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EXHIBIT 10.6
FIRST AMENDMENT TO
LOAN AGREEMENT DATED OCTOBER 21, 1997
BY AND AMONG
HORIZON EXPLORATION LIMITED
AND
BANK ONE, TEXAS, N.A.
This First Amendment to Loan Agreement dated October 21, 1997 is entered
into as of June 10, 1998 (this "First Amendment") by and between HORIZON
EXPLORATION LIMITED, an English company with Registered Number 2804983, having
its Registered Office at Xxxxxx House, 00-00 Xxxxx Xxxxxxx Xxxx, Xxxxxxxxx
Xxxxx, Xxxx XX0 0XX ("Borrower"), and BANK ONE, TEXAS, N.A., a national banking
association (the "Bank").
W I T N E S S E T H:
Borrower and Bank entered into a Loan Agreement dated October 21, 1997
(the "Loan Agreement").
Ultimate Parent and Bank executed that certain Unsecured Advancing Line
of Credit Agreement (the "Advancing Loan") dated June 5, 1998.
Borrower will, in addition to Ultimate Parent, benefit from the proceeds
under the Advancing Loan.
Bank entered into the Advancing Loan and is willing to enter into this
First Amendment, subject to and conditioned upon the provisions set forth
herein.
NOW, THEREFORE, in consideration of the promises herein contained, and
each intending to be legally bound hereby, the parties agree as follows:
I. Amendments to Loan Agreement.
Article I of the Loan Agreement is hereby amended by revising the
following definition in its entirety to read as follows:
"Maturity Date" means June 1, 1999.
Article I of the Loan Agreement is further amended by adding the
following new definitions:
"Consolidated Fixed Charge Coverage Ratio" means the ratio of (a)
consolidated net income, plus consolidated interest expense, plus
consolidated tax expenses, plus
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depreciation and amortization, plus consolidated non-cash charges
deducted from consolidated net income, to (b) consolidated interest
expense, all calculated in accordance with GAAP.
"First Amendment" shall mean that certain First Amendment to the
Loan Agreement, entered into by and among Bank and Borrower on June 10,
1998.
"High Yield Debt Offering" means that certain contemplated
offering of up to $100,000,000 of Senior Notes issued by Ultimate Parent
on terms substantially as set forth in the Summary of Indicative 144A
Offering Terms dated May 5, 1998, prepared by Prudential Securities
Incorporated, and otherwise acceptable to Bank in its discretion (it
being understood that Bank has no objection to the amount of such
offering exceeding $100,000,000).
Section 4.16 of the Loan Agreement is hereby amended by adding
immediately preceding the semicolon at the end of Subsection (A) the following:
", as of Closing".
Article V of the Loan Agreement is hereby amended as follows:
Section 5.03 of the Loan Agreement is hereby amended by replacing the
text of that section in its entirety with the following:
5.03 Monthly Unaudited Financial Statements of Borrower. (a) Cause
the Ultimate Parent to deliver to Bank, on or before the sixtieth (60th)
day after the end of each calendar month, unaudited consolidated and
consolidating Financial Statements of Borrower and its Subsidiaries as at
the end of such month and from the beginning of each fiscal year to the
end of each such month, which Financial Statements shall be certified by
the president or chief financial officer of Borrower as being true and
correct, subject to changes resulting from year-end audit adjustments;
and (b) deliver to Bank, on or before the sixtieth (60th) day after the
end of each calendar month, unaudited internal consolidating Financial
Statements of Borrower and its Subsidiaries as at the end of such month
and from the beginning of each fiscal year to the end of each such month,
which Financial Statements shall be certified by the president or chief
financial officer of Borrower as being true and correct, subject to
changes resulting from year-end audit adjustments.
Section 5.05 is hereby amended by replacing the contents of that section
in its entirety with the following:
5.05 Compliance Certificate. Deliver to Bank a Compliance
Certificate: (a) at the time of Borrower's execution of this Agreement,
and (b) on the first day of each month thereafter prior to the Maturity
Date.
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Section 5.19 of the Loan Agreement is amended by replacing the following
clause therein "Sections 5.19 through 5.22" with the following clause: "Sections
5.19 through 5.22 and 5.31".
Section 7.01 of the Loan Agreement is hereby amended by replacing the
period at the end of subsection (j) with a semicolon, followed by the word
"and," and then adding the following new subsection:
(k) An "Event of Default," as defined in the Advancing Loan Agreement,
has occurred and is continuing.
"Exhibit B" attached to and incorporated to the Loan Agreement is hereby
replaced with Exhibit B attached to this First Amendment and is incorporated
herein for all purposes.
II. Conditions to First Amendment. This First Amendment shall not become
effective until Bank shall have received multiple counterparts of the First
Amendment, as requested by Bank, and the Certificate of Compliance (in the form
attached as Exhibit B to the First Amendment), all duly executed on behalf of
Borrower.
III. Extent of Amendments. This First Amendment shall not be deemed to be an
amendment by Bank of any covenant, condition or obligation on the part of the
Borrower under the Loan Agreement, as amended hereby, except as expressly set
forth herein. In addition, this First Amendment shall in no respect evidence any
commitment by the Bank to grant any future amendments of any covenant, condition
or obligation on the part of the Borrower under the Loan Agreement, as amended
hereby. Any further amendments, waivers or consents must be specifically agreed
to in writing in accordance with Section 8.12 of the Loan Agreement.
IV. Reaffirmation of Representations and Warranties. To induce the Bank to
enter into this First Amendment, the Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Section 4 of the Loan
Agreement and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:
A. The execution and delivery of this First Amendment and the performance
of Borrower of its obligations under this First Amendment are within
Borrower's power, have been duly authorized by all necessary corporate
action, have received all necessary governmental approval (if any shall
be required), and do not and will not contravene or conflict with any
provision of law or of the charter or by-laws of the Borrower or of any
agreement binding upon Borrower.
B. This First Amendment represents the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with its terms subject as to enforcement only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally.
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C. Since the date of the Loan Agreement, no change, event or state of
affairs has occurred and is continuing which would constitute an event of
default as described in Section 7.01 of the Loan Agreement.
V. Defined Terms. Terms used herein that are defined in the Loan Agreement
shall have the same meanings herein, unless the context otherwise requires.
VI. Reaffirmation of Loan Agreement. This First Amendment shall be deemed to
be an amendment to the Loan Agreement, and the Loan Agreement, as amended
hereby, is hereby ratified, adopted and confirmed in each and every respect.
VII. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. This First Amendment has been entered into in Xxxxxx
County, Texas, and it shall be performable for all purposes in Xxxxxx County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes between the Borrower and the Bank, whether in law or equity, including,
but not limited to, any and all disputes arising out of or relating to this
First Amendment or any other Loan Documents; and venue in any such dispute
whether in federal or state court shall be laid in Xxxxxx County, Texas.
VIII. Severability. Whenever possible each provision of this First Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this First Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this First Amendment.
IX. Execution in Counterparts. This First Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts on
different dates, and each such counterpart shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
agreement.
X. Section Captions. Section captions used in this First Amendment are for
convenience of reference only, and shall not affect the construction of this
First Amendment.
XI. Successors and Assigns. This First Amendment shall be binding upon the
Borrower, the Bank and its respective successors and assigns, and shall inure to
the benefit of the Borrower, the Bank and the respective successors and assigns
of the Bank.
XII. Non-Application of Chapter 15 of Texas Credit Code. The provisions of
Chapter 15 of the Texas Credit Code (Vernon's Texas Civil Statutes, Article
5069-15) are specifically declared by the parties hereto not to be applicable to
this First Amendment or any of the other Loan Documents or to the transactions
contemplated hereby.
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XIII. Notice. THE LOAN AGREEMENT, AS HEREBY AMENDED, EMBODIES THE ENTIRE
AGREEMENT BETWEEN THE BORROWER AND THE BANK AND SUPERSEDES ALL PRIOR PROPOSALS,
AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER HEREOF. THE
BORROWER CERTIFIES THAT IT IS RELYING ON NO REPRESENTATION, WARRANTY, COVENANT
OR AGREEMENT EXCEPT FOR THOSE SET FORTH IN THE LOAN AGREEMENT, AS HEREBY
AMENDED, AND THE OTHER DOCUMENTS PREVIOUSLY EXECUTED IN CONNECTION THEREWITH.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
BORROWER:
HORIZON EXPLORATION LIMITED
By: /s/ Xxxxxxx X. XxXxxxx
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Xxxxxxx X. XxXxxxx
Agent and Attorney-in-Fact
BANK:
BANK ONE, TEXAS, N.A.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Vice President
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