EXHIBIT 10.15
Greeley, Colorado
Loan # 9051266
AMENDMENT # 1 TO LOAN AGREEMENT
THIS AMENDMENT # 1 TO LOAN AGREEMENT (this "Amendment") is made as of the
23rd day of April, 2012 by SYNERGY RESOURCES CORPORATION, a Colorado company,
having an office at 00000 Xxxxxxx 00, Xxxxxxxxxxx, Xxxxxxxx, 00000-0000 (the
"Borrower"), and BANK OF CHOICE, a division of BANK MIDWEST, N.A., having an
office at 0000 X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000,(xxx "Lender").
W I T N E S S E T H
WHEREAS, reference is made to (a) the Loan Agreement dated as of November
30, 2011 (the "Original Loan Agreement") (as by this Amendment and otherwise
amended, supplemented or otherwise modified and in effect from time to time, the
"Existing Loan Agreement") among the Borrower, and the Lender; (b) the Secured
Promissory Note dated as of November 30, 2011 (the "Original Note"), as amended
by that certain Amendment and Allonge to Secured Promissory Note dated as of the
date hereof (as amended, supplemented or otherwise modified and in effect from
time to time, the "Existing Note") among the Borrower and the Lender and (c) the
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated
as of November 30, 2011 and recorded December 1, 2011 at Reception #3809198 of
the Weld County, Colorado Clerk and Recorder records, and at Reception #03187188
of the Boulder County, Colorado Clerk and Recorder records (the "Original Deed
of Trust" and as amended by that certain Amendment to Deed of Trust, Assignment
of Rents, Security Agreement and Fixture Filing dated as of the date hereof, the
"Existing Deed of Trust"); and
WHEREAS, the Lender and the Borrower have agreed to amend the Original Loan
Agreement to provide for, among other things, an increase in the Commitment
Limit to an aggregate amount up to, but not to exceed $20,000,000 for the period
commencing on the date hereof, and ending November 30, 2014, as set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree that the
Existing Loan Agreement shall be hereby amended and modified as follows:
Section 1. Defined Terms. Each capitalized term used herein and not
otherwise defined herein shall have the meaning assigned thereto in the Existing
Loan Agreement, as amended by this Amendment, or if not defined therein, in the
Existing Deed of Trust. Each reference in the Existing Loan Agreement to "this
Loan Agreement" or "this Agreement" shall be deemed to be a reference to the
Existing Loan Agreement, as amended by this Amendment.
Section 2. Modification. The Existing Loan Agreement is hereby amended as
follows:
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(a) The definition of "Commitment Limit" shall be amended and restated
to read as follows: "$20,000,000, as adjusted pursuant to the terms of
Section 2.7 and Section 2.9 of this Agreement";
(b) All references to the "Note" shall mean the Existing Note;
(c) A new Section 2.10 shall be added to the Original Loan Agreement
that reads as follows:
"2.10 Unused Availability Fee. In addition to interest and all other
amounts due and payable pursuant to the terms of this Agreement and
the Note, Borrower agrees to pay to Lender an unused facility fee on
the unused portion of the Commitment Limit (the "unused portion" being
the amount by which the maximum dollar amount of the Note (initially,
$20,000,000) exceeds the outstanding principal balance of the Note)
from the Effective Date through the Maturity Date, at the rate of
0.25% per annum, accrued daily and payable for each three (3) calendar
month period (each calendar quarter), in arrears, fifteen (15) days
after the last day of each calendar quarter, with the exception that
the first payment relating to the period ending on February 29, 2012
shall be due on upon execution of Amendment # 1 to the Loan Agreement.
The amount of the unused facility fee shall be calculated each day
during the period for which the fee is due using an assumed 360 day
year.
(d) A new Paragraph (g) shall be added to Section 6.1 of the Existing
Loan Agreement that reads as follows:
"(g) as soon as available, but in any event not later than sixty (60)
days after the end of the second fiscal quarter of Borrower, a reserve
report on Borrower's oil and gas properties as of the end of such
fiscal quarter prepared by or audited by a professional petroleum
engineer approved in advance by Lender which report shall include all
engineering-relevant information as may be requested by Lender (the
"Mid-Year Reserve Report")."
(e) Section 2.7 of the Original Loan Agreement shall be deleted in its
entirety and replaced with the following:
"2.7 Adjustment of Commitment Limit or Collateral. Lender shall engage
a third-party consultant, at the sole cost and expense of Borrower, to
review (a) the Annual Reserve Report delivered to Lender pursuant to
Section 6.1(c) of this Agreement and (b) the Mid-Year Reserve Report
delivered to Lender Pursuant to Section 6.1(g) of this Agreement,
which review shall include preparation of a price-deck established by
Lender at PV9 for the purposes of establishing a new Borrowing Base.
If Lender delivers to Borrower written notification that, in Lender's
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sole discretion, the new Borrowing Base does not provide sufficient
collateral to support Advances up to the Commitment Limit, then the
Commitment Limit shall be immediately reduced to such an amount as is
supported by the adjusted Borrowing Base. Provided, however, that, in
the event the Borrowing Base is reduced pursuant to this Section 2.7,
Borrower may pledge additional assets as Collateral to Lender as may
be necessary, in Lender's sole discretion, to support an increase in
the Commitment Limit back to $20,000,000, and the Commitment Limit
shall be so adjusted following documentation of such pledge of
additional assets as Collateral, such documentation to be determined
in the reasonable discretion of Lender. Provided, further that, if the
Commitment Limit has been reduced pursuant to this Section 2.7 or
pursuant to Section 2.9 and in subsequent years the Annual Reserve
Report or the Mid-Year Reserve Report displays a Borrowing Base that
would support a Commitment Limit greater than the then-existing
Commitment Limit, then the Commitment Limit shall be increased to an
amount (not to exceed $20,000,000) that, in Lender's reasonable
discretion, would be supported by the information regarding the
Collateral contained in such Annual Reserve Report."
(f) A new Section 2.11 shall be added to the Existing Loan Agreement
that reads as follows:
"2.10 Other Credit Available to Borrower. Any and all additional
commitments by Lender to extend credit to Borrower (including credit
cards, etc.) shall serve to reduce the credit available for Advances
pursuant to this Agreement or the Note by the amount of such
additional commitments."
(g) The following definitions shall be added to Section 8.1 of the
Existing Loan Agreement:
"`Current Assets' means, as of the period of determination, all
current assets of Borrower, excluding all receivables aged 90 days or
longer and including all unfunded borrowing availability pursuant to
the terms of this Agreement."
"`Current Liabilities' means, as of the period of determination, all
current liabilities of Borrower, excluding all current maturities of
amounts due pursuant to the terms of this Agreement or the Note."
(g) A new Section 8.5 shall be added to the Existing Loan Agreement
that reads as follows:
"8.5 Current Ratio. Borrower shall maintain a Current Ratio of no less
than 1.00, calculated at the end of each fiscal quarter, where
"Current Ratio" is calculated as Current Assets divided by Current
Liabilities."
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It is the intent of this Amendment that the obligations of the Borrower under
the Existing Loan Agreement shall be entitled to the benefits and collateral
security under the Existing Deed of Trust as fully as if such obligations had
been incurred under the Original Loan Agreement as originally in effect.
Section 3. Third Party Costs and Expenses. All reasonable third party costs
and expenses of Lender related to or arising from the increase of the Commitment
Limit and the amendment to the Loan Documents, including, without limitation,
any and all legal fees, valuations, reviews, surveys, reports, filings and
recordation fees, shall be the sole responsibility of Borrower, and shall be
payable to Lender upon demand, and if not so paid, shall become part of the
Obligation (as defined in the Existing Loan Agreement) and shall bear interest
at the Default Rate beginning on the date demand for payment is made by Lender
until the date paid by Borrower.
Section 4. Facility Fee. Upon the date hereof, Borrower shall pay Lender a
commitment fee of Twelve Thousand and Five Hundred Dollars ($12,500.00) (0.25%
of the $5,000,000 increase in the Commitment Limit).
Section 5. Representations and Warranties. The Borrower hereby represents
and warrants that the representations and warranties made by it in the Original
Loan Agreement are true and complete on and as of the date hereof as if made on
and as of the date hereof.
Section 6. Covenants. The Borrower hereby covenants and agrees to perform
each and every duty and obligation of the Borrower contained in the Existing
Loan Agreement as amended by this Amendment.
Section 7. Effectiveness. This Amendment shall be effective as of the day
and year first written above upon its execution and delivery by the Borrower.
Except as herein provided, the Existing Loan Agreement shall remain unchanged
and in full force and effect.
Section 8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Amendment has been duly executed by the parties
hereto as of the day and year first above written.
BORROWER:
SYNERGY RESOURCES CORPORATON, a Colorado
corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Name: Xxxxxxx X Xxxxx, Xx.
Title: Vice President
AGREED TO AND ACCEPTED:
BANK OF CHOICE, a division of BANK MIDWEST, N.A., as Lender
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Relationship Manager
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