FORBEARANCE AGREEMENT
EXECUTION VERSION
Exhibit 10.1
This
FORBEARANCE AGREEMENT, dated as of September 16, 2019 (this
“Forbearance
Agreement”), is by and among Yuma Energy, Inc., Yuma
Exploration and Production Company, Inc., Pyramid Oil LLC and Xxxxx
Petroleum Corp. (collectively, the “Borrowers” and each, a
“Borrower”), The Yuma
Companies, Inc. and Xxxxx Petroleum Acquisition Corp., as
guarantors (the “Guarantors”), the lender
party to the Credit Agreement described below as Lender (the
“Lender”), YE Investment
LLC, a Delaware limited liability company, as Administrative Agent
(in such capacity, the “Administrative Agent”).
Each of the foregoing is referred to herein as a
“Party”
and collectively as the “Parties.”
WITNESSETH:
WHEREAS, the
Borrowers, the Guarantors, the Lender and the Administrative Agent
are parties to the Credit Agreement dated as of October 26, 2016,
as amended by the First Amendment to Credit Agreement and Borrowing
Base Redetermination, dated as of May 19, 2017, the Limited Waiver
and Second Amendment to Credit Agreement and Borrowing Base
Redetermination, dated as of May 8, 2018, the Waiver and Third
Amendment to Credit Agreement, dated as of July 31, 2018, and the
Successor Agent and Issuing Bank Agreement dated as of September
10, 2019 (as amended, amended and restated or otherwise modified
from time to time, the “Credit Agreement”;
capitalized terms that are used herein and not defined herein shall
have the meanings given to such terms in the Credit
Agreement);
WHEREAS, the Loan
Parties and the Lender acknowledge that certain Defaults and Events
of Default have occurred, each as more specifically described in
Exhibit A attached
hereto (each, a “Specified Default” and
collectively, the “Specified
Defaults”);
WHEREAS, the Loan
Parties have requested that the Administrative Agent and the Lender
forbear during the Forbearance Period (as defined below) from
exercising their respective rights and remedies under the Loan
Documents arising as a result of the occurrence of the Specified
Defaults; and
WHEREAS, the
Administrative Agent (acting at the direction of the Lender), and
the Lender have agreed to grant such forbearance on the terms and
subject to the conditions set forth in this Forbearance
Agreement.
NOW,
THEREFORE, in consideration of the foregoing, the covenants and
conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
Section
1. Incorporation
of Recitals. The Loan
Parties and the Lender acknowledge that the recitals set forth
above are true and correct in all material respects.
Section
2. Forbearance.
(a) Forbearance
Period. The “Forbearance Period” shall
commence on the Forbearance Agreement Effective Date (as defined
below) and shall terminate immediately and automatically upon the
earlier to occur of (i) October 26, 2019, at 11:59 p.m. Eastern
Time and (ii) the termination of this Forbearance Agreement
pursuant to Section
2(b) below.
(b) Termination
Events. The Forbearance Period shall terminate upon the
occurrence of any of the following events or circumstances (each, a
“Termination
Event”):
(i) any Loan
Party’s failure to perform or observe any of its agreements
contained in this Forbearance Agreement or any document delivered
in connection herewith in any material respect;
(ii) any
representation or warranty contained in this Forbearance Agreement
or any document delivered in connection herewith shall be false or
misleading in any material respect; or
(iii) a
Default or Event of Default other than a Specified Default shall
occur.
1
(c) Forbearance.
Subject to the terms of this Forbearance Agreement and only so long
as no Termination Event shall have occurred, the Administrative
Agent and the Lender hereby agree to forbear during the Forbearance
Period from exercising their respective rights and remedies under
or in connection with any or all of the Loan Documents against the
Borrowers or their Subsidiaries (in any capacity, including as
Guarantors) at law, in equity, or otherwise, arising from the
Specified Defaults. Notwithstanding the foregoing, the forbearance
granted by the Administrative Agent and the Lender pursuant hereto
shall not constitute and shall not be deemed to constitute a waiver
of any of the Specified Defaults or of any other Default or Event
of Default under the Loan Documents. In addition, each Specified
Default shall continue to constitute an actionable Event of Default
for the purpose of triggering all limitations, restrictions, or
prohibitions on certain actions that may not be taken, omitted or
otherwise acquiesced to by or on behalf of the Loan Parties
pursuant to the Loan Documents during the continuance of an Event
of Default. Upon the termination of the Forbearance Period, the
Administrative Agent’s and the Lender’s agreement
hereunder to forbear shall terminate automatically without further
act or action by the Administrative Agent or the Lender, and the
Administrative Agent and the Lender shall be entitled immediately
to exercise any and all rights and remedies available to it or them
under the Loan Documents and this Forbearance Agreement, at law, in
equity, or otherwise.
(d) Fees
and Expenses. During the Forbearance Period, the Borrowers
shall, within thirty (30) Business Days of receipt of an invoice
therefor, pay all reasonable and invoiced out-of-pocket costs and
expenses incurred by the Administrative Agent or the Lender
(including the reasonable and invoiced fees, charges and
disbursements of outside counsel for the Administrative Agent or
the Lender) unless the Administrative Agent has agreed in writing
in its sole discretion that such payment may be made at a later
date. Each Borrower acknowledges and agrees that all such expenses
are being incurred in connection with a restructuring or workout,
as such terms are used in Section 9.3 of the Credit
Agreement.
(e) Tolling
of Statute of Limitation. The Parties agree that the running
of all statutes of limitation and the doctrine of laches applicable
to all claims or causes of action that the Administrative Agent or
the Lender may be entitled to take or bring in order to enforce its
rights and remedies against the Borrowers are, to the fullest
extent permitted by applicable law, tolled and suspended during the
Forbearance Period.
(f) Certain
Remedies. Without limitation of the terms and conditions of
the Credit Agreement and the other Loan Documents, during the
Forbearance Period, (i) no Borrower may request the making of any
Loans or the issuance of any Letters of Credit, (ii) a
Borrower’s right to select an interest rate based on Adjusted
LIBO Rate shall be suspended, and (iii) interest on (x) the unpaid
principal amount of the Loans and (y) any amounts not paid by any
Loan Party when due under the Loan Documents shall, in each case,
accrue at a rate per annum equal to two percent (2%) plus the rate
applicable to Base Rate Borrowings as provided in Section 2.12 of the Credit
Agreement; provided, however, that, if the Secured Obligations are
paid in full on or before October 26, 2019, the portion of the
accrued and unpaid interest as of such payment date in excess of
the amount of interest that would have accrued at the rate
applicable to Base Rate Borrowings as provided in Section 2.12(a) of the Credit
Agreement shall be waived by the Lender.
Section
3. Covenants.
Notwithstanding any provisions to the contrary contained in the
Loan Documents, each Loan Party hereby covenants and agrees that,
during the Forbearance Period, it shall perform, observe and comply
with each of the following covenants:
(a) Compliance
with Loan Documents; Limited Waiver. Each Loan Party shall
perform, observe and comply with each covenant, agreement and term
contained in the Credit Agreement and the other Loan Documents
(except as expressly modified by this Forbearance Agreement);
provided, however, that notwithstanding anything to the contrary in
the Credit Agreement, this Forbearance Agreement, or any other Loan
Documents, during the Forbearance Period the Borrowers and their
Subsidiaries (in any capacity, including as Guarantors), shall not
be required to perform, observe or comply with (i) Section 2.12(d) of the Credit
Agreement, and all interest that would otherwise have been payable
by the Borrowers thereunder shall accrue during the Forbearance
Period and, upon the expiration or termination of the Forbearance
Period, be payable in accordance with the terms of the Credit
Agreement, (ii) Sections
2.10(c)(i), (ii) and (iii) of the Credit Agreement,
and all principal prepayments that would otherwise have been
payable by the Borrowers thereunder shall be deferred during the
Forbearance Period until the expiration or termination of the
Forbearance Period (together with all accrued and unpaid interest
thereon), (iii) Section
5.4 (“Payment
of Obligations”) of the Credit Agreement to the extent
such Section requires compliance by the Borrowers or the
Subsidiaries with Sections
2.10(c)(i), 2.10(c)(ii) and 2.10(c)(iii) of the Credit
Agreement, (iv) Section
5.10 of the Credit Agreement; (v) Section 5.14 of the Credit
Agreement; (vi) Section
5.15(b)(3) of the Credit Agreement; (vii) Section 5.15(c) of the Credit
Agreement; (viii) Section
6.1 (“Financial Covenants”) of
the Credit Agreement; and (ix) Section 6.19 of the Credit
Agreement. Each Loan Party acknowledges and agrees that the limited
consent and waiver contained in this Section 3 shall not waive or
amend (or be deemed to be or constitute an amendment to, waiver of
or consent with respect to) any other covenant, term or provision
in the Credit Agreement or any other Loan Document or hinder,
restrict or otherwise modify the rights and remedies of the
Administrative Agent or the Lender following the occurrence of any
present or future Default or Event of Default under the Credit
Agreement or any other Loan Document.
2
Section
4. Representations,
Warranties and Acknowledgments of the Loan
Parties. Each Loan
Party hereby represents and warrants and acknowledges to the
Administrative Agent and the Lender that, as of the Forbearance
Agreement Effective Date:
(a) Power
and Authority. Such Loan Party has the corporate power to
execute, deliver and carry out the terms and provisions of this
Forbearance Agreement, and such Loan Party has taken all necessary
corporate action (including any consent of holders of the Equity
Interests in such Loan Party required by applicable law or by its
Organization Documents) to authorize the execution, delivery and
performance of this Forbearance Agreement.
(b) Enforceability.
This Forbearance Agreement, when executed and delivered by each
Party hereto, constitutes or will constitute the authorized, valid
and legally binding obligations of such Loan Party enforceable in
accordance with its terms, except as such enforceability may be
limited by applicable Debtor Relief Laws and by general principles
of equity.
(c) No
Violation of Agreements; Absence of Conflicts. The execution
and delivery of this Forbearance Agreement, the consummation of the
transactions contemplated hereunder and compliance with the terms
and provisions of this Forbearance Agreement, in each case, by such
Loan Party, will not:
(i) require
any consent or approval, governmental or otherwise, not already
obtained (other than in connection with the recordation of any New
Mortgage Document);
(ii) violate
any applicable law or judgment respecting such Loan Party or any of
its Subsidiaries;
(iii) conflict
with, result in a breach of, or constitute a default under, the
Organization Documents of such Loan Party or any of its
Subsidiaries, or under any indenture, agreement, license or other
instrument to which such Loan Party or any of its Subsidiaries is a
party or by which any of them or their respective properties may be
bound; or
(iv) result
in, or require the creation or imposition of, any Lien upon or with
respect to any property now owned or hereafter acquired by such
Loan Party or any of its Subsidiaries (other than any such Lien
granted to the Administrative Agent).
(d) Amounts
Owing; No Defenses. The Borrowers and the other Loan Parties
are indebted to the Lender in an aggregate amount equal to (i) the
aggregate principal amount of Loans outstanding under the Credit
Agreement (which, as of September 10, 2019 was an amount equal to
U.S.$32,805,517.85) plus accrued and unpaid interest thereon, plus
(ii) all reasonable and invoiced out-of-pocket costs and expenses
incurred by the Administrative Agent (A) in connection with the
preparation, negotiation, execution and delivery of this
Forbearance Agreement, or (B) in connection with the Credit
Agreement and the other Loan Documents or (in connection with the
Loans made under the Credit Agreement, including all costs and
expenses incurred during any workout, restructuring or negotiations
in respect of such Loans, as and to the extent set forth in
Section 9.3 of the
Credit Agreement plus (iii) other amounts that may be due for
reimbursement under the Credit Agreement. The Borrower acknowledges
and agrees that such amounts are outstanding without defense,
offset or counterclaim. As of the date hereof, the LC Exposure is
$0.
(e) Collateral.
The collateral covered by the Security Documents, including,
without limitation, each Mortgaged Property, is unimpaired by this
Forbearance Agreement and the Loan Parties have granted to the
Administrative Agent, valid, binding, perfected, enforceable Liens
(subject to Permitted Encumbrances) in the Mortgaged Properties and
other collateral covered by the Security Documents and such Liens
are not subject to encumbrance since the execution of the Credit
Agreement to which the Lender and/or Administrative Agent have not
consented to or otherwise been notified regarding (subject to
Permitted Encumbrances) (the “Collateral”).
(f) Borrowing
Base. The Borrowing Base is $32,805,517.85 and such
Borrowing Base shall remain in effect until a reduction or
adjustment made in accordance with the Credit
Agreement.
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Section
5. Debt
Reduction Process. On
the Forbearance Agreement Effective Date, the Borrowers shall in
good faith use their commercially reasonable efforts to diligently
negotiate certain amendments and modifications to the agreements to
which the Borrowers are a party, including, without limitation,
those set forth on Schedule A attached hereto, in
order to improve the financial condition of the Borrowers and their
Subsidiaries.
Section
6. Conditions
to Effectiveness of this Agreement. This Forbearance Agreement shall
become effective (the date of such effectiveness being referred to
herein as the “Forbearance Agreement Effective
Date”) upon the satisfaction of each of the following
conditions:
(a) This
Agreement. The Lender and each Loan Party shall have
executed and delivered to the Administrative Agent this Forbearance
Agreement.
(b) Representations.
The representations and warranties in this Forbearance Agreement
shall be true and correct in all material respects, 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.
Section
7. Notice
of Termination Events. The Borrowers shall provide notice to
the Administrative Agent, as soon as possible but in any event
within one (1) Business Day of the occurrence of any Termination
Event, which notice shall state that such event occurred and set
forth, in reasonable detail, the facts and circumstances that gave
rise to such event. For the avoidance of doubt, the occurrence of a
Termination Event is not contingent on whether Borrowers have
provided such notice. Such notice shall be delivered by electronic
mail to:
YE
Investment LLC
c/o Red
Mountain Capital Partners LLC
00000
Xxxxxxxxxxxxx Xxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxx
Xxxxxx
Email:
xxxxxxx@xxxxxxxxx.xxx
All
notices given in accordance with the provisions of this
Section 7 shall be
deemed to (a) have been given on the date of receipt and (b)
satisfy and supersede the Administrative Agent notice instructions
set forth in Section
9.1 of the Credit Agreement.
Section
8. Notice
of Specified Defaults. The Loan Parties (i) acknowledge that
the Specified Defaults have occurred and are continuing, (ii)
agrees that this Forbearance Agreement shall constitute written
notice of the Specified Defaults for purposes of satisfying the
notice requirements set forth in Section 7.1 of the Credit
Agreement and (iii) agrees that any grace periods set forth in
Section 7.1 of the
Credit Agreement (as applicable) shall be deemed to have expired
with respect to the Specified Defaults. Each Loan Party hereby
waives any further notice of Default, notice of intent to
accelerate, or demand for payment required pursuant to Section 7.1 of the Credit
Agreement or otherwise with respect to any Specified
Default.
Section
9. Remedies
Upon Termination Event. Upon the occurrence of a Termination
Event, (a) the Forbearance Period will terminate without further
act or action by any of the Administrative Agent or the Lender, and
(b) the Administrative Agent will be entitled immediately to
accelerate the Obligations under the Credit Agreement and the other
Loan Documents, institute foreclosure proceedings against the
Mortgaged Properties and the other Collateral covered by the
Security Documents and to exercise any and all of the
Administrative Agent’s and the Lender’s rights and
remedies available under the Loan Documents and this Forbearance
Agreement, at law, in equity, or otherwise, without further
opportunity to cure, demand, presentment, notice of dishonor,
notice of Default, notice of intent to accelerate, notice of intent
to foreclose, notice of protest or other formalities of any kind,
all of which are hereby expressly waived by each Loan
Party.
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Section
10. Effect
Upon Credit Agreement; Ratification of Liability; No
Waiver.
(a) Effect
Upon Credit Agreement. From and after the Forbearance
Agreement Effective Date, (i) the term “Agreement” in
the Credit Agreement, and all references to the Credit Agreement in
any Loan Document, shall mean the Credit Agreement, as interpreted
in accordance with the terms of this Agreement, (ii) the term
“Agreement” in the Guarantee and Collateral Agreement,
and all references to the Guarantee and Collateral Agreement in any
Loan Document, shall mean the Guarantee and Collateral Agreement,
as interpreted in accordance with the terms of this Agreement and
(iii) the term “Loan Documents” in the Credit Agreement
and the other Loan Documents shall include, without limitation,
this Forbearance Agreement and any agreements, instruments and
other documents executed and/or delivered in connection herewith.
This Forbearance Agreement shall not constitute a novation or
satisfaction and accord of the Credit Agreement or any other Loan
Document.
(b) Ratification
of Liability. Except as modified or waived by this
Forbearance Agreement, each Loan Party hereby acknowledges,
ratifies, reaffirms, and agrees that each of the Loan Documents,
perfected Liens and security interests created thereby in favor of
the Administrative Agent in the Mortgaged Properties and the other
Collateral covered by the Security Documents, are and will remain
in full force and effect and binding on such Loan Party and are
enforceable in accordance with their respective terms and
applicable law. Each Loan Party acknowledges, ratifies, and
reaffirms all of the terms and provisions of the Loan Documents,
except as modified or waived herein, which are incorporated by
reference as of the Forbearance Agreement Effective Date as if set
forth herein including, without limitation, all promises,
agreements, warranties, representations, covenants, releases,
indemnifications and waivers of jury trials contained therein. Each
Loan Party hereby acknowledges, ratifies and confirms the Credit
Agreement, the Security Documents and the other Loan Documents and
all of their respective debts and obligations thereunder, except as
modified or waived herein. Each Loan Party acknowledges and agrees
that in the event the Administrative Agent seeks to take possession
of any or all of the Mortgaged Properties or any other Collateral
securing any of the Obligations by court process, such Loan Party
irrevocably waives, to the fullest extent permitted by law, any
bonds and any surety or security relating thereto required by any
statute, court rule or otherwise as an incident to such
possession.
(c) No
Waiver. The descriptions herein of the Specified Defaults
are based upon the information provided to the Administrative Agent
and the Lender 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 any Lender to
give notice to any Loan Party of any such other Defaults or Events
of Default is not intended to be nor shall be a waiver
thereof.
Section
11. Release;
Waiver.
(a) Release.
Each Loan Party (on behalf of itself and its Affiliates) for itself
and for its successors in title, legal representatives and
assignees and, to the extent the same is claimed by right of,
through or under such Loan Party, for its past, present and future
employees, agents, representatives, officers, directors,
shareholders, and trustees (each, a “Releasing Party” and
collectively, the “Releasing Parties”), does
hereby remise, release and discharge, and shall be deemed to have
forever remised, released and discharged, the Administrative Agent
and the Lender in their respective capacities as such under the
Loan Documents, and the Administrative Agent’s and the
Lender’s respective successors-in-title, legal
representatives and assignees, past, present and future officers,
directors, affiliates, shareholders, trustees, agents, employees,
consultants, experts, advisors, attorneys and other professionals
and all other persons and entities to whom the Administrative
Agent, and the Lender or any of their respective
successors-in-title, legal representatives and assignees, past,
present and future officers, directors, affiliates, shareholders,
trustees, agents, employees, consultants, experts, advisors,
attorneys and other professionals would be liable if such persons
or entities were found to be liable to any Releasing Party or any
of them (collectively, hereinafter the “Releasees”), from any and
all manner of action and actions, cause and causes of action,
claims, charges, demands, counterclaims, crossclaims, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, rights of setoff and recoupment,
controversies, damages, judgments, expenses, executions, liens,
claims of liens, claims of costs, penalties, attorneys’ fees,
or any other compensation, recovery or relief on account of any
liability, obligation, demand or cause of action of whatever
nature, whether in law, equity or otherwise, including, without
limitation, any claims relating to (i) the making or administration
of the Loans, including, without limitation, any such claims and
defenses based on mistake, duress, usury or misrepresentation, or
any other claim based on so-called “lender liability”
theories, (ii) any covenants, agreements, duties or obligations set
forth in the Credit Agreement or any other Loan Document, (iii)
increased financing costs, interest or other carrying costs, (iv)
penalties, (v) lost profits or loss of business opportunity, (vi)
legal, accounting and other administrative or professional fees and
expenses and incidental, consequential and punitive damages payable
to third parties, (vii) damages to business reputation or (viii) to
the extent allowed by applicable law, any claims arising under 11
U.S.C. Sections 541 to 550 or any claims for avoidance or recovery
under any other federal, state or foreign law equivalent, whether
known or unknown, fixed or contingent, joint and/or several,
secured or unsecured, due or not due, primary or secondary,
liquidated or unliquidated, contractual or tortious, direct,
indirect, or derivative, asserted or unasserted, foreseen or
unforeseen, suspected or unsuspected, now existing, heretofore
existing or which may heretofore accrue against any of the
Releasees, whether held in a personal or representative capacity,
and which are, in each case, based on any act, fact, event or
omission or other matter, cause or thing occurring at any time
prior to or on the Forbearance Agreement Effective Date in any way,
directly or indirectly arising out of, connected with or relating
to the Credit Agreement, or any other Loan Document and the
transactions contemplated thereby, and all other agreements,
certificates, instruments and other documents and statements
(whether written or oral) related to any of the foregoing (each, a
“Claim”
and collectively, the “Claims”). Each Releasing
Party further stipulates and agrees with respect to all Claims,
that it hereby waives, to the fullest extent permitted by
applicable law, any and all provisions, rights, and benefits
conferred by any applicable U.S. federal or state law, any
applicable foreign law or any principle of common law, that would
otherwise limit a release or discharge of any unknown Claims
pursuant to this Section
11.
5
(b) Waiver.
Each Loan Party, on behalf of itself and its successors, assigns,
and other legal representatives, hereby absolutely, unconditionally
and irrevocably, covenants and agrees with and in favor of each
Releasee that it will not xxx (at law, in equity, in any regulatory
proceeding or otherwise) any Releasee on the basis of any Claim
released, remised and discharged by such Loan Party pursuant to
Section 11(a)
hereof. If any Loan Party or any of its successors, assigns or
other legal representatives violates the foregoing covenant, the
Borrower, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages
as any Releasee may sustain as a result of such violation, all
attorneys’ fees and costs incurred by any Releasee as a
result of such violation.
(c) Representation
by Counsel. In entering into this Forbearance Agreement,
each Loan Party has consulted with and been represented by counsel
and expressly disclaims any reliance on any representations, acts
or omissions by the Administrative Agent, the Lender or any of the
Administrative Agent’s or the Lender’s Affiliates and
hereby agrees and acknowledges that the validity and effectiveness
of the releases set forth above do not depend in any way on any
such representations, acts and/or omissions or the accuracy,
completeness or validity thereof. The provisions of this
Section 11 shall
survive the termination of the Credit Agreement and payment in full
of all amounts owing thereunder.
Section
12. No
Obligation. Each Loan
Party hereby acknowledges and understands that upon the expiration
or termination of the Forbearance Period, if all the Specified
Defaults have not been cured or waived by written agreement in
accordance with the Credit Agreement, or if there shall at such
time exist a Default or an Event of Default, then the
Administrative Agent and the Lender shall have the right to proceed
to exercise any or all available rights and remedies, which may
include foreclosure on the Mortgaged Properties and the other
Collateral covered by the Security Documents and/or institution of
legal proceedings. The Administrative Agent and the Lender shall
have no obligation whatsoever to extend the maturity of the
Obligations, waive any Events of Default or Defaults, defer any
payments, or further forbear from exercising its or their rights
and remedies. This Forbearance Agreement and the forbearance
contemplated hereby shall not be construed as establishing a custom
or a course of conduct or dealing among the Lender and the Loan
Parties.
Section
13. No
Implied Waivers. No
failure or delay on the part of the Administrative Agent or the
Lender in exercising, and no course of dealing with respect to, any
right, power or privilege under this Forbearance Agreement, the
Credit Agreement, the Security Documents or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Forbearance
Agreement, the Credit Agreement, the Security Documents or any
other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or
privilege.
Section
14. Successors
and Assigns. This
Forbearance Agreement shall be binding upon and inure to the
benefit of each Party hereto and their respective successors and
assigns.
Section
15. No
Third-Party Beneficiaries. No Person other than the Loan Parties,
the Administrative Agent and the Lender, and in the case of
Section 11 hereof,
the Releasees, shall have any rights hereunder or be entitled to
rely on this Forbearance Agreement and all third-party beneficiary
rights (other than the rights of the Releasees under Section 11 hereof) are hereby
expressly disclaimed.
Section
16. Severability.
The invalidity, illegality or unenforceability of any provision in
or obligation under this Forbearance Agreement in any jurisdiction
shall not affect or impair the validity, legality or enforceability
of the remaining provisions or obligations under this Forbearance
Agreement or of such provision or obligation in any other
jurisdiction.
Section
17. Governing
Law, Jurisdiction; Waiver of Jury Trial. Section 9.9 of the Credit
Agreement applies to this Forbearance Agreement, mutatis
mutandis.
Section
18. Amendments.
The provisions of this Forbearance Agreement, including the
provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may not be given, without the express prior
written consent of the Loan Parties, the Administrative Agent and
the Lender.
Section
19. Time
of Essence. Time is
of the essence in the performance of each of the obligations of the
Loan Parties hereunder and with respect to all conditions to be
satisfied by such parties.
Section
20. Further
Assurances. Each Loan
Party hereby agrees to execute and deliver from time to time such
other documents and take such other actions as may be reasonably
requested by the Administrative Agent to the extent necessary in
order to effectuate the terms hereof.
6
Section
21. Prior
Negotiations; Entire Agreement. This Forbearance Agreement, the Credit
Agreement and the other Loan Documents constitute the entire
agreement of the Parties with respect to the subject matter hereof,
and supersede all other prior negotiations, understandings or
agreements with respect to the subject matter hereof.
Section
22. Interpretation.
This Forbearance Agreement is the product of negotiations of the
Parties and in the enforcement or interpretation hereof, is to be
interpreted in a neutral manner, and any presumption with regard to
interpretation for or against any Party by reason of that Party
having drafted or caused to be drafted this Forbearance Agreement,
or any portion hereof, shall not be effective in regard to the
interpretation hereof.
Section
23. Counterparts.
This Forbearance Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of
which taken together shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this
Forbearance Agreement by facsimile transmission or by electronic
mail in portable document format (.pdf) shall be effective as
delivery of an original executed counterpart of this Forbearance
Agreement.
Section
24. Section
Titles. The section
and subsection titles contained in this Forbearance Agreement are
included for convenience only, shall be without substantive meaning
or content of any kind whatsoever, and are not a part of the
agreement between the Borrowers, on the one hand, and
Administrative Agent and the Lender, on the other hand. Any
reference in this Forbearance Agreement to any
“Section” refers, unless the context otherwise
indicates, to a section of this Forbearance Agreement.
Section
25. No
Other Creditor Action. The Administrative Agent’s and
the Lender’s obligations to forbear are expressly conditioned
upon all other creditors of the Borrowers and the Guarantors
(including, without limitation, trade creditors) refraining or
otherwise forbearing from exercising remedies or otherwise taking
any enforcement action against the Borrowers, any Guarantor or the
Mortgaged Properties (including, without limitation, acceleration
of indebtedness) during the Forbearance Period. In the event that
any such creditor takes any such action, all of the Administrative
Agent’s and the Lender’s obligations hereunder shall
automatically and immediately terminate without further notice
(provided, that, without limitation of this Section 25, the Administrative
Agent agrees to give notice of such event to the Borrowers (it
being understood that the failure to give such notice will not
prevent the operation of this Section 25 and that the
Administrative Agent shall have no liability to the Borrowers or
its affiliates for the failure to give such notice)) or
demand.
[Remainder of Page Intentionally Left Blank; Signature Pages
Follow]
7
IN
WITNESS WHEREOF, the parties hereto have executed and delivered
this Forbearance Agreement as of the day and year first above
written.
BORROWERS:
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
YUMA
EXPLORATION AND PRODUCTION COMPANY, INC.
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
PYRAMID
OIL LLC
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
XXXXX
PETROLEUM CORP.
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
GUARANTORS:
THE
YUMA COMPANIES, INC.
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
XXXXX
PETROLEUM ACQUISITION CORP.
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
YE INVESTMENT LLC, as the Administrative
Agent and Lender
By:
/s/ Xxxxxx
Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Managing Member
8
Exhibit A
Specified
Defaults
1.
The
Borrowers’ failure to pay the accrued and unpaid interest on
the Loans that was due and payable on December 31, 2018, March 31,
2019 and June 30, 2019.
2.
The
Borrowers’ failure to comply with Section 6.1 of the Credit
Agreement as of September 30, 2018, December 31, 2018, March 31,
2019 and June 30, 2019.
3.
The
Borrowers’ failure to comply with Section 5.10 of the Credit
Agreement.
4.
The
Borrowers’ failure to comply with Section 6.2 of the Credit
Agreement.
5. The
Borrowers’ failure to comply with Section 6.18(a) of the
Credit Agreement.
6. The
Borrowers’ failure to comply with Section 5.13(c) of the
Credit Agreement.
9
