Exhibit 10.22.2
SECOND AMENDMENT TO CREDIT AGREEMENT
BETWEEN
PRIMEENERGY CORPORATION
PRIMEENERGY MANAGEMENT CORPORATION
PRIME OPERATING COMPANY
EASTERN OIL WELL SERVICE COMPANY
SOUTHWEST OILFIELD CONSTRUCTION COMPANY
EOWS MIDLAND COMPANY
F-W OIL EXPLORATION L.L.C.
AND
GUARANTY BANK, FSB, AS AGENT
AND A LENDER
EFFECTIVE AS OF SEPTEMBER 22, 2003
REDUCING REVOLVING LINE OF CREDIT OF UP TO $50,000,000
REDUCING REVOLVING TERM LOAN OF $3,666,665
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS......................................................... 1
1.01 Terms Defined Above................................................. 1
1.02 Terms Defined in Agreement.......................................... 1
1.03 References.......................................................... 1
1.04 Articles and Sections............................................... 2
1.05 Number and Gender................................................... 2
ARTICLE II AMENDMENTS.......................................................... 2
2.01 Amendment of Section 2.9(a)......................................... 2
2.02 Addition of Section 2.25............................................ 2
2.03 Amendment of Section 6.6............................................ 2
2.04 Amendment of Section 6.7............................................ 2
2.05 Amendment of Section 6.8............................................ 3
ARTICLE III CONDITIONS.......................................................... 3
3.01 Receipt of Documents................................................ 3
3.02 Accuracy of Representations and Warranties.......................... 4
3.03 Matters Satisfactory to Lenders..................................... 4
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................... 4
ARTICLE V RATIFICATION........................................................ 5
ARTICLE VI MISCELLANEOUS....................................................... 5
6.01 Scope of Amendment.................................................. 5
6.02 Agreement as Amended................................................ 5
6.03 Parties in Interest................................................. 5
6.04 Rights of Third Parties............................................. 5
6.05 ENTIRE AGREEMENT.................................................... 5
6.06 GOVERNING LAW....................................................... 5
6.07 JURISDICTION AND VENUE.............................................. 6
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SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is
made and entered into effective as of September 22, 2003, between PRIMEENERGY
CORPORATION, a Delaware corporation ("PEC"), PRIMEENERGY MANAGEMENT CORPORATION,
a New York corporation, PRIME OPERATING COMPANY, a Texas corporation, EASTERN
OIL WELL SERVICE COMPANY, a West Virginia corporation, SOUTHWEST OILFIELD
CONSTRUCTION COMPANY, an Oklahoma corporation, EOWS MIDLAND COMPANY, a Texas
corporation, and F-W OIL EXPLORATION L.L.C., a Delaware limited liability
company ("FWOE") (collectively, the "Borrower"), with each other lender that is
a signatory hereto or becomes a signatory hereto as provided in Section 9.1,
(individually, together with its successors and assigns, a "'Lender" and
collectively together, with their respective successors and assigns, the
"Lenders") and GUARANTY BANK, FSB, a federal savings bank, as agent for the
Lenders (in such capacity, together with its successors in such capacity
pursuant to the terms hereof, the "Agent").
W I T N E S S E T H
WHEREAS, the above named parties did execute and exchange counterparts
of that certain Credit Agreement dated December 19, 2002, as amended by First
Amendment to Credit Agreement dated effective as of June 1, 2003 (the
"Agreement"), to which reference is here made for all purposes;
WHEREAS, Borrower has acquired a majority interest in FWOE and FWOE has
been added to the Agreement as a Borrower effective the date of this Second
Amendment;
WHEREAS, the parties subject to and bound by the Agreement are desirous
of amending the Agreement in the particulars hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties to the Agreement, as set forth therein, and the mutual covenants
and agreements of the parties hereto, as set forth in this Second Amendment, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms "Agent,"
"Agreement," "Borrower," "Lenders" and "Second Amendment." shall have the
meaning assigned to such term hereinabove.
1.02 Terms Defined in Agreement. As used herein, each term defined in
the Agreement shall have the meaning assigned thereto in the Agreement, unless
expressly provided herein to the contrary.
1.03 References. References in this Second Amendment to Article or
Section numbers shall be to Articles and Sections of this Second Amendment,
unless expressly stated herein to the contrary. References in this Second
Amendment to "hereby," "herein," hereinafter," hereinabove,"
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"hereinbelow," "hereof." and "hereunder" shall be to this Second Amendment in
its entirety and not only to the particular Article or Section in which such
reference appears.
1.04 Articles and Sections. This Second Amendment, for convenience only,
has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Second Amendment as an entirety and without
regard to such division into Articles and Sections and without regard to
headings prefixed to such Articles and Sections.
1.05 Number and Gender. Whenever the context requires, reference herein
made to the single number shall be understood to include the plural and likewise
the plural shall be understood to include the singular. Words denoting sex shall
be construed to include the masculine, feminine, and neuter, when such
construction is appropriate, and specific enumeration shall not exclude the
general, but shall be construed as cumulative. Definitions of terms defined in
the singular and plural shall be equally applicable to the plural or singular,
as the case may be.
ARTICLE II
AMENDMENTS
The Borrower and the Lender hereby amend the Agreement in the following
particulars:
2.01 Amendment of Section 2.9(a). Section 2.9(a) of the Agreement is
hereby amended to read as follows:
"2.9 Borrowing Base Determinations, (a) The Borrowing Base as of
September 9, 2003, is acknowledged by the Borrower and the Lenders to be
$25,800,000."
2.02 Addition of Section 2.25. Section 2.25 is added to the Agreement
as follows:
"2.25 Limitation of Liability of FWOE. FWOE's liability to the Lender on
the Note and other Obligations under the Agreement is limited to
$3,800,000."
2.03 Amendment of Section 6.6. Section 6.6 of the Agreement shall be
amended to add the following sentence:
"6.6 Loans or Advances. ... Notwithstanding the above, the Borrower may
make a loan to FWOE in the amount of $1,312,500 pursuant to the terms of
the Subscription Agreement dated August 27, 2003, by and between FWOE,
F-W Oil Interests, Inc., Xxxxx X. Xxxx and PEC."
2.04 Amendment of Section 6.7. Section 6.7 of the Agreement shall be
amended to add the following sentence:
"6.7 Investments. ... Notwithstanding the above, the Borrower may make
an investment in FWOE in the amount of $4,166,000 pursuant to the terms
of the Subscription Agreement dated August 27, 2003, by and between
FWOE, F-W Oil Interests, Inc., Xxxxx X. Xxxx and PEC."
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2.05 Amendment of Section, 6.8. Section 6.8 of the Agreement shall be
amended to add the following sentence:
"6.8 Dividends and Distributions. ... Notwithstanding the above, FWOE
may make distributions to PEC (1) in the amount of $2,187,500, and (2)
in the amount of $1,312,500 in payment of the Promissory Note dated
August 27, 2003 and (3) to F-W Oil Interests, Inc. and Xxxxx X. Xxxx in
amounts due in settlement of accounting matters as a result of the
Subscription Agreement dated August 27, 2003, between PEC and FWOE et
al."
ARTICLE III
CONDITIONS
The obligation of the Lenders to amend the Agreement as provided herein
is subject to the fulfillment of the following conditions precedent:
3.01 Receipt of Documents. The Lender shall have received, reviewed, and
approved the following documents and other items, appropriately executed when
necessary and in form and substance satisfactory to the Lender:
(a) multiple counterparts of this Second Amendment as requested by
the Lender;
(b) Mortgage, Deed of Trust, Indenture, Security Agreement.
Assignment of Production and Financing Statement from FWOE
covering all Oil and Gas Properties of FWOE and all
improvements, personal property, and fixtures related thereto;
(c) Financing Statements from FWOE, as debtor, constituent to the
instrument described in clause (b) above;
(d) undated letters, in form and substance satisfactory to the
Agent, from FWOE to each purchaser of production and disburser
of the proceeds of production from or attributable to the
Mortgaged Properties, together with additional letters with the
addressees left blank, authorizing and directing the addressees
to make future payments attributable to production from the
Mortgaged Properties directly to the Agent;
(e) Security Agreement from FWOE pledging contract rights, etc.;
(f) Financing Statements from FWOE, as debtor, constituent to the
instrument described in clause (e) above;
(g) payment by FWOE to Guaranty Bank, FSB of $19,000 as a Facility
Fee for the increase in the Borrowing Base of $3,800,000;
(h) Ratification of and Amendment to Mortgage, Deed of Trust,
Indenture, Security Agreement, Financing Statement and
Assignment of Production;
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(i) Financing Statements from the Borrower, as debtor, constituent
to the instrument described in clause (h) above;
(j) pledge of membership interest of Borrower in FWOE together with
blank power of sale;
(k) copies of the formation documents of FWOE and all amendments
thereto, accompanied by a certificate dated the Closing Date
issued by the secretary or an assistant secretary or another
authorized representative of FWOE to the effect that each such
copy is correct and complete;
(l) a certificate of incumbency dated the Closing Date, including
specimen signatures of all officers or other representatives of
FWOE who are authorized to execute Loan Documents on behalf of
FWOE, such certificate being executed by an authorized
representative of FWOE;
(m) copies of resolutions of FWOE, adopted by the board of managers
of FWOE approving the Loan Documents to which FWOE is a party
and authorizing the transactions contemplated herein and
therein, accompanied by a certificate dated the date of the
Second Amendment issued by an authorized representative of FWOE
to the effect that such copies are true and correct copies of
resolutions duly adopted and that such resolutions constitute
all the resolutions adopted with respect to such transactions,
have not been amended, modified, or rescinded in any respect,
and are in full force and effect as of the date of such
certificate;
(n) Note in the form of Exhibit I hereto; and
(o) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Agent may
reasonably request.
3.02 Accuracy of Representations and Warranties. The representations and
warranties contained in Article IV of the Agreement and this Second Amendment
shall be true and correct.
3.03 Matters Satisfactory to Lenders. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lenders.
3.04 Amendment of Exhibit I. Exhibit I, i.e. the Form of Promissory
Note, shall be as set forth on Exhibit I to this Second Amendment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lenders, all of
the representations and warranties set forth in Article IV of the Agreement, and
represents and warrants that all such representations and warranties remain true
and unbreached.
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ARTICLE V
RATIFICATION
Each of the parties hereto does hereby adopt, ratify, and confirm the
Agreement and the other Loan Documents, in all things in accordance with the
terms and provisions thereof, as amended by this Second Amendment.
ARTICLE VI
MISCELLANEOUS
6.01 Scope of Amendment. The scope of this Second Amendment is expressly
limited to the matters addressed herein and this Second Amendment shall not
operate as a waiver of any past, present, or future breach, Default, or Event of
Default under the Agreement, except to the extent, if any, that any such breach,
Default, or Event of Default is remedied by the effect of this Second Amendment.
6.02 Agreement as Amended. All references to the Agreement in any
document heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this Second Amendment.
6.03 Parties in Interest. All provisions of this Second Amendment shall
be binding upon and shall inure to the benefit of the Borrower, the Lender and
their respective successors and assigns.
6.04 Rights of Third Parties. All provisions herein are imposed solely
and exclusively for the benefit of the Lender and the Borrower, and no other
Person shall have standing to require satisfaction of such provisions in
accordance with their terms and any or all of such provisions may be freely
waived in whole or in part by the Lender at any time if in its sole discretion
it deems it advisable to do so.
6.05 ENTIRE AGREEMENT. THIS SECOND AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS SECOND AMENDMENT,
THE AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, AND THE OTHER WRITTEN
DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN CONNECTION WITH OR AS
SECURITY FOR THE NOTE REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE
PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
6.06 GOVERNING LAW. THIS SECOND AMENDMENT, THE AGREEMENT AND THE NOTE
SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. THE PARTIES ACKNOWLEDGE AND
AGREE THAT THIS AGREEMENT AND THE NOTE AND THE TRANSACTIONS CONTEMPLATED
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HEREBY BEAR A NORMAL, REASONABLE, AND SUBSTANTIAL RELATIONSHIP TO THE STATE OF
TEXAS.
6.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS SECOND AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED
IN COURTS HAVING SITUS IN XXXXXX COUNTY, TEXAS. EACH OF THE BORROWER AND THE
LENDER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED IN XXXXXX COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE BORROWER OR THE LENDER IN ACCORDANCE WITH THIS SECTION.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, this Second Amendment to Credit Agreement is
executed effective the date first hereinabove written.
BORROWER
PRIMEENERGY CORPORATION PRIMEENERGY
MANAGEMENT CORPORATION, PRIME
OPERATING COMPANY, EASTERN OIL WELL
SERVICE COMPANY, SOUTHWEST OILFIELD
CONSTRUCTION COMPANY EOWS MIDLAND
COMPANY
By:
--------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
Treasurer, and Chief
Financial Officer
F-W OIL EXPLORATION L.L.C.
By:
--------------------------------
Xxx X. Xxxxx
President and CFO
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AGENT AND LENDER
GUARANTY BANK, FSB
By:
--------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President
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EXHIBIT I
[FORM OF NOTE]
PROMISSORY NOTE
$50,000,000 Houston, Texas September 22,2003
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("Maker") promises
to pay to the order of GUARANTY BANK, FSB ("Payee"), at its banking quarters in
Houston, Xxxxxx County, Texas, the sum of FIFTY MILLION DOLLARS ($50,000,000),
or so much thereof as may be advanced against this Note pursuant to the Credit
Agreement dated of even date herewith by and between Maker and Payee (as
amended, restated, or supplemented from time to time, the "Credit Agreement"),
together with interest at the rates and calculated as provided in the Credit
Agreement.
Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitle the
holder hereof to accelerate the maturity of all amounts due hereunder.
Capitalized terms used but not defined in this Note shall have the meanings
assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is payable as
provided in the Credit Agreement. Subject to compliance with applicable
provisions of the Credit Agreement, Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or fee, but such
payment shall not, until this Note is fully paid and satisfied, excuse the
payment as it becomes due of any payment on this Note provided for in the Credit
Agreement.
Without being limited thereto or thereby, this Note is secured by the
Security Instruments.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW;
PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL
NOT APPLY TO THIS NOTE.
(PAGE ONE OF TWO PAGE NOTE)
PRIMEENERGY CORPORATION
PRIMEENERGY MANAGEMENT CORPORATION,
PRIME OPERATING COMPANY, EASTERN
OIL WELL SERVICE COMPANY, SOUTHWEST
OILFIELD CONSTRUCTION COMPANY EOWS
MIDLAND COMPANY
By:
--------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
Treasurer, and Chief
Financial Officer
F-W OIL EXPLORATION L.L.C.
By:
--------------------------------
Xxx X. Xxxxx
President and CFO
(PAGE TWO OF TWO PAGE NOTE)
