Document:

EXHIBIT
10.12

 

TENTH
AMENDMENT TO LOAN AGREEMENT

 

This
TENTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as of March 31, 2016 (the “Tenth
Amendment Effective Date”), among MEXCO ENERGY CORPORATION, FORMAN ENERGY CORPORATION, SOUTHWEST TEXAS
DISPOSAL CORPORATION and TBO OIL & GAS, LLC (collectively, “Borrowers” and each, individually,
a “Borrower”) and BANK OF AMERICA, N.A. (“Bank”).

 

WHEREAS,
Borrowers and Bank are parties to that certain Loan Agreement dated as of December 31, 2008, as amended by First Amendment to
Loan Agreement dated as of December 28, 2009, Second Amendment to Loan Agreement dated as of March 1, 2010, Third Amendment to
Loan Agreement dated as of September 30, 2010, Fourth Amendment to Loan Agreement dated as of October 22, 2010, Fifth Amendment
to Loan Agreement dated as of December 28, 2011, Sixth Amendment to Loan Agreement dated as of October 22, 2012, Seventh Amendment
to Loan Agreement dated as of October 25, 2013, Eighth Amendment to Loan Agreement dated as of September 10, 2014, and Ninth Amendment
to Loan Agreement dated as of February 13, 2015 (as so amended, the “Loan Agreement”);

 

WHEREAS,
Borrowers have requested that Bank amend the Loan Agreement as hereinafter provided;

 

WHEREAS,
by that certain letter from Bank to Borrowers dated April 11, 2016, Borrowers were notified of the occurrence of an event of default
under the Loan Agreement as a result of the failure by Borrowers to maintain the minimum Tangible Net Worth required under Section
7.3 of the Loan Agreement for the period ended December 31, 2015 (the “Existing Event of Default”);

 

WHEREAS,
Borrowers have requested that Bank waive and rescind the Existing Event of Default;

 

WHEREAS,
subject to the terms and conditions set forth herein, Bank is willing to agree to such amendments and to waive and rescind the
Existing Event of Default (the “Waiver”); and

 

WHEREAS,
Borrowers and Bank acknowledge that the terms of this Amendment constitute an amendment and modification of, and not a novation
of, the Loan Agreement.

 

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

 

SECTION
1. Definitions. Unless otherwise defined in this Amendment, terms used in this Amendment that are defined in the Loan Agreement
shall have the meanings assigned to such terms in the Loan Agreement.

 

SECTION
2. Amendments to the Loan Agreement. Subject to satisfaction of the conditions of effectiveness set forth in Section
3 of this Amendment, the parties hereto agree that:

 

(a)
Section 1.3 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 

1.3
Borrowing Base.

 

(a)
Borrowing Base Standards. The “Borrowing Base” shall represent Bank’s determination, in its sole discretion,
of the loan amount that may be supported by Bank’s evaluation of the proved oil and gas properties of Borrowers. The determination
of the Borrowing Base will be made in accordance with then-current practices, economic and pricing parameters, methodology, assumptions,
and customary procedures and standards established by Bank from time to time for its petroleum industry customers including without
limitation (i) an analysis of such reserve and production data with respect to all of the proved oil and gas properties of Borrowers
as is provided to Bank in accordance herewith, (ii) an analysis of the assets, liabilities, cash flow, business, properties, prospects,
management and ownership of Borrowers, (iii) Borrowers’ commodity hedging transactions, and (iv) such other credit factors
consistently applied as Bank customarily considers in evaluating similar oil and gas credit facilities. Borrowers and Bank acknowledge
that due to the uncertainties of the oil and gas extraction process, the oil and gas properties of Borrowers are not subject to
evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, the determination of the
loan amount will be less than the total present value of the proved oil and gas properties of Borrower, which Borrowers’
acknowledge to be essential for the adequate protection of Bank. Without limiting the foregoing, Bank may exclude any oil and
gas reserves or portion of production therefrom or any income from any other property from the Borrowing Base, at any time, because
title information is not satisfactory, such oil and gas reserves are not subject to a lien in favor of Bank or such oil and gas
reserves are not in “pay” status. The Borrowing Base shall be set at $5,570,000 as of June 20, 2016.

 

    	 		 

    	 		 

    

 

(b)
Periodic Redeterminations of Borrowing Base.

 

(i)
The Borrowing Base shall be redetermined as of July 30 and January 31 of each year until the Facility No. 1 Expiration Date. On
or before June 30 of each year, Borrowers shall furnish Bank an acceptable engineering report audited by an independent petroleum
engineer acceptable to Bank (and Bank hereby approves Joe C. Neal & Associates as an acceptable independent petroleum engineer)
as of the preceding March 31 covering all of the proved oil and gas properties of Borrowers. On or before December 30 of each
year, Borrowers shall furnish Bank an acceptable engineering report as of the preceding September 30 prepared by Borrowers’
engineer and certified by an authorized officer of Borrowers covering all of the proved oil and gas properties of Borrowers. Upon
receipt of each such engineering report, Bank shall make a determination of the Borrowing Base which shall become effective upon
written notification from Bank to Borrower, and which, subject to the other provisions of this Agreement, shall be the Borrowing
Base until the effective date of the next redetermination as provided in this Section 1.3.

 

(ii)
In the event that Borrowers do not furnish to Bank an engineering report by the dates specified in Section 1.3(b)(i), then
Bank may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time to time thereafter in its sole
discretion until Bank receives the relevant engineering report, whereupon Bank shall redetermine the Borrowing Base as otherwise
specified in this Section 1.3.

 

(c)
Special Redeterminations of Borrowing Base. Special determinations of the Borrowing Base may be requested by Bank at any
time during the term hereof. If any special determination is requested by Bank, Borrowers will provide Bank with engineering data
for the oil and gas reserves updated from the most recent engineering report furnished to Bank, as soon as is reasonably possible
following the request, but in no event later than thirty (30) days after such request. The determination whether to increase or
decrease the Borrowing shall be made in accordance with the standards set forth in Section 1.3(a). In the event of any
special determination of the Borrowing Base pursuant to this Section, Bank in the exercise of its discretion may suspend the next
regularly scheduled determination of the Borrowing Base.

 

(d)
Borrowing Base Deficiency.

 

(i)
If the Total Exposure of Bank exceeds the amount of the Borrowing Base because of a periodic or special determination made pursuant
to Section 1.3(b) or Section 1.3(c), then Bank shall send a Borrowing Base deficiency notice to Borrowers, and Borrowers
shall within ten (10) days following receipt of such Borrowing Base deficiency notice elect whether to (A) prepay an amount which
would, if prepaid immediately, reduce the Total Exposure of Bank to the amount of the Borrowing Base, (B) execute one or more
mortgages or deeds of trust covering such other oil and gas properties not previously taken into account in the determination
of the Borrowing Base as are acceptable to Bank having present values which, in the opinion of Bank, based upon Bank’s evaluation
of the engineering data provided it, taken in the aggregate are sufficient to increase the Borrowing Base to an amount at least
equal to the Total Exposure of Bank, or (C) do any combination of the foregoing as is acceptable to Bank. If Borrowers fail to
make an election within ten (10) days after Borrowers’ receipt of the Borrowing Base deficiency notice, then Borrower shall
be deemed to have selected the prepayment option specified in clause (A) above. Within ten (10) days after receipt of a
Borrowing Base deficiency notice from Bank or, if earlier, notification from Bank that a Borrowing Base deficiency is expected,
Borrowers shall deliver to Bank a plan in form and substance satisfactory to Bank with respect to how such Borrowing Base deficiency
or expected Borrowing Base deficiency is to be cured. As used herein, “Total Exposure” means, as of any date,
the aggregate outstanding loans hereunder plus the aggregate undrawn amount of letters of credit issued hereunder plus the aggregate
of all amounts that remain unreimbursed by Borrowers with respect to letters of credit issued hereunder, in each case, as of such
date. Any payments made hereunder shall be applied to the loans then outstanding hereunder and, once all loans have been prepaid,
any excess shall be utilized to cash collateralize exposure under letters of credit issued hereunder.

 

    	 		 

    	 		 

    

 

(ii)
Borrowers shall deliver such prepayments or mortgages or deeds of trust of additional oil and gas properties in accordance with
its election (or deemed election) pursuant to Section 1.3(d)(i) as follows:

 

(A)
Prepayment Elections. If Borrowers elect (or are deemed to have elected) to prepay an amount in accordance with Section
1.3(d)(i)(A) above, then Borrowers may make such prepayment in one installment within thirty (30) days after Borrower’s
receipt of the Borrowing Base deficiency notice or, provided no default or events of default has occurred and is continuing hereunder,
in three (3) equal consecutive monthly installments beginning within thirty (30) days after Borrowers’ receipt of the Borrowing
Base deficiency notice and continuing on the same day of each month thereafter.

 

(B)
Elections to Mortgage Additional Oil and Gas Properties. If Borrowers elect to mortgage additional oil and gas properties
in accordance with Section 1.3(d)(i)(B) above, then (1) such properties shall be acceptable to Bank with values determined
by Bank in accordance with this Section 1.3 and (2) the applicable Borrower(s) shall execute, acknowledge and deliver to
Bank one or more mortgages or deeds of trust within thirty (30) days after Borrowers’ receipt of the Borrowing Base deficiency
notice (or such longer time as determined by Bank); provided, however (x) if none of the additional oil and gas
properties offered by Borrowers are acceptable to Bank, Borrowers shall be deemed to have elected the prepayment option specified
in Section 1.3(d)(i)(A) (and Borrowers shall make such prepayment in accordance with Section 1.3(d)(ii)(A)); and
(y) if the aggregate present values of additional oil and gas properties which are acceptable to Bank are insufficient to eliminate
the Borrowing Base deficiency, then Borrowers shall be deemed to have selected the option specified in Section 1.3(d)(i)(C)
(and Borrowers shall make prepayment and deliver one or more mortgages or deeds of trust as provided in Section 1.3(d)(ii)(C)).
Together with such mortgages and deeds of trust, Borrowers shall deliver to Bank title opinions and/or other title information
and data acceptable to Bank such that Bank shall have received, together with the title information previously delivered to Bank,
acceptable title information regarding the proved developed producing and proved developed non-producing oil and gas properties
of Borrowers that in the aggregate represent not less than 80% of the PV10 value reported in the then most recent engineering
report delivered to Bank hereunder (the “PV10 Value”) of all proved developed producing and proved developed
non-producing oil and gas properties evaluated in the most recent engineering report delivered to Bank and that are subject to
a lien in favor of Bank.

 

(C)
Combination Elections. If Borrowers elect (or are deemed to have elected) to eliminate the Borrowing Base deficiency by
a combination of prepayment and mortgaging of additional oil and gas properties in accordance with Section 1.3(d)(i)(C),
then within thirty (30) days after Borrowers’ receipt of the Borrowing Base deficiency notice (or such longer time as determined
by Bank), the applicable Borrower(s) shall execute, acknowledge and deliver to Bank one or more mortgages or deeds of trust covering
such additional oil and gas properties and pay Bank the amount by which the Borrowing Base deficiency exceeds the present values
of such additional oil and gas properties in one installment within thirty (30) days after Borrower’s receipt of the Borrowing
Base deficiency notice or, provided no default or event of default has occurred and is continuing hereunder, in three (3) equal
consecutive monthly installments beginning within thirty (30) days after Borrowers’ receipt of the Borrowing Base deficiency
notice and continuing on the same day of each month thereafter.

 

    	 		 

    	 		 

    

 

(b)
Section 1.4 of the Loan Agreement is hereby amended to add new subsection (d) to read as follows:

 

(d)
To the extent any Borrower sells or otherwise disposes of any of its oil and gas properties, including, without limitation, any
oil and gas property that is subject to a lien in favor of Bank, Borrower shall prepay the loans and, if necessary, cash collateralize
exposure under letters of credit issued hereunder, in an amount equal to 100% of the aggregate net proceeds received therefrom,
which shall result in an immediate and permanent reduction of the Borrowing Base on a dollar-for-dollar basis.

 

(c)
Section 1.5(a) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 

(a)
The interest rate is a rate per year equal to the lesser of (i) the LIBOR Daily Floating Rate, plus 3.00 percentage points, or
(ii) the maximum lawful rate of interest permitted under applicable usury laws, now or hereafter enacted (the “Maximum Rate”).

 

(d)
Section 4.2(a) of the Loan Agreement is hereby amended to add the following at the end thereof:

 

Notwithstanding
the foregoing, any telephonic notice for loan advances honored by Bank must be confirmed immediately by delivery to Bank of a
written loan advance request.

 

(e)
Section 6 of the Loan Agreement is hereby amended to add new Section 6.15 to read as follows:

 

6.15
OFAC. Neither any Borrower nor, to the knowledge of Borrowers, any director, officer, employee, agent, affiliate or representative
thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (a) currently the subject
or target of any Sanctions, (b) included on OFAC’s List of Specially Designated nationals, HMT’s Consolidated List
of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority
or (c) located, organized or resident in a Designated Jurisdiction. As used herein, (x) “Designated Jurisdiction”
means any country or territory to the extent that such country or territory itself is the subject of any Sanction; (y) “OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury; and (z) “Sanctions”
means any international economic sanction administered or enforced by OFAC or other relevant sanctions authority of the United
States of America.

 

(f)
Section 6 of the Loan Agreement is hereby amended to add new Section 6.16 to read as follows:

 

6.16
Anti-Corruption Laws. Borrowers have conducted their businesses in compliance with the United States Foreign Corrupt Practices
Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted
and maintained policies and procedures designed to promote and achieve compliance with such laws.

 

(g)
Sections 7.2(f) and (g) of the Loan Agreement are hereby amended to add “in the form of Exhibit A attached
hereto” after each reference to “compliance certificate.”

 

(h)
Section 7.2 of the Loan Agreement is hereby amended to add the following new subsections to read as follows:

 

(i)
Within 100 days after the end of each fiscal year, Borrowers shall deliver to Bank a budget in form and substance satisfactory
to Bank, with respect to the fiscal year in which such budget is delivered.

 

(j)
Within 10 days after the end of each month, Borrowers shall deliver to Bank an operating report in form and substance satisfactory
to Bank, which shall include cash inflows and outflows for such month and shall be prepared on a week-by-week basis for such month,
certified and dated by an authorized financial officer of Borrowers.

 

(k)
Together with the annual and quarterly financial statements delivered under Sections 7.2(a) and (b) hereof, an accounts
payable aging report in form and substance satisfactory to Bank.

 

    	 		 

    	 		 

    

 

(i)
Section 7.3 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

 

7.3
Financial Covenants.

 

(a)
Minimum EBITDA: EBITDA shall initially be measured on a cumulative fiscal year to date basis and shall be at least $100,000
for the two fiscal quarters ending September 30, 2016, $300,000 for the three fiscal quarters ending December 31, 2016, $500,000
for the four fiscal quarters ending March 31, 2017, and $650,000 for each trailing four fiscal quarter period thereafter. As used
herein, (x) “EBITDA” means, for any period, an amount equal to (a) net income (excluding any non-cash revenue
or expense associated with hedging transactions resulting from ASC 815 and any non-cash charges attributable to the application
of ASC 410) plus without duplication (b) the sum of the following to the extent deducted in the calculation of net
income: (i) Interest Expense; (ii) income taxes; (iii) depreciation; (iv) depletion; (v) amortization; (vi) extraordinary losses
determined in accordance with GAAP; and (vii) other non-recurring expenses reducing such net income which do not represent a cash
item in such period or any future period, minus without duplication (c) the sum of the following to the extent included
in the calculation of net income: (i) income tax credits; (ii) extraordinary gains determined in accordance with GAAP; (iii) gains
on the sale of assets; and (iv) all non-recurring, non-cash items increasing net income, in each case, of Borrowers and their
subsidiaries on a consolidated basis in accordance with GAAP; (y) “ASC 410” means the Accounting Standards
Codification No. 410 (Asset Retirement and Environmental Obligations), as issued by the Financial Accounting Standards Board,
as amended; and (z) “ASC 815” means the Accounting Standards Codification No. 815 (Derivatives and Hedging),
as issued by the Financial Accounting Standards Board, as amended.

 

(b)
Minimum Interest Coverage Ratio (EBITDA/Interest Expense) of at least 1.25 to 1.00 for the fiscal quarter ending June 30,
2016 and at least 2.00 to 1.00 for the two fiscal quarters ending September 30, 2016 and each period thereafter. EBITDA and Interest
Expense will be measured on a cumulative fiscal year to date basis for each of the fiscal quarters ending September 30, 2016,
and December 31, 2016. Commencing with the fiscal quarter ending March 31, 2017, EBITDA and Interest Expense shall be measured
with respect to the trailing four fiscal quarters. As used herein, “Interest Expense” means, for any period,
the interest expense of Borrowers and their subsidiaries on a consolidated basis in accordance with GAAP.

 

(j)
Section 7.11 of the Loan Agreement is hereby amended to add the following new subsections to read as follows:

 

(f)
Neither any Borrower nor any of its subsidiaries shall enter into any transaction of any kind with any affiliate of any Borrower
or any of its subsidiaries, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially
as favorable to such Borrower or such subsidiary as would be obtainable by such Borrower or such subsidiary at the time in a comparable
arm’s length transaction with a person or entity other than any of its affiliates.

 

(g)
No Borrower shall, directly or indirectly, use the proceeds of any loan or letter of credit issued hereunder, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity, to fund any
activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding,
is the subject of Sanctions, or in any other manner that will result in a violation by an individual or entity of Sanctions.

 

(h)
No Borrower shall, directly or indirectly, use the proceeds of any loan or letter of credit issued hereunder for any purpose which
would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption
legislation in other jurisdictions.

 

(k)
Section 7.13 of the Loan Agreement is hereby amended to add new subsection (d) to read as follows:

 

(d)
If any portion of any collateral securing Borrowers’ obligations hereunder is at any time located in an area identified
by the Federal Emergency Management Agency (or any successor agency) as a Special Flood Hazard Area with respect to which flood
insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act
thereto), then Borrowers shall (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood
insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to mandatory
federal flood insurance requirements and (ii) deliver to Bank evidence of such compliance in form and substance reasonably acceptable
to Bank.

 

    	 		 

    	 		 

    

 

(l)
Section 7.19 of the Loan Agreement is hereby amended and restated as follows:

 

7.19
Bank as Sole Depository

 

To
maintain Bank as its sole depository bank, including for the maintenance of all business, cash management, operating and administrative
deposit accounts.

 

(m)
Section 7 of the Loan Agreement is hereby amended to add new Section 7.21 to read as follows:

 

7.21
Mortgage and Title Requirements.

 

(a)
To secure full and complete payment and performance of the indebtedness hereunder, Borrowers shall grant a first priority lien
(subject to liens permitted hereunder) against the oil and gas properties of Borrower to the extent set forth below pursuant to
terms of one or more mortgages or deeds of trust. Borrowers covenant that the aggregate PV10 Value of all proved developed producing
and proved developed non-producing oil and gas properties of Borrowers subject to a lien in favor of Bank shall at all times be
not less than 80% of the aggregate PV10 Value of all proved developed producing and proved developed non-producing oil and gas
properties of Borrowers. Within thirty (30) days (or such longer time as determined by Bank) after Bank advises Borrowers of the
failure to so achieve such percentage and the percentage shortfall thereof, Borrowers shall execute such mortgages or deeds of
trust covering additional oil and gas properties sufficient to cover such shortfall.

 

(b)
Without limitation of any other requirements contained in this Agreement, Borrowers shall, upon request by Bank, deliver to Bank
title opinions and/or other title information and data acceptable to Bank regarding the oil and gas properties of Borrowers that
in the aggregate represent not less than 80% of the PV10 Value of all proved developed producing and proved developed non-producing
oil and gas properties of Borrowers evaluated in the most recent engineering report delivered to Bank and that are subject to
a lien in favor of Bank.

 

(n)
Section 9 of the Loan Agreement is hereby amended to add new Section 9.15 to read as follows:

 

9.15
Change of Control. The occurrence of any Change of Control. As used herein, “Change of Control” means
any event or series of events by which (a) any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other
than Nicholas C. Taylor or Howard Cox becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)), directly or indirectly, of 25% or more of the equity securities
of Mexco entitled to vote for members of the board of directors or equivalent governing body of Mexco on a fully-diluted basis
(and taking into account all such securities that such “person” or “group” has the right to acquire pursuant
to any option right); or (b) during any period of 24 consecutive months, a majority of the members of the board of directors or
other equivalent governing body of Mexco cease to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of
such election or nomination at least a majority of that board or equivalent governing body; or (c) Mexco shall cease for any reason
to have record and beneficial ownership, directly or indirectly, of 100% of the equity interests in Forman, Southwest Texas Disposal
Corporation (“SWTDC”) or TBO Oil & Gas, LLC (“TBO”) entitled to vote for the board of
directors, managers or other applicable governing body thereof.

 

(o)
The Loan Agreement is hereby amended to add an Exhibit A in the form of Exhibit A attached hereto.

 

    	 		 

    	 		 

    

 

SECTION
3. Conditions of Effectiveness. The amendments set forth in Section 2 of this Amendment, as well as any other terms
and conditions set forth herein, shall be effective as of date first above written, provided that Bank shall have received the
following, which, in each case, shall be in form and substance satisfactory to Bank:

 

(a)
a counterpart of this Amendment executed by each Borrower and Bank;

 

(b)
one or more security agreements covering all personal property assets of each Borrower;

 

(c)
one or more pledge agreements in form and substance satisfactory to Bank covering 100% of the equity interests in SWTDC and TBO
Oil & Gas, LLC (“TBO”), together with original stock certificates and stock powers executed in blank, as
applicable;

 

(d)
satisfactory results of UCC lien searches with respect to each Borrower;

 

(e)
a current organizational chart of Borrowers and their subsidiaries;

 

(f)
a succession plan for Borrowers in form and substance satisfactory to Bank in the event of the death of Nicholas C. Taylor;

 

(g)
all fees and expenses required to be paid pursuant to the Loan Agreement, including, without limitation, the fees and expenses
of Winstead PC; and

 

(h)
such other certificates, documents, consents or opinions as Bank reasonably may require.

 

SECTION
4. Post-Closing. Borrowers shall prepare or obtain, as the case may be, and deliver to Bank, (a) within 14 days of the
closing date of this Amendment, a perfection certificate in form and substance satisfactory to Bank regarding the assets of Borrowers;
and (b) on or before July 30, 2016, one or more deeds of trust or mortgages in form and substance satisfactory to Bank covering
such oil and gas properties of Borrowers as required under Section 7.21(a) of the Loan Agreement, as amended hereby.

 

SECTION
5. Limited Waiver. Subject to the terms and conditions hereof and upon satisfaction of the conditions set forth in Section
3, and effective as of December 31, 2015, Bank hereby agrees to the Waiver. Except as expressly stated herein, the Waiver
shall not be construed as a consent to or waiver of any default, event of default or breach which may now exist or hereafter occur
or any violation of any term, covenant or provision of the Loan Agreement or any other document executed in connection therewith.
All rights and remedies of Bank are hereby expressly reserved with respect to any such default, event of default or breach. The
Waiver does not affect or diminish the right of Bank to require strict performance by Borrower or each other guarantor of each
provision of the Loan Agreement and each other document executed in connection therewith to which it is a party, except as expressly
provided herein, and shall not be construed as a course of dealing between Bank and any Borrower or guarantor. All terms and provisions
of, and all rights and remedies of Bank under, the Loan Agreement and each other document executed in connection therewith shall
continue in full force and effect and are hereby confirmed and ratified in all respects.

 

SECTION
6. Acknowledgment and Ratification. As a material inducement to Bank to execute and deliver this Amendment, each Borrower
acknowledges and agrees that the execution, delivery, and performance of this Amendment shall, except as expressly provided herein,
in no way release, diminish, impair, reduce, or otherwise affect the obligations of any Borrower under the Loan Agreement and
each other document executed in connection therewith, which documents shall remain in full force and effect.

 

SECTION
7. Borrowers’ Representations and Warranties. As a material inducement to Bank to execute and deliver this
Amendment, each Borrower represents and warrants to Bank (with the knowledge and intent that Bank is relying upon the same in
entering into this Amendment) that, as of the date of its execution of this Amendment:

 

(a)
This Amendment, the Loan Agreement and each of the other documents executed in connection therewith to which such Borrower is
a party, have each been duly executed and delivered by such Borrower’s duly authorized officers and constitute the valid
and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms, except
as enforcement thereof may be limited by applicable bankruptcy and insolvency laws and by general principles of equity (regardless
of whether enforcement is considered in a proceeding at law or in equity).

 

(b)
The representations and warranties set forth in Section 6 of the Loan Agreement are true and correct in all material respects,
after giving effect to this Amendment, as if made on and as of the Tenth Amendment Effective Date (except to the extent such representations
and warranties relate solely to an earlier date, in which case, they are true and correct in all material respects as of such
date).

 

    	 		 

    	 		 

    

 

(c)
At the time of and after giving effect to this Amendment, no default or event of default under the Loan Agreement exists.

 

(d)
The execution, delivery and performance of this Amendment are within such Borrower’s corporate or limited liability company
power, as the case may be, have been duly authorized, are not in contravention of any law applicable to such Borrower or the terms
of such Borrower’s organizational documents and, except as have been previously obtained, do not require the consent or
approval of any governmental authority or any other person or entity except to the extent that such consent or approval is not
material to the transactions contemplated by this Amendment.

 

SECTION
8. Bank Makes No Representations or Warranties. By execution of this Amendment, Bank does not (a) make any representation
or warranty or assume any responsibility with respect to any statements, warranties, or representations made in or in connection
with the Loan Agreement or the other documents executed in connection therewith or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this Amendment, the Loan Agreement, the other documents executed in connection therewith
or any other instrument or document furnished pursuant thereto, or (b) make any representation or warranty or assume any responsibility
with respect to the financial condition of any Borrower or any other person or entity or the performance or observance by such
person or entity of any of their obligations under the Loan Agreement or the other documents executed in connection therewith,
or any other instrument or document furnished pursuant thereto.

 

SECTION
9. Effect of Amendment. This Amendment (a) except as expressly provided herein, shall not be deemed to be a consent to
the modification or a waiver of any other term or condition of the Loan Agreement or any other document executed in connection
therewith or any of the instruments or agreements referred to therein, (b) shall not prejudice any right or rights which Bank
may now or hereafter have under or in connection with the Loan Agreement or any other document executed in connection therewith,
and (c) except as expressly provided herein, shall not be deemed to be a waiver of any existing or future default or event of
default under the Loan Agreement or any other document executed in connection therewith.

 

SECTION
10. Release. As a material part of the consideration for Bank entering into this Amendment, each Borrower (collectively
“Releasor”) agrees as follows (the “Release Provision”):

 

(a)
RELEASOR HEREBY RELEASES AND FOREVER DISCHARGES BANK AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS, MANAGERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, AGENTS, ATTORNEYS, REPRESENTATIVES, PARENT CORPORATIONS, SUBSIDIARIES, AND AFFILIATES (HEREINAFTER ALL
OF THE ABOVE COLLECTIVELY REFERRED TO AS “RELEASED PARTIES”) JOINTLY AND SEVERALLY FROM ANY AND ALL CLAIMS,
COUNTERCLAIMS, DEMANDS, DAMAGES, DEBTS, AGREEMENTS, COVENANTS, SUITS, CONTRACTS, OBLIGATIONS, LIABILITIES, ACCOUNTS, OFFSETS,
RIGHTS, ACTIONS, AND CAUSES OF ACTION OF ANY NATURE WHATSOEVER OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING, WITHOUT LIMITATION,
ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION FOR CONTRIBUTION AND INDEMNITY, WHETHER ARISING AT LAW OR IN EQUITY, PRESENTLY POSSESSED,
WHETHER KNOWN OR UNKNOWN, WHETHER LIABILITY BE DIRECT OR INDIRECT, LIQUIDATED OR UNLIQUIDATED, PRESENTLY ACCRUED, WHETHER ABSOLUTE
OR CONTINGENT, FORESEEN OR UNFORESEEN, AND WHETHER OR NOT HERETOFORE ASSERTED (“CLAIMS”), WHICH RELEASOR MAY
HAVE OR CLAIM TO HAVE AGAINST ANY RELEASED PARTIES.

 

(b)
Releasor agrees not to sue any Released Parties or in any way assist any other person or entity in suing any Released Parties
with respect to any Claim released herein. The Release Provision may be pleaded as a full and complete defense to, and may be
used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted
in breach of the release contained herein.

 

(c)
Releasor acknowledges, warrants, and represents to Released Parties that:

 

(i)
Releasor has read and understands the effect of the Release Provision. Releasor has had the assistance of independent counsel
of its own choice, or has had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all
the terms of the Release Provision; and if counsel was retained, counsel for Releasor has read and considered the Release Provision
and advised Releasor to execute the same. Before execution of this Amendment, Releasor has had adequate opportunity to make whatever
investigation or inquiry it may deem necessary or desirable in connection with the subject matter of the Release Provision.

 

    	 		 

    	 		 

    

 

(ii)
Releasor is not acting in reliance on any representation, understanding, or agreement not expressly set forth herein. Releasor
acknowledges that Released Parties have not made any representation with respect to the Release Provision except as expressly
set forth herein.

 

(ii)
Releasor has executed this Amendment and the Release Provision thereof as its free and voluntary act, without any duress, coercion,
or undue influence exerted by or on behalf of any person or entity.

 

(iii)
Releasor is the sole owner of the Claims released by the Release Provision, and Releasor has not heretofore conveyed or assigned
any interest in any such Claims to any other person or entity.

 

(d)
Releasor understands that the Release Provision was a material consideration in the agreement of Bank to enter into this Amendment.

 

(e)
It is the express intent of Releasor that the release and discharge set forth in the Release Provision be construed as broadly
as possible in favor of the Released Parties so as to foreclose forever the assertion by Releasor of any claims released hereby
against Released Parties.

 

(f)
If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid,
illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.

 

SECTION
11. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE LOAN AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION THEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR
THEREOF.

 

SECTION
12. Miscellaneous. This Amendment shall be governed by, and construed in accordance with, the Law of the State of Texas.
The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof. This
Amendment may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all
of which together shall constitute one instrument. In proving this Amendment, it shall not be necessary to produce or account
for more than one such counterpart. This Amendment, and any documents required or requested to be delivered pursuant to Section
3 hereof, may be delivered by facsimile or pdf transmission of the relevant signature pages hereof and thereof, as applicable.

 

SECTION
13. Ratification. Each Borrower ratifies and acknowledges that the Loan Agreement and each other document executed in connection
therewith to which it is a party are valid, subsisting and enforceable.

 

[Remainder
of page intentionally left blank. Signature pages follow.]

 

    	 		 

    	 		 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the date and year first above written.

 

	 	BORROWERS:
	 	 
	 	MEXCO
    ENERGY CORPORATION
	 	 	 
	 	By:	/s/
    Nicholas C. Taylor
	 	 	Nicholas
    C. Taylor
	 	 	Chairman
    of the Board and
	 	 	Chief
    Executive Officer
	 	 	 
	 	FORMAN
    ENERGY CORPORATION
	 	 	 
	 	By:	/s/
    Nicholas C. Taylor
	 	 	Nicholas
    C. Taylor
	 	 	Chairman
    of the Board and
	 	 	Chief
    Executive Officer
	 	 	 
	 	SOUTHWEST
    TEXAS DISPOSAL CORPORATION
	 	 	 
	 	By:	/s/
    Nicholas C. Taylor
	 	 	Nicholas
    C. Taylor
	 	 	Chairman
    of the Board and
	 	 	Chief
    Executive Officer
	 	 	 
	 	TBO
    OIL & GAS, LLC
	 	 	 
	 	By:	/s/
    Nicholas C. Taylor
	 	 	Nicholas
    C. Taylor
	 	 	Chairman
    of the Board and
	 	 	Chief
    Executive Officer

 

	 	BANK:
	 	 
	 	BANK
    OF AMERICA, N.A.
	 	 	 
	 	By:	/s/
    Edna Aguilar Mitchell
	 	 	Edna
    Aguilar Mitchell
	 	 	Director

 

    	 		 

    	 		 

    

 

EXHIBIT
A

 

FORM
OF

COMPLIANCE
CERTIFICATE

 

Financial
Statement Date __________

 

To:
Bank of America, N.A.

Ladies
and Gentlemen:

 

Reference
is made to the Loan Agreement dated as of December 31, 2008 (as amended, restated, amended and restated, supplemented and/or otherwise
modified from time to time, the “Loan Agreement”) among Mexco Energy Corporation, Forman Energy Corporation,
Southwest Texas Disposal Corporation and TBO Oil & Gas, LLC (collectively “Borrowers” and each, individually,
a “Borrower”) and Bank of America, N.A. (“Bank”) (capitalized terms used herein have the
meanings attributed thereto in the Loan Agreement unless otherwise defined herein). The undersigned, in his/her capacity as an
authorized financial officer of Borrowers, certifies as follows:

 

[Use
following paragraph 1 for fiscal year-end financial statements]

 

1.
[Attached hereto as Schedule I are the consolidated financial statements of Borrowers and their consolidated subsidiaries
as at the fiscal year ended [__________], all in reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of a certified public accountant acceptable to Bank, which report and opinion has been prepared in accordance
with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit.]

 

[Use
following paragraph 1 for fiscal quarter-end financial statements]

 

1.
[Attached hereto as Schedule I are the consolidated financial statements of Borrowers and their consolidated subsidiaries
as at the fiscal quarter ended [__________], all in reasonable detail each of which fairly present in all material respects the
financial condition, results of operations, shareholders’ or members’ equity and cash flows of Borrowers and their
consolidated subsidiaries in accordance with GAAP, subject only to normal year-end adjustments and the absence of footnotes.]

 

2.
During such fiscal period, except as otherwise disclosed to Bank in writing, no default or event of default under the Loan Agreement
has occurred and is continuing.1

 

3.
Attached hereto as Schedule II are the computations of the financial covenants contained in Section 7.3 of the Loan
Agreement.

 

4.
Attached hereto a Schedule III is the accounts payable aging report required by Section 7.2(k) of the Loan Agreement.

 

 

1 If
unable to provide the foregoing certification, fully describe the reasons therefor, the circumstances thereof, the covenants or
conditions which have not been performed/observed and any action taken or proposed to be taken with respect thereto on Annex
A attached hereto.

 

    	 		 

    	 		 

    

 

Schedule
I to

Compliance
Certificate

 

CONSOLIDATED
FINANCIAL STATEMENTS

 

    	 		 

    	 		 

    

 

Schedule
II to

Compliance
Certificate

 

FINANCIAL
COVENANTS

 

	Section
    7.3(a) – Minimum EBITDA (calculated in accordance with the Loan Agreement)	 
	1.
    EBITDA	 	June 30, 2016	 	September 30, 2016	 	December 31, 2016	 	March 31, 2017	 	[Cumulative

    fiscal year to

    date][Trailing

    four fiscal

    quarters]	 
	a.
    Net income	 	$	—

	 	$	—	 	$	—	 	$	—	 	$	—	 
	b.
    Interest Expense	 	$	—

	 	$	—	 	$	—	 	$	—	 	$	—	 
	c.
    Income taxes	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	d.
    Depreciation	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	e.
    Depletion	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	f.
    Amortization	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	g.
    Extraordinary losses	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	h.
    Other non-recurring expenses	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	i.
    Income tax credits	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	j.
    Extraordinary gains	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	k.
    Gains on the sale of assets	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	l.
    Non-recurring, non-cash items increasing net income	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	2.
    EBITDA (Line 1.a + (Line 1.b + Line 1.c + Line 1.d + Line 1.e + Line 1.f + Line 1.g + Line 1.h) – (Line 1.i + Line 1.j
    + Line 1.k + Line 1.l))	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 
	3.
    Minimum EBITDA	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[100,000]	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[300,000]	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[500,000]	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[650,000]	 
	4.
    In compliance	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[Yes][No]	 
	Section
    7.3(b) – Minimum Interest Coverage Ratio (calculated in accordance with the Loan Agreement)	 
	5.
    Interest Coverage Ratio (Line 2 / Line 1(b))	 	 	 	 	 	 	 	 	 	 	 	 	 	 	_____
    to 1.00	 
	6.
    Minimum Interest Coverage Ratio	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[1.25]
    to 1.00	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[2.00]
    to 1.00	 
	7.
    In compliance	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[Yes][No]	 

 

    	 		 

    	 		 

    

 

Schedule
III to

 

Compliance
Certificate

 

ACCOUNTS
PAYABLE AGING REPORT

 

    	 		 

    	 		 

    

 

Annex
A to

Compliance
Certificate

 

DEFAULTS

 

    	 		 

    	 		 

    

 

IN
WITNESS WHEREOF, the undersigned, in his/her capacity as an authorized financial officer of Borrowers, has executed this certificate
for and on behalf of Borrowers and has caused this certificate to be delivered this _____ day of _______________, 201__.

 

	 	MEXCO
    ENERGY CORPORATION
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FORMAN
    ENERGY CORPORATION
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	SOUTHWEST
    TEXAS DISPOSAL CORPORATION
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	TBO
    OIL & GAS, LLC
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:Exhibit 4.1

 

CIM COMMERCIAL TRUST CORPORATION

Articles Supplementary 
 Series A Preferred Stock

 

CIM Commercial Trust Corporation, a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST:  Under a power contained in Article VI of the charter of the Corporation (the “Charter”) and Section 2-105 of the Maryland General Corporation Law, the Board of Directors of the Corporation (the “Board of Directors”) by duly adopted resolutions classified and designated 36,000,000 shares of authorized but unissued preferred stock, $0.001 par value per share, of the Corporation as shares of Series A Preferred Stock, with the following preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption, which, upon any restatement of the Charter, shall become part of Article VI of the Charter, with any necessary or appropriate renumbering or relettering of the sections or subsections hereof.

 

Series A Preferred Stock

 

1.                                      Designation and Number.  A series of Preferred Stock, designated the “Series A Preferred Stock” (the “Series A Preferred Stock”), is hereby established.  The par value of the Series A Preferred Stock is $0.001 per share. The number of shares of the Series A Preferred Stock shall be 36,000,000.

 

2.                                      Definitions.  In addition to the capitalized terms elsewhere defined herein, the following terms, when used herein, shall have the meanings indicated:

 

(a)                                 “Person” shall mean an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(b)                                 “NASDAQ” shall mean the Nasdaq Global Market.

 

(c)                                  “Stated Value” shall mean $25.00 per share, subject to adjustment pursuant to Section 13.

 

(d)                                 “Trading Day” shall mean, (i) if the Common Stock (as defined in the Charter) is listed or admitted to trading on NASDAQ, a day on which NASDAQ is open for the transaction of business, (ii) if the Common Stock is not listed or admitted to trading on NASDAQ but is listed or admitted to trading on another national securities exchange or automated quotation system, a day on which such national securities exchange or automated quotation system, as the case may be, on which the Common Stock is listed or admitted to trading is open for the transaction of business, or (iii) if the Common Stock is not listed or admitted to trading on any national securities exchange or automated quotation system, any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

(e)                                  “VWAP” shall mean, for any Trading Day, the volume-weighted

 

 

average price, calculated by dividing the aggregate value of Common Stock traded on NASDAQ during regular hours (price per share multiplied by number of shares traded) by the total volume (number of shares) of Common Stock traded on NASDAQ (or such other national securities exchange or automated quotation system on which the Common Stock is listed) for such Trading Day, or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day as determined by the Board of Directors in a commercially reasonable manner, using a volume-weighted average price method.

 

3.                                      Rank.  The Series A Preferred Stock shall, with respect to rights to the payment of dividends and other distributions and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (a) senior to all classes or series of Common Stock and any other class or series of stock of the Corporation the terms of which specifically provide that the holders of the Series A Preferred Stock are entitled to receive dividends and other distributions or amounts distributable upon the liquidation, dissolution or winding up of the Corporation in preference or priority to the holders of shares of such class or series (the “Junior Stock”); (b) on a parity with any class or series of stock of the Corporation the terms of which specifically provide that the holders of such class or series of stock and the Series A Preferred Stock are entitled to receive dividends and other distributions  and amounts distributable upon the liquidation, dissolution or winding up of the Corporation in proportion to their respective amounts of accumulated, accrued and unpaid dividends per share or liquidation preferences, on parity and without preference or priority of one over the other (the “Parity Stock”); and (c) junior to any class or series of stock of the Corporation the terms of which specifically provide that the holders of such class or series are entitled to receive dividends and other distributions or amounts distributable upon the liquidation, dissolution or winding up of the Corporation in preference or priority to the holders of the Series A Preferred Stock (the “Senior Stock”).

 

4.                                      Dividends.

 

(a)                                 Subject to the preferential rights of holders of any class or series of Senior Stock, holders of the Series A Preferred Stock shall be entitled to receive, when and as authorized by the Board of Directors and declared by the Corporation, out of funds legally available for the payment of dividends, preferential cumulative cash dividends at the rate of 5.5% per annum of the Stated Value (initially equivalent to a fixed annual rate of $1.375 per share).  The dividends on each share of Series A Preferred Stock shall be cumulative from (and including) the first date on which such share of Series A Preferred Stock is issued and shall be payable quarterly on the 15th day of the month following the quarter for which the dividend was declared or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  Any dividend payable on the Series A Preferred Stock for any partial dividend period shall be computed ratably on the basis of a 360-day year consisting of twelve 30-day months.  Dividends shall be payable in arrears to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date (the “Dividend Record Date”), which shall be the 5th day of the month in which the applicable Dividend Payment Date occurs.  The term “business day” shall mean any day, other than Saturday, Sunday, or a day on which banking institutions in the

 

2

 

State of New York are authorized or obligated by law to close, or a day which is or is declared a national or a New York state holiday.

 

(b)                                 Holders of Series A Preferred Stock shall not be entitled to any dividends on the Series A Preferred Stock in excess of the dividends provided for in Section 4(a).

 

(c)                                  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock that may be in arrears.

 

(d)                                 When dividends are not paid in full upon the Series A Preferred Stock or any other class or series of Parity Stock, or a sum sufficient for such payment is not set apart, all dividends declared upon the Series A Preferred Stock and any shares of Parity Stock shall be declared ratably in proportion to the respective amounts of dividends accumulated, accrued and unpaid on the Series A Preferred Stock and accumulated, accrued and unpaid on such Parity Stock (which shall not include any accumulation in respect of unpaid dividends for prior dividend periods if such Parity Stock does not have a cumulative dividend).

 

(e)                                  Except as set forth in the preceding paragraph, unless full cumulative dividends equal to the full amount of all accumulated, accrued and unpaid dividends on the Series A Preferred Stock have been, or are concurrently therewith, declared and paid, or declared and set apart for payment, for all past dividend periods,

 

(i)                                     no dividends or other distributions shall be declared and paid or declared and set apart for payment by the Corporation and no other distribution of cash or other property may be declared and made (other than dividends or distributions paid in shares of Junior Stock or options, warrants or rights to subscribe for or purchase shares of Junior Stock), directly or indirectly, by the Corporation with respect to any shares of Junior Stock or Parity Stock,

 

(ii)                                  nor shall any shares of Junior Stock or Parity Stock be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Stock made for purposes of an equity incentive or benefit plan of the Corporation) for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any shares of any such stock), directly or indirectly, by the Corporation (except by conversion into or exchange for shares of Junior Stock, or options, warrants or rights to subscribe for or purchase shares of Junior Stock).

 

(f)                                   Notwithstanding the foregoing provisions of this Section 4, the Corporation shall not be prohibited from (i) declaring or paying or setting apart for payment any dividend or other distribution on any shares of Junior Stock or Parity Stock, or (ii) redeeming, purchasing or otherwise acquiring any Junior Stock or Parity Stock, in each case, if such declaration, payment, setting apart for payment, redemption, purchase or other acquisition is necessary in order to maintain the

 

3

 

continued qualification of the Corporation as a real estate investment trust (“REIT”) under Section 856 of the Code (as defined in the Charter).

 

5.                                      Liquidation Preference.

 

(a)                                 Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after satisfaction of liabilities to creditors and subject to the preferential rights of holders of any class or series of Senior Stock, before any payment or distribution by the Corporation shall be made to or set apart for the holders of any shares of Junior Stock, the holders of shares of the Series A Preferred Stock shall be entitled to be paid out of the assets of the Corporation that are legally available for distribution to the stockholders, a liquidation preference equal to the Stated Value per share (the “Liquidation Preference”), plus an amount equal to all accumulated, accrued and unpaid dividends (whether or not declared) to and including the date of payment.  Until the holders of the Series A Preferred Stock have been paid the Liquidation Preference in full, plus an amount equal to all accumulated, accrued and unpaid dividends (whether or not earned or declared) to the date of final distribution to such holders, no payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up of the Corporation.  If upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the available assets of the Corporation, or proceeds thereof, distributable among the holders of the Series A Preferred Stock shall be insufficient to pay in full the above described Liquidation Preference and the liquidating payments on any shares of any class or series of Parity Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of the Series A Preferred Stock and any such Parity Stock ratably in the same proportion as the respective amounts that would be payable on such Series A Preferred Stock and any such Parity Stock if all amounts payable thereon were paid in full.  After payment of the full amount of the Liquidation Preference to which they are entitled, the holders of the Series A Preferred Stock shall have no right or claim to any of the remaining assets of the Corporation.

 

(b)                                 Upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of the Series A Preferred Stock and any Parity Stock, the holders of any classes or series of Junior Stock shall be entitled to receive any and all assets of the Corporation remaining to be paid or distributed in accordance with the terms of such classes or terms of Junior Stock, and the holders of the Series A Preferred Stock and any Parity Stock shall not be entitled to share therein.

 

(c)                                  The consolidation, merger or conversion of the Corporation with or into any other corporation, trust or entity or of any other corporation, trust or entity with or into the Corporation, or the sale or transfer of all or substantially all of the assets or business of the Corporation or a statutory share exchange, shall not be deemed to constitute a voluntary or involuntary liquidation, dissolution or winding up of the Corporation.

 

(d)                                 In determining whether a distribution (other than upon voluntary or

 

4

 

involuntary liquidation), by dividend, redemption or other acquisition of shares of stock of the Corporation or otherwise, is permitted under the Maryland General Corporation Law, amounts that would be needed, if the Corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of holders of shares of the Series A Preferred Stock shall not be added to the Corporation’s total liabilities.

 

6.                                      Redemption by the Corporation.

 

(a)                                 The Series A Preferred Stock is not redeemable at the option of the Corporation prior to the fifth anniversary of the date of original issuance of any given shares of Series A Preferred Stock.

 

(b)                                 From and after the fifth anniversary of the date of original issuance of any given shares of Series A Preferred Stock, subject to Section 9, the Corporation may, at its option, redeem such shares, in whole or from time to time, in part, at a redemption price equal to 100% of the Stated Value per share, plus all accumulated, accrued and unpaid dividends, if any, to and including the date fixed for redemption (the “Corporation Redemption Date”) payable in cash or equal value through the issuance of Common Stock.

 

(c)                                  The Corporation Redemption Date shall be selected by the Corporation and shall be no fewer than 30 nor more than 60 days after the date on which the Corporation sends the notice of redemption.

 

(d)                                 If full cumulative dividends on all outstanding shares of Series A Preferred Stock have not been declared and paid or declared and set apart for payment for all past dividend periods, no shares of the Series A Preferred Stock may be redeemed pursuant to this Section 6, unless all outstanding shares of the Series A Preferred Stock are simultaneously redeemed, and neither the Corporation nor any of its affiliates may purchase or otherwise acquire shares of the Series A Preferred Stock otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of the Series A Preferred Stock.

 

(e)                                  If fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed pursuant to this Section 6, the Corporation shall select those shares to be redeemed pro rata or in such manner as the Board of Directors may determine.

 

(f)                                   Written notice as to the redemption of any shares of Series A Preferred Stock pursuant to this Section 6 shall be given by first class mail, postage pre-paid, to each such record holder of such shares of Series A Preferred Stock at the respective mailing addresses of each such holder as the same shall appear on the stock transfer records of the Corporation.  No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any such shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given.

 

(g)                                  In addition to any information required by law or by the applicable

 

5

 

rules of any exchange upon which Series A Preferred Stock may then be listed or admitted to trading, such notice shall state: (i) the Corporation Redemption Date; (ii) the redemption price payable on the Corporation Redemption Date, including without limitation a statement as to whether or not accumulated, accrued and unpaid dividends shall be payable as part of the redemption price, or payable on the next Dividend Payment Date to the record holder at the close of business on the relevant Dividend Record Date as described in Section 9(b) below; (iii) whether the redemption price will be paid in cash or Common Stock; and (iv) that dividends on the shares of Series A Preferred Stock to be redeemed will cease to accrue on such Corporation Redemption Date.  If less than all the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder also shall specify the number of shares of Series A Preferred Stock held by such holder to be redeemed.

 

(h)                                 If notice of redemption of any shares of Series A Preferred Stock has been given and if the funds necessary for such redemption have been set apart by the Corporation for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption, then, from and after the Corporation Redemption Date, dividends will cease to accrue on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall be redeemed in accordance with the notice and shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the cash or Common Stock payable upon such redemption without interest thereon.  No further action on the part of the holders of such shares shall be required.

 

(i)                                     Subject to applicable law and the limitation on purchases when dividends on the Series A Preferred Stock are in arrears, the Corporation may, at any time and from time to time, purchase or otherwise acquire any shares of Series A Preferred Stock in the open market, by tender or by private agreement.

 

7.                                      Redemption at the Option of a Holder.

 

(a)                                 Subject to the provisions in this Section 7 and Section 9, each holder of Series A Preferred Stock may deliver written notice to the Corporation and its agent (“Holder Redemption Notice”) requesting that the Corporation redeem each share of Series A Preferred Stock held by such holder at a redemption price determined as follows:

 

(i)                                     Beginning on the second anniversary of the date of original issuance of any given shares of Series A Preferred Stock until but excluding the fifth anniversary from the date of original issuance of such shares, the holder will have the right to require the Corporation to redeem such shares of Series A Preferred Stock at a redemption price equal to 90% of the Stated Value, plus all accumulated, accrued and unpaid dividends, if any, to the Holder Redemption Date (as defined below).

 

(ii)                                  From and after the fifth anniversary from the date of original issuance of any given shares of Series A Preferred Stock, the holder will have

 

6

 

the right to require the Corporation to redeem such shares at a redemption price equal to 100% of the Stated Value, plus all accumulated, accrued and unpaid dividends, if any, to the Holder Redemption Date (as defined below).

 

(b)                                 The Corporation’s obligation to redeem any shares of Series A Preferred Stock is limited to the extent that (i) the Corporation does not have sufficient funds available to fund any such redemption, in which case the Corporation will be required to redeem with shares of Common Stock, or (ii) the Corporation is restricted by applicable law, the Corporation’s charter or contractual obligations from making such redemption.

 

(c)                                  The “Holder Redemption Date” shall be on a date selected by the Corporation that is no later than 45 days after the Holder Redemption Notice is received by the Corporation.

 

(d)                                 The Holder Redemption Notice shall specify the number of shares of Series A Preferred Stock to be redeemed.

 

(e)                                  If a Holder Redemption Notice has been given to the Corporation and if the funds necessary to pay for the related redemption have been set apart by the Corporation for the benefit of the holder delivering such Holder Redemption Notice, then, as of the Holder Redemption Date, dividends will cease to accrue on the shares of Series A Preferred Stock subject to redemption, such shares of Series A Preferred Stock shall be redeemed and shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the cash or Common Stock payable upon such redemption without interest thereon. No further action on the part of the holder of such shares shall be required.

 

8.                                      Optional Redemption Following Death of a Holder.

 

(a)                                 Subject to the provisions in this Section 8, beginning on the date of original issuance of the Series A Preferred Stock to be redeemed and ending on the second anniversary of such issuance, the Corporation will redeem shares of Series A Preferred Stock held by a natural person upon his or her death at the written request of the holder’s estate (the “Estate Redemption Notice”) at a redemption price equal to the Stated Value, plus accrued and unpaid dividends thereon, if any, through and including the Estate Redemption Date (defined below); provided, however, that the Corporation’s obligation to redeem any shares of Series A Preferred Stock is limited to the extent that (i) the Corporation does not have sufficient funds available to fund any such redemption, in which case the Corporation will be required to redeem with shares of Common Stock, or (ii) the Corporation is restricted by applicable law, the Corporation’s charter or contractual obligations from making such redemption.

 

(b)                                 The redemption price payable pursuant to any redemption pursuant to this Section 8 shall be paid (i) in cash or (ii) on or after the first anniversary of the original issuance of the Series A Preferred Stock to be redeemed, at the election of the Corporation, in shares of Common Stock, based on the VWAP of the Common Stock

 

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for the 60 Trading Days immediately preceding the applicable redemption date.

 

(c)                                  The “Estate Redemption Date” shall be on a date selected by the Corporation that is no later than 45 days after the Estate Redemption Notice is received by the Corporation.

 

(d)                                 If an Estate Redemption Notice has been given to the Corporation and if the funds necessary to pay for the related redemption have been set apart by the Corporation for the benefit of the estate delivering such Estate Redemption Notice, then, as of the redemption date of the Series A Preferred Stock, dividends will cease to accrue on the shares of Series A Preferred Stock subject to redemption, such shares of Series A Preferred Stock shall be redeemed and shall no longer be deemed outstanding and all rights of such shares held by such holder’s estate will terminate, except the right to receive the cash or Common Stock payable upon such redemption without interest thereon. No further action on the part of such holder’s estate shall be required.

 

9.                                      Redemption Price.

 

(a)                                 The redemption price payable pursuant to any redemption pursuant to Section 6, Section 7 or Section 8(b)(ii) shall be paid in cash or, at the sole discretion of the Corporation, in shares of Common Stock, based on the VWAP of the Common Stock for the 60 Trading Days immediately preceding the applicable redemption date.

 

(b)                                 In the event of any redemption pursuant to Section 6, Section 7 or Section 8, if the applicable redemption date occurs after a Dividend Record Date and on or prior to the related Dividend Payment Date, the dividend payable on such Dividend Payment Date in respect of such shares called for redemption shall be payable on such Dividend Payment Date to the holders of record at the close of business on such Dividend Record Date, and shall not be payable as part of the redemption price for such shares.

 

10.                               No Fractional Shares. The Corporation shall not issue fractional shares of Common Stock upon any redemption pursuant to Section 6, Section 7 or Section 8, but in lieu of fractional shares, the Corporation shall round down to the nearest whole number of shares of Common Stock to be issued.

 

11.                               Appointment of Transfer Agent; Mechanics of Redemption.

 

(a)                                 The Corporation shall maintain or cause to be maintained a register in which, subject to such reasonable regulations as it may prescribe, the Corporation shall provide for the registration of shares of Series A Preferred Stock and of transfers of shares of Series A Preferred Stock for the purpose of registering shares of Series A Preferred Stock and of transfers of shares of Series A Preferred Stock as herein provided.  The initial registrar and transfer agent for the Series A Preferred Stock shall be American Stock Transfer and Trust Company. The Corporation may appoint one or more additional transfer agents as it shall determine.  The Corporation may change the transfer agent without prior notice to any holder.

 

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(b)                                 If the Corporation elects to pay the redemption price in Common Stock pursuant to Section 9(a), the Corporation shall cause the transfer agent for the Common Stock to, as soon as practicable, but not later than three (3) business days after the applicable redemption date, register the number of shares of Common Stock to which such holder shall be entitled as a result of such redemption.  The Person or Persons entitled to receive the shares of Common Stock issuable upon such redemption shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of the applicable redemption date.

 

12.                               Status of Shares.

 

(a)                                 All shares of Common Stock that may be issued upon redemption of shares of Series A Preferred Stock shall be validly issued, fully paid and nonassessable.

 

(b)                                 Any shares of Series A Preferred Stock that shall at any time have been redeemed pursuant to Section 6, Section 7 or Section 8 or otherwise acquired by the Corporation shall, after such redemption or acquisition, have the status of authorized but unissued Preferred Stock (as defined in the Charter), without designation as to class or series until such shares are once more classified and designated as part of a particular class or series by the Board of Directors.

 

13.                               Adjustments.  If a redemption of any shares of Series A Preferred Stock pursuant to Section 6, Section 7 or Section 8 occurs less than 60 Trading Days after the Corporation: (i) declaring a dividend or making a distribution on the Common Stock payable in Common Stock, (ii) subdividing or splitting the outstanding Common Stock, (iii) combining or reclassifying the outstanding Common Stock into a smaller number of shares or (iv) consolidating with, or merging with or into, any other Person, or engaging in any reorganization, reclassification or recapitalization that is effected in such a manner that the holders of Common Stock are entitled to receive stock, securities, cash or other assets with respect to or in exchange for Common Stock (other than as a cash dividend or distribution declared by the Corporation), the Stated Value shall be adjusted so that the redemption of the Series A Preferred Stock less than 60 Trading Days after such event shall entitle the holder to receive the aggregate number of shares of Common Stock or cash which, if the Series A Preferred Stock had been redeemed immediately prior to such event, such holder would have owned upon such redemption and been entitled to receive by virtue of such dividend, distribution, subdivision, split, combination, consolidation, merger, reorganization, reclassification or recapitalization.

 

14.                               Voting Rights.  Holders of the Series A Preferred Stock shall not have any voting rights.

 

15.                               Conversion.  The Series A Preferred Stock is not convertible into or exchangeable for any other property or securities of the Corporation.

 

SECOND:  The shares of Series A Preferred Stock have been classified and designated by the Board of Directors under the authority contained in the Charter.

 

THIRD:  These Articles Supplementary have been approved by the Board of Directors

 

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in the manner and by the vote required by law.

 

FOURTH:  The undersigned acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.

 

[Signatures on following page]

 

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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed in its name and on its behalf by its Vice President and attested to by its Chief Financial Officer on this 28 day of June, 2016.

 

 

	
ATTEST:
    	
 
    	
CIM COMMERCIAL TRUST CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ David Thompson
    	
 
    	
By:
    	
/s/ Eric Rubenfeld
    
	
 
    	
David Thompson
    	
 
    	
 
    	
Eric Rubenfeld
    
	
 
    	
Chief   Financial Officer
    	
 
    	
 
    	
Vice   President
    

 

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