Exhibit 10.3
Execution Version
CONSENT NO. 5, FORBEARANCE AND CONDITIONAL WAIVER AGREEMENT
This CONSENT NO. 5, FORBEARANCE AND CONDITIONAL WAIVER AGREEMENT, dated as of December 20, 2021 (this “Agreement”), is entered into by and among BKRF HCB, LLC, a Delaware limited liability company (the “Borrower”), BKRF HCP, LLC, a Delaware limited liability company (“Holdings”), Orion Energy Partners TP Agent, LLC, in its capacity as the administrative agent and collateral agent (in such capacity, the “Administrative Agent”), and the Lenders party hereto, constituting 100% of the Lenders party to the Credit Agreement (as defined below) (the “Signatory Lenders”). As used in this Agreement, capitalized terms which are not defined herein shall have the meanings ascribed to such terms in the Credit Agreement unless otherwise specified.
WITNESSETH
WHEREAS, the Borrower, Holdings, the Administrative Agent and each Lender from time to time party thereto have entered into that certain Credit Agreement, dated as of May 4, 2020 (as amended, amended and restated, modified and supplemented on or prior to the date hereof, the “Credit Agreement”); and
WHEREAS, pursuant to this Agreement, the Borrower has requested that the Administrative Agent and the Lenders forbear from exercising their rights and remedies under the Credit Agreement and the other Financing Documents with respect to all Defaults and Events of Default arising prior to, or based on events occurring prior to, the Forbearance Effective Date (all such currently outstanding Defaults and Events of Default, collectively, the “HoldCo Forbearance Matters”) for a limited period of time subject to the terms and conditions hereinafter set forth and conditioned upon the strict performance by Borrower of all obligations set forth herein and therein and the Signatory Lenders and the Administrative Agent have agreed, subject to the terms and conditions set forth in this Agreement, to forbear from exercising its rights and remedies under the Credit Agreement and the other Financing Documents with respect to the HoldCo Forbearance Matters for a limited period of time subject to the terms and conditions hereinafter set forth and conditioned upon the strict performance by Borrower of all obligations set forth herein and therein;
WHEREAS, pursuant to this Agreement, the Borrower has requested a conditional waiver of the HoldCo Forbearance Matters, and the Signatory Lenders and the Administrative Agent have agreed, subject to the terms and conditions set forth in this Agreement, to waive such HoldCo Forbearance Matters;
WHEREAS, the OpCo Loan Parties, the OpCo Senior Administrative Agent and the OpCo Senior Lenders entered into (i) that certain Forbearance and Conditional Waiver Agreement, dated as of the date hereof (the “OpCo Forbearance Agreement”) and (ii) that certain Amendment No. 6 to the OpCo Senior Credit Agreement, dated as of the date hereof (the “OpCo Amendment”), to amend certain terms and conditions of the OpCo Senior Credit Agreement, in each case as expressly set forth in the OpCo Amendment and subject to the terms and conditions thereof (including the conditions to effectiveness set forth therein);
WHEREAS, pursuant to Section 6.09(c) of the Credit Agreement, without the prior written consent of the Required Lenders, the Borrower shall not cause or permit any OpCo Loan Party to, directly or indirectly amend, modify, supplement or grant a consent, approval or waiver under, or cause or permit or consent to the amendment, modification, supplement, consent, approval or waiver of any provision of the OpCo Senior Financing Documents, except to the extent any such amendment, modification, supplement, consent, approval or waiver could not reasonably be expected to be materially adverse to the Loan Parties or the Lenders;
WHEREAS, pursuant to this Agreement, the Borrower has requested, and the parties hereto have agreed, subject to the satisfaction of the conditions precedent set forth in this Agreement, to consent to each of the OpCo Amendment and the OpCo Forbearance Agreement;
WHEREAS, pursuant to this Agreement, the Borrower has also requested that the Administrative Agent and the Lenders forbear from exercising their rights and remedies under the Credit Agreement and the other Financing Documents with respect to all currently outstanding Defaults and Events of Default under the Credit Agreement or other Financing Documents resulting from any Forbearance Matter (as defined in the OpCo Forbearance Agreement) (all such currently outstanding Default and Events of Default hereinafter, together with the HoldCo Forbearance Matters, the “Forbearance Matters”), for a limited period of time subject to the terms and conditions hereinafter set forth and conditioned upon the strict performance by Borrower of all obligations set forth herein and therein and the Signatory Lenders and the Administrative Agent have agreed, subject to the terms and conditions set forth in this Agreement, to forbear from exercising its rights and remedies under the Credit Agreement and the other Financing Documents with respect to the Forbearance Matters for a limited period of time subject to the terms and conditions hereinafter set forth and conditioned upon the strict performance by Borrower of all obligations set forth herein and therein;
WHEREAS, pursuant to this Agreement, the Borrower has requested a conditional waiver of the Forbearance Matters, and the Signatory Lenders and the Administrative Agent have agreed, subject to the terms and conditions set forth in this Agreement, to waive such Forbearance Matters;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. OpCo Amendment and the OpCo Forbearance Agreement. Subject to the satisfaction of all the conditions precedent set forth in Section 6 hereof, as of the Sixth Amendment Effective Date (as defined in the OpCo Senior Credit Agreement), each Lender hereby consents to the OpCo Loan Parties’ entry into each of the OpCo Amendment and the OpCo Forbearance Agreement and each of the transactions contemplated thereunder.
2. Forbearance Provisions; No Waiver of Forbearance Matters.
(a) During the period commencing on the Forbearance Effective Date (as defined below) and ending on the occurrence of a Termination Event (such period, the “Forbearance Period”), the Administrative Agent and the Lenders hereby agree to forbear from exercising their rights and remedies under the Financing Documents, solely to the extent that such rights and remedies relate to the Forbearance Matters; provided, however:
(i) prior to the occurrence of any Event of Default that first occurs after the Forbearance Effective Date, the Obligations shall continue to bear interest at the regular, non-Post-Default Rate;
(ii) each Loan Party shall comply with all limitations, restrictions or prohibitions set forth in this Agreement, the Credit Agreement or any of the other Financing Documents during the continuance of any Event of Default; and
(iii) nothing herein shall restrict, impair or otherwise affect any Lender’s rights and remedies under any agreements containing subordination provisions in favor of the Administrative Agent (including, without limitation, any rights or remedies available to the Administrative Agent as a result of the occurrence or continuation of any Forbearance Matter) or amend or modify any provision thereof.
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(b) A “Termination Event” shall occur upon the earliest to occur of any of the following:
(i) January 15, 2022; provided that such date shall be extended to January 31, 2022, if on January 15, 2022, Borrower delivers to the Administrative Agent a written confirmation (which may be in the form of electronic email) from ExxonMobil Oil Corporation (“Exxon”) that the transactions contemplated by the Memorandum of Understanding, dated as of the date hereof (the “Exxon MOU”), by and among Exxon, the OpCo Borrower and Global Clean Energy Holdings, Inc. (“GCEH”) are reasonably expected to close and fund consistent with the terms set forth in the Exxon MOU on or before January 31, 2022 (such date as extended if applicable, the “Scheduled Forbearance Termination Date”), unless extended by the Administrative Agent and the Lenders in their sole and absolute discretion by notice to the Borrower;
(ii) the failure of any Loan Party to timely and fully comply in all respects with any of the terms and conditions of this Agreement, including the conditions set forth in Section 6 below; and
(iii) the occurrence of any Default or Event of Default under the Credit Agreement or any of the other Financing Documents or any default, breach or event of default under any of the Financing Documents, other than the Forbearance Matters or as provided in Section 2(a) above.
(c) This Agreement is limited in effect and shall apply only as a forbearance as expressly set forth in this Agreement and, subject to Section 3, shall not constitute a consent, waiver, modification, approval or amendment of any provision of the Credit Agreement or any other Financing Document. The execution of this Agreement and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Forbearance Matter or any other Default or Event of Default, or a waiver of any other breach, default or event of default under any Financing Document, whether or not known to the Administrative Agent or any Lender and whether or not existing on the date of this Agreement. The Administrative Agent and the Lenders have not waived the Forbearance Matters nor any other Defaults or Events of Default, or any other breach, default or event of default under any Financing Document, whether or not known to the Administrative Agent or any Lender and whether or not existing on the date of this Agreement, and the Administrative Agent and each Lender reserve the right to exercise any or all of their rights and remedies upon the termination of the Forbearance Period.
(d) Upon the occurrence of a Termination Event, the agreement of the Administrative Agent to forbear from exercising their respective default-related rights and remedies shall immediately terminate without the requirement of any demand, presentment, protest, or notice of any kind, all of which Borrower and the other Loan Parties each waives. Borrower and the other Loan Parties each agrees that any or all of the Administrative Agent and the Lenders may at any time thereafter proceed to exercise any and all of their respective rights and remedies under any or all of the Credit Agreement, any other Financing Document and/or applicable law, including, without limitation, their respective rights and remedies with respect to the Forbearance Matters. Without limiting the generality of the foregoing, upon the occurrence of a Termination Event, the Administrative Agent or the Lenders may, in their sole discretion and without the requirement of any demand, presentment, protest, or notice of any kind, (i) suspend or terminate any commitment to provide Loans or other extensions of credit under any or all of the Credit Agreement and other Financing Documents, (ii) following such Termination Event, charge interest on any or all of the Obligations at the Post-Default Rate, (iii) commence any legal or other action to collect any or all of the Obligations from Borrower, any other Loan Party and/or any Collateral, (iv) foreclose or otherwise realize on any or all of the Collateral, and/or appropriate, setoff or apply to the payment of any or all of the Obligations, any or all of the Collateral, and (v) take any other enforcement action or otherwise exercise any or all rights and remedies provided for by any or all of the Credit Agreement, any other Financing Documents and/or applicable law, all of which rights and remedies are fully reserved by the Administrative Agent.
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(e) Any agreement by the Administrative Agent to extend the Forbearance Period, if any, must be set forth in writing and signed by a duly authorized signatory of the Administrative Agent.
(f) Borrower and the other Loan Parties each acknowledge that the Administrative Agent has not made any assurances concerning (i) any possibility of an extension of the Forbearance Period, (ii) the manner in which or whether the Forbearance Matters may be resolved or (iii) any additional forbearance, waiver, restructuring or other accommodations.
(g) The parties hereto agree that the running of all statutes of limitation and the doctrine of laches applicable to all claims or causes of action that the Administrative Agent or any Lender may be entitled to take or bring in order to enforce its rights and remedies against Borrower or any other Loan Party are, to the fullest extent permitted by law, tolled and suspended during the Forbearance Period.
(h) Borrower and the other Loan Parties acknowledge and agree that any Loan or other financial accommodation that any Lender makes on or after the Forbearance Effective Date has been made by such party in reliance upon, and is consideration for, among other things, the covenants, agreements, representations and warranties of Borrower and the other Loan Parties hereunder.
3. Conditional Waiver.
(a) Subject to the satisfaction of the conditions precedent set forth in Section 2(a) of the OpCo Forbearance Agreement on or before January 31, 2022, the Signatory Lenders, who constitute all of the Lenders under the Credit Agreement, and the Administrative Agent (acting on the instructions of the Signatory Lenders) hereby agree as follows: the Signatory Lenders hereby permanently waive each Forbearance Matter effective on January 31, 2022, it being acknowledged and agreed that the Signatory Lenders shall retain any and all claims of fraud or intentional misconduct of the Loan Parties or one or more of their parent companies based on facts and information that are not known to the Signatory Lenders or the Administrative Agent as of the date hereof.
To the extent the foregoing conditions are not satisfied on or prior to January 31, 2022, the foregoing shall not waive any Forbearance Matter.
(b) The waiver contained in the foregoing clause (a) is a limited waiver and (i) shall be limited precisely as written, (ii) shall only be relied upon and used for the specific purposes set forth herein, (iii) shall not constitute or be deemed to constitute a waiver or consent to any other Event of Default (other than as expressly noted above) or any other term or condition of the Financing Documents and (iv) shall not constitute a custom or course of dealing among the parties hereto. Notwithstanding any provision contained herein, nothing contained herein shall limit any rights or remedies under the Financing Documents or applicable law based on any breaches, failures, defaults or Events of Default (as defined in each applicable Financing Document) thereunder that has not been waived pursuant to the terms of this Agreement (other than as expressly noted above).
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4. Forbearance and Conditional Waiver Fees.
(a) As consideration for the consents agreed to pursuant to Section 1, forbearances agreed pursuant to Section 2 and conditional waivers agreed pursuant to Section 3 and the other waivers and forbearances provided by the Lenders on and before the Forbearance Effective Date and as consideration for the waivers provided under the OpCo Senior Credit Agreement by the OpCo Senior Lenders or Affiliates thereof on or prior the date hereof, the Borrower hereby agrees to pay to each Lender a forbearance and conditional waiver fee in the form of warrants to obtain the shares of common equity as set forth in Exhibit A hereto, on the terms, and strike prices, set forth in Exhibit C to the OpCo Amendment (the “GCEH Warrants”), which GCEH Warrants shall be payable to each Lender (or its designated Affiliate) in the amounts set forth on Exhibit A hereto (the “Forbearance and Waiver Premium”). The Forbearance and Waiver Premium shall be due, earned and payable on the Forbearance Effective Date. Each Lender acknowledges and agrees that issuance of the GCEH Warrants to such Lender satisfies the obligation of the Borrower to pay the both (x) the Amendment & Consent Premium (as defined in Section 3 of the Amendment No. 5 to the OpCo Senior Credit Agreement, dated as of July 29, 2021) and (y) the Amendment & Consent Premium (as defined in Section 3 of Consent No. 3 and Amendment No. 3 to the Credit Agreement, dated as of July 29, 2021). The GCEH Warrants must be issued in accordance with the term sheet set forth in Exhibit C to the OpCo Amendment, and any failure to issue GCEH Warrants in accordance with the foregoing shall constitute an Event of Default.
(b) The Borrower hereby agrees that the Forbearance and Waiver Premium shall be paid without set-off, deduction or counterclaim and free and clear of, and without deduction by reason of, any taxes.
(c) All fees and premiums hereunder, once paid, are nonrefundable and are in addition to and not creditable against any other fee or premium payable to any Lender and/or its affiliates in connection with the transactions contemplated by the Credit Agreement or otherwise.
(d) For U.S. federal income tax purposes, the Forbearance and Waiver Premium shall be treated as a payment on the loan made pursuant to the Credit Agreement (in accordance with the ordering provisions of Treasury Regulations Section 1.1275-2(a)). Each of the Lenders and the Borrower agrees to file tax returns consistent with such treatment.
(e) Borrower shall cause GCEH to file a registration statement with the SEC on Form S-3 or, if Form S-3 is not available for use by GCEH, Form S-1 (or any successor form or other appropriate form promulgated under the Securities Act) for an offering to be made on a continuous or delayed basis pursuant to Rule 415 promulgated under the Securities Act, as soon as practicable after the closing of the transactions contemplated by the Exxon MOU, but in no event later than May 31, 2022, which registration statement shall include all shares of GCEH Common Stock issuable upon exercise of the GCEH Warrants, and shall cause GCEH to use commercially reasonable efforts to obtain effectiveness thereafter.
5. Representations and Warranties. Each Loan Party hereby represents and warrants to the other parties hereto that:
(a) Each Loan Party has full corporate, limited liability company or other organizational powers, authority and legal right to enter into, deliver and perform its respective obligations under this Agreement, and has taken all necessary corporate, limited liability company or other organizational action to authorize the execution, delivery and performance by it of this Agreement. This Agreement has been duly executed and delivered by the Loan Parties, is in full force and effect and constitutes a legal, valid and binding obligation of the Loan Parties, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited (i) by Bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting creditors’ rights generally, (ii) by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.
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