FIRST AMENDMENT TO TERM CREDIT AGREEMENT
EXHIBIT
10.1
FIRST
AMENDMENT TO
THIS
FIRST AMENDMENT TO TERM CREDIT AGREEMENT (this “First Amendment”)
is
entered into effective as of October 22, 2008 between RANCHER
ENERGY CORP.,
a
Nevada corporation (“Borrower”),
and
GASROCK
CAPITAL LLC,
a
Delaware limited liability company (“Lender”).
Capitalized terms used but not defined in this First Amendment have the meaning
given them in the Credit Agreement (defined below).
RECITALS
A. Borrower
and Lender entered into that certain Term Credit Agreement dated as of October
16, 2007 (as amended, restated or supplemented from time to time, the
“Credit
Agreement”).
B. Borrower
and Lender have agreed to amend the Credit Agreement, subject to the terms
and
conditions of this First Amendment.
AGREEMENT
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are acknowledged, the undersigned hereby agree as follows:
1. Amendments
to Credit Agreement.
Section
1.1, Defined Terms
of the
Credit Agreement is hereby amended by revising the following definition in
its
entirety to read as follows:
“Maturity
Date”
means
the earliest of (a) Xxxxx 00, 0000, (x) the date on which all Obligations (other
than the obligations under any ORRI Conveyance and indemnity obligations and
similar obligations that expressly survive the termination of the Loan
Documents) have been paid in full and this Agreement has terminated, and (c)
the
date on which Lender notifies Borrower of the acceleration of payments of all
or
any portion of the Obligations based on the occurrence of an Event of
Default.
Section
2.6(c)
is
hereby amended to add the following text immediately following the last sentence
thereof:
In
addition to the foregoing and to the extent any portion of the Interest Reserve
remains unapplied on the Repayment Dates as set forth below, Borrower hereby
instructs Lender, and Lender hereby agrees, to apply the balance of such
Interest Reserve, if any, against the accrued and unpaid interest due on the
Principal Amount on the Repayment Dates as follows: (i) first, the amount of
the
Interest Reserve in excess of $300,000 against the accrued and unpaid interest
payable on the January 2009 Repayment Date; (ii) second, the
amount
of
Interest Reserve in excess of $206,666.67, if any, against the accrued and
unpaid interest payable on the February 2009 Repayment Date; (iii) third, the
amount of the Interest Reserve in excess of $100,000, if any, against the
accrued and unpaid interest payable on the March 2009 Repayment Date; and (iv),
fourth, the remainder of such Interest Reserve, if any, against the accrued
and
unpaid interest payable on the April 2009 Repayment Date; provided
that
in the
event Lender applies the balance of such Interest Reserve, if any, in accordance
with the foregoing, Borrower shall not be required to deposit additional funds
into the Lender Account sufficient to eliminate any such deficit in the Interest
Reserve created thereby. If, on the Maturity Date and after applying the
foregoing accrued interest payments, any excess Interest Reserve amount exists,
such excess shall be applied to the outstanding Principal Amount.
Section
7.1(d)
is
hereby amended to add the following subsection (v) immediately following
subsection (iv) thereof:
(v)
Subject to clause (ii) above, Borrower shall permit Lender or its
representatives to consult directly with any of Borrower’s advisors or
consultants that are hired or employed from time to time in connection with
Borrower’s assets, business or operations and the acquisition and divestitures
or financing in connection with any of its assets, business or operation,
including, without limitation, Growth Capital Partners and Borrower agrees
to
promptly notify Lender of any such newly hired or employed advisors or
consultants.
Sections
8.4(a) and 8.4(b)
are
hereby deleted in their entirety and replaced with the following:
(a)
On
the Closing Date, Borrower shall grant to Lender an ORRI covering the Leases
more particularly described on Exhibit
A
attached
hereto, pursuant to the ORRI Conveyance, equal to 2% of 8/8ths proportionately
reduced to Borrower’s Working Interest. Additionally, effective as of October 1,
2008, Borrower shall grant to Lender an ORRI covering the Leases more
particularly described on Exhibit A attached hereto, pursuant to the ORRI
Conveyance, equal to 1% of 8/8ths proportionately reduced to Borrower’s Working
Interest (which is in addition to the ORRI described above).
(b)
After
the Closing Date, during the term of this Agreement or so long as the
Obligations remain outstanding, Borrower shall assign to Lender an ORRI
(pursuant to an ORRI Conveyance) covering each Lease acquired by Borrower after
the Closing Date, which ORRI shall be equal to 2% of 8/8ths proportionately
reduced to Borrower’s Working Interest; provided that,
from
and after October 1, 2008, any such ORRI shall be 3% of 8/8ths proportionately
reduced to Borrower’s Working Interest.
Sections
8.5(a) and 8.5(d)
are
hereby deleted in their entirety and replaced with the following:
(a)
Prior to
the Maturity Date, the Borrower may purchase from Lender one-third (1/3rd)
of
the entire ORRI granted or assigned to Lender under the ORRI Conveyances in
accordance with Section
8.4,
so
that, after giving effect to such purchase, Lender’s ORRI
(b) on
all
Borrower’s Leases and Xxxxx will be equal to 2.0% of 8/8ths proportionately
reduced to Borrower’s Working Interest.
(c) The
amount of the purchase price for the repurchased ORRI shall be the “supplemental
amount” needed to cause the following equation to equal 1.4: (i) the
sum
of
(A) the
Principal Amount paid to Lender, plus
(B) all
accrued interest on the Principal Amount paid to Lender, plus
(C) all
payments in respect of the ORRI paid to Lender, plus
(D) the
supplemental amount, divided
by
(ii)
12,240,000.
Section
10.1(a)
is
hereby deleted in its entirety and replaced with the following:
(a) Borrower
fails to (i) pay any portion of the Obligations (principal, interest, fees
or
expenses) when the same is due and payable, whether on a Repayment Date, at
a
date for the payment of an installment, or at a date fixed for prepayment
thereof; provided
that
Borrower
shall not be deemed to have failed to pay an interest payment on a Repayment
Date if Lender debits such interest payment from the Lender Account on such
Repayment Date, or (ii) except as otherwise provided in Section
2.6(c),
replenish the Interest Reserve in the Lender Account within 3 Business Days
after Lender debits an interest payment from the Lender Account on a Repayment
Date;
2. Conditions
to Closing First Amendment. This
First Amendment shall be effective once each of the following conditions
precedent have been satisfied, unless specifically waived in writing by
Lender:
(a) Lender
shall have received the following documentation, each in form and substance
satisfactory to Lender and its legal counsel, in their sole
discretion:
(i) this
First Amendment executed by Borrower and Lender;
(ii) the
ORRI
Conveyance executed by Borrower and Lender; and
(iii) such
other documents as Lender may reasonably request.
(b) Borrower
shall have paid to Lender the amount of $2,240,000 as a principal
repayment.
3. Representations
and Warranties.
Borrower represents and warrants to Lender that (a) it possesses all requisite
power and authority to execute, deliver and comply with the terms of this First
Amendment, (b) this First Amendment has been duly authorized and approved by
all
requisite corporate action on the part of Borrower, (c) no other consent of
any
Person (other than Lender) is required for this First Amendment to be effective,
(d) the execution and delivery of this First Amendment does not violate its
organizational documents, (e) the representations and warranties in each Loan
Document to which it is a party are true and correct in all material respects
on
and as of the date of this First Amendment as though made on the date of this
First Amendment (except
to the
extent that such representations and warranties speak to a specific date),
(f)
it is in full compliance with all covenants and agreements contained in each
Loan Document to which it is a party, and (g) no Default or Event of Default
has
occurred and is continuing.
4. The
representations and warranties made in this First Amendment shall survive the
execution and delivery of this First Amendment. No investigation by Lender
is
required for Lender to rely on the representations and warranties in this First
Amendment.
5. Scope
of
Amendment; Reaffirmation; Release. All references to the Credit Agreement shall
refer to the Credit Agreement as amended by this First Amendment. Except as
affected by this First Amendment, the Loan Documents are unchanged and continue
in full force and effect. However, in the event of any inconsistency between
the
terms of the Credit Agreement (as amended by this First Amendment) and any
other
Loan Document, the terms of the Credit Agreement shall control and such other
document shall be deemed to be amended to conform to the terms of the Credit
Agreement. Borrower hereby reaffirms its obligations under the Loan Documents
to
which it is a party and agrees that all Loan Documents to which they are a
party
remain in full force and effect and continue to be legal, valid, and binding
obligations enforceable in accordance with their terms (as the same are affected
by this First Amendment). Borrower hereby releases Lender from any liability
for
actions or omissions in connection with the Credit Agreement and the other
Loan
Documents prior to the date of this First Amendment.
6. Miscellaneous.
(a) No
Waiver of Defaults.
This
First Amendment does not constitute (i) a waiver of, or a consent to, (A) any
provision of the Credit Agreement or any other Loan Document not expressly
referred to in this First Amendment, or (B) any present or future violation
of,
or default under, any provision of the Loan Documents, or (ii) a waiver of
Lender’s right to insist upon future compliance with each term, covenant,
condition and provision of the Loan Documents.
(b) Form.
Each
agreement, document, instrument or other writing to be furnished Lender under
any provision of this First Amendment must be in form and substance satisfactory
to Lender and its counsel.
(c) Headings.
The
headings and captions used in this First Amendment are for convenience only
and
will not be deemed to limit, amplify or modify the terms of this First
Amendment, the Credit Agreement, or the other Loan Documents.
(d) Costs,
Expenses and Attorneys’ Fees.
Borrower agrees to pay or reimburse Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, and execution of this First Amendment, including, without
limitation, the reasonable fees and disbursements of Lender’s
counsel.
(e) Successors
and Assigns.
This
First Amendment shall be binding upon and inure to the benefit of each of the
undersigned and their respective successors and permitted assigns.
(f) Multiple
Counterparts.
This
First Amendment may be executed in any number of counterparts with the same
effect as if all signatories had signed the same document. All counterparts
must
be construed together to constitute one and the same instrument. This First
(g) Amendment
may be transmitted and signed by facsimile or portable document format (PDF).
The effectiveness of any such documents and signatures shall, subject to
applicable law, have the same force and effect as manually-signed originals
and
shall be binding on Borrower and Lender. Lender may also require that any such
documents and signatures be confirmed by a manually-signed original;
provided
that the
failure to request or deliver the same shall not limit the effectiveness of
any
facsimile or PDF document or signature.
(h) Governing
Law.
This
First Amendment and the other Loan Documents must be construed, and their
performance enforced, under Texas law.
(i) Arbitration.
Upon
the demand of any party to this First Amendment, any dispute shall be resolved
by binding arbitration as provided for in Section
12.1
of the
Credit Agreement.
(j) Entirety.
The
Loan Documents (as amended hereby) Represent the Final Agreement Between
Borrower and Lender and May Not Be Contradicted by Evidence of Prior,
Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No
Unwritten Oral Agreements among the Parties.
[Signatures
appear on the next page.]
IN
WITNESS WHEREOF, this First Amendment is executed as of the date first written
above.
BORROWER:
a
Nevada
corporation
By:
/s/
Xxxx
Works
Xxxx
Works
President
& Chief Executive Officer
LENDER:
GASROCK
CAPITAL LLC,
a
Delaware limited liability company
By:
/s/
Xxxxxxxx Xxxx
Xxxx
Xxxxxxxx
Xxxx Xxxx
Principal
GUARANTOR’S
CONSENT AND AGREEMENT
TO
FIRST
AMENDMENT TO TERM CREDIT AGREEMENT
Guarantor
executes this First Amendment for purposes of acknowledging and agreeing to
the
Credit Agreement, as amended by this First Amendment, and hereby expressly
ratifies and confirms its liability under its Guaranty dated October 16, 2007
executed in favor of Lender and confirms that such liability continues in full
force and effect with respect to the indebtedness of Borrower covered by the
Credit Agreement, as amended by this First Amendment, as same may be further
restated, amended, modified, renewed, or rearranged from time to
time.
RANCHER
ENERGY WYOMING, LLC
a
Wyoming
limited liability company
By:
RANCHER
ENERGY CORP.,
its
sole
Manager
By:
/s/
Xxxx
Works
Xxxx
Works
President
& Chief Executive Officer
