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ITEM 1.01
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Entry into a Material Definitive Agreement
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On August 18, 2020, Range Resources Corporation (the “Company”) entered into a Purchase Agreement (the “Purchase Agreement”), by and among the Company, Range Louisiana Operating, LLC, Range Production Company, LLC, Range Resources—Appalachia, LLC, Range Resources—Louisiana, Inc., Range Resources—Midcontinent, LLC and Range Resources—Pine Mountain, Inc. (collectively, the “Subsidiary Guarantors”) and J.P. Morgan Securities LLC, as representative of the several initial purchasers named therein (collectively, the “Initial Purchasers”), by which the Company agreed to issue and sell, and the Initial Purchasers agreed to purchase, $300 million aggregate principal amount of its 9.25% senior notes due 2026 (the “New Notes”) in accordance with exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) afforded by Rule 144A and Regulation S. The New Notes will be issued as additional notes under the indenture dated January 24, 2020, entered into among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as trustee, pursuant to which the Company issued $550 million aggregate principal amount of its 9.25% senior notes due 2026 (the “Initial Notes”). The New Notes will have identical terms as the Initial Notes, other than the issue date, and the New Notes and the Initial Notes will be treated as a single class of securities under the indenture.
The New Notes will be fully and unconditionally guaranteed by the Subsidiary Guarantors. The Company estimates that the net proceeds of the offering will be approximately $294.6 million after deducting the Initial Purchasers’ discounts and estimated expenses of the offering payable by the Company. The Company intends to use the net proceeds from this offering, together with borrowings from its bank credit facility, if necessary, to purchase Target Notes in the Tender Offers (each as defined below), including fees and expenses incurred in connection therewith, with the remainder, if any, to be used to repay borrowings under its bank credit facility. The New Notes have not been registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
Some of the Initial Purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In particular, certain of the Initial Purchasers or their affiliates are lenders under the Company’s bank credit facility and may receive a portion of the net proceeds from this offering used to repay such bank credit facility. In addition, certain of the Initial Purchasers or their affiliates may hold a portion of the Company’s 5.750% senior notes due 2021, 5.750% senior subordinated notes due 2021, 5.875% senior notes due 2022, 5.000% senior notes due 2022, 5.000% senior subordinated notes due 2022 and/or 5.000% senior notes due 2023 (collectively, the “Target Notes”) that may be purchased in the tender offers commenced by the Company to purchase the Target Notes for cash (the “Tender Offers”), and such Initial Purchasers or their affiliates may receive a portion of the net proceeds from this offering. U.S. Bancorp Investments, Inc., one of the initial purchasers, is an affiliate of the trustee. In addition, Citigroup Global Markets Inc., an initial purchaser, is acting as dealer manager in connection with the Tender Offers.
The Purchase Agreement contains customary representations and warranties of the parties, conditions to closing, indemnification rights and termination provisions. The Company has agreed with the Initial Purchasers not to offer or sell any debt securities issued or guaranteed by the Company having a term of more than one year other than the New Notes for a period of 60 days after the date of the Purchase Agreement without the prior written consent of J.P. Morgan Securities LLC. The closing of the issuance and sale of the New Notes is expected to occur on September 1, 2020, subject to customary closing conditions. A copy of the Purchase Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The description of the Purchase Agreement in this report is a summary and is qualified in its entirety by the terms of the Purchase Agreement.