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This FORBEARANCE AGREEMENT (this “Forbearance Agreement”) is entered into as of September 29, 2011 (the “ Forbearance Effective Date ”), by and among (i) NYTEX Energy Holdings, Inc. (“ NYTEX Holdings ”), (ii) NYTEX FDF Acquisition, Inc. (“ NYTEX Acquisition ”), (iii) WayPoint Nytex, LLC (“ WayPoint ”), (iv) New Francis Oaks, LLC (“ New Francis ”), and (v) Francis Drilling Fluids, Ltd. and any of its subsidiaries (collectively, “ FDF ”). Where applicable, NYTEX Holdings, NYTEX Acquisition, WayPoint, New Francis and FDF are collectively referred to as the “ Parties ” or each “ Party .” Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Preferred Stock and Warrant Purchase Agreement, dated” as of November 23, 2010, among NYTEX Holdings, NYTEX Acquisition and WayPoint, as amended from time to time (collectively, the “ WayPoint Purchase Agreement ”) and all related agreements and documents, each as amended from time to time (collectively, together with the WayPoint Purchase Agreement, the “ WayPoint Purchase Documents ”).
WHEREAS, (a) Events of Default have occurred under the WayPoint Purchase Documents (each such Events of Default, a “ Current Event of Default ” and, collectively, the “ Current Events of Default ”) including, without limitation, the Current Events of Default set forth in the letter dated April 14, 2011, from WayPoint to NYTEX Holdings; and (b) pursuant to the letter from WayPoint to NYTEX Holdings dated May 4, 2011 (the “ Put Election Notice ”), as a result of the Current Events of Default, WayPoint has demanded that, pursuant to the WayPoint Purchase Agreement, NYTEX Holdings repurchase the Warrants, the shares of Senior Series A Redeemable Preferred Stock of NYTEX Acquisition and the one share of Series B Redeemable Preferred Stock of NYTEX Holdings held by WayPoint for an aggregate purchase price of $30,000,000, and NYTEX Holdings has failed to timely make such repurchase, which failure is an additional Current Event of Default.
WHEREAS, upon the request of NYTEX Holdings, WayPoint has agreed, subject to the terms and conditions set forth herein, to forbear during the Forbearance Period (as defined below) from exercising rights and remedies under the WayPoint Purchase Documents with respect to the Current Events of Default and, as additional consideration, subject to the terms and conditions set forth herein, grant such other and further relief as expressly set forth in this Forbearance Agreement; and
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
SECTION 1. Forbearance; Forbearance Default Rights and Remedies.
(a) Acknowledgment of Current Events of Default and Entitlement to Exercise Rights and Remedies . NYTEX Holdings, NYTEX Acquisition, New Francis and FDF acknowledge and agree that (i) the Current Events of Default have occurred and are continuing and (ii) but for the terms of this Forbearance Agreement, WayPoint may, if it so elects, exercise its respective rights and remedies in respect of the Current Events of Default.
(b) The Forbearance. Effective upon the Forbearance Effective Date (as hereinafter defined), WayPoint agrees that until the occurrence of the Forbearance Termination Date (as hereinafter defined), WayPoint will forbear from exercising all of its rights and remedies under the WayPoint Purchase Documents or otherwise existing pursuant to any other agreement entered into in connection with the WayPoint Purchase Agreement, by operation of law or otherwise against NYTEX Holdings, NYTEX Acquisition, New Francis and FDF solely with respect to the Current Events of Default. NYTEX Holdings, NYTEX Acquisition, New Francis and FDF acknowledge and agree that each Current Event of Default constitutes an Event of Default upon which action could be taken but for the forbearance described herein.
(c) Effect of Forbearance Termination. From and after the Forbearance Termination Date, the agreement of WayPoint to forbear as set forth in Section 1(b) shall immediately terminate without the requirement of any demand, presentment, protest, or notice of any kind.
(d) Forbearance Termination Date means the earlier of:
(e) Forbearance Period means the period beginning on the Forbearance Effective Date and ending on the Forbearance Termination Date
(f) Forbearance Default. A Forbearance Default shall occur, immediately and without notice, if one or more of the following shall occur:
SECTION 2. Conditions to Effectiveness. This Forbearance Agreement shall not be effective unless WayPoint shall have received duly executed counterparts of this Forbearan