Exhibit 10.4
$10,000,000 Advance Note
November 3, 2003
THIRD MODIFICATION AGREEMENT
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This Third Modification Agreement ("Third Modification Agreement") is effective
as of March 24, 2006. The parties to the Third Modification Agreement are
Natural Gas Services Group, Inc. ("Borrower") and Western National Bank
("Lender").
RECITALS
On November 3, 2003, Borrower executed and delivered to Lender that certain
Advancing Line of Credit Promissory Note in the original principal sum of
$10,000,000.00, bearing interest at the rate stated therein, with a stated final
maturity date of November 15, 2009, as modified in Modification Agreement dated
December 15, 2004, and further modified in Second Modification Agreement dated
May 1, 2005 (the "Note"). The Note was made pursuant to that certain Second
Amended and Restated Loan Agreement dated November 3, 2003, as amended and
restated in that certain Third Amended and Restated Loan Agreement dated January
3, 2005, and further amended and restated in that certain Fourth Amended and
Restated Loan Agreement dated March 14, 2005, as modified in that certain First
Modification to Fourth Amended and Restated Loan Agreement dated May 1, 2005;
and further amended and restated in that certain Fifth Amended and Restated Loan
Agreement dated September 26, 2005; and further amended and restated in that
certain Sixth Amended and Restated Loan Agreement dated January 3, 2006 (the
"Loan Agreement"). All liens, security interests and assignments securing the
Note are collectively called the "Liens". Terms defined in the Note or the Loan
Agreement and not otherwise defined herein shall have the same meanings here as
in those documents.
Borrower now proposes to pay down a portion of the outstanding principal amount
of the Note. In this regard, Borrower and Lender have agreed to enter into this
Third Modification Agreement (i) to modify the interest provisions of the Note
to provide for an decrease in the interest rate of one-half of one percent
(.0.5%) and to eliminate the interest floor; (ii) to modify the amount of the
monthly principal payments; and (iii) to ratify the Liens.
AGREEMENT
1. Modification of Interest Provision of the Note. In lieu of the following
provision which was contained in the Note:
"...at a rate per annum which shall from day to day be equal to the
lesser of (a) a rate per annum (the "Established Rate") equal to the
greater of (i) one-half percent (0.5%) over the Prime Rate in effect
from day to day, or (ii) five and one-quarter percent (5.25%), or (b)
the Highest Lawful Rate, in each case calculated on the basis of actual
days elapsed, but computed as if each calendar year consisted of 360
days." such provision of the Note is changed to read in its entirety as
follows:
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"...at a rate per annum which shall from day to day be equal to the
lesser of (a) a rate per annum (the "Established Rate") equal to the
Prime Rate in effect from day to day, or (b) the Highest Lawful Rate,
in each case calculated on the basis of actual days elapsed, but
computed as if each calendar year consisted of 360 days."
2. Modification of Payment Provisions of the Note. In lieu of the following
provision which was contained in the fourth (4th) paragraph of the Note:
"The principal of this Note shall be due and payable as follows:
(a) with respect to the principal balance outstanding under this
Note on December 15, 2004, in fifty-nine (59) consecutive
monthly installments of $166,666.67, with the first (1st) such
installment being due and payable on December 5, 2004 and a
like installment being due and payable on the 15th day of each
succeeding month to and including October 15, 2009; plus
(b) 1/60th of the sum of all advances made by Lender under this
note after December 15, 2004 and prior to March 31, 2005 and a
like installment being due and payable on the 15th day of each
succeeding month to and including October 15, 2009; plus
(c) 1/60th of the sum of all advances made by Lender under this
note after April 1, 2005 and prior to June 30, 2005, and a
like installment being due and payable on the 15th day of each
succeeding month to and including October 15, 2009; plus
(d) 1/60th of the sum of all advances made by Lender under this
note after July 1, 2005 and prior to September 30, 2005 and a
like installment being due and payable on the 15th day of each
succeeding month to and including October 15, 2009; plus
(e) 1/60th of the sum of all advances made by Lender under this
note after October 1, 2005 and prior to December 15, 2005 and
a like installment being due and payable on the 15th day of
each succeeding month to and including October 15, 2009; plus
(f) one final installment in an amount equal to all remaining
unpaid principal and accrued and unpaid interest on the Note
shall be due and payable on November 15, 2009.
Interest, computed on the unpaid balance of the Note, shall be due and payable
monthly as it accrues, on the same dates as, but in addition to each installment
of principal." such provision of the Note is changed to read as follows:
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"The principal of this Note shall be due and payable in (a) forty-four
consecutive monthly installments of $57,037.00, with the first such
installment being due and payable on April 15, 2006, and a like
installment being due and payable on the fifteenth (15th ) day of each
succeeding month to and including October 15, 2009; and (b) one final
installment in an amount equal to all remaining unpaid principal and
accrued and unpaid interest on this Note shall be due and payable on
November 15, 2009. Interest, computed on the unpaid balance of this
Note, shall be due and payable monthly as it accrues, on the same dates
as, but in addition to each installment of principal."
3. Ratification of Liens. Borrower and Lender further agree that all Liens
securing the Note shall continue and carry forward until the Note and all
indebtedness evidenced thereby is paid in full. Borrower further agrees that
such Liens are hereby ratified and affirmed as valid and subsisting against the
collateral described therein, and that this Third Modification Agreement shall
in no manner vitiate, affect or impair the Note or the Liens (except as
expressly modified in this Third Modification Agreement) and that such Liens
shall not in any manner be waived, released, altered or modified.
4. Miscellaneous.
(a) As modified hereby, the provisions of the Note and the Liens
shall continue in full force and effect, and Borrower
acknowledges and affirms its liability to Lender thereunder.
In the event of an inconsistency between this Third
Modification Agreement and the terms of the Note or of the
Liens, this Third Modification Agreement shall govern.
(b) Borrower hereby agrees to pay all costs and expenses incurred
by Lender in connection with the execution and administration
of this Third Modification Agreement.
(c) Any default by Borrower in the performance of its obligations
herein contained shall constitute a default under the Note and
the Liens and shall allow Lender to exercise any or all of its
remedies set forth in such Note and Liens or at law or in
equity.
(d) Lender does not, by its execution of this Third Modification
Agreement, waive any rights it may have against any person not
a party hereto.
(e) All terms, provisions, covenants, agreements, and conditions
of the Note and the Liens are unchanged, except as provided
herein. Borrower agrees that this Third Modification Agreement
and all of the covenants and agreements contained herein shall
be binding upon Borrower and shall inure to the benefit of
Lender and each of their respective heirs, executors, legal
representatives, successors, and permitted assigns. THIS THIRD
MODIFICATION AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Borrower:
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Natural Gas Services Group, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
Lender:
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Western National Bank
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Executive Vice President
STATE OF TEXAS ss.
ss.
COUNTY OF MIDLAND ss.
This instrument was acknowledged before me on March 31, 2006, by
Xxxxxxx X. Xxxxxx, President of Natural Gas Services Group, Inc., a Colorado
corporation, on behalf of said corporation.
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Notary Public, State of Texas
STATE OF TEXAS ss.
ss.
COUNTY OF MIDLAND ss.
This instrument was acknowledged before me on March 31, 2006, by Xxxxx
X. Xxxxxx, Executive Vice President of Western National Bank, a national banking
association, on behalf of said association.
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Notary Public, State of Texas
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