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Exhibit 10.6
HADSON ENERGY RESOURCES CORPORATION
SECOND AGREEMENT TO CREDIT AGREEMENT
Bank of Montreal
Chicago, Illinois
Gentlemen:
We refer to the Credit Agreement dated as of December 18, 1990 as
amended and currently in effect between us (the "Credit Agreement"),
capitalized terms used without definition below to have the same meanings
herein as they have in the Credit Agreement. Upon your acceptance hereof in
the space provided for that purpose below and as of the dates provided for
below, the Credit Agreement and the Revolving Credit Note shall be amended as
follows:
1. Section 1.2 (the Term Credit). The third sentence of Section 1.2 of
the Credit Agreement shall be amended by striking the word "nine" appearing
therein and by substituting the word "five" therefor.
2. Section 3.1 (Commitment Fee). Section 3.1 of the Credit Agreement
shall be amended by striking the fraction "1/2" appearing therein and
substituting the fraction "3/8" therefor.
3. Section 8.5(a) (Financial Reports). Section 8.5(a) of the Credit
Agreement shall be amended and as so amended shall be restated in its entirety
to read as follows:
"(a) as soon as available, and in any event within 60 days after the
close of each quarterly fiscal period of the Company, a copy of the
balance sheet, statement of earnings and statement of changes in cash
flow of the Company and its Subsidiaries as of the last day of such
period (in the case of the balance sheet) and for the fiscal year to
date ending as of the last day of such period (in the case of the other
statements) prepared on a consolidated basis and certified to by the
president, chief financial officer, chief accounting officer or vice
president and treasurer thereof with such certificate to also (i)
state that the signer thereof has reexamined the provisions of this
Agreement and that no Default or Event of Default has occurred or is
continuing or if any of such has occurred or is continuing stating the
nature thereof and the action, if any, which the Company proposes to
take with respect thereto, (ii) set forth a computation in reasonable
detail of compliance with the proviso to Section 8.8 hereto, Section
8.10(h) hereof and Sections 8.9, 8.13 and 8.14 hereof, (iii) include a
statement of the current adjusted valuation of the principal balance of
the Petroleum Notes and (iv) include a statement of all sales of
Borrowing Base Assets during the fiscal year to date ending as of the
last day of such period;"
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4. Section 8.5(c) (Financial Reports). Section 8.5(c) of the Credit
Agreement shall be amended by deleting the phrase "on a month by month basis"
appearing in line 2 thereof and by deleting the phrase "by month and" in the
parenthetical clause at the end thereof.
5. Section 10 (Definition of the term "Applicable Base Rate Margin").
The definition of the term "Applicable Base Rate Margin" appearing in Section
10 of the Credit Agreement shall be amended and as so amended shall be restated
in its entirety to read as follows:
"The term "Applicable Base Rate Margin" shall mean 0% per annum
when applied to the indebtedness evidenced by the Revolving Credit
Notes and 1/4 of 1% per annum when applied to the indebtedness
evidenced by the Term Credit Notes, provided however that from and
after the occurrence of an Event of Default, the term "Applicable
Base Rate Margin" shall mean 2% per annum when applied to the
indebtedness evidenced by the Revolving Credit Notes and 2-1/4% per
annum when applied to the indebtedness evidenced by the Term Credit
Notes."
6. Section 10 (Definition of the term "Applicable CD Rate Margin").
The definition of the term "Applicable CD Rate Margin" appearing in Section 10
of the Credit Agreement shall be amended and as so amended shall be restated in
its entirety to read as follows:
"The term "Applicable Base Rate Margin" shall mean for each Interest
Period applicable to an Adjusted CD Rate Portion (i) 1-1/8% per annum
if as of the first day of such Interest Period the Outstandings are
equal to or less than 50% of the Borrowing Base as most recently
determined by the Banks, (ii) 1-1/4% per annum if as of the first day
of such Interest Period the Outstandings exceed 50% but are less than
75% of the Borrowing Base as most recently determined by the Banks
and (iii) 1-3/8% per annum if as of the first day of such Interest
Period the Outstandings equal or exceed 75% of the Borrowing Base as
most recently determined by the Banks; provided, however, that
(aa) the Applicable CD Rate Margin for any CD Rate Portion evidenced
by the Term Credit Notes shall be the rate per annum determined
pursuant to the foregoing plus 1/4 of 1% per annum, (ab) from and
after the occurrence of an Event of Default the Applicable CD Rate
Margin shall be the rate per annum determined pursuant to all of the
foregoing (including the foregoing proviso) plus the rate of 2% per
annum and (ac) through December 31, 1994 (but not thereafter) the
Applicable CD Rate Margin shall be reduced by 1/8 of 1% per annum
from such margin as computed pursuant to the applicable foregoing
provisions of this definition."
7. Section 10 (Definition of the term "Applicable LIBOR Rate Margin").
The definition of the term "Applicable LIBOR Rate Margin" appearing in Section
10 of the Credit Agreement shall be amended and as so amended shall be restated
in its entirety to read as follows:
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"The term "Applicable LIBOR Rate Margin" shall mean for each
Interest Period applicable to a LIBOR Portion (i) 7/8 of 1% per annum
if as of the first day of such Interest Period the Outstandings are
equal to or less than 50% of the Borrowing Base as most recently
computed by the Banks, (ii) 1% per annum if as of the first day of
such Interest Period the Outstandings exceed 50% but are less than 75%
of the Borrowing Base as most recently determined by the Banks and
(iii) 1-1/8% per annum if as of the first day of such Interest Period
the Outstandings equal or exceed 75% of the Borrowing Base as most
recently determined by the Banks; provided, however that (aa) the
Applicable LIBOR Rate Margin for any LIBOR Portion evidenced by the
Term Credit Notes shall be the rate per annum determined pursuant to
the foregoing plus 1/4 of 1% per annum, (ab) from and after the
occurrence of an Event of Default, the Applicable LIBOR Rate Margin
shall be the rate per annum determined pursuant to all of the
foregoing (including the foregoing proviso) plus the rate of 2% per
annum and (ac) through December 31, 1994 (but not thereafter) the
Applicable LIBOR Rate Margin shall be reduced by 1/8 of 1% per annum
from such margin as computed pursuant to the applicable foregoing
provisions of this definition."
8. Section 10 (Definition of the term "Termination Date"). The
definition of the term "Termination Date" appearing in Section 10 of the Credit
Agreement shall be amended by striking the date "October 31, 1994" appearing
therein and by substituting the date "October 31, 1995" therefor.
9. Section 10 (new definition). Section 10 of the Credit Agreement
shall be amended by adding the following additional definition thereto:
"The term "Outstandings" shall mean as of any time the same is
to be determined the sum of the then outstanding principal balance of
the Notes and the amount of all outstanding Letters of Credit."
10. The Revolving Credit Note. The first paragraph of the Revolving
Credit Note heretofore issued to Bank of Montreal shall be amended by striking
the date "October 31, 1994" appearing therein and by substituting the date
"October 31, 1995" therefor. If at any time Bank of Montreal requests the
issuance of a new revolving credit note to it in substitution for the Revolving
Credit Note currently outstanding, the Company agrees to issue such revolving
credit note to Bank of Montreal in the same form as the Revolving Credit Note
presently outstanding but with the foregoing amendment embodied therein upon
surrender of the presently outstanding Revolving Credit Note marked
"Superseded".
11. Exhibit B. The first paragraph of Exhibit B to the Credit
Agreement is hereby amended by striking the word "nine" appearing therein and
by substituting the word "five" therefor.
12. Section 12.7 (Notices). Section 12.7 of the Credit Agreement
shall be amended by striking the phrase "101 Park Avenue, Suite 1400, Oklahoma
City, Oklahoma 73126,
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Attention: William C. Rankin" and by substituting the following therefor
"2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400, Attention:
Daniel D. Hawk".
Except as specifically amended hereby all of the terms, conditions and
provisions of the Credit Agreement and Revolving Credit Note shall stand and
remain unchanged and in full force and effect. No reference to this Second
Amendment to Credit Amendment need be made in any instrument or document at any
time referring to the Credit Agreement or Revolving Credit Note, a reference to
the Credit Agreement or Revolving Credit Note in any of such to be deemed to be
a reference to the Credit Agreement or Revolving Credit Note as amended hereby.
This amendment shall be effective as of the date appearing immediately above
the signature of the Company hereon except that the amendment to Section 3.1
hereof shall be effective for all computations of the commitment fee accruing
from and after December 1, 1993, the amendment to the definition of the term
"Applicable Base Rate Margin" shall be effective from and after December 1,
1993 and the amendments to definition of the terms "Applicable CD Rate Margin"
and "Applicable LIBOR Rate Margin" shall become effective for all LIBOR
Portions and Adjusted CD Rate Portions created or continued through a new
Interest Period subsequent to the date hereof. This Second Amendment to Credit
Agreement shall be construed in accordance with and governed by the laws of the
State of Illinois.
Dated as of this 22nd day of December, 1993.
HADSON ENERGY RESOURCES CORPORATION
By: /s/ Clyde E. McKenzie
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Its Vice President
Accepted and agreed to as of the date last above written.
BANK OF MONTREAL
By: /s/ Robert Roberts
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Its Director
The undersigned confirms that it is aware of the terms and conditions
of this Second Amendment to Credit Amendment while it acknowledges that its
consent thereto is not required, it further acknowledges that it has no
objection to the terms and conditions thereof and that its Guaranty dated as of
December 18, 1990 of the indebtedness, obligations and liabilities of the
Company continues in full force and effect.
HADSON ENERGY LIMITED
By: /s/ David Nevis Hayes
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Its Managing Director
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