Exhibit
10.2
SECOND AMENDMENT TO TERM
LOAN AND SECURITY AGREEMENT
AND AMENDMENT TO LIMITED
GUARANTY
THIS SECOND AMENDMENT TO TERM LOAN AND SECURITY
AGREEMENT AND AMENDMENT TO LIMITED GUARANTY (this "
Amendment ") is dated effective as of March 15, 2007,
among LARCLAY, L.P. (" Borrower "), CLAYTON WILLIAMS ENERGY,
INC. (" Guarantor "), the lenders listed on the signature
pages hereof as Lenders (the " Lenders ") and MERRILL LYNCH
CAPITAL, a division of Merrill Lynch Business Financial Services
Inc., as Administrative Agent for the benefit of the Lenders (the "
Administrative Agent ").
RECITALS:
Pursuant to that certain Term Loan and Security
Agreement (as amended by letter agreement dated February 28,
2007, and including a letter from Borrower authorizing substitution
of corrected pages, the " Loan Agreement ") among Borrower,
Lenders and Administrative Agent dated as of April 21, 2006,
the Lenders extended the credit facilities referred to therein to
Borrower.
Borrower, Guarantor, Administrative Agent and
Lenders now agree to modify the Loan Agreement as set forth in the
succeeding provisions of this Amendment (which shall control over
any conflicting or inconsistent recitals above). Each capitalized
term used but not otherwise defined herein shall have the meaning
given to such term in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements, representations and warranties herein
set forth, and further good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Borrower,
Administrative Agent and Lenders do hereby agree as
follows:
THE
AGREEMENT:
1.
Amendments to Loan
Agreement .
(a) Section 1.1 is hereby amended to add a
definition, in alphabetical order, and amend and restate certain
others, all as set forth below:
"
Commitment Expiration Date " means May 31, 2007, at
2:00 p.m. CDT.
" CWEI
Guaranty " means the Guaranty delivered by CWEI pursuant to
Section 3.4(l) .
" L/C" means the letter of credit, with an expiry date
not earlier than June 13, 2007, in the face amount of
$5,000,000, in form and substance and from a financial institution
reasonably satisfactory to Administrative Agent, for the account of
CWEI and for the benefit of Administrative Agent acting on behalf
of itself and the Lenders.
"
Maturity Date " means June 1, 2011.
(b) Section 2.3(a) is amended and restated in its
entirety to read as follows:
"(a)
Borrower shall pay to
Administrative Agent, for the account of each Lender, the
outstanding principal amount of the Loan, in monthly principal
installments on each Payment Date that occurs on or after
July 1, 2007, as follows:
"(i) for each Payment Date occurring during the
period from and including July 1, 2007, through and including
June 1, 2008, an equal monthly principal installment equal to
1/12 of 35% of the outstanding principal amount of the Loan on
July 1, 2007;
"(ii) for each Payment Date occurring during the
period from and including July 1, 2008, through and including
June 1, 2010, an equal monthly principal installment equal to
1/24 of 50% of the outstanding principal amount of the Loan on
July 1, 2007; and
"(iii) for each Payment Date occurring during the
period from and including July 1, 2010, through and including
June 1, 2011, an equal monthly principal installment equal to
1/12 of 15% of the outstanding principal amount of the Loan on
July 1, 2007."
(c) Section 2.3(d) is amended by deleting therefrom
the date "March 15, 2007," and inserting in lieu thereof the
date "June 1, 2007."
(d) Section 3.2(b) is amended by changing the
reference therein to "3.3" to a reference to "3.2".
(e) Section 3.4 is amended by adding a new
subsection, lettered "m," reading as follows:
"(m) L/C Matters . (i) Provided no Event of Default has occurred
and is then continuing, Administrative Agent will contemporaneously
release the L/C to Borrower once (x) Administrative Agent has
established that the outstanding principal balance of the Loan is
less than seventy-five percent (75%) of the Net OLV of the
Operating Rigs or (y) the Commitment Expiration Date shall
have occurred, and Borrower shall have prepaid the principal of the
Loan as and to the extent required under Section 2.3(d)
.
"(ii) Notwithstanding anything herein, in the
L/C, or in any other Loan Document to the contrary, Administrative
Agent shall only have the right (which right may be exercised
without notice, opportunity to cure or other restraint) to draw on
the L/C (x) if an Event of Default has occurred and is then
continuing (to the extent necessary to pay amounts in respect of
Obligations that are then due and payable hereunder), (y) in the
event the Borrower has not timely prepaid the principal of the Loan
as and to the extent required under Section 2.3(d) , and (z)
upon t
