Exhibit 10.1

 

 

 

 

 

WAIVER and AMENDMENT no. 10 to credit AGREEMENT

 

This Waiver and Amendment No. 10 to 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 Société Générale, as Administrative Agent for
the Lenders (the “Administrative Agent”) and as Issuing Lender.

 

INTRODUCTION

 

A.     The Borrower, the financial institutions party thereto as Lenders (the
“Lenders”), the Issuing Lender, and the Administrative Agent have entered into
the Third Amended and Restated Credit Agreement dated as of June 11, 2014, as
amended by Amendment No. 1 to Third Amended and Restated Credit Agreement dated
as of September 22, 2014, Amendment No. 2 to Third Amended and Restated Credit
Agreement dated as of April 20, 2016, Amendment No. 3 to Third Amended and
Restated Credit Agreement dated as of May 16, 2017, Amendment No. 4 to Third
Amended and Restated Credit Agreement dated as of January 10, 2018, Amendment
No. 5 to Third Amended and Restated Credit Agreement dated as of March 29, 2018,
Amendment No. 6 and Master Assignment and Acceptance Agreement to Third Amended
and Restated Credit Agreement dated as of September 17, 2018, Waiver to Credit
Agreement dated as of March 11, 2019, Amendment No. 7 to Third Amended and
Restated Credit Agreement dated as of March 29, 2019, Amendment No. 8 to Third
Amended and Restated Credit Agreement dated as of August 30, 2019, and Master
Assignment and Acceptance Agreement, Waiver, and Amendment No. 9 to Third
Amended and Restated Credit Agreement dated as of November 13, 2019 (as so
amended and as further amended, supplemented or otherwise modified, the “Credit
Agreement”).

 

B.     Reference is made to that certain Third Amended and Restated Guaranty
Agreement made by the Guarantors in favor of the Administrative Agent dated as
of June 11, 2014 (as amended, supplemented or otherwise modified, the
“Guaranty”).

 

C.     Events of Default have occurred under Section 7.01(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 5.06(a) of the Credit Agreement and (b) an unaudited
balance sheet and unaudited financial statements for the fiscal quarter ended
March 31, 2020 (the “Q1 2020 Financials”) not later than 45 days after the end
of such fiscal quarter in violation of Section 5.06(b) of the Credit Agreement
(such Events of Default being referred to herein as the “Financials Delivery
Events of Default”).

 

D.     An Event of Default has occurred under Section 7.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to comply with Section
6.14(b)(ii) of the Credit Agreement on or prior to the Effective Date (such
Event of Default being referred to herein as the “Maximum Hedging Event of
Default”).

 

E.     An Event of Default has occurred under Section 7.01(c)(i) of the Credit
Agreement as a result of the Borrower’s failure to comply with the minimum Asset
Coverage Ratio requirement as set forth in Section 6.21 of the Credit Agreement
with respect to the fiscal quarter ended March 31, 2020 (such Event of Default
being referred to herein as the “Asset Coverage Ratio Event of Default, and
together with the Maximum Hedging Event of Default and the Financials Delivery
Events of Default, the “Designated First Lien Events of Default”).

 

F.     Events of Default have occurred under Section 7.01(d)(ii) of the Credit
Agreement as a result of the Borrower’s failure to (a) deliver 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 Senior Secured Term Loan Agreement, (b) deliver the Q1
2020 Financials not later than 60 days after the end of such fiscal quarter in
violation of Section 8.06(b) of the Senior Secured Term Loan Agreement,
(c) comply with Section 9.14(b)(ii) of the Senior Secured Term Loan Agreement on
or prior to the Effective Date, and (d) comply with the minimum Asset Coverage
Ratio (as defined in the Senior Secured Term Loan Agreement) requirement as set
forth in Section 9.19 of the Senior Secured Term Loan Agreement with respect to
the fiscal quarter ended March 31, 2020 (all such Events of Default being
referred to herein as the “Designated Second Lien Cross-Defaults”, and together
with the Designated First Lien Events of Default, collectively, the “Designated
Events of Default”)

 

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G.     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, (ii) redetermine the Borrowing Base,
and (iii) amend the Credit Agreement, in each case as set forth herein.

 

H.     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 9 of this Agreement, but effective for all
purposes as of the 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
under the first clause of the definition of “Applicable Margin” in the Credit
Agreement, in each case so long as each of the 2019 Audited Financials and the
Q1 2020 Financials are delivered to the Administrative Agent and each Lender no
later than 30 days after the 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
Section 5.06(a), Section 5.06(b), Section 6.14, or Section 6.21 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.     Borrowing Base Redetermination. In accordance with Section
2.02(b) of the Credit Agreement, the Administrative Agent, the Lenders and the
Borrower confirm and agree that the Borrowing Base shall be redetermined from
$135,000,000 to $102,000,000, effective as of the Effective Date. After giving
effect to the Borrowing Base redetermination pursuant to this Agreement, each
Lender’s respective Pro Rata Share of the Borrowing Base will be as set forth
beside its name on Schedule I included in Annex I attached hereto. Once
effective, the new Borrowing Base amount shall remain in effect until the next
redetermination or adjustment of the Borrowing Base made pursuant to the Credit
Agreement. The decrease in the Borrowing Base pursuant to this Section 3 shall
constitute the Spring 2020 scheduled redetermination pursuant to Section
2.02(b)(ii) of the Credit Agreement immediately prior to giving effect to the
amendments set forth in Section 4 below.

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Section 4.     Amendments to Credit Agreement. After giving effect to Section 3
above,

 

(a)      each of (a) the Credit Agreement, (b) Schedule I (Addresses and
Commitments), (c) Schedule 4.01 (Subsidiaries) thereto, (d) Schedule 4.05
(Existing Debt) thereto, (e) Schedule 4.20 (Hedging Agreements) thereto,
(f) Schedule 4.21 (Material Agreements) thereto, (g) Exhibit B (Form of
Compliance Certificate) thereto, and (h) Exhibit F (Form of Notice of Borrowing)
thereto is hereby amended and restated to read in its entirety as set forth in
Annex I hereto; and

 

(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 5.     Senior Representative Consent. The Administrative Agent, as the
Senior Representative under the Intercreditor Agreement, in connection with
Section 5.03(b) of the Intercreditor Agreement, hereby consents to the amendment
and modification of the Junior Debt Documents to (a) allow the Borrower to
increase the principal amount of the Junior Obligations by means of payment of
interest in-kind pursuant to Section 3.02(e) of the Senior Secured Term Loan
Agreement, (b) require the payment of an Exit Fee, as described in Section
3.06(b) of the Senior Secured Term Loan Agreement, and (c) increase the amount
of interest rate charged under Sections 3.02(a) and 3.02(b) of the Senior
Secured Term Loan Agreement, in each case, as effected pursuant to the Second
Lien Amendment (as defined in Section 9 below). The consent described in this
Section 5 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 Loan Document.

 

Section 6.     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 7.     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.

 

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Section 8.     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

 

(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 9.     Effectiveness. This Agreement shall become effective and
enforceable against the parties hereto, upon the occurrence of the following
conditions precedent (such date being the “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 the Required Lenders.

 

(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 Senior
Secured Term Loan Agreement among the Borrower, the other Credit Parties, the
lenders party to the Senior Secured Term Loan Agreement, and Angelo Gordon
Energy Servicer, LLC, as administrative agent, which waiver and amendment shall
(A) waive all defaults caused by or corresponding to the Designated Events of
Default under and pursuant to the Senior Secured Term Loan Agreement, (B)
include amendments to the Senior Secured Term Loan Agreement corresponding to
those made pursuant to this Agreement and (C) otherwise be in a form
satisfactory to the Administrative Agent (the “Second Lien Amendment”) and
(ii) the Second Lien Amendment shall be effective or shall become effective on
the Effective Date substantially simultaneously with this Agreement.

 

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(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 9.04 of the Credit
Agreement or any other written agreement.

 

Section 10.     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.

 

Section 11.     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 11, 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 12.     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 13.     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.

 

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(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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