EXHIBIT 10.6
FIRST AMENDMENT TO
SUBORDINATION AGREEMENT
THIS FIRST AMENDMENT TO SUBORDINATION AGREEMENT (this "AMENDMENT")
dated as of May 21, 1997 is made among OPAL AIR, INC. (the "SUBORDINATE
NOTEHOLDER"), and RIMCO PARTNERS, L.P., a Delaware limited partnership, RIMCO
PARTNERS, X.X. XX, a Delaware limited partnership, RIMCO PARTNERS, L.P. III, a
Delaware limited partnership and RIMCO PARTNERS, X.X. XX, a Delaware limited
partnership (collectively, the "SENIOR NOTEHOLDERS"), TEXOIL, INC., a Nevada
corporation ("PARENT"), and TEXOIL COMPANY, a Tennessee corporation (the
"COMPANY").
PRELIMINARY STATEMENT
A. The Parent and the Senior Noteholders have entered into that
certain Note Purchase Agreement, dated September 6, 1996 (the "ORIGINAL NOTE
AGREEMENT").
B. In connection with the Original Note Agreement, the Senior
Noteholders, the Company and Parent entered into that certain Guaranty and
Exchange Agreement, dated as of September 6, 1996 (the "ORIGINAL GUARANTY
AGREEMENT").
C. The Subordinate Noteholder and Parent entered into that certain
Amended and Restated Agreement of Purchase and Sale, dated as of September 6,
1996 (the "SUBORDINATE NOTE AGREEMENT"), whereby the Subordinate Noteholder
loaned the Parent $50,000 and the Parent issued the Subordinated Noteholder a
promissory note in the principal amount of $50,000 (the "SUBORDINATE NOTE")
D. As a condition precedent to induce the Senior Noteholders to
purchase the Senior Notes under the Original Note Agreement, the Senior
Noteholders and the Subordinate Noteholder have entered into that certain
Subordination Agreement, dated September 6, 1996 (the "SUBORDINATION
AGREEMENT").
E. On even date herewith, the Parent, the Company and the
Noteholders have amended and restated the Original Note Agreement by entering
into that certain Amended and Restated Note Purchase Agreement (the "AMENDED
NOTE AGREEMENT") whereby the Noteholders have committed to make Tranche C
Advances (as defined in the Amended Note Agreement) of up to $1,500,000.00.
F. In connection with the Amended Note Agreement, the Senior
Noteholders, the Company and Parent have amended and restated the Original
Guaranty Agreement, dated as of even date herewith (the "AMENDED GUARANTY
AGREEMENT").
Exhibit 10.6 - Page 1
G. The Senior Noteholders and the Subordinate Noteholders now desire
to amend the Subordination Agreement to include within the definition of Senior
Obligations the indebtedness, liabilities and obligations of the Company and
Parent under the Amended Note Agreement and the Amended Guaranty Agreement.
H. It is a condition precedent to the effectiveness of the Amended
Note Agreement that the Senior Noteholders and the Subordinate Noteholder shall
have executed this Amendment.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
(a) All capitalized terms defined in the Subordination Agreement and
not otherwise defined herein shall have the same meanings herein as in the
Subordination Agreement including, without limitation, defined terms that are
defined by reference to the Amended Note Agreement. All references in the
Subordination Agreement to Note Agreement and Guaranty Agreement shall be
references to the Amended Note Agreement and Amended Guaranty Agreement,
respectively (as same may be modified, amended or amended and restated from time
to time). All references in the Subordination Agreement to the Senior Notes
shall mean the "Notes" (as such term is defined in the Amended Note Agreement)
including, without limitation, the Tranche C Notes.
(b) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Amendment as a whole and not to any particular
Article, Section or other subdivision.
(c) The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
ARTICLE II
AMENDMENT TO SUBORDINATION AGREEMENT
The term "Senior Obligations" as defined in Section 1.01 of the
Subordination Agreement is hereby amended to include, without limitation, the
indebtedness, liabilities and obligations of the Company and/or Parent to the
Senior Noteholders under the Amended Note Agreement, the Senior Notes
(including, without limitation, the Tranche C Notes), the Amended Guaranty
Agreement or any other Transaction Document as such documents may be further
amended, amended and restated, extended or otherwise modified from time to time
in the future.
Exhibit 10.6 - Page 2
ARTICLE III
CONDITION OF EFFECTIVENESS
This Amendment shall become effective when, and only when, the
following conditions shall have been fulfilled:
(a) the Senior Noteholders and the Subordinate Noteholder shall have
executed a counterpart of this Amendment;
(b) the Amended Note Agreement shall have become effective; and
(c) the Amended Guaranty Agreement shall have become effective.
ARTICLE IV
MISCELLANEOUS
Section 4.01 REFERENCE TO SUBORDINATION AGREEMENT AND EFFECT ON
NOTES, NOTE AGREEMENT AND OTHER TRANSACTION DOCUMENTS EXECUTED IN CONNECTION
WITH THE SUBORDINATION AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference in the
Subordination Agreement to "this Agreement," "hereunder," "herein," "hereof," or
words of similar import shall mean and be a reference to the Subordination
Agreement as affected and amended hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes, the Amended Note Agreement, the other Transaction Documents and the other
documents and agreements delivered or to be delivered pursuant to the Amended
Note Agreement and the other Transaction Documents to the Subordination
Agreement shall mean and be a reference to the Subordination Agreement, as
affected and amended hereby.
(c) The Subordination Agreement and the other Transaction Documents,
as affected and amended hereby, shall remain in full force and effect and are
hereby ratified and confirmed.
Section 4.02 GOVERNING LAW; TERMS. THIS AMENDMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING
CHOICE OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
Section 4.03 EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when
Exhibit 10.6 - Page 3
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
OPAL AIR, INC.
By: _______________________
X.X. Xxxxx, Xx.
President
Address for Notices:
0000 Xxx Xxxxxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: X.X. Xxxxx, Xx.
Telecopy Number: 000-000-0000
RIMCO PARTNERS, L.P.,
RIMCO PARTNERS, X.X. XX,
RIMCO PARTNERS, L.P. III, AND
RIMCO PARTNERS, X.X. XX
By: RESOURCE INVESTORS MANAGEMENT
COMPANY LIMITED PARTNERSHIP,
THEIR GENERAL PARTNER
By: RIMCO ASSOCIATES, INC.,
its general partner
By: _______________________
Name: Xxxx Xxxxxxx
Title:Vice President
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TEXOIL, INC.
By: _______________________
Name: Xxxxx Xxxxxxx
Title: President
TEXOIL COMPANY
By: _______________________
Name: Xxxxx Xxxxxxx
Title: President
Exhibit 10.6 - Page 5
