EXHIBIT 10.2
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FIRST AMENDMENT TO DEFINITIVE AGREEMENT
This Amendment ("First Amendment") of the Definitive
Agreement ("Definitive Agreement") dated the 3rd day of January, 2006, is made
this 22nd day of March, 2006 by and among TRANS ENERGY, INC., a Nevada
corporation, with its principal place of business at 000 Xxxxxx Xxxxxx, Xx.
Xxxxx, Xxxx Xxxxxxxx 00000 ("Seller"); PRIMA OIL COMPANY, INC., a Delaware
corporation, with their principal place of business at 000 Xxxxxx Xxxxxx, Xx.
Xxxxx, Xxxx Xxxxxxxx 00000 (the "Credit Facilitator"); XXXXXXXX X. XXXXX and
XXXXXXX X. XXXXX, of P. X. Xxx 000, Xx. Xxxxx, Xxxx Xxxxxxxx 00000
("Purchasers"); XXXXXXX OILFIELD SERVICES, LLC, a West Virginia limited
liability company ("AOS"); and ARVILLA PIPELINE CONSTRUCTION CO., INC., a West
Virginia corporation whose stock is wholly owned by Purchasers ("APC").
W I T N E S S E T H:
WHEREAS, the parties hereto entered into the Definitive
Agreement intending to close the transactions described therein no later than
January 31, 2006;
WHEREAS, the closing of the transactions described in the
Definitive Agreement was made expressly subject to certain conditions precedent,
including without limitation, the consent described in Section 4.5 of the
Definitive Agreement of Huntington National Bank to such closing (the "Bank
Consent"), and the receipt of a fairness opinion as described in Section 4.7 of
the Definitive Agreement to the effect that said transactions are fair to the
Seller and its stockholders (the "Fairness Opinion");
WHEREAS, due to factors beyond the control of the parties it
has become apparent that it is not possible to obtain the Fairness Opinion under
the terms set forth in the Definitive Agreement; and
WHEREAS, the parties have agreed upon certain amendments to
the terms and provisions of the Definitive Agreement designed to obtain an
unqualified Fairness Opinion.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, together with other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Article 1. Amendments
1.1 Section 1.4.1 or the Definitive Agreement is amended
to read as follows:
"Seller, together with any of its subsidiary
corporations or affiliated entities ("Seller's
Affiliated Entities"), shall execute a promissory
note ("AOS Promissory Note") in favor of AOS in the
principal amount of One Hundred Seventy-six Thousand
Two Hundred Thirty-nine Dollars and 58/100 Cents
($176,239.58), bearing interest from January 1, 2006
at an annual stated rate of interest equal to Wall
Street Journal plus one percent (1%), adjusted
monthly on the twenty-eighth (28th) day of each
calendar month; said AOS Promissory Note shall be
payable in full, without notice and demand, on or
before April 30, 2006."
1.2 Section 1.4.2 of the Definitive Agreement is amended
to read as follows:
"Seller, together with any of its subsidiary
corporations or affiliated entities ("Seller's
Affiliated Entities"), shall execute a promissory
note ("APC Promissory Note") in favor of APC in the
principal amount of One Hundred Fifteen Thousand
Dollars and No Cents ($115,000.00), bearing interest
from January 1, 2006 at an annual stated rate of
interest equal to Wall Street Journal plus one
percent (1%), adjusted monthly on the twenty-eighth
(28th) day of each calendar month; said APC
Promissory Note shall be payable in full, without
notice and demand, on or before April 30, 2006."
1.3 A new section 1.6 is added to the Definitive
Agreement to read as follows:
"1.6 Release of Lien on Xxxxx Lease. Upon payment in
full of the obligations described in Sections 1.4.1
and 1.4.2, and upon release of Purchasers from any
and all liability and the obligation pursuant to
outstanding debt secured by the Five Xxxxx,
Purchasers shall provide Seller and Seller's
Affiliated Entities with a complete release of the
Xxxxx Leasehold Deed of Trust."
1.4 A new section 1.7 is added to the Definitive
Agreement to read as follows:
"1.7 Value of Reacquired Shares. For all purposes
under the Definitive Agreement, as amended, including
without limitation, the Fairness Opinion, the value
of the Reacquired Shares is Eighty-five cents ($0.85)
per share."
1.5 A new section 1.8 is added to the Definitive
Agreement to read as follows:
"1.8 Limit on Rate of Sale of the Balance of
Purchasers' Shares. During each calendar quarter on
or after March 22, 2006, Purchasers shall not sell an
amount of the Purchasers' Shares which is more than
the greater of: (i) 50,000 shares, adjusted for stock
splits or stock dividends; or (ii) one percent (1.0%)
of the shares of Seller outstanding on the date of
any such sale; provided, however, as between Xxxxxxxx
X. Xxxxx and Xxxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxx
shall not sell any of Purchasers' Shares without
first giving Xxxxxxx X. Xxxxx three (3) days actual
notice in writing."
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1.6 Section 1.3.2 of the Definitive Agreement is amended
to read as follows:
"1.3.2 Trans Energy shall immediately upon Escrow
Closing assume primary responsibility for all
outstanding debt secured by the Five Xxxxx and shall
diligently pursue obtaining release of Purchasers
from all such debt."
1.7 Sections 1.4.5 and 1.4.6 are deleted.
Article 2. Other Matters
2.1 Definitions. All capitalized terms shall have the
meanings set forth in the Definitive Agreement, unless otherwise specifically
provided in this First Amendment.
2.2 Effectiveness of Definitive Agreement. Except as
otherwise specifically amended by this First Amendment, the Definitive
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First
Amendment:
PURCHASERS:
/s/ Xxxxxxxx X. Xxxxx
---------------------------------------
(Xxxxxxxx X. Xxxxx)
/s/ Xxxxxxx X. Xxxxx
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(Xxxxxxx X. Xxxxx)
SELLER:
Trans Energy, Inc.
Attest: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------------- -----------------------------------
Its: Secretary Its: President
CREDIT FACILITATOR:
Prima Oil Company, Inc.
Attest: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxx
---------------------------- -----------------------------------
Its: Secretary Its: President
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APC:
Xxxxxxx Pipeline Construction Co., Inc.
Attest: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxxxxx Xxxxx
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Its: Secretary Its: President
AOS:
By: Xxxxxxx, Inc.,
its sole corporate member
Attest: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxx
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Its: Secretary Its: President
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