EX-10.1



 






Exhibit 10.1




FIRST AMENDMENT TO

ADVANCING TERM CREDIT AGREEMENT




     THIS FIRST AMENDMENT TO ADVANCING TERM CREDIT AGREEMENT (this “Amendment”) is entered into
effective as of November 29, 2007 between BPI ENERGY, INC., a Nevada corporation (“Borrower”), and
GASROCK CAPITAL LLC, a Delaware limited liability company (“Lender”). Capitalized terms used but
not defined in this Amendment have the meaning given them in the Credit Agreement (defined below).



RECITALS




     A. Borrower and Lender entered into that certain Advancing Term Credit Agreement dated as of
July 27, 2007 (as amended, restated or supplemented the “Credit Agreement”).



     B. Borrower and Lender have agreed to amend the Credit Agreement, subject to the terms and
conditions of this Amendment.



     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the undersigned hereby agree as follows:



     1. Amendments to Credit Agreement.



     Section 1.1, Defined Terms of the Credit Agreement is hereby amended by revising the
following definition in its entirety to read as follows:



     “Initial Termination Date” means January 30, 2009.



     Sections 2.1(a) and 2.1(a)(i), The Initial Loans, of the Credit
Agreement are hereby deleted in their entirety and replaced with the following:




(a) The Initial Loans. On or after the Closing Date and on or before the Drawdown
Termination Date, Lender agrees to advance to Borrower up to $10,700,000 (collectively, the
“Initial Loans”) to be applied as follows:




(i) $9,559,566.40 used for D&A Operations described on Schedule 2.1(a) attached
hereto, including reimbursement to Borrower for expenses incurred by Borrower prior
to the disbursement of the Initial Loans in connection with such D&A Operations (the
“Initial Committed D&A Operations”); provided that such Schedule 2.1(a) may
be amended, restated, or supplemented by mutual agreement of Borrower and Lender;



     Sections 2.6(b), 2.6(b)(i) and 2.6(b)(ii) of the Credit Agreement are
hereby deleted in their entirety and replaced with the following:




(b) From the Closing Date through the Initial Termination Date,




(i) accrued and unpaid interest shall be due and payable on each Repayment Date;
provided that (A) the amount of interest that would accrue at a rate equal to



 









 







the
Pay Rate shall be paid in immediately available funds and all Net Revenue shall be
applied first to pay Expenses and then to pay such interest, and (B) prior
to August 1, 2008, all additional accrued and unpaid interest shall be capitalized
so that it is added to and becomes part of the principal under the Note, and




(ii) prior to August 1, 2008, if the amount of Net Revenue for any month is not
sufficient to pay that portion of the accrued and unpaid interest payable in
immediately available funds, the amount of such excess accrued and unpaid interest
shall be capitalized so that it is added to and becomes a part of the principal
under the Note.



     Section 2.9, Optional Extension of Loan Termination Date, is hereby amended by
changing the Extended Termination Date to January 30, 2013.



     Section 8.4(c) is hereby deleted in its entirety and replaced with the following:




After the Closing Date and thereafter so long as the Obligations remain outstanding (other
than the obligations under any Royalty Interest Conveyance), Borrower shall grant to Lender
a royalty interest in and to Fee Interests and an overriding royalty interest in and to
Leasehold Interests covering such interests, in each case, acquired after the Closing Date
equal to one percent (1.0%) of 8/8ths (for Leasehold Interests, proportionately reduced to
Borrower’s Working Interest).



     2. Conditions. This Amendment shall be effective once each of the following have been
delivered to Lender:




     (a) this Amendment executed by Borrower and Lender; and




     (b) such other documents as Lender may reasonably request.



     3. Representations and Warranties. Borrower represents and warrants to Lender that
(a) it possesses all requisite power and authority to execute, deliver and comply with the terms of
this Amendment, (b) this Amendment has been duly authorized and approved by all requisite corporate
action on the part of Borrower, (c) no other consent of any Person (other than Lender) is required
for this Amendment to be effective, (d) the execution and delivery of this Amendment does not
violate its organizational documents, (e) the representations and warranties in each Loan Document
to which it is a party are true and correct in all material respects on and as of the date of this
Amendment as though made on the date of this Amendment (except to the extent that such
representations and warranties speak to a specific date), (f) it is in full compliance with all
covenants and agreements contained in each Loan Document to which it is a party, and (g) no Default
or Event of Default has occurred and is continuing. The representations and warranties made in
this Amendment shall survive the execution and delivery of this Amendment. No investigation by
Lender is required for Lender to rely on the representations and warranties in this Amendment.



 









 





     4. Scope of Amendment; Reaffirmation; Release. All references to the Credit Agreement
shall refer to the Credit Agreement as amended by this Amendment. Except as affected by this
Amendment, the Loan Documents are unchanged and continue in full force and effect. However, in the
event of any inconsistency between the terms of the Credit Agreement (as amended by this Amendment)
and any other Loan Document, the terms of the Credit Agreement shall control and such other
document shall be deemed to be amended to conform to the terms of the Credit Agreement. Borrower
hereby reaffirms its obligations under the Loan Documents to which it is a party and agrees that
all Loan Documents to which they are a party remain in full force and effect and continue to be
legal, valid, and binding obligations enforceable in accordance with their terms (as the same
are affected by this Amendment). Borrower hereby releases Lender from any liability for actions or
omissions in connection with the Credit Agreement and the other Loan Documents prior to the date of
this Amendment.



     5. Miscellaneous.




     (a) No Waiver of Defaults. This Amendment does not constitute (i) a waiver
of, or a consent to, (A) any provision of the Credit Agreement or any other Loan Document
not expressly referred to in this Amendment, or (B) any present or future violation of, or
default under, any provision of the Loan Documents, or (ii) a waiver of Lender’s right to
insist upon future compliance with each term, covenant, condition and provision of the Loan
Documents.




     (b) Form. Each agreement, document, instrument or other writing to be
furnished Lender under any provision of this Amendment must be in form and substance
satisfactory to Lender and its counsel.




     (c) Headings. The headings and captions used in this Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of this
Amendment, the Credit Agreement, or the other Loan Documents.




     (d) Costs, Expenses and Attorneys’ Fees. Borrower agrees to pay or
reimburse Lender on demand for all its reasonable out-of-pocket costs and expenses incurred
in connection with the preparation, negotiation, and execution of this Amendment, including,
without limitation, the reasonable fees and disbursements of Lender’s counsel.




     (e) Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of each of the undersigned and their respective successors and permitted
assigns.




     (f) Multiple Counterparts. This Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same instrument. This
Amendment may be transmitted and signed by facsimile or portable document format (PDF). The
effectiveness of any such documents and signatures shall, subject to applicable law, have
the same force and effect as manually-signed originals and shall be binding on Borrower and
Lender. Lender may also require that any such



 









 







documents and signatures be confirmed by a
manually-signed original; provided that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile or PDF document or signature.




     (g) Governing Law. This Amendment and the other Loan Documents must be
construed, and their performance enforced, under Texas law.




     (h) Arbitration. Upon the demand of any party to this Amendment, any
dispute shall be resolved by binding arbitration as provided for in Section 12.1 of the
Credit Agreement.




     (i) Entirety. The Loan Documents (as amended hereby) Represent the
Final Agreement Between Borrower and Lender and May Not Be Contradicted by Evidence of
Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No
Unwritten Oral Agreements among the Parties.



[Signatures appear on the next page.]




 









 








     IN WITNESS WHEREOF, this Agreement is executed as of the date first written above.



	 	 	 	 	 
	 	BORROWER:


BPI ENERGY, INC.,

a Nevada corporation

 	 
	 	By:  	/s/ James G. Azlein
 	 
	 	 	James G. Azlein 	 
	 	 	President 	 
	 
	 	LENDER:


GASROCK CAPITAL LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/ Marshall Lynn Bass
 	 
	 	 	Marshall Lynn Bass 	 
	 	 	Principal 	 
	 



Signature Page to the First Amendment to

Advancing Term Credit Agreement




 









 









     Guarantor executes this Amendment for purposes of acknowledging and agreeing to the Credit
Agreement, as amended by this Amendment, and hereby expressly ratifies and confirms its liability
under its Guaranty dated July 27, 2007 executed in favor of Lender and confirms that such liability
continues in full force and effect with respect to the indebtedness of Borrowers covered by the
Credit Agreement, as amended by this Amendment, as same may be further restated, amended, modified,
renewed, or rearranged from time to time.



	 	 	 	 	 
	 	BPI ENERGY HOLDINGS, INC.

a British Columbia corporation

 	 
	 	By:  	/s/ James G. Azlein
 	 
	 	 	James G. Azlein 	 
	 	 	President and Chief Executive Officer