ADAMS RESOURCES & ENERGY, INC. : entering into a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a filer, changes in articles of association or regulations; Year change, other events, financial statements and exhibits (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

Cadence Credit Facility

On October 27, 2022, Adams Resources & Energy, Inc. (the “Company”) has entered into a credit agreement (the “Credit Agreement”) between and among the Company,
GulfMark Asset Holdings, LLC and Service transportation company, each a wholly owned subsidiary of Adams, as borrowers (the “Borrowers”), Cadence Bank, as administrative agent, principal lender and originating lender, and the other lender parties thereto ( collectively, the “Lenders”). All capitalized words used in this description of the Credit Agreement without definition have the meaning attributed to them in the Credit Agreement.

The Credit Agreement provides for (a) a revolving credit facility which provides for borrowing up to $60 million in the aggregate principal amount from time to time (the “Revolving Credit Facility”) and (b) a term loan in the aggregate principal amount of $25 million (the “Term Loan”).

The Credit Agreement replaces the previous agreements of the Borrowers $60 million credit facility with Wells Fargo Bank, National Association (“Wells Fargo”) as agent and issuing lender, has entered into May 4, 2021. In connection with the Borrowers’ termination of their prior credit facility with Wells Fargo, the Borrowers and Wells Fargo deposited cash equivalent to 103% of the face value of three letters of credit previously issued by Wells Fargo in May 2021. All three letters of credit are fully secured, have no associated debt, and no draws on any of the letters of credit are pending.

For each borrowing under the Revolving Credit Facility, the relevant borrower may elect whether such loans bear interest (i) at the base rate plus the applicable margin for base rate loans; or (ii) the term SOFR plus the applicable margin for SOFR loans. The Base Rate is the greater of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5%, and (c) the Adjusted Term SOFR for a one-month term in effect at the date of determination plus 1.0%. The applicable margin to be added to a base rate loan under (a), (b) or (c) in the preceding sentence is an amount determined quarterly between 1.00% and 2.00% based on the ratio of total consolidated financial leverage of the Company. The Applicable Margin to be added to a SOFR Term loan under the Revolving Credit Facility is an amount determined quarterly between 2.00% and 3.00% depending on the total consolidated leverage ratio of the Company. A commitment fee of 0.25% per annum accrues on the average daily unused amount of the lenders’ commitments under the revolving credit facility. The Company may obtain letters of credit under the revolving credit facility up to a maximum amount of $30 million. The amount of the Company’s outstanding letters of credit reduces the availability under the revolving credit facility. The revolving credit facility matures on October 27, 2027 unless terminated early.

The term loan is amortized over a 10-year schedule with quarterly payments commencing
December 31, 2022and mature the October 27, 2027 except earlier acceleration. The term loan may be prepaid in whole or in part without premium or penalty, and must be prepaid with the proceeds of any future debt issuance, the proceeds of any equity issuance to the extent that the proceeds exceed $2 million in any quarter, with certain exceptions, and the proceeds of certain asset disposals. The Term Loan bears interest at the SOFR Rate plus the Applicable Margin for SOFR Rate Loans as described above.

Pursuant to the terms of the credit agreement, Adams is required to maintain compliance with the following financial covenants on a pro forma basis, after giving effect to any borrowing (in each case commencing with the fiscal quarter ending December 31, 2022): (i) the total consolidated leverage ratio must not exceed 2.50 to 1.00; (ii) the asset coverage ratio must not be less than 2.00 to 1.00; and (iii) the consolidated fixed charge coverage ratio will not be less than 1.25 to 1.00. Each of these ratios is calculated as indicated in the credit agreement and subject to certain exclusions and reservations described therein.

The Credit Agreement contains certain customary representations and warranties as well as positive and negative clauses. Positive covenants require Adams to provide lenders with certain financial statements, business plans, certificates of compliance and other documents and reports and to comply with certain laws. Negative covenants restrict the ability of each of the Borrowers to contract additional debts, to create


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liens on its assets, make certain investments, dispose of its assets, or engage in a merger or other similar transaction or engage in transactions with affiliated companies, subject, in each case, to the various exceptions and conditions . . .

Section 2.03. Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant.

The information in Section 1.01 above is incorporated into this Section 2.03.

Section 5.03. Amendments to the Articles of Incorporation of Regulations; Change of fiscal year.

On October 27, 2022, the Company’s Board of Directors has adopted amendments to its Amended and Restated Articles of Association (as amended, the “By-Laws”), effective immediately. Among others, the statutes:

• Clarify that shareholder meetings and board meetings can be held by remote communication;

• Provide that the notice of shareholders’ meeting will be provided between 10 and 60 days (formerly 50 days) before the meeting, which is the period authorized by
Delaware right;


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• Reflect updates to requirements for shareholder lists at shareholder meetings and notices of adjournment of meetings, consistent with recent amendments to Delaware’s general corporate law;

• Improve procedural mechanisms and disclosure requirements in relation to shareholder nominations of directors and the submission of shareholder proposals (other than proposals to be included in the company’s proxy statement in accordance with the rule 14a-8 under the Securities Exchange Act of 1934, as amended) made in connection with annual and special meetings of shareholders, including:

• Require advance notice from a shareholder wishing to submit a shareholder proposal for consideration at an annual meeting, to be delivered to the Company in most cases not less than 90 days nor more than 120 days before the anniversary of the previous year’s meeting, which notice must include certain information about the proposing shareholder, any material interest of such shareholder in the matter, and any agreements that such shareholder has with other parties and, in the case of a shareholder seeking to appoint a director, information about the proposed nominee, and representation if the shareholder intends to solicit proxies under the new “universal proxy” rules adopted by the SECOND; and

• Require any candidate for the position of director nominated by the shareholders to provide the Company with certain information in questionnaires, with a declaration and an agreement indicating, among other things, that he has given no commitment or assurance that will vote a certain way on any matter, and agree to abide by the policies of the board in place which apply to directors;

• Describe the procedures to be followed at a special meeting called by shareholders and the required form and content of a request for a special meeting by shareholders;

• Provide that no special meeting called by a shareholder will be held if, among other things, the request does not comply with the articles of association or applicable law or if an identical or substantially similar item of business is included in the notice of annual notice or special meeting which has been called but which has not yet taken place or which is called on a date within 90 days of the shareholder’s request for a special meeting, or if an identical or substantially similar item was presented at an annual or special meeting of shareholders held not more than 12 months before the request for the special meeting, or not more than 120 days before the request in the case of the election or removal of directors and certain related matters;

• Addressing the establishment of a record date to determine shareholders entitled to act by written consent, and the appointment of an election inspector to confirm the validity of any action by written consent of shareholders;

•Simplify the job description of certain managers;

• Provide more detailed provisions on establishing record dates to determine shareholders entitled to receive notice of a meeting of shareholders, to vote at a meeting or to receive dividends or other distributions;

• Include a Delaware choice of court provision providing that chancellery court in the State of Delaware (or, if the chancellery court is not competent, the federal district court for the district of Delaware) is the sole and exclusive forum for certain corporate law claims;

• Include a federal choice of court provision for claims asserting a cause of action under the Securities Act of 1933, as amended; and

• Provide that the vote required for shareholders to approve amendments to the articles is a majority of the outstanding shares entitled to vote on the matter.


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The foregoing general description of the Bylaw Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws set forth in Schedule 3.2 to this Form 8-K and incorporated herein by reference.

Item 8.01. Other Events.

On November 1, 2022, Adams issued a press release announcing the execution of the new credit agreement and the execution of the repurchase agreement. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial statements and supporting documents.

(d) Exhibits.

    3.2       Amended and Restated Bylaws of Adams Resources & Energy, Inc.
   10.1       Credit Agreement dated October 27, 2022 by and among Adams Resources & Energy,
            Inc., GulfMark Asset Holdings, LLC, Service Transport Company, and Cadence Bank,
            as administrative agent, swingline lender and issuing lender, and the other
            lenders party thereto.
   10.2       Stock Repurchase Agreement dated October 31, 2022 by and among Adams Resources &
            Energy, Inc., KSA Industries, Inc. and the other parties identified as sellers
   99.1       Press Release dated November 1, 2022.

    104     Cover Page Interactive Data File - the cover page interactive data file does not
            appear in the Interactive Data File because its XBRL tags are embedded within the
            Inline XBRL document.


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