THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT
10.35
THIRD
AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS
THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT is made as of
February 18, 2009 (the "Third Amendment
to Restated Credit Agreement," or this "Amendment"),
among VANGUARD NATURAL GAS,
LLC, a Kentucky limited liability company ("Borrower"),
each lender from time to time party hereto (collectively, 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, and as
amended by a First Amendment to First Amended and Restated Credit Agreement
dated as of May 15, 2008, and as amended by a Second Amendment to First
Amended and Restated Credit Agreement dated as of October 22, 2008
(collectively, the "Original Credit
Agreement").
B. Borrower
has requested certain amendments to the Original 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 Original
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 Original 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 February 18, 2009.
"Modification
Papers" means this Amendment 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. Third
Amendment to Restated Credit Agreement. This Third Amendment
to Restated Credit Agreement shall be in full force and effect.
B. 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.
C. 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.
D. 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 Original Credit Agreement. On the Effective Date, the
Original Credit Agreement shall be deemed to be amended as follows:
(a) The
Equity Interests of the Borrower are owned 100% by Vanguard Natural Resources,
LLC. The parties have agreed to include the financial results of
Vanguard Natural Resources, LLC with the consolidated financial results of the
Borrower and its Subsidiaries for purposes of determining compliance with the
financial covenants set forth in Sections 9.01(a), (b) and (c) of the Original
Credit Agreement. Accordingly, the definitions of "Consolidated
Leverage Ratio," "EBITDA," "Interest Expense" and "Total Debt" set forth in
Section 1.02 of the Original Credit Agreement shall be amended to read in their
entirety as follows:
"'Consolidated
Leverage Ratio' means, as of any date of determination, for the Borrower,
the Consolidated Subsidiaries and Vanguard Natural Resources, LLC on a
consolidated basis, the ratio of (a) Total Debt as of such date to (b) EBITDA
for each four consecutive fiscal quarter period ending on and after
December 31, 2007. For purposes of calculating the Consolidated
Leverage Ratio at any date, EBITDA shall be calculated on a pro forma basis (as
certified by the Borrower to the Administrative Agent and as approved by the
Administrative Agent) assuming that all acquisitions made, and all dispositions
completed, during the four consecutive fiscal quarters then most recently ended
have been made on the first day of such period (but without any adjustment for
projected cost savings or other synergies).
'EBITDA'
means, for any twelve-month period (except as otherwise expressly provided)
ending on the last day of any fiscal quarter, consolidated net income, excluding
any non-cash revenue or expense associated with Swap Agreements resulting from FAS 133, plus without duplication
and to the extent deducted from revenues
in determining consolidated net income, the sum of (a) the aggregate amount of consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts attributable to depletion,
depreciation and amortization for such period, and (d) all other non-cash charges, all determined on a
consolidated basis with respect to Borrower, the Consolidated Subsidiaries and
Vanguard Natural Resources, LLC in accordance with GAAP,
using the results of the twelve-month period ending with that reporting period
(except as otherwise herein provided).
'Interest
Expense' means, for any period, the sum (determined without duplication)
of the aggregate gross interest expense of the Borrower, the Consolidated
Subsidiaries and Vanguard Natural Resources, LLC for such period, including to
the extent included in interest expense under GAAP: (a) amortization
of debt discount, (b) capitalized interest and (c) the portion of any payments
or accruals under Capital Leases allocable to interest expense, minus (i) the
portion of any payments or accruals under Synthetic Leases allocable to interest
expense, and (ii) and any imputed interest pursuant to asset retirement
obligations whether or not the same constitutes interest expense under
GAAP.
'Total
Debt' means, at any date, all Debt of the Borrower, the Consolidated
Subsidiaries and Vanguard Natural Resources, LLC on a consolidated basis,
excluding (i) non-cash obligations under FAS 133 and (ii) accounts payable and
other accrued liabilities (for the deferred purchase price of Property or
services) from time to time incurred in the ordinary course of business which
are not greater than sixty (60) days past the date of invoice or delinquent or
which are being contested in good faith by appropriate action and for which
adequate reserves are maintained in accordance with GAAP."
(b) Section
9.01(a) of the Original Credit Agreement shall be amended to read in its
entirety as follows:
"(a) Interest Coverage
Ratio. The Borrower will not, as of the last day of any fiscal
quarter beginning with the fiscal quarter ending December 31, 2007, permit its
ratio of EBITDA, less
the aggregate amount of cash used to purchase Equity Interests of Vanguard
Natural Resources, LLC for the twelve month period ending on the last day of
such fiscal quarter, to Interest Expense for such twelve month period, to be
less than 2.5 to 1.0."
(c) Section
9.04(e) of the Original Credit Agreement shall be amended to read in its
entirety as follows:
"(e) the
Borrower may make Restricted Payments to its Equity Interest holders provided
that (i) no Default has occurred and is continuing or would result from the
making of such Restricted Payment, and (ii) after giving effect to such
Restricted Payment, the Revolving Credit Exposure is less than 90% of the
Borrowing Base as of such date, and (iii) in the case of a Restricted Payment
which will be used by Vanguard Natural Resources, LLC to purchase treasury
stock, the sum of the amounts of all such payments to date, plus the amount of
such proposed Restricted Payment, does not exceed $5,000,000."
(d) Exhibit D
to the Original Credit Agreement shall be amended by replacing it in its
entirety with Exhibit
D attached hereto.
4. Guarantor
Confirmation Letter – Nami Resources. On or before April 30,
2009, Borrower shall have caused Nami Resources Company L.L.C. to deliver to
Administrative Agent a Guarantor Confirmation Letter which shall be satisfactory
in form and substance to Administrative Agent. A breach of this
covenant shall constitute an Event of Default under the Original Credit
Agreement with no further grace period being applicable.
5. Certain
Representations. Borrower represents and warrants that, as of
the Effective Date: (a) Vanguard Natural Resources, LLC owns
100% of the issued and outstanding Equity Interests of Borrower; (b) Borrower
has full power and authority to execute the Modification Papers, and the
Modification Papers executed by Borrower constitute the legal, valid and binding
obligation of Borrower 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 (c) 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 thereof. In addition, Borrower
represents that all representations and warranties contained in the Original
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).
6. No
Further Amendments. Except as previously amended in writing or
as amended hereby, the Original Credit Agreement shall remain unchanged and all
provisions shall remain fully effective among the parties.
7. 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 Original 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 Original 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.
8. 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.
9. Incorporation
of Certain Provisions by Reference. The provisions of Section
12.09 of the Original Credit Agreement captioned "Governing Law; Jurisdiction;
Consent to Service of Process; Waiver of Jury Trial" are incorporated herein by
reference for all purposes.
10. 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 Xxx
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Name:
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Xxxxxx Xxx
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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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Managing Director
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LENDERS:
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COMPASS
BANK
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By:
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/s/
Xxxxxxxx X. Xxxxx
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Name:
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Xxxxxxxx
X. Xxxxx
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Title:
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Senior
Vice President
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EXHIBIT
D
FORM
OF
COMPLIANCE
CERTIFICATE
The
undersigned hereby certifies that he/she is the _______________ of VANGUARD NATURAL GAS, LLC, a
Kentucky limited liability company (the "Borrower"),
and that as such he/she is authorized to execute this certificate on behalf of
the Borrower. With reference to the First Amended and Restated Credit
Agreement dated as of February 14, 2008 (together with all amendments,
restatements, supplements or other modifications thereto being the "Agreement")
among the Borrower, CITIBANK,
N.A., as Administrative Agent, and the other agents and lenders (the
"Lenders")
which are or become a party thereto, and such Lenders, the undersigned
represents and warrants as follows (each capitalized term used herein having the
same meaning given to it in the Agreement unless otherwise
specified):
(a) The
representations and warranties of the Borrower contained in Article VII of the
Agreement and in the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct in all material respects when made, and are repeated at and as
of the time of delivery hereof and are true and correct in all material respects
at and as of the time of delivery hereof, except to the extent such
representations and warranties are expressly limited to an earlier date or the
Majority Lenders have expressly consented in writing to the
contrary.
(b) The
Borrower has performed and complied with all agreements and conditions contained
in the Agreement and in the Loan Documents required to be performed or complied
with by it prior to or at the time of delivery hereof [or specify default and
describe].
(c) Since
_________________, 200_, no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect
[or specify event].
(d) There
exists no Default or Event of Default [or specify Default and
describe].
(e) The
aggregate amount of cash used to date by Vanguard Natural Resources, LLC to
repurchase treasury stock is $_________________.
(f) Attached
hereto are the detailed computations necessary to determine whether the Borrower
is in compliance with Section 9.01 and
Section 8.14 as
of the end of the [fiscal quarter][fiscal year] ending
[ ].
EXECUTED
AND DELIVERED this _________ day of __________, 20__.
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VANGUARD
NATURAL GAS, LLC
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By:
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Name:
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Title:
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For the
Quarter/Year ended ___________________("Statement
Date")
SCHEDULE
2
to the
Compliance Certificate
($ in
000's)
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I.
Section 9.01(a) – Interest Coverage Ratio.
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A.
EBITDA
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1.consolidated
net income, less
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$______________
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2.non-cash
revenue or expense associated with Swap Agreements resulting from FAS 133,
less
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($______________)
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3.income
or plus loss from discontinued operations and extraordinary items, plus
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($______________)
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4.income
taxes, plus
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$______________
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5.interest
expense, plus
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$______________
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6.depreciation,
plus
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$______________
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7.depletion,
plus
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$______________
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8.amortization,
plus
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$______________
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9.non-cash
and extraordinary items
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$______________
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00.Xxxxx
EBITDA
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$______________
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11.
less the aggregate amount of cash
used to purchase Equity Interests of Vanguard Natural Resources, LLC
during the twelve month period ending on the Statement
Date
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$______________
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B.
Interest Expense
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$______________
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C.
Ratio (Line I.A.11 ÷ Line I.B)
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_________
to 1.0
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Minimum
Required: 2.5 to 1.0
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II. Section 9.01(b) –
Consolidated Leverage Ratio.
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A.
Total Debt
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1.Debt, less
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$_______________
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2.Non-cash obligations under FAS
133, less
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($______________)
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3.Accounts
payable and other accrued liabilities not greater than 60 days past due or
which are being contested in good faith
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($______________)
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0.Xxxxx Debt
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$_______________
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B.
EBITDA (amount on Line I.A.10)
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$_______________
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C.
Ratio (Line II.A.4 ÷ Line II.B)
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__________
to 1.0
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Maximum Permitted: 4.0
to 1.0
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III.
Section 9.01(c) – Current Ratio.
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A.
Current Assets (including
Borrowing Base availability)
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$______________
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B.
Current Liabilities (excluding current
maturities of Indebtedness owed to Lenders)
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$______________
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C.
Ratio (Line III.A ÷ Line III.B):
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_________
to 1.0
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Minimum
Required: 1.0 to 1.0
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