Document:

ex10_15.htm

EXHIBIT 10.15

 

THIRD AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT,

BORROWING BASE REDETERMINATION AND LIMITED WAIVER

 

THIS THIRD AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT, BORROWING BASE REDETERMINATION AND LIMITED WAIVER (this “Amendment”), dated as of July 20, 2010, is by and among SEFTON RESOURCES, INC., a British Virgin Islands corporation (“Parent”), TEG OIL & GAS U.S.A., INC., a Colorado corporation (“TEGOG”), TEG MIDCONTINENT, INC., a Colorado corporation (“TEGMC”), and BANK OF THE WEST, a California corporation (“BOTW”). Parent, TEGOG and TEGMC are herein collectively referred to as “Borrowers.”

 

RECITALS

 

A.           Borrowers and BOTW entered into an Amended and Restated Credit Agreement dated as of October 21, 2008, as heretofore amended (as so amended, the “Credit Agreement”). Capitalized terms used herein but not defined herein shall have the same meanings as set forth in the Credit Agreement.

 

B.           Borrowers and BOTW desire that this Amendment be executed and delivered in order to amend certain terms and provisions of the Credit Agreement, to evidence a Borrowing Base redetermination and to provide for a limited waiver of certain covenants contained in the Credit Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.           Credit Agreement . The Credit Agreement shall be, and hereby is, amended as follows, effective as of the date hereof:

 

(a)           The following new definition shall be inserted in proper alphabetical order in Section 1.1 of the Credit Agreement:

 

“Debt Service Coverage Ratio” means, at any time, as to any Person, the ratio of: (a) such Person’s EBITDAX for the then most recently completed four consecutive Fiscal Quarters of such Person, determined on a Consolidated basis in accordance with GAAP; to (b) the sum of all principal and interest payments made on indebtedness by such Person (excluding any such payments made by the issuance of equity in such Person) for the then most recently completed four consecutive Fiscal Quarters of such Person, determined on a Consolidated basis in accordance with GAAP.

 

  

 

  

 

(b)           In lines 1 and 2 of the definition of “Maturity Date” in Section 1.1 on page 7 of the Credit Agreement, “February 28, 2011” shall be substituted for “August 31, 2010.”

 

(c)           The following shall be inserted just prior to the period at the end of Section 2.1(c) on page 11 of the Credit Agreement:

 

, or (8) issue a Letter of Credit if, after such Letter of Credit is issued, the sum of the face amounts of all Letters of Credit outstanding hereunder would exceed $1,000,000.

 

(d)           The following shall be substituted for Section 6.2(a)(2) on page 32 of the Credit Agreement:

 

(2)           Borrowers will not permit the Debt Service Coverage Ratio of Parent, determined on a Consolidated basis, to be less than 1.25:1.00 at any time on or after September 30, 2010.

 

(e)           The following shall be substituted for Section 4(b) of Exhibit E on page E-2 of the Credit Agreement:

 

	
(b)             

	
Debt Service Coverage Ratio:

	  	  
	  	
  Actual

	  	  
	  	
  (1)             

	
Parent’s Consolidated EBITDAX

	  	  
	  	  	
for most recently completed four

	  	  
	  	  	
consecutive Fiscal Quarters:

	  	
$__________

	 	 	 	 	 
	  	
  (2)

	
Consolidated principal and interest

	  	  
	  	  	
payments of Parent for most

	  	  
	  	  	
recently completed four consecutive

	  	  
	  	  	
Fiscal Quarters:

	  	
$__________

	 	 	 	 	 
	  	
  Debt Service Coverage Ratio

	  	  
	  	
  of Parent ((1)/(2)):

	  	
  ______/1.00

	 	 	 	 
	  	
  Minimum Per Agreement:

	  	
       1.25/1.00

 

2.           Borrowing Base Redetermination.  BOTW has performed the regularly-scheduled June 1, 2010 Borrowing Base redetermination, resulting in the Borrowing Base being set at $7,000,000 until the effective date of the ensuing Borrowing Base redetermination pursuant to the terms of the Credit Agreement.

 

3.           Limited Waiver.  BOTW hereby waives compliance by Borrowers with the following covenants contained in the Credit Agreement, subject to the conditions set forth below:

 

(a)           Borrowers’ covenant in Section 6.1(b)(2) of the Credit Agreement to have furnished BOTW with the unaudited Consolidated and consolidating financial statements of Parent for the Fiscal Quarter ending March 31, 2010 not later than 45 days after the end of such Fiscal Quarter; provided that said financial statements shall be provided to BOTW not later than 105 days after the end of such Fiscal Quarter; and

 

  

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(b)           Borrowers’ covenant in Section 6.2(a)(1) of the Credit Agreement that Parent would maintain a Current Ratio of not less than 1.00:1.00 at all times on or before June 30, 2010; provided that Parent shall maintain a Current Ratio of not less than 1.00:1.00 at all times on or after September 30, 2010.

 

4.           Loan Documents.  All references in any document to the Credit Agreement shall be deemed to refer to the Credit Agreement, as amended pursuant to this Amendment.

 

5.           Certification by Borrowers.  Borrowers hereby certify to BOTW that, as of the date of this Amendment, after giving effect to the provisions hereof: (a) all of Borrowers’ representations and warranties contained in the Credit Agreement are true, accurate and complete in all material respects, (b) Borrowers have performed and complied with all agreements and conditions required to be performed or complied with by Borrowers under the Credit Agreement and/or any Loan Document on or prior to this date, and (c) no Default or Event of Default has occurred under the Credit Agreement.

 

6.           Conditions Precedent.  The obligations of the parties under this Amendment are subject, at the option of BOTW, to the prior satisfaction of the condition that Borrowers shall have delivered to BOTW the following (all documents to be satisfactory in form and substance to BOTW and, if appropriate, duly executed and/or acknowledged on behalf of the parties other than BOTW):

 

(a)           This Amendment.

 

(b)           A fee in the amount of $35,000, payable to BOTW in connection with the extension of the Maturity Date being made pursuant to the terms hereof.

 

7.           Continuation of the Credit Agreement.  Except as specified in this Amendment, the provisions of the Credit Agreement shall remain in full force and effect.

 

8.           Expenses.  Borrowers shall pay all expenses incurred in connection with the transactions contemplated by this Amendment, including without limitation all fees and expenses of the attorney for BOTW and any and all filing and recording expenses.

 

9.           Miscellaneous.  This Amendment shall be governed by and construed under the laws of the State of Colorado and shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

 

[SIGNATURES ON FOLLOWING PAGE]

  

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EXECUTED as of the date first above written.

 

	  	
SEFTON RESOURCES, INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chief Executive Officer

	  	  
	  	  
	  	  
	  	
TEG OIL & GAS U.S.A., INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chairman

	  	  
	  	  
	  	  
	  	
TEG MIDCONTINENT, INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chairman

	  	  
	  	  
	  	  
	  	
BANK OF THE WEST

	  	  
	  	  
	  	
By:

	
/s/ Duc Duong

	  	  	
     Duc Duong,

	  	  	
     Vice President

 

 

-4-ex10_16.htm

EXHIBIT 10.16

 

FOURTH AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT

AND BORROWING BASE REDETERMINATION

 

THIS FOURTH AMENDMENT OF AMENDED AND RESTATED CREDIT AGREEMENT AND BORROWING BASE REDETERMINATION (this “Amendment”), dated as of February 1, 2011, is by and among SEFTON RESOURCES, INC., a British Virgin Islands corporation (“Parent”), TEG OIL & GAS U.S.A., INC., a Colorado corporation (“TEGOG”), TEG MIDCONTINENT, INC., a Colorado corporation (“TEGMC”), and BANK OF THE WEST, a California corporation (“BOTW”). Parent, TEGOG and TEGMC are herein collectively referred to as “Borrowers.”

 

RECITALS

 

A.           Borrowers and BOTW entered into an Amended and Restated Credit Agreement dated as of October 21, 2008, as heretofore amended (as so amended, the “Credit Agreement”). Capitalized terms used herein but not defined herein shall have the same meanings as set forth in the Credit Agreement.

 

B.           Borrowers and BOTW desire that this Amendment be executed and delivered in order to amend certain terms and provisions of the Credit Agreement and to evidence a Borrowing Base redetermination.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.           Credit Agreement.  The Credit Agreement shall be, and hereby is, amended as follows, effective as of the date hereof:

 

(a)           In lines 1 and 2 of the definition of “Maturity Date” in Section 1.1 on page 7 of the Credit Agreement, “February 28, 2012” shall be substituted for “February 28, 2011.”

 

(b)           The following shall be substituted for the definition of “Maximum Loan Amount” in Section 1.1 on pages 7 and 8 of the Credit Agreement:

 

“Maximum Loan Amount” means, at any time, the amount set forth in Exhibit F attached hereto and made a part hereof for that time; provided that, upon the request of Borrowers, BOTW may, in its sole discretion and upon such terms and conditions as BOTW may determine, increase said amount to an amount not greater than $10,000,000 by giving written notice of such increase to Borrowers, but nothing contained in this Agreement, the Note or any other Loan Document shall be deemed to commit or require BOTW to grant any such increase.

 

  

  

  

 

(c)           The following shall be substituted for BOTW’s address for notice purposes, as set forth in Section 8.3 on page 40 of the Credit Agreement:

 

	
BOTW’s address:     

	
600 Seventeenth Street, Suite 1500

	  	
Denver, Colorado 80202

	  	
Attention: Duc Duong, Energy Lending

	  	
Fax: 303-202-5788

 

(d)           Exhibit F attached hereto shall be added as Exhibit F attached to the Credit Agreement.

 

2.           Borrowing Base Redetermination.  BOTW has redetermined the Borrowing Base as of the date hereof, which redetermination shall be deemed to be in lieu of the regularly-scheduled December 1, 2010 Borrowing Base redetermination, resulting in the Borrowing Base being set as follows until the effective date of the ensuing Borrowing Base redetermination pursuant to the terms of the Credit Agreement: $6,800,000 as of February 1, 2011, reduced by $100,000 as of the close of business on each subsequent Payment Date, commencing with the February 28, 2011 Payment Date.

 

3.           Loan Documents.  All references in any document to the Credit Agreement shall be deemed to refer to the Credit Agreement, as amended pursuant to this Amendment.

 

4.           Certification by Borrowers.  Borrowers hereby certify to BOTW that, as of the date of this Amendment, after giving effect to the provisions hereof: (a) all of Borrowers’ representations and warranties contained in the Credit Agreement are true, accurate and complete in all material respects, (b) Borrowers have performed and complied with all agreements and conditions required to be performed or complied with by Borrowers under the Credit Agreement and/or any Loan Document on or prior to this date, and (c) no Default or Event of Default has occurred under the Credit Agreement.

 

5.           Conditions Precedent.  The obligations of the parties under this Amendment are subject, at the option of BOTW, to the prior satisfaction of the condition that Borrowers shall have delivered to BOTW the following (all documents to be satisfactory in form and substance to BOTW and, if appropriate, duly executed and/or acknowledged on behalf of the parties other than BOTW):

 

(a)           This Amendment.

 

(b)           A fee in the amount of $68,000, payable to BOTW in connection with the extension of the Maturity Date being made pursuant to the terms hereof.

 

6.           Continuation of the Credit Agreement.  Except as specified in this Amendment, the provisions of the Credit Agreement shall remain in full force and effect.

 

7.           Expenses.  Borrowers shall pay all expenses incurred in connection with the transactions contemplated by this Amendment, including without limitation all fees and expenses of the attorney for BOTW and any and all filing and recording expenses.

 

  

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8.           Miscellaneous.  This Amendment shall be governed by and construed under the laws of the State of Colorado and shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

EXECUTED as of the date first above written.

 

	  	
SEFTON RESOURCES, INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chief Executive Officer

	  	  
	  	  
	  	  
	  	
TEG OIL & GAS U.S.A., INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chairman

	  	  
	  	  
	  	  
	  	
TEG MIDCONTINENT, INC.

	  	  
	  	  
	  	
By:

	
/s/ Jim Ellerton

	  	  	
     Jim Ellerton,

	  	  	
     Chairman

	  	  
	  	  
	  	  
	  	
BANK OF THE WEST

	  	  
	  	  
	  	
By:

	
/s/ Duc Duong

	  	  	
     Duc Duong,

	  	  	
     Vice President

 

 

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