FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
This
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this “
Amendment ”) is made as of the 10
th day of July, 2009, by and among Seminole Gas
Company, L.L.C., an Oklahoma limited liability company (the “
Buyer ”), NGAS Gathering, LLC, a Kentucky
limited liability company (“ NGL ”),
Daugherty Petroleum, Inc., a Kentucky corporation (“
DPI ” and, collectively with NGL, the “
Sellers ”), and NGAS Gathering II, LLC, a
Kentucky limited liability company wholly owned by DPI (“
New NGAS Gathering ”). Sellers and Buyer are
sometimes referred to herein individually as a “
Party ” and collectively as the “
Parties .”
A.
Reference is made to that certain Asset Purchase Agreement (the
“ Agreement ”) dated as of May 11,
2009, by and between Sellers and Buyer, regarding the proposed sale
of Seller’s right, title and interest in the Gathering Assets
(as defined in the Agreement).
B.
Seller and Buyer desire to amend the Agreement, as set forth
herein, relating to certain matters reflected herein.
C.
All capitalized terms used herein but not otherwise defined herein
shall have the meanings attributed to them in the
Agreement.
NOW,
THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the Parties hereby
amend the Agreement and agree as follows:
1.
Amendments . The Agreement is hereby amended as
follows:
(i)
Amendment to Article 1 . Article 1 is hereby
amended by modifying each of the defined terms below to read in
their entirety as follows:
“
Ancillary Option Agreements ” means each of the
agreements and instruments pertaining to any exercise of an NGAS
Options, in accordance with terms thereof, as set forth on
Exhibit O , and the Kay Jay ROFR, in accordance
with the terms thereof, as set forth on
Schedule H .
“
Closing Date ” means subject to the
satisfaction of the conditions to Closing set forth in
Article 6 , 10:00 a.m., Eastern Time,
July 15, 2009, or such other date as may be mutually agreed by
Buyer and Sellers in writing.
“
Equity Releases ” has the meaning set forth in
Exhibit O .
“
NAESB Purchase Agreement ” means the NAESB form
gas purchase agreement, together with the special provisions and
any confirmations provided thereunder and including the Forward
Sales Agreement, by and between DPI, on behalf of itself and the
other DPI Producers, and SES, in substantially the form of
Exhibit I. The NAESB Purchase Agreement will be effective as
of the Effective Date, but to the extent Closing occurs on a date
that is other than the first of a calendar month, then the
Gathering Fees thereunder shall be prorated for the month in which
Closing occurs, any volumes delivered by DPI during the remainder
of the calendar month in which Closing occurs shall be deemed
gathered (not purchased) by SES thereunder, and the purchase of
volumes of gas thereunder shall commence on the first day of the
calendar month immediately following the month in which closing
occurs.
“
NGAS Mortgages ” means the instruments pursuant
to which Sellers grant Buyer a first priority Lien on all of the
Retained Gathering Assets to secure the performance of the Seller
Secured Obligations, in substantially the form of
Exhibit M-1 , as modified to accommodate
recording practices and statutory references in Kentucky, Tennessee
and Virginia.
“
NGAS Option Promissory Note ” has the meaning
set forth in Exhibit O .
“
NGAS Options ,” “ NGAS Option
Promissory Note ” and “ NGAS Options
Price ” have the meanings set forth in
Exhibit O.
“
Put Notice ” has the meaning set forth in
Exhibit O.
“Seminole Mortgages”
means the instruments pursuant to
which Buyer grants New NGAS Gathering a Lien on all of the
Purchased Assets, subordinated and second in priority to the Liens
in favor of International Bank of Commerce, a Texas state banking
association, to secure the performance of the Buyer Secured
Obligations, in substantially the form of
Exhibit M-2, as modified to accommodate
recording practices and statutory references in Kentucky, Tennessee
and Virginia.
(ii)
Amendment to Section 2.2 . Section 2.2 is
hereby amended by restating the second to last sentence of
Section 2.2 in its entirety to read as
follows:
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