AMENDMENT NO. 1 (Subordinated Credit Agreement)
Exhibit 10.2
AMENDMENT NO.
1
This Amendment No. 1 ("Agreement") dated as
of January 16, 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").
RECITALS
A. The
Borrower, the Lenders and the Administrative Agent are parties to the
Subordinated Credit Agreement dated as of January 31, 2008, (as the same may be
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 Senior Agent and the Senior Lenders (each as defined
in the Credit Agreement) propose to make certain amendments to the Senior Credit
Agreement (as defined in the Credit Agreement) pursuant to that certain
Amendment No. 1 dated as of January 16, 2009 (the "Senior Credit Agreement
Amendment") among the Borrower, the Senior Agent and the Senior
Lenders.
C. The
Borrower has requested that the Lenders (a) to the extent required to make such
agreements effective, consent to (i) the Senior Credit Agreement Amendment and
(ii) the terms of that certain Amendment No. 1 to Intercreditor Agreement and
Subordination dated as of January 16, 2009 (the "Intercreditor
Amendment") among the Administrative Agent, the Senior Agent, the
Borrower and the Guarantors, and (b) make certain amendments to the Credit
Agreement as provided herein.
D. The
Borrower, the Administrative Agent and the Lenders wish to, subject to the terms
and conditions of this Amendment, make certain amendments to the Credit
Agreement as provided herein.
THEREFORE, the Borrower, the
Administrative Agent and the Lenders hereby agree as follows:
ARTICLE
I.
DEFINITIONS
Section
1.01Terms
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
1.02Other
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,
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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
2.01Consent;
Acknowledgment; Agreement. Subject to the terms of this
Amendment and to the extent required to make such agreements effective, the
Administrative Agent and the Lenders hereby consent to (a) the execution and
delivery of the Senior Credit Agreement Amendment and the terms and conditions
thereof and (b) the execution and delivery of the Intercreditor Amendment and
the terms and conditions thereof. The consents by the Lenders and by
the Administrative described in this Section 2.01 are collectively referred to
herein as the "Consents." The Consents are contingent upon the
satisfaction of the conditions precedent described in Article V
below. Such Consents are 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 Consents 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
descriptions herein of the Consents are 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, such 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.
AMENDMENTS
Section
3.01Section 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:
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"Adjusted Reference
Rate" means, for any day, the fluctuating rate per annum of interest
equal to the greatest of (a) the Reference Rate in effect on such day, (b) the
Federal Funds Rate in effect on such day plus ½ of 1%, and (c) a date determined
by the Administrative Agent to be the Daily One-Month LIBOR plus
1.50%. Any change in the Adjusted Reference Rate due to a change in
the Reference Rate, the Federal Funds Rate or the Daily One-Month LIBOR shall be
effective on the effective date of such change in the Reference Rate, Federal
Funds Rate or Daily One-Month LIBOR.
"Applicable Margin"
means, with respect to any Advance, (a) during such times as any Event of
Default exists, 3% per annum plus the rate per annum set forth below for the
relevant Type of such Advance based on the applicable date, and (b) at all other
times, the rate per annum set forth below for the relevant Type of such
Advance. The Applicable Margin for any Advance shall change when and
as any such Event of Default commences or terminates.
|
Eurodollar
Rate Advances
|
Reference
Rate Advances
|
|
8.50%
|
7.50%
|
"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
July 1, 2009; provided that if an
Investor Trigger Event shall have occurred, the "Maturity Date" under this
Agreement shall be May 14, 2009.
(b) The
following new terms are added in alphabetical order:
"Amendment No. 1 Effective
Date" means January 16, 2009.
"APC Letter of Credit"
has the meaning specified in Section 7.01(o).
"Daily One-Month
LIBOR" means, for any day, the rate of interest equal to the greater of
(a) 2% per annum and (b) the rate of interest per annum
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(rounded
upward, if necessary, to the nearest whole 1/8 of 1%) determined pursuant to the
following formula:
Daily
One Month LIBOR
= Base
LIBOR
100%
- LIBOR Reserve Percentage
For
purposes of this definition:
(a) "Base LIBOR" means the
rate per annum for United States dollar deposits quoted by the Administrative
Agent for the purpose of calculating effective rates of interest for loans
making reference to the "Daily One-Month LIBOR", as the inter-bank offered rate
in effect from time to time for delivery of funds for one (1) month in amounts
approximately equal to the principal amount of such loans; provided that the
Administrative Agent may base its quotation of the inter-bank offered rate upon
such offers or other market indicators of the inter-bank market as the
Administrative Agent in its discretion deems appropriate including, but not
limited to, the Eurodollar Rate.
(b) "LIBOR Reserve
Percentage" means the reserve percentage prescribed by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
adjusted by the Administrative Agent for expected changes in such reserve
percentage during a one (1) month period.
"Exchange Agreement"
means that certain Exchange and Registration Rights Agreement dated May 25, 2007
among Abraxas Petroleum Corporation, Abraxas Energy Partners, L.P., and the
Purchasers party thereto, as the same may be amended, restated or otherwise
modified from time to time.
"Investor Trigger
Event" means any Purchaser (as defined in the Exchange Agreement)
exercises its right to exchange any Purchased Common Units (as defined in the
Exchange Agreement) into Exchange Shares (as defined in the Exchange Agreement)
pursuant to the Exchange Agreement, other than the exercise by ▇▇▇▇▇▇▇ Value
Partners of up to 9,000 of its Purchased Common Units.
"May 14, 2009 Payment
Amount" means an amount equal to the lesser of (a) the amount of the cash
distribution made by the Borrower to Abraxas Energy Investments, LLC on or about
February 14, 2009 attributable to the fourth quarter of 2008 and (b)
$2,250,000.
Section
3.02Section 2.03(e)(ii) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(ii)
in the case of a payment to be made by the Borrower, the interest rate
applicable to Reference Rate Advances.
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Section
3.03Section 2.06 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
Section
2.06. Repayment of
Advances. The Borrower shall repay to the Administrative Agent
for the ratable benefit of the Lenders the outstanding principal amount of each
Advance, together with any accrued interest thereon, in installments in the
aggregate amounts and on the dates indicated as follows or on such earlier date
pursuant to Section 7.02 or Section 7.03:
|
Date
|
Amount
|
|
May
14, 2009
|
May
14, 2009 Payment Amount
|
|
Maturity
Date
|
all
remaining principal, interest, fees and other amounts owing in respect of
the Advances
|
Section
3.04Section 7.01 of the Credit Agreement is hereby amended by (A)
deleting the "or" at the end of clause (m), (B) deleting the period
after clause (n) and replacing it with ";", and (C) adding the following new
clauses (o) and (p):
(o) APC Letter of
Credit. (i) the Borrower fails to receive a letter of credit
in its favor on terms, including draw conditions, satisfactory to all of the
Lenders in their sole discretion and from an issuer satisfactory to all of the
Lenders in their sole discretion, in the amount of the May 14, 2009 Payment
Amount (the "APC Letter of Credit"), (ii) the Borrower fails to draw on the APC
Letter of Credit on or before May 14, 2009, or (iii) the Borrower fails to use
the proceeds of such draw to repay the Advances on May 14, 2009 in accordance
with Section 2.06; provided that if the
Borrower repays such Advances with funds received from APC, failure to comply
with (i), (ii) or (iii) shall not constitute an Event of Default;
or
(p) Equity Issuance
Proceeds. The Borrower fails to receive Equity Issuance Proceeds in
immediately available funds in an amount equal to at least $20,000,000 on or
before April 30, 2009.
Section
3.05Section 9.01 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
Section
9.01. Amendments,
Etc. No amendment or waiver of any provision of this
Agreement, the Notes, or any other Loan Document, nor consent to any departure
by the Borrower or any Subsidiary therefrom, shall in any event be effective
unless the same shall be in writing and signed by each Lender and the Borrower,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that (a) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document and (b) the Administrative Agent’s Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed only by the
parties thereto.
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ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES
Section
4.01Representations
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 corporate 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
V.
CONDITIONS
This
Agreement shall become effective and enforceable against the parties hereto upon
the occurrence of the following conditions precedent:
Section
5.01Documentation. The
Administrative Agent shall have received multiple original counterparts, as
requested by the Administrative Agent, of (a) this Agreement duly and validly
executed and delivered by duly authorized officers of the Borrower, the
Administrative Agent, and the Lenders and (b) the Intercreditor
Amendment.
Section
5.02Senior
Credit Agreement Amendment. The Administrative Agent shall
have received true and correct copies of the fully-executed Senior Credit
Agreement Amendment and such agreement shall have become effective.
Section
5.03No
Default. No Default shall have occurred and be continuing as
of the Effective Date.
Section
5.04Representations
and Warranties. The representations and warranties in this
Agreement shall be true and correct in all material respects.
Section
5.05Fees and
Expenses. The Borrower shall have paid (a) an amendment fee in
the amount of $100,000 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.
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ARTICLE
VI.
MISCELLANEOUS
Section
6.01Effect 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 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 or any Lender with respect to the Loan
Documents, or (iv) the rights of the Administrative Agent or any Lender to
collect the full amounts owing to them under the Loan Documents.
(c) Each
of the Borrower, the Administrative Agent 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
6.02Counterparts. 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.
Section
6.03Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Lenders, the Borrower, the Administrative Agent and their
respective successors and assigns permitted pursuant to the Credit
Agreement.
Section
6.04Invalidity. 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
6.05Governing
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 6.06Entire
Agreement.
THIS AGREEMENT, THE
CREDIT AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT
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