Email Address:
  
  Password:
  
  

Exhibit 10.1

FORBEARANCE AGREEMENT

     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.

1


 

     (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:

 

i.

 

the occurrence of a Forbearance Default (as defined below);or

 

 

ii.

 

12:00 a.m. (New York City time) 60 days after the Forbearance Effective Date.

     (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:

 

i.

 

the occurrence of any Default or Event of Default other than the Current Events of Default (without taking into account any grace or cure periods);

 

 

ii.

 

any creditor of any Party (other than WayPoint), or any of such creditor’s assignees, agents or designees, including, without limitation, PNC Bank, National Association (“PNC”) pursuant to its senior revolving credit and term loan facility (the “Senior Facility”), commences any enforcement action, exercises or seeks to exercise any of its or their respective rights or remedies or takes or seeks to take any action that renders compliance by NYTEX Holdings, NYTEX Acquisition, New Francis and FDF with this Forbearance Agreement impossible, or that otherwise materially impairs or materially adversely affects WayPoint’s ability to exercise its rights or remedies;

 

 

iii.

 

the failure by NYTEX Holdings to, no later than 35 days after the Forbearance Effective Date, either (x) identify a lead investor in connection with a proposed recapitalization of NYTEX Holdings, NYTEX Acquisition, New Francis and FDF that would, among other things, fund the purchase of the WayPoint Securities contemplated by Sections 3(a)(xiv) and 3(a)(xv) hereof, or (y) provide WayPoint with evidence of

2


 

 

 

 

progress toward such a proposed recapitalization that is satisfactory to WayPoint in its sole discretion;

 

 

iv.

 

the commencement by one or more of NYTEX Holdings, NYTEX Acquisition, New Francis and FDF of a case under title 11 of the United States Code or any other act that seeks relief under any comparable bankruptcy or insolvency regime proceeding, or the commencement against one or more of NYTEX Holdings, NYTEX Acquisition, New Francis and FDF of any such case or proceeding;

 

 

v.

 

the failure of any of NYTEX Holdings, NYTEX Acquisition, New Francis and FDF to timely comply with any term, condition or covenant set forth in this Forbearance Agreement;

 

 

vi.

 

no later than one (1) Business Day after the Forbearance Effective Date, FDF shall pay not less than $100,000.00 of the reasonable out-of-pocket fees, costs and expenses incurred by WayPoint both on behalf of itself in connection with the Current Events of Default and on behalf of NYTEX Acquisition, New Francis and FDF, including the reasonable fees, disbursements and other charges of their counsel, consultants and advisors to date, and the remaining amount of such fees, costs and expenses to be paid no later than 14 days after the Forbearance Effective Date;

 

 

vii.

 

any change in the members of the Board of Directors of and NYTEX Acquisition, New Francis and FDF;

 

 

viii.

 

the failure of the NYTEX Acquisition, New Francis and FDF to retain no later than three (3) Business Days after the Forbearance Effective Date a Business Improvement Officer or financial and operational consultant with executive officer authority (the “ BIO ”) and related personnel reasonably acceptable to WayPoint (it being understood that firm for such personnel will be PriceWaterhouseCoopers LLP and that James F. Reed from that firm as BIO is acceptable to all Parties) pursuant to a scope of engagement and otherwise on terms and conditions (in each case) reasonably acceptable to NYTEX Acquisition, New Francis, FDF and WayPoint, and WayPoint and its representatives shall be granted direct, regular access to the BIO and all reasonably requested information related to the performance of the BIO’s duties; and

 

 

ix.

 

the failure of any representation or warranty made by any of NYTEX Holdings, NYTEX Acquisition, New Francis and FDF under this Forbearance Agreement to be true and complete as of the date when made or any other breach of such representation or warranty.

3


 

     SECTION 2. Conditions to Effectiveness. This Forbearance Agreement shall not be effective unless WayPoint shall have received duly executed counterparts of this Forbearan


This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more