AMENDMENT NO. 2 (Amended and Restated Credit Agreement)
Exhibit
10.1
AMENDMENT NO.
2
(Amended
and Restated Credit Agreement)
This Amendment No. 2 ("Agreement") dated as
of April 30, 2009 ("Effective Date") is
among Abraxas Energy Partners, L.P., a Delaware limited partnership ("Borrower"), the
lenders party to the Credit Agreement described below from time to time as
Lenders, and Société Générale, as Administrative Agent (in such capacity, the
"Administrative
Agent") and as Issuing Lender (in such capacity, the "Issuing
Lender").
RECITALS
A. The
Borrower, the Lenders, the Issuing Lender and the Administrative Agent are
parties to the Amended and Restated Credit Agreement dated as of January 31,
2008, as amended by that certain Amendment No. 1 dated as of January 16, 2009
(as so amended and as the same may be further amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement";
each capitalized term defined in the Credit Agreement and used herein without
definition shall have the meaning assigned to such term in the Credit Agreement,
unless expressly provided to the contrary).
B. Contemporaneously
herewith, the Borrower, the Subordinated Agent and the Subordinated Lenders
(each as defined in the Credit Agreement) propose to make certain amendments to
the Subordinated Credit Agreement (as defined in the Credit Agreement) pursuant
to that certain Amendment No. 2 dated as of April 30, 2009 (the "Subordinated Credit
Agreement Amendment") among the Borrower, the Subordinated Agent and the
Subordinated Lenders.
C. The
Borrower has requested that the Lenders (a) consent to the Subordinated Credit
Agreement Amendment, (b) redetermine the amount of the Borrowing Base as
provided herein, and (c) make certain amendments to the Credit Agreement as
provided herein.
THEREFORE, the Borrower, the Lenders,
the Issuing Lender and the Administrative Agent hereby agree as
follows:
ARTICLE
I.
DEFINITIONS
Section
1.1 Terms
Defined Above. As used in this Agreement, each of the terms
defined in the opening paragraph and the Recitals above shall have the meanings
assigned to such terms therein.
Section
1.2 Other
Definitional Provisions.
The words "hereby", "herein", "hereinafter", "hereof", "hereto" and
"hereunder" when used in this Agreement shall refer to this Agreement as a whole
and not to any particular Article, Section, subsection or provision of this
Agreement. Article, Section, subsection and Exhibit references herein
are to such Articles, Sections, subsections and Exhibits of this Agreement
unless otherwise specified. All titles or headings to Articles, Sections,
subsections or other divisions of this Agreement or the exhibits hereto, if any,
are only for the convenience of the parties and shall not be construed to have
any effect or meaning with respect to the other content of such Articles,
Sections, subsections, other divisions or exhibits, such other content being
controlling as the agreement among the parties hereto. Whenever the
context requires, reference herein made to the single number shall be understood
to include the plural; and likewise, the plural shall be understood to include
the singular. Words denoting gender shall be construed to include the
masculine, feminine and neuter, when
such
construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative. Definitions of terms
defined in the singular or plural shall be equally applicable to the plural or
singular, as the case may be, unless otherwise indicated.
ARTICLE
II.
CONSENT
Section
2.1 Consent;
Acknowledgment; Agreement. Subject to the terms of this
Amendment, the Administrative Agent and the Lenders hereby consent to the
execution and delivery of the Subordinated Credit Agreement Amendment and the
terms and conditions thereof. The consent by the Lenders and by the
Administrative Agent described in this Section 2.1 is referred to herein as
the "Consent." The Consent is contingent upon the satisfaction of the
conditions precedent described in Article VII below. The Consent is
strictly limited to the extent described herein. Nothing contained
herein shall be construed to be a consent to or a permanent waiver of the
Sections covered by the Consent provided for herein or any other terms,
provisions, covenants, warranties or agreements contained in the Credit
Agreement or any other Loan Document. The Lenders reserve the right
to exercise any rights and remedies available to them in connection with any
other present or future defaults with respect to any provision of the Credit
Agreement or any other Loan Document. The description herein of the
Consent is based upon the information provided to the Lenders on or prior to the
date hereof, and, to the extent that material information is incorrect or
omitted with respect to any activity, event or circumstance that could result in
a Default or Event of Default, the Consent shall not be deemed to apply to such
activity, event or circumstance. The failure of the Lenders to give
notice to the Borrower of any such Defaults or Events of Default is not intended
to be nor shall be a waiver thereof. The Borrower hereby agrees and
acknowledges that the Lenders require and will require strict performance by the
Borrower of all of its obligations, agreements and covenants contained in the
Credit Agreement and the other Loan Documents pursuant to the terms thereof, and
no inaction or action regarding any Default or Event of Default is intended to
be or shall be a waiver thereof.
ARTICLE
III.
BORROWING
BASE
Section
3.1 Redetermination
of Borrowing Base. Subject to the terms of this Amendment, the
parties hereto agree that, as of the Effective Date, the Borrowing Base shall be
equal to $130,000,000 and such Borrowing Base shall remain in effect at such
amount until the Borrowing Base is redetermined in accordance with the Credit
Agreement.
2
ARTICLE
IV.
AMENDMENTS
Section
4.1 Section 1.01 of the Credit Agreement is hereby amended as
follows:
(a) Each
of the following defined terms is deleted in its entirety and replaced with the
following:
"Commitment Fee Rate"
means a commitment fee rate equal to 0.50% per annum.
"Eurodollar Rate"
means, for the Interest Period for each Eurodollar Rate Advance comprising the
same Borrowing, the rate of interest equal to the greater of (a) 2% per annum
and (b) the interest rate per annum (rounded upward to the nearest whole
multiple of
1/100
of 1% per annum) set forth on Reuters Reference LIBOR01 as the London Interbank
Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England time) two
Business Days before the first day of such Interest Period and for a period
equal to such Interest Period; provided that if no
such quotation appears on the Reuters Reference LIBOR01, the Eurodollar Rate
shall be an interest rate per annum equal to the rate per annum at which
deposits in Dollars are offered by the principal office of Société Générale in
London, England to prime banks in the London interbank market at 11:00 a.m.
(London, England time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the Eurodollar Rate Advance to be
maintained by the Lender that is the Administrative Agent in respect of such
Borrowing and for a period equal to such Interest Period.
"Maturity Date" means
January 31, 2012.
(b) The
following new terms are added in alphabetical order:
"Amendment No. 2"
means that certain Amendment No. 2 dated as of April 30, 2009 entered into by
the parties hereto which amends this Agreement.
"Amendment No. 2 Effective
Date" means April 30, 2009.
“Defaulting Lender”
means any Lender that (a) has failed to fund any portion of the Advances or
participations in Letter of Credit Obligations required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder unless such failure has been cured within three Business Days (or such
longer time period accepted by the Borrower and the Administrative Agent), (b)
has otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day of
the date when due, unless the subject of a good faith dispute or unless such
failure has been cured within three Business Days (or such longer time period
accepted by the Administrative Agent or such other Lender, as applicable), or
(c) has, or whose Parent has, been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.
3
"Hedge Termination"
means any termination (other than a termination that occurs on the date
scheduled for such termination and not as a result of an event of default or
other early termination event), cancellation or disposition of any Hedge
Contract.
Section
4.2 Section 2.04 of the Credit Agreement is hereby amended by
adding the following new subsection (c) to the end thereof:
(c) In
the event of a Defaulting Lender, the Borrower, at the Borrower's election may
elect to terminate such Defaulting Lender's Commitment hereunder; provided that (i)
such termination must be of the Defaulting Lender's entire Commitment, (ii) the
Borrower shall pay all amounts owed by the Borrower to such Defaulting Lender
under this Agreement and under the other Loan Documents (including principal of
and interest on the Advances owed to such Defaulting Lender, accrued commitment
fees, and letter of credit fees but specifically excluding any amounts owing
under Section 2.12 as result of such payment of Advances) and shall deposit with
the Administrative Agent into the Cash Collateral Account cash collateral in the
amount equal to such Defaulting Lender's ratable share of the Letter of Credit
Exposure, and (iii) a Defaulting Lender’s Commitment may be terminated by the
Borrower under this Section 2.04(c) if and only if at such time, the
Borrower has elected, or is then electing, to terminate the
Commitments
of all then existing Defaulting Lenders. Upon written notice to the
Defaulting Lender and Administrative Agent of the Borrower's election to
terminate a Defaulting Lender's Commitment pursuant to this clause (c) and the
payment and deposit of amounts required to be made by the Borrower under clause
(ii) above, (A) such Defaulting Lender shall cease to be a “Lender” hereunder
for all purposes except that such Lender's rights under Sections 2.13, 2.14, and
9.05 shall continue with respect to events and occurrences occurring before or
concurrently with its ceasing to be a “Lender” hereunder, (B) such Defaulting
Lender's Commitment shall be deemed terminated, and (C) such Defaulting Lender
shall be relieved of its obligations hereunder.
Section
4.3 Section 2.07 of the Credit Agreement is hereby amended by (a)
deleting "and" at the end of clause (v), (b) deleting the period at the end of
clause (vi) and replacing it with "; or", and (c) inserting the following new
clause (vii) to the end thereof:
(vii) a
default of any Lender’s obligations to fund under Section 2.07(d) exists or any
Lender is at such time a Defaulting Lender hereunder, unless the Issuing Lender
has entered into satisfactory arrangements with the Borrower or such Lender to
eliminate the Issuing Lender's credit risk with respect to such
Lender.
Section
4.4 Section 2.07 of the Credit Agreement is hereby amended by adding the
following new subsection (j) to the end thereof:
(j) Defaulting
Lender. If at any time a Defaulting Lender exists hereunder,
then, at the request of the Issuing Lender, the Borrower shall deposit funds
with Administrative Agent into the Cash Collateral Account an amount equal to
such Defaulting Lender's pro rata share of the Letter of Credit
Exposure. So long as (a) such Defaulting Lender's Commitment is
terminated in accordance with Section 2.04(c) or such Defaulting Lender is
replaced in accordance with Section 2.15, and (b) no Default or Event of Default
exists, the Administrative Agent shall release to the Borrower, at the
Borrower's written request, any amounts held in the Cash Collateral Account that
are attributable to such Defaulting Lender's pro rata share of the Letter of
Credit Exposure.
4
Section
4.5 The first sentence of Section 2.08(a) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender having a Commitment a commitment fee at a per annum rate equal to the
Commitment Fee Rate on the average daily Unused Commitment Amount of such
Lender, from the date of this Agreement until the Commitment Termination Date;
provided that
no such commitment fee shall accrue on the Unused Commitment Amount of any
Defaulting Lender during the period such Lender remains a Defaulting
Lender.
Section
4.6 The first sentence of Section 2.11 of the Credit Agreement is hereby
amended by inserting "(other than as a result of a termination of a Defaulting
Lender's Commitment under Section 2.04(c))" immediately after the phrase "If any
Lender shall, by exercising any right of setoff or counterclaim or
otherwise"
Section
4.7 Article II of the Credit Agreement is hereby amended by adding the
following new Section 2.15 to the end thereof:
Section
2.15 Replacement of
Defaulting Lenders. If any Lender becomes a Defaulting Lender,
then (A) the Administrative Agent, upon notice to the Defaulting Lender and the
Borrower, or (B) the Borrower, upon notice to the Defaulting Lender and the
Administrative Agent and at the Borrower's sole cost and expense, may require
such Defaulting Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by,
Section 9.08), all of its interests, rights and obligations under this Agreement
and the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that,
in any event:
(a) as
to assignments requested by the Borrower, the Borrower shall have paid to the
Administrative Agent the processing and recording fee specified in
Section 9.08;
(b) such
Defaulting Lender shall have received payment of an amount equal to the
outstanding principal of its Advances and participations in outstanding Letter
of Credit Obligations, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (but
specifically excluding any amounts owing under Section 2.12 as result of such
payment of Advances) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts); and
5
(c) such
assignment does not conflict with applicable Legal Requirements.
Solely
for purposes of effecting the assignment required for a Defaulting Lender under
this Section 2.15 and to the extent permitted under applicable Legal
Requirements, each Lender hereby designates and appoints the Administrative
Agent as true and lawful agent and attorney-in-fact, with full power and
authority, for and on behalf of and in the name of such Lender to execute,
acknowledge and deliver the Assignment and Acceptance required hereunder if such
Lender was a Defaulting Lender, and such Lender shall be bound thereby as fully
and effectively as if such Lender had personally executed, acknowledged and
delivered the same. In lieu of the Borrower or the Administrative
Agent replacing a Defaulting Lender as provided in this Section 2.15, the
Borrower may terminate such Defaulting Lender's Commitment as provided in
Section 2.04.
Section
4.8 Section 5.12 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
Section
5.12 Hedging
Arrangements. The Borrower shall maintain in effect all of the
Hydrocarbon Hedge Agreements required to be established on (a) the Closing
Date pursuant to Section 3.01(p) and (b) the Amendment No. 2 Effective Date
pursuant to Section 7.3 of Amendment No. 2.
Section
4.9 Section 6.04(b) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(b) The
Borrower shall not, nor shall it permit any of its Subsidiaries to enter into or
effect a Disposition of any of its Properties or to effect a Hedge Termination
other than: (i) the sale of Hydrocarbons in the ordinary course of business,
(ii) the Disposition of equipment that is
(A)
obsolete, worn out, depleted or uneconomic and disposed of in the ordinary
course of business, (B) no longer necessary for the business of such Person or
(C) contemporaneously replaced by equipment of at least comparable use, (iii)
Farmouts of undeveloped acreage and assignments in connection with such
Farmouts, (iv) Dispositions of Oil and Gas Properties or any interest therein or
Subsidiaries owning Oil and Gas Properties and/or Hedge Terminations not
otherwise prohibited under Section 5.12; provided that (A)
100% of the consideration received in respect of such Disposition shall be cash,
(B) the consideration received in respect of such Disposition shall be equal to
or greater than the fair market value of the Oil and Gas Property, interest
therein or Subsidiary subject of such Disposition (as reasonably determined by
the board of managers or the equivalent governing body of the General Partner
and, if requested by the Administrative Agent, the Borrower shall deliver a
certificate of a Responsible Officer of the Borrower certifying to that effect),
(C) if and to the extent (1) the fair market value (as
6
determined
by the Administrative Agent), individually or in the aggregate, of any such
Disposition of Oil and Gas Property or Subsidiary owning Oil and Gas Properties
included in the most recently delivered Engineering Report or (2) the net cash
proceeds of any such Hedge Termination, in each case taken together with all
other such Dispositions and Hedge Terminations during any period between two
successive scheduled determinations of the Borrowing Base, exceeds 5% of the
Borrowing Base in effect at the time such Disposition or Hedge Termination is
effected, the Borrowing Base shall be reduced, effective immediately upon such
Disposition or such Hedge Termination, by an amount equal to the value, if any,
assigned such Property as determined by the Required Lenders in the most
recently delivered Engineering Report or by the net cash proceeds of any such
Hedge Contract, as applicable, and (D) if any such Disposition is of a
Subsidiary owning Oil and Gas Properties, such Disposition shall include all the
Equity Interests of such Subsidiary; (v) the sale, release, surrender (in
accordance with the terms of the applicable lease) or other disposition of
leasehold interests in any Oil and Gas Property to which no Proven Reserves are
attributed, (vi) Dispositions of Properties between and among Loan Parties, and
(vii) any Disposition of Properties not otherwise permitted by
Section 6.04(b) and having a fair market value not to exceed $250,000
during any 12-month period.
Section
4.10 Section 7.01(c)(i) of the Credit Agreement is hereby deleted
in its entirety and replaced with the following:
(i)
perform or observe any covenant contained in Section 5.02(a), Section
5.06(e), Section 5.12, Section 5.13 or Article VI of this Agreement or
Section 5.1 of Amendment No. 2 or
Section
4.11 Section 9.08(b)(i) of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:
(i)except
in the case of (A) an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Advances being assigned at the time owing to it, (B)
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, or (C) an assignment pursuant to Section 2.15, the
aggregate amount of the Commitments and Advances of such Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall not be less than
$5,000,000.00;
ARTICLE
V.
AGREEMENT
Section
5.1 Escrow
Arrangement. Notwithstanding anything to the contrary
contained in the Credit Agreement, the parties hereto hereby agree that (a) the
Borrower shall deposit cash in an amount equal to the cash distribution
scheduled to be made on or about May 15, 2009 attributable to the first quarter
of 2009 (the "May 2009
Distribution") into an account established with a Lender (the "Designated Escrow
Account"), (b) the Administrative Agent
7
shall
have a first priority, perfected security interest in the Designated Escrow
Account on terms and subject to documentation satisfactory to the Administrative
Agent in its sole discretion, (c) funds in an amount equal to the May 2009
Distribution shall be held in the Designated Escrow Account until the
Subordinated Loan Termination Date, and (d) the Borrower shall not pay the May
2009 Distribution to any of the equity holders of the Borrower until the
Subordinated Loan Termination Date has occurred. The Borrower hereby
agrees and acknowledges that during the existence of any Event of Default, the
Administrative Agent may apply any funds held in the Designated Escrow Account
to the Obligations in any order determined by the Administrative
Agent.
ARTICLE
VI.
REPRESENTATIONS
AND WARRANTIES
Section
6.1 Representations
and Warranties. The Borrower represents and warrants that: (a)
its representations and warranties contained in Article IV of the Credit
Agreement and its representations and warranties contained in the Security
Instruments, the Guaranties, and each of the other Loan Documents to which it is
a party are true and correct in all material respects on and as of the Effective
Date, as though made on and as of such date, except those representations and
warranties that speak of a certain date, which representations and warranties
were true and correct as of such date; (b) no Default has occurred and is
continuing; (c) the execution, delivery and performance of this Agreement are
within the corporate power and authority of the Borrower and have
been duly authorized by appropriate partnership action and proceedings; (d) this
Agreement constitutes the legal, valid, and binding obligation of the Borrower
enforceable 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; (e) there
are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security
Instruments are valid and subsisting and secure the Borrower's obligations under
the Loan Documents.
ARTICLE
VII.
CONDITIONS
This
Agreement shall become effective and enforceable against the parties hereto upon
the occurrence of the following conditions precedent:
Section
7.1 Documentation. 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
Administrative Agent, the Issuing Lender and the Lenders.
Section
7.2 Subordinated
Credit Agreement Amendment. The Administrative Agent shall
have received true and correct copies of the fully-executed Subordinated Credit
Agreement Amendment and such agreement shall have become effective.
Section
7.3 Hydrocarbon
Hedge Agreements. The Borrower shall have entered into
Hydrocarbon Hedge Agreements covering at least 60% of the production volumes of
crude oil and natural gas, calculated separately, attributable to Proven
Reserves categorized as "proved,
8
developing
and producing" estimated to be produced by the Borrower during the calendar year
2012, as shown on the most recently delivered Independent Engineering Report (or
such separate or supplemental reserve data or other information acceptable to
the Administrative Agent in its sole discretion).
Section
7.4 No
Default. No Default shall have occurred and be continuing as
of the Effective Date.
Section
7.5 Representations. The
representations and warranties in this Agreement shall be true and correct in
all material respects.
Section
7.6 Fees and
Expenses. The Borrower shall have paid (a) an amendment fee in
the amount of $325,000 to the Administrative Agent for the pro rata account of
the Lenders and (b) all fees and expenses of the Administrative Agent's outside
legal counsel and other consultants pursuant to all invoices presented for
payment on or prior to the Effective Date.
ARTICLE
VIII.
MISCELLANEOUS
Section
8.1 Effect on
Loan Documents;
Acknowledgments.
(a) The
Borrower acknowledges that on the date hereof all Obligations are payable
without defense, offset, counterclaim or recoupment.
(b) The
Administrative Agent, the Issuing Lender, and the Lenders hereby expressly
reserve all of their rights, remedies, and claims under the Loan
Documents. Nothing in this Agreement shall constitute a waiver or
relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of
the Loan Documents, (iii) any rights or remedies of the Administrative Agent,
the Issuing Lender or any Lender with respect to the Loan Documents, or (iv) the
rights of the Administrative Agent, any Issuing Lender or any Lender to collect
the full amounts owing to them under the Loan Documents.
(c) Each
of the Borrower, the Administrative Agent, the Issuing Lender, and the Lenders
does hereby adopt, ratify, and confirm the Credit Agreement, and acknowledges
and agrees that the Credit Agreement and all other Loan Documents are and remain
in full force and effect, and the Borrower acknowledges and agrees that its
liabilities under the Credit Agreement and the other Loan Documents are not
impaired in any respect by this Agreement or the consent and amendment granted
hereunder.
(d) 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, as applicable, under the Credit
Agreement.
Section 8.2 Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original and all of which, taken together, constitute a single
instrument. This Agreement may be executed by facsimile signature and
all such signatures shall be effective as originals.
9
Section
8.3Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Lenders, the Borrower, the Administrative Agent, the Issuing
Lender and their respective successors and assigns permitted pursuant to the
Credit Agreement.
Section
8.4 Invalidity. In
the event that any one or more of the provisions contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.
Section
8.5 Governing
Law. This Agreement
shall be deemed to be a contract made under and shall be governed by and
construed in accordance with the laws of the State of New York.
Section 8.6 Entire
Agreement.
THIS AGREEMENT, THE
CREDIT AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Signature Pages
Follow]
10
