Exhibit 10.1

 

SIXTH AMENDMENT
TO LIMITED FORBEARANCE AGREEMENT

SIXTH AMENDMENT TO LIMITED FORBEARANCE AGREEMENT (this “Amendment”), dated as of
September 11, 2019 (the “Amendment Effective Date”), to the Limited Forbearance
Agreement, dated as of May 9, 2019 (as amended, restated, supplemented or
otherwise modified from time to time prior to the date hereof, the “Forbearance
Agreement”), among APPROACH RESOURCES INC., a Delaware corporation, as the
Borrower (the “Borrower”), each Guarantor (as such term is defined in the Credit
Agreement referenced below) (the Borrower, together with each Guarantor,
collectively, the “Credit Parties”), the lenders party to this Amendment
(collectively, the “Consenting Lenders”), the Issuing Bank and JPMORGAN CHASE
BANK, N.A., a national banking association, as administrative agent for itself
and the other Secured Parties (in such capacity, the “Administrative Agent”).

WHEREAS, the Credit Parties, the Administrative Agent and the financial
institutions named therein as lenders (the “Lenders”) are parties to that
certain Amended and Restated Credit Agreement, dated as of May 7, 2014 (as
heretofore amended, restated, amended and restated, or otherwise modified, the
“Credit Agreement”), pursuant to which the Lenders agreed to make Loans and
provide certain other financial accommodations to the Borrower;

WHEREAS, the Credit Parties have requested that the Administrative Agent and the
Lenders amend the Forbearance Agreement as set forth herein; and

WHEREAS, the Administrative Agent and the Consenting Lenders, which constitute
at least the Majority Lenders, are willing to amend the Forbearance Agreement on
the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

1.Definitions.  All terms used herein that are defined in the Forbearance
Agreement and not otherwise defined herein shall have the meanings assigned to
them in the Forbearance Agreement.

2.Amendments to Forbearance Agreement.  The Forbearance Agreement is hereby
amended as follows:

(a)The definition of “Borrower Advisor” set forth in Section 1 of the
Forbearance Agreement is hereby replaced with the following definition:

“Borrower Advisors” means collectively, Perella Weinberg Partners LP (together
with its affiliate Tudor Pickering Holt & Co Advisors LP, “PWP”), and Alvarez &
Marsal North America LLC.

(b)Section 1 of the Forbearance Agreement is hereby amended by adding the
following definition in the appropriate alphabetical order:

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“Forbearance Sixth Amendment Effective Date” means September 11, 2019.”

(c)The definition of “Forbearance Termination Date” set forth in Section 1 of
the Forbearance Agreement is hereby amended by replacing the date “September 11,
2019” contained therein with “October 3, 2019”.

(d)The definition of “Forbearance Termination Event” set forth in Section 1 of
the Forbearance Agreement is hereby amended by replacing “Section 5.1 or 5.5”
contained therein with “Section 5”.

(e)Section 2.2 of the Forbearance Agreement is hereby amended by deleting the
last sentence thereof and adding the following proviso to the penultimate
sentence which shall read as follows:

; provided, that all Loans shall automatically bear interest at the default rate
equal to a rate per annum of two percent (2%) plus the interest rate applicable
to ABR Borrowings set forth in Section 3.02(a) of the Credit Agreement (but in
no event shall such rate exceed the Highest Lawful Rate) upon the earlier to
occur of (a) the date on which an Event of Default occurs due to the failure of
the Borrower to make any payment of interest on the Loans when due and (b) the
occurrence of an Event of Default of the type described in Section 10.01(h),
Section 10.01(i) or Section 10.01(j) of the Credit Agreement.

(f)Section 5.1(b) and Section 5.2 of the Forbearance Agreement is hereby amended
by replacing the word “Advisor” contained in each such section with “Advisors”.

(g)Section 5 of the Forbearance Agreement is hereby amended by adding the
following Sections 5.6 and 5.7 which shall read in full as follows:

5.6Borrower Advisors.  As of the Forbearance Sixth Amendment Effective Date, the
Credit Parties (or, in the case of PWP, a special committee of the board of
directors of Borrower (the “Committee”)) have retained each of the Borrower
Advisors.  The Credit Parties (or, in the case of PWP, the Committee) shall
continue to retain each Borrower Advisor at all times on the terms and
conditions as in effect as of the Forbearance Sixth Amendment Effective Date or
any modifications thereto acceptable to Borrower and the Administrative Agent.

5.7Post-Closing Covenant.  Information.  

1.Within five (5) Business Days of written request (or such later time as is
approved in writing by the Administrative Agent in its sole discretion), the
Credit Parties will provide the Administrative Agent with such information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary (including any Plan and any reports or other
information required to be filed with respect thereto under the Code or under
ERISA), or compliance with the terms of the Credit

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Agreement or any other Loan Document, as the Administrative Agent may reasonably
request.

2.The Credit Parties will provide the Administrative Agent within five (5)
Business Days of receipt or preparation all transactional documentation,
including, without limitation, but subject to any express confidentiality or
similar restrictions contained in any such documentation received from any third
party and not binding on the Credit Parties, (i) letters of intent or offers to
purchase, lease or license any portion, all, or substantially all of the assets
or ownership interests of the Credit Parties and (ii) letters of intent or
commitments for any capital investment, loan or other financing in or to the
Credit Parties.    

3.The Credit Parties and its Advisors shall hold a telephone conference no less
often than once per week to advise Administrative Agent and its professionals on
the status of the Credit Parties’ restructuring efforts and other status
updates.

3.Additional Specified Defaults.  The Forbearance Agreement is hereby amended by
amending and restating Recital Paragraph C thereof to read in its entirety as
follows:

The Credit Parties acknowledge that (i) an Event of Default under Section
10.01(d) of the Credit Agreement has occurred and is continuing on account of
the failure by the Borrower to maintain a ratio of EBITDAX for the four fiscal
quarter period ending March 31, 2019 to Interest Expense for such period of not
less than 2.25 to 1.00 as required by Section 9.01(a) of the Credit Agreement,
(ii) an Event of Default under Section 10.01(d) of the Credit Agreement has
occurred and is continuing on account of the failure by the Borrower to maintain
a Total Leverage Ratio for the fiscal quarter ended March 31, 2019 of less than
5.00 to 1.00 as required by Section 9.01(c) of the Credit Agreement, (iii) an
Event of Default under Section 10.01(d) of the Credit Agreement may occur on
account of the failure by the Borrower to maintain a ratio of EBITDAX for the
four fiscal quarter period ending June 30, 2019 to Interest Expense for such
period of not less than 2.25 to 1.00 as required by Section 9.01(a) of the
Credit Agreement, (iv) an Event of Default under Section 10.01(d) of the Credit
Agreement may occur on account of the failure by the Borrower to maintain a
Total Leverage Ratio for the fiscal quarter ended June 30, 2019 of less than
5.00 to 1.00 as required by Section 9.01(c) of the Credit Agreement, (v) an
Event of Default under Section 10.01(d) of the Credit Agreement may occur on
account of the failure by the Borrower to maintain, as of the last day of the
fiscal quarter ended June 30, 2019, its ratio of (x) consolidated current assets
of the Borrower and its Consolidated Restricted Subsidiaries to (y) consolidated
current liabilities of the Borrower and its Consolidated Restricted Subsidiaries
of less than 1.0 to 1.0 as required by Section 9.01(b) of the Credit Agreement,
(vi) an Event of Default under Section 10.01(b) may occur on account of the
failure by the Borrower to make the interest payment due on September 16, 2019,
(vii) an Event of Default under Section 10.01(b) may occur on account of the
failure by the Borrower to make the interest payment due on September 30,
2019,  and (viii) an

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Event of Default under Section 10.01(d) may occur on account of the failure by
the Borrower to deliver notice as required by Section 8.02(a) of the Credit
Agreement with respect to the Events of Default described in the foregoing
clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) (clauses (i), (ii), (iii),
(iv), (v) (vi), (vii) and (viii), collectively, the “Specified Defaults”).

4.Condition to Effectiveness.  This Amendment shall become effective upon
receipt by the Administrative Agent of counterparts to this Amendment duly
executed by the Administrative Agent, the Credit Parties, the Issuing Bank and
Lenders constituting Majority Lenders.

5.Amendment.  The provisions of this Amendment may be amended or waived only by
an instrument in writing signed by the Credit Parties, the Administrative Agent
and the Majority Lenders.

6.Lender Direction.  Each Consenting Lender hereby directs and authorizes the
Administrative Agent to enter into this Amendment.

7.NO CLAIMS; RELEASE; COVENANT NOT TO SUE.  EACH CREDIT PARTY (IN ITS OWN RIGHT
AND ON BEHALF OF ITS PREDECESSORS, SUCCESSORS AND ASSIGNS) HEREBY EXPRESSLY AND
UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT, AS OF THE DATE HEREOF, IT HAS NO
SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, DEFENSES, CLAIMS, CAUSES OF
ACTION, ACTIONS OR DAMAGES OF ANY CHARACTER OR NATURE, WHETHER CONTINGENT,
NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED,
UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR
PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT, OR INDIRECT, AGAINST ADMINISTRATIVE
Agent, any lender, THE ISSUING BANK, ANY OF their AFFILIATES OR ANY OF their
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS, consultants to attorneys OR
REPRESENTATIVES OR ANY OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS OR ASSIGNS
(COLLECTIVELY, THE “LENDER-RELATED PARTIES”), in each case which existed, arose
or occurred at any time prior to the DATE HEREOF OR ANY GROUNDS OR CAUSE FOR
REDUCTION, MODIFICATION, SET ASIDE OR SUBORDINATION OF THE SECURED Indebtedness
OR ANY LIENS OR SECURITY INTERESTS OF ADMINISTRATIVE AGENT.  IN PARTIAL
CONSIDERATION FOR THE AGREEMENT OF THE ADMINISTRATIVE AGENT, the CONSENTING
LENDERs AND THE ISSUING BANK TO ENTER INTO THIS AMENDMENT, EACH CREDIT PARTY
HEREBY KNOWINGLY AND UNCONDITIONALLY WAIVES AND FULLY AND FINALLY RELEASES AND
FOREVER DISCHARGES THE LENDER-RELATED PARTIES FROM, and covenants not to sue the
Lender-related parties for, ANY AND ALL SETOFFS, COUNTERCLAIMS, ADJUSTMENTS,
RECOUPMENTS, CLAIMS, DEMANDS, CAUSES OF ACTION, ACTIONS, GROUNDS, CAUSES,
DAMAGES, REMEDIES, COSTS AND EXPENSES OF EVERY NATURE AND CHARACTER, WHETHER
CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED,
DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN,

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ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT OR INDIRECT, ARISING OUT OF
OR FROM OR RELATED TO ANY LAW, STATUTE, RULE, REGULATION, OR ANY OF THE LOAN
DOCUMENTS, WHETHER AT LAW, IN EQUITY, OR OTHERWISE, WHICH any CREDIT PArTY OWNS
AND HOLDS as of the date hereof, OR HAS AT ANY TIME prior to the date hereof
OWNED OR HELD, SUCH WAIVER, RELEASE, DISCHARGE, AND COVENANT NOT TO SUE IS BEING
MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE CIRCUMSTANCES AND EFFECTS OF
SUCH WAIVER, RELEASE AND DISCHARGE AND AFTER HAVING CONSULTED LEGAL COUNSEL OF
ITS OWN CHOOSING WITH RESPECT THERETO.  THIS SECTION IS IN ADDITION TO ANY OTHER
RELEASE, INDEMNITY, COVENANT NOT TO SUE AND WAIVER OF ANY OF THE LENDER-RELATED
PARTIES BY ANY CREDIT PARTY AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE,
INDEMNITY, COVENANT NOT TO SUE, OR WAIVER BY ANY CREDIT PARTY IN FAVOR OF ANY OF
THE LENDER-RELATED PARTIES, IT BEING THE INTENT OF THE CREDIT PARTIES THAT THIS
RELEASE, COVENANT NOT TO SUE AND WAIVER BE AS BROAD AND INCLUSIVE AS PERMITTED
BY APPLICABLE LAW.

8.Miscellaneous.  The provisions of Sections 12, 14, 15, 17 and 19 through 26 of
the Forbearance Agreement are hereby incorporated into this Amendment by
reference, mutatis mutandis.  Except as amended herein, the Forbearance
Agreement shall remain in full force and effect on a cumulative basis in
accordance with its terms.  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the date set forth on the first page hereof.

 

 

BORROWER:

APPROACH RESOURCES INC.,

a Delaware corporation

 

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

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GUARANTORS:

APPROACH OPERATING, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

APPROACH RESOURCES I, LP,

a Texas limited partnership

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

APPROACH OIL & GAS INC.,

a Delaware corporation

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

APPROACH DELAWARE, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

APPROACH SERVICES, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

APPROACH MIDSTREAM HOLDINGS LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  Chief Executive Officer

 

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ADMINISTRATIVE AGENT:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, an Issuing Bank, and a Lender

 

 

By:/s/ David Morris

Name:David Morris

Title:Authorized Officer

 

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CONSENTING LENDERS:

KEYBANK NATIONAL ASSOCIATION,

as a Lender

By:/s/ Dale Conder

Name:Dale Conder

Title:SVP

 

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HANCOCK WHITNEY BANK,

as a Lender

By:/s/ Eric K. Sander

Name:Eric K. Sander

Title:Vice President

 

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ROYAL BANK OF CANADA,

as a Lender

By:/s/ Leslie P. Vowell

Name:Leslie P. Vowell

Title:Authorized Signatory