EX-10.12 4 h96034a1ex10-12.txt SECOND AMENDMENT TO LOAN AGREEMENT EXHIBIT 10.12 Second Amendment to the Loan Agreement dated as of April 16, 2001 between Ascent and Fortis Capital Corp. (Fortis Logo) April 16, 2002 Ascent Energy Inc. 1700 Redbud Boulevard, Suite 450 McKinney, Texas 75069 Re: Second Amendment to Loan Agreement Gentlemen: This Second Amendment to the Loan Agreement (the "Amendment") sets forth the amended terms of the financing transaction by and among ASCENT ENERGY INC., a Delaware corporation ("Borrower"), FORTIS CAPITAL CORP., a Connecticut corporation as Agent ("Agent") and as a Lender, and the other Lenders. WHEREAS, Borrower and Fortis Capital Corp., as Agent, entered into a Loan Agreement dated as of July 27, 2001, as amended (the "Loan Agreement"); and WHEREAS, the Borrower has requested that the Agent and the Lenders make certain amendments to the Loan Agreement, and the Agent and the Lenders are willing to do so subject to the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. DEFINED TERMS. All capitalized terms used but not otherwise defined in this Amendment shall have the meaning ascribed to them in the Loan Agreement. Unless otherwise specified, all section references herein refer to sections of the Loan Agreement. 2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby amended as follows: 2.1 Method of Calculating Financial Ratios (a) Section 16(g) is amended to read as follows: "(g) Total Debt to EBITDA. The Borrower shall not, on a Consolidated basis, allow its ratio of Debt to EBITDA to exceed: 5.0 to 1.0 measured as of the last day of any Fiscal Quarter in 2001 and the first three Fiscal Quarters of 2002; 4.5 to 1.0 measured as of the last day of the last Fiscal Quarter in 2002; and 4.0 to 1.0 measured as of the last day of any Fiscal Quarter in 2003 or thereafter." (b) Section 16(i) is amended to read as follows: "(i) Method of Calculation. The financial ratios set forth in Subsections 16(g) and 16(h) above shall be calculated for the period of the last four consecutive Fiscal Quarters preceding the date of determination. In each case, if during any relevant period, the Borrower or one of its Restricted Subsidiaries has acquired or acquires another Restricted Subsidiary or has merged or merges with another Person, such calculation shall be made on a pro forma basis as if the acquisition or merger had occurred on the first day of the relevant period of four Fiscal Quarters in question. For the avoidance of doubt, the calculations made for the period of four Fiscal Quarters following the acquisitions of each of Pontotoc and Devo Holding Company, LLC shall be made on a pro forma basis 2 as aforesaid taking into account the consolidated financial statements of each of the Borrower, Pontotoc and Devo Holding Company LLC. 3. EFFECTIVENESS OF AMENDMENT. (a) This Amendment shall be effective upon receipt by Agent of: (i) A Confirmation of Guaranty executed by Forman and the Restricted Subsidiaries party to the Subsidiary Guaranty; (ii) An amendment fee equal to $25,000; (iii) A compliance certificate executed by Borrower; and (iv) An Incumbency Certificate executed by Borrower. (b) Upon satisfaction of the conditions set forth at subsection (a) above, this Amendment shall be effective as of the date of the Loan Agreement, July 27, 2001. 4. RATIFICATIONS, REPRESENTATIONS AND WARRANTIES. (a) The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Loan Agreement and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Agreement are ratified and confirmed and shall continue in full force and effect. The Borrower and Agent agree that the Loan Agreement and the Loan Documents, as amended hereby, shall continue to be legal, valid, binding and enforceable in accordance with their respective terms. (b) In order to induce the Agent to enter into this Amendment, the Borrower represents and warrants to the Agent that: (i) The representations and warranties contained in Section 11 of the Loan Agreement are true and correct in all material respects at and as of the time of the effectiveness hereof (except to the extent that such representations and warranties related solely to an earlier date and except to the extent that the facts upon which such 3 representations are based have been changed by the transactions contemplated by this Amendment). (ii) Each Restricted Person is duly authorized to execute and deliver each Loan Document to the extent a party thereto and Borrower is and will continue to be duly authorized to borrow and to perform its obligations under the Loan Agreement as amended hereby. Each Restricted Person has duly taken all action necessary to authorize the execution and delivery of each Loan Document to which it is a party and to authorize the performance of the obligations of each Restricted Person thereunder. 5. BENEFITS. This Amendment shall be binding upon and inure to the benefit of the Lenders and Borrower, and their respective successors and assigns; provided, however, that Borrower may not, without the prior written consent of the Lenders, assign any rights, powers, duties or obligations under this Amendment, the Loan Agreement or any of the other Loan Documents. 6. CONSTRUCTION. This Amendment shall be governed by and construed in accordance with the laws of the State of Texas. 7. INVALID PROVISIONS. If any provision of this Amendment is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable and the remaining provisions of this Amendment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance. 8. ENTIRE AGREEMENT. The Loan Agreement, as amended by this Amendment, contains the entire agreement among the parties regarding the subject matter hereof and supersedes all prior written and oral agreements and understandings among the parties hereto regarding same. 9. REFERENCE TO LOAN AGREEMENT. The Loan Agreement and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are hereby amended so that any reference in the Loan Agreement to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby. 4 10. COUNTERPARTS. This Amendment may be separately executed in any number of counterparts, each of which shall be an original, but all of which, taken together, shall be deemed to constitute one and the same agreement. If the foregoing correctly sets forth our mutual agreement, please so acknowledge by signing and returning this Amendment to the undersigned. 5 Very truly yours, FORTIS CAPITAL CORP., AS AGENT AND LENDER By: ------------------------------------------------ Name: ---------------------------------------------- Title: --------------------------------------------- By: ------------------------------------------------ Name: ---------------------------------------------- Title: --------------------------------------------- ACCEPTED as of the date first written above. BORROWER: ASCENT ENERGY INC. By: ---------------------------------------- Jeffrey Clark, President 6 COMPLIANCE CERTIFICATE April 16, 2002 Reference is made to that certain Loan Agreement dated as of July 27, 2001 between Ascent Energy Inc. ("Borrower") and Fortis Capital Corp ("Agent") as amended by the Second Amendment to the Loan Agreement dated the date hereof (the "Loan Agreement"). Terms which are defined in the Loan Agreement and which are used but not defined herein shall have the meanings given them in the Loan Agreement. The undersigned, Jeffrey Clarke, Borrower's president, hereby certifies in the name, and on behalf, of Borrower that Borrower has made a thorough inquiry into all matters certified herein and based upon such inquiry, does hereby further certify that: 1. All representations and warranties made by any Restricted Person in any Loan document delivered on or before the date hereof (including, without limitation, the representations and warranties contained in Section 4 of the Amendment) are true in all material respects on and as of the date hereof (except to the extent that such representations and warranties related solely to an earlier date and except to the extent that the facts upon which such representations are based have been changed by the transactions contemplated in the Loan Agreement) as if such representations and warranties had been made as of the date hereof. 2. No Event of Default exists on the date hereof. 3. Each Restricted Person has performed and complied with all agreements and conditions required in the Loan Document to be performed or complied with by it on or prior to the date hereof. IN WITNESS WHEREOF, this instrument is executed by the undersigned as of the date first above written. ASCENT ENERGY INC. By: --------------------------------------- Jeffrey Clark, President CONFIRMATION OF GUARANTY Reference is made to the Loan Agreement dated July 27, 2001 between FORTIS CAPITAL CORP. ("Agent") and ASCENT ENERGY INC. ("Borrower") (the "Loan Agreement"). The undersigned Guarantor hereby confirms that its guaranty under the Guaranty between the undersigned Guarantor and Agent continues in full force and effect notwithstanding the Second Amendment to the Loan Agreement dated as of April 16, 2002 between Agent, the Lenders and Borrower, which Second Amendment to the Loan Agreement is hereby accepted and consented to by such Guarantor. In accordance herewith, the aforesaid guaranty shall be deemed to cover and secure the Obligations at any time due from Borrower to Agent pursuant to the Loan Agreement as the latter has been amended and supplemented by the Second Amendment to the Loan Agreement. This Confirmation of Guaranty shall be governed by and construed in accordance with the laws of Texas. Dated as of the 16th day of April, 2002. FORMAN PETROLEUM CORPORATION By: ------------------------------ Name: Jeffrey Clarke Title: President ACCEPTED as of the date first above written. BORROWER: ASCENT ENERGY INC. By: ---------------------------------------- Jeffrey Clark, President 8 INCUMBENCY CERTIFICATE April 16, 2002 Reference is made to that certain Loan Agreement dated as of July 27, 2001 between Ascent Energy Inc. ("Borrower") and Fortis Capital Corp ("Agent") as amended by the Second Amendment to the Loan Agreement dated the date hereof (the "Loan Agreement"). Terms which are defined in the Loan Agreement and which are used but not defined herein shall have the meanings given them in the Loan Agreement. The undersigned, Borrower's Secretary, hereby certifies in the name, and on the behalf, of Borrower that Jeffrey Clarke is the duly elected, qualified, and acting president of Borrower. By: ------------------------------------ Kevin D. McMillan Secretary 9