FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT
10.34
FIRST
AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT is made as of May
15, 2008 (the "First Amendment
to Restated Credit Agreement," or this "Amendment"),
among VANGUARD NATURAL GAS,
LLC, a Kentucky limited liability company ("Borrower"),
the lenders listed on the signature pages hereto as Lenders (the "Lenders"),
and CITIBANK,
N.A., a national banking association, in its capacity as Administrative
Agent ("Administrative
Agent").
R E C I T A L S
A. Borrower,
the Lenders, and the Administrative Agent are parties to that certain First
Amended and Restated Credit Agreement dated as of February 14, 2008 (the "Restated Credit
Agreement").
B. The
parties desire to amend the Restated Credit Agreement as hereinafter
provided.
NOW,
THEREFORE, in consideration of these premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Same
Terms. All terms used herein which are defined in the Restated
Credit Agreement shall have the same meanings when used herein, unless the
context hereof otherwise requires or provides. In addition, all
references in the Loan Documents to the "Agreement" shall
mean the Restated Credit Agreement, as amended by this Amendment, as the same
shall hereafter be amended from time to time. In addition, the
following terms have the meanings set forth below:
"Effective
Date" means May 15, 2008.
"Modification
Papers" means this Amendment, the First Amendment to NRC Guaranty
Agreement, the Guarantor Confirmation Letters, and all of the other documents
and agreements executed in connection with the transactions contemplated by this
Amendment.
2. Conditions
Precedent. The transactions contemplated by this Amendment
shall be deemed to be effective as of the Effective Date, when the following
conditions have been complied with to the satisfaction of Administrative Agent,
unless waived in writing by Administrative Agent:
A. First
Amendment to Restated Credit Agreement. This First Amendment
to Restated Credit Agreement shall be in full force and effect.
B. First
Amendment to NRC Guaranty Agreement. Nami Resources Company
L.L.C. shall have executed and delivered to Administrative Agent an amendment to
the Unconditional Guaranty of Nami Resources Company L.L.C. (the "First Amendment
to NRC Guaranty Agreement"), which shall be satisfactory in form and
substance to Administrative Agent.
C. Guarantor
Confirmation Letters. Each of Ariana Energy, LLC and Trust
Energy Company, LLC shall have executed a letter in favor of Administrative
Agent (each a "Guarantor
Confirmation Letter") confirming that its Guaranty remains in full force
and effect.
D. Fees and
Expenses. Administrative Agent shall have received payment of
all out-of-pocket fees and expenses (including reasonable attorneys' fees and
expenses) incurred by Administrative Agent in connection with the preparation,
negotiation and execution of the Modification Papers.
E. Representations
and Warranties All representations and warranties contained
herein or in the documents referred to herein or otherwise made in writing in
connection herewith or therewith shall be true and correct with the same force
and effect as though such representations and warranties have been made on and
as of this date.
3. Amendments
to Restated Credit Agreement. On the Effective Date, the
Restated Credit Agreement shall be deemed to be amended as follows:
(a) The
definition of "Swap Agreement" shall be amended to read in its entirety as
follows:
"'Swap
Agreement' means any agreement with respect to any swap, forward, future
or derivative transaction or option (whereby the aggregate position for options
creates an obligation for Borrower) or similar agreement, whether exchange
traded, "over-the-counter" or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, managers, officers, employees or consultants of Borrower or the
Subsidiaries shall be a Swap Agreement."
(b) Section
2.07(a) of the Restated Credit Agreement shall be deemed to be amended as
follows:
"The term
'Borrowing
Base' means, as of the date of the determination thereof, the designated
loan value as calculated by the Lenders in their sole discretion assigned to the
discounted present value of future net income accruing to the Mortgaged
Property, based upon the Lenders' in-house evaluation of the Mortgaged
Property. The Lenders' determination of the Borrowing Base will be
made in accordance with then-current practices, economic and pricing parameters,
methodology, assumptions, and customary procedures and standards established by
each Lender from time to time for its petroleum industry
customers. Borrower acknowledges that the determination of the
Borrowing Base contains an equity cushion (market value in excess of loan
amount) which Borrower acknowledges to be essential for the adequate protection
of the Lenders. For the period from and including the date on which
the conditions in Section 6.03 were
satisfied to but excluding the next Redetermination Date, the amount of the
Borrowing Base shall be $150,000,000. Borrower further acknowledges
and agrees that in calculating the Borrowing Base, the combined value of the
Xxxxx XX Properties and the Xxxxx PUD Properties shall not exceed the maximum
liability of NRC with respect to the principal amount of the Notes guaranteed by
NRC as provided in the Guaranty Agreement of NRC as amended from time to time.
Notwithstanding the foregoing, the Borrowing Base may be subject to further
adjustments from time to time pursuant to Section 8.13(c)."
4. Temporary
Waiver – 95% Ceiling for Crude Oil Swaps. Pursuant to
Section 9.18 of the Restated Credit Agreement, Borrower is prohibited from
hedging more than 95% of the reasonably anticipated projected production from
proved, developed, producing Oil and Gas Properties for natural gas and crude
oil. Borrower proposes to acquire certain non-operating working
interests in proved, developed, producing Oil and Gas Properties producing
natural gas and crude oil from Greenbriar Energy XX XX (the "Greenbriar
Acquisition"). Concurrently with its execution of the purchase
and sale agreement for the Greenbriar Acquisition, Borrower proposes to enter
into Swap Agreements for forecasted production of crude oil which will exceed
the 95% ceiling imposed by Section 9.18 of the Restated Credit Agreement (the
"Swap
Violation"). If the Greenbriar Acquisition is consummated, the
additional production from the newly acquired Oil and Gas Properties will bring
Borrower back into compliance with Section 9.18 of the Restated Credit
Agreement. If the Greenbriar Acquisition fails to close, Borrower
will unwind the Swap Agreements in order to get back into compliance with the
95% ceiling for crude oil production set forth in Section 9.18 of the Restated
Credit Agreement. Absent a waiver, the Swap Violation will constitute
an Event of Default under Section 10.01(d) of the Restated Credit
Agreement. The Administrative Agent and the Lenders hereby waive the
exercise of their rights and remedies for the Event of Default resulting from
the Swap Violation until 5:00 p.m. Friday, July 11, 2008, subject to the
following:
(i) During
the period that the Swap Violation exists, Borrower will maintain unencumbered
liquid assets having an aggregate value of at least $10,000,000 (the phrase
"unencumbered liquid assets" shall have the same meaning as set forth in Section
9.01(d) of the Restated Credit Agreement);
(ii) During
the period that the Swap Violation exists, Borrower will not enter into Swap
Agreements for forecasted production of crude oil which will exceed more than
107% of the reasonably anticipated projected production from proved, developed,
producing Oil and Gas Properties for crude oil; and
(iii) If the
Swap Violation continues to exist after 5:00 p.m. on Friday, July 11, 2008, an
Event of Default shall be deemed to exist under Section 10.01(d) of the Restated
Credit Agreement.
5. Limitations
as to Temporary Waiver of Swap Violation. The waivers granted
herein and the future failure of the Administrative Agent and/or the Lenders to
exercise available rights and remedies is not intended (a) to operate as a
waiver of rights and remedies due to defaults other than the Event of Default
resulting from the Swap Violation, or (b) to indicate any agreement on the part
of the Administrative Agent and the Lenders to waive their rights and remedies
in the future. The waivers and consents set forth herein are limited
precisely as written and shall not be deemed (a) to be a waiver or waivers of or
a consent or consents to the modification of or deviation from any other term or
condition of the Credit Agreement or the Loan Documents, or (b) to prejudice any
right or rights which the Administrative Agent and/or the Lenders may now have
or may have in the future under or in connection with the Credit Agreement or
any of the other Loan Documents.
6. Release. To
induce the Administrative Agent and the Lenders to agree to the temporary waiver
of the Swap Violation, Borrower warrant and represent that as of the Effective
Date, there are no claims or offsets or defenses or counterclaims to the
obligations of Borrower under the Loan Documents, and in accordance therewith,
Borrower:
(a) Waives
any and all such claims, offsets, defenses or counterclaims, whether known or
unknown, arising under the Loan Documents prior to the Effective Date;
and
(b) Releases
and discharges the Administrative Agent and the Lenders and their officers,
directors, employees, agents, shareholders, affiliates and attorneys (the "Released
Parties") from any and all obligations, indebtedness, liabilities,
claims, rights, causes of action or other demands whatsoever, whether known or
unknown, suspected or unsuspected, in law or equity, which Borrower ever had,
now have or claim to have or may have against any Released Parties arising prior
to the Effective Date and from or in connection with the Loan Documents or the
transactions contemplated thereby, except those resulting from the gross
negligence or willful misconduct of the Released Parties.
7. Certain
Representations. Borrower represents and warrants that, as of
the Effective Date: (a) Borrower and each Guarantor has full
power and authority to execute the Modification Papers to which it is a party
and the Modification Papers executed by Borrower and each Guarantor constitute
the legal, valid and binding obligation of Borrower and each such Guarantor
enforceable in accordance with their terms, except as enforceability may be
limited by general principles of equity and applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the enforcement of
creditors' rights generally; and (b) no authorization, approval, consent or
other action by, notice to, or filing with, any governmental authority or other
person is required for the execution, delivery and performance by Borrower or
each such Guarantor thereof. In addition, Borrower represents that
all representations and warranties contained in the Restated Credit Agreement
are true and correct in all material respects on and as of the Effective Date
(except representations and warranties that relate to a specific prior date are
based upon the state of facts as they exist as of such date).
8. No
Further Amendments. Except as
previously amended in writing or as amended hereby, the Restated Credit
Agreement shall remain unchanged and all provisions shall remain fully effective
among the parties.
9. Limitation
on Agreements. The modifications set forth herein are limited
precisely as written and shall not be deemed (a) to be a consent under or a
waiver of or an amendment to any other term or condition in the Restated Credit
Agreement or any of the Loan Documents, or (b) to prejudice any right or
rights which Administrative Agent and/or the Lenders now have or may have in the
future under or in connection with the Restated Credit Agreement and the Loan
Documents, each as amended hereby, or any of the other documents referred to
herein or therein. The Modification Papers shall constitute Loan Documents for
all purposes.
10. Counterparts. This
Amendment may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed an original, but all of which constitute
one instrument. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.
11. Incorporation
of Certain Provisions by Reference. The provisions of Section
12.09 of the Restated Credit Agreement captioned "Governing Law; Jurisdiction;
Consent to Service of Process; Waiver of Jury Trial" are incorporated herein by
reference for all purposes.
12. Entirety,
Etc. This instrument and all of the other Loan Documents
embody the entire agreement between the parties. THIS AMENDMENT AND
ALL OF THE OTHER LOAN DOCUMENTS 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 NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective
as of the date and year first above written.
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BORROWER:
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VANGUARD
NATURAL GAS, LLC
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By:
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/s/
Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx
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Executive
Vice President and Chief Financial Officer
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ADMINISTRATIVE
AGENT:.
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CITIBANK,
N.A
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as
Administrative Agent
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By:
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/s/
Xxxx Xxxxxx
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Xxxx
Xxxxxx
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Vice
President
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LENDERS:
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CITIBANK,
N.A.
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By:
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/s/
Xxxx Xxxxxx
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Xxxx
Xxxxxx
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Vice
President
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LENDERS:
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BNP
PARIBAS
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By:
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/s/
Xxxxx Xxxxxx
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Name:
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Xxxxx
Xxxxxx
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Title:
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Director
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By:
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/s/
Xxxxxx Xxxx
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Name:
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Xxxxxx
Xxxx
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Title:
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Vice
President
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LENDERS:
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WACHOVIA
BANK, NATIONAL ASSOCIATION
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By:
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/s/
Xxxxx Xxxxx
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Name:
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Xxxxx
Xxxxx
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Title:
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Director
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LENDERS:
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THE
BANK OF NOVA SCOTIA
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By:
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/s/
Xxxxx X. Xxxxx
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Name:
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Xxxxx
X. Xxxxx
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Title:
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Director
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