3rd Amendment to Credit Agreement

EX-10.22.3 5 d22569exv10w22w3.txt 3RD AMENDMENT TO CREDIT AGREEMENT EXHIBIT 10.22.3 ATTORNEYS & COUNSELORS 1401 McKinney Street, Suite 1900 Donna Lyn Carter Houston, Texas 77010 [JW LOGO] (713 ###-###-#### ###-###-#### - fax ###-###-#### ***@*** www.jw.com JACKSON WALKER L.L.P. March 19, 2004 VIA FEDERAL EXPRESS Mr. Dan Solomon Guaranty Bank, FSB 8333 Douglas Avenue Dallas, Texas 75225 Re: Guaranty Bank, FSB/PrimeEnergy Corporation Credit Facility (Our File No. 120117.00012) Dear Dan: As we discussed, enclosed is a counterpart original Third Amendment to Credit Agreement dated effective February 17, 2004, between PrimeEnergy Corporation, PrimeEnergy Management Corporation, PrimeEnergy 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. Please acknowledge receipt of the above referenced document by signing the enclosed copy of this letter and returning it to me in the enclosed postage paid envelope. Very truly yours, /s/ Donna L. Carter Donna L. Carter Paralegal/Transactions DLC/cmj Enclosures cc: Ms. Beverly Cummings (w/ encl.) Wayne G. Dotson (Firm) Receipt of the above referenced document is acknowledged this ___ day of March, 2004. Austin ___________________________________________ Dallas Dan Solomon, Guaranty Bank, FSB Fort Worth Houston Richardson San Angelo ___________________________________________ San Antonio Beverly Cummings, PrimeEnergy Corporation Member of GLOBALAW(TM) Delivery Ticket Page 1 of 1 Last step: Please print this page as the delivery ticket for the courier. [HOUSTON EXPRESS LOGO] Houston Express Couriers, Inc. P.O. Box 70349 Houston, Texas 77270 Phone Number: 713 ###-###-#### CUSTOMER: Jackson Walker Law Firm DATE: 3/19/2004 TICKET NUMBER: W59150 TYPE OF DELIVERY: Super Express (A.S.A.P.)

Continue | Log Out - -------------------------------------------------------------------------------- THIRD 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 FEBRUARY 17, 2004 --------------------------------- REDUCING REVOLVING LINE OF CREDIT OF UP TO $50,000,000 REDUCING REVOLVING TERM LOAN OF $3,599,998 --------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS

THIRD AMENDMENT TO CREDIT AGREEMENT This THIRD AMENDMENT TO CREDIT AGREEMENT (this "Third Amendment") is made and entered into effective as of February 17, 2004, 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, and as further amended by Second Amendment to Credit Agreement dated effective as of September 22,2003 (the "Agreement"), to which reference is here made for all purposes; 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 Third 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 "Third 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 Third Amendment to Article or Section numbers shall be to Articles and Sections of this Third Amendment, unless expressly stated herein to the contrary. References in this Third Amendment to "hereby," "herein," hereinafter," hereinabove," "hereinbelow," "hereof," and "hereunder" shall be to this Third Amendment in its entirety and not only to the particular Article or Section in which such reference appears. 1 1.04 Articles and Sections. This Third 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 Third 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 1.2. Section 1.2 of the Agreement is hereby amended as follows: The following definitions shall be added and/or amended to read as follows: "Commitment Termination Date" shall mean March 31,2007. "Final Maturity" shall mean March 31, 2007. 2.02 Amendment of Section 2.9(a). Section 2.9(a) of the Agreement shall be amended to read as follows: "2.9 Borrowing Base Determinations, (a) The Borrowing Base as of February 17, 2003, is acknowledged by the Borrower and the Lenders to be $44,000,000." 2.03 Addition of Section 2.9(e). Section 2.9(e) is added to the Agreement to read as follows: "2.9 Borrowing Base Determinations.---(e) The Borrowing Base may be decreased by the Borrower by giving the Agent written notice of the amount of the decrease and the resulting Borrowing Base. The Borrower may then only borrow up to the amount of the decreased Borrowing Base and if any future increase in the Borrowing Base is required the Borrower shall furnish the Agent with the information requested by the Agreement as set forth in (b) above and pay all fees required by increasing the Borrowing Base." 2.04 Amendment of Section 2.25. Section 2.25 of the Agreement is amended to read as follows: 2 "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 $10,120,000.00." 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 repay advances made by PEC in the amount of $1,275,000.00 and by Frank C. Wade in the amount of $847,260.00." 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 Agent 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 Third Amendment as requested by the Agent. (b) payment by Borrower to Guaranty Bank, FSB of $165,000 as an extension fee; (c) payment by Borrower to Guaranty Bank, FSB of $91,000 as a Facility Fee for the increase in the Borrowing Base; and (d) 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 Third 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. 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. 3 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 Third Amendment. ARTICLE VI MISCELLANEOUS 6.01 Scope of Amendment. The scope of this Third Amendment is expressly limited to the matters addressed herein and this Third 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 Third 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 Third Amendment. 6.03 Parties in Interest. All provisions of this Third 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 THIRD 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 THIRD 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 THIRD 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 4 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 THIRD AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED IN COURTS HAVING SITUS IN HARRIS COUNTY, TEXAS. EACH OF THE BORROWER AND THE LENDER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN HARRIS 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) 5 IN WITNESS WHEREOF, this Third 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: /s/ Beverly A. Cummings ---------------------------------------- Beverly A. Cummings Executive Vice President, Treasurer, and Chief Financial Officer F-W OIL EXPLORATION L.L.C. By: /s/ Jim R. Brock ---------------------------------------- Jim R. Brock President and CFO 6 AGENT AND LENDER GUARANTY BANK, FSB By: /s/ Richard E. Menchaca ---------------------------------------- Richard E. Menchaca Senior Vice President 7