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SECOND MODIFICATION AGREEMENT

Addendum or Modifications

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This Addendum or Modifications involves

Natural Gas Services Group, Inc. | Western National Bank

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Title: SECOND MODIFICATION AGREEMENT
Date: 5/13/2005
Industry: OILSRV     Sector: ENERGY

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Exhibit 10

 

 

Exhibit 10.6

 

                                                         $7,521,109.00 Term Note

                                                          dated November 3, 2003

 

 

                          SECOND MODIFICATION AGREEMENT

 

This  Second  Modification   Agreement  ("Second  Modification   Agreement")  is

effective as of May 1, 2005.  The parties to the Second  Modification  Agreement

are Natural Gas Services  Group,  Inc.  ("Borrower")  and Western  National Bank

("Lender").

 

                                    RECITALS

 

On November 3, 2003, Borrower executed and delivered to Lender that certain Term

Promissory Note in the original principal sum of $7,521,109.00, bearing interest

at the rate stated  therein,  with a stated final maturity date of September 15,

2007, as modified in Modification  Agreement dated January 3, 2005 (the "Note").

The Note was made  pursuant to that certain  Second  Amended and  Restated  Loan

Agreement dated November 3, 2003, as  subsequently  amended and restated in that

certain  Third Amended and Restated Loan  Agreement  dated January 3, 2005,  and

that certain  Fourth  Amended and Restated Loan  Agreement  dated March 14, 2005

(the "Loan Agreement").  All liens,  security interests and assignments securing

the Note are collectively  called the "Liens".  Terms defined in the Note or the

Loan  Agreement  and not otherwise  defined  herein shall have the same meanings

here as in those documents.

 

At Borrower's request, Borrower and Lender have agreed to enter into this Second

Modification  Agreement  to modify the  interest  provisions  of the Note and to

ratify the Liens. Said modified interest provisions shall be effective as of May

1, 2005.

 

                                    AGREEMENT

 

1.  Modification  of Interest  Provisions  of the Note. In lieu of the following

provisions which were contained in the first paragraph of the Note:

 

                  "...at a rate per annum  which  shall from day to day be equal

         to the lesser of (a) a rate per annum (the "Established Rate") equal to

         the greater of (i) one percent  (1%) over the Prime Rate in effect from

         day to day, or (ii) five and one-quarter  percent  (5.25%),  or (b) the

         Highest  Lawful Rate,  in each case  calculated  on the basis of actual

         days elapsed,  but computed as if each  calendar year  consisted of 360

         days."

 

such provisions of the Note are changed to read in their entirety as follows:

 

                  "...at a rate per annum  which  shall from day to day be equal

         to the lesser of (a) a rate per annum (the "Established Rate") equal to

         the  greater  of (i)  one-half  percent  (0.5%)  over the Prime Rate in

         effect from day to day, or (ii) five and one- quarter percent  (5.25%),

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