Exhibit 10.1

 

SEVENTH AMENDMENT
TO LIMITED FORBEARANCE AGREEMENT

SEVENTH AMENDMENT TO LIMITED FORBEARANCE AGREEMENT (this “Amendment”), dated as
of October 3, 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.  

(a)The Forbearance Agreement is hereby amended by replacing the date “October 3,
2019” contained in the definition of “Forbearance Termination Date” set forth in
Section 1 of the Forbearance Agreement with “October 15, 2019”.

(b)The Forbearance Agreement is hereby amended by amending and restating Recital
Paragraph C thereof to read in its entirety as follows:

C.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

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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 has occurred 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 has occurred 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 a ratio of EBITDAX for the four fiscal quarter period ending September
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, (vi) 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 September 30, 2019 of less than 4.75 to 1.00 as required by
Section 9.01(c) of the Credit Agreement, (vii) 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 September
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 not less than 1.0
to 1.0 as required by Section 9.01(b) of the Credit Agreement, (viii) an Event
of Default under Section 10.01(b) has occurred on account of the failure by the
Borrower to make the interest payment due on September 16, 2019, (ix) an Event
of Default under Section 10.01(b) has occurred on account of the failure by the
Borrower to make the interest payment due on September 30, 2019,  and (x) an
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), (vii) (viii), (ix) and (x) (clauses
(i), (ii), (iii), (iv), (v) (vi), (vii), (viii), (ix) and (x) collectively, the
“Specified Defaults”).

3.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.

4.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.

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

6.NO CLAIMS; RELEASE; COVENANT NOT TO SUE.  EACH CREDIT PARTY (IN ITS OWN RIGHT
AND ON BEHALF OF ITS PREDECESSORS, SUCCESSORS AND

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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, 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.

7.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

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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:  President and Chief Executive Officer

 

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GUARANTORS:

APPROACH OPERATING, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

APPROACH RESOURCES I, LP,

a Texas limited partnership

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

APPROACH OIL & GAS INC.,

a Delaware corporation

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

APPROACH DELAWARE, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

APPROACH SERVICES, LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and Chief Executive Officer

 

APPROACH MIDSTREAM HOLDINGS LLC,

a Delaware limited liability company

By:/s/ Sergei Krylov

Name:Sergei Krylov

Title:  President and 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:

COMERICA BANK,

as a Lender

By:/s/ Cynthia B. Jones

Name:Cynthia B. Jones

Title:Vice President

 

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FROST BANK,

as a Lender

By:/s/ Teresa Woods

Name:Teresa Woods

Title:Senior Vice President

 

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CAPITAL ONE, NATIONAL ASSOCIATION,

as a Lender

By:/s/ Christopher Kuna

Name:Christopher Kuna

Title:Director

 

 

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ROYAL BANK OF CANADA,

as a Lender

By:/s/ Amy G. Josephson

Name:Amy G. Josephson

Title:Authorized Signatory