Item. 1.01 Entry into a Material Definitive Agreement.
Asset Purchase and Sale Agreement
On January 3, 2022, Abraxas Petroleum Corporation, a Nevada corporation (the
"Company", "we", "us" or "our") issued a press release, which is filed herewith
as Exhibit 99.1, regarding the Company and Lime Rock Resources V-A, L.P., a
Delaware limited partnership ("Lime Rock"), having entered into an Asset
Purchase and Sale Agreement (the "Purchase Agreement"), pursuant to which the
Company agreed to sell to Lime Rock certain oil, gas, and mineral properties in
the Williston Basin region of North Dakota (the "Properties") and other related
assets (together with the Properties, the "Assets") belonging to the Company and
its subsidiaries for $87,200,000 in cash, subject to customary purchase price
adjustments (the "Purchase Price"; such sale, the "Sale"). As described in and
subject to the limitations set forth in the Purchase Agreement, the Assets
include, among other things, the oil and gas leases described in the Purchase
Agreement; the leasehold, mineral, and royalty interests in, and the production
and development rights to, the Properties; all contracts, agreements, and
instruments by which the Properties are bound; and all rights and interests in
the drilling, spacing, or pooled units designated in the Purchase Agreement. The
Purchase Agreement includes customary terms and conditions for agreements of
this nature. The Purchase Agreement also contains indemnification obligations of
both the Company and Lime Rock with respect to customary matters, including
breaches of representations, warranties, and covenants. The closing of the
transactions contemplated by the Purchase Agreement occurred concurrently with
execution of the agreement on January 3, 2022.
As previously disclosed on our Form 8-K/A filed on June 13, 2014, the Company
entered into a Third Amended and Restated Credit Facility, dated June 11, 2014
(as amended, modified, or supplemented, the "First Lien Debt Agreement"), by and
among the Company, the financial institutions party thereto as lenders, and
Société Générale, as "Issuing Lender" and administrative agent (the "First Lien
Agent").
Also, as previously disclosed on our Form 8-K filed on November 19, 2019, the
Company entered into a $100,000,000 Term Loan Credit Agreement, dated
November 13, 2019 (as amended, modified, or supplemented, the "Second Lien Debt
Agreement"), by and among the Company, the financial institutions party thereto
as lenders (the "Second Lien Lenders"), and Angelo Gordon Energy Servicer, LLC,
as administrative agent (the "Second Lien Agent"). As previously disclosed in
our Form 8-K filed on April 22, 2021, the Company, the Second Lien Agent, the
Second Lien Lenders, and certain parties named as the Company's guarantors
(collectively, the "Second Lien Parties") entered into a Forbearance Agreement,
dated March 31, 2021, in respect of the Second Lien Debt Agreement, which was
later amended by the Agreement, Amendment to Forbearance Agreement, and
Amendment No. 4 to Credit Agreement, dated as of April 27, 2021, among the
Second Lien Parties (as so amended, the "Forbearance Agreement"), pursuant to
which the Second Lien Lenders agreed to temporarily forbear from exercising
. . .
Item 1.02 Termination of a Material Definitive Agreement.
As set forth in the First Lien Release Agreement, and the Exchange Agreement,
the First Lien Debt Agreement and the Second Lien Debt Agreement will be
terminated upon consummation of the transactions set forth in the Purchase
Agreement, the First Lien Release Agreement, and the Exchange Agreement. See
Item 1.01 of this Current Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity Securities.
The Company's issuance of the Preferred Stock under the Exchange Agreement, as
described in Item 1.01, did not involve a public offering and was exempt from
the requirements of the Securities Act of 1933, as amended (the "Securities
Act") pursuant to Section 4(a)(2) of the Securities Act.
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Item 3.03 Material Modification to Rights of Security Holders.
Upon issuance of the Preferred Stock, as described in Item 1.01, the ability of
the Company to declare or pay dividends on, or purchase, redeem or otherwise
acquire, shares of its common stock will be subject to certain restrictions in
the event that the Company fails to pay dividends on its Preferred Stock. These
restrictions are set forth in the Certificate establishing the terms of the
Preferred Stock, which is filed herewith as Exhibits 3.1 and 4.1 and
incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
Following the Company's issuance of the Preferred Stock to AGEF as contemplated
by the Exchange Agreement and described in Item 1.01 of this Current Report on
Form 8-K, a change of control of the Company occurred. AGEF's ownership of the
Preferred Stock results in its beneficial ownership, both directly and
indirectly, of approximately 85% of the voting securities of the Company. The
consideration for the Preferred Stock is set forth in Item 1.01.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
In connection with the transactions contemplated by the Exchange Agreement,
Mr. Ralph F. Cox and Dr. Angela A. Steffen Meyer tendered letters of resignation
to the Board in which they resigned from their positions on the Board. In
accordance with the terms of the Exchange Agreement, the resignations are
effective at 8:00 a.m. Houston time on January 3, 2022 (the "Closing"). At the
time of their resignations, Mr. Cox served as a Class I member of the Board,
Dr. Meyer served as a Class III member of the Board, and both held positions on
the Company's Audit, Compensation, and Nominating Committees, with Mr. Cox being
the Chairman of the Compensation Committee and Dr. Meyer being the Chairman of
the Nominating Committee. Mr. Cox and Dr. Meyer resigned from the Board given
the change of control of the Company described in Item 5.01 of this Current
Report on Form 8-K and in accordance with the conditions of Closing set forth in
the Exchange Agreement described in Item 1.01. Mr. Robert L.G. Watson will
continue to serve as a Class II member of the Board until the expiration of his
term when he stands for re-election in 2023. Mr. Brian L. Melton will continue
to serve as a Class III member of the Board until the expiration of his term
when he stands for re-election in 2022.
In accordance with the terms of the Exchange Agreement, on January 3, 2022, the
Board voted to increase the size of the Board from four to five directors and to
appoint Todd Dittmann, Damon Putman and Daniel Baddeloo as members of the Board
to fill the vacancies created by the resignations of Mr. Cox and Dr. Meyer and
the expansion of the Board. The appointments of Todd Dittmann and Damon Putman
took effect immediately following completion of the Exchange on January 3, 2022,
and Daniel Baddeloo's appointment will take effect following the mailing of a
Schedule 14f-1 to the Company's stockholders and the expiration of a ten day
waiting period following such mailing. The Company expects the waiting period to
expire, and Daniel Baddeloo's appointment to take effect in January 2022.
Mr. Dittmann, will fill the vacancy created by the resignation of Mr. Cox and
serve as a Class I director until he or his successor is duly elected and
qualified at the 2024 annual meeting of the Company's stockholders, Mr. Putman
will fill the vacancy created by the resignation of Dr. Meyer and serve as a
Class III director and Mr. Baddeloo will be also be appointed to serve as a
Class III direct until they or their successors are duly elected and qualified
at the 2022 annual meeting of the Company's stockholders, or in the case of all
three new directors until their earlier death, resignation, retirement,
disqualification, or removal. The Board intends to determine on which committees
the three new directors will serve at its first board meeting following the
transactions. There are no related-party transactions that would be required to
be disclosed under Item 404(a) of Regulation S-K of the Securities Act with
respect to Mr. Dittmann, Mr. Putman, or Mr. Baddeloo.
All three newly appointed members of the Board are affiliated with Angelo,
Gordon & Co. L.P. ("Angelo Gordon"), an affiliate of AGEF. Mr. Dittmann is a
managing director and member of the executive committee, Mr. Baddeloo is a vice
president, and Mr. Putman is a managing director of Angelo Gordon. Upon the
effectiveness of their appointment to the Company's Board, Mr. Dittmann,
Mr. Baddeloo, and Mr. Putman will become subject to Section 16 of the Securities
Exchange Act of 1934.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On January 2, 2022, the Board of Directors adopted an amendment to the Company's
Bylaws, which will become effective as of the closing of the transactions
described in this Current Report on Form 8-K. Specifically, a new Article X was
added to establish the inapplicability of the "Controlling Interest Statues" set
for in the Nevada Revised Statutes Sections 78.378 through 78.3793. The
foregoing description of the amendment to the Company's Bylaws is a summary
only, does not purport to be complete, and is qualified in its entirety by
reference to the complete text of the amendment, which is filed herewith as
Exhibits 3.1, and is incorporated by reference herein.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
3.1 Certificate of Designation of Series A Preferred Stock
3.2 Amendment to Bylaws of Abraxas Petroleum Corporation, effective January
3, 2022
4.1 Certificate of Designation of Series A Preferred Stock
10.1 Asset Purchase and Sale Agreement by and between the Company and Lime
Rock
10.2 Settlement and Lien Release Agreement by and between the Company and
the First Lien Agent
10.3 Exchange Agreement by and between the Company and AGEF
10.4 Amendment No. 2 to Forbearance Agreement by and between the Company and
the Second Lien Agent
99.1 Press Release dated January 3, 2022
104 Cover Page Interactive Data File (Embedded within the Inline XBRL
document)
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