Limited Waiver and Amendment No. 5 to Credit Agreement, dated as of June 23, 2020, among Berry Petroleum Company, LLC, as borrower, Berry Corporation (bry), as parent, Wells Fargo Bank, National Association, as administrative agent and the lenders and other parties thereto

This Limited Waiver and Amendment No. 5 to Credit Agreement (this “Amendment”) dated as of June 23, 2020 (the “Effective Date”), is among Berry Petroleum Company, LLC, a Delaware limited liability company (the “Borrower”), Berry Corporation (bry), a Delaware corporation (the “Parent” and the “Guarantor”), Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”) and as issuing lender (in such capacity, the “Issuing Lender”), and the Lenders (as defined below).

A.    Reference is made to that certain Credit Agreement dated as of July 31, 2017 (as amended by that certain Limited Waiver and Amendment No. 1 to Credit Agreement dated as of November 16, 2017, Amendment No. 2 to Credit Agreement dated as of March 8, 2018, Amendment No. 3 to Credit Agreement dated as of November 14, 2018, and Amendment No. 4 to Credit Agreement dated as of December 17, 2019, and as further amended, restated, supplemented, or otherwise modified from time to time, including by this Amendment, the “Credit Agreement”) among the Borrower, the Parent, the Administrative Agent, the Issuing Lender and the financial institutions party thereto as lenders from time to time (the “Lenders”).

B.    Pursuant to Section 5.2(e)(ii) of the Credit Agreement, the Borrower is required to deliver a report with respect to its compliance with Section 6.15 of the Credit Agreement within three Business Days of the end of each calendar month. The Borrower has failed to deliver such required reports for the calendar months ended November, 2019 through May, 2020 (the “Hedge Certificate Default”), which has resulted in a Default that, if unremedied, would result in an Event of Default under Section 7.1(c) of the Credit Agreement, and has requested that the Majority Lenders waive the Hedge Certificate Default and each Default or Event of Default that may have arisen out of a representation or warranty made by the Borrower that no Default had occurred and was continuing (but only to the extent such representation or warranty was untrue solely due to the Hedge Certificate Default) (the “Representation Defaults” and together with the Hedge Certificate Default, the “Subject Defaults”).

C.    Subject to the terms and conditions set forth herein, (i) the parties hereto wish to amend the Credit Agreement as provided herein, (ii) the Lenders party hereto have agreed to waive the Subject Defaults permanently, and (iii) the Lenders party hereto (which constitute at least the Required Lenders) have agreed to decrease the Borrowing Base to $200,000,000 in accordance with the regularly scheduled Borrowing Base redetermination process described in Section 2.2(b) of the Credit Agreement, subject to the established Aggregate Elected Commitment Amount of $200,000,000.

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

Section 1.Defined Terms. As used in this Amendment, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein. Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary.

Section 2.    Other Definitional Provisions. Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Amendment, unless otherwise specified. The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Amendment shall refer to this Amendment as a whole and not to any particular provision of this Amendment. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Amendment as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Amendment and shall not be used in the interpretation of any provision of this Amendment.

Section 3.    Waiver.

(a)    The Borrower hereby acknowledges the existence and continuation of the Subject Defaults.

(b)    The Lenders hereby agree, subject to the terms and conditions of this Amendment, to waive permanently the Subject Defaults. The limited waiver by the Lenders described in this Section 3(b) is contingent upon the satisfaction of the conditions precedent set forth below in this Amendment and is limited to the Subject Defaults. Such waiver is limited to the extent described herein and shall not be construed to be a consent to any other (existing or future) non-compliance with, or a permanent waiver of, Section 5.2(e)(ii) of the Credit Agreement, or any other terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or in any of the other Credit Documents. The Administrative Agent and the Lenders reserve the right to exercise any rights and remedies available to them in connection with any other present or future Defaults or Events of Default with respect     to the Credit Agreement or any other provision of any Credit Document. The Credit Parties acknowledge that any failure of the Administrative Agent or any Lender at any time or times hereafter to require strict performance by any Credit Party of any provision of the Credit Agreement and each other Credit Document shall not waive, affect or diminish any right of the Administrative Agent or any Lender to thereafter demand strict compliance therewith.

Section 4.    Borrowing Base. Subject to the satisfaction of the conditions below, the Borrowing Base is hereby redetermined to be $200,000,000 effective as of the Effective Date, and such Borrowing Base shall remain in effect at that level until the Borrowing Base is next redetermined or adjusted pursuant to the terms of the Credit Agreement. For the avoidance of doubt, the Borrowing Base redetermination set forth in this Section 4 shall constitute the regularly scheduled Semi-Annual Redetermination to be made on or about April 1, 2020 pursuant to Section 2.2(b)(i) of the Credit Agreement. The parties hereto hereby acknowledge and agree that any delay in timing in connection with the redetermination of the Borrowing Base hereunder shall not constitute any course of dealing or other basis for altering any obligation of the Credit Parties or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the other Credit Documents, all of which are expressly reserved by the Administrative Agent and the Lenders.

Section 5.    Amendments to Credit Agreement.

(a)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by adding the following new defined terms in the appropriate alphabetical order therein as follows:

(b)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by restating the definition of “Aggregate Elected Commitment Amounts” in its entirety as follows:

(c)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by restating the definition of “Availability” in its entirety as follows:

(d)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by restating the definition of “Borrowing Base Deficiency” in its entirety as follows:

(e)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by restating the definition of “Investment Conditions” in its entirety as follows:

(f)    Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended by restating the definition of “Unused Commitment Amount” in its entirety as follows:

(g)    Article 1 of the Credit Agreement (Definitions and Accounting Terms) is hereby amended by adding the following new Section 1.6 at the end of such Article as follows:

(h)    Section 2.3(a)(i) of the Credit Agreement (Commitment for Letters of Credit) is hereby restated in its entirety as follows:

(i)    Section 2.5(c)(i) of the Credit Agreement (Prepayments) is hereby amended by adding the words “or any increase in the Borrowing Limitation” inside the first parenthetical therein immediately following the words “under Section 5.12.”

(j)    Section 2.5 of the Credit Agreement (Prepayments) is hereby amended by adding the following new clauses (g) and (h) at the end of such Section as follows:

(k)    Section 3.2 of the Credit Agreement (Conditions Precedent to Each Borrowing and to Each Issuance after the Closing Date, Extension or Renewal of a Letter of Credit) is hereby amended by adding the following new clause (e) at the end of such Section as follows:

(l)    Article 4 of the Credit Agreement (Representations and Warranties) is hereby amended by adding the following new Section 4.29 at the end of such Article as follows:

(m)    Section 5.2 of the Credit Agreement (Reporting.) is hereby amended by (i) deleting “; and” at the end of clause (t) thereto, (ii) replacing the period at the end of clause (u) with “;”, and (iii) adding the following new clauses (v) and (w) at the end of such Section as follows:

(n)    Article 5 of the Credit Agreement (Affirmative Covenants) is hereby amended by adding the following new Section 5.21 at the end of such Article as follows:

(o)    Section 6.9(b)(i) of the Credit Agreement (Restricted Payments; Payments in Respect of Specified Additional Debt) is hereby restated in its entirety as follows:

(p)    Section 6.9(c) of the Credit Agreement (Restricted Payments; Payments in Respect of Specified Additional Debt) is hereby restated in its entirety as follows:

(q)    Article 8 of the Credit Agreement (The Administrative Agent) is hereby amended by adding a new Section 8.11 at the end of such Article as follows:

(r)    Article 10 of the Credit Agreement (Miscellaneous) is hereby amended by adding the following new Section 10.22 at the end of such Article as follows:

(s)    Schedule I to the Credit Agreement (Commitments, Contact Information) shall be amended and restated in its entirety as set forth on Schedule I hereto.

(t)    Exhibit F to the Credit Agreement (Form of Notice of Borrowing) shall be amended and restated in its entirety as set forth on Exhibit F hereto.

Section 6.    Representations and Warranties. Each Credit Party represents and warrants that, as of the date hereof, after giving effect to the waiver provided in Section 3(b) hereof: (a) the representations and warranties of such Credit Party contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the Effective Date as if made on and as of such date, except that any representation and warranty which by its terms is made as of a specified date is true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) only as of such specified date; (b) no Default has occurred and is continuing; (c) the execution, delivery and performance of this Amendment are within such Credit Party’s powers and have been duly authorized by all necessary corporate, limited liability company, or partnership action; (d) each of this Amendment and the Credit Agreement, as amended hereby, constitutes the legal, valid, and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity whether applied by a court of law or equity; (e) the execution, delivery and performance of this Amendment by such Credit Party do not require any authorization or approval or other action by, or any notice or filing with, any Governmental Authority other than those that have been obtained or provided; and (f) the Liens under the Security Documents are valid and subsisting and secure the obligations under the Credit Documents.

Section 7.    Conditions to Effectiveness. This Amendment shall become effective on the Effective Date and enforceable against the parties hereto upon the occurrence of the following conditions precedent:

(a)    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 the Lenders constituting Required Lenders.

(b)    The Administrative Agent shall have received (i) duly executed Mortgages (or supplements to existing Mortgages) encumbering not less than 85% of PV10 of the Credit Parties’ Proven Reserves and not less than 85% of PV10 of all the Credit Parties’ PDP Reserves, in each case, as evaluated in the most recently delivered Engineering Report, and (ii) title information reasonably satisfactory to it on at least 85% of the PV10 of each of the Proven Reserves evaluated in the most recently delivered Engineering Report

(c)    The Borrower shall have paid to the Administrative Agent all reasonable out-of-pocket costs and expenses that have been invoiced and are payable pursuant to Section 10.1 of the Credit Agreement.

(d)    The Administrative Agent shall have received such other documents, governmental certificates, agreements, and lien searches as the Administrative Agent or any Lender may reasonably request.

(e)    After giving effect to the wavier provided in Section 3(b) hereof, the representations and warranties in this Amendment shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such date except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case it shall have been true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date, and no Default shall have occurred and be continuing.

(f)    To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation (as defined in Section 5), the Borrower shall have delivered to the Administrative Agent a Beneficial Ownership Certification (as defined in Section 5) with respect to the Borrower.

Section 8.    Acknowledgments and Agreements.

(a)    The parties hereto hereby acknowledge and agree that no amendment, waiver, or consent to the Credit Agreement shall, unless in writing and signed by all Lenders, amend the definition of “Borrowing Limitation” or this Section 8(a). Each Lender, whether or not a party hereto, is a third-party beneficiary of this Section 8(a).

(b)    Each Credit Party acknowledges that on the date hereof all outstanding Secured Obligations are payable in accordance with their terms and each Credit Party waives any set-off, counterclaim, recoupment, defense, or other right, in each case, existing on the date hereof, with respect to such Secured Obligations. Each party hereto does hereby adopt, ratify, and confirm the Credit Agreement, as amended hereby, and acknowledges and agrees that the Credit Agreement, as amended hereby, is and remains in full force and effect, and each Credit Party acknowledges and agrees that its respective liabilities and obligations under the Credit Agreement, as amended hereby, and the other Credit Documents are not impaired in any respect by this Amendment.

(c)    The Administrative Agent, the Issuing Lender, and the Lenders hereby expressly reserve all of their rights, remedies, and claims under the Credit Documents. Nothing in this Amendment shall constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Credit Documents (other than as expressly set forth in Section 3(b) hereof), (ii) any of the agreements, terms or conditions contained in any of the Credit Documents, (iii) any rights or remedies of the Administrative Agent, the Issuing Lender, or any Lender with respect to the Credit Documents, or (iv) the rights of the Administrative Agent, the Issuing Lender, or any Lender to collect the full amounts owing to them under the Credit Documents.

(d)    This Amendment is a Credit Document for the purposes of the provisions of the other Credit Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment shall be a Default or Event of Default, as applicable, under the Credit Agreement.

Section 9.    Reaffirmation of the Guaranty. Each Guarantor hereby ratifies, confirms, acknowledges and agrees that its obligations under the applicable Guaranty are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all the Guaranteed Obligations (as defined in the applicable Guaranty), and its execution and delivery of this Amendment does not indicate or establish an approval or consent requirement by such Guarantor under the applicable Guaranty, in connection with the execution and delivery of amendments, consents or waivers to the Credit Agreement or any of the other Credit Documents.

Section 10.    Reaffirmation of Liens. Each Credit Party (a) reaffirms the terms of and its obligations (and the security interests granted by it) under each Security Document to which it is a party, and agrees that each such Security Document will continue in full force and effect to secure the Secured Obligations as the same may be amended, supplemented, or otherwise modified from time to time, and (b) acknowledges, represents, warrants and agrees that the Liens and security interests granted by it pursuant to the Security Documents are valid, enforceable and subsisting and create an Acceptable Security Interest to secure the Secured Obligations.

Section 11.    Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 12.    Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

Section 13.    Severability. In case one or more of the provisions of this Amendment shall for any reason be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein or in the other Credit Documents shall not be affected or impaired thereby.

Section 14.    Governing Law. This Amendment shall be deemed to be a contract made under and shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York).

Section 15.    Entire Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, THE NOTES, AND THE OTHER CREDIT DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

EXECUTED to be effective as of the date first above written.

BORROWER AND GUARANTOR:

By: /s/ Cary Baetz            

Title:    Chief Financial Officer

By: /s/ Cary Baetz             

Name:    Cary Baetz

Title: Chief Financial Officer

LENDER/LENDER:

NATIONAL ASSOCIATION,

as Administrative Agent and a Lender

By: /s/ Jonathan Herrick        

Name: Jonathan Herrick

Title: Director

LENDERS:

BANK OF MONTREAL, as a Lender

By: /s/ Gumaro Tijerina        

Name: Gumaro Tijerina

Title: Managing Director

KEYBANK NATIONAL ASSOCIATION, as a Lender

By: /s/ George E. McKean        

Name: George E. McKean

Title: Senior Vice President

ABN AMRO CAPITAL USA LLC,

as a Lender

By: /s/ Darrell Holley            

Name: Darrell Holley

Title: Managing Director

By: /s/ Elizabeth Johnson        

Name: Elizabeth Johnson

Title: Executive Director

BOKF, N.A., as a Lender

By: /s/ Sonja Borodko            

Name: Sonja Borodko

Title: SVP

CAPITAL ONE, NATIONAL ASSOCIATION,

as a Lender

 

By: /s/ Christopher Kuna        

Name: Christopher Kuna

Title: Senior Director

CITIZENS BANK, N.A., as a Lender

By: /s/ Kelly Graham            

Name: Kelly Graham

Title: Vice President

CATHAY BANK, as a Lender

By: /s/ Dale T. Wilson        

Name: Dale T. Wilson

Title: Senior Vice President

ING CAPITAL LLC, as a Lender

By: /s/ Juli Bieser            

Name: Juli Bieser

Title: Managing Director

By: /s/ Lauren Gutterman        

Name: Lauren Gutterman

Title: Vice President

MORGAN STANLEY BANK, N.A., as a Lender

By: /s/ Jake Dowden            

Name: Jake Dowden

Title: Authorized Signatory

UBS AG, STAMFORD BRANCH, as a Lender

By: /s/ Darlene Arias            

Name: Darlene Arias

Title: Director

By: /s/ Anthony Joseph        

Name: Anthony Joseph

Title: Associate Director

BP ENERGY COMPANY, as a Lender

By: /s/ Mark S. Galicia        

Name: Mark S. Galicia

Title: Attorney-In-Fact

GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender

By: /s/ Jamie Minieri            

Name: Jamie Minieri

Title: Authorized Signatory

MACQUARIE BANK LIMITED, as a Lender

By: /s/ Lynette Ladhams        

Name: Lynette Ladhams

Title: Associate Director

CGM Legal

IBERIA BANK, as a Lender

By: /s/ W. Bryan Chapman        

Name: W. Bryan Chapman

Title: Market President-Energy Lending

ARVEST BANK, as a Lender

By: /s/ S. Matt Condry        

Name: S. Matt Condry

Title: V.P. Commercial Banking

Wells Fargo Bank, National Association, as Administrative Agent

1700 Lincoln St., 6th Floor

Denver, CO 80203

Attn: [__]

[303 ###-###-####]

(a)The undersigned, Berry Petroleum Company, LLC, a Delaware limited liability company ("Borrower"), refers to the Credit Agreement dated as of July [31], 2017 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the "Credit Agreement," the defined terms of which are used in this Notice of Borrowing as defined therein unless otherwise defined in this Notice of Borrowing) among the Borrower, Berry Petroleum Corporation, a Delaware corporation (the "Parent"), the lenders party thereto (the "Lenders"), and Wells Fargo Bank, National Association, as administrative agent and as issuing lender, and hereby gives you irrevocable notice pursuant to Section 2.4(a) of the Credit Agreement that the undersigned hereby requests a Borrowing (the "Proposed Borrowing"), and in connection with that request sets forth below the information relating to such Proposed Borrowing as required by the Credit Agreement:

The Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:

made as of a specified date, which shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) only as of such specified date¹;