WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT
THIS
WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”)
dated as of July 31, 2018 among YUMA ENERGY, INC., a Delaware
corporation (“Yuma Energy”),
YUMA EXPLORATION AND PRODUCTION
COMPANY, INC., a Delaware corporation, PYRAMID OIL LLC, a California limited
liability company, and XXXXX
PETROLEUM CORP., a Delaware corporation (“Xxxxx”, and
together with Yuma Energy, Yuma Exploration and Production Company,
Inc., and Pyramid Oil LLC, the “Borrowers”,
and each a “Borrower”),
the Guarantors existing on the date hereof, the undersigned Lenders
party to the Credit Agreement (the “Lenders”) and
SOCIÉTÉ
GÉNÉRALE, in its capacity as Administrative Agent
(the “Administrative
Agent”).
RECITALS
A. The
Borrowers, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement dated as of October 26, 2016, as
amended by that certain First Amendment to Credit Agreement and
Borrowing Base Redetermination dated as of May 19, 2017,
and as further amended by that certain Limited Waiver and Second
Amendment to Credit Agreement and Borrowing Base Redetermination
effective as of March 31, 2018 (as so amended, and as
otherwise amended, restated, amended and restated, supplemented or
otherwise modified prior to the date hereof, the
“Credit
Agreement”).
B. Yuma
Energy, in its capacity as the Borrowing Agent, has notified the Administrative Agent
and the Lenders under the Credit Agreement that as of the last day
of the fiscal quarter ended June 30, 2018, Yuma Energy
and its Subsidiaries failed to maintain cash and Cash Equivalent
Investments held in accounts that are not subject to any
restriction on use or designated for a particular purpose or any
Lien other than the security interest in favor of the
Administrative Agent under the Security Documents (net of the
amount of any Borrowing Base Deficiency, if any), together with
borrowing availability under the Credit Agreement, of at least
$4,000,000.
C. The
Borrowers have requested certain amendments and waivers to the
Credit Agreement and, subject to the conditions precedent set forth
herein, the parties hereto have agreed to so amend and waive
certain provisions of the Credit Agreement as set forth
herein.
NOW,
THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1.
Same Terms. All
terms used herein that are defined in the Credit Agreement shall
have the same meanings when used herein, unless the context hereof
otherwise requires or provides. In addition, (i) all references in
the Loan Documents to the “Agreement” shall mean the
Credit Agreement, as amended by this Amendment, and (ii) all
references in the Loan Documents to the “Loan
Documents” shall mean the Loan Documents, as amended by this
Amendment.
2.
Waiver.
A. At
the request of the Borrowers, the Administrative Agent and the
Lenders, hereby agree to waive any non-compliance by the
Borrowers’ with Section 6.1(d) of the Credit Agreement
for the fiscal quarter ended June 30, 2018, and any Default or
Event of Default directly arising as a result thereof are each
hereby waived (and any breach of any representation or warranty
under the Credit Agreement or any other Loan Document as a result
of the existence of such failure (if any) to comply is hereby
similarly waived).
B. The
post-default rate of interest, which would otherwise apply as a
result of the breach described in the foregoing clause (A) of
this Section 2
to the aggregate outstanding amount of all Loans outstanding for
the period from June 30, 2018 until (but not including)
the date hereof, is hereby waived; provided that the waiver of the
post-default rate of interest herein shall apply only to the Events
of Default waived herein and not to any other Event of Default now
existing or that may hereafter occur.
The
waiver in this Section 2 is effective
only in respect of the matters and for the time periods expressly
set forth in this Section 2 and not for any
other period and, except as expressly set forth in this Amendment,
no other waivers are intended or made by this Amendment. No failure
or delay on the part of the Administrative Agent, any Lender, the
Issuing Bank or the holder of any Note in exercising any power or
right under the Credit Agreement or any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No
waiver or approval by the Administrative Agent, any Lender, the
Issuing Bank or the holder of any Note under this Amendment, the
Credit Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to any
subsequent transaction or any Default or Event of Default under any
Loan Document.
3. Amendments
to Credit Agreement. Subject to the conditions precedent set
forth in Section 4
hereof, Section 5.1(h) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“(h) Cash
flow and accounts payable reports. On (i) Thursday of
each week, commencing August 2, 2018, a 13-week cash flow
forecast for Yuma Energy and its Subsidiaries and, commencing
August 9, 2018, an update with respect to the immediately
preceding week’s 13-week cash flow forecast, including actual
performance for the immediately preceding week and variance reports
and (ii) the tenth day of each month, commencing
August 10, 2018, a report of the outstanding accounts
payable of Yuma Energy and its Subsidiaries (including an aging
report) as of the end of the immediately prior month (e.g., the report due on
August 10, 2018 shall be a report of the outstanding
accounts payable as of July 31, 2018), in each case, in
reasonable detail and otherwise in form and substance acceptable to
the Administrative Agent.”
4. Conditions
Precedent. This Amendment shall become effective (the
“Amendment Effective
Date”) upon each of the following conditions being
satisfied:
A. Amendment
to Credit Agreement. The Administrative Agent shall have
received multiple original counterparts, as requested by the
Administrative Agent, of this Amendment duly and validly executed
and delivered by duly authorized officers of the Borrowers, the
Guarantors, the Administrative Agent and each Lender.
B. Representations
and Warranties; No Defaults. Each Borrower shall have confirmed and
acknowledged to the Administrative Agent and the Lenders, and by
its execution and delivery of this Amendment, each Borrower does
hereby confirm and acknowledge to the Administrative Agent and the
Lenders, that (i) all representations and warranties contained
herein or in the other Loan Documents or otherwise made in writing
in connection herewith or therewith shall be true and correct with
the same force and effect as though such representations and
warranties have been made on and as of the Amendment Effective Date
and (ii) no Default or Event of Default exists under the Credit
Agreement or any of the other Loan Documents.
5. Certain
Representations. Each Borrower represents and warrants that,
as of the Amendment Effective Date: (A) each Borrower has full
power and authority to execute this Amendment and the other
documents executed in connection herewith and this Amendment and
such other documents constitute the legal, valid and binding
obligation of each Borrower enforceable in accordance with their
terms, except as enforceability may be limited by general
principles of equity and applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally; and (B) no
authorization, approval, consent or other action by, notice to, or
filing with, any governmental authority or other person is required
for the execution, delivery and performance by each Borrower
thereof. In addition, each Borrower represents that after giving
effect to this Amendment all representations and warranties
contained in the Credit Agreement and the other Loan Documents are
true and correct in all material respects on and as of the
Amendment Effective Date as if made on and as of such date except
to the extent that any such representation or warranty expressly
relates solely to an earlier date, in which case such
representation or warranty is true and correct in all material
respects as of such earlier date.
Page 2
6.
Agreement to Redetermine
the Borrowing Base in August 2018. The parties hereto agree
that the Borrowing Base shall be redetermined on
August 15, 2018 (the “August 2018
Redetermination”) based on the Engineering Reports
most recently provided by the Borrowing Agent to the Administrative
Agent and the Lenders, as well as any additional reports, data, or
supplemental information reasonably requested by the Required
Lenders. Each of the Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, agree and
acknowledge that the August 2018 Redetermination shall not
constitute an Interim Redetermination (or a Scheduled
Redetermination).
7. No
Further Amendments or Waivers. Except as amended or waived
hereby, the Credit Agreement and the Loan Documents shall remain
unchanged and all provisions shall remain fully effective between
the parties.
8.
Acknowledgments and
Agreements. Each Borrower acknowledges that on the date
hereof all outstanding Obligations are payable in accordance with
their respective terms, and each Borrower waives any defense,
offset, counterclaim or recoupment with respect thereto. Each
Borrower, the Administrative Agent and each Lender do hereby adopt,
ratify and confirm the Credit Agreement, as amended hereby, and the
Loan Documents and acknowledge and agree that the Credit Agreement,
as amended hereby, and the Loan Documents are and remain in full
force and effect. Each Borrower acknowledges and agrees that its
liabilities and obligations under the Credit Agreement, as amended
hereby, and under the Loan Documents, are not impaired in any
respect by this Amendment. Any breach of any representations,
warranties and covenants under this Amendment shall be an Event of
Default under the Credit Agreement.
9. Limitation
on Agreements. The modifications set forth herein are
limited precisely as written and shall not be deemed (A) to be
a consent under or a waiver of or an amendment to any other term or
condition in the Credit Agreement or any of the Loan Documents
(other than the waiver provided for in Section 2 of this Amendment),
or (B) to prejudice any right or rights that the
Administrative Agent now has or may have in the future under or in
connection with the Credit Agreement and the Loan Documents, each
as amended hereby, or any of the other documents referred to herein
or therein. This Amendment shall constitute a Loan Document for all
purposes.
10.
Release of Administrative
Agent, Issuing Bank and Lenders; Etc. In consideration of
the amendments and waivers set forth in this Amendment, each of the
Borrowers and the Guarantors hereby releases, acquits, forever
discharges, and covenants not to xxx, the Administrative Agent, the
Issuing Bank and each Lender, along with all of their respective
beneficiaries, officers, directors, shareholders, agents,
employees, servants, attorneys, accountants, consultants,
affiliates, owners and representatives, as well as their respective
heirs, executors, legal representatives, administrators,
predecessors in interest, successors and assigns (each
individually, a “Released
Party” and collectively, the “Released
Parties”) from any and all claims, demands, damages,
costs, expenses, debts, liabilities, contracts, agreements,
obligations, accounts, defenses, suits, offsets against the
indebtedness evidenced by the Loan Documents, actions, causes of
action or claims for damages or relief of whatever kind or nature,
whether equitable or monetary, whether known or unknown, fixed,
contingent or conditional, at law or in equity, suspected or
unsuspected by any Borrower which any Borrower, any Guarantor or
any Subsidiary of any of them, has, had or may have against any
Released Party, for or by reason of any matter, cause or thing
whatsoever occurring on, or at any time prior to, the date of this
Amendment, including, without limitation, any matter that relates
to, in whole or in part, directly or indirectly (a) the Credit
Agreement, any Note, any Security Document, any other Loan Document
or the transactions evidenced thereby, including, without
limitation, any disbursements under the Credit Agreement, any
Notes, the negotiation of any of the Credit Agreement, the Notes,
the Mortgages, the Hazardous Materials Undertaking and Indemnity or
the other Loan Documents, the terms thereof, or the approval,
administration or servicing thereof, or (b) any notice of
default, event of default in reference to any Loan Document or any
other matter pertaining to the collection or enforcement by any
Released Party of the indebtedness evidenced by any Loan Document
or any right or remedy under any Loan Document, or (c) any
purported oral agreements or understandings by and between any
Released Party and any Borrower or any Guarantor in reference to
any Loan Document.
11. Confirmation
of Security. Each Borrower hereby confirms and agrees that
all of the Security Documents, as may be amended in accordance
herewith, that presently secure the Obligations shall continue to
secure, in the same manner and to the same extent provided therein,
the payment and performance of the Obligations as described in the
Credit Agreement as modified by this Amendment.
Page 3
12.
Counterparts. This Amendment
may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed an original, but all of
which constitute one instrument. In making proof of this Amendment,
it shall not be necessary to produce or account for more than one
counterpart thereof signed by each of the parties
hereto.
13. Incorporation
of Certain Provisions by Reference. The provisions of
Section 9.9 of the Credit Agreement captioned “Governing
Law; Jurisdiction; Waiver of Venue; Service of Process” are
incorporated herein by reference for all purposes.
14.
Entirety, Etc. This
Amendment and all of the other Loan Documents embody the entire
agreement between the parties. THIS AMENDMENT AND ALL OF THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.
[The
rest of this page is intentionally left blank; the signature pages
follow.]
Page 4
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment to
be effective as of the date and year first above
written.
BORROWERS
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
YUMA
EXPLORATION AND PRODUCTION COMPANY, INC.
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
PYRAMID
OIL LLC
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
XXXXX
PETROLEUM CORP.
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
Signature
Page to Waiver and Third Amendment
ADMINISTRATIVE
AGENT
AND
LENDER:
SOCIÉTÉ
GÉNÉRALE
By:
/s/ Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
Director
LENDER:
CIT
BANK, N.A.
By:
/s/ Xxxx
Xxxxxx
Name:
Xxxx Xxxxxx
Title:
Director
LENDER:
LEGACYTEXAS
BANK
By:
/s/ Xxxxxxx
Xxxxxxxx
Name:
Xxxxxxx Xxxxxxxx
Title:
Senior Vice President
Signature
Page to Waiver and Third Amendment
THE
GUARANTORS HEREBY CONSENT TO THE
EXECUTION, DELIVERY
AND PERFORMANCE OF THE
TERMS
OF THIS AMENDMENT BY THE BORROWERS.
THE
YUMA COMPANIES, INC.
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
XXXXX
PETROLEUM ACQUISITION CORP.
By:
/s/ Xxx X.
Xxxxx
Name:
Xxx X. Xxxxx
Title:
Chief Executive Officer
Signature
Page to Waiver and Third Amendment
