EXHIBIT 10.6
EXECUTION COPY
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INVESTMENT NUMBER 11090
Second Amendment to
Loan Agreement
between
VAALCO GABON (ETAME), INC.
and
INTERNATIONAL FINANCE CORPORATION
Dated August 23, 2002
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SECOND AMENDMENT TO
LOAN AGREEMENT
AGREEMENT, dated August 23, 2002 between
(1) VAALCO GABON (ETAME), INC., a corporation organized and existing under
the laws of the State of Delaware, the United States of America (the
"Borrower"); and
(2) INTERNATIONAL FINANCE CORPORATION, an international organization
established by Articles of Agreement among its member countries
including the Republic of Gabon ("IFC").
WHEREAS:
(A) Pursuant to a Loan Agreement dated April 19, 2002, as amended May 28,
2002 (as amended, the "Loan Agreement") between Vaalco Gabon (Etame), Inc. (the
"Borrower") and IFC, IFC has agreed to extend to the Borrower a loan (the "IFC
Loan") in a principal amount not to exceed ten million Dollars ($10,000,000),
subject to the terms and conditions set forth in the Loan Agreement.
(B) The parties hereto have agreed to further amend the Loan Agreement to
bring it into conformity with other Transaction Documents that are being amended
on or about the date hereof.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. All capitalized terms used in this Agreement
(including the preamble and recitals) and not otherwise defined herein, unless
the context otherwise requires, have the respective meanings given to such terms
in the Loan Agreement.
Section 1.2. Interpretation. In this Agreement, unless otherwise stated or
unless the context otherwise requires:
(a) headings are for convenience only and do not affect the interpretation
of this Agreement;
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(b) words importing the singular include the plural and vice versa;
(c) an expression importing a natural person includes any company,
partnership, trust, joint venture, association, corporation or other body
corporate and any Authority;
(d) a reference to a Section, Article or party is a reference to that
Section or Article of, or that party to, this Agreement;
(e) a reference to a document includes an amendment or supplement to, or
replacement or novation of, that document but disregarding any amendment,
supplement, replacement or novation made in breach of this Agreement or the Loan
Agreement;
(f) a reference to a party to any document includes that party's successors
and permitted assigns; and
(g) no rule of construction applies to the disadvantage of a party because
that party was responsible for the preparation of this Agreement or any part
thereof.
ARTICLE II
Amendments
Section 2.1. Amendment of Section 1.01 (Definitions). Section 1.01 of the
Loan Agreement is amended as follows:
(a) by inserting each of the following new definitions in the appropriate
alphabetical location:
"'NIC' Nissho Iwai Corporation, a corporation organized
and existing under the laws of Japan;"; and
"'VII' VAALCO International, Inc., a corporation
organized and existing under the laws of
Delaware;";
(b) by amending each of the defined terms "1818 Fund Subordination
Agreement", "Escrow Account Agreement", "Pledge of Shares", "Subordination and
Share Retention Agreement" and "Sponsor" to read in full as follows:
"'1818 Fund Subordination
Agreement' the agreement entitled "Amended and Restated
Subordination and Intercreditor Agreement" dated
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June 10, 2002 and amended and restated as of
August 23, 2002, among IFC, 1818 Fund, NIC, the
Sponsor and VII;";
"'Escrow Account
Agreement' the agreement entitled "Escrow Account Agreement"
dated May 31, 2002, as amended August 23, 2002,
among the Sponsor, the Escrow Account Bank and IFC
pursuant to which the Sponsor Escrow Account shall
be established, operated and maintained;";
"'Pledge of Shares' the agreement entitled "Amended and
Restated Pledge of Shares Agreement" dated May 31,
2002 and amended and restated as of August 23,
2002 among the Sponsor, VII and IFC;";
"'Subordination and Share
Retention Agreement' the agreement entitled "Amended and
Restated Subordination and Share Retention
Agreement" dated May 10, 2002 and amended and
restated August 23, 2002 among the Borrower, VII,
the Sponsor, NIC and IFC;"; and
"'Sponsor' VAALCO Energy, Inc., a corporation organized and
existing under the laws of Delaware;";
(c) by amending paragraphs (i), (ii) and (iv) of the defined term "Material
Adverse Effect" to read in full as follows:
"(i) the Borrower, VII or the Sponsor or
their respective assets or properties;
(ii) the Borrower's, VII's or the Sponsor's
business prospects or financial
condition;
(iv) the ability of the Borrower, VII or the
Sponsor to comply with their respective
obligations under this Agreement or any
other Transaction Document or Project
Document;"; and
(d) by amending paragraphs (h) and (i) of the defined term "Security" to
read in full as follows:
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"(h) a first ranking pledge by each of the
Sponsor and VII of all its shares in the
Borrower; and
(i) an assignment of all Affiliate Loans by
the Sponsor and VII and an assignment by
the Sponsor of all loans by the Sponsor
to VII;"
Section 2.2. Amendment of Section 1.03 (Financial Calculations). Subsection
(a) of Section 1.03 of the Loan Agreement is amended by deleting the phrase
"Section 16.04 (g)" in the ninth line thereof and replacing it with the phrase
"Section 20.04 (g)".
Section 2.3. Amendment of Section 7.02 (Events of Default). Subsection (x)
of Section 7.02 of the Loan Agreement is amended to read in full as follows:
"(x) any of the events specified in Section 7.02 (g) through (k) or in
Section 7.02 (v) occur to either of the Sponsor or VII or any of their
properties, assets or share capital; provided that, in the case of Section 7.02
(k) and Section 7.02 (v), such event shall only be an Event of Default if the
aggregate amount of the unpaid Debt or the final judgment, order or award, as
the case may be, exceeds one million Dollars ($1,000,000) or its equivalent;".
ARTICLE III
Miscellaneous
Section 3.1. Effect. (a) All references in the Loan Agreement to "this
Agreement", "herein", "hereof", "hereunder", "hereto" or expressions of like
meaning shall be references to the Loan Agreement as amended by this Agreement.
(b) Except as amended hereby, the Loan Agreement shall remain in full force
and effect.
Section 3.2. Confirmation and Restatement; No Waiver. (a) The Borrower
hereby confirms and restates in favor of IFC all of the obligations expressed to
be undertaken by it in the Loan Agreement as amended by this Agreement and
covenants to observe and perform all such obligations and all the terms and
conditions of the Loan Agreement as so amended as if the same were set out in
full herein.
(b) Unless expressly stated herein, nothing herein shall amend or alter any
obligation of the Borrower under the Loan Agreement or shall be construed as a
waiver by IFC of any rights which IFC may have pursuant to the Loan Agreement.
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(c) The Borrower hereby restates, as if set forth herein at length, and
confirms, as of the date hereof, the representations and warranties made by it
in Section 4.01 of the Loan Agreement, as amended hereby.
Section 3.3. Governing Law. This Agreement is governed by, and shall be
construed in accordance with, the laws of England.
Section 3.4. Amendments. Any amendment of any provision of this Agreement
shall be in writing and signed by the parties.
Section 3.5. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same agreement.
[signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in
their respective names as of the date first above written.
VAALCO GABON (ETAME), INC.
By:
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Name:
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Title:
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INTERNATIONAL FINANCE CORPORATION
By:
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Name:
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Title:
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