exhibit101_05222009.htm


    Exhibit
10.1

     

    


     

    


    


    


    


    


    


    


    


    


    


    FIRST
AMENDMENT

    


                                                                       TO

    


                                                                  CREDIT AGREEMENT

    


    DATED
AS OF MAY 22, 2009

    


    AMONG

    


                                                               NORTHERN OIL AND GAS,
INC.

                                                                   as Borrower,

    


    


                                                                CIT CAPITAL USA
INC.,

                                                                as Administrative
Agent,

    


                                                                      AND

    


                                                                THE LENDERS PARTY
HERETO

    


    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    FIRST AMENDMENT TO CREDIT
AGREEMENT

    


    THIS
FIRST AMENDMENT TO
CREDIT AGREEMENT (this “First Amendment”)
dated May 22, 2009, is among Northern
Oil and Gas, Inc., a corporation duly formed and existing under the laws
of the State of Nevada (the “Borrower”); each of
the Lenders from time to time party to the Credit Agreement (as hereinafter
defined); and CIT Capital USA Inc., as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Administrative
Agent”).

    


    RECITALS

    


    A.           The
Borrower, the Administrative Agent and the Lenders are parties to that certain
Credit Agreement dated as of February 27, 2009 (the “Credit Agreement”),
pursuant to which the Lenders made certain revolving loans and extensions of
credit available to and on behalf of the Borrower.

    


    B.           In
connection with an acquisition by the Borrower, the Borrower has requested and
the Administrative Agent and the Lenders have agreed to amend certain provisions
of the Credit Agreement.

    


    C.           NOW,
THEREFORE, to induce the Administrative Agent and the Lenders to enter into this
First Amendment and in consideration of the premises and the mutual covenants
herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     

    Section
1. Defined
Terms.  Each capitalized term used herein but not otherwise
defined herein has the meaning given such term in the Credit Agreement, as
amended by this First Amendment.  Unless otherwise indicated, all
section references in this First Amendment refer to sections of the Credit
Agreement.

     

    Section
2. Amendments to Credit
Agreement.

     

    2.1 Amendments to Section
1.02.

     

    
      	
              (a)  

            	
              The
      definition of “Agreement” is
      hereby amended in its entirety to read as
  follows:

            


    

     

    “Agreement” means this
Credit Agreement, as amended by that certain First Amendment, as the same may be
further amended or supplemented from time to time.

     

    
      	
              (b)  

            	
              The
      following definitions are hereby added where alphabetically appropriate to
      read as follows:

            


    

     

    “Acquisition” means
the acquisition of the Acquisition Properties pursuant to the terms and
conditions of the Acquisition Documents.

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    “Acquisition
Documents” means (a) that certain Exploration and Development Agreement
executed on May 22, 2009 and dated to be effective as of April 1, 2009, by and
between Slawson Exploration Company, Inc., a Kansas corporation, as operator,
and Northern Oil and Gas, Inc., a Nevada corporation, as participant and (b) all
bills of sale, assignments, agreements, instruments and documents executed and
delivered in connection therewith, as amended.

     

    “Acquisition Proceeds”
means the Loan made by the Lenders to the Borrower on the First Amendment
Effective Date in an amount up to $5,000,000.

     

    “Acquisition
Properties” means the Hydrocarbon Interests in the Oil and Gas Properties
and other properties acquired by the Borrower pursuant to the Acquisition
Documents.

     

     “First Amendment”
means that certain First Amendment to Credit Agreement, dated as of May 22,
2009, among the Borrower, the Administrative Agent and the Lenders party
thereto.

     

    “First Amendment Effective
Date” means May 22, 2009.

     

    2.2           Amendment to Section
2.07(a).  Section 2.07(a) is hereby amended in its entirety to
read as follows:

     

    (a)           Borrowing
Base.  For the period from and including the First Amendment
Effective Date to but excluding the next Redetermination Date, the amount of the
Borrowing Base shall be $16,000,000.  Notwithstanding the foregoing,
the Borrowing Base may be subject to further adjustments from time to time
pursuant to Section 8.13(c), Section 8.20(b) or Section 9.12(d).

     

    In the
event the requirements of Section 8.20 have not been fully satisfied (or waived
in accordance with Section 12.02) within thirty (30) days of the First Amendment
Effective Date, then the Borrowing Base shall reduce by $5,000,000 or such
lesser amount as determined by the Lenders in their sole
discretion.  For the avoidance of doubt, any such reduction in the
Borrowing Base shall be effective immediately on June 22, 2009.

     

    2.3           Amendment to Article
VIII.  Article VIII is hereby amended to add the following
Section 8.20 to the end of such Article:

     

    Section
8.20                                Acquisition.

    


    (a)           Promptly,
but in any event within thirty (30) days of the First Amendment Effective Date,
the Borrower shall satisfy or cause to be satisfied the following
requirements:


    
      
         


      

      
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    (i) The
Administrative Agent shall have received from the Borrower duly executed
Security Instruments in compliance with Section 8.14 covering all of the
Acquisition Properties.

     

    (ii)           The
Administrative Agent shall have received a Reserve Report covering the Acquired
Properties accompanied by a reserve report certificate, substantially in the
form of Exhibit I, covering the matters described in Section
8.12(c).

     

    (iii)           The
Administrative Agent shall have received such title information as the
Administrative Agent may reasonably require and which is reasonably satisfactory
to the Administrative Agent setting forth the status of title to the Acquisition
Properties evaluated in the Reserve Report provided pursuant to Section
8.20(a)(ii) above.

     

    (iv)           The
Administrative Agent shall be reasonably satisfied with the environmental
condition of the Acquisition Properties of the Borrower.

     

    (v)           The
Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens encumbering the Acquisition Properties other than
those being released or assigned to the Administrative Agent in connection with
such Acquisition and Liens permitted under Section 9.03.

     

    (vi)           
The Administrative Agent shall have received evidence satisfactory to it that
all Liens on the Acquisition Properties (other than Liens permitted under
Section 9.03) have been released or terminated or assigned to the Administrative
Agent and that arrangements satisfactory to the Administrative Agent have been
made for recording and filing of such releases or assignments, as
applicable.

     

    (vii)           if
requested by the Administrative Agent, the Administrative Agent shall have
received a legal opinion from the Borrower’s legal counsel in a form and of
substance reasonably acceptable to the Administrative Agent.

     

    (viii)                      The
Borrower and the Lenders shall have agreed upon revisions to the Development
Plan (incorporating the Acquisition Properties) which shall be reasonably
satisfactory to the Lenders.

     

    (ix) The
Borrower and the Lenders shall have agreed upon revisions to the hedging program
(incorporating the Acquisition Properties) which shall be reasonably
satisfactory to the Lenders and such

     


    
      
         


      

      
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    revised
hedging program shall supplement the hedging program described on Schedule
6.01(p).

     

    (x)           The
Administrative Agent shall have received such other documents as the
Administrative Agent or counsel to the Administrative Agent may reasonably
request with respect to the Acquisition.

     

     (b)           The
Lenders may, in their sole discretion, cause the Borrowing Base to be
redetermined at any time based on any information provided pursuant to 8.20(a)
above.  Such redetermination shall be in addition to any Scheduled
Redetermination or Interim Redetermination the Lenders may be entitled to under
Section 2.07.

    


    (c)           The
Acquisition Proceeds shall be used solely to fund the Acquisition and all
associated Acquisition costs, expenses and fees (including the First Amendment)
or as otherwise approved by the Administrative Agent in writing.

    


    Section
3. Waivers.

     

    3.1 The
Borrower has informed the Administrative Agent that intends to consummate the
Acquisition to purchase the Acquisition Properties referred to above and as a
result will not be able to comply with Section 9.14 (Material Agreements) of the
Credit Agreement and Section 9.21 (Limitations on Capital Expenditures) of the
Credit Agreement (collectively, the “Designated
Defaults”).  Therefore,
the Borrower hereby requests, and the Administrative Agent and the Lenders
hereby agree to waive the Designated Defaults for a period of thirty (30) days
(such period to begin as of the First Amendment Effective Date and to end as of
June 22, 2009).  Except as expressly waived herein, all covenants,
obligations and agreements of the Borrower contained in the Credit Agreement and
the other Loan Documents shall remain in full force and effect in accordance
with their terms.

     

    3.2 Neither the execution by the
Administrative Agent or the Lenders of this Third Amendment, nor any other act
or omission by the Administrative Agent or the Lenders or their officers in
connection herewith, shall be deemed a waiver by the Administrative Agent or the
Lenders of any other defaults which may exist, which may have occurred prior to
the Designated Defaults or which may occur in the future under the Credit
Agreement and/or the other Loan Documents, or any future defaults of the same
provision waived hereunder (collectively "Other
Violations").  Similarly, nothing contained in this First
Amendment shall directly or indirectly in any way whatsoever either: (i) impair,
prejudice or otherwise adversely affect the Administrative Agent's or the
Lenders' right at any time to exercise any right, privilege or remedy in
connection with the Loan Documents with respect to any Other Violations, (ii)
amend or alter any provision of the Credit Agreement, the other Loan Documents,
or any other contract or instrument, or (iii) constitute any course of dealing
or other basis for altering any obligation of the Borrower or any right,
privilege or remedy of the Administrative Agent or the Lenders under the Credit
Agreement, the other Loan Documents, or any other contract or
instrument.  Nothing in this letter shall be construed to be a consent
by the Administrative Agent or the Lenders to any Other Violations.

     


    
      
         


      

      
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    3.3 Conditions
Precedent.  This First Amendment shall not become effective
until the each of the following conditions is satisfied (or waived in accordance
with Section 12.02):

     

    3.4 The
Administrative Agent shall have received from each party hereto, counterparts
(in such number as may be requested by the Administrative Agent) of this First
Amendment signed on behalf of such Person.

     

    3.5 The
Borrower shall have paid to the Lenders: (a) a non-refundable
cash  underwriting fee in an amount of $125,000; and (b) a
non-refundable cash facility fee in an amount of $75,000 (or 1.5% of the
$5,000,000 Borrowing Base increase provided for herein).

     

    3.6 The
Borrower shall have paid all out-of-pocket expenses incurred by the
Administrative Agent and Lenders in connection with this First Amendment
(including, without limitation, the reasonable fees and expenses of Vinson &
Elkins L.L.P., counsel to the Administrative Agent).

     

    3.7 At the
time of and immediately after giving effect to the terms of this First
Amendment, no Default shall have occurred and be continuing.

     

    3.8 Acquisition
Certificate.  The Administrative Agent shall have received (i)
a certificate of a Responsible Officer certifying: (A) that the Borrower is
concurrently consummating the Acquisition in accordance with the terms of the
Acquisition Documents (with all of the material conditions precedent thereto
having been satisfied in all material respects by the parties thereto) and
acquiring substantially all of the Acquisition Properties contemplated by such
Acquisition Documents; (B) as to the final purchase price for such Acquisition
Properties after giving effect to all adjustments as of the closing date
contemplated by the Acquisition Documents and specifying, by category, the
amount of such adjustment; (C) that attached thereto is a true and complete list
of all Oil and Gas Properties related to the Acquisition Properties which
have been excluded from such Acquisition pursuant to the terms of the
Acquisition Documents, specifying with respect thereto the basis of exclusion as
(1) title defect, (2) preferential purchase right, (3) environmental or (4)
casualty loss; (D) that attached thereto is a true and complete list of all Oil
and Gas Properties related to the Acquisition Properties for which any seller
has elected to cure a title defect; (E) that attached thereto is a true and
complete list of all the Oil and Gas Properties related to the Acquisition
Properties for which any seller has elected to remediate an adverse
environmental condition; (F) that attached thereto is a true and complete list
of all Oil and Gas Properties related to the Acquisition Properties which are
currently pending final decision by a third party regarding purchase of such
property in accordance with any preferential right; (G) that the Borrower has
received all consents and approvals required by Section 7.03 of the Credit
Agreement in connection with the Acquisition as if the Acquisition constituted
part of the Transactions and (H) there are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower relating to the Acquisition; (ii) a true and complete executed copy
of each of the material Acquisition Documents and (iii) such other related
documents and information as the Administrative Agent shall have reasonably
requested.

     


    
      
         


      

      
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    3.9 The
Administrative Agent is hereby authorized and directed to declare this First
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with the
conditions set forth in this Section 4 or the waiver of such conditions as
permitted hereby. Such declaration shall be final, conclusive and binding upon
all parties to the Credit Agreement for all purposes.

     

    Section
4. Miscellaneous.

     

    4.1 Confirmation.  The
provisions of the Credit Agreement, as amended by this First Amendment, shall
remain in full force and effect following the effectiveness of this First
Amendment.

     

    4.2 Ratification and
Affirmation; Representations and Warranties.  The Borrower
hereby (a) acknowledges the terms of this First Amendment; (a) ratifies and
affirms its obligations under, and acknowledges, renews and extends its
continued liability under, each Loan Document to which it is a party and agrees
that each Loan Document to which it is a party remains in full force and effect,
except as expressly amended hereby, notwithstanding the amendments contained
herein and (b) represents and warrants to the Lenders that as of the date
hereof, after giving effect to this First Amendment and the
Acquisition:  (i) all of the representations and warranties contained
in each Loan Document to which it is a party are true and correct, except to the
extent any such representations and warranties are expressly limited to an
earlier date, in which case, such representations and warranties shall continue
to be true and correct as of such specified earlier date; (ii) no Default or
Event of Default has occurred and is continuing; (iii) no event or events have
occurred which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect; and (iv) upon consummation of the Acquisition,
the Borrower will have good and defensible title to the Acquisition Properties,
free and clear of all Liens, except Liens permitted under Section
9.03.

     

    4.3 Counterparts.  This
First Amendment may be executed by one or more of the parties hereto in any
number of separate counterparts, and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.  Delivery
of this First Amendment by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.

     

    4.4 NO ORAL
AGREEMENT.  THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.

     

    4.5 GOVERNING
LAW.  THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     


    
      
         


      

      
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    4.6 Payment of
Expenses.  The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred in
connection with this First Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

     

    4.7 Severability.  Any
provision of this First Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    4.8 Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and its respective successors and
assigns.

     

    [The remainder of this page
intentionally left blank; signature pages below]

     


    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly
executed as of the date first written above.

     

    


    


    BORROWER:                                                                     NORTHERN
OIL AND GAS, INC.

     

    


    By:           /s/ Michael
Reger                                                                

    Name:  Michael
Reger

    Title:    Chief
Executive Officer

    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    ADMINISTRATIVE
AGENT:                                                           CIT
CAPITAL USA INC.,

    as Administrative Agent

     

    By:___/s/ Brian
Kerrigan_______________

    Brian Kerrigan

    Vice President

    


    


    


    


    


    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    LENDER:                                                                            
 CIT BANK

     

    By:           /s/ Benjamin
Haslam                                                                

    Name:  Benjamin
Haslam

    Title:  Authorized
Signatory