Lock-Up Agreement
Date: September 29, 2017
Yuma Energy, Inc. 0000 Xxxx Xxxx Xxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Reference is made to that certain Registration Rights Agreement dated
as of October 26, 2016 (the RRA), by and among Yuma Energy, Inc.,
a Delaware corporation (the Company), and each of the stockholders
executing a signature page thereto. Capitalized terms used but not
defined herein have the meaning ascribed to such terms in the RRA.
Pursuant to Section 2.3 of the RRA the undersigned has agreed to enter
into this Lock-up Agreement (this Agreement). The Company has entered
into an Underwriting Agreement dated September 28, 2017 (the Underwriting
Agreement) with Northland Securities, Inc. as representative
(the Representative) for the several underwriters named in Schedule I
thereto for a public registered underwritten offering (the Offering)
of certain securities (the Securities) of the Company. The undersigned
hereby agrees that without, in each case, the prior written consent of
the Representative during the period specified in the second succeeding
paragraph (the Lock-Up Period), the undersigned will not: (1) offer,
announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, make any short sale or otherwise
transfer or dispose of, directly or indirectly, any shares of the Companys
common stock, par value $0.001 per share (the Common Stock), or any
securities convertible into, exercisable or exchangeable for or that
represent the right to receive Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the
U.S. Securities and Exchange Commission (the SEC)) whether now owned or
hereafter acquired (the Undersigneds Securities); (2) enter into
any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Undersigneds Securities,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash
or otherwise; or (3) publicly disclose the intention to do any of
the foregoing.
The undersigned agrees that the foregoing restrictions preclude the
undersigned from engaging in any hedging or other transaction which
is designed to or which reasonably could be expected to lead to or
result in a sale or disposition of the Undersigneds Securities even
if such securities would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or
grant of any right (including without limitation any put or call
option) with respect to any of the Undersigneds Securities or
with respect to any security that includes, relates to or derives
any significant part of its value from such securities.
The Lock-Up Period will commence on September 28, 2017 and continue
and include the date ninety (90) days thereafter.
Notwithstanding the foregoing, (i) the undersigned may sell or
transfer any Registrable Securities to any Affiliate of the undersigned,
so long as such Affiliate agrees to be and remains bound hereby, (ii)
the undersigned may enter into a bona fide pledge of any Registrable
Securities (and any foreclosure on any such pledge shall also be permitted),
and (iii) any hedging transaction with respect to an index or basket of
securities where the equity securities of the Company constitute a de
minimis amount shall not be prohibited pursuant to this Agreement.
In furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to decline to make any transfer
of shares of Common Stock if such transfer would constitute a violation
or breach of this Agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Agreement and that upon
request, the undersigned will execute any additional documents necessary
to ensure the validity or enforcement of this Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned. The undersigned understands that the
undersigned shall be released from all obligations under this Agreement
if it shall cease to hold 1% of the Registrable Securities under the RRA.
The undersigned agrees that that Representative is a third-party
beneficiary of this Agreement. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
[The remainder of this page has intentionally been left blank.]
Very truly yours,
Sankaty Xxxxx, LLC
/s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx, Authorized Signatory
