This Loan Agreement involves
Title: THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Industry: Oil and Gas Operations Sector: Energy
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
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 not become effective until the date (such date, the “ Third Amendment Effective Date ”) the Administrative Agent receives this Third Amendment, executed by the Borrower, the Guarantors, the Administrative Agent and the Lender;
Paragraph 3. Acknowledgment and Ratification . The Borrower and the Guarantors each (i) consent to the agreements in this Third Amendment and (ii) agree and acknowledge that the execution, delivery, and performance of this Third Amendment shall in no way release, diminish, impair, reduce, or otherwise affect the respective obligations of the Borrower or any Guarantor under the Loan Documents to which it is a party, which Loan Documents shall remain in full force and effect, as amended and waived h