Blueprint





 





 Exhibit 10.1


 



FIRST AMENDMENT TO CREDIT AGREEMENT AND
BORROWING BASE REDETERMINATION

 

 


 

 


THIS
FIRST AMENDMENT TO CREDIT AGREEMENT AND BORROWING BASE
REDETERMINATION (this “Amendment”)
dated as of May 19, 2017, 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 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 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 Davis and Hawkwood
Energy East Texas, LLC, as buyer, have entered into a certain
Letter Agreement executed on May 19, 2017, pursuant to
which Davis will sell all of its Oil and Gas Properties that are
located in Brazos County, Texas (the disposition transaction
contemplated therein, the “El Halcon
Disposition”).

 


C.           The
Borrowing Agent has provided the necessary reserve report
information in order for the Administrative Agent and the Lenders
to complete the spring 2017 Scheduled Redetermination of the
Borrowing Base and, after reviewing such reserve information and
taking into account the El Halcon Disposition, the Administrative
Agent and the Lenders have recommended a reduction in the Borrowing
Base as set forth herein (to which the Borrowers do hereby
agree).

 


D.           The
Borrowers have requested certain amendments and modifications to
the Credit Agreement and, subject to the conditions precedent set
forth herein, the parties hereto have agreed to so amend or
otherwise modify 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, as the same shall hereafter be amended from time to
time.

 


2.           Amendment
to Credit Agreement. Subject to the conditions precedent set
forth in Section 6 hereof, the
Credit Agreement is amended as follows:

 


A.           Section
6.1(d) of the Credit Agreement is hereby amended by replacing
“$3,000,000” with
“$4,000,000”.

 


B.           Section
6.5(d)(iv) of the Credit Agreement is hereby amended by deleting
the “(A)” at the beginning of such subsection and by
inserting the word “Party” immediately after the word
“ Loan”.

 


 









 








 






 

 


3.           Redetermination
of the Borrowing Base.

 


A.           Effective
as of the Amendment Effective Date, the Borrowing Base shall be
maintained at $44,000,000, which Borrowing Base shall remain in
effect until further reduced in accordance with Section 3(B) below or
otherwise redetermined in accordance with the Credit Agreement.
Each of the Borrowers, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, agree that the
redetermination of the Borrowing Base pursuant to this Section 3(A) shall
constitute the spring 2017 Scheduled Redetermination.

 


B.           Upon
consummation of the El Halcon Disposition, the Borrowing Base shall
be automatically reduced by $3,500,000 to $40,500,000 (unless, on
or before such date, the requisite Lenders determine to reduce the
Borrowing Base by or to a different amount in accordance with the
Credit Agreement), which Borrowing Base shall remain in effect
until the next redetermination of the Borrowing Base in accordance
with the Credit Agreement; provided, however, that each of the
Borrowers acknowledges and agrees that the Administrative Agent and
the Required Lenders expressly reserve the right to further adjust
the Borrowing Base reduction specified in this Section 3(B) in accordance with
the Credit Agreement if consummation of the El Halcon Disposition
has not occurred within forty-five (45) days of the Amendment
Effective Date. Each the Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, agree that
the reduction of the Borrowing Base pursuant to this Section 3(B) shall not
constitute an Interim Redetermination.

 


4.           Consummation
of the El Halcon Disposition. Each of the Borrowers
acknowledges and agrees that (1) notwithstanding anything to
the contrary provided in Section 6.5(d)(i) of the Credit
Agreement, 100% of the consideration received in respect of the El
Halcon Disposition shall be cash and (2) notwithstanding anything
to the contrary provided in Section 2.10(c) of the Credit
Agreement, within one (1) Business Day of the consummation of the
El Halcon Disposition, the Borrowing Agent shall make a single lump
sum payment in an amount equal to the proceeds received by the
Borrowers in connection with El Halcon Disposition.

 


5.           Scheduled
Redetermination of Borrowing Base for Fall 2017.
Notwithstanding anything to the contrary in the Credit Agreement
(including Section 2.4(b) or Section 5.14 of the Credit
Agreement), the parties hereto agree that the Scheduled
Redetermination of the Borrowing Base for the fall 2017 shall occur
on or about September 15, 2017, and implemented as follows: (a) the
Reserve Report otherwise due September 1, 2017, and any other
related certificates or Engineering Reports shall be delivered the
Administrative Agent on or before August 15, 2017; (b)
the Administrative Agent shall deliver notice of the proposed
redetermined Borrowing Base with respect to the Scheduled
Redetermination for the fall 2017 (that would otherwise be
delivered to the Lenders on or before September 15, 2017)
on or before September 1, 2017; and (c) the redetermined
Borrowing Base (that would otherwise be effective on or about
October 1, 2017) shall become effective on or about
September 15, 2017. Except for the contemplated advancement of the
Scheduled Redetermination of the Borrowing Base for the
fall 2017, each of the provisions of the Credit Agreement with
respect to any Scheduled Redetermination of the Borrowing Base
shall otherwise apply in the same manner as otherwise provided in
the Credit Agreement.

 


6.           Conditions
Precedent. This Amendment shall become effective on the date
(the “Amendment Effective
Date”) on which each of the following conditions is
satisfied:

 


A.           First
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 the
Required Lenders.

 


B.           Fees
and Expenses. The Administrative Agent shall have received
from the Borrowing Agent (a) payment of all out-of-pocket fees
and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Administrative Agent in connection with
the preparation, negotiation and execution of this Amendment and
the other documents in connection herewith and (b) all fees due and
payable under the Credit Agreement and under any separate fee
agreement entered into by the parties pursuant to the Credit
Agreement.

 


 




 

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C.           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.

 


7.           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
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.

 


8.           No
Further Amendments. Except as amended hereby, the Credit
Agreement and the Loan Documents shall remain unchanged and all
provisions shall remain fully effective between the
parties.

 


9.           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.

 


10.           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 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.

 


11.           Authorization
to Release Liens. Each Lender party hereto hereby authorizes
and directs the Administrative Agent to execute and deliver such
collateral releases as the Administrative Agent determines with
respect to Oil and Gas Properties and other assets of the Borrowers
that are the subject of the El Halcon Disposition.

 


12.           Confirmation
of Security. Each Borrower hereby confirms and agrees that
all of the Security Instruments, as may be amended in accordance
herewith, that presently secure the Indebtedness shall continue to
secure, in the same manner and to the same extent provided therein,
the payment and performance of the Indebtedness as described in the
Credit Agreement as modified by this Amendment.

 


 




 

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13.           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.

 


14.           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.

 


15.      
Entirety, Etc. This
Amendment 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.]


 




 

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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment to
be effective as of the date and year first above
written.

 



BORROWERS


 


YUMA
ENERGY, INC.


 


 


By:
/s/ James J.
Jacobs


Name:
James J. Jacobs


Title:
Executive Vice President, Chief Financial Officer and
Treasurer


 


 


YUMA
EXPLORATION AND PRODUCTION COMPANY, INC.


 


 


By:
/s/ James J.
Jacobs


Name:
James J. Jacobs


Title:
Officer


 


 


PYRAMID
OIL LLC


 


 


By:
/s/ James J.
Jacobs


Name:
James J. Jacobs


Title:
Officer


 


 


DAVIS
PETROLEUM CORP.


 


 


By:
/s/ James J.
Jacobs


Name:
James J. Jacobs


Title:
Officer


 


 


 




Signature
Page to First Amendment and


Borrowing
Base Redetermination

  




 




 








 






 



ADMINISTRATIVE AGENT



AND LENDER:


 


SOCIÉTÉ
GÉNÉRALE


 


 


By:
/s/ Max
Sonnonstine


Name:
Max Sonnonstine


Title:
Director


 


 



LENDER:


 


CIT
BANK, N.A.


 


 


By:
/s/ John
Feeley


Name:
John Feeley


Title:
Director


 


 


 



LENDER:


 


LEGACYTEXAS
BANK


 


 



By: /s/ David
Carter                                            






Name:
David Carter


Title:
Vice President


 


 


 


 


 


 


 




Signature
Page to First Amendment and


Borrowing
Base Redetermination

  




 




 








 






 


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/ James J.
Jacobs

Name:  James
J. Jacobs

Title:   
Officer


 


 


DAVIS
PETROLEUM ACQUISITION CORP.


 


 


 


By:
/s/ James J.
Jacobs

Name:  James
J. Jacobs

Title:   
Officer


 


 


 


 


 


 


 


 


 


 


Signature
Page to First Amendment and


Borrowing
Base Redetermination