Forbearance Agreement

Contract Categories: Business Finance - Forbearance Agreements
EX-10.22 2 h59617exv10w22.htm FORBEARANCE AGREEMENT exv10w22
Exhibit 10.22
FORBEARANCE AGREEMENT
     This FORBEARANCE AGREEMENT (this “Agreement”), dated as of August 13, 2008, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), FOOTHILLS RESOURCES, INC., a Nevada corporation (“Parent”) and each of Parent’s Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”). All terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement (as hereinafter defined).
RECITALS
A.      The Agent, the Lenders and the Borrowers are parties to that certain Credit Agreement, dated as of December 13, 2007, as amended by that First Amendment to Credit Agreement, dated as of May 15, 2008 and as further amended by that Limited Waiver and Second Amendment to Credit Agreement, dated as of May 15, 2008 (as the same may be amended, extended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
B.      The Borrowers acknowledge that certain Events of Default have occurred and are continuing and will continue to exist under the Credit Agreement (referred to herein as the “Specified Defaults”) resulting from (i) the Borrowers’ failure to maintain a minimum Asset Coverage Ratio of at least 1.60 to 1.0 for the quarter ending June 30, 2008, in violation of Section 6.14(a) of the Credit Agreement and (ii) the Borrowers’ failure to have a Leverage Ratio of less than or equal to 6.25:1.00 for the quarter ending June 30, 2008, in violation of Section 6.14(c) of the Credit Agreement.
C.      The Borrowers have requested that the Agent and Lenders forbear until the Termination Date (as defined below) from exercising their rights and remedies arising as a result of the occurrence of the Specified Defaults. The Agent and the Lenders are willing to grant such forbearance in accordance with the terms and subject to the conditions of this Agreement.
     NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations, warranties and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS:
     1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the same meanings ascribed to them in the Credit Agreement. In addition, the following terms, for the purposes of this Agreement, shall have the following meanings:
          (a) “Effective Date” means the date the conditions set forth in Section 5 have been satisfied.
          (b) “Forbearance Period” means the period commencing on the Effective Date and continuing through and including the Termination Date, unless earlier terminated pursuant to the terms and provisions of this Agreement.
          (c) “Forbearance Fee” means, (i) initially a forbearance fee (the “Initial Forbearance Fee”) in an aggregate amount of $150,000 payable pursuant to Section 5(e), and (ii) an additional


 

forbearance fee of $225,000 (the “Additional Forbearance Fee”), payable pursuant to Section 4(e). In connection with the Initial Forbearance Fee, $50,000 shall be payable to the Revolving Loan Lenders and $100,000 shall be payable to Term Loan Lenders. In connection with the Additional Forbearance Fee, $75,000 shall be payable to the Revolving Loan Lenders and $150,000 shall be payable to the Term Loan Lenders. The Forbearance Fee shall be fully earned as of the Effective Date and shall be nonrefundable. The parties hereto acknowledge that the Forbearance Fee is due and payable as of the Effective Date but that the Required Lenders have agreed to defer payment of the Additional Forbearance Fee so long as payment of the Additional Forbearance Fee is not required pursuant to Section 4(e).
          (d) “Termination Date” means 5:00 p.m. (Eastern Standard Time) on September 15, 2008.
          (e) “Termination Event” means the occurrence of any of the following: (i) any representation or warranty made or deemed made by any Borrower in this Agreement shall be false, misleading or erroneous in any material respect when made or deemed to have been made (or if such representation or warranty is qualified by materiality or a Material Adverse Change qualification, false, misleading or erroneous in any respect), (ii) any Borrower shall fail to perform, observe or comply timely with any covenant, agreement or term contained in this Agreement, (iii) any Default or Event of Default, other than the Specified Defaults, shall occur under the Credit Agreement or any of the other Loan Documents, or (iv) any event or condition shall occur after the Effective Date which shall constitute a Material Adverse Change.
     2. Limited Forbearance by Agent and Lenders. In accordance with the terms and subject to the conditions of this Agreement and only so long as no Termination Event shall have occurred, the Agent and the Lenders, for themselves and on behalf of their permitted successors and assigns, hereby agree to forbear until the Termination Date from (x) declaring all or any portion of the Obligations to be immediately due and payable, (y) foreclosing upon the Collateral and (z) exercising other similar rights as a secured creditor pursuant to Section 8.1 of the Credit Agreement, in each case solely by reason of, or as a result of the occurrence of, the Specified Defaults. Notwithstanding the foregoing, (a) the Borrowers and the Lenders acknowledge and agree that (i) the Agent has given an Activation Instruction to each Cash Management Bank and has implemented a daily sweep of all amount in each Cash Management Account to the Agent’s Account, and (ii) the Agent has established an additional $2,000,000 reserve against the Borrowing Base and the Maximum Revolver Amount, (b) at the election of the Agent or the Required Lenders, the applicable interest rate and Letter of Credit fee may be increased in accordance with Section 2.6(c) of the Credit Agreement, and (c) the forbearance granted by the Agent and the Lenders pursuant hereto shall not constitute, and shall not be deemed to constitute, a waiver of the Specified Defaults or of any other Default or Event of Default under the Loan Documents or a waiver of any of the rights and remedies provided thereunder, under law, at equity or otherwise. On and after the Termination Date, or such earlier date on which a Termination Event occurs, the Agent’s and the Lenders’ agreement hereunder to forbear shall terminate automatically without further act or action by the Agent or the Lenders. The Borrowers expressly acknowledge and agree that the effect of such termination will be to permit the Agent and the Lenders to exercise any and all rights and remedies available to them under the Loan Documents and this Agreement, at law, in equity, or otherwise without any further lapse of time, expiration of applicable grace periods, or requirements of notice, all of which are hereby expressly waived by the Borrowers.
     3. Representations and Warranties. To induce the Agent and the Lenders to enter into this Agreement, Borrowers hereby jointly and severally represent and warrant to the Agent and the Lenders as follows:

 


 

          (a) Duly Organized. Each Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has the full power and authority to execute, deliver and perform this Agreement.
          (b) Authority. The execution, delivery and performance by each Borrower of this Agreement (i) have been duly authorized by all requisite action on the part of Borrowers, (ii) do not and will not violate the Governing Documents of any Borrower, or any Material Contract of any of the Borrowers, or any order, judgment or decree of any court, Governmental Authority or arbitrator by which any Borrower or any of its properties is bound, (iii) do not and will not conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Borrower and (iv) do not and will not require any filing (other than any disclosure filing) or registration with, consent, or authorization or approval of, or notice to, or other action with or by, any Governmental Authority or other Person.
          (c) Binding Obligation. This Agreement constitutes the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
          (d) No Other Defaults. Except for the Specified Defaults, no Default or Event of Default has occurred and is continuing or would result from this Agreement becoming effective in accordance with its terms.
          (e) Representations and Warranties. All representations and warranties by the Borrowers contained in the Credit Agreement and in each other Loan Document and certificate or other writing delivered to the Agent or the Lenders pursuant to the Credit Agreement or this Agreement that are qualified by materiality or Material Adverse Effect are true and correct and that are not so qualified are true and correct in all material respects as of the date hereof, except to the extent made as of a specific date, in which case each such representation and warranty shall be true and correct as of such date.
          (f) False or Misleading Representations or Warranties. By its signature below, each Borrower agrees that it shall constitute an Event of Default if any representation or warranty made herein should be false or misleading in any material respect.
     4. Covenants. Notwithstanding any provisions to the contrary contained in the Loan Documents, Borrowers hereby covenant and agree to observe and comply with each of the following covenants and Borrowers agree and acknowledge that failure to comply with any such covenant shall result in an immediate Event of Default:
          (a) Compliance with Loan Documents and this Agreement. From and after the Effective Date, each Borrower will perform, observe and comply with each covenant, agreement and term contained in this Agreement and each of the Loan Documents, other than the Specified Defaults.
          (b) Consultant. Borrowers shall deliver to the Agent, on or before September 15, 2008, evidence in form and substance satisfactory to the Required Lenders, that the Parent has retained at its cost and expense an independent investment banker selected by the Parent that is not an Affiliate and which is satisfactory to the Required Lenders, for the purpose of developing and facilitating the plan of restructuring provided for in Section 4(c) of this Agreement.

 


 

          (c) Plan of Restructuring. Borrowers shall deliver to the Agent a definitive, written plan of restructuring, on or before September 15, 2008. Such plan shall be satisfactory to the Required Lenders.
          (d) Detailed Timeline for Plan of Restructuring. Borrowers shall deliver to the Agent, on or before September 15, 2008, a detailed timeline setting forth applicable dates for the implementation of such plan of restructuring. Such timeline shall be satisfactory to the Required Lenders.
          (e) Additional Forbearance Fee. Borrowers shall pay to the Agent the Additional Forbearance Fee (i) on the earlier of on demand or September 15, 2008 if at any time after the Effective Date it has failed to comply with Section 4(a) or (ii) on September 15, 2008 if it has failed to comply with Section 4 (b), (c) or (d). For the avoidance of doubt, Borrowers shall not be obligated to pay the Additional Forbearance Fee if Borrowers comply with Section 4(a), (b), (c) and (d) in accordance with the terms hereof.
     5. Closing Deliveries. Unless otherwise provided herein, simultaneously with the execution and delivery hereof, and as a condition to the effectiveness hereof, the Borrowers shall deliver (or deposit with), or cause the delivery to (or deposit with), the Agent:
          (a) such certificates of duly authorized officers of the Borrowers, certificates of governmental authorities, certified copies of resolutions of the Board of Directors (or other applicable managing body) of the Borrowers (or the general partner thereof), and such other documents, instruments and agreements as the Agent shall require to evidence the due authorization, execution and delivery of this Agreement;
          (b) payment of all Lender Group Expenses incurred in connection with the preparation, negotiation and execution of this Agreement, all related documents and the transactions contemplated hereby and thereby;
          (c) a fully executed copy of this Agreement;
          (d) such documents and instruments as the Lenders, in their sole discretion, deem necessary or desirable to evidence and confirm perfection of its liens and security interests in the Collateral; and
          (e) payment of the Initial Forbearance Fee.
          The failure of the Borrowers to timely comply with the terms of this Section 5 shall constitute (i) an Event of Default under and for all purposes of the Credit Agreement and the other Loan Documents, and (ii) a Termination Event hereunder.
     6. Ratification of Loan Documents and Collateral. The Borrowers hereby acknowledge that this Agreement constitutes receipt from the Agent and the Lenders of proper notice of default, notice of intent to accelerate and opportunity to cure, and demand for payment. The Borrowers hereby waive (a) any further notice of default, notice of intent to accelerate, or demand for payment and (b) any further opportunity to cure the Specified Defaults. Except as modified by this Agreement, the Borrowers hereby acknowledge, ratify, reaffirm, and agree that each of the Loan Documents and the perfected liens and security interests created thereby in favor of the Agent for the benefit of the Lenders in the Collateral, are and will remain in full force and effect and binding on the Borrowers, and are enforceable in accordance with their respective terms and applicable law. The Borrowers hereby acknowledge, ratify, and reaffirm all of the terms and provisions of the Loan Documents (including, without limitation, the Credit Agreement), except as modified herein, which are incorporated by reference as of the Effective Date as if

 


 

set forth herein including, without limitation, all promises, agreements, warranties, representations, covenants, releases, and indemnifications contained therein.
     7. Remedies Upon Termination Event. Upon the occurrence of a Termination Event, (a) the Forbearance Period will terminate without further act or action by the Agent or the Lenders and (b) the Agent and the Lenders shall be entitled immediately to exercise any and all rights and remedies available to them under the Loan Documents and this Agreement, at law, in equity, or otherwise, without further opportunity to cure, demand, presentment, notice of dishonor, notice of default, notice of intent to accelerate, notice of intent to foreclose, notice of protest or other formalities of any kind, all of which are hereby expressly waived by the Borrowers.
     8. Acknowledgment of Defaults. The Borrowers specifically acknowledge the existence and continuation of the Specified Defaults.
     9. Release and Covenant Not to Sue. EACH BORROWER (IN ITS OWN RIGHT AND ON BEHALF OF ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS) (THE “RELEASING PARTIES”) JOINTLY AND SEVERALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES THE AGENT AND THE LENDERS AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS, (COLLECTIVELY, THE “RELEASED PARTIES”), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, FROM ANY AND ALL ACTS AND OMISSIONS OF THE RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, DAMAGES, OBLIGATIONS, LIABILITIES, OBJECTIONS, AND EXECUTIONS OF ANY NATURE, TYPE, OR DESCRIPTION WHICH THE RELEASING PARTIES HAVE AGAINST THE RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE, USURY, UNCONSCIONABILITY, DURESS, ECONOMIC DURESS, DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION, CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF COLLATERAL, WRONGFUL RELEASE OF COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL DUE DILIGENCE, NEGLIGENT LOAN PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF, VIOLATIONS OF STATUTES AND REGULATIONS OF GOVERNMENTAL ENTITIES, INSTRUMENTALITIES AND AGENCIES (CIVIL), SECURITIES AND ANTITRUST LAWS VIOLATIONS, TYING ARRANGEMENTS, BREACH OR ABUSE OF ANY ALLEGED FIDUCIARY DUTY, BREACH OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE OF CONDUCT OR DEALING, ALLEGED OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF GOOD FAITH, AND ALLEGED OBLIGATION OF GOOD FAITH AND FAIR DEALING, IN CONNECTION WITH OR RELATED TO THE LOAN DOCUMENTS AND THE CREDIT AGREEMENT, AT LAW OR IN EQUITY, IN CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED (COLLECTIVELY, THE “RELEASED CLAIMS”); PROVIDED, HOWEVER, THAT THE RELEASED CLAIMS SHALL NOT INCLUDE ANY CLAIMS ARISING OUT OF ANY FAILURE BY THE AGENT OR LENDERS TO PERFORM, ON OR AFTER THE DATE HEREOF, ANY OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR UNDER ANY OF THE LOAN DOCUMENTS OR THE CREDIT AGREEMENT. THE RELEASING PARTIES FURTHER JOINTLY AND SEVERALLY AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND EXEMPLARY DAMAGES, DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, DAMAGES ATTRIBUTABLE TO MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND SUFFERING, AND THE RELEASING PARTIES DO HEREBY JOINTLY AND

 


 

SEVERALLY WAIVE AND RELEASE ALL SUCH DAMAGES WITH RESPECT TO ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAY ARISE AT ANY TIME AGAINST ANY OF THE RELEASED PARTIES. THE RELEASING PARTIES REPRESENT AND WARRANT THAT NO FACTS EXIST WHICH COULD PRESENTLY SUPPORT THE ASSERTION OF ANY OF THE RELEASED CLAIMS AGAINST THE RELEASED PARTIES. THE RELEASING PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED PARTIES ON ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY AND ALL DEFENSES THEY MAY HAVE IN CONNECTION WITH THEIR DEBTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THE CREDIT AGREEMENT (AS AMENDED HEREBY). THIS SECTION 9 IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES IN FAVOR OF THE RELEASED PARTIES. NOTWITHSTANDING ANY PROVISION OF THE CREDIT AGREEMENT (AS AMENDED HEREBY) OR ANY OTHER LOAN DOCUMENT, THIS SECTION 9 SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL SURVIVE THE DELIVERY AND PAYMENT ON THE OBLIGATIONS, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
     10. No Obligation of Agent and Lenders. The Borrowers hereby acknowledge and understand that upon the expiration or termination of the Forbearance Period and if the Specified Defaults have not been cured or waived by written agreement in accordance with the Credit Agreement, or if there shall at such time exist a Default or Event of Default, then the Agent and the Lenders shall have the right to proceed to exercise any or all available rights and remedies, which may include foreclosure on the Collateral and/or institution of legal proceedings. The Agent and the Lenders shall have no obligation whatsoever to extend the maturity of the Obligations, waive any events of default or defaults, defer any payments, or further forbear from exercising its rights and remedies.
     11. No Implied Waivers. No failure or delay on the part of the Agent or the Lenders in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement, the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
     12. INDEMNIFICATION. IN ADDITION TO, AND WITHOUT LIMITATION OF, ANY AND ALL INDEMNITIES PROVIDED IN THE LOAN DOCUMENTS, BORROWERS SHALL AND DO HEREBY, JOINTLY AND SEVERALLY, INDEMNIFY AND HOLD EACH OF THE RELEASED PARTIES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITY, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS, JUDGMENTS, COSTS, AND EXPENSES, INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES, ARISING OUT OF OR FROM OR RELATED TO ANY OF THE RELEASED CLAIMS. IF ANY ACTION, SUIT, OR PROCEEDING IS BROUGHT AGAINST ANY OF THE RELEASED PARTIES, BORROWERS SHALL, AT LENDERS’ REQUEST, DEFEND THE SAME AT THEIR SOLE COST AND EXPENSE, SUCH COST AND EXPENSE TO BE A JOINT AND SEVERAL LIABILITY OF THE BORROWERS, BY COUNSEL SELECTED BY THE LENDERS. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THIS SECTION 12 SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL SURVIVE ANY DELIVERY AND PAYMENT ON THE OBLIGATIONS, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
     13. Survival of Representations and Warranties. All representations and warranties made in this Agreement or any other Loan Document will survive the execution and delivery of this Agreement, and no investigation by the Agent or the Lenders or any closing will affect the representations and warranties or the right of the Agent or the Lenders to rely upon them.

 


 

     14. Review and Construction of Documents. The Borrowers hereby acknowledge, and represent and warrant to the Lenders that (a) the Borrowers have had the opportunity to consult with legal counsel of their own choice and have been afforded an opportunity to review this Agreement with their legal counsel, (b) the Borrowers have reviewed this Agreement and fully understand the effects thereof and all terms and provisions contained herein, and (c) the Borrowers have executed this Agreement of their own free will and volition. The recitals contained in this Agreement shall be construed to be part of the operative terms and provisions of this Agreement.
     15. ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT AND THE LOAN DOCUMENTS AS INCORPORATED HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO REGARDING THE AGENT’S AND THE LENDERS’ FORBEARANCE WITH RESPECT TO THEIR RIGHTS AND REMEDIES ARISING AS A RESULT OF THE SPECIFIED DEFAULTS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the Borrowers, the Agent and the Lenders. The Loan Documents, as modified by this Agreement, continue to evidence the agreement of the parties with respect to the subject matter thereof.
     16. Notices. All notices, requests, demands and other communications under this Agreement will be given in accordance with the provisions of the Credit Agreement.
     17. Successors and Assigns. This Agreement will be binding upon, and will inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns, provided that the Borrowers may not assign any rights or obligations under this Agreement without the prior written consent of the Agent and the Lenders.
     18. Tolling of Statutes of Limitation. The parties hereto agree that all applicable statutes of limitations with respect to the Loan Documents shall be tolled and not begin running until the Termination Date.
     19. Arms-Length/Good Faith. This Agreement has been negotiated at arms-length and in good faith by the parties hereto.
     20. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
     21. Interpretation. Wherever the context hereof will so require, the singular shall include the plural, the masculine gender shall include the feminine gender and the neuter and vice versa. The headings, captions and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.
     22. Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

 


 

     23. Counterparts. This Agreement may be executed and delivered in any number of counterparts, and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument; provided that no party shall be bound by this Agreement until the Borrowers, the Agent and the Lenders have executed a counterpart hereof. Execution of this Agreement via facsimile or electronic mail shall be effective, and signatures received via facsimile or electronic mail shall be binding upon the parties hereto and shall be effective as originals.
     24. Further Assurances. The Borrowers agree to execute, acknowledge, deliver, file and record such further certificates, instruments and documents, and to do all other acts and things, as may be reasonably requested by the Agent and the Lenders as necessary or advisable to carry out the intents and purposes of this Agreement.
     25. Loan Document. This Agreement is a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.
     26. WAIVER OF JURY TRIAL. BORROWERS HEREBY WAIVE THEIR RESPECTIVE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. BORROWERS (a) CERTIFY THAT NO REPRESENTATIVE, THE AGENT OR ATTORNEY OF THE AGENT OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGE THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED HEREIN.
[Remainder of page is intentionally left blank; signature page follows]

 


 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
         
  FOOTHILLS RESOURCES, INC.,
as Borrower
 
 
  By:   /s/ W. Kirk Bosché    
    Name:   W. Kirk Bosché   
    Title:   Chief Financial Officer   
 
 
  FOOTHILLS CALIFORNIA, INC.,
as Borrower
 
 
  By:   /s/ W. Kirk Bosché    
    Name:   W. Kirk Bosché   
    Title:   Chief Financial Officer   
 
 
  FOOTHILLS OKLAHOMA, INC.,
as Borrower
 
 
  By:   /s/ W. Kirk Bosché    
    Name:   W. Kirk Bosché   
    Title:   Chief Financial Officer   
 
 
  FOOTHILLS TEXAS, INC.,
as Borrower
 
 
  By:   /s/ W. Kirk Bosché    
    Name:   W. Kirk Bosché   
    Title:   Chief Financial Officer   
 
[Signature Page to Forbearance Agreement]

 


 

         
  WELLS FARGO FOOTHILL, LLC,
as Agent and as a Lender
 
 
  By:   /s/ William M. Plough   
    Name:   William M. Plough   
    Title:   Vice President   
 
[Signature Page to Forbearance Agreement]

 


 

         
  REGIMENT CAPITAL SPECIAL SITUATIONS
FUND III, L.P., as a Lender
 
 
  By:   Regiment Capital GP, LLC    
    its General Partner   
       
     
  By:   /s/ Richard T. Miller   
    Name:   Richard T. Miller   
    Title:   Authorized Signatory   
 
[Signature Page to Forbearance Agreement]