exhibit10_7.htm


    


    FIRST
      AMENDMENT TO AMENDED AND RESTATED

    REVOLVING
      CREDIT AGREEMENT

    


    


    THIS
      FIRST AMENDMENT TO AMENDED
      AND RESTATED REVOLVING CREDIT AGREEMENT (this
“Amendment”), is made effective as of August 31,
      2006,
      by and among NGP CAPITAL RESOURCES COMPANY, a Maryland
      corporation (the “Borrower”), the several banks and
      other financial institutions from time to time party hereto (collectively,
      the
“Lenders”) and SUNTRUST BANK, in its
      capacity as Administrative Agent for the Lenders (the
“Administrative Agent”).

    


    WITNESSETH:

    


    WHEREAS,
      the Borrower, the Lenders and the Administrative Agent are parties to a certain
      Amended and Restated Revolving Credit Agreement, dated as of August 31, 2006
      (as
      amended, restated, supplemented or otherwise modified from time to time, the
      “Credit Agreement”; capitalized terms used herein and
      not otherwise defined shall have the meanings assigned to such terms in the
      Credit Agreement), pursuant to which the Lenders have made certain financial
      accommodations available to the Borrower;

     

    WHEREAS,
      the Borrower has requested that the Lenders and the Administrative Agent amend
      certain provisions of the Credit Agreement to clarify such provisions, and
      subject to the terms and conditions hereof, the Lenders are willing to do
      so;

     

    NOW,
      THEREFORE, for good and valuable consideration, the sufficiency and receipt
      of
      all of which are acknowledged, the Borrower, the Lenders and the Administrative
      Agent agree as follows:

    


    1.  Amendments.

     

    (a)  Section
      1.1 of the Credit Agreement is hereby amended by:

    


    
      	 	
              (i)           adding
                the following definitions of “Approved Dealer”, “Fair Market Value”,
                “Investment Grade Rating”, “Marketable Securities”, “Non-Investment Grade
                Rating” and “Total Asset Value” in appropriate alphabetical
                order:

            


    

    


    “Approved
      Dealer” shall mean in the case of any Marketable Security, a bank
      or a broker-dealer registered under the Securities Exchange Act of 1934 of
      nationally recognized standing or an Affiliate thereof.

    


    “Fair
      Market Value” shall mean, as of any date of determination, in the
      case of any Marketable Security, the mean prices as determined by two Approved
      Dealers mutually acceptable to the Borrower and the Administrative
      Agent.

    


    “Investment
      Grade Rating” shall mean, with respect to any Marketable
      Securities, any actual or implied rating of such Marketable Securities which
      is
      at or above BBB- from S&P and at or above Baa3 from Moody’s.

    


    “Marketable
      Securities” shall mean (i) those certain 7.20% Senior Notes due
      2028 issued by Pioneer Natural Resources Company, (ii) those certain 5.00%
      Senior Notes due 2015 issued by XTO Energy Inc., or (iii) those certain 8.75%
      Senior Notes due 2011 issued by Venoco, Inc.

    


    “Non-Investment
      Grade Rating” shall mean, with respect to any Marketable
      Securities, any actual or implied rating of such Marketable Securities which
      is
      below BBB- from S&P or below Baa3 from Moody’s.

    


    “Total
      Asset Value” shall mean, for the Borrower and its Subsidiaries for
      any period determined on a consolidated basis in accordance with GAAP, the
      sum
      of (i) the Borrower’s and its Subsidiaries’ total assets as reported in the most
      recent public disclosures filed with the Securities and Exchange Commission
      (which shall include all loans and investments of the Borrower in its
      Subsidiaries, including those that are not Subsidiary Guarantors),
plus (ii) the value, determined in accordance with GAAP,
      of assets
      acquired (including loans made) by the Borrower or its Subsidiaries subsequent
      to the most recent public disclosures filed with the Securities and Exchange
      Commission, to the extent reported to the Administrative Agent in a certificate
      of a Responsible Officer, minus (iii) to the extent reported or required to
      be
      reported to the Administrative Agent in a report of a Responsible Officer under
      Section 5.1(g), the value, determined in accordance with GAAP, of assets
      disposed of by the Borrower or its Subsidiaries (including loans repaid to
      the
      Borrower or its Subsidiaries) subsequent to the most recent public disclosures
      filed with the Securities and Exchange Commission.

    


    
      	 	
              (ii)           replacing
                the definition of “Eligible Net Asset Value” in its entirety with the
                following:

            


    

    


    “Eligible
      Net Asset Value” shall mean Total Asset Value, including fair
      market value of Unencumbered Overriding Royalty Interests to the extent that
      the
      fair market value of all Unencumbered Overriding Royalty Interests does not
      exceed in the aggregate five percent (5%) of Total Asset Value but excluding
      (i)
      all warrant positions, (ii) any assets of a subsidiary that is not a Guarantor
      and any assets of the Borrower and its subsidiaries not pledged to the
      Administrative Agent on terms and conditions satisfactory to Administrative
      Agent, (iii) the fair market value of all other Unencumbered Overriding Royalty
      Interests to the extent not expressly included as provided for above, (v) any
      Treasury Revolving Credit Facility Collateral, and (vi) such other assets that
      are not otherwise satisfactory to the Administrative Agent in its reasonable
      discretion.

    


    (iii)                      and
      deleting the definition of “Net Asset Value.”

    


    (b)  Section
      7.12 of the Credit Agreement is hereby amended by replacing such Section in
      its
      entirety with the following:

    


    Section
      7.12                                           Loans,
      Etc.  The Borrower will not permit at any time the aggregate
      amount of all unfunded commitments of the Borrower and its Subsidiaries to
      provide loans, advances or Guarantees with respect to such Investments (but
      excluding any “unapproved capital expenditure amount” as defined below) to
      exceed 100% of the sum of (i) all cash of the Borrower and its Subsidiaries
      held
      in deposit accounts that are subject to a Control Agreement granting the Agent
      a
      first priority security interest therein, excluding the Cash Collateral (as
      such
      term is defined in the Treasury Credit Agreement), plus (ii) the
      difference between (x) the Senior Revolving Commitment Amount minus (y) the
      Senior Revolving Credit Exposure, plus (iii) 95% of the Fair Market Value
      of all Marketable Securities with an Investment Grade
      Rating,  plus (iv) 85% of the Fair Market Value of all
      Marketable Securities with a Non-Investment Grade Rating.  For
      purposes of this Section 7.12, “unapproved capital expenditure amount” means the
      portion of any commitment that (i) may only be used for capital expenditures
      (including drilling and completion of wells, the purchase of assets or other
      capital expenditures) that are approved by (or consented to by) the Borrower
      or
      such Subsidiary in its sole discretion or words of similar effect (whether
      under
      a specific approval or under a budget that must be approved) and (ii) exceeds
      the amount of the capital expenditures that have been so approved and that,
      if
      applicable, will not be paid from cash flow from operations under the approved
      budget.  In addition, for purposes of this Section 7.12, with respect
      to all Marketable Securities, the Borrower shall, not less frequently than
      once
      each calendar week, determine the Fair Market Value of each such Marketable
      Securities; provided, however, following the occurrence and continuation
      of an Event of Default, the Administrative Agent shall have the right to require
      the Borrower to make such determination on a more frequent basis and provide
      such information to the Administrative Agent.  Borrower shall also
      provide to the Administrative Agent evidence of compliance with this Section
      7.12 on each Compliance Certificate that it delivers pursuant to Section 5.1(c),
      in form and substance acceptable to the Administrative Agent.

     

    (c)           Section
      5.1(g) of the Credit Agreement is hereby amended by replacing such Section
      in
      its entirety with the following:

    


    (g)           a
      report of a Responsible Officer of the Total Asset Value of assets disposed
      of
      by the Borrower or its Subsidiaries (including loans repaid to the Borrower
      or
      its Subsidiaries) subsequent to the most recent public disclosures filed with
      the Securities and Exchange Commission, promptly following such disposition
      to
      the extent that the Total Asset Value of such assets (to the extent not
      previously reported) exceeds $10,000,000.

    


    (d)           Section
      5.9 of the Credit Agreement is hereby amended by replacing such Section in
      its
      entirety with the following:

    


    Section
      5.9                                Use
      of Proceeds and Letters of Credit.  The Borrower will use
      the proceeds of all Senior Revolving Loans for general corporate purposes and
      for investments in loan portfolios and other similar investments permitted
      under
      the Internal Revenue Code.  No part of the proceeds of any Loan will
      be used, whether directly or indirectly, for any purpose that would violate
      any
      rule or regulation of the Board of Governors of the Federal Reserve System,
      including Regulations T, U or X.  All Letters of Credit will be used
      for general corporate purposes.

    


    (e)           Section
      5.11(b) of the Credit Agreement is hereby amended by replacing such Section
      in
      its entirety with the following:

    


    (b)           Upon
      the occurrence of a Triggering Event, Borrower shall promptly, but in any event
      within 10 days of such Triggering Event enter into a mortgage or deed of trust
      covering such overriding royalty interest in favor of the Administrative Agent
      and recorded in the real property records where such overriding royalty interest
      is located (the “Mortgaged Property”); provided, however, such
      Loan Party shall not be obligated to enter into a mortgage or deed of trust
      in
      respect of any overriding interest that the Borrower has, by notice to the
      Administrative Agent, then excluded from the determination of Total Asset
      Value.

    


    2.  Conditions
      to Effectiveness of this
      Amendment.  Notwithstanding any other
      provision of this Amendment and without affecting in any manner the rights
      of
      the Lenders hereunder, it is understood and agreed that this Amendment shall
      not
      become effective, and the Borrower shall have no rights under this Amendment,
      until the Administrative Agent shall have received (i) reimbursement or payment
      of its costs and expenses incurred in connection with this Amendment or the
      Credit Agreement (including reasonable fees, charges and disbursements of King
      & Spalding LLP, counsel to the Administrative Agent), and (ii) executed
      counterparts to this Amendment from the Borrower, each of the Subsidiary
      Guarantors and the Lenders.

    


    3.  Representations
      and Warranties.  To induce the Lenders
      and the Administrative Agent to enter into this Amendment, Borrower hereby
      represents and warrants to the Lenders and the Administrative Agent
      that:

    


    (a)           The
      execution, delivery and performance by Borrower of this Amendment (i) is within
      Borrower’s power and authority; (ii) has been duly authorized by all necessary
      corporate and shareholder action; (iii) is not in contravention of any provision
      of Borrower’s certificate of incorporation or bylaws or other organizational
      documents; (iv) does not violate any law or regulation, or any order or decree
      of any Governmental Authority; (v) does not conflict with or result in the
      breach or termination of, constitute a default under or accelerate any
      performance required by, any indenture, mortgage, deed of trust, lease,
      agreement or other instrument to which Borrower or any of its Subsidiaries
      is a
      party or by which Borrower or any such Subsidiary or any of their respective
      property is bound; (vi) does not result in the creation or imposition of any
      Lien upon any of the property of Borrower or any of its Subsidiaries; and (vii)
      does not require the consent or approval of any Governmental Authority or any
      other person;

    


    (b)           This
      Amendment has been duly executed and delivered for the benefit of or on behalf
      of Borrower and constitutes a legal, valid and binding obligation of Borrower,
      enforceable against Borrower in accordance with its terms except as the
      enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
      moratorium and other laws affecting creditors’ rights and remedies in general;
      and

    


    (c)           After
      giving effect to this Amendment, the representations and warranties contained
      in
      the Credit Agreement and the other Loan Documents are true and correct in all
      material respects, and no Default or Event of Default has occurred and is
      continuing as of the date hereof.

    


    4.  Reaffirmations
      and Acknowledgments.

    


    (a)           Reaffirmation
      of Subsidiary Guaranty.  Each Subsidiary Guarantor consents to the
      execution and delivery by the Borrower of this Amendment and jointly and
      severally ratify and confirm the terms of the Subsidiary Guarantee Agreement
      with respect to the indebtedness now or hereafter outstanding under the Credit
      Agreement as amended hereby and all promissory notes issued thereunder. Each
      Subsidiary Guarantor acknowledges that, notwithstanding anything to the contrary
      contained herein or in any other document evidencing any indebtedness of the
      Borrower to the Lenders or any other obligation of the Borrower, or any actions
      now or hereafter taken by the Lenders with respect to any obligation of the
      Borrower, the Subsidiary Guarantee Agreement (i) is and shall continue to be
      a
      primary obligation of the Guarantors, (ii) is and shall continue to be an
      absolute, unconditional, joint and several, continuing and irrevocable guaranty
      of payment, and (iii) is and shall continue to be in full force and effect
      in
      accordance with its terms.  Nothing contained herein to the contrary
      shall release, discharge, modify, change or affect the original liability of
      the
      Subsidiary Guarantors under the Subsidiary Guarantee Agreement.

    


    (b)           Acknowledgment
      of Perfection of Security Interest. Borrower and each Subsidiary Guarantor
      hereby acknowledges that, as of the date hereof, the security interests and
      liens granted to the Administrative Agent and the Lenders under the Credit
      Agreement and the other Loan Documents are in full force and effect, are
      properly perfected and are enforceable in accordance with the terms of the
      Credit Agreement and the other Loan Documents.

    


    5.  Effect
      of Amendment.  Except as set forth expressly herein, all
      terms of the Credit Agreement, as amended hereby, and the other Loan Documents
      shall be and remain in full force and effect and shall constitute the legal,
      valid, binding and enforceable obligations of the Borrower to the Lenders and
      the Administrative Agent.  The execution, delivery and effectiveness
      of this Amendment shall not, except as expressly provided herein, operate as
      a
      waiver of any right, power or remedy of the Lenders under the Credit Agreement,
      nor constitute a waiver of any provision of the Credit
      Agreement.  This Amendment shall constitute a Loan Document for all
      purposes of the Credit Agreement.

    


    6.  Governing
      Law.   This Amendment shall be governed
      by, and construed in accordance with, the internal laws of the State of New
      York
      and all applicable federal laws of the United States of America.

    


    7.  No
      Novation.  This Amendment is not
      intended by the parties to be, and shall not be construed to be, a novation
      of
      the Credit Agreement or an accord and satisfaction in regard
      thereto.

    


    8.  Costs
      and Expenses.  The Borrower agrees to pay on demand all
      costs and expenses of the Administrative Agent in connection with the
      preparation, execution and delivery of this Amendment, including, without
      limitation, the reasonable fees and out-of-pocket expenses of outside counsel
      for the Administrative Agent with respect thereto.

    


    9.  Counterparts.This
      Amendment may be executed by one or more of the parties
      hereto in any number of separate counterparts, each of which shall be deemed
      an
      original and all of which, taken together, shall be deemed to constitute one
      and
      the same instrument.  Delivery of an executed counterpart of this
      Amendment by facsimile transmission or by electronic mail in pdf form shall
      be
      as effective as delivery of a manually executed counterpart hereof.

    


    10.  Binding
      Nature.  This Amendment shall be binding
      upon and inure to the benefit of the parties hereto, their respective
      successors, successors-in-titles, and assigns.

    


    11.  Entire
      Understanding.  This Amendment sets
      forth the entire understanding of the parties with respect to the matters set
      forth herein, and shall supersede any prior negotia­tions or agreements,
      whether written or oral, with respect thereto.

    


    [Signature
      Pages To Follow]

    


    IN
      WITNESS WHEREOF, the parties hereto
      have caused this Amendment to be duly executed, under seal in the case of the
      Borrower and the Subsidiary Guarantors, by their respective authorized officers
      as of the day and year first above written.

    


    BORROWER:

    


    NGP
      CAPITAL RESOURCES
      COMPANY

    


    


    By:
/s/
      Stephen K.
      Gardner

          Name:  Stephen
      K. Gardner

          Title:  Chief
      Financial Officer

    


    SUBSIDIARY
      GUARANTORS:

    


    NGPC
      FUNDING GP, LLC

    


    


    By:
      /s/ Stephen K. Gardner

    Name:  Stephen
      K. Gardner

    Title:  Chief
      Financial Officer

    


    NGPC
      FUNDING, LP

    By:
      NGPC
      Funding GP, LLC

    Its
      general partner

    


    


    By:
      /s/ Stephen K. Gardner

    Name:  Stephen
      K. Gardner

    Title:  Chief
      Financial Officer

    


    NGPC
      ASSET HOLDINGS GP, LLC

    


    


    By:
      /s/ Stephen K. Gardner

    Name:  Stephen
      K. Gardner

    Title:  Chief
      Financial Officer

    


    


    


    


    


    


    


    


    NGPC
      ASSET HOLDINGS, LP

    By:
      NGPC
      Asset Holdings GP, LLC

    Its
      general partner

    


    


    By:
      /s/ Stephen K. Gardner

    Name:  Stephen
      K. Gardner

    Title:  Chief
      Financial Officer

    


    NGPC
      NEVADA, LLC

    


    


    By:
      /s/ Stephen K. Gardner

    Name:  Stephen
      K. Gardner

    Title:  Chief
      Financial Officer

    


    LENDERS:

    


    SUNTRUST
      BANK, individually and as Administrative Agent and Collateral
      Agent

    


    


    By:
      /s/ James Warren

    Name:  James
      Warren

    Title:
      Managing Director

    BRANCH
      BANK & TRUST CO.

    


    


    By:                      /s/
      Greg Drabik

    Name:  Greg
      Drabik

    Title:
      Assistant Vice President

    


    RAYMOND
      JAMES BANK, FSB

    


    


    
      	
               

            	
              By:

            	
              /s/
                Thomas F. Macina

            	 


    

    Thomas
      F. Macina

    Senior
      Vice President

    COMERICA
      BANK

    


    By:/s/
      Huma
      Vadgama                                                                

    Name:
      Huma Vadgama

    Title:  Vice
      President

    


    AMEGY
      BANK National Association

    


    


    By:
/s/
      W. Bryan
      Chapman

    W.
      Bryan
      Chapman

    Senior
      Vice President

    Energy
      Lending