EXHIBIT
10.34


 


FIFTH AMENDMENT TO CREDIT
AGREEMENT


Among


VANGUARD NATURAL GAS, LLC

(f/k/a NAMI HOLDING COMPANY, LLC),

as Borrower,


CITIBANK, N.A.,

as Administrative Agent and L/C Issuer,


and


CITIBANK, N.A.,

as Co-Lead Arranger, Sole Bookrunner

and Co-Syndication Agent,


and


BNP PARIBAS,

as Co-Lead Arranger and Co-Syndication Agent


and


THE LENDERS PARTY HERETO


Dated as of October 5, 2007


 
















FIFTH AMENDMENT TO CREDIT
AGREEMENT


FIFTH AMENDMENT TO CREDIT
AGREEMENT made as of October 5, 2007 (this “Fifth Amendment”
or “Amendment”), is entered into among VANGUARD NATURAL GAS, LLC, a limited liability company duly
formed and existing under the laws of the Commonwealth of Kentucky (f/k/a Nami
Holding Company, LLC) (the “Borrower”),
the lenders listed on the signature pages hereto as Lenders (the “Lenders”), and CITIBANK,
N.A., as Administrative Agent and L/C Issuer.


R  E  C  I  T  A
L  S


A.             The Borrower, the Lenders, the Administrative Agent and
the L/C Issuer are parties to that certain Credit Agreement dated as of January
3, 2007, as amended by that certain First Amendment to Credit Agreement dated
as of March 2, 2007, and by that certain Second Amendment to Credit Agreement
dated as of April 13, 2007, and as amended by that certain Third Amendment to
Credit Agreement dated as of May 4, 2007, and as amended by that certain Fourth
Amendment to Credit Agreement dated as of August 30, 2007 (these four documents
are collectively referred to herein as the “Credit
Agreement”).


B.            The parties desire to amend the Credit Agreement as
hereinafter provided.


NOW, THEREFORE, in
consideration of these premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:


1.         Same Terms.  All terms used herein which are defined in
the Credit Agreement shall have the same meanings when used herein, unless the
context hereof otherwise requires or provides. 
In addition, all references in the Loan Documents to the “Agreement”  shall mean the
Credit Agreement, as amended by this Amendment, as the same shall hereafter be
amended from time to time.  In addition,
the following terms shall have the meanings set forth below:


“Effective
Date” means October 5, 2007.


“Modification Papers” means this
Amendment, and all of the other documents and agreements executed in connection
with the transactions contemplated by this Amendment.


2.         Conditions Precedent.  The transactions contemplated by this
Amendment shall be deemed to be effective as of the Effective Date, when the
following conditions have been complied with to the satisfaction of the
Administrative Agent, unless waived in writing by the Administrative Agent:


(a)       Fifth Amendment to Credit
Agreement.  This Amendment
to Credit Agreement shall be in full force and effect.


(b)       Fees and Expenses.  The Administrative Agent shall have received
payment of all out-of-pocket fees and expenses (including reasonable attorneys’
fees and expenses) incurred by the Administrative Agent in connection with the
preparation, negotiation and execution of the Modification Papers and
previously incurred under the Loan Documents.


(c)       Representations
and Warranties  All
representations and warranties contained herein or in the documents referred to
herein or otherwise made in writing in connection herewith 



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or therewith shall be true
and correct with the same force and effect as though such representations and
warranties have been made on and as of this date.


3.         Amendments to Credit
Agreement.  On the
Effective Date, the Credit Agreement shall be deemed to be amended as follows:


(a)       The definition of “Reversion Date”
contained in Section 1.01 shall be amended to read in its entirety as
follows:


“‘Reversion
Date’ means the first to occur of (i) the third Business Day
following the occurrence of an Equity Event which consists of a public offering
of equity securities, or (ii) November 1, 2007.”


(b)       Section 7.21 shall be amended to read
in its entirety as follows:


“Section 7.21.        Use of Loans and Letters of Credit
and Proceeds of Equity Event.  The
proceeds of the Loans and the Letters of Credit shall be used (a) to provide
working capital for exploration and production operations, (b) to refinance
Debt under the Existing Credit Agreements, (c) to pay fees and expenses related
to the Transaction, (d) to make a one time distribution of up to $14,000,000
(subject to compliance with clause (a) of Section 9.04 hereof)
to Majeed S. Nami, (e) and for general corporate purposes.  In addition, the Borrower may use the
proceeds of Loans to make Restricted Payments to the holders of its Equity
Interests provided (i) the aggregate amount of the Restricted Payment does not
exceed the Borrower's EBITDA for the immediately preceding fiscal quarter; and
(ii) the Restricted Payment is otherwise permitted by Section 9.04(g).  The Borrower and its Subsidiaries are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board).  No part of the
proceeds of any Loan or Letter of Credit will be used for any purpose which
violates the provisions of Regulations T, U or X of the Board.  The first $80,000,000 of the proceeds
received from an Equity Event shall be applied to the repayment of the
Indebtedness.”


(c)       Section 9.04 shall be amended to
read in its entirety as follows:


“Section 9.04.        Dividends, Distributions and
Redemptions.   The Borrower will not,
and will not permit any of its Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, return any capital
to its stockholders, members or partners or make any distribution of its
Property to its Equity Interest holders, except


(a)           the Borrower may pay a one time cash
distribution to Majeed S. Nami promptly following the Effective Date
consisting of up to $14,000,000 of proceeds of the Loan so long as after giving
effect thereto (i) no Default has occurred and there is an unused amount
of Commitments of at least $5,000,000, (ii) the Debt under the Existing
Credit Agreements has been repaid in full, (iii) all amounts required to
be paid pursuant to the provisions of Section 6.01(a) have been
paid in full, (iv) all Swap Agreements and put option contracts required to be
in effect pursuant to Section 8.16 hereof shall be in effect, and
(v) all Swap Agreements to be terminated pursuant to Section 8.17
hereof have terminated and all amounts owed by NRC to the counterparties
thereto have been paid in full;



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(b)           the Borrower may declare and pay cash
distributions to its Equity Interest holders to permit such holders to pay
federal and state taxes due with respect to the income of the Borrower;


(c)           the Borrower may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its Equity Interests (other than Disqualified Capital Stock);


(d)           Subsidiaries may declare and pay
dividends ratably with respect to their Equity Interests;


(e)           the Borrower may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Borrower and its Subsidiaries;


(f)            after the occurrence of any Equity
Event, the Borrower may make Restricted Payments to its Equity Interest holders
provided that (i) no Default has occurred and is continuing or would
result from the making of such Restricted Payment and (ii) after giving
effect to the application of the proceeds of such Equity Event, the Revolving
Credit Exposure is less than 50% of the Borrowing Base as of the date of such Equity
Event; and


(g)           the Borrower may make Restricted
Payments to its Equity Interest holders provided that (i) no Default has
occurred and is continuing or would result from the making of such Restricted
Payment, and (ii) after giving effect to such Restricted Payment, the Revolving
Credit Exposure is less than 80% of the Borrowing Base as of such date."


4.         Change of Date for
Scheduled Redetermination of Borrowing Base.  The Credit Agreement provides for the
Borrowing Base to be redetermined semi-annually on April 1 and October 1 of
each year.  The parties agree that the
Scheduled Redetermination of the Borrowing Base on October 1, 2007 shall be
rescheduled for determination on November 1, 2007.


5.         Certain Representations.  The Borrower represents and warrants that, as
of the Effective Date:  (a) the
Borrower has full power and authority to execute the Modification Papers and
the Modification Papers constitute the legal, valid and binding obligation of
the Borrower enforceable in accordance with their terms, except as enforceability
may be limited by general principles of equity and applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally; and (b) no authorization,
approval, consent or other action by, notice to, or filing with, any
governmental authority or other person is required for the execution, delivery
and performance by the Borrower thereof. 
In addition, the Borrower represents that all representations and
warranties contained in the Credit Agreement are true and correct in all
material respects on and as of the Effective Date (except representations and
warranties that relate to a specific prior date are based upon the state of
facts as they exist as of such date).


6.         No Further Amendments.  Except as previously amended in writing or as
amended hereby, the Credit Agreement shall remain unchanged and all provisions
shall remain fully effective between the parties.


7.         Limitation on Agreements.  The modifications set forth herein are limited
precisely as written and shall not be deemed (a) to be a consent under or
a waiver of or an amendment to any other 



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term or condition in the
Credit Agreement or any of the Loan Documents, or (b) to prejudice any
right or rights which the Administrative Agent or any Lender now has or may
have in the future under or in connection with the Credit Agreement and the
Loan Documents, each as amended hereby, or any of the other documents referred
to herein or therein. The Modification Papers shall constitute Loan Documents
for all purposes.


8.         Counterparts.  This Amendment may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed an
original, but all of which constitute one instrument.  In making proof of this Amendment, it shall
not be necessary to produce or account for more than one counterpart thereof
signed by each of the parties hereto.


9.         Incorporation of Certain
Provisions by Reference. 
The provisions of Section 12.09 of the Credit Agreement captioned “Governing
Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial” are
incorporated herein by reference for all purposes.


10.       Entirety, Etc.  This instrument and all of the other Loan
Documents embody the entire agreement between the parties.  THIS AMENDMENT AND ALL OF THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


[This
space if left intentionally blank.  The
signature pages follow.]


 



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The parties hereto have
caused this Amendment to be duly executed as of the day and year first above
written.


	
  BORROWER:

  	
  VANGUARD NATURAL GAS, LLC

  	
   

  	
   

  
	
   

  	
  f/k/a Nami Holding Company, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Robert

  
	
   

  	
   

  	
  Richard Robert

  	
   

  	
   

  
	
   

  	
   

  	
  Executive Vice President

  	
   

  	
   

  
	
   

  	
   

  	
  and Chief Financial Officer

  	
   

  	
   

  



 



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  ADMINISTRATIVE AGENT:

  	
   

  	
   

  	
  CITIBANK, N.A.

  
	
  as Administrative Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Angela McCracken

  
	
   

  	
   

  	
   

  	
   

  	
  Angela McCracken

  
	
   

  	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LENDERS:

  	
   

  	
   

  	
  CITIBANK, N.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Angela McCracken

  
	
   

  	
   

  	
   

  	
   

  	
  Angela McCracken

  
	
   

  	
   

  	
   

  	
   

  	
  Vice President

  



 


 



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  LENDERS:

  	
  BNP PARIBAS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Betsy Jocher

  
	
   

  	
  Name:

  	
  Betsy Jocher

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Polly Schott

  
	
   

  	
  Name:

  	
  Polly Schott

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  



 



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