.

99.1        Press release, dated November 5, 2012, issued by Heckmann Corporation.


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