SEVENTH AMENDMENT TO LIMITED FORBEARANCE AGREEMENT
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
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 XXX. EACH CREDIT PARTY (IN ITS OWN RIGHT AND ON BEHALF OF ITS PREDECESSORS, SUCCESSORS AND
2
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 xxx 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 XXX 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 XXX 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 XXX, 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 XXX 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
3
mutandis. Except as amended herein, the Forbearance Agreement shall remain in full force and effect on a cumulative basis in accordance with its terms.
[Remainder of page intentionally left blank.]
4
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: |
a Delaware corporation
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
GUARANTORS: |
APPROACH OPERATING, LLC, |
a Delaware limited liability company
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
|
|
APPROACH RESOURCES I, LP, |
a Texas limited partnership
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
APPROACH OIL & GAS INC., |
a Delaware corporation
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
|
|
APPROACH DELAWARE, LLC, |
a Delaware limited liability company
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
APPROACH SERVICES, LLC, |
a Delaware limited liability company
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
|
|
APPROACH MIDSTREAM HOLDINGS LLC, |
a Delaware limited liability company
By:/s/ Xxxxxx Xxxxxx
Name:Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
|
ADMINISTRATIVE AGENT: |
JPMORGAN CHASE BANK, N.A., |
By:/s/ Xxxxx Xxxxxx
Name:Xxxxx Xxxxxx
Title:Authorized Officer
as a Lender
By:/s/ Xxxxxxx X. Xxxxx
Name:Xxxxxxx X. Xxxxx
Title:Vice President
as a Lender
By:/s/ Xxxxxx Xxxxx
Name:Xxxxxx Xxxxx
Title:Senior Vice President
CAPITAL ONE, NATIONAL ASSOCIATION,
as a Lender
By:/s/ Xxxxxxxxxxx Xxxx
Name:Xxxxxxxxxxx Xxxx
Title:Director
as a Lender
By:/s/ Xxx X. Xxxxxxxxx
Name:Xxx X. Xxxxxxxxx
Title:Authorized Signatory
