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SECOND MODIFICATION AGREEMENT

Addendum or Modifications

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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 10.7

 

                                                   Advancing Line of Credit 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

Advancing  Line of  Credit  Promissory  Note in the  original  principal  sum of

$10,000,000.00, bearing interest at the rate stated therein, with a stated final

maturity date of November 15, 2009, as modified in Modification  Agreement dated

December  15, 2004 (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, as modified

in Modification Agreement dated December 15, 2004:

 

                  "...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

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