THIRD AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
THIS THIRD
AMENDMENT TO AMENDED AND RESTATED AGREEMENT (this “
Third Amendment ”) is entered into as of
January 30, 2009, among QUEST RESOURCE CORPORATION, a Nevada
corporation (the “ Borrower ”), the
Guarantors listed on the signature pages hereto, ROYAL BANK OF
CANADA, as Administrative Agent and Collateral Agent for the
Lenders parties to the hereinafter defined Credit Agreement (in
such capacities, the “ Administrative Agent
” and “ Collateral Agent ,”
respectively), and as the Lender.
Reference is made
to the Amended and Restated Credit Agreement dated as of
July 11, 2008 among Borrower, the Administrative Agent, the
Collateral Agent and the Lender, as amended by that certain First
Amendment to Amended and Restated Credit Agreement dated as of
October 24, 2008 and that certain Second Amendment to Amended
and Restated Credit Agreement dated as of November 4, 2008 (as
amended, the “ Credit Agreement ”).
Unless otherwise defined in this Third Amendment, capitalized terms
used herein shall have the meaning set forth in the Credit
Agreement; all section, exhibit and schedule references herein are
to sections, exhibits and schedules in the Credit Agreement; and
all paragraph references herein are to paragraphs in this Third
Amendment.
A.
The Borrower, Administrative Agent and Lender desire to enter into
this Third Amendment.
Accordingly, for
adequate and sufficient consideration, the parties hereto agree, as
follows:
Paragraph 1. Amendments . Effective as of
the Third Amendment Effective Date (hereinafter defined), the
Credit Agreement is amended as follows:
1.1
Definitions . Section 1.01 of the
Credit Agreement is amended as follows:
(a) The
following definitions are amended in their entirety to read as
follows:
“
Agreement means this Amended and Restated Credit
Agreement as amended by the First Amendment to Credit Agreement,
the Second Amendment to Credit Agreement and the Third Amendment to
Credit Agreement.”
(b) The
following definitions are inserted alphabetically into
Section 1.01 of the Credit Agreement:
“
Qualifying Lycoming Sale ” means a sale of all
or a portion of the Oil and Gas Properties owned by Quest Eastern
Resource, LLC, f/k/a PetroEdge Resources (WV) LLC located in
Lycoming County, Pennsylvania, to a purchaser for Net Cash Proceeds
of at least $5,100,000 provided that (i) a purchase and
sale agreement for such sale is executed on or before
January 31, 2009, (ii) a signed copy of such purchase and
sale agreement is delivered to the Administrative Agent on or
before January 31, 2009, (iii) Net Cash Proceeds (other
than any holdback amount) are received by Quest Eastern Resource,
LLC or Borrower on or before February 28, 2009 and out of such
Net Cash Proceeds Quest Eastern Resource, LLC or Borrower applies
$750,000 as a mandatory prepayment against the Original Term Loan
Principal Debt by the earlier of (A) one (1) Business Day
after receipt by Quest Eastern Resource, LLC or Borrower of such
Net Cash Proceeds and (B) February 28,
2009.”
Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement
“
Third Amendment Effective Date means January 30,
2009.”
“
Third Amendment to Credit Agreement means that
certain Third Amendment to Amended and Restated Credit Agreement
dated as of January 30, 2009, among the Borrower, Royal Bank
of Canada, as Administrative Agent, Collateral Agent and as the
Lender.”
1.2
Section 2.04(c)(i) .
Section 2.04(c)(i) of the Credit Agreement is amended
to read in its entirety as follows:
“(i)
Dispositions . If any Net Cash Proceeds are received by the
Borrower or any Subsidiary (other than an Excluded Subsidiary) from
one or more Dispositions (including any deferred purchase price
therefor and including sales of stock or other equity interests of
Subsidiaries (other than Excluded Subsidiaries)) excluding the
PetroEdge Disposition and any Disposition permitted by
Section 7.07(a) , the Term Loans shall be
prepaid, immediately upon receipt of such Net Cash Proceeds, in an
amount equal to the amount of Net Cash Proceeds received from all
such Dispositions as follows: first, to the Additional Term Loan
Principal Debt until repaid in full, second, the next $4,500,000
will be applied to the Original Term Loan Principal Debt (and any
such prepayments will be applied against installments of principal
due on the Original Term Loan in direct order of maturity as
specified in Section 2.06(a)), third,
provided (a) the QELP Second Amendment has become
effective, (b) the QELP First Amendment has become effective,
(c) the QMLP Second Amendment has become effective,
(d) the QELP Redetermined Borrowing Base is at least
$190,000,000, and (e) such Net Cash Proceeds are received by
the Borrower or any Subsidiary (other than an Excluded Subsidiary)
by January 31, 2009 (or in the case of the Qualifying Lycoming
Sale, by the deadline specified therefor in the definition of
“Qualifying Lycoming Sale”), the Borrower or such
Subsidiary will be entitled to retain for its own use up to
$20,000,000 of Net Cash Proceeds (subject to the additional
mandatory $750,000 prepayment specified in the definition of
“Qualifying Lycoming Sale” in connection with the
Qualifying Lycoming Sale) received by Borrower or such Subsidiary
for working capital and to make Capital Expenditures for the
development of its Oil and Gas Properties (but if any of the
foregoing conditions are not satisfied, then no Net Cash Proceeds
will be retained by the Borrower or such Subsidiary for its own use
pursuant to this clause) and fourth, any excess Net Cash Proceeds
will be applied to the Original Term Loan Principal Debt,
unless an Event of Default has occurred and is continuing or
would arise as a result thereof (whereupon the provisions of
Section 2.11(d) and not the provisions of this
Section 2.04(c)(i) shall
apply.”
Paragraph 2. Effective Date . This Third
Amendment shall
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