Document:

Exhibit 10.6

 

THIRD AMENDMENT TO CREDIT AGREEMENT
AND ASSIGNMENT

 

THIS THIRD AMENDMENT
TO CREDIT AGREEMENT AND ASSIGNMENT (this “Amendment”) is entered into effective as of May 20, 2013 (the
“Effective Date”), among YUMA EXPLORATION AND PRODUCTION COMPANY, INC., a Delaware corporation
(“Borrower”), the undersigned lenders party to the Credit Agreement (the “Lenders”),
UNION BANK, N.A., in its individual capacity as an assignor (“Union”), SOCIÉTÉ
GÉNÉRALE, in its individual capacity as an assignor (“SocGen” and collectively
with Union, the “Assignors”) and in its capacity as Administrative Agent and Issuing Bank (“Administrative
Agent”), and ONEWEST BANK, FSB, in its individual capacity as an assignee (the “Assignee”).

 

RECITALS

 

A.           Borrower,
the Lenders and Administrative Agent are parties to a Credit Agreement dated as of August 10, 2011, as amended by that certain
First Amendment and Limited Waiver to Credit Agreement and Assignment, dated as of September 30, 2012, and as further amended by
that certain Second Amendment to Credit Agreement and Assignment, dated as of February 13, 2013 (as amended, restated, modified
or supplemented from time to time until the date hereof, the “Credit Agreement”).

 

B.           Borrower
has requested certain amendments to the Credit Agreement as set forth herein and, subject to the conditions precedent set forth
herein, the parties hereto have agreed to so amend the Credit Agreement.

 

C.           Each
Assignor wishes to assign a certain percentage of its rights and obligations under the Credit Agreement to the Assignee, pursuant
to the terms hereof and after the assignment and acceptance of the rights and obligations between Assignors and Assignee, as set
forth herein, the Assignee shall be a “Lender”.

 

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 which 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.          Amendments
to Credit Agreement. Subject to the conditions precedent set forth in Section 4 hereof, the Credit Agreement is amended as
follows:

 

A.           The
following new definitions are added to Section 1.02 of the Credit Agreement in proper alphabetical order:

 

“Addison Acquisition”
means the acquisition of certain Oil and Gas Properties from Addison Oil, L.L.C., a Delaware corporation, or any
of its affiliates.

 

“Addison EBITDA”
means the portion of EBITDA that is directly attributable to the Oil and Gas Properties acquired by the Borrower under the
Addison Acquisition.

 

“Annualized EBITDA”
means

 

(a) as of June
30, 2013, the sum of (i) Addison EBITDA for the fiscal quarter then ending multiplied by three plus (ii) EBITDA for the
period of four consecutive fiscal quarters then ending on such date;

 

(b) as of September
30, 2013, the sum of (i) Addison EBITDA for the fiscal quarter ended June 30, 2013 multiplied by two plus (ii) EBITDA for
the period of four consecutive fiscal quarters then ending on such date; and

 

    	 

    	 

    

 

(c) as of December
31, 2013, the sum of (i) Addison EBITDA for the fiscal quarter ended June 30, 2013 plus (ii) EBITDA for the period of four
consecutive fiscal quarters then ending on such date.

 

“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor
statute.

 

“Excluded Swap Obligation”
means, with respect to any Loan Party, any Lender Swap Agreement if, and to the extent that, all or a portion of the guarantee
of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Lender Swap Agreement (or any guarantee
thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) (a) by virtue of such Guarantor’s failure for any
reason to constitute an Qualified ECP Guarantor at the time such Loan Party’s guarantee or such Loan Party’s grant
of such security interest becomes or would become effective with respect to such Lender Swap Agreement or (b) in the case of a
Lender Swap Agreement subject to a clearing requirement pursuant to Section 2(h) of the Commodity Exchange Act (or any successor
provision thereto), because such Loan Party is a “financial entity,” as defined in Section 2(h)(7)(C)(i) of the Commodity
Exchange Act (or any successor provision thereto), at the time the guarantee of such Loan Party becomes or would become effective
with respect to such related Lender Swap Agreement. If a Swap Obligation arises under a Lender Swap Agreement governing more than
one Swap Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Agreements
for which such guarantee or security interest is or becomes illegal.

 

“Qualified ECP Guarantor”
means, in respect of any Lender Swap Agreement, each Loan Party that has total assets exceeding $10,000,000 at the time such Lender
Swap Agreement is incurred or such other person as constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulation promulgated thereunder and can cause another person to qualify as an “eligible contract participant”
at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Series A Preferred
Stock” means the “Series A Preferred Stock” as defined in the Series A Preferred Stock Agreement.

 

“Swap Obligation”
means, with respect to any Person, all liabilities or obligations of such Person under any Swap Agreement.

 

B.           The
following definitions in Section 1.02 of the Credit Agreement are amended and restated in their entirety as follows:

 

"Indebtedness"
means any and all amounts owing or to be owing by the Borrower, any Subsidiary or any Guarantor (whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising): (a) to the
Administrative Agent, the Issuing Bank or any Lender under any Loan Document; (b) to any Swap Lender under any Lender Swap
Agreement (which shall be deemed to be the Swap Termination Value as of the date the amount of Indebtedness is being determined);
(c) to any Cash Management Party under any Secured Cash Management Agreement; and (d) all renewals, extensions and/or
rearrangements of any of the above. Notwithstanding the foregoing, Excluded Swap Obligations shall not be Indebtedness of any Loan
Party that is not a Qualified ECP Guarantor.

 

“Maturity
Date” means May 20, 2017; provided, however, that if the Series A Preferred Stock is not terminated or the redemption
date of the Series A Preferred Stock is not extended to a date that is no earlier than May 20, 2018, on or prior to January 1,
2016, the Maturity Date shall be accelerated to a date no later than April 30, 2016.

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 2

    	 

    

  

C.           The
last sentence of Section 2.07(b) of the Credit Agreement is hereby amended to read in its entirety:

 

“In addition, the Administrative
Agent may, by notifying the Borrower thereof, elect to cause an Interim Redetermination of the Borrowing Base any time a prepayment
made by the Borrower pursuant to Section 3.04(c)(iv) exceeds five percent (5%) of the Borrowing Base then existing at the time
of prepayment. The Borrowing Base will also be redetermined or adjusted in accordance with the provisions of Section 8.13(c)
or Section 9.12(d).”

 

D.           Section
2.07(c)(iii) of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“(iii)        Any
Proposed Borrowing Base that would increase the Borrowing Base then in effect must be approved by all of the Lenders as provided
in this Section 2.07(c)(iii); and any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in
effect must be approved or be deemed to have been approved by the Required Lenders as provided in this Section 2.07(c)(iii).
Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have fifteen (15) days to agree with the Proposed Borrowing
Base or disagree with the Proposed Borrowing Base by proposing an alternate Borrowing Base. If at the end of such fifteen (15)
days, any Lender has not communicated its approval or disapproval in writing to the Administrative Agent, such silence shall be
deemed to be an approval of the Proposed Borrowing Base in the case of a Proposed Borrowing Base that would decrease or maintain
the Borrowing Base then in effect (it being understood by the parties hereto that if the Proposed Borrowing Base would increase
the Borrowing Base, written approval of all Lenders is required). If, at the end of such 15-day period, all of the Lenders, in
the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Required Lenders, in the case
of a Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect, have approved or deemed to have
approved, as aforesaid, then the Proposed Borrowing Base shall become the new Borrowing Base, effective on the date specified in
Section 2.07(d). If, however, at the end of such 15-day period, all of the Lenders or the Required Lenders, as applicable,
have not approved or deemed to have approved, as aforesaid, the Proposed Borrowing Base, then the Administrative Agent shall poll
the Lenders to ascertain the highest Borrowing Base then acceptable to all of the Lenders or the Required Lenders, as applicable,
and such amount shall become the new Borrowing Base, effective on the date specified in Section 2.07(d).”

 

E.           Section
2.09(a) of the Credit Agreement is amended by deleting the text “85% of the present value of the Borrower’s Proved
Reserves with such adjustments as the Administrative Agent desires in it sole discretion” in its entirety and replacing it
with the text “80% of the present value of the Borrower’s Proved Reserves”.

 

F.           Section
3.04(c) of the Credit Agreement is hereby amended by deleting the word “Commitments” in the third line and replacing
it with the words “Aggregate Maximum Credit Amounts”.

 

G.           Section
8.13(a) of the Credit Agreement is amended by deleting the text “85% of the present value of the Borrower’s Proved
Reserves evaluated by such Reserve Report with such adjustments as
the Administrative Agent desires in it sole discretion” in its entirety and replacing it with the text “70% of the
present value of the Borrower’s Proved Reserves evaluated by
such Reserve Report”. 

 

H.           Section
8.13(b) of the Credit Agreement is amended by deleting the text “85% of the present value of the Borrower’s Proved
Reserves evaluated by such Reserve Report with such adjustments as
the Administrative Agent desires in it sole discretion” in its entirety and replacing it with the text “70% of the
present value of the Borrower’s Proved Reserves evaluated by
such Reserve Report”. 

 

I.           Section
8.13(c) of the Credit Agreement is amended to read in its entirety as follows:

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 3

    	 

    

 

“(c)          If
the Borrower is unable to cure any title defect requested by the Administrative Agent or the Lenders to be cured within the 60-day
period or the Borrower does not comply with the requirements to provide acceptable title information covering 70% of the present
value of the Borrower’s Proved Reserves evaluated by such Reserve Report, such default shall not be a Default, but instead
the Administrative Agent and/or the Majority Lenders shall have the right to exercise the following remedy in their sole discretion
from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as to future exercise of the remedy
by the Administrative Agent or the Lenders. To the extent that the Administrative Agent or the Majority Lenders are not satisfied
with title to any Mortgaged Property after the 60-day period has elapsed, such unacceptable Mortgaged Property shall not count
towards the 70% requirement, and the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding
Borrowing Base shall be reduced by an amount as determined by the Majority Lenders to cause the Borrower to be in compliance with
the requirement to provide acceptable title information on 70% of the present value of the Borrower’s Proved Reserves evaluated
by such Reserve Report. This new Borrowing Base shall become effective immediately after receipt of such notice.”

 

J.           Article
VIII of the Credit Agreement is hereby amended by inserting the following new Section 8.17 immediately after the existing Section
8.16:

 

“Section 8.17         Keepwell.
The Borrower hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed
from time to time by each other Loan Party to honor all of its obligations under each Loan Document or any Lender Swap Agreement
in respect of Swap Obligations (provided, however, that the Borrower shall only be liable under this Section 8.17 for
the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 8.17
or otherwise under this Agreement voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount). The obligations of the Borrower under this Section 8.17 shall remain in full force and effect
until all Indebtedness has been repaid in full. The Parent Guarantor intends that this Section 8.17 constitute, and
this Section 8.17 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit
of each other Obligor for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.”

 

K.          Sections
9.01(a) and (b) of the Credit Agreement are amended to read in their entirety as follows:

 

“(a)          Interest
Coverage Ratio. The Borrower will not, (i) as of each of June 30, 2013, September 30, 2013 and December 31, 2013, permit its
ratio of Annualized EBITDA as of such date to Interest Expense to be less than 2.75 to 1.00, and (ii) as of the last day of any
fiscal quarter beginning with the fiscal quarter ending March 31, 2014, permit its ratio of EBITDA for the four quarter period
then ended to Interest Expense for the four quarter period then ended to be less than 2.75 to 1.00.

 

(b)          Ratio
of Funded Debt to EBITDA. The Borrower will not, (i) as of each of June 30, 2013, September 30, 2013 and December 31, 2013,
permit its ratio of Funded Debt as of such time to Annualized EBITDA to exceed 4.00 to 1.00, and (ii) as of the last day of any
fiscal quarter beginning with the fiscal quarter ending March 31, 2014, permit its ratio of Funded Debt as of such time to EBITDA
for the four quarter period then ended to exceed 4.00 to 1.00.” 

 

L.           Section
9.12 of the Credit Agreement is amended to read in its entirety as follows:

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 4

    	 

    

 

“Section 9.12         Sale
of Properties. The Borrower will not, and will not permit any Subsidiary to, sell, assign, farm-out, convey or otherwise transfer
any Property except for (a) the sale of Hydrocarbons in the ordinary course of business; (b) farmouts of undeveloped acreage and
assignments in connection with such farmouts to which there are no Proved Reserves attributable; (c) the sale or transfer of equipment
that is no longer necessary for the business of the Borrower or such Subsidiary or is replaced by equipment of at least comparable
value and use; and (d) so long as no Event of Default is then continuing or will result therefrom, Asset Dispositions (including
Asset Dispositions pursuant to the WIIP); provided that (1) all of the consideration received in respect to such Asset Disposition
shall be cash, (2) the consideration received shall be equal to or greater than the fair market value thereof (as reasonably determined
by the Borrower and, if requested by the Administrative Agent, the Borrower shall deliver a certificate of a Responsible Officer
of the Borrower certifying to that effect), and (3) if such sale or other disposition of Oil and Gas Property included in the
most recently delivered Reserve Report during any period between two successive Scheduled Redeterminations has a Recognized Value,
individually or in the aggregate, in excess of five percent of the then current Borrowing Base, the Borrowing Base shall be reduced,
effective immediately upon such sale or disposition, by the amount of the Recognized Value of the assets included in such Asset
Disposition in the then current Borrowing Base as determined by the Administrative Agent or the Majority Lenders in their discretion.”

 

M.            Section
9.18 of the Credit Agreement is amended to read in its entirety as follows:

 

“Section
9.18         Swap Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any Swap Agreements with any Person other than (a) Swap Agreements in respect of commodities (i) which
are for combined durations of not more than sixty (60) months, (ii) with an Approved Counterparty, and (iii) the notional volumes
for which (when aggregated with other commodity Swap Agreements then in effect other than basis differential swaps on volumes
already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, 85% of the reasonably
anticipated Projected Production from Proved Developed Producing Reserves during the period during which such Swap Agreement is
in effect for each of crude oil and natural gas, calculated separately (natural gas liquids shall be included in crude oil volumes
at 50% of the reasonably anticipated Projected Production from Proved Developed Producing Reserves) and (b) Swap Agreements in
respect of interest rates with an Approved Counterparty with the purpose and effect of fixing interest rates on a principal amount
of indebtedness of the Borrower that is accruing interest at a variable rate, provided that (i) the aggregate notional
amount of such contracts never exceeds 75% of the anticipated outstanding principal balance of the indebtedness to be hedged by
such contracts or an average of such principal balances calculated by using a generally accepted method of matching interest swap
contracts to declining principal balances, and (ii) the floating rate index of each such contract generally matches the index
used to determine the floating rates of interest on the corresponding indebtedness to be hedged by such contract; provided,
further, that if, at the end of any calendar month or for any other period as determined by the Administrative Agent and
the Majority Lenders, the aggregate notional volumes covered by Swap Agreements exceed 85% of such Projected Production from
Proved Developed Producing Reserves during the period during which such Swap Agreement is in effect for each of crude oil and
natural gas, calculated separately, in any month, the Borrower shall, or shall cause any Subsidiary to, either (X) unwind,
assign or terminate Swap Agreements with respect to such month such that the maximum aggregate notional volumes covered by all
remaining Swap Agreements with respect to such month shall not, in any event, exceed 85% of Projected Production of crude oil
or natural gas, as so reduced or (Y) make other arrangements satisfactory to the Administrative Agent and the Majority Lenders
in their reasonable discretion to mitigate risks attendant to having Swap Agreements with such excess volumes, which arrangements
could include the posting of additional collateral to secure the Indebtedness or other acceptable arrangements.”

 

N.           Section
10.02(c) of the Credit Agreement is amended by inserting the following sentence at the end of the section:

 

“Notwithstanding
the foregoing, Excluded Swap Obligations shall not be Indebtedness of any Guarantor that is not a Qualified ECP Guarantor.”

 

3.          Redetermination
of the Borrowing Base.         Effective as
of the Effective Date, until the next redetermination of the Borrowing Base in accordance with the provisions of Section 2.07
of the Credit Agreement on July 1, 2013 or such earlier date in accordance with the provisions of Section 2.07, which the Borrower
has notified the Administrative Agent that it has elected such date to be the date of an Interim Redetermination in accordance
with Section 2.07(b) of the Credit Agreement, the amount of the Borrowing Base shall be increased from $32,000,000 to $36,000,000.
Both the Borrower, on the one hand, and the Administrative Agent and the Lenders, on the other hand, agree that the redetermination(s)
of the Borrowing Base pursuant to this Section 3 shall constitute the March 1, 2013 Scheduled Redetermination of the Borrowing
Base pursuant to Section 2.07(b) of the Credit Agreement and not an Interim Redetermination of the Borrowing Base pursuant to
Section 2.07(b) of the Credit Agreement.

 

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4.          Conditions
Precedent. The obligations and agreements of the Lenders as set forth in this Amendment are subject to the satisfaction (in
the opinion of Administrative Agent), unless waived in writing by Administrative Agent, of each of the following conditions (and
upon such satisfaction, this Amendment shall be deemed to be effective as of the Effective Date):

 

A.           Third
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 Borrower,
the Guarantor, the Administrative Agent, the Assignors, the Assignee and each Lender.

 

B.           Notes.
Borrower shall have executed and delivered a Note for the Assignee.

 

C.           Secretary
Certificate. The Administrative Agent shall have received a certificate of the Secretary, an Assistant Secretary or other duly
authorized officer satisfactory to the Administrative Agent of the Borrower and each Guarantor setting forth (i) resolutions
of its board of directors (or equivalent body) authorizing the execution, delivery and performance of this Amendment and amendments
to Loan Documents to which it is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and effect, (ii) the officers of the Borrower or such Guarantor
(y) who are authorized to sign the Loan Documents to which the Borrower or such Guarantor is a party and (z) who will,
until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with this Amendment and the transactions contemplated hereby,
(iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws
or certificate of formation and partnership agreement or certificate of formation and limited liability company agreement (as the
case may be) of the Borrower, and each Guarantor, certified as being true and complete. The Administrative Agent and the Lenders
may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.

 

D.           Good
Standings. The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the
existence, qualification and good standing of the Borrower and each Guarantor.

 

E.           Loan
Documents. The Loan Documents and amendments and supplements to Loan Documents listed in Annex II attached hereto shall
have been executed and delivered to Administrative Agent by each Loan Party party thereto, and where appropriate, properly acknowledged,
witnessed and notarized.

 

F.           Addison
PSA. The Administrative Agent shall have received a true and complete copy of the Purchase and Sale Agreement, dated as of
March 6, 2013, by and between the Borrower and Addison Oil, L.L.C., certified as such by the Borrower (the “Addison
Purchase Agreement”). 

 

G.           Fees
and Expenses. The Administrative Agent shall have received (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, (b) all fees due and payable pursuant to the Expenses and Indemnity
Letter and (c) an upfront fee in the amount equal to 0.60% of the Maximum Credit Amount for the ratable benefit of each Lender.

 

H.           Representations
and Warranties; No Defaults. The Borrower shall have confirmed and acknowledged to the Administrative Agent and the Lenders,
and by its execution and delivery of this Amendment, the 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 Effective Date and (ii) no Default or Event of Default exists under the Credit
Agreement or any of the other Loan Documents. 

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 6

    	 

    

  

I.           Patriot
Act and Know-Your-Customer Disclosures. The Administrative Agent and each Lender shall have received all Patriot Act and “know-your-customer”
disclosures reasonably requested by them prior to execution of this Amendment.

 

J.           Other
Documents. Borrower shall have delivered to the Administrative Agent such other agreements, documents, items, instruments,
opinions, certificates, waivers, consents, and evidence as Administrative Agent may reasonably request.

 

5.             Post-Closing
Conditions. The continued obligations of each Lender under the Credit Agreement is subject to:

 

A.           No
later than ninety (90) days after the Effective Date, the Borrower shall have delivered executed and notarized new mortgages or
deeds of trust or supplements to existing mortgages or deeds of trust covering additional Oil and Gas Properties of the Borrower,
in form and substance reasonably satisfactory to the Administrative Agent, to the extent necessary to cause the Administrative
Agent to have first priority, perfected Liens (subject only to Excepted
Liens identified in clauses (a), (b), (c) and (f) of the definition thereof, but subject to the provisos at the end of such definition)
on at least 80% of the present value of the Borrower’s Proved Reserves evaluated
in the most recently delivered Reserve Report. 

 

B.           No
later than ninety (90) days after the Effective Date, the Administrative Agent shall have received additional title opinions and
other title information and data as the Administrative Agent may reasonably request satisfactory to the Administrative Agent setting
forth the status of title to at least 80% of the present value of the Borrower’s Proved Reserves evaluated in the most recently
delivered Reserve Report; provided that notwithstanding the requirements of Section 8.13 of the Credit Agreement, the parties hereto
agree that Borrower has previously delivered certain title opinions and other title information and the Borrower is not in violation
of the requirements of Section 8.13 as of the Effective Date, so long as the Borrower complies with this Section 5(B). 

 

6.             Assignment.

 

A.           Each
Assignor hereby sells and assigns to the Assignee, without recourse and without representation or warranty other than as expressly
provided herein, and the Assignee hereby purchases and assumes from each Assignor, (i) such percentage in and to all of such Assignor’s
rights and obligations under the Credit Agreement as a Lender (including, without limitation, such percentage interest in the Loans
owing to such Assignor and such Assignor’s risk participation and funded participation in LC Obligations existing as of the
date hereof (prior to the effectiveness of this Assignment) that would result in the Assignors and the Assignee having the respective
Applicable Percentage of the Maximum Credit Amount set forth in Annex I attached hereto, and (ii) to the extent permitted
to be assigned under applicable law, such percentage in and to all of each Assignor’s right, title and obligations in all
claims, suits, causes of action and any other right of such Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any other Loan Document or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred
to herein collectively as the “Assigned Interest”); provided however,
the Assigned Interest shall not include all indemnities and other obligations contained in the Credit Agreement and the Loan Documents
which expressly survive the assignment of such Assignor’s rights and obligations (the “Reserved Obligations”).
For avoidance of doubt the Reserved Obligations are hereby expressly reserved and retained for all purposes by each Assignor. Such
sale and assignment is without recourse to any Assignor and, except as expressly provided in this Agreement, without representation
or warranty by each Assignor. After giving effect to the sale and assignment pursuant to this Section 5, Annex I to the
Credit Agreement shall be replaced with Annex I attached to this Amendment and the Commitments and Applicable Percentages
held by each Lender shall be as follows:

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 7

    	 

    

  

(a)   Société
Générale will have a Commitment of $18,000,000 (50.00%) of the $36,000,000 Borrowing Base.

 

(b)   OneWest
Bank, FSB will have a Commitment of $18,000,000 (50.00%) of the $36,000,000 Borrowing Base.

 

B.           Each
Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of its respective Assigned Interest,
(ii) such Assigned Interest is free and clear of any lien, encumbrance or other adverse claim created through or under such
Assignor but not otherwise, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions contemplated hereby and (iv) it is not a Defaulting Lender under the Credit
Agreement; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in
or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

 

C.           The
Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied
by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented
by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest,
is experienced in acquiring assets of such type, and (v) it has received a copy of the Credit Agreement, together with copies
of the most recent financial statements delivered pursuant to Section 8.01 thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and to purchase
the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative
Agent or any other Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative
Agent, any Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by
it as a Lender.

 

D.           From
and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to each Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

7.          Certain
Representations. Borrower represents and warrants that, as of the Effective Date: (a) 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 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 Borrower thereof. In addition, 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.

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 8

    	 

    

  

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

 

9.          Acknowledgments
and Agreements. Borrower acknowledges that on the date hereof all outstanding Indebtedness is payable in accordance with its
terms, and Borrower waives any defense, offset, counterclaim or recoupment with respect thereto. Borrower, Administrative Agent
and each Lender do hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and acknowledge and agree that the
Credit Agreement, as amended hereby, is and remains in full force and effect. 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
(other than the waiver of the Specified Default), or (b) to prejudice any right or rights which 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.         Confirmation
of Security. Borrower hereby confirms and agrees that all of the Security Instruments, as may be amended in accordance herewith,
which 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.

 

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 12.09 of the Credit Agreement captioned “Governing Law;
Jurisdiction; Consent to Service of Process” are incorporated herein by reference for all purposes.

 

14.         Entirety,
Etc. This Amendment, the Expenses and Indemnity Letter and all of the other Loan Documents embody the entire agreement between
the parties. THIS AMENDMENT, THE EXPENSES AND INDEMNITY LETTER 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.]

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Page 9

    	 

    

 

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

 

	 	BORROWER
	 	 
	 	YUMA EXPLORATION AND PRODUCTION COMPANY, INC.
	 	 	 
	 	By:	/s/ Kirk Sprunger
	 	 	Kirk Sprunger, Secretary and Treasurer

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Signature Page

    	 

    

 

ADMINISTRATIVE AGENT, ISSUING BANK,

LENDER AND ASSIGNOR:

 

SOCIÉTÉ GÉNÉRALE

 

	By:	/s/ David Bornstein	 
	Name:	David Bornstein	 
	Title:	Director	 

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Signature Page

    	 

    

 

ASSIGNOR:

 

UNION BANK, N.A.

 

	By:	/s/ Damien G. Meiburger	 
	Name:	Damien G. Meiburger	 
	Title:	Senior Vice President	 

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Signature Page

    	 

    

 

LENDER AND ASSIGNEE:

 

ONEWEST BANK, FSB

 

	By:	/s/ Sean Murphy	 
	Name:	Sean Murphy	 
	Title:	Executive Vice President	 

 

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Signature Page

    	 

    

 

THE GUARANTOR HEREBY CONSENTS TO THE EXECUTION, DELIVERY
AND PERFORMANCE OF THE TERMS OF THIS AMENDMENT BY THE BORROWER.

 

	 	THE YUMA COMPANIES, INC.
	 	 	 
	 	By:	/s/ Kirk Sprunger
	 	 	Kirk Sprunger, Secretary and Treasurer

  

    	THIRD AMENDMENT TO CREDIT AGREEMENT AND ASSIGNMENT– Signature Page

    	 

    

 

ANNEX
I

LIST OF MAXIMUM CREDIT AMOUNTS

 

Aggregate Maximum Credit Amounts

 

	Name of Lender	 	Applicable Percentage	 	 	Maximum Credit Amount	 
	Société Générale	 	 	50.00	%	 	$	62,500,000.00	 
	OneWest Bank, FSB	 	 	50.00	%	 	$	62,500,000.00	 
	TOTAL	 	 	100.00	%	 	$	125,000,000.00	 

 

 

    	ANNEX I, List of Maximum Credit Amounts

    	 

    

 

ANNEX II

LOAN DOCUMENTS

 

		1.	Act of Mortgage, Pledge and Assignment of Production
and Multiple Indebtedness Mortgage, dated as of May 20, 2013, by and between Yuma Exploration and Production Company, Inc. and
Société Générale, as Administrative Agent, to be filed of record in the following Louisiana parishes:
Beauregard, Rapides and Vernon.

 

    	ANNEX II, Loan DocumentsExhibit 10.7

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT
TO CREDIT AGREEMENT (this “Amendment”) is entered into effective as of April 22, 2014 (the “Effective
Date”), among YUMA EXPLORATION AND PRODUCTION COMPANY, INC., a Delaware corporation (the “Borrower”),
the undersigned lenders party to the Credit Agreement (the “Lenders”) and SOCIÉTÉ
GÉNÉRALE, in its capacity as Administrative Agent and Issuing Bank (the “Administrative
Agent”).

 

RECITALS

 

A.           Borrower,
the Lenders and Administrative Agent are parties to a Credit Agreement dated as of August 10, 2011, as amended by that certain
First Amendment and Limited Waiver to Credit Agreement and Assignment, dated as of September 30, 2012, as further amended by that
certain Second Amendment to Credit Agreement and Assignment, dated as of February 13, 2013, and as further amended by that certain
Third Amendment to Credit Agreement and Assignment, dated as of May 20, 2013 (as amended, restated, modified or supplemented from
time to time until the date hereof, the “Credit Agreement”).

 

B.             Borrower
has requested certain amendments to the Credit Agreement as set forth herein and, subject to the conditions precedent set forth
herein, the parties hereto have agreed to so amend the Credit Agreement.

 

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 which 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.            Amendments
to Credit Agreement. Subject to the conditions precedent set forth in Section 4 hereof, the Credit Agreement is amended as
follows:

 

A.           Section
1.02. The following new definitions are added to Section 1.02 of the Credit Agreement in proper alphabetical order:

 

“Conforming
Borrowing Base” means, (i) on the Fourth Amendment Effective Date, the amount provided for in Section 2.07(b) and
(ii) from and after the Fourth Amendment Effective Date until the Non-Conforming Borrowing Base Termination Date, the amount determined
by the Administrative Agent and approved by the Required Lenders or all of the Lenders, as applicable, in accordance with the provisions
of Section 2.07 as the Conforming Borrowing Base. For the avoidance of doubt, on and after the Non-Conforming Borrowing Base Termination
Date, the Conforming Borrowing Base shall equal the Borrowing Base.

 

“Fourth Amendment”
means that certain Fourth Amendment to Credit Agreement dated as of April 22, 2014 among the parties thereto which amends this
Agreement.

 

“Fourth Amendment Effective
Date” means the first date on which the Fourth Amendment becomes effective in accordance with its terms.

 

“Non-Conforming Borrowing
Base” means an amount equal to $4,500,000, provided that any increase in the Conforming Borrowing Base prior to the
Non-Conforming Borrowing Base Termination Date shall reduce the Non-Conforming Borrowing Base on a dollar-for-dollar basis, unless
otherwise agreed among the Administrative Agent and the Required Lenders or all of the Lenders, as applicable.

 

    	 

    	 

    

 

“Non-Conforming Borrowing
Base Termination Date” means the earlier of (i) the date on which the next Scheduled Redetermination or Interim Redetermination
occurs or (ii) October 15, 2014, unless otherwise extended or postponed with the consent of the Administrative Agent and all of
the Lenders.

 

B.           Section
1.02. The following definitions in Section 1.02 of the Credit Agreement are amended and restated in their entirety as follows:

 

“Applicable
Margin” means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the Commitment Fee
Rate, as the case may be, the rate per annum set forth in the Borrowing Base Utilization Grid below based upon the Borrowing Base
Utilization Percentage then in effect:

 

	Borrowing Base Utilization Grid
	Level	 	Borrowing Base
 Utilization Percentage	 	Eurodollar

 Loans	 	 	ABR
 Loans	 	 	Commitment

 Fee Rate	 
	1	 	<25%	 	 	2.250	%	 	 	1.250	%	 	 	0.500	%
	2	 	>25% <50%	 	 	2.500	%	 	 	1.500	%	 	 	0.500	%
	3	 	>50% <75%	 	 	2.750	%	 	 	1.750	%	 	 	0.500	%
	4	 	>75%<90%	 	 	3.000	%	 	 	2.000	%	 	 	0.500	%
	5	 	>90%<100%	 	 	3.250	%	 	 	2.250	%	 	 	0.500	%
	6	 	>100%	 	 	3.750	%	 	 	2.750	%	 	 	0.500	%

 

“Borrowing
Base” means, (i) on the Fourth Amendment Effective Date, the amount provided for in Section 2.07(a), (ii) from and
after the Fourth Amendment Effective Date until the Non-Conforming Borrowing Base Termination Date, the sum of the Conforming Borrowing
Base and the Non-Conforming Borrowing Base and (iii) from and after the Non-Conforming Borrowing Base Termination Date, the amount
determined by the Administrative Agent and approved by the Required Lenders or all of the Lenders, as applicable, in accordance
with the provisions of Section 2.07 as the Borrowing Base; provided, however, that in no event shall the Borrowing Base ever exceed
the Maximum Credit Amount.

 

“Borrowing
Base Utilization Percentage” means, as of any day, the fraction expressed as a percentage, the numerator of which
is the sum of the Revolving Credit Exposures of the Lenders on such day, and the denominator of which is the Conforming Borrowing
Base in effect on such day.

 

“Parent
Guarantor” means Yuma Energy, Inc., a Delaware corporation (f/k/a The Yuma Companies, Inc., a Delaware corporation).

 

“Reserve
Definitions” means, at any time, the Definitions for Oil and Gas Reserves adapted from Petroleum Resources Management
Systems (SPE-PRMS) and approved by the Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum
Geologists and the Society of Petroleum Evaluation Engineers (or any of each entity’s generally recognized successor) as
in effect at such time and acceptable to the Administrative Agent. Such reserves may be adjusted from time to time by the Administrative
Agent based on its professional judgment of the well performance or the drilling additions.

 

C.           Section
2.07(a). Section 2.07(a) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 2

    	 

    

  

“(a)          Initial
Borrowing Base. On the Fourth Amendment Effective Date, the Borrowing Base shall be an amount equal to $44,500,000, which shall
consist of the Conforming Borrowing Base in an amount equal to $40,000,000 and the Non-Conforming Borrowing Base in an amount equal
to $4,500,000, and which Borrowing Base shall remain in effect until the Conforming Borrowing Base (or the Borrowing Base) is redetermined
or the Non-Conforming Borrowing Base is reduced, in each case, in accordance with this Agreement.”

 

D.           Section
2.07(b). Section 2.07(b) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(b)          Scheduled
and Interim Redeterminations. The Borrowing Base or the Conforming Borrowing Base, as applicable, shall be redetermined semi-annually
in accordance with this Section 2.07 (a “Scheduled Redetermination”), and, subject to Section 2.07(d),
such redetermined Borrowing Base shall become effective and applicable to the Borrower, the Agents, the Issuing Bank and the Lenders
on April 15th and October 15th of each year, commencing October 15, 2014. In addition, the Borrower may, by
notifying the Administrative Agent thereof, twice during any twelve month period, and the Administrative Agent may twice during
the twelve month period following the closing date and one time during any twelve month period thereafter, at the direction of
the Majority Lenders, by notifying the Borrower thereof, each elect to cause the Borrowing Base or Conforming Borrowing Base, as
applicable, to be redetermined between Scheduled Redeterminations (an “Interim Redetermination”) in accordance
with this Section 2.07. In addition, the Administrative Agent may, by notifying the Borrower thereof, elect to cause an
Interim Redetermination of the Borrowing Base or Conforming Borrowing Base, as applicable, any time a prepayment made by the Borrower
pursuant to Section 3.04(c)(iv) exceeds five percent (5%) of the Borrowing Base or Conforming Borrowing Base, as applicable,
then existing at the time of prepayment. The Borrowing Base or Conforming Borrowing Base, as applicable, will also be redetermined
or adjusted in accordance with the provisions of Section 8.13(c) or Section 9.12(d).”

 

E.           Section
2.07(c)(i). Section 2.07(c)(i) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base,
as applicable” in the eleventh line of Section 2.07(c)(i) following the words “Borrowing Base”.

 

F.           Section
2.07(c)(ii)(A). Section 2.07(c)(ii)(A) of the Credit Agreement is hereby amended by deleting the term “March 1st and
September 1st” and inserting in lieu thereof “April 15th and October 15th”.

 

G.           Section
2.07(c)(iii). Section 2.07(c)(iii) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(iii)        Any
Proposed Borrowing Base that would increase the Borrowing Base or Conforming Borrowing Base, as applicable, then in effect must
be approved by all of the Lenders as provided in this Section 2.07(c)(iii); and any Proposed Borrowing Base that would decrease
or maintain the Borrowing Base or Conforming Borrowing Base, as applicable, then in effect must be approved or be deemed to have
been approved by the Required Lenders as provided in this Section 2.07(c)(iii). Upon receipt of the Proposed Borrowing Base
Notice, each Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the Proposed Borrowing
Base by proposing an alternate Borrowing Base or Conforming Borrowing Base, as applicable,. If at the end of such fifteen (15)
days, any Lender has not communicated its approval or disapproval in writing to the Administrative Agent, such silence shall be
deemed to be an approval of the Proposed Borrowing Base in the case of a Proposed Borrowing Base that would decrease or maintain
the Borrowing Base or Conforming Borrowing Base, as applicable, then in effect (it being understood by the parties hereto that
if the Proposed Borrowing Base would increase the Borrowing Base or Conforming Borrowing Base, as applicable, written approval
of all Lenders is required). If, at the end of such 15-day period, all of the Lenders, in the case of a Proposed Borrowing Base
that would increase the Borrowing Base or Conforming Borrowing Base, as applicable, then in effect, or the Required Lenders, in
the case of a Proposed Borrowing Base that would decrease or maintain the Borrowing Base or Conforming Borrowing Base, as applicable,
then in effect, have approved or deemed to have approved, as aforesaid, then the Proposed Borrowing Base shall become the new Borrowing
Base or Conforming Borrowing Base, as applicable, effective on the date specified in Section 2.07(d). If, however, at the
end of such 15-day period, all of the Lenders or the Required Lenders, as applicable, have not approved or deemed to have approved,
as aforesaid, the Proposed Borrowing Base, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing
Base or Conforming Borrowing Base, as applicable, then acceptable to all of the Lenders or the Required Lenders, as applicable,
and such amount shall become the new Borrowing Base or Conforming Borrowing Base, as applicable, effective on the date specified
in Section 2.07(d).”

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 3

    	 

    

  

H.           Section
2.07(d). Section 2.07(d) of the Credit Agreement of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(d)          Effectiveness
of a Redetermined Borrowing Base. After a redetermined Borrowing Base or Conforming Borrowing Base, as applicable, is approved
or is deemed to have been approved by all of the Lenders or the Required Lenders, as applicable, pursuant to Section 2.07(c)(iii),
the Administrative Agent shall notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base or Conforming
Borrowing Base, as applicable, (the “New Borrowing Base Notice”), and such amount shall become the new Borrowing
Base or Conforming Borrowing Base, as applicable, effective and applicable to the Borrower, the Administrative Agent, the Issuing
Bank and the Lenders:

 

(i)          in
the case of a Scheduled Redetermination, (A) if the Administrative Agent shall have received the Engineering Reports required
to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on
April 15th or October 15th, as applicable, following such notice, or (B) if the Administrative Agent shall not have
received the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c)
in a timely and complete manner, then on the Business Day next succeeding delivery of such notice; and 

 

(ii)         in
the case of an Interim Redetermination, on the Business Day next following delivery of such notice.

 

Such amount shall then become the Borrowing
Base or Conforming Borrowing Base, as applicable, until the next Scheduled Redetermination Date, the next Interim Redetermination
Date or the next adjustment to the Borrowing Base or Conforming Borrowing Base, as applicable, under Section 8.13(c)
or Section 9.12, whichever occurs first.

 

I.           Section
2.07(e)(i). Section 2.07(e)(i) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base,
as applicable” in each of the third and ninth lines of Section 2.07(e)(i) following the words “Borrowing Base”.

 

J.           Section
2.07(e)(ii). Section 2.07(e)(ii) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base,
as applicable” in each of the second and third lines of Section 2.07(e)(ii) following the words “Borrowing Base”.

 

K.          Section
2.07(e)(iii). Section 2.07(e)(iii) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base,
as applicable” following the words “Borrowing Base”.

 

L.           Section
2.07(e)(iv). Section 2.07(e)(iv) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base,
as applicable” following the words “Borrowing Base”.

 

M.
           Section 8.01(a). Section 8.01(a) of the Credit Agreement is hereby
amended in its entirety to read as follows:

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 4

    	 

    

  

“(a)          Annual
Financial Statements. As soon as available, but in any event not later than 120 days after the end of each fiscal year of the
Parent Guarantor, its audited consolidated and consolidating balance sheets (with the Borrower as a discrete segment), the related
statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case
in comparative form the figures for the previous fiscal year of both the Borrower and the Parent Guarantor, all reported on by
Pierson & Pierson or other independent public accountants of recognized national standing (without a “going concern”
or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects the financial condition and results of operations
of the Borrower, its Consolidated Subsidiaries and the Parent Guarantor on a consolidated and consolidating basis in accordance
with GAAP consistently applied.”

 

N.           Section
8.01(b). Section 8.01(b) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(b)          Quarterly
Financial Statements. As soon as available, but in any event not later than 60 days after the end of each of the first three
fiscal quarters of each fiscal year of the Parent Guarantor (beginning with the second quarter of 2014), its consolidated and consolidating
balance sheets (with the Borrower as a discrete segment), the related statements of operations, stockholders’ equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the
end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Borrower, its Consolidated Subsidiaries and the Parent Guarantor on a
consolidated and consolidating basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes.”

 

O.           Section
8.01(d). Section 8.01(d) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(d)          [Reserved].”

 

P.           Section
8.01(k). Section 8.01(k) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(k)          [Reserved].”

 

Q.           Section
8.01(o). Section 8.01(o) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(o)          Production
Reports and Lease Operating Statements. Within 60 days after the end of each of the first three fiscal quarters of each fiscal
year, a report setting forth, for each calendar month during the then current fiscal year to date, (i) the volume of production
and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for
each such calendar month from the Oil and Gas Properties, individually and in the aggregate, and (ii) the related ad valorem, severance
and production taxes and lease operating expenses attributable thereto and incurred for each such calendar month.”

 

R.           Section
8.01(p). Section 8.01(p) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“(p)          [Reserved].”

 

S.           Section
8.01(t). Section 8.01(t) of the Credit Agreement is hereby amended in its entirety to read as follows:

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 5

    	 

    

  

“(t)          [Reserved].”

 

T.           Section
8.12. Section 8.12 of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“Section 8.12.         Reserve
Reports.

 

(a)          On
or before February 28th and August 31st of each year, commencing August 31, 2014, the Borrower shall furnish to the Administrative
Agent and the Lenders a Reserve Report evaluating the Oil and Gas Properties of the Borrower and its Subsidiaries with an “as
of” date acceptable to the Administrative Agent. The Reserve Report to be delivered by February 28th of each year shall
be prepared by one or more Approved Petroleum Engineers, and the Reserve Report to be delivered by August 31st of each year
shall be prepared by or under the supervision of the chief engineer or chief operating officer of the Borrower who shall certify
such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately
preceding Reserve Report.

 

(b)          In
the event of an Interim Redetermination, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report
prepared by or under the supervision of the chief engineer or chief operating officer of the Borrower who shall certify such Reserve
Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately preceding February 28th
Reserve Report. For any Interim Redetermination requested by the Administrative Agent or the Borrower pursuant to Section 2.07(b),
the Borrower shall provide such Reserve Report with an "as of" date as required by the Administrative Agent as soon as
possible, but in any event no later than thirty (30) days following the receipt of such request.

 

(c)          With
the delivery of each Reserve Report, the Borrower shall provide to the Administrative Agent and the Lenders a certificate from
a Responsible Officer certifying that: (i) the information contained in the Reserve Report and any other information delivered
in connection therewith is true and correct in all material respects, (ii) the Borrower or its Subsidiaries own good and defensible
title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens
permitted by Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no Material Gas
Imbalances, take or pay or other prepayments in excess of the volume specified in Section 7.19 with respect to its Oil and Gas
Properties evaluated in such Reserve Report which would require the Borrower or any Subsidiary to deliver Hydrocarbons either generally
or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor and
(iv) none of their Oil and Gas Properties have been sold since the date of the last Borrowing Base determination except as set
forth on an exhibit to the certificate, which certificate shall list all of its Oil and Gas Properties sold and in such detail
as required by the Administrative Agent.”

 

U.           Section
8.13(c). Section 8.13(c) of the Credit Agreement is hereby amended by adding “or the Conforming Borrowing Base, as applicable”
following each occurrence of the words “Borrowing Base”.

 

V.
           Section 9.12. Section 9.12 of the Credit Agreement is hereby
amended by adding “or the Conforming Borrowing Base, as applicable” in the fourteenth, fifteenth and sixteenth lines
of Section 9.12 following the words “Borrowing Base”.

 

W.
           Section 12.02(b). Section 12.02(b) of the Credit Agreement is
hereby amended by adding “, the Conforming Borrowing Base or the Non-Conforming Borrowing Base” in the sixth line of
Section 12.02(b) following the words “Borrowing Base” and adding “or the Conforming Borrowing Base” in
the seventh line of Section 12.02(b) following the words “Borrowing Base”.

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 6

    	 

    

  

3.            Redetermination
of the Borrowing Base.         Effective as of the Effective Date, until
the next redetermination of the Borrowing Base in accordance with the provisions of Section 2.07 of the Credit Agreement on
August 1, 2014 or such earlier date in accordance with the provisions of Section 2.07, which the Borrower has notified the Administrative
Agent that it has elected such date to be the date of an Interim Redetermination in accordance with Section 2.07(b) of the Credit
Agreement, the Conforming Borrowing Base shall remain at $40,000,000 and the Non-Conforming Borrowing Base shall be established
at $4,500,000. Both the Borrower, on the one hand, and the Administrative Agent and the Lenders, on the other hand, agree that
the redetermination of the Conforming Borrowing Base pursuant to this Section 3 shall constitute the March 1, 2014 Scheduled Redetermination
of the Borrowing Base and not an Interim Redetermination of the Borrowing Base pursuant to Section 2.07(b) of the Credit Agreement.

 

4.            Conditions
Precedent. The obligations and agreements of the Lenders as set forth in this Amendment are subject to the satisfaction (in
the opinion of Administrative Agent), unless waived in writing by Administrative Agent, of each of the following conditions (and
upon such satisfaction, this Amendment shall be deemed to be effective as of the Effective Date):

 

A.           Fourth
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 Borrower,
the Guarantor, the Administrative Agent and each Lender.

 

B.           Fees
and Expenses. The Administrative Agent shall have received (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, (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 and (c) an upfront fee in the amount equal
to 0.45% of the Non-Conforming Borrowing Base in effect on the Effective Date for the ratable benefit of each Lender. 

 

C.           Representations
and Warranties; No Defaults. The Borrower shall have confirmed and acknowledged to the Administrative Agent and the Lenders,
and by its execution and delivery of this Amendment, the 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 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. Borrower represents and warrants that, as of the Effective Date: (a) 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 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 Borrower thereof. In addition, 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.

 

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

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 7

    	 

    

 

7.          Acknowledgments
and Agreements. Borrower acknowledges that on the date hereof all outstanding Indebtedness is payable in accordance with its
terms, and Borrower waives any defense, offset, counterclaim or recoupment with respect thereto. Borrower, Administrative Agent
and each Lender do hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and acknowledge and agree that the
Credit Agreement, as amended hereby, is and remains in full force and effect. 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.

 

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 of the Specified Default), or (b) to prejudice any right or rights which 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. 

 

9.          Confirmation
of Security. Borrower hereby confirms and agrees that all of the Security Instruments, as may be amended in accordance herewith,
which 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.

 

10.         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.

 

11.         Incorporation
of Certain Provisions by Reference. The provisions of Section 12.09 of the Credit Agreement captioned “Governing Law;
Jurisdiction; Consent to Service of Process” are incorporated herein by reference for all purposes.

 

12.         Entirety,
Etc. This Amendment, the Expenses and Indemnity Letter and all of the other Loan Documents embody the entire agreement between
the parties. THIS AMENDMENT, THE EXPENSES AND INDEMNITY LETTER 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.]

 

    	FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 8

    	 

    

  

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

 

	 	BORROWER
	 	 
	 	YUMA EXPLORATION AND PRODUCTION COMPANY, INC.
	 	 	 
	 	By:	/s/ Kirk Sprunger
	 	 	Kirk Sprunger, Secretary and Treasurer

 

    	Signature Page to Fourth Amendment

    	 

    

 

ADMINISTRATIVE AGENT, ISSUING BANK

AND LENDER:

 

SOCIÉTÉ GÉNÉRALE

 

	By:	/s/ Elena Robciuc	 
	Name:	 Elena Robciuc	 
	Title:	 Managing Director	 

 

 

    	Signature Page to Fourth Amendment

    	 

    

 

LENDER:

 

ONEWEST BANK, FSB

 

	By:	/s/ Whitney Randolph	 
	Name:	 Whitney Randolph	 
	Title:	Senior Vice President	 

 

    	Signature Page to Fourth Amendment

    	 

    

 

LENDER:

 

VIEWPOINT BANK, N.A.

 

	By:	/s/ William K. Maberry	 
	Name:	William K. Maberry  	 
	Title:	Vice President	 

 

    	Signature Page to Fourth Amendment

    	 

    

 

	 	THE GUARANTOR HEREBY CONSENTS TO THE EXECUTION, DELIVERY AND PERFORMANCE OF THE TERMS OF THIS AMENDMENT BY THE BORROWER.
	 	 
	 	YUMA ENERGY, INC.
	 	 	 
	 	By:	/s/ Kirk Sprunger
	 	 	Kirk Sprunger, Secretary and Treasurer

 

    	Signature Page to Fourth Amendment

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