Exhibit 10.2

 

WAIVER and SECOND AMENDMENT to TERM LOAN credit AGREEMENT

 

This Waiver and Second Amendment to Term Loan Credit Agreement dated as of June
25, 2020 (this “Agreement”) is among ABRAXAS PETROLEUM CORPORATION, a Nevada
corporation (the “Borrower”), the undersigned Guarantors (the “Guarantors”), the
undersigned Lenders (as defined below), and ANGELO GORDON ENERGY SERVICER, LLC,
(in its individual capacity, “AGES”), as Administrative Agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).

 

INTRODUCTION

 

A.     The Borrower, the financial institutions party thereto as Lenders (the
“Lenders”) and the Administrative Agent have entered into the Term Loan Credit
Agreement dated as of November 13, 2019, as amended by the First Amendment to
Term Loan Credit Agreement dated as of January 20, 2020 (as so amended and as
further amended, supplemented or otherwise modified, the “Credit Agreement”).

 

B.     Reference is made to that certain Term Loan Guaranty Agreement made by
the Guarantors in favor of the Administrative Agent dated as of November 13,
2019 (as amended, supplemented or otherwise modified, the “Guaranty”).

 

C.     Events of Default have occurred under Section 10.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to deliver (a) audited financial
statements for the fiscal year ended December 31, 2019 (the “2019 Audited
Financials”) not later than 90 days after the end of such fiscal year in
violation of Section 8.06(a) of the Credit Agreement and (b) a consolidated
unaudited balance sheet and consolidated unaudited financial statements for the
fiscal quarter ended March 31, 2020 (the “Q1 2020 Financial Statements”) not
later than 60 days after the end of such fiscal quarter in violation of Section
8.06(b) of the Credit Agreement (such Events of Default being referred to herein
as the “Second Lien Financial Statement Events of Default”).

 

D.     An Event of Default has occurred under Section 10.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to maintain the Required Hedges
as set forth in Section 8.12 of the Credit Agreement with respect to the fiscal
quarter ended March 31, 2020 (such Event of Default being referred to herein as
the “Second Lien Minimum Hedges Default”).

 

E.     An Event of Default has occurred under Section 10.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to comply with Section
9.14(b)(ii) of the Credit Agreement on or prior to the Second Amendment
Effective Date (such Event of Default being referred to herein as the “Second
Lien Maximum Hedges Default”).

 

F.     An Event of Default has occurred under Section 10.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to comply with the minimum Asset
Coverage Ratio requirement set forth in Section 9.19 of the Credit Agreement
with respect to the fiscal quarter ended March 31, 2020 (such Event of Default
being referred to herein as the “Second Lien Asset Coverage Ratio Default”, and
together with the Second Lien Financial Statement Events of Default, the Second
Lien Minimum Hedges Default and the Second Lien Maximum Hedges Default, the
“Designated Second Lien Defaults”).

 

G.     Events of Default have occurred under Section 10.01(d)(ii) of the Credit
Agreement as a result of (a) the Borrower’s failure to deliver (i) the 2019
Audited Financials not later than 90 days after the end of such fiscal year in
violation of Section 5.06(a) of the Revolving Credit Agreement and (ii) the Q1
2020 Financial Statements not later than 45 days after the end of such fiscal
quarter in violation of Section 5.06(b) of the Revolving Credit Agreement, (b)
the Borrower’s failure to comply with Section 6.14(b)(ii) of the Revolving
Credit Agreement on or prior to the Second Amendment Effective Date and (c) the
Borrower’s failure to comply with the minimum Asset Coverage Ratio (as defined
in the Revolving Credit Agreement) requirement as set forth in Section 6.21 of
the Revolving Credit Agreement with respect to the fiscal quarter ended March
31, 2020 (such Events of Default being referred to herein as the “Designated
First Lien Cross-Defaults”, and together with the Designated Second Lien
Defaults, the “Designated Events of Default”).

 

 

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H.     The Borrower has requested, and the Administrative Agent and the Lenders
party hereto have agreed, subject to the terms and conditions hereof, (i)
to waive the Designated Events of Default and (ii) amend the Credit Agreement,
in each case as set forth herein.

 

I.     The Borrower and the Guarantors wish to reaffirm their guarantees of and
liens supporting the Obligations as amended by this Agreement.

 

THEREFORE, in fulfillment of the foregoing, the Borrower, the Guarantors, the
Administrative Agent, and the undersigned Lenders hereby agree as follows:

 

Section 1.     Definitions; References. All capitalized terms not otherwise
defined in this Agreement that are defined in the Credit Agreement shall have
the meanings assigned to such terms by the Credit Agreement.

 

Section 2.     Waiver. Notwithstanding any provisions in the Credit Agreement
and the other Loan Documents to the contrary, upon the satisfaction of the
conditions specified in Section 7 of this Agreement, but effective for all
purposes as of the Second Amendment Effective Date, subject to the terms and
conditions of this Agreement, each of the undersigned Lenders and the
Administrative Agent hereby (a) permanently waives each of the Designated Events
of Default and (b) agrees not to charge default interest with respect to the
Designated Events of Default so long as each of the 2019 Audited Financials and
the Q1 2020 Financial Statements are delivered to the Administrative Agent and
each Lender no later than 30 days after the Second Amendment Effective Date (as
defined below). The waiver by the Lenders described in this Section 2 is limited
to the extent described above and shall not be construed to be a waiver of any
other claim arising out of the same or similar facts as the Designated Events of
Default, or to be a waiver of Sections 8.06(a), 8.06(b), 8.12, 9.14(b)(ii) or
Section 9.19 of the Credit Agreement for any defaults other than the Designated
Events of Default, or otherwise to be a permanent waiver of any provision of the
Credit Agreement or any other terms, provisions, covenants, warranties or
agreements contained in any Loan Document. The Administrative Agent and the
Lenders reserve the right to exercise any rights and remedies available to them
in connection with any other present or future Defaults or Events of Default
under any Loan Document. The description herein of the Designated Events of
Default is based upon the information available to the Administrative Agent and
the Lenders on or prior to the date hereof and shall not be deemed to exclude
the existence of any other Defaults or Events of Default. The failure of the
Administrative Agent or the Lenders to give notice to any Loan Party of any such
other Defaults or Events of Default is not intended to be and shall not be a
waiver thereof. Each of the Loan Parties acknowledges that any failure of the
Administrative Agent or any Lender at any time or times hereafter to require
strict performance by any Loan Party of any provision of the Credit Agreement
and each other Loan Document shall not waive, affect or diminish any right of
the Administrative Agent or any Lender to thereafter demand strict compliance
therewith.

 

Section 3.     Amendments to Credit Agreement.

 

(a)      the Credit Agreement is hereby amended and restated to read in its
entirety as set forth in Annex I hereto; and

 

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(b)     a new Exhibit M (Form of Excess Cash Certificate) in the form of Exhibit
M hereto is added to the Credit Agreement in the appropriate order therein.

 

Section 4.     Junior Representative Consent. The Administrative Agent, as the
Junior Representative under the Intercreditor Agreement, in connection with
Section 5.03(a) of the Intercreditor Agreement, hereby consents to the amendment
and modification of the Senior Debt Documents to limit cash payments of interest
and certain fees under the Senior Secured Term Loan Agreement as effected
pursuant to the First Lien Amendment (as defined in Section 8 below).  The
consent described in this Section 4 is limited to the extent described above and
shall not be construed to be a consent to or waiver of any provision of the
Intercreditor Agreement or any other terms, provisions, covenants, warranties or
agreements contained in the Credit Agreement or any other Loan Document.

 

Section 5.     Reaffirmation of Liens.

 

(a)     Each of the Borrower and each Guarantor (i) is party to certain Security
Instruments securing and supporting the Borrower’s and Guarantors’ obligations
under the Loan Documents, (ii) represents and warrants that according to their
terms the Security Instruments will continue in full force and effect to secure
the Borrower’s and Guarantors’ obligations under the Loan Documents, as the same
may be amended, supplemented, or otherwise modified (including by this
Agreement), and (iii) acknowledges, represents, and warrants that the liens and
security interests created by the Security Instruments are valid and subsisting
and create an Acceptable Security Interest in the Collateral to secure the
Borrower’s and Guarantors’ obligations under the Loan Documents, as the same may
be amended, supplemented, or otherwise modified (including by this Agreement).

 

(b)     The delivery of this Agreement does not indicate or establish a
requirement that any Guaranty or Security Instrument requires the Borrower’s or
any Guarantor’s approval of amendments to the Credit Agreement.

 

Section 6.     Reaffirmation of Guaranty. Each Guarantor hereby ratifies,
confirms, and acknowledges that its obligations under the Guaranty are in full
force and effect and that such Guarantor continues to unconditionally and
irrevocably guarantee the full and punctual payment, when due, whether at stated
maturity or earlier by acceleration or otherwise, of all of the Obligations, as
such Obligations may have been amended by this Agreement. Each Guarantor hereby
acknowledges that its execution and delivery of this Agreement do not indicate
or establish an approval or consent requirement by such Guarantor under the
Guaranty in connection with the execution and delivery of amendments,
modifications or waivers to the Credit Agreement, the Notes or any of the other
Loan Documents.

 

Section 7.     Representations and Warranties. Each of the Borrower and each
Guarantor represents and warrants to the Administrative Agent and the Lenders
that:

 

(a)     the representations and warranties set forth in the Credit Agreement,
the Guaranties and in the other Loan Documents are true and correct in all
material respects as of the date of this Agreement (except to the extent such
representations and warranties relate to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date); provided that such materiality qualifier
shall not apply if such representation or warranty is already subject to a
materiality qualifier in the Credit Agreement or such other Loan Document;

 

(b)     (i) the execution, delivery, and performance of this Agreement are
within the corporate, limited liability company or other power and authority of
the Borrower or such Guarantor, as applicable, and have been duly authorized by
appropriate proceedings and (ii) this Agreement constitutes a legal, valid, and
binding obligation of the Borrower or such Guarantor, as applicable, enforceable
against the Borrower or such Guarantor in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the rights of creditors generally and general principles
of equity; and

 

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(c)     as of the effectiveness of this Agreement and after giving effect
thereto, no Default or Event of Default (other than the Designated Events of
Default) shall have occurred and be continuing.

 

Section 8.     Effectiveness. This Agreement shall become effective and
enforceable against the parties hereto, upon the occurrence of the following
conditions precedent (such date being the “Second Amendment Effective Date”):

 

(a)     The Administrative Agent shall have received multiple original
counterparts, as requested by the Administrative Agent, of this Agreement duly
and validly executed and delivered by duly authorized officers of the Borrower,
the Guarantors, the Administrative Agent and each Lender.

 

(b)     The representations and warranties in this Agreement shall be true and
correct before and after giving effect to this Agreement.

 

(c)     No Default or Event of Default (other than the Designated Events of
Default) shall have occurred and be continuing.

 

(d)     (i) the Administrative Agent shall have received a copy of a fully
executed waiver and amendment dated as of the date hereof under the Revolving
Credit Agreement among the Borrower, the other Credit Parties, the lenders party
to the Revolving Agreement, and Société Générale, as administrative agent and
issuing lender, which waiver and amendment shall (A) waive all defaults caused
by or corresponding to the Designated Events of Default under and pursuant to
the Revolving Credit Agreement, (B) include amendments to the Revolving Credit
Agreement corresponding to those made pursuant to this Agreement and
(C) otherwise be in a form satisfactory to the Administrative Agent in its sole
discretion (the “First Lien Amendment”), (ii) the First Lien Amendment shall be
effective or shall become effective on the Second Amendment Effective Date
substantially simultaneously with this Agreement and (iii) the Administrative
Agent shall have received a consent duly executed by the requisite number of
Approved RBL Lenders under Section 5.03(b) of the Intercreditor Agreement in
form and substance satisfactory to the Administrative Agent, which consent shall
permit the amendment contemplated by this Agreement pursuant to the terms of the
Intercreditor Agreement.

 

(e)     The Administrative Agent shall have received such other certificates,
documents, instruments and agreements as the Administrative Agent shall
reasonably request in connection herewith.

 

(f)     The Borrower shall have paid all other costs, expenses, and fees which
have been invoiced and are payable pursuant to Section 12.04 of the Credit
Agreement or any other written agreement.

 

Section 9.     Effect on Loan Documents. Except as amended hereby, the Credit
Agreement and the Loan Documents remain in full force and effect as originally
executed, and, other than as set forth in Section 2, nothing herein shall act as
a waiver of any of the Administrative Agent’s or Lenders’ rights under the Loan
Documents, as amended. This Agreement is a Loan Document for the purposes of the
provisions of the other Loan Documents. Without limiting the foregoing, any
breach of representations, warranties, and covenants under this Agreement shall
be a Default or Event of Default under other Loan Documents.

 

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Section 10.     RELEASE. THE BORROWER ACKNOWLEDGES THAT ON THE DATE HEREOF ALL
OBLIGATIONS ARE PAYABLE WITHOUT DEFENSE, OFFSET, COUNTERCLAIM OR RECOUPMENT. IN
ADDITION, EACH OF THE LOAN PARTIES (FOR THEMSELVES AND THEIR RESPECTIVE
SUCCESSORS, AGENTS, ASSIGNS, TRANSFEREES, OFFICERS, DIRECTORS, EMPLOYEES,
SHAREHOLDERS, ATTORNEYS AND AGENTS) HEREBY RELEASES ANY AND ALL CLAIMS, CAUSES
OF ACTION OR OTHER DISPUTES IT MAY HAVE AGAINST THE ADMINISTRATIVE AGENT, ANY OF
THE LENDERS, LEGAL COUNSEL TO THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS,
CONSULTANTS HIRED BY ANY OF THE FOREGOING, OR ANY OF THEIR RESPECTIVE
AFFILIATES, SUBSIDIARIES, SHAREHOLDERS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS OR ASSIGNS OF ANY KIND OR NATURE ARISING OUT OF,
RELATED TO, OR IN ANY WAY CONNECTED WITH, THE CREDIT AGREEMENT, THE SECURITY
AGREEMENTS OR THE LOAN DOCUMENTS, IN EACH CASE WHICH MAY HAVE ARISEN ON OR
BEFORE THE DATE OF THIS AGREEMENT. EACH OF THE LOAN PARTIES HEREBY ACKNOWLEDGES
THAT IT HAS READ THIS AGREEMENT AND HAS CONFERRED WITH ITS COUNSEL AND ADVISORS
REGARDING ITS CONTENT, INCLUDING THIS SECTION 10, AND IS FREELY AND VOLUNTARILY
ENTERING INTO THIS AGREEMENT, AND HEREBY AGREES TO WAIVE ANY CLAIM THAT THE
TERMS OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE RELEASES CONTAINED
HEREIN) ARE INVALID OR OTHERWISE UNENFORCEABLE.

 

Section 11.     Choice of Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.

 

Section 12.     Miscellaneous.

 

(a)     Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original. Delivery of this Agreement by
facsimile or electronic transmission shall be effective as delivery of a
manually executed counterpart hereof.

 

(b)     No Oral Agreement. This AGREEMENT and the other Loan Documents represent
the final agreement among the parties and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. there are
no unwritten oral agreements among the parties.

 

(c)     Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred in
connection with this Agreement, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees, charges and disbursements of counsel to the
Administrative Agent.

 

(d)     Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, (i) the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired thereby
and (ii) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

(e)     Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

[Remainder of page left blank; signatures follow.]

 

 

 

 

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