Amendment No. 1 to Amended and Restated Credit Agreement
Exhibit 10.7
Amendment No. 1 to
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”),
effective (subject to Section 2 below) as of June 30, 2008 (the “Amendment Effective
Date”), by and among NGAS RESOURCES, INC., a corporation organized under the laws of the
Province of British Columbia (“Holdings”), XXXXXXXXX PETROLEUM, INC., a Kentucky
corporation (the “Borrower”), the several banks and other financial institutions or
entities from time to time party to the Credit Agreement referred to below (the “Lenders”),
and KEYBANK NATIONAL ASSOCIATION, a national banking association (“KeyBank”), as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).
PRELIMINARY STATEMENTS:
Holdings, the Borrower, the Lenders and the Administrative Agent have entered into an Amended
and Restated Credit Agreement dated as of May 30, 2008 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”); capitalized terms defined
therein and used herein having the meanings specified therein unless otherwise defined herein.
Holdings, the Borrower, the Lenders and the Administrative Agent desire to amend Section
2.02(e) of the Credit Agreement to increase the Conforming Borrowing Base from $75,000,000 to
$80,000,000 and to extend the date on which the Borrowing Base is to equal the Conforming Borrowing
Base from June 30, 2008 to December 31, 2008.
Holdings, the Borrower, the Lenders and the Administrative Agent have agreed to make the
amendments as provided herein upon and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE XI Amendments to Credit Agreement. The Credit Agreement is, as of the
Amendment Effective Date, but subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, hereby amended as follows:
Section 11.01. Section 2.02(e) of the Credit Agreement is amended by deleting such Section in
its entirety and replacing it with the following:
“(e) Conforming Borrowing Base. The Conforming Borrowing Base is
$80,000,000. The Conforming Borrowing Base shall be utilized solely for purposes of
determining the Conforming Borrowing Base Usage under and for purposes of this
Agreement. The amount of the Conforming Borrowing Base may be redetermined on or
about October 1, 2008, by the Administrative Agent and the Lenders in the same
manner as the Borrowing Base may be redetermined on or about such date as provided
in this Section 2.02. Notwithstanding the foregoing, beginning on December 31, 2008
and continuing through the Termination Date, the Borrowing Base shall be an amount
which is equal to the Conforming Borrowing Base, as redetermined in accordance with
Section 2.02, unless all of the Lenders agree in writing that the Conforming
Borrowing Base should thereafter be maintained at an amount which is lower than the
amount of the Borrowing Base then in effect.
Section 11.02. Schedule 1.01A of the Credit Agreement is hereby deleted in its entirety and
replaced with Schedule 1.01A attached hereto.
ARTICLE XII Conditions of Effectiveness. This Amendment shall become effective as of
the Amendment Effective Date, subject to the satisfaction (or waiver in writing by the
Administrative Agent) of the following conditions precedent:
Section 12.01. the Administrative Agent shall have received this Amendment duly executed by
Holdings, the Borrower and all of the Lenders, and acknowledged and consented to by the Guarantors.
Section 12.02. the Administrative Agent shall have received a certificate of a Responsible
Officer of each Loan Party, in form satisfactory to the Administrative Agent, certifying as of the
Amendment Effective Date:
(a) the names and true signatures of the officers of such Loan Party authorized to
execute and deliver, in the name of and on behalf of such Loan Party, this Amendment;
(b) copies of the resolutions (or similar authorizing documents) of the board of
directors or other governing body of such Loan Party approving and authorizing the
execution, delivery and performance by such Loan Party of this Amendment; and
(c) other documents and matters as the Administrative Agent may reasonably request;
Section 12.03. the Borrower shall have paid all reasonable accrued and unpaid fees, costs and
expenses of the Administrative Agent and the Lenders in connection with this Amendment and any
other agreements, instruments or documents related hereto, and the transactions contemplated hereby
and thereby to the extent due and payable, including, without limitation, the reasonable fees and
out of pocket expenses of legal counsel for the Administrative Agent;
Section 12.04. the Administrative Agent shall have received, for the ratable account of the
Lenders, payment by the Borrower of a fee for the increase of the Commitment in immediately
available funds in the amount of $140,000; and
Section 12.05. the Administrative Agent and each Lender shall have received copies of all
other documents, instruments and certificates which the Administrative Agent, any Lender or its or
their counsel may reasonably request in connection herewith.
ARTICLE XIII Borrowing Base. The Lenders and the Borrower agree that the amount of
the Borrowing Base from and after the Amendment Effective Date up to the next redetermination will
be $90,000,000. This provision does not limit the right of the parties to initiate interim
redeterminations of the Borrowing Base in accordance with Section 2.02(c).
ARTICLE XIV Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders as follows:
Section 14.01. The Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Kentucky.
Section 14.02. The execution, delivery and performance by the Borrower of this Amendment is
within the Borrower’s general corporate powers, has been duly authorized by all necessary action on
the part of such Borrower and does not contravene (i) such Borrower’s Organizational Documents, or
(ii) any Requirement of Law or any Contractual Obligation binding on or affecting the Borrower or
any of its assets or properties, or result in, or require, the creation or imposition of any Lien
or other charge, encumbrance or preferential arrangement of any nature (other than pursuant to the
Security Documents) upon or with respect to any of the properties now owned or hereafter acquired
by such Borrower.
Section 14.03. No authorization, approval or other action by, and no notice to or filing with,
any Governmental Authority is required for the due execution, delivery and performance by the
Borrower of this Amendment.
Section 14.04. This Amendment constitutes the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective terms.
Section 14.05. The Security Documents create valid and perfected first priority (subject to
Permitted Liens) security interests and Liens in and to the Collateral covered thereby, enforceable
against all third parties in all
jurisdictions, to secure the payment and performance of the Obligations. The execution,
delivery and performance of this Amendment does not and will not adversely affect the Liens created
under any of the Security Documents.
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Section 14.06. Prior to the last date of execution on the signature pages, no Default or Event
of Default exists, and after giving effect to this Amendment no Default or Event of Default will
exist, under the Credit Agreement or any other Loan Document.
Section 14.07. The representations and warranties made by Holdings and the Borrower in the
Credit Agreement and the other Loan Documents are true and correct on the date hereof, before and
after giving effect to the effectiveness of this Amendment, as if made on and as of such date
(except to the extent such representations and warranties relate, by their terms, to a specific
earlier date, in which case they shall be true and correct on and as of such earlier date).
Section 14.08. There is no pending or threatened action or proceeding affecting Holdings, the
Borrower or any of its Subsidiaries before any Governmental Authority which may materially
adversely affect the financial condition or operations of Holdings, the Borrower or any such
Subsidiary or which purports to affect the legality, validity or enforceability of this Amendment
or any other Loan Document (as amended hereby).
ARTICLE XV Reference to and Effect on the Loan Documents.
Section 15.01. Upon the effectiveness of this Amendment, on and after the date hereof each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.
Section 15.02. Except as specifically amended above, the Credit Agreement and all other Loan
Documents, and the Liens created under the Security Documents, are and shall continue to be in full
force and effect in accordance with their respective terms and are hereby in all respects ratified
and confirmed by each Borrower. Without limiting the generality of the foregoing, the Security
Documents and all of the Collateral described therein do and shall continue to secure the payment
and performance of all Obligations under the Credit Agreement and the other Loan Documents.
Section 15.03. Except as expressly provided in Section 3, the execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan Documents.
ARTICLE XVI Costs, Expenses and Taxes. The Borrower hereby agrees to pay on demand
all costs and expenses of the Administrative Agent and any Lender in connection with the
preparation, negotiation, execution and delivery of this Amendment and any other agreements,
instruments and documents to be negotiated, reviewed, executed or delivered hereunder or in
connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses
of legal counsel for the Administrative Agent and the Lenders with respect thereto and with respect
to advising the Administrative Agent and the Lenders as to its and their respective rights and
responsibilities hereunder and thereunder (which fees and expenses, as to legal counsel of the
Administrative Agent, shall be paid directly to legal counsel of the Administrative Agent upon
presentation of an invoice for legal services rendered). The Borrower hereby further agrees to pay
on demand all costs and expenses, if any (including, without limitation, reasonable legal counsel
fees and expenses), in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Amendment and the other agreements, instruments and documents to
be negotiated, reviewed, executed or delivered hereunder or in connection herewith, including,
without limitation, reasonable fees and expenses of legal counsel in connection with the
enforcement of rights under this Section 7. In addition, the Borrower shall pay any and all stamp
and other taxes payable or determined to be payable in connection with the execution and delivery
of this Amendment and the other agreements, instruments and documents to be delivered hereunder,
and agrees to save the Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to pay such taxes.
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ARTICLE XVII Release of Claims and Covenant Not to Xxx. As a material inducement to
the Administrative Agent and each Lender to enter into this Amendment, each of the Loan Parties,
for and on behalf of
itself and its and their respective Related Parties, (a) does hereby release, acquit, satisfy
and forever discharge the Administrative Agent, each Lender and each of its and their respective
Related Parties (collectively, the “Released Parties”), from any and all liabilities,
obligations, expenses, damages, judgments, actions, claims, demands and causes of action of any
kind or nature, whether at law or in equity, whether now accrued or hereafter maturing and whether
known or unknown, which such Loan Party or any of its Related Parties now has or hereafter may have
by reason of any action, inaction, matter, cause or thing, occurring on or prior to the date of
this Amendment, arising out of, in connection with or relating to this Amendment, the Collateral,
the Obligations, or the Loan Documents (collectively, “Released Claims”) and (b) does
hereby covenant and agree never to institute or cause to be instituted or continue prosecution of
any suit or other action or proceeding of any kind or nature against any Released Party, by reason
of or in connection with any Released Claim, provided, however, that the foregoing
release and covenant not to xxx shall not apply to any claims arising after the date of this
Amendment with respect to acts or events that occur after the date of this Amendment.
ARTICLE XVIII Further Assurances. The Borrower covenants and agrees from time to
time, as and when requested by the Administrative Agent or the Lenders, to execute and deliver or
cause to be executed or delivered, all such documents, instruments and agreements and to take or
cause to be taken such further or other action as the Administrative Agent or the Lenders may
reasonably deem necessary or desirable in order to (a) carry out the intent and purposes of this
Amendment, the Credit Agreement and the other Loan Documents, (b) exercise and enforce any rights
and remedies under this Amendment, the Credit Agreement and the other Loan Documents, and (c)
perfect, preserve and protect the validity, effectiveness and priority of the security interests
and Liens in and to the Collateral created by the Security Documents.
ARTICLE XIX Time. Time is of the essence in the performance of the covenants
contained herein and in the Loan Documents.
ARTICLE XX Binding Agreement. This Amendment shall be binding on the parties hereto
and their respective successors and assigns; provided, however, that the Borrower
may not assign or delegate any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent.
ARTICLE XXI Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart by facsimile or
other electronic means shall be effective as delivery of an original executed counterpart of this
Amendment.
ARTICLE XXII Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Ohio.
ARTICLE XXIII Headings. The section headings hereof are inserted for convenience of
reference only and shall in no way alter, amend, define or be used in the construction or
interpretation of the text of such section.
ARTICLE XXIV Interpretation. The rules of interpretation in Article I of the Credit
Agreement shall apply to this Amendment.
ARTICLE XXV Loan Document. This Amendment is and shall constitute a Loan Document in
all respects and for all purposes.
ARTICLE XXVI ENTIRE AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS COLLECTIVELY REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NOT UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
ARTICLE XXVII Guarantor Acknowledgment and Consent. The Borrower hereby covenants and
agrees to cause each Guarantor existing on the date hereof to execute and deliver the Guarantor
Acknowledgment and Consent to this Amendment, in the form attached hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.
| NGAS RESOURCES, INC., a British Columbia corporation |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX PETROLEUM, INC., a Kentucky corporation |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as a Lender and as the Issuing Bank |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| BMO CAPITAL MARKETS FINANCING, INC., as a Lender |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| RBC CENTURA BANK, as a Lender |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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