Exhibit 10.22596

 

 

SIXTH AMENDMENT TO SECOND

AMENDED AND RESTATED CREDIT AGREEMENT

AMONG

PRIMEENERGY CORPORATION

THE GUARANTORS PARTY HERETO

COMPASS BANK

AS ADMINISTRATIVE AGENT, LETTER OF CREDIT ISSUER

AND COLLATERAL AGENT

AND

THE LENDERS SIGNATORY HERETO

Effective

June 28, 2013

 

 

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TABLE OF CONTENTS

 

         PAGE  

ARTICLE I

 

DEFINITIONS

     1   

1.1

 

Terms Defined Above

     1   

1.2

 

Terms Defined in Agreement

     2   

1.3

 

References

     2   

1.4

 

Articles and Sections

     2   

1.5

 

Number and Gender

     2   

1.6

 

Negotiated Transaction

     2   

ARTICLE II

 

AMENDMENTS

     3   

2.1

 

Amendments to Section 1.2

     3   

2.2

 

Addition of Section 2.26

     4   

2.3

 

Amendment to Section 5.4

     5   

2.4

 

Amendments to Section 6.1

     5   

2.5

 

Amendment to Section 6.2

     6   

2.6

 

Amendment to Section 6.4

     6   

2.7

 

Amendment to Section 6.5

     6   

2.8

 

Amendment to Section 7.2(e)

     6   

2.9

 

Amendment to Table of Contents

     7   

ARTICLE III

 

CONDITION TO EFFECTIVENESS

     7   

ARTICLE IV

 

RATIFICATION AND ACKNOWLEDGMENTS

     7   

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

     7   

ARTICLE VI

 

MISCELLANEOUS

     7   

6.1

 

Parties in Interest

     7   

6.2

 

Rights of Third Parties

     7   

6.3

 

Counterparts

     8   

6.4

 

Integration

     8   

6.5

 

Invalidity

     8   

6.6

 

Governing Law

     8   

6.7

 

Scope of Amendment

     8   

 

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SIXTH AMENDMENT TO SECOND

AMENDED AND RESTATED CREDIT AGREEMENT

This SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is made and entered into effective as of June 28, 2013 (the
“Effective Date”) by and among PRIMEENERGY CORPORATION, a Delaware corporation
(the “Borrower”), 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, E O W S MIDLAND COMPANY, a Texas corporation, PRIME
OFFSHORE L.L.C., a Delaware limited liability company, each lender that is a
signatory hereto (individually, together with its successors and assigns, a
“Lender” and collectively, together with their respective successors and
assigns, the “Lenders”) and COMPASS BANK, an Alabama banking association and
successor in interest to Guaranty Bank, FSB, a federal savings bank, as agent
for the Lenders, letter of credit issuer and collateral agent for the Lenders
and any other Lender Hedge Counterparties (in such capacities, together with its
successors in such capacity pursuant to the terms of the Second Amended and
Restated Credit Agreement referred to hereinafter, the “Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Guarantors (as such term is defined in such Second
Amended and Restated Credit Agreement), Prime Offshore (the Initial Guarantors
and Prime Offshore, collectively, the “Guarantors”), the Lenders and the Agent
are parties to that certain Second Amended and Restated Credit Agreement dated
effective July 30, 2010, as amended by that certain First Amendment to Second
Amended and Restated Credit Agreement dated effective September 30, 3010, that
certain Second Amendment to Second Amended and Restated Credit Agreement dated
effective June 22, 2011, that certain Third Amendment to Second Amended and
Restated Credit Agreement dated effective December 8, 2011, that certain Fourth
Amendment to Second Amended and Restated Credit Agreement dated effective
June 25, 2012 and that certain Fifth Amendment to Second Amended and Restated
Credit Agreement dated effective November 26, 2012 (as so amended, the
“Agreement”), to which reference is here made for all purposes;

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent desire to amend
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 herein, the Borrower, the Initial
Guarantors, the Lenders and the Agent agree as follows:

ARTICLE I

DEFINITIONS

1.1 Terms Defined Above. As used in this Sixth Amendment to Second Amended and
Restated Credit Agreement, each of the terms “Agent,” “Agreement,” “Amendment,”
“Borrower,” “Effective Date,” “Guarantors,” “Lender” and “Lenders” shall have
the meaning assigned to such term hereinabove.

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1.2 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.

1.3 References. References in this Amendment to Schedule, Exhibit, Article, or
Section numbers shall be to Schedules, Exhibits, Articles, or Sections of this
Amendment, unless expressly stated to the contrary. References in this Amendment
to “hereby,” “herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,”
“hereunder” and words of similar import shall be to this Amendment in its
entirety and not only to the particular Schedule, Exhibit, Article, or Section
in which such reference appears. Specific enumeration herein shall not exclude
the general and, in such regard, the terms “includes” and “including” used
herein shall mean “includes, without limitation,” or “including, without
limitation,” as the case may be, where appropriate. Except as otherwise
indicated, references in this Amendment to statutes, sections, or regulations
are to be construed as including all statutory or regulatory provisions
consolidating, amending, replacing, succeeding, or supplementing the statute,
section, or regulation referred to. References in this Amendment to “writing”
include printing, typing, lithography, facsimile reproduction, and other means
of reproducing words in a tangible visible form. References in this Amendment to
amendments and other contractual instruments shall be deemed to include all
exhibits and appendices attached thereto and all subsequent amendments and other
modifications to such instruments, but only to the extent such amendments and
other modifications are not prohibited by the terms of this Amendment.
References in this Amendment to Persons include their respective successors and
permitted assigns.

1.4 Articles and Sections. This Amendment, for convenience only, has been
divided into Articles and Sections; and it is understood that the rights and
other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.

1.5 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. Definitions of terms defined
in the singular or plural shall be equally applicable to the plural or singular,
as the case may be, unless otherwise indicated. 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.

1.6 Negotiated Transaction. Each party to this Amendment affirms to the other
that it has had the opportunity to consult, and discuss the provisions of this
Amendment with, independent counsel and fully understands the legal effect of
each provision.

 

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ARTICLE II

AMENDMENTS

Effective as of the Effective Date, the Agreement is amended as follows:

2.1 Amendments to Section 1.2. Section 1.2 of the Agreement is amended as
follows:

(a) clause (g) of the definition of “Permitted Liens” appearing in such
Section 1.2 is amended to read as follows in its entirety:

“(g) Liens securing the purchase price or rental obligations of or with respect
to Property, including vehicles and equipment, acquired or leased by the
Borrower or any of the Guarantors in the ordinary course of business (including
Liens existing under conditional sale or title retention contracts) or
Indebtedness secured by Liens against Property, including vehicles and
equipment, owned by the Borrower or any of the Guarantors for use in the
ordinary course of business at the time the relevant Lien is created, provided
that such Liens cover only the acquired, leased or owned and the aggregate
unpaid purchase price, rental obligations or Indebtedness secured by such Liens
does not violate Section 6.1,”; and

(b) to amend the definition of “Obligations” to except from the scope thereof
all Excluded Swap Obligations; and

(c) to add to such Section 1.2 the following definitions, each in its proper
alphabetical location:

“‘Commodity Exchange Act’ shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

“‘Eligible Contract Participant’ shall mean an “eligible contract participant”
as defined in the Commodity Exchange Act and the regulations thereunder.

‘Excluded Swap Obligation’ shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure, for any reason, to constitute an
Eligible Contract Participant thereunder at the time the Guaranty of such
Guarantor or the grant of such security interest becomes effective with respect
to such Swap Obligation and, if a Swap Obligation arises under a

 

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master agreement governing more than one swap such exclusion shall apply only to
the portion of such Swap Obligation that is attributable to Commodity Hedge
Agreements or Interest Rate Hedge Agreements for which such Guaranty or security
interest is or becomes illegal.

‘Qualified ECP Guarantor’ means, in respect of any Swap Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
Guaranty or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other Person as constitutes as Eligible
Contract Participant and can cause another Person to qualify as an Eligible
Contract Participant at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

‘Swap Obligation’ means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.”

2.2 Addition of Section 2.26. A new Section 2.26 is added to the Agreement
reading as follows:

“2.26 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally,
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Guarantor to
honor all of its obligations under its Guaranty in respect of Swap Obligations;
provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 2.26 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 2.26, or otherwise
under its Guaranty, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not of any greater amount. The
obligations of each Qualified ECP Guarantor under this Section 2.26 shall remain
in full force and effect until the Obligations are paid in full and all
Commitments are terminated or have lapsed. Each Qualified ECP Guarantor intends
that this Section 2.26 constitute, and this Section 2.26 shall be deemed to
constitute, a “keepwell, support or other agreement” for the benefit of each
other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act. Notwithstanding any other provisions of this Agreement or any
other Loan Document, the Obligations guaranteed by any Guarantor or secured by
any Lien granted by such Guarantor under any Loan Document shall exclude all
Excluded Swap Obligations with respect to such Guarantor.”

 

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2.3 Amendment to Section 5.4. Clause (ii) of subsection (a) of Section 5.4 of
the Agreement is amended to read as follows in its entirety:

“(ii) no later than November 1 of each year during the term of this Agreement,
engineering reports in form and substance satisfactory to the Agent prepared by
the Borrower evaluating, as of July 1 of the year for which such reserve reports
are furnished, the Oil and Gas Properties of the Borrower, PrimeEnergy
Management and those limited partnerships in which the Borrower is a partner and
the partnership interest of the Borrower in such limited partnership is subject
to a first priority Lien in favor of the Agent to secure the Obligations and
updating the information provided in the reports delivered pursuant to the
preceding clause (i).”

2.4 Amendments to Section 6.1. Clause (iii) of the first proviso in subsection
(a) of Section 6.1 of the Agreement is amended to read as follows in its
entirety:

“(iii) Commodity Hedge Agreements, in form and substance and with an Approved
Hedge Counterparty, provided that the notional volumes for which (when
aggregated with other Commodity Hedge Agreements then in effect, other than
basis differential swaps on volumes already hedged pursuant to other Commodity
Hedge Agreements) do not exceed, as of the date such Commodity Hedge Agreement
is executed, ninety percent (90%) of the reasonably anticipated projected
production from proved developed producing reserves for each month during the
period during which such Commodity Hedge Agreement is in effect for each of
crude oil and natural gas, calculated separately, for each of the next four
succeeding calendar years and seventy percent (70%) of the reasonably
anticipated projected production from proved developed producing reserves for
each month during the period during which such Commodity Hedge Agreement is in
effect for each of crude oil and natural gas, calculated separately, for the
fifth succeeding calendar year and up to eighty percent (80%) of each component
of the projected production of natural gas liquids from proved developed
producing reserves for terms not exceeding three years; provided that puts and
put options may be purchased on production that is subject of an acquisition,
pending the completion of such acquisition, and puts, excluding the effect of
the provision for pending acquisitions, may be purchased limited to total
notional volumes of all Commodity Hedge Agreements and put options not exceeding
100% of projected production from proved developed producing reserves”;

delete “and” preceding clause (viii) of the first proviso in Section 6.1 of the
Agreement; insert “and” preceding new clause (ix) of the first proviso in
Section 6.1 of the Agreement appearing below; and (x) new clause (ix) is added
to the first proviso in Section 6.1 of the Agreement reading as follows:

“(ix) in addition to other Indebtedness excepted from the prohibition of this
Section 6.1, Indebtedness (for the avoidance of doubt, including capitalized
lease obligations) not exceeding, when taken together with lease backs permitted
pursuant to the provisions of the proviso to Section 6.5, $10,000,000 for the
Borrower and the Guarantors in the aggregate at any time incurred for the
acquisition or lease of vehicles or equipment for use in the business of the
Borrower or the relevant Guarantor or secured by Liens against vehicles or
equipment owned by the Borrower or the relevant Guarantor for use in the
business of the Borrower or the relevant Guarantor at the time any relevant Lien
is created.”

 

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2.5 Amendment to Section 6.2. Section 6.2 of the Agreement is amended to
(a) delete the word “or” preceding clause (e) of the proviso in such
Section 6.2, (b) add a comma preceding such clause e and (c) add the following
to such proviso immediately preceding the period at the end of such Section 6.2:

“and (f) guarantees of payment or performance of Indebtedness or leases
permitted pursuant to the provisions of clause (ix) of the first proviso in
Section 6.1 or the provisions of the proviso in Section 6.5, as the case may
be”.

2.6 Amendment to Section 6.4. Section 6.4 of the Agreement is amended to
(a) delete the word “or” preceding clause (e) of the first proviso in such
Section 6.4, (b) add a comma preceding such clause (e), and (c) add the
following to such proviso immediately preceding the period at the end of such
Section 6.4:

“and (f) sales of vehicles or equipment which is leased back as permitted
pursuant to the provisions of the proviso in Section 6.5”.

2.7 Amendment to Section 6.5. Section 6.5 of the Agreement is amended to add the
following proviso thereto immediately preceding the period at the end of such
Section 6.5:

“; provided, however, the foregoing restriction shall not apply to the lease
back of vehicles or equipment, so long as the aggregate obligations of the
Borrower and the Guarantors, when taken together with Indebtedness permitted
pursuant to clause (ix) of the first proviso in Section 6.1, under all such
leases does not exceed $10,000,000”.

2.8 Amendment to Section 7.2(e). Section 7.2(e) of the Agreement is amended to
(a) add a period at the end of the existing language of such Section 7.2(e) and
(b) add a new sentence to such Section 7.2(e) reading as follows:

“Notwithstanding the foregoing, amounts received from the Borrower or any
Guarantor that is not an Eligible Contract Participant shall not be applied to
any Excluded Swap Obligations owing to a Lender Hedge Counterparty (it being
understood, that in the event any amount is applied to the Obligations other
than Excluded Swap Obligations as a result of this sentence, the Agent shall
make such adjustments as it determines are appropriate pursuant to this
sentence, from amounts received from Eligible Contract Participants to ensure,
as nearly as

 

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possible, that the proportional aggregate recoveries with respect to the
Obligations described in the preceding sentence of this Section 7.2(e) by Lender
Hedge Counterparties that are the holders of any Excluded Swap Obligations are
the same as the proportional aggregate recoveries with respect to other
Obligations pursuant to the preceding sentence of this Section 7.2(e).”

2.9 Amendment to Table of Contents. The Table of Contents to the Agreement is
amended as necessary to give effect to this Amendment.

ARTICLE III

CONDITION TO EFFECTIVENESS

The effectiveness of this Amendment is expressly subject to receipt by the Agent
from the Borrower of payment, in immediately available funds, of the fees
provided for in the Fee Letter dated October 25, 2012 between Compass Bank and
the Borrower.

ARTICLE IV

RATIFICATION AND ACKNOWLEDGMENTS

Each of the Borrower, the Guarantors, the Lenders and the Agent does hereby
adopt, ratify and confirm the Agreement, as amended hereby, and acknowledges and
agrees that the Agreement, as amended hereby, and each of the other Loan
Documents to which it is a party is and remains in full force and effect.
Furthermore, each of the Borrower, the Agent and the Lenders hereby acknowledges
and agrees that, pursuant to Section 2.10 of the Agreement, as of the Effective
Date, the Borrowing Base in effect under the Agreement is $145,000,000 and the
Monthly Reduction Amount in effect under the Agreement is $0.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower and each of the Guarantors does hereby re-make in favor of the
Lenders and the Agent each of the representations and warranties made by it in
the Loan Documents to which it is a party and further represents and warrants
that each of such representations and warranties made by it remains true and
correct as of the date of execution of this Amendment. Further to the foregoing,
the Borrower and each of the Guarantors specifically represents and warrants to
the Lenders and the Agent that no Default or Event of Default exists as of the
date of execution of this Amendment and giving effect to this Amendment.

ARTICLE VI

MISCELLANEOUS

6.1 Parties in Interest. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted pursuant to the Agreement.

6.2 Rights of Third Parties. Except as provided in Section 6.1, all provisions
herein are imposed solely and exclusively for the benefit of the parties hereto.

 

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6.3 Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument and
shall be enforceable upon the execution of one or more counterparts hereof by
each of the parties hereto. In this regard, each of the parties hereto
acknowledges that a counterpart of this Amendment containing a set of
counterpart execution pages reflecting the execution of each party hereto shall
be sufficient to reflect the execution of this Amendment by each necessary party
hereto and shall constitute one instrument.

6.4 Integration. This Amendment constitutes the entire agreement among the
parties hereto with respect to the subject hereof. All prior understandings,
statements and agreements, whether written or oral, relating to the subject
hereof are superseded by this Amendment.

6.5 Invalidity. IN THE EVENT THAT ANY ONE OR MORE OF THE PROVISIONS CONTAINED IN
THIS AMENDMENT SHALL FOR ANY REASON BE HELD INVALID, ILLEGAL OR UNENFORCEABLE IN
ANY RESPECT, SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY SHALL NOT AFFECT
ANY OTHER PROVISION OF THIS AMENDMENT.

6.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF SUCH LAWS RELATING TO CONFLICT OF
LAWS.

6.7 Scope of Amendment. This Amendment shall constitute a Loan Document. The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Agent under any of the Loan Documents, nor, except as
expressly provided herein, constitute a waiver or amendment of any provision of
any of the Loan Documents.

(Signatures appear on following pages)

 

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IN WITNESS WHEREOF, this Sixth Amendment to Second Amended and Restated Credit
Agreement is executed effective as of the Effective Date.

 

BORROWER: PRIMEENERGY CORPORATION By:  

 

  Beverly A. Cummings   Executive Vice President, Treasurer and Chief Financial
Officer GUARANTORS: PRIMEENERGY MANAGEMENT CORPORATION By:  

 

  Beverly A. Cummings   Executive Vice President and Treasurer PRIME OPERATING
COMPANY By:  

 

  Beverly A. Cummings   Executive Vice President and Treasurer EASTERN OIL WELL
SERVICE COMPANY By:  

 

  Beverly A. Cummings   Executive Vice President and Treasurer

 

(Signatures continue on following pages)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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SOUTHWEST OILFIELD CONSTRUCTION COMPANY By:  

 

  Beverly A. Cummings   Executive Vice President and Treasurer E O W S MIDLAND
COMPANY By:  

 

  Beverly A. Cummings   Executive Vice President and Treasurer PRIME OFFSHORE
L.L.C. By:  

 

  Beverly A. Cummings   Executive Vice President and Chief Executive Officer

 

(Signatures continue on following pages)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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AGENT:

COMPASS BANK,

as Agent

By:  

 

  Kathleen J. Bowen   Senior Vice President LENDER: COMPASS BANK, By:  

 

  Kathleen J. Bowen   Senior Vice President

 

(Signatures continue on following pages)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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LENDER: WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

 

Name:  

 

Title:  

 

 

(Signatures continue on following pages)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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LENDER: JPMORGAN CHASE BANK, N.A. By:  

 

Name:  

 

Title:  

 

 

(Signatures continue on following pages)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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LENDER: AMEGY BANK NATIONAL ASSOCIATION By:  

 

  Mark A. Serice   Senior Vice President

 

(Signatures continue on following page)

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)

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LENDER: KEYBANK NATIONAL ASSOCIATION By:  

 

Name:  

 

Title:  

 

 

(Signature page to Sixth Amendment to Second

Amended and Restated Credit Agreement)