Exhibit 10.1
 
LIMITED WAIVER
 
THIS LIMITED WAIVER (this “Waiver”) dated as of August 30, 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 DAVIS PETROLEUM CORP., a Delaware corporation
(“Davis”, 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, restated,
amended and restated, supplemented or otherwise modified from time to time prior
to the date hereof, the “Credit Agreement”).
 
B. Yuma Energy, in its capacity as the Borrowing Agent, has delivered the
Administrative Agent and the Lenders under the Credit Agreement the Borrowers’
Compliance Certificate dated as of August 29, 2018, with respect to the fiscal
quarter ended June 30, 2018, demonstrating that Yuma Energy and its Subsidiaries
failed to comply with certain financial ratios required pursuant to Section 6.1
of the Credit Agreement for the fiscal quarter ended June 30, 2018.
 
C. The Borrowers have requested that the Lenders waive any breaches under the
Credit Agreement resulting from such non-compliance, and, subject to the
conditions precedent set forth herein, the parties hereto have agreed to waive
any such breaches 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
Waiver, and (ii) all references in the Loan Documents to the “Loan Documents”
shall mean the Loan Documents, as amended by this Waiver.
 
2. Limited Waiver.
 
A. At the request of the Borrowers, and in reliance on the accuracy of the
information certified by the Borrowers in the Compliance Certificate dated
August 29, 2018, the Administrative Agent and the Lenders hereby waive the
non-compliance by the Borrowers with the financial ratios specified in clauses
(a), (b) and (c) of Section 6.1 of the Credit Agreement as of the last day of
the fiscal quarter ended June 30, 2018, or for the four fiscal quarter period
ended June 30, 2018, as applicable.
 
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 Waiver, no other waivers are
intended or made by this Waiver. 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 Waiver, 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.
 
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3. Conditions Precedent. This Waiver shall become effective (the “Waiver
Effective Date”) upon each of the following conditions being satisfied:
 
A. Waiver to Credit Agreement. The Administrative Agent shall have received
multiple original counterparts, as requested by the Administrative Agent, of
this Waiver 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 Waiver, 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 Waiver Effective Date and (ii) no
Default or Event of Default exists under the Credit Agreement or any of the
other Loan Documents.
 
4. Certain Representations. Each Borrower represents and warrants that, as of
the Waiver Effective Date: (A) each Borrower has full power and authority to
execute this Waiver and the other documents executed in connection herewith and
this Waiver 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 Waiver 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 Waiver 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.
 
5. Agreement Regarding Redetermination of the Borrowing Base in September 2018.
The parties hereto agree that the Borrowing Base redetermination that was
contemplated by that certain Waiver and Third Amendment to Credit Agreement
dated as of July 31, 2018, to occur on or about August 15, 2018, shall be, and
hereby is, postponed until on or about September 15, 2018 (the “September 2018
Redetermination”), whereupon the Borrowing Base shall be redetermined 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 September 2018 Redetermination
shall not constitute an Interim Redetermination (or a Scheduled
Redetermination).
 
6. 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.
 
7. 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 Waiver. Any breach of any
representations, warranties and covenants under this Waiver shall be an Event of
Default under the Credit Agreement.
 
 
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8. 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 Waiver), 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 Waiver shall constitute a Loan
Document for all purposes.
 
9. Release of Administrative Agent, Issuing Bank and Lenders; Etc. In
consideration of the amendments and waivers set forth in this Waiver, each of
the Borrowers and the Guarantors hereby releases, acquits, forever discharges,
and covenants not to sue, 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 Waiver, 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.
 
10. 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 Waiver.
 
11. Counterparts. This Waiver 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 Waiver, it shall not
be necessary to produce or account for more than one counterpart thereof signed
by each of the parties hereto.
 
12. 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.
 
13. Entirety, Etc. This Waiver and all of the other Loan Documents embody the
entire agreement between the parties. THIS WAIVER 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.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Waiver to be effective
as of the date and year first above written.
 
BORROWERS
 
YUMA ENERGY, INC.
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
YUMA EXPLORATION AND PRODUCTION COMPANY, INC.
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
PYRAMID OIL LLC
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
DAVIS PETROLEUM CORP.
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
 
Signature Page to Limited Waiver
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ADMINISTRATIVE AGENT
AND LENDER:
 
SOCIÉTÉ GÉNÉRALE
 
 
By: /s/ Elena Robciuc
Name: Elena Robciuc
Title: Managing Director
 
 
 
LENDER:
 
CIT BANK, N.A.
 
 
By: /s/ John S. Yusi, III
Name: John S. Yusi, III
Title: Senior Vice President
 
 
LENDER:
 
LEGACYTEXAS BANK
 
 
By: /s/ Christopher S. Parada
Name: Christopher S. Parada
Title: Managing Director
 
 
 
 
Signature Page to Limited Waiver
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THE GUARANTORS HEREBY CONSENT TO THE EXECUTION, DELIVERY AND PERFORMANCE OF THE
TERMS OF THIS WAIVER BY THE BORROWERS.
 
 
THE YUMA COMPANIES, INC.
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
DAVIS PETROLEUM ACQUISITION CORP.
 
 
By: /s/ Sam L. Banks
Name: Sam L. Banks
Title: Chief Executive Officer
 
 
 
Signature Page to Limited Waiver
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