Document:

Exhibit 10.4

    

    
       

      

      Execution Version

    

     

    

    
      THIRD FORBEARANCE

      

      

      TO

      

      

      TERM LOAN CREDIT AGREEMENT

      

      

      AMONG

      

      

      LEGACY RESERVES LP,

      as Borrower,

      

      

      THE GUARANTORS,

      

      

      CORTLAND CAPITAL MARKET SERVICES LLC,

      as Administrative Agent,

      

      

      and

      

      

      THE LENDERS SIGNATORY HERETO

      

      

      DATED AS OF June 12, 2019

       

      

      
        
          

      

      
      THIRD FORBEARANCE TO TERM LOAN CREDIT AGREEMENT

      

      

      This THIRD FORBEARANCE TO TERM LOAN CREDIT AGREEMENT (this “Forbearance Agreement”) dated as of June 12, 2019, among LEGACY RESERVES LP, a limited partnership duly formed under the laws of
        the State of Delaware (the “Borrower”); each of the undersigned guarantors (the “Guarantors,” and together with the Borrower, the “Obligors”); CORTLAND CAPITAL MARKET SERVICES LLC, as administrative agent for the Lenders (in
        such capacity, together with its successors, the “Administrative Agent”); and the Lenders under the Term Loan Credit Agreement (collectively, the “Lenders”) signatory hereto.

      

      

      Recitals

      

      

      A.          The Borrower, the Administrative Agent and the Lenders are parties to that certain Term Loan Credit Agreement dated as of October 25, 2016 (as amended by the First Amendment and Waiver
        to the Term Loan Credit Agreement, dated July 31, 2017, as further amended by the Second Amendment to the Term Loan Credit Agreement, dated October 30, 2017, as further amended by the Third Amendment to the Term Loan Credit Agreement, dated
        December 31, 2017, as further amended by the Fourth Amendment to the Term Loan Credit Agreement, dated as of March 23, 2018, as further amended by the Fifth Amendment to the Term Loan Credit Agreement, dated as of September 14, 2018, as further
        amended by the Sixth Amendment to the Term Loan Credit Agreement, dated as of September 20, 2018 and as further amended by the Seventh Amendment to the Term Loan Credit Agreement, dated March 21, 2019 (as so amended prior to the date hereof, the “Term

          Loan Credit Agreement”)), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.

      

      

      B.        The Guarantors are parties to that certain Term Loan Guaranty Agreement Third Amended and Restated Guaranty Agreement dated as of October 25, 2016 made by each of the Guarantors (as
        defined therein) in favor of the Administrative Agent (as amended, supplemented or modified prior to the date hereof, the “Term Loan Guaranty Agreement”).

      

      

      C.          The Borrower has notified the Administrative Agent and the Lenders that (a) an Event of Default has occurred under Section 10.01(g) of the Term Loan Credit Agreement on account of a
        missed payment under the RBL Facility as of the date hereof and (b) an Event of Default has occurred under Section 4.1 of that certain Seventh Amendment to Term Loan Credit Agreement, dated March 21, 2019 as a result of the Borrower’s failure to
        deliver its audited consolidated balance sheet and related statements of operations, shareholders’ equity and cash flows for 2018 without a “going concern” or like qualification or exception and without any qualification or exception as to the
        scope of such audit (collectively, the “Forbearance Defaults”).

      

      

      D.         Notwithstanding the occurrence of the Forbearance Defaults, the Borrower has requested that the Lenders hereto forbear, and the Lenders party hereto (constituting all of the Lenders
        under the Term Loan Credit Agreement) are willing to forbear from taking any other remedial actions under the Term Loan Credit Agreement and the Loan Documents, but only on the terms and subject to the conditions provided herein.

      

      

      
        1

        
          

      

      NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
        parties hereto agree as follows:

      

      

      Section 1.             Defined Terms.

      

      

      1.1          As used in this Forbearance Agreement, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein.  Each term
        defined in the Term Loan Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Term Loan Credit Agreement unless expressly provided to the contrary.  Article, Section, Schedule, and Exhibit
        references are to Articles and Sections of and Schedules and Exhibits to the Term Loan Credit Agreement, unless otherwise specified.  The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Forbearance Agreement
        shall refer to this Forbearance Agreement as a whole and not to any particular provision of this Forbearance Agreement.  The term “including” means “including, without limitation”.  Paragraph headings have been inserted in this Forbearance
        Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Forbearance Agreement and shall not be used in the interpretation of any provision of this Forbearance Agreement.

      

      

      1.2         The following terms shall have the following meanings:

      

      

      “Forbearance Period” means the period beginning on the Forbearance Agreement Effective Date and ending on the earlier to occur of (i) 11:59 p.m. (New York time) on June 18, 2019, and (ii)
        the Termination Date.

      

      

      “Forbearance Termination Event” means any of the following: (i) the occurrence of a Default or Event of Default (in each case other than the Forbearance Defaults) under any Loan Document or (ii) any breach of
        the Borrower or any Guarantor of any representation, warranty, term, covenant, or agreement set forth in this Forbearance Agreement.

      

      

      “Termination Date” has the meaning assigned to such term in Section 3.2 hereof.

      

      

      Section 2.           Conditions Precedent.  This Forbearance Agreement shall not become effective until the date on which the Administrative Agent shall have received (such date, the “Forbearance Agreement
          Effective Date”): (i) from the Majority Lenders, the Borrower and the Guarantors, counterparts of this Forbearance Agreement signed on behalf of each such Person and (ii) the Administrative Agent and Lenders shall have received a certificate
        of a Responsible Officer of the Borrower certifying that attached thereto is a true, correct and complete copy of a forbearance to the RBL Facility dated as of June 12, 2019, among the Obligors and Wells Fargo Bank, National Association, as
        administrative agent (the “RBL Forbearance”), which shall be in form and substance reasonably satisfactory to the Majority Lenders and the effectiveness of such forbearance agreement shall have occurred (or shall occur substantially
        concurrently with the Forbearance Agreement Effective Date).

      

      

      
        2

        
          

      

      This Forbearance Agreement shall be effective and the Forbearance Agreement Effective Date shall have occurred when the Administrative Agent and the Lenders signatory hereto (constituting all
        Lenders under the Term Loan Credit Agreement) have received documents confirming or certifying, to the satisfaction of the Majority Lenders, compliance with the conditions set forth in this Section 2 or the waiver of such conditions as permitted in
        Section 12.02 of the Term Loan Credit Agreement.

      

      

      Section 3.            Forbearance Agreement; Miscellaneous.

      

      

      3.1         Forbearance Agreement.  Subject to the terms and conditions hereof, the Administrative Agent and the Majority Lenders party hereto agree to forbear, during the Forbearance
        Period, from the exercise of all rights or remedies under the Term Loan Credit Agreement and the other Loan Documents and applicable law (including, but not limited to, initiating any proceedings to collect the Indebtedness, initiating or
        repossessing or commencing a foreclosure of any Collateral), solely as a result of the occurrence of the Forbearance Defaults.  The Borrower acknowledges and agrees that, at the end of the Forbearance Period, the provisions of this Section 3
        shall become of no force and effect and the Administrative Agent will be free, in accordance with the applicable Loan Documents and applicable law, to exercise any rights and remedies available to them at that time on account of any Forbearance
        Defaults that have occurred (and, for the avoidance of doubt, and without prejudice to the reservation of rights in this Forbearance Agreement, any other Defaults or Events of Default under the Loan Documents, that have occurred), as if this
        Forbearance Agreement had not been entered into on the date hereof.

      

      

      3.2        Termination of Forbearance.  Upon the occurrence of any Forbearance Termination Event, this Forbearance Agreement and the forbearance provided for herein shall immediately and
        automatically terminate (such date of termination, the “Termination Date”), as if this Forbearance Agreement had not been entered into on the date hereof.

      

      

      Section 4.             Miscellaneous.

      

      

      4.1        Acknowledgement of Indebtedness.  The Administrative Agent and the Lenders hereby expressly reserve all rights, remedies, and claims under the Loan Documents.  Except as
        expressly provided herein with respect to the Forbearance Defaults, nothing in this Forbearance Agreement shall constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Loan Documents, (ii) any of the
        agreements, terms or conditions contained in any of the Loan Documents, (iii) any rights or remedies of any Secured Party with respect to the Loan Documents, or (iv) the rights of any Secured Party (as defined in the Security Agreement) to collect
        the full amounts owing to them under the Loan Documents.

      

      

      4.2          Strict Performance.  Each Obligor hereby agrees and acknowledges that the Secured Parties (as defined in the Security Agreement) require and will require strict performance by
        the Obligors of all of their respective obligations, agreements and covenants contained in the Term Loan Credit Agreement and the other Loan Documents (including any action or circumstance which is prohibited or limited during the existence of a
        Default or Event of Default), and no inaction or action by any such Secured Party regarding any Default or Event of Default is intended to be or shall be a waiver thereof.  Each Obligor hereby also agrees and acknowledges that no course of dealing
        and no delay in exercising any right, power, or remedy conferred to any such Secured Party in the Term Loan Credit Agreement or in any other Loan Documents or now or hereafter existing at law, in equity, by statute, or otherwise shall operate as a
        waiver of or otherwise prejudice any such right, power, or remedy.

      

      

      
        3

        
          

      

      4.3         No Course of Dealings.  Furthermore, each party hereto hereby agrees that, in no event and under no circumstance shall any past or future discussions with the Administrative
        Agent or any other Secured Party (as defined in the Security Agreement), serve to (i) cause a modification of the Loan Documents, (ii) establish a custom or course of dealing with respect to any of the Loan Documents, (iii) operate as a waiver of
        any existing or future Default or Event of Default under the Loan Documents, (iv) entitle any Obligor to any other or further notice or demand whatsoever beyond those required by the Loan Documents, as forborne hereby or (v) in any way modify,
        change, impair, affect, diminish or release any Obligor’s obligations or liability under the Loan Documents, as forborne hereby, or any other liability any Obligor may have to any such Secured Party.

      

      

      4.4         Confirmation.  The provisions of the Term Loan Credit Agreement, as forborne by this Forbearance Agreement, shall remain in full force and effect following the Forbearance
        Agreement Effective Date.

      

      

      4.5         Ratification and Affirmation; Representations and Warranties.  Each Obligor hereby (a) acknowledges the terms of this Forbearance Agreement; (b) ratifies and affirms its
        obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby; and (c) represents
        and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Forbearance Agreement:  (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct,
        except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date, (ii) no Default or
        Event of Default (other than the Forbearance Defaults) has occurred and is continuing, (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect and (iv) it has not
        designated any Subsidiary as an E&P Subsidiary.  Without limiting the foregoing, each Guarantor hereby ratifies, confirms, acknowledges and agrees that its obligations under the Term Loan Guaranty Agreement are in full force and effect and that
        such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guarantor Obligations (as defined in the Term Loan
        Guaranty Agreement) and its execution and delivery of this Forbearance Agreement does not indicate or establish an approval or consent requirement by such Guarantor under the Term Loan Guaranty Agreement, in connection with the execution and
        delivery of amendments, consents or waivers to the Term Loan Credit Agreement or any of the other Loan Documents.  Each of the Grantors have granted to the Administrative Agent, a valid, binding, perfected, enforceable, first priority (subject to
        Excepted Liens) Liens in the Collateral and all Deed of Trust Property and all other assets described in the Security Instruments and such Liens are not subject to avoidance, subordination, recharacterization, recovery, attack, offset,
        counterclaim, or defense of any kind.

      

      

      4.6         Counterparts.  This Forbearance Agreement may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken
        together shall be deemed to constitute one and the same instrument.  Delivery of this Forbearance Agreement by telecopy, facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart hereof.

      

      

      
        4

        
          

      

      4.7        No Oral Agreement.  This Forbearance Agreement, the Term Loan Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final
        agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties.  There are no subsequent oral agreements between the parties.

      

      

      4.8         GOVERNING LAW.  THE PROVISIONS OF SECTION 12.09 OF THE TERM LOAN CREDIT AGREEMENT ARE INCORPORATED HEREIN MUTATIS MUTANDIS.

      

      

      4.9         Payment of Expenses.  In accordance with Section 12.03 of the Term Loan Credit Agreement and without limiting the rights of any Lender under Section 12.03 of the Term Loan
        Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent and the Lenders for all of their reasonable out-of-pocket costs and reasonable expenses incurred, including, without limitation, the reasonable fees and
        disbursements of counsel and financial advisor to the Administrative Agent, promptly upon receipt.

      

      

      4.10       Severability.  Any provision of this Forbearance Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

      

      

      4.11       Successors and Assigns.  This Forbearance Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

      

      

      4.12       Loan Document.  This Forbearance Agreement is a “Loan Document” as defined and described in the Term Loan Credit Agreement, and all of the terms and provisions of the Term Loan
        Credit Agreement relating to Loan Documents shall apply hereto.  Without limiting the foregoing, any breach of representations, warranties, and covenants under Forbearance Agreement shall be a Default or Event of Default, as applicable, under the
        Term Loan Credit Agreement.

       

      

      
        5

        
          

      

      4.13     RELEASE.  FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
          ACKNOWLEDGED, THE BORROWER AND EACH OTHER OBLIGOR HEREBY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, RELEASES AND FOREVER DISCHARGES EACH LENDER, EACH AGENT, THE ARRANGER, THE ISSUING BANK, AND EACH OF THEIR RESPECTIVE
          SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, TRUSTEES, ATTORNEYS, AGENTS, ADVISORS (INCLUDING ATTORNEYS, ACCOUNTANTS AND EXPERTS) AND AFFILIATES (COLLECTIVELY THE “RELEASED
            PARTIES” AND INDIVIDUALLY A “RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, DEMANDS, CAUSES OF ACTION,
          JUDGMENTS, EXECUTIONS, SUITS, DEBTS, LIABILITIES, COSTS, DAMAGES, EXPENSES OR OTHER OBLIGATIONS OF ANY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED
          (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), FOR OR BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO BE DONE,
          OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON OR PRIOR TO THE DATE HEREOF AND ARE IN ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO ANY OF THIS FORBEARANCE AGREEMENT, THE TERM LOAN CREDIT
          AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (COLLECTIVELY, THE “RELEASED MATTERS”).  THE BORROWER AND EACH
          OTHER OBLIGOR, BY EXECUTION HEREOF, HEREBY ACKNOWLEDGES AND AGREES THAT THE AGREEMENTS IN THIS SECTION 4.13 ARE INTENDED TO COVER AND BE IN FULL SATISFACTION
          FOR ALL OR ANY ALLEGED INJURIES OR DAMAGES ARISING IN CONNECTION WITH THE RELEASED MATTERS.  THE BORROWER AND EACH OTHER OBLIGOR HEREBY FURTHER AGREES THAT IT WILL NOT SUE ANY RELEASED PARTY ON THE BASIS
          OF ANY RELEASED MATTER RELEASED, REMISED AND DISCHARGED BY THE BORROWER AND THE OBLIGORS PURSUANT TO THIS SECTION 4.13.  IN AGREEING TO THIS SECTION 4.13, THE BORROWER AND EACH GUARANTOR CONSULTED WITH, AND HAS BEEN REPRESENTED BY, LEGAL COUNSEL AND EXPRESSLY DISCLAIM ANY RELIANCE ON ANY REPRESENTATIONS, ACTS OR
          OMISSIONS BY ANY OF THE RELEASED PARTIES AND HEREBY AGREES AND ACKNOWLEDGES THAT THE VALIDITY AND EFFECTIVENESS OF THE RELEASES SET FORTH HEREIN DO NOT DEPEND IN ANY WAY ON ANY SUCH REPRESENTATIONS, ACTS AND/OR OMISSIONS OR THE ACCURACY,
          COMPLETENESS OR VALIDITY HEREOF.  THE PROVISIONS OF THIS SECTION 4.13, SHALL SURVIVE THE TERMINATION OF THIS FORBEARANCE AGREEMENT, THE TERM LOAN CREDIT
          AGREEMENT AND THE OTHER LOAN DOCUMENTS AND PAYMENT IN FULL OF THE INDEBTEDNESS.

      

      

      4.14        Administrative Agent Direction.  Each undersigned Lender (collectively constituting all Lenders party to the Term Loan Agreement) hereby directs the Administrative Agent to
        execute and deliver this Forbearance Agreement.

      

      

      [SIGNATURES BEGIN NEXT PAGE]

       

      

      
        6

        
          

      

      IN WITNESS WHEREOF, the parties hereto have caused this Forbearance Agreement to be duly executed as of the date first written above.

       

      

      	
              BORROWER:

            	
              LEGACY RESERVES LP

            
	 	 

      	 	
              By:

            	
              Legacy Reserves GP, LLC, its

              general partner

            
	 	
              By:

            	
              Legacy Reserves Inc., its sole member

            

      

      

      	 	
              By:

            	
              /s/ James Daniel Westcott

            
	 	 	
              James Daniel Westcott

            
	 	 	
              Chief Executive Officer

            

      

      

      	
              GUARANTORS:

            	
              LEGACY RESERVES OPERATING LP

            
	 	 
	 	
              By:

            	
              Legacy Reserves Operating GP LLC, its general partner

            
	 	
              By:

            	
              Legacy Reserves LP, its sole member

            
	 	
              By:

            	
              Legacy Reserves GP, LLC, its

              general partner

            
	 	
              By:

            	
              Legacy Reserves Inc., its sole member

            
	 	 	 
	 	
              By:

            	
              /s/ James Daniel Westcott

            
	 	 	
              James Daniel Westcott

            
	 	 	
              Chief Executive Officer

            
	 	 	 
	 	
              LEGACY RESERVES OPERATING GP LLC

            
	 	 
	 	
              By:

            	
              Legacy Reserves LP, its sole member

            
	 	
              By:

            	
              Legacy Reserves GP, LLC, its

              general partner

            
	 	
              By:

            	
              Legacy Reserves Inc., its sole member

            
	 	 	 
	 	
              By:

            	
              /s/ James Daniel Westcott

            
	 	 	
              James Daniel Westcott

            
	 	 	
              Chief Executive Officer

            

      
         

        

        Signature Page to

        Third Forbearance Agreement to Term Loan Credit Agreement

         

        

      

      
        
          

      

      	 	
              LEGACY RESERVES GP, LLC

            
	 	 
	 	
              By:

            	
              Legacy Reserves Inc., its sole member

            

      

      

      	 	
              By:

            	
              /s/ James Daniel Westcott

            
	 	 	
              James Daniel Westcott

            
	 	 	
              Chief Executive Officer

            

      

      

      	 	
              LEGACY RESERVES SERVICES LLC

               

              DEW GATHERING LLC

            
	 	 	 
	 	
              PINNACLE GAS TREATING LLC

            
	 	 	 
	 	
              LEGACY RESERVES ENERGY SERVICES LLC

            
	 	 	 
	 	
              LEGACY RESERVES INC.

            
	 	
              LEGACY RESERVES MARKETING LLC

            

      

      

      	 	
              By:

            	
              /s/ James Daniel Westcott

            
	 	 	
              James Daniel Westcott

            
	 	 	
              Chief Executive Officer

            

      
         

        

        Signature Page to

        Third Forbearance Agreement to Term Loan Credit Agreement

         

        

      

      
        
          

      

      	
              ADMINISTRATIVE AGENT:

            	
              CORTLAND CAPITAL MARKET 

              SERVICES LLC, as Administrative Agent

            
	 	 	 
	 	
              By:

            	
              /s/ Matthew Trybula

            
	 	
              Name:

            	
              Matthew Trybula

            
	 	
              Title:

            	
              Associate Counsel

            

      
         

        

        Signature Page to

        Third Forbearance Agreement to Term Loan Credit Agreement

         

        

      

      
        
          

      

      
        	
                LENDERS:

              	
                GSO ENERGY SELECT OPPORTUNITIES FUND LP

              
	 	
                By: GSO Energy Select Opportunities Associates LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 

        	 	
                GSO ENERGY PARTNERS-A LP

              
	 	
                By: GSO Energy Partners-A Associates LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 

        	 	
                GSO ENERGY PARTNERS-B LP

              
	 	
                By: GSO Energy Partners-B Associates LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 

        	 	
                GSO ENERGY PARTNERS-C LP

              
	 	
                By: GSO Energy Partners-C Associates LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 

        	 	
                GSO ENERGY PARTNERS-C II LP

              
	 	
                By: GSO Energy Partners-C Associates II LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              

        
           

          

          Signature Page to

          Third Forbearance Agreement to Term Loan Credit Agreement

           

          

        

        
          
            

        

        	 	
                GSO ENERGY PARTNERS-D LP

              
	 	
                By: GSO Energy Partners-D Associates LLC, its general partner

              
	 	 

        	 	
                By:

              	 

        	 	
                Name:

              	 
	 	
                Title:

              	 
	 	 	 

        	 	
                GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNERS LP

              
	 	
                By: GSO Palmetto Opportunistic Associates LLC, its general partner

              
	 	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 
	 	
                GSO CSF III HOLDCO LP

              
	 	
                By: GSO Capital Solutions Associates III LP, its general partner

              
	 	
                By: GSO Capital Solutions Associates III (Delaware) LLC, its general partner

              
	 	 	 

        	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              
	 	 	 

        	 	
                GSO AIGUILLE DES GRAND MONTETS FUND II LP

              
	 	
                By: GSO Aiguille des Grand Montets Associates LLC, its general partner

              
	 	 
	 	
                By:

              	
                /s/ Marisa J. Beeney

              

        	 	
                Name:

              	
                Marisa J. Beeney

              
	 	
                Title:

              	
                Authorized Signatory

              

      

      

      

      

      

      
        Signature Page to

        Third Forbearance Agreement to Term Loan Credit AgreementExhibit 10.1

page 1 of 8

 

SECURITY AGREEMENT

 

THIS SECURITY
AGREEMENT (this “Agreement"), is entered into as of November 12, 2018, by and among SkyAuction.com, Inc., a Delaware
corporation (the "Guarantor"), and the Michael Hering as Shareholder Representative (as defined in the Merger
Agreement, (the "Secured Party”). All capitalized terms not otherwise defined herein shall the meanings ascribed
to them in that certain Agreement and Plan of Merger (the “Merger Agreement”), that certain Secured Promissory
Note (the “Note”), and that certain Secured Unconditional Guaranty (“Guaranty”), entered
into by and between Guarantor, the Secured Party, and Incumaker of even date herewith.

 

RECITALS

 

WHEREAS,
the Guarantor has guaranteed the Promissory Note owed by Incumaker, Inc., (“Incumaker”) a Delaware corporation,
to the Shareholder Representative (as defined in the Merger Agreement), for $2,500,000 which was entered into as partial consideration
pursuant to the Merger Agreement, each dated as of even date herewith; and

 

WHEREAS,
this Agreement is being executed and delivered by Guarantor to secure the Guaranty.

 

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereto hereby
agrees as follows:

 

1.          Obligations
Secured. This Agreement secures, in part, the prompt payment and performance of all Obligations of Guarantor under the Note
and the Guaranty, and all renewals, extensions, modifications, amendments, and/or supplements thereto (collectively, the "Secured
Obligations").

 

2.          Grant
of Security.

 

		a.	Collateral. Guarantor hereby grants, pledges,
and assigns for the benefit of the Secured Party, and there is hereby created in favor of the Secured Party, a security interest
in and to all of Guarantor' s right, title, and interest in, to, and under all of the collateral set forth on Exhibit A
hereto (collectively, "Collateral").

 

		b.	Effective Date. This grant of security shall be
effective as of the date hereof.

 

		c.	Filings to Perfect Security. The Secured Party
will (and is hereby authorized to) file with any filing office such financing statements, amendments, addenda, continuations,
terminations, assignments and other records (whether or not executed by Guarantor) to perfect and to maintain perfected security
interests in the Collateral by the Secured Party, whereby (a) promptly upon the execution of this Agreement, a Financing Statement
on Form UCC-1 (the "Financing Statement'') shall be filed with the Delaware Secretary of State on behalf of the Secured
Party with respect to the Collateral; The Financing Statement shall designate the Secured Party as a Secured Party and Guarantor
as the debtor, shall identify the security interest in the Collateral, and contain any other items required by law.

 

     

    	 	 	Exhibit 10.1 

page 2 of 8

    

 

The Financing Statement shall
contain a description of collateral consistent with the description set forth herein."

 

3.          Transfers
and Other Liens. Guarantor shall not, without the prior written consent of the Secured Party, at their sole and absolute discretion

 

		a.	Sell, transfer, assign, or dispose of (by operation of
law or otherwise), any of the Collateral outside of the ordinary course of business; or

 

		b.	Permit any of the Collateral to be levied upon under
any legal process.

 

4.          Representations
and Warranties. Guarantor hereby represents and warrants to the Secured Party as follows: (a) to Guarantor' s knowledge, Guarantor
will be the owner of the Collateral after the consummation of the merger with the Guarantor (or, in the case of after-acquired
Collateral, at the time Guarantor acquires rights in the Collateral, will be the owner thereat) and that, except as expressly provided
herein, no other person has (or, in the case of after-acquired Collateral, at the time Guarantor acquires rights therein, will
have) any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral except as provided under
the terms of the Agreement with respect to the Secured Party; (b) to Guarantor's knowledge, except as expressly provided herein,
upon the filing of a Financing Statement with the Delaware Secretary of State, the Secured Party (or in the case of after-acquired
Collateral, at the time Guarantor acquires rights therein, will have) will have a perfected security interest in the Collateral
to the extent that a security interest in the Collateral can be perfected by such filing; (c) all Accounts Receivable (as defined
in Exhibit A) are genuine and enforceable against the party obligated to pay the same; (d) Guarantor has full power
and authority to enter into the transactions provided for in this Agreement and the Guaranty; (e) this Agreement and the Guaranty,
when executed and delivered by Guarantor, will constitute the legal, valid and Exhibit 10.1 page  obligations of Guarantor enforceable in
accordance with their terms; (t) the execution and delivery by Guarantor of this Agreement and the Guaranty and the performance
and consummation of the transactions contemplated hereby and thereby do not and will not violate Guarantor's Certificate of Incorporation
or Bylaws or any material judgment, order, writ, decree, statute, rule or regulation applicable to Guarantor (g) there does not
exist any default or violation by Guarantor of or under any of the terms, conditions or obligations of (i) any indenture, mortgage,
deed of trust, franchise, permit, contract, agreement, or other instrument to which Guarantor is a party or by which Guarantor
is bound, or (ii) any law, ordinance, regulation, ruling, order, injunction, decree, condition or other requirement applicable
to or imposed upon Guarantor by any law, the action of any court or any governmental authority or agency; and the execution, delivery
and performance of this Agreement will not result in any such default or violation; (h) there is no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand pending or, to the knowledge of Guarantor, threatened which adversely affects
Guarantor' s business or financial condition and there is no basis known to Guarantor for any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand which could result in the same; and (i) this Agreement and the Guaranty do not
contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained
in this Agreement and the Guaranty not misleading.

  

     

    	 	 	Exhibit 10.1 

page 3 of 8

    

 

5.          Events
of Default. For purposes of this Agreement, the term "Event of Default" shall mean and refer to any of the following:

 

		a.	Failure of Guarantor to perform or observe any covenant
set forth in this Agreement, or to perform or observe any other term, condition, covenant, warranty, agreement or other provision
contained in this Agreement, where such failure continues for five (5) days after receipt of written notice from Secured Party
specifying such failure;

 

		b.	Any representation or warranty made or furnished by Guarantor
in writing in connection with this Agreement and the Guaranty or any statement or representation made in any certificate, report
or opinion delivered pursuant to this Agreement or in connection with this Agreement is false, incorrect or incomplete in any
material respect at the time it is furnished; or

 

		c.	Occurrence of any other Event of Default as defined in
the Guaranty.

 

6.          Remedies.
Upon the occurrence and during the continuance of an Event of Default (subject to the notice and cure provisions provided for herein,
if any), the Secured Party shall have the rights of a secured creditor under the Uniform Commercial Code of the applicable jurisdiction,
all rights granted by the Guaranty, this Security Agreement and by law, including the right to require Guarantor to assemble the
Collateral and make it available to the Secured Party at a place to be designated by Guarantor. The rights and remedies provided
in this Agreement and the Guaranty are cumulative and may be exercised independently or concurrently and are not exclusive of any
other right or remedy provided at law or in equity. No failure to exercise or delay by the Secured Party in exercising any right
or remedy under this Agreement or the Guaranty shall impair or prohibit the exercise of any such rights or remedies in the future
or be deemed to constitute a waiver or limitation of any such right or remedy or acquiescence therein. Every right and remedy granted
to the Secured Party under this Agreement and the Guaranty or by law or in equity may be exercised by any Secured Party at any
time and from time to time.

 

7.          Further
Assurances. Guarantor agrees that, from time to time, at its own expense, it will:

 

		a.	Protect and defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest therein and preserve and protect Secured Party's security
interest in the Collateral.

 

		b.	Promptly execute and deliver to Secured Party all instruments
and documents, and take all further action necessary or desirable, as any Secured Party may reasonably request to (i) continue,
perfect, or protect any security interest granted or purported to be granted hereby, and (ii) enable a Secured Party to exercise
and enforce any of Secured Party's rights and remedies hereunder with respect to any Collateral.

 

		c.	Permit a Secured Party's representatives to inspect and
make copies of all books and records relating to the Collateral, wherever such books and records are located, and to conduct an
audit relating to the Collateral at any reasonable time or times.

 

8.          Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed telex, e-mail or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

     

    	 	 	Exhibit 10.1 

page 4 of 8

    

 

	 	If to the Guarantor, to:	 
	 	 	 	 
	 	 	Incumaker, Inc.	 
	 	 	327 Dahlonega Road, Suite 1701B	 
	 	 	Cumming, GA 30040	 
	 	 	Attention: Ketan Thakker	 
	 	 	e-mail: ketan.thakker@ubid.com	 
	 	 	 	 
	 	With a copy by e-mail only to (which copy shall not constitute notice):	 
	 	 	 	 
	 	 	Culhane Meadows PLLC	 
	 	 	1101 Pennsylvania Avenue, N.W., Suite 300	 
	 	 	Washington, D.C. 20004	 
	 	 	Attn: Ernest Stern, Esq.	 
	 	 	e-mail: estern@CulhaneMeadows.com	 
	 	 	 	 
	 	If to the Secured Party:
	 	 	 	 
	 	 	Michael Hering	 
	 	 	547 Highland Avenue	 
	 	 	Westfield, NJ 07090	 
	 	 	 	 
	 	With a copy by e-mail only to (which copy shall not constitute notice):	 
	 	 	 	 
	 	 	Nick Day Law	 
	 	 	95 River Street, Suite 202	 
	 	 	Hoboken, New Jersey 07030	 
	 	 	Attn: Nick Day, Esq.	 
	 	 	e-mail: nday@nickdaylaw.com	 

 

or to such other address or telecopy number as the
party to whom notice is to be given may have furnished to the other party in writing in accordance herewith.

 

9.          Shareholder
Representative. As specified in the Merger Agreement, the Shareholder Representative shall have the authority to act on behalf
of the Sky Shareholders (as defined in the Merger Agreement) and shall hold any such Collateral on behalf of the Sky Shareholders
and shall distribute it accordingly as reasonably as practicable.

 

10. Amendments
and Waivers. No modification, amendment or waiver of any provision of, or consent required by, this Agreement, nor any consent
to any departure herefrom, shall be effective unless it is in writing and signed by each of the parties hereto. Such modification,
amendment, waiver or consent shall be effective only in the specific instance and for the purpose for which given.

 

11.         Exclusivity
and Waiver of Rights. No failure to exercise and no delay in exercising on the part of any party, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude
any other right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of any other
rights or remedies provided by law.

 

     

    	 	 	Exhibit 10.1 

page 5 of 8

    

 

12.         Invalidity.
Any term or provision of this Agreement shall be ineffective to the extent it is declared invalid or unenforceable, without rendering
invalid or enforceable the remaining terms and provisions of this Agreement.

 

13.         Headings.
Headings used in this Agreement are inserted for convenience only and shall not affect the meaning of any term or provision of
this Agreement.

 

14.         Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which
collectively shall constitute one and the same agreement.

 

15.         Assignment.
This Agreement and the rights and obligations hereunder shall not be assignable or transferable by the any of the parties without
the prior written consent of the Secured Party, at their sole and absolute discretion.

 

16.         Survival.
Unless otherwise expressly provided herein, all representations warranties, agreements and covenants contained in this Agreement
shall survive the execution hereof and shall remain in full force and effect until the payment in full of the Note guaranteed
by the Guaranty.

 

17.         Miscellaneous.
This Agreement shall inure to the benefit of each of the parties hereto and all their respective successors and permitted assigns.
Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision herein contained.

 

18.         GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).

 

19.         CONSENT
TO JURISDICTION. Any action brought by either party against the other arising
out of or related to this agreement shall be commenced only in the state or federal courts of general jurisdiction located in NEW
YORK, NY, except that all such disputes between the parties shall be subject to alternative dispute resolution through Exhibit 10.1 page
arbitration at the Holder’s sole discretion and election (regardless of which party initiates the legal proceedings). 

 

20.         WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THISAGREEMENT.
EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND EACH OF THE OTHER PARTIES HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 20.

 

     

    	 	 	Exhibit 10.1

 page 6 of 8

    

 

21.         Attorneys'
Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

22.         Entire
Agreement. This Agreement contains the entire agreement among the parties with respect to the transactions contemplated by
this Agreement and supersedes all prior agreements or understandings among the parties with respect to the subject matter hereof.

 

[SIGNATURE PAGE(S) FOLLOW]

 

     

    	 	 	Exhibit 10.1

 page 7 of 8

    

 

IN WITNESS WHEREOF, this Security
Agreement has been executed as of the date first set written above.

 

	SKYAUCTION.COM, Inc.	 
	 	 
	By:	/s/ Salvatore Esposito
	 
	Name: Salvatore Esposito	 
	Title: Chief Operating Officer and Secretary	 

 

	SHAREHOLDER REPRESENTATIVE	 
	 	 
	By:	/s/ Michael Hering	 
	Name: Michael Hering	 

 

	ACCEPTED AND AGREED TO BY:	 
	 	 
	INCUMAKER, INC.	 
	 	 
	By:	/s/ Ketan Thakker	 
	Name: Ketan Thakker	 
	Title: Chief Executive Officer	 

 

     

    	 	 	Exhibit 10.1 

page 8 of 8

    

 

EXHIBIT A

 

COLLATERAL

 

Guarantor
hereby grants, pledges, and assigns for the benefit of the Secured Party, and there is hereby created in favor of the Secured Party,
a security interest in and to all of Guarantor's right, title, and interest in, to, and under all assets of Guarantor which shall
include, but not be limited to:

 

		·	Cash reserves and collateral held by Guarantor’s
banks 

		·	Customer deposits

		·	Gift certificates

		·	Inventory

		·	Accounts receivable

		·	Customer lists

		·	Software

		·	Hardware including laptops

		·	Desks and furniture

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